UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of Report (Date of earliest event reported) August 31, 2010
U.S.
CONCRETE, INC.
(Exact
name of registrant as specified in its charter)
Delaware
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000-26025
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76-0586680
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(State
or other jurisdiction
of
incorporation)
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|
(Commission
File Number)
|
|
(IRS
Employer
Identification
No.)
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2925
Briarpark, Suite 1050, Houston, Texas 77042
(Address
of principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code (713) 499-6200
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
EXPLANATORY
NOTE
As
previously reported, on April 29, 2010 (the “
Petition Date
”), U.S.
Concrete, Inc. (the “
Company
”), and
certain of its subsidiaries (collectively, the “
Debtors
”) filed
voluntary petitions in the United States Bankruptcy Court for the District of
Delaware (the “
Bankruptcy Court
”)
seeking relief under the provisions of Chapter 11 of Title 11 of the United
States Code (the “
Bankruptcy
Code
”).
On July
29, 2010 (the “
Confirmation Date
”),
the Bankruptcy Court entered an order (the “
Confirmation Order
”)
confirming the Debtors’ Joint Plan of Reorganization, pursuant to Chapter 11 of
the Bankruptcy Code, which was originally filed with the Bankruptcy Court on the
Petition Date and supplemented by the Supplement to Debtors’ Joint Plan of
Reorganization pursuant to Chapter 11 of the Bankruptcy Code filed with the
Bankruptcy Court on July 19, 2010 and July 22, 2010, and amended on July 27,
2010 (as so amended and supplemented, the “
Plan
”).
On August
31, 2010 (the “
Effective Date
”), the
Debtors consummated their reorganization under the Bankruptcy Code and the Plan
became effective. The distributions of securities under the Plan of
the Debtors described in this Current Report on Form 8-K were made on the
Effective Date. Capitalized terms used but not defined in this Form 8-K have the
meanings set forth in the Plan.
ITEM
1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
Revolving
Credit Facility
On the
Effective Date, the Company entered into a new credit agreement, dated as of
August 31, 2010 (the “
Credit Agreement
”),
by and among the Company, certain of the Company’s domestic subsidiaries as
guarantors, the lenders party thereto and JPMorgan Chase Bank, N.A., as
administrative agent (the
“
Administrative Agent
”)
, which provides
for a $75.0 million asset-based revolving credit facility (the “
Revolving
Facility
”).
The following is a description of certain material terms of the
Revolving Facility.
Up to $30
million of the Revolving Facility is available for the issuance of letters of
credit, and any such issuance of letters of credit will reduce the amount
available for loans under the Revolving Facility. Advances under the
Revolving Facility are limited by a borrowing base of (a) 85% of the face amount
of eligible accounts receivable plus (b) the lesser of (i) 85% of the net
orderly liquidation value (as determined by the most recent appraisal) of
eligible inventory and (ii) the sum of (A) 50% of the eligible inventory (other
than eligible aggregates inventory) and (B) 65% of the eligible aggregates
inventory plus (c) the lesser of (i) $15.0 million and (ii) the sum of (A) 85%
of the net orderly liquidation value (as determined by the most recent
appraisal) of eligible trucks plus (B) 80% of the cost of newly acquired
eligible trucks since the date of the latest appraisal of eligible trucks minus
(C) the depreciation amount applicable to eligible trucks since the date of the
latest appraisal of eligible trucks minus (d) such reserves as the
Administrative Agent may establish from time to time in its permitted
discretion. The Administrative Agent may, in its permitted
discretion, reduce the advance rates set forth above, adjust reserves or reduce
one or more of the other elements used in computing the borrowing
base. In addition, prior to the delivery of the Company’s financial
statements for the fiscal quarter ended September 30, 2011, there will be an
availability block (the “
Availability Block
”)
of $15.0 million and after such date, unless the fixed charge coverage ratio for
any trailing twelve month period is greater than or equal to 1.00:1.00, there
will be an Availability Block of $15.0 million, to be increased monthly by $1.0
million up to a maximum of $20.0 million. Beginning with the fiscal
month in which the Availability Block is eliminated and with respect to each
fiscal month thereafter, at any time that availability under the Revolving
Facility is less than $15.0 million, the Company must maintain a fixed charge
coverage ratio of at least 1.00:1.00 until availability is greater than or equal
to $15.0 million for a period of 30 consecutive days.
At the
Company’s option, loans may be maintained from time to time at an interest rate
equal to the Eurodollar-based rate (“
LIBOR
”) or the
applicable domestic rate (“
CB Floating
Rate
”). The CB Floating Rate shall be the greater of (x) the
interest rate per annum publicly announced from time to time by JPMorgan Chase
Bank, N.A. as its prime rate and (y) the interest rate per annum equal to the
sum of 1.0% per annum plus the adjusted LIBOR rate for a one month interest
period, in each case plus the applicable margin. The applicable margin on loans
is 2.75% in the case of loans bearing interest at the CB Floating Rate and 3.75%
in the case of loans bearing interest at the LIBOR rate. Issued and outstanding
letters of credit are subject to a fee equal to the applicable margin then in
effect for LIBOR loans, a fronting fee equal to 0.20% per annum on the stated
amount of such letter of credit, and customary charges associated with the
issuance and administration of letters of credit. Protective advances
and overadvances shall bear interest at the CB Floating Rate plus 2.75% to plus
2.00%. The Company also will pay a commitment fee on undrawn amounts
under the Revolving Facility in an amount equal to 0.75% per
annum. Upon any event of default, at the direction of the required
lenders under the Revolving Facility, all outstanding loans and the amount of
all other obligations owing under the Revolving Facility will bear interest at a
rate per annum equal to 2.0% plus the rate otherwise applicable to such loans or
other obligations.
The
Revolving Facility will mature four years after the Effective Date (the “
Revolving Facility Maturity
Date
”). Loans are due and payable in full on the Revolving
Facility Maturity Date. Outstanding borrowings under the Revolving
Facility are prepayable, and the commitments under the Revolving Facility may be
permanently reduced, without penalty. There are mandatory prepayments of
principal in connection with (i) the incurrence of certain indebtedness, (ii)
certain equity issuances and (iii) certain asset sales or other dispositions
(including as a result of casualty or condemnation). Mandatory
prepayments are applied to repay outstanding loans without a corresponding
permanent reduction in commitments under the Revolving Facility and are subject
to the terms of the Intercreditor Agreement (as defined below).
The
Revolving Facility requires the Company and its subsidiaries to comply with
customary affirmative and negative covenants, and contains customary events of
default.
All
obligations under the Revolving Facility and obligations in respect of banking
services and swap agreements with the lenders and their affiliates will
be unconditionally guaranteed by all of the Company’s existing and future
U.S. subsidiaries (other than Superior Materials Holdings, LLC, the Company’s
joint venture, and its direct and indirect subsidiaries). In connection
with the Credit Agreement, on the Effective Date the Company and certain of its
subsidaries entered into a Pledge and Security Agreement (the “
Security Agreement
”) with the
Administrative Agent. Pursuant to the Security Agreement, all obligations under
the Revolving Facility and obligations in respect of banking services and swap
agreements with lenders and their affiliates will be,
subject
to the terms of the Intercreditor Agreement (as defined below), secured by (i) a
first-priority perfected lien (subject to certain exceptions) in substantially
all of the Company’s and such guarantors’ present and after acquired inventory
(including as-extracted collateral), accounts, certain specified mixer trucks,
chattel paper, deposit accounts, securities accounts, commodities accounts,
letter of credit rights, cash and cash equivalents, general intangibles (other
than intellectual property and equity in subsidiaries), instruments, documents,
supporting obligations and related books and records and all proceeds and
products of the foregoing and (ii) a perfected second-priority
lien (subject to certain exceptions) on substantially all other
present and after acquired property (including, without limitation, material
owned real estate).
The
foregoing description of the Credit Agreement and the Security Agreement does
not purport to be complete and is qualified in its entirety by reference to the
full text of the Credit Agreement and the Security Agreement, which are attached
as Exhibits 10.1 and 10.2 and are incorporated herein by
reference.
Convertible
Secured Notes
On the
Effective Date, the Company issued $55.0 million aggregate principal amount of
9.5% Convertible Secured Notes due 2015 (the “
Convertible Notes
”)
pursuant to a subscription offering contemplated by the Plan. The
Convertible Notes are governed by an indenture (the “
Indenture
”), dated as
of August 31, 2010, among the Company, certain subsidiaries of the Company,
as guarantors, and U.S. Bank National Association, as trustee and noteholder
collateral agent. Under the terms of the Indenture, the Convertible
Notes bear interest at a rate of 9.5% per annum and will mature on August 31,
2015. Interest payments will be payable quarterly in cash in
arrears.
The
Convertible Notes will be convertible, at the option of the holder, at any time
on or prior to maturity, into shares of the Company’s new common stock, par
value $0.001 per share (the “
Common Stock
”), at an
initial conversion rate of 95.23809524 shares of Common Stock per $1,000
principal amount of Convertible Notes (the “
Conversion
Rate
”). The conversion rate is subject to adjustment to
prevent dilution resulting from stock splits, stock dividends, combinations or
similar events. In connection with any such conversion, holders of
the Convertible Notes to be converted shall also have the right to receive
accrued and unpaid interest on such Convertible Notes to the date of conversion
(the “
Accrued
Interest
”). The Company may elect to pay the Accrued Interest
in cash or in shares of Common Stock. If the Company elects to pay
the Accrued Interest in shares, the number of shares issuable shall be
determined by dividing the Accrued Interest by 95% of the trailing 10-day
volume-weighted average price of the Common Stock.
In
addition, if a “Fundamental Change of Control” (as defined in the Indenture)
occurs prior to the maturity date, in addition to any conversion rights the
holders of Convertible Notes may have, each holder of Convertible Notes will
have (i) a make-whole provision calculated as provided in the Indenture pursuant
to which each holder may be entitled to additional shares of Common Stock upon
conversion (the “
Make
Whole Premium
”), and (ii) an amount equal to the interest on such
Convertible Notes that would have been payable from the date of the occurrence
of such Fundamental Change of Control (the “
Fundamental Change of
Control Date
”) through the third anniversary of the Effective Date, plus
any accrued and unpaid interest from the Effective Date to the Fundamental
Change of Control Date (the amount in this clause (ii), the “
Make Whole
Payment
”). The Company may elect to pay the Make Whole
Payment in cash or in shares of Common Stock.
If the
closing price of the Common Stock exceeds 150% of the Conversion Price (defined
as $1,000 divided by the Conversion Rate) then in effect for at least 20 trading
days during any consecutive 30-day trading period (the “
Conversion Event
”),
the Company may provide, at its option, a written notice (the “
Conversion Event
Notice
”) of the occurrence of the Conversion Event to each holder of
Convertible Notes in accordance with the Indenture. Except as set
forth in an Election Notice (as defined below), the right to convert Convertible
Notes with respect to the occurrence of the Conversion Event shall terminate on
the date that is 46 days following the date of the Conversion Event Notice (the
“
Conversion
Termination Date
”), such that the holder shall have a 45-day period in
which to convert its Convertible Notes up to the amount of the Conversion Cap
(as defined below). Any Convertible Notes not converted prior to the
Conversion Termination Date as a result of the Conversion Cap shall be, at the
holder’s election and upon written notice to the Company (the “
Election Notice
”),
converted into shares of Common Stock on a date or dates prior to the date that
is 180 days following the Conversion Termination Date (such date or dates to be
specified in the holder’s Election Notice). As used herein, “
Conversion Cap
” means
the number of shares of Common Stock into which the Convertible Notes are
convertible and that would cause the related holder to “beneficially own” (as
such term is used in the Exchange Act) more than 9.9% of the Common Stock at any
time outstanding.
Any
Convertible Notes not otherwise converted prior to the Conversion Termination
Date or specified for conversion in an Election Notice shall be redeemable, in
whole or in part, at the Company’s election at any time prior to maturity at par
plus accrued and unpaid interest thereon to the Conversion Termination
Date.
The
Indenture contains certain covenants that restrict the Company and guarantors’
ability to, among other things,
·
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incur
additional indebtedness or issue disqualified stock or preferred
stock;
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pay
dividends or make other distributions or repurchase or redeem the
Company’s stock or subordinated indebtedness or make
investments;
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sell
assets and issue capital stock of the Company’s restricted
subsidiaries;
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enter
into agreements restricting the Company’s restricted subsidiaries’ ability
to pay dividends;
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enter
into transactions with affiliates;
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consolidate,
merge or sell all or substantially all of the Company’s assets;
and
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designate
the Company’s subsidiaries as unrestricted
subsidiaries.
|
The
Convertible Notes will be guaranteed by each of the Company’s existing and
future direct or indirect domestic restricted subsidiaries (other than Superior
Materials Holdings LLC and its subsidiaries).
In
connection with the Indenture, on August 31, 2010, the Company and certain of
its subsidiaries entered into a Pledge and Security Agreement (the “
Pledge and Security
Agreement
”) with U.S. Bank National Association, as noteholder collateral
agent. Pursuant to the Pledge and Security Agreement,
the Convertible
Notes and related guarantees will be secured by first-priority liens on certain
of the property and assets directly owned by the Company and each of the
guarantors, including material owned real property, fixtures, intellectual
property, capital stock of subsidiaries and certain equipment, subject to
permitted liens (including a second-priority lien in favor of the Administrative
Agent) with certain exceptions. Obligations under the Revolving
Facility and those in respect of hedging and cash management obligations owed to
the lenders (and their affiliates) that are a party to the Revolving Facility
(collectively, the “
Revolving Facility
Obligations
”) will be secured by a second-priority lien on such
collateral.
The
Convertible Notes and related guarantees will also be secured by a
second-priority lien on the assets of the Company and the guarantors securing
the Revolving Facility Obligations on a first-priority basis, including,
inventory (including as extracted collateral), accounts, certain specified
mixture trucks, chattel paper, general intangibles (other than collateral
securing the Convertible Notes on a first-priority basis), instruments,
documents, cash, deposit accounts, securities accounts, commodities accounts,
letter of credit rights and all supporting obligations and related books and
records and all proceeds and products of the foregoing, subject to permitted
liens and certain exceptions.
The
foregoing description of the Indenture and the Pledge and
Security Agreement does not purport to be complete and is qualified in its
entirety by reference to the full text of the Indenture and the Pledge and
Security Agreement, which are attached as Exhibits 4.2 and 4.4 hereto and are
incorporated herein by reference.
Registration
Rights Agreement
In
connection with the issuance of the Convertible Notes, the Company entered into
a registration rights agreement, dated August 31, 2010 (the “
Registration Rights
Agreement
”), under which it agreed, pursuant to the terms and conditions
set forth therein, to register the Convertible Notes and the Common Stock into
which the Convertible Notes convert. Under the Registration
Rights Agreement, the Company is required to use commercially reasonable efforts
to file a shelf registration statement covering the resale by the Electing
Holders (as defined in the Registration Rights Agreement) of Convertible Notes
that are Registrable Securities (as defined in the Registration Rights
Agreement) by the first business day following the date that is 366 days
following the Effective Date, and to file a shelf registration statement
covering the resale of shares of Common Stock that constitute Registrable
Securities by the Electing Holders, on a delayed or continuous basis, within 180
days of the Issue Date. The Company is required to pay special
interest if it fails to file either shelf registration statement by the
applicable deadline or if any registration statement required by the
Registration Rights Agreement ceases to be effective for more than 45 days, with
respect to any Registrable Securities that are Convertible Notes and are
Restricted Securities (as defined in the Indenture).
The
foregoing description of the Registration Rights Agreement does not purport to
be complete and is qualified in its entirety by reference to the full text of
the Registration Rights Agreement, which is attached as Exhibit 4.3 hereto and
is incorporated herein by reference.
Intercreditor
Agreement
In
connection with the issuance of the Convertible Notes, the Company entered into
an intercreditor agreement with the noteholder collateral agent and the
Administrative Agent (the “
Intercreditor
Agreement
”). The Intercreditor Agreement sets forth the terms
on which the Administrative Agent and the noteholder collateral agent are
permitted to receive, hold, administer, maintain, enforce and distribute the
proceeds of their respective liens upon the collateral. The
Intercreditor Agreement grants (i) to the Administrative Agent, the exclusive
right to enforce rights, exercise remedies (including setoff) and make
determinations regarding the release, disposition, or restrictions of the
collateral which secures the Revolving Facility Obligations on a first-priority
basis and (ii) to the noteholder collateral agent, the exclusive right to
enforce rights, exercise remedies (including setoff) and make determinations
regarding the release, disposition, or restrictions of the collateral which
secures the Convertible Notes on a first-priority basis, in each case subject to
limitations described therein, which limitations shall include an access right
of the Administrative Agent to exercise remedies in respect of its assets
located on real property in which the noteholder collateral agent has a
first-priority lien under the security documents for the Convertible
Notes. In addition, the Intercreditor Agreement sets forth the
distribution of proceeds in respect of the collateral between Revolving Facility
lenders and noteholders. The Intercreditor Agreement expressly
requires that proceeds received from (or are otherwise attributable to the value
of) the sale or disposition of all or substantially all of the capital stock of
any subsidiary of the Company which is a guarantor or all or substantially all
of the assets of any such subsidiary be treated as collateral securing the
Revolving Facility Obligations (on a first priority basis) in an amount equal to
the face amount of the accounts and the net book value of all other collateral
owned by such subsidiary, and to the extent of any excess, collateral securing
the convertible notes (on a first priority basis).
The
foregoing description of the Intercreditor Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Intercreditor Agreement, which is attached as Exhibit 10.3 hereto and is
incorporated herein by reference.
Warrant
Agreements
As of the
Effective Date, the Company issued warrants to acquire Common Stock (the “
New Warrants
”) in two
tranches: Class A Warrants to purchase an aggregate of approximately 1.5 million
shares of Common Stock (the “
Class A Warrants
”)
and Class B Warrants to purchase an aggregate of approximately 1.5 million
shares of Common Stock (the “
Class B
Warrants
”). The New Warrants were issued to holders of shares
of U.S. Concrete common stock outstanding prior to the Effective Date (the
“
Old Common
Stock
”) pro rata based on a holder’s stock ownership as of the
Effective Date.
In
connection with the issuance of the Class A Warrants,
the Company entered into a Class A Warrant Agreement (the “
Class A Warrant
Agreement
”) with American Stock Transfer & Trust Company, LLC,
as warrant agent. Subject to the terms of the Class A Warrant
Agreement, holders of Class A Warrants are entitled to purchase shares of Common
Stock at an exercise price of $22.69 per share. In connection with
the issuance of the Class B Warrants, the Company entered into a
Class B Warrant Agreement (the “
Class B Warrant
Agreement
” and, together with the Class A Warrant Agreement, the “
Warrant Agreements
”)
with American Stock Transfer & Trust Company, as warrant
agent. Subject to the terms of the Class B Warrant Agreement, holders
of Class B Warrants are entitled to purchase shares of Common Stock at an
exercise price of $26.68 per share. Subject to the terms of the
Warrant Agreements, both classes of New Warrants will have a seven−year term and
will expire at 5:00 p.m., New York City time, on the seventh anniversary of the
Effective Date. The New Warrants may be exercised for cash or on a
net issuance basis.
If, at
any time before the expiration date of the New Warrants, the Company pays or
declares a dividend or makes a distribution on the Common Stock payable in
shares of its capital stock, subdivides or combines its outstanding shares
of Common Stock into a greater or lesser number of shares or issues any shares
of its capital stock by reclassification of Common Stock, then the exercise
price and number of shares issuable upon exercise of the New Warrants will be
adjusted so that the holders of the New Warrants will be entitled to receive the
aggregate number and kind of shares that they would have received as a result of
the event if their New Warrants had been exercised immediately before the
event. In addition, if the Company distributes to holders of the
Common Stock in an Extraordinary Distribution (defined in each Warrant Agreement
to include assets, securities or warrants to purchase securities), then the
exercise price of the New Warrants will be decreased by the amount of cash
and/or the fair market value of any securities or assets paid or distributed on
each share of Common Stock; however, no adjustment to the exercise price will be
made if, at the time of an Extraordinary Distribution, the Company makes the
same distribution to holders of New Warrants as it makes to holders of Common
Stock pro rata based on the number of shares of Common Stock for which the New
Warrants are exercisable.
In the
event of a Fundamental Change (defined in each Warrant Agreement to include
transactions such as mergers, consolidations, sales of assets, tender offers,
exchange officers, reorganizations, reclassifications, compulsory share
exchanges or liquidations in which all or substantially all of the outstanding
Common Stock is converted into or exchanged for stock, other securities, cash or
assets), if the consideration paid consists 90% or more of publicly traded
securities, each holder of a New Warrant will have the right upon any subsequent
exercise to receive the kind and amount of stock, other securities, cash and
assets that such holder would have received if the New Warrant had been
exercised immediately prior to such Fundamental Change. If a
Fundamental Change occurs (other than a Fundamental Change in which the
consideration paid consists at least 90% of publicly traded securities), then
each holder of a New Warrant will be entitled to receive an amount equal to the
Fair Market Value (as defined in each of the Warrant Agreements) of their New
Warrant on the date the Fundamental Change is consummated. For
purposes of a Fundamental Change, Fair Market Value of a New Warrant shall be
determined based on such factors as the person making the determination shall
consider relevant, including but not limited to the factors set forth in the
applicable Warrant Agreement, but if the consideration per share of Common Stock
exceeds the exercise price of a New Warrant, the fair market value of the New
Warrant shall be deemed to equal the greater of (a) the excess of such
consideration per share over the exercise price or (b) an amount equal to the
fair market value of the New Warrant as determined in accordance with the first
clause of this sentence and calculated as of the consummation of the Fundamental
Change.
No
adjustment in the exercise price of New Warrants shall be required unless such
adjustment would require an increase or decrease of at least $0.05 in the
exercise price; provided that any adjustments that are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment.
Indemnification
Agreement
The
Company entered or will enter into indemnification agreements (the “
Indemnification
Agreements
”) with each of its directors and executive officers (an “
Indemnitee
”) as of
the Effective Date. Each Indemnification Agreement provides for the
indemnification of and the advancement of expenses to the Indemnitee to the
fullest extent permitted by Delaware law. Each Indemnitee will be
indemnified and held harmless in any threatened, pending or completed
proceeding, other than a proceeding by or in the right of the Company, in which
the Indemnitee is or was threatened to be made a party by reason of his
corporate status, if Indemnitee acted in good faith in a manner reasonably
believed to be in or not opposed to the best interests of the Company and, with
respect to any criminal proceeding, had no reasonable cause to believe his
conduct was unlawful. With respect to proceedings brought by or in
the right of the Company, Indemnitee will be indemnified and held harmless from
all expenses actually and reasonably incurred by him, if Indemnitee acted in
good faith in a manner reasonably believed to be in or not opposed to the best
interests of the Company, but indemnification against those expenses will not be
made with respect to any claim, issue, or matter in which Indemnittee was found
liable to the Company, unless the court determines that Indemnitee is fairly and
reasonably entitled to indemnification.
Each
Indemnification Agreement provides (i) that an Indemnitee is automatically
entitled to indemnification for expenses to the extent an Indemnitee is
successful in defending any indemnifiable claim whether on the merits or
otherwise, (ii) that an Indemnitee is entitled to the advancement of expenses
during the pendency of a proceeding, (iii) that the Company has the burden of
proving that an Indemnitee is not entitled to indemnification and negates
certain presumptions that may otherwise be drawn against an Indemnitee, (iv)
that an Indemnitee, in his discretion, may request either the Disinterested
Directors (as defined in the Indemnification Agreements) make the determination
of entitlement to indemnification or request that Independent Counsel (as
defined in the Indemnification Agreements) make such a determination, (v) that
an Indemnitee may choose a mechanism through which an Indemnitee may seek court
relief or arbitration in the event it is determined that the Indemnitee would
not be entitled to be indemnified and (vi) that an Indemnitee is entitled to
indemnification against all expenses (including attorneys’ fees) incurred in a
proceeding seeking to collect an indemnity claim or advancement of expenses from
the Company, but only if Indemnitee prevails in such proceeding.
The
Indemnitees’ rights under the Indemnification Agreements are not exclusive of
any other rights they may have under Delaware law, directors’ and officers’
liability insurance, the Company’s bylaws or otherwise. However, the
Indemnification Agreements do prevent double payment. The
Indemnification Agreements require that the Company maintain an insurance policy
providing liability insurance for director and officers in effect during the
entire period for which the Company is obligated to indemnify the Indemnitee
under the Indemnification Agreements.
The
foregoing description of the indemnification agreements does not purport to be
complete and is qualified in its entirety by reference to the full text of the
indemnification agreements, the form of which is attached as Exhibit 10.7 hereto
and is incorporated herein by reference.
ITEM
1.02 TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT
Indenture
Governing Existing Notes
On the
Effective Date, pursuant to the Plan, all outstanding obligations under the
Company’s 8.375% senior subordinated notes due 2014 (the “
Old Notes
”) were
cancelled and the indenture governing the Old Notes was cancelled.
Debtor-in-possession
Credit Agreement
On the
Effective Date, pursuant to the Plan, all amounts outstanding under the
Revolving Credit, Term Loan and Guarantee Agreement among the Company, as
borrower, certain of its subsidiaries, as guarantors, JPMorgan Chase Bank, N,A,
as administrative agent, and the lenders party thereto from time to time, (the
“
DIP Facility
”)
were paid and such agreement was terminated in accordance with its
terms.
Equity
Interests
On the
Effective Date, pursuant to the Plan, all of the Company’s existing equity
securities, including its existing common stock (the “
Old Common Stock
”),
all options to purchase the Old Common Stock and all rights to purchase the
Company’s Series A Junior Participating Preferred Stock (the “
Preferred Stock Purchase
Rights
”) pursuant to a Rights Agreement, dated as of November 5, 2009,
were cancelled. Accordingly, upon the Effective Date, certain of the
Company’s equity incentive plans in place prior to the Effective Date, and all
awards granted under such plans, were terminated. The following
equity incentive plans were terminated on the Effective Date:
·
|
1999
Incentive Plan of U.S. Concrete,
Inc.
|
·
|
U.S.
Concrete, Inc. 2000 Employee Stock Purchase
Plan
|
·
|
2001
Employee Incentive Plan of U.S. Concrete,
Inc.
|
·
|
U.S.
Concrete, Inc. 2008 Incentive Plan
|
ITEM
2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
The
information set forth under “Item 1.01. Entry into a Material Definitive
Agreement-Revolving Credit Facility” and “Item 1.01. Entry into a Material
Definitive Agreement-Convertible Secured Notes” is incorporated by reference
into this Item 2.03.
ITEM
3.02 UNREGISTERED SALE OF EQUITY SECURITIES
On the
Effective Date, the Company issued (i) approximately 11.9 million of Common
Stock to holders of the Old Notes, (ii) approximately 1.5 million Class A
Warrants to holders of Old Common Stock and (iii) approximately 1.5 million
Class B Warrants to holders of Old Common Stock pursuant to the
Plan. In addition, as described in Item 1.01, on the Effective Date,
the Company also issued Convertible Notes pursuant to the subscription
offering.
Based on
the Plan and the Confirmation Order from the Bankruptcy Court, the issuance of
the Common Stock and the New Warrants (including shares of Common Stock issuable
upon exercise) described in the preceding sentence is exempt from registration
requirements of the Securities Act of 1933, as amended (the “
Securities Act
”), in
reliance on Section 1145 of the Bankruptcy Code. The issuance of the
Convertible Notes is exempt from registration requirements of the Securities Act
reliance on Section 4(2) and Regulation D promulgated thereunder.
ITEM
3.03 MATERIAL MODIFICATION TO RIGHTS OF SECURITY HOLDERS
The
information set forth under “Item 5.03. Amendments to Articles of Incorporation
or Bylaws; Change in Fiscal Year” is incorporated by reference into this Item
3.03.
ITEM
5.01 CHANGES IN CONTROL OF REGISTRANT
On the
Effective Date, all of the Company’s existing equity securities, including Old
Common Stock, options to purchase Old Common Stock and Preferred Stock Purchase
Rights, were cancelled. As a result of the distributions of the New
Common Stock and New Warrants pursuant to the Plan, holders of Old Notes held
100% of the outstanding Common Stock and holders of the Old Common Stock held
100% of the New Warrants when the Plan became effective. The
consummation of the reorganization pursuant to the Plan may be deemed to result
in a change in control of the Company. The information set forth
under “Item 1.02. Termination of Material Definitive Agreement-Equity Interests”
and the information set forth under “Item 3.02. Unregistered Sale of Equity
Securities” is incorporated by reference into this Item 5.01.
ITEM
5.02 DEPARTURE OF DIRECTORS; CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN
OFFICERS.
Departure
of Directors
On the
Effective Date, the following directors have departed the Company’s board of
directors (the “
Board
”) in connection
with the Company’s emergence from Chapter 11 proceedings and pursuant to the
Plan: John M. Piecuch, Vincent D. Foster, T. William Porter III, Mary
P. Ricciardello, William T. Albanese and Ray C. Dillon.
New
Board of Directors
On the
Effective Date, pursuant to the Plan, the Company’s board of directors was
reconstituted to consist of Michael W. Harlan, the Chief Executive Officer of
the reorganized Company, and the following five directors who were selected by
the Informal Noteholders Committee (as defined in the Plan) and disclosed to the
Bankruptcy Court in advance of the hearing to consider confirmation of the Plan:
Michael D. Lundin, Robert M. Rayner, Colin M. Sutherland, Eugene I. Davis and
Kurt M. Cellar.
Mr. Davis
was appointed the Chairman of the Board. Messrs. Rayner, Davis and
Sutherland were appointed to the Audit Committee of the Board, and Mr. Rayner
will serve as the Chairman of the Audit Committee. Messrs. Cellar,
Lundin and Sutherland were appointed to the Compensation Committee of the Board,
and Mr. Cellar will serve as the Chairman of the Compensation
Committee. The Audit Committee will assume the corporate governance
responsibilities of the Nominating and Corporate Governance Committee, and the
Board will assume the nomination responsibilities.
Other
than as set forth above, there are no arrangements or understandings between any
of Messrs. Lundin, Rayner, Sutherland, Davis and Cellar and any other person
pursuant to which such individual was selected to serve on the Board, and there
are no relationships between any of Messrs. Lundin, Rayner, Sutherland, Davis
and Cellar and the Company that would require disclosure under Item 404(a) of
Regulation S-K. Messrs. Lundin, Rayner, Sutherland, Davis and Cellar
will be entitled to receive any standard non-employee director cash compensation
as may be determined, and will participate in the management equity incentive
plan described under “-Management Equity Incentive Plan.” Each of the
directors has entered into or will enter into the Company’s form of
Indemnification Agreement for directors. The information set forth
under “Item 1.01. Entry into a Material Definitive
Agreement-Indemnification Agreements” is incorporated by reference into this
Item 5.02.
Management
Equity Incentive Plan
The
Company adopted a management equity incentive plan (the “
Incentive Plan
”) via
approval of the Bankruptcy Court, effective as of August 31, 2010, under which
9.5% of the equity of the reorganized Company authorized pursuant to the Plan,
on a fully-diluted basis, is reserved for issuance as equity-based awards to
management and employees, and 0.5% of such equity, on a fully-diluted basis, is
reserved for issuance to directors of the reorganized Company.
The
following is a summary of the material terms of the Incentive Plan.
Administration
The
Compensation Committee of the Board or any other Board committee the Board
designates by a written resolution (the “
Committee
”) will
administer the Incentive Plan.
Subject
to the provisions of the Incentive Plan, the Committee will have full and
exclusive power and authority to administer the Incentive Plan and to take all
actions that the Incentive Plan specifically contemplates or that are necessary
or appropriate in connection with the administration and operation of the
Incentive Plan, including, without limitation, the authority and discretion to
designate participants in the Incentive Plan, determine the type or types of
awards to be granted to a participant, determine the terms and conditions of any
award under the Incentive Plan, including, without limitation, and as
applicable, the exercise price, vesting schedules, conditions relating to
exercise and termination of the right to exercise and review any decisions or
actions made or taken by any Committee in connection with any award or the
operation, administration or interpretation of the Incentive
Plan. The Committee may, in its discretion, extend the exercisability
of any award, accelerate the vesting or exercisability of any award, eliminate
or make less restrictive any restrictions any award contains, waive any
restriction or other provision of the Incentive Plan or any award or otherwise
amend or modify any award in any manner that is either not adverse to the
participant to whom that award was granted or consented to in writing by that
participant.
The
Committee may delegate to the Company’s chief executive officer and other senior
officers its duties under the Incentive Plan.
Participation
and Eligibility
Employees
eligible for awards to employees under the Incentive Plan are employees assigned
or to be assigned positions of responsibility with the Company or any of its
subsidiaries and whose performance, in the judgment of the Committee, can have a
significant effect on the success of the Company and its
subsidiaries. Each director of the Board is eligible for awards to
directors under the Incentive Plan.
Shares
Subject to the Incentive Plan
The
Company has reserved 2,243,933 shares of Common Stock for use in connection with
the Incentive Plan. By no later than the fifth anniversary of the
Effective Date, all shares of Common Stock reserved for issuance under the
Incentive Plan are required to be subject to an outstanding award or to have
been delivered pursuant to the settlement of an award. Within thirty
(30) days following the Effective Date, thirty-five percent (35%) of the shares
of Common Stock available for delivery pursuant to Awards are required to be
allocated to employee awards in a form to be determined by the
Committee. No more than five percent (5%) of the shares of Common
Stock available for delivery pursuant to awards shall be allocated to director
awards. Each participant who receives an award in the form of
restricted stock units will also concurrently receive an award for an equal
amount of incentive restricted stock units (which represent the right to receive
0.35020 of a share of Common Stock upon satisfaction of applicable vesting
restrictions or upon such other basis as determined by the Committee in its sole
discretion).
Terms,
Conditions and Limitations of Awards
Generally,
the Committee will determine the type or types of awards and will designate the
participants who will receive such awards. An award will be embodied
in an agreement, which will contain such terms, conditions and limitations as
the Committee determines. Awards may be granted singly or in
combination or in tandem with other awards. Awards also may be made
in combination or in tandem with, in replacement of or as alternatives to grants
or rights under the Incentive Plan or any other employee plan of the Company or
any of its subsidiaries, including the plan of any acquired entity.
No stock
options or stock appreciation rights may be repriced, replaced, regranted though
cancellation or modified without stockholder approval (except in connection with
a change in the Company’s capitalization) if the effect would be to reduce the
exercise price for the shares underlying such award. All or part of
an award may be subject to such conditions as the Committee may establish, which
may include, but are not limited to, continuous service with U.S. Concrete and
its subsidiaries, achievement of specific business objectives, increases in
specified indices, attainment of specified growth rates and other comparable
measurements of performance. If a participant holding an employee
award ceases to be an employee, any unexercised, deferred, unexercisable,
unvested or unpaid portion of that employee award will be treated as the
applicable award agreement sets forth.
With the
approval of the Committee, payments in respect of awards may be deferred and
paid, either in the form of installments or as a lump-sum
payment. Any deferred payment of an award, whether elected by the
Participant or specified by the applicable award agreement or by the Committee,
may be forfeited if and to the extent that the applicable award agreement so
provides.
The
Committee may grant an employee award to any individual who has agreed in
writing to become an employee within six months after the date of that
agreement, provided that the effectiveness of that award is subject to the
condition that the individual actually becomes an employee within that time
period.
Options
. Options
are rights to purchase a specified number of shares of Common Stock at a
specified price. An option awarded under the Incentive Plan may
consist of either an incentive stock option, if so designated by the Committee,
that complies with the requirements of Section 422 of the Internal Revenue Code
of 1986, as amended (the “
Code
”), or a
non-qualified stock option that does not comply with those
requirements. Director awards will not include incentive stock
options. Options must have an exercise price per share which is not
less than the fair market value of the Common Stock on the date of
grant.
The
exercise price of any option must be paid in full at the time the option is
exercised in cash or, if the optionee so elects according to methods the
Committee establishes, by means of tendering shares of Common Stock valued at
their fair market value per share on the date of exercise, the withholding of
shares issuable upon exercise of such option, through a broker-assisted
“cashless exercise” procedure, or any combination thereof. The
Committee will determine acceptable methods for participants to tender Common
Stock or other awards to exercise an option. The Committee may
provide for procedures to permit the exercise or purchase of any award by use of
the proceeds to be received from the sale of Common Stock issuable pursuant to
such award. No option may be exercised after the expiration of 10
years from the date such option is granted.
Stock Appreciation
Rights
. A stock appreciation right is a right to receive a
payment, in cash or Common Stock, equal to the excess of the fair market value
or other specified valuation of a specified number of shares of Common Stock on
the date the right is exercised over a specified strike price. The
strike price for any stock appreciation right shall not be less than the fair
market value of the Common Stock on the date on which the stock appreciation
right is granted and will be subject to such other terms and conditions as
determined by the Committee in its discretion.
Stock
Awards
. Stock Awards consist of restricted and non-restricted
grants of Common Stock or units denominated in shares of Common
Stock. The Committee will determine the terms, conditions and
limitations applicable to stock awards in its sole discretion and provided for
in an award agreement, which may make reference to the provisions of any
applicable employment or similar agreement. Rights to dividends or
dividend equivalents may be extended to and made part of any stock award in the
discretion of the Committee.
Cash Awards
. Cash
awards consist of grants denominated in cash. The terms, conditions
and limitations applicable to cash awards will be determined by the Committee
and provided for in an award agreement, which may make reference to the
provisions of any applicable employment or similar agreement.
Performance
Awards
. Performance awards consist of grants made to a
participant the earning of which is subject to the attainment of one or more
performance goals. The Committee will determine the performance
goals, terms, conditions and limitations applicable to performance awards in its
sole discretion and provided for in an award agreement, which may make reference
to the provisions of any applicable employment or similar
agreement. Performance awards may be in the form of qualified
performance awards or nonqualified performance awards.
The
following limitations will apply to each employee award that is intended to
qualify as performance-based compensation under Section 162(m) of the
Code: (i) no participant may be granted, during any one-year period,
employee awards consisting of options or stock appreciation rights that are
exercisable for more than 500,000 shares of Common Stock; (ii) no participant
may be granted, during any one-year period, stock awards covering or relating to
more than 500,000 shares of Common Stock; and (iii) no participant may be
granted employee awards consisting of cash or that are in any other form the
Incentive Plan permits (other than employee awards consisting of options or
stock appreciation rights, or otherwise consisting of Common Stock or units
denominated in Common Stock) in respect of any one-year period having a value
determined on the date of grant in excess of $2,000,000.
Adjustments
In the
event of any extraordinary distribution (whether in the form of cash, Common
Stock, securities or other property), stock dividend, extraordinary cash
dividend, recapitalization, reclassification stock split, reverse stock split,
reorganization, merger, consolidation, spin-off, combination, repurchase, Common
Stock exchange or other similar transaction or event, then outstanding awards
under the Incentive Plan shall be appropriately and equitably adjusted by the
Board to reflect such transaction. In the event of a corporate
merger, consolidation, acquisition of property or stock, separation,
reorganization or liquidation, the Board may (i) issue or assume awards by means
of substitution of new awards for previously issued awards or to assume
previously issued awards as part of such adjustment, (ii) make provision, prior
to the transaction, for the acceleration of the vesting and exercisability of,
or lapse of restrictions with respect to the award and, if the transaction is a
cash merger, provide for the termination of any portion of the award that
remains unexercised at the time of such transaction, or (iii) cancel any such
awards and deliver to the participants cash in an amount that the Board
determines in its sole discretion is equal to the fair market value of such
awards on the date of such event. In the case of options or SARs,
this amount shall be the excess (if any) of the fair market value of Common
Stock on such date over the grant price of such award.
Amendment,
Modification and Termination
The Board
may, subject to stockholder approval in certain circumstances, amend, modify,
suspend or terminate the Incentive Plan for the purpose of meeting or addressing
any changes in legal requirements or for any other purpose applicable law
permits, except that no amendment or alteration that would adversely affect the
rights of any participant under any award previously granted to that participant
will be made without the written consent of that participant. The
Incentive Plan shall terminate on the tenth anniversary of the date of its
adoption by the Board, unless it is terminated sooner by the Board.
The above
summary of the Incentive Plan does not purport to be complete and is qualified
in its entirety by reference to the full text of the Incentive Plan, which is
attached as Exhibit 10.4 hereto and is incorporated herein by
reference.
ITEM
5.03. AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS; CHANGE IN
FISCAL YEAR.
In
accordance with the Plan, the Company’s certificate of incorporation and bylaws
were amended and restated in their entirety. The Company’s Amended and Restated
Certificate of Incorporation (the “
Amended Certificate of
Incorporation
”) and Third Amended and Restated By-Laws (the “
Amended By-Laws
”)
became effective on the Effective Date.
A
description of the key provisions of the Amended Certificate of Incorporation
and the Amended By-Laws is included in Amendment No. 1 to the Company’s
registration statement on Form 8-A filed with the Securities and Exchange
Commission on August 31, 2010, which description is incorporated herein by
reference. This description is qualified in its entirety by reference to the
full text of these documents, which are attached as Exhibit 3.1 and 3.2 hereto
and incorporated herein by reference.
ITEM
8.01. OTHER EVENTS.
On August
31, 2010, the Company announced that it had consummated the Plan. A
copy of the press release announcing the effectiveness of the Plan and the
Company’s emergence from Chapter 11 of the Bankruptcy Code is attached hereto as
Exhibit 99.1 and is incorporated herein by reference.
ITEM
9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
Exhibit
No.
|
Exhibit
|
|
|
3.1
|
Amended
and Restated Certificate of Incorporation of U.S. Concrete, Inc.
(incorporated by reference to Exhibit 1 to U.S. Concrete’s Form 8-A filed
August 31, 2010).
|
|
|
3.2
|
Third
Amended and Restated By-Laws of U.S. Concrete, Inc. (incorporated by
reference to Exhibit 2 to U.S. Concrete’s Form 8-A filed August 31,
2010).
|
|
|
4.1
|
Form
of New Common Stock Certificate (incorporated by reference to Exhibit 3 to
U.S. Concrete’s Form 8-A filed August 31, 2010).
|
|
|
4.2
|
Indenture,
dated as of August 31, 2010, by and among U.S. Concrete, Inc., the
Guarantors named therein, and U.S. Bank National Association, as Trustee
and Noteholder Collateral Agent.
|
|
|
4.3
|
Registration
Rights Agreement, dated as of August 31, 2010, by and among U.S. Concrete,
Inc., the Guarantors named therein and the Holders party
thereto.
|
|
|
4.4
|
Pledge
and Security Agreement, dated as of August 31, 2010, by and among U.S.
Concrete, Inc., subsidiaries named therein, and U.S. Bank National
Association, as noteholder collateral agent.
|
|
|
4.5
|
Form
of Convertible Secured Note, included in Exhibit
4.2.
|
10.1
|
Credit
Agreement, dated as of August 31, 2010, by and among U.S. Concrete, Inc.,
certain of U.S. Concrete’s domestic subsidiaries as guarantors, the
lenders party thereto and JPMorgan Chase Bank, N.A., as administrative
agent.
|
|
|
10.2
|
Pledge
and Security Agreement, dated as of August 31, 2010, by and among U.S.
Concrete, Inc., subsidiaries named therein and JPMorgan Chase Bank, N.A.,
as administrative agent.
|
|
|
10.3
|
Intercreditor
Agreement, dated as of August 31, 2010, by and among JPMorgan Chase Bank,
N.A., as administrative agent, U.S. Bank National Association, as
Trustee and noteholder collateral agent and each of the loan parties party
thereto.
|
|
|
10.4
|
U.S.
Concrete, Inc. Management Equity Incentive Plan.
|
|
|
10.5
|
U.S.
Concrete, Inc. Non-Qualified Stock Option Award
Agreement.
|
|
|
10.6
|
U.S.
Concrete, Inc. Restricted Stock Unit Award Agreement.
|
|
|
10.7
|
Form
of Indemnification Agreement.
|
|
|
99.1
|
Press
Release dated August 31,
2010.
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, U.S. Concrete, Inc.
has duly caused this Current Report to be signed on its behalf by the
undersigned hereunto duly authorized.
|
U.S.
CONCRETE, INC.
|
|
|
|
|
|
|
|
|
|
|
/s/ Michael
W. Harlan
|
|
Date:
August 31, 2010
|
Name:
Michael W. Harlan
|
|
|
Title
President and Chief Executive Officer
|
|
|
|
|
|
Exhibit
4.2
U.S.
CONCRETE, INC.
as
Issuer,
the
GUARANTORS named herein,
as
Guarantors,
and
U.S. BANK
NATIONAL ASSOCIATION,
as
Trustee and Noteholder Collateral Agent
________________________
INDENTURE
________________________
Dated as
of August 31, 2010
________________________
9.5%
Convertible Secured Notes due 2015
Reference
is made to the Intercreditor Agreement dated as of August 31, 2010, among
JPMorgan Chase Bank, N.A. as Bank Collateral Agent, U.S. Bank National
Association, as Trustee and Noteholder Collateral Agent, U.S. Concrete, Inc. and
each Guarantor (the “Intercreditor Agreement”). Notwithstanding
anything to the contrary contained herein, each Holder, by its acceptance of a
Note, (a) consents to the subordination of Liens provided for in the
Intercreditor Agreement, (b) agrees that it will be bound by and will take
no actions contrary to the provisions of the Intercreditor Agreement,
(c) authorizes and instructs the Trustee and Noteholder Collateral Agent to
enter into the Intercreditor Agreement as Trustee and Noteholder Collateral
Agent and on behalf of such Holder and (d) agrees that this Indenture and
the other Note Documents are subject to the terms, conditions and provisions of
the Intercreditor Agreement. The foregoing provisions are intended as
an inducement to the lenders under the Credit Agreement to extend credit and
such lenders are intended third party beneficiaries of such provisions and the
provisions of the Intercreditor Agreement.
CROSS-REFERENCE
TABLE
Trust
Indenture Act
|
|
Indenture
|
Section
|
|
Section
|
310
|
(a)(1)
|
|
9.10
|
|
(a)(2)
|
|
9.10
|
|
(a)(3)
|
|
N.A.
|
|
(a)(4)
|
|
N.A.
|
|
(a)(5)
|
|
9.08;
9.10
|
|
(b)
|
|
9.08;
9.10; 14.02
|
|
(c)
|
|
N.A.
|
311
|
(a)
|
|
9.11
|
|
(b)
|
|
9.11
|
|
(c)
|
|
N.A.
|
312
|
(a)
|
|
2.05
|
|
(b)
|
|
14.03
|
|
(c)
|
|
14.03
|
313
|
(a)
|
|
9.06
|
|
(b)(1)
|
|
9.06;
12.02
|
|
(b)(2)
|
|
9.06;
12.02
|
|
(c)
|
|
9.06;
14.02
|
|
(d)
|
|
9.06
|
314
|
(a)
|
|
6.06;
6.18; 14.02
|
|
(b)
|
|
N.A.
|
|
(c)(1)
|
|
9.02;
14.04; 14.05
|
|
(c)(2)
|
|
9.02;
14.04; 14.05
|
|
(c)(3)
|
|
N.A.
|
|
(d)
|
|
12.02;
12.03; 12.05
|
|
(e)
|
|
N.A.
|
|
(f)
|
|
N.A.
|
315
|
(a)
|
|
9.01(b);
9.02(a)
|
|
(b)
|
|
9.05;
14.02
|
|
(c)
|
|
9.01
|
|
(d)
|
|
8.05;
9.01(c)
|
|
(e)
|
|
8.11
|
316
|
(a)(last
sentence)
|
|
2.09
|
|
(a)(1)(A)
|
|
8.05
|
|
(a)(1)(B)
|
|
8.04
|
|
(a)(2)
|
|
11.02
|
|
(b)
|
|
8.07
|
|
(c)
|
|
11.05
|
317
|
(a)(1)
|
|
8.08
|
|
(a)(2)
|
|
8.09
|
|
(b)
|
|
2.04
|
318
|
(a)
|
|
14.01
|
|
(c)
|
|
14.01
|
N.A.
means Not Applicable
Note:
This Cross-Reference Table shall not, for any purpose, be deemed to be a part of
this Indenture.
TABLE OF
CONTENTS
|
|
|
Page
|
|
|
|
|
ARTICLE
ONE DEFINITIONS AND INCORPORATION BY REFERENCE
|
1
|
|
SECTION
1.01.
|
Definitions
|
1
|
|
SECTION
1.02.
|
Other
Definitions
|
37
|
|
SECTION
1.03.
|
Incorporation
by Reference of Trust Indenture Act
|
39
|
|
SECTION
1.04.
|
Rules
of Construction
|
39
|
|
|
ARTICLE
TWO THE NOTES
|
40
|
|
SECTION
2.01.
|
Form
and Dating
|
40
|
|
SECTION
2.02.
|
Execution,
Authentication and Denomination
|
41
|
|
SECTION
2.03.
|
Registrar
and Paying Agent
|
42
|
|
SECTION
2.04.
|
Paying
Agent to Hold Assets in Trust
|
43
|
|
SECTION
2.05.
|
Holder
Lists
|
43
|
|
SECTION
2.06.
|
Transfer
and Exchange
|
43
|
|
SECTION
2.07.
|
Replacement
Notes
|
44
|
|
SECTION
2.08.
|
Outstanding
Notes
|
44
|
|
SECTION
2.09.
|
Treasury
Notes
|
45
|
|
SECTION
2.10.
|
Temporary
Notes
|
45
|
|
SECTION
2.11.
|
Cancellation
|
45
|
|
SECTION
2.12.
|
Defaulted
Interest
|
45
|
|
SECTION
2.13.
|
Cusip
Numbers
|
46
|
|
SECTION
2.14.
|
Deposit
of Moneys
|
46
|
|
SECTION
2.15.
|
Book-Entry
Provisions for Global Notes
|
46
|
|
SECTION
2.16.
|
Special
Transfer and Exchange Provisions
|
48
|
|
|
ARTICLE
THREE PURCHASE AT OPTION OF HOLDERS UPON A FUNDAMENTAL CHANGE
OF CONTROL
|
53
|
|
SECTION
3.01.
|
Purchase
at the Option of Holders upon a Fundamental Change of
Control
|
53
|
|
SECTION
3.02.
|
Fundamental
Change of Control Issuer Notice
|
54
|
|
SECTION
3.03.
|
Effect
of Fundamental Change of Control Purchase Notice;
Withdrawal
|
56
|
|
SECTION
3.04.
|
Deposit
of Fundamental Change of Control Purchase Price
|
57
|
|
SECTION
3.05.
|
Notes
Purchased in Whole or in Part; Repayment to the Issuer
|
58
|
|
|
ARTICLE
FOUR REDEMPTION
|
58
|
|
SECTION
4.01.
|
Redemption
at the Option of the Issuer
|
58
|
|
SECTION
4.02.
|
Payment
of Cash Conversion Amount in Shares of Common Stock
|
60
|
|
SECTION
4.03.
|
No
other Redemption Rights
|
60
|
|
|
ARTICLE
FIVE CONVERSION
|
60
|
|
SECTION
5.01.
|
Right
to Convert
|
60
|
|
SECTION
5.02.
|
Conversion
Procedure
|
61
|
|
SECTION
5.03.
|
Settlement
upon Conversion
|
62
|
|
SECTION
5.04.
|
Adjustment
of Conversion Rate
|
63
|
|
SECTION
5.05.
|
Effect
of Reclassification, Consolidation, Merger or Sale
|
73
|
|
SECTION
5.06.
|
Adjustments
of Prices
|
74
|
|
SECTION
5.07.
|
Adjustment
Upon Fundamental Change of Control
|
74
|
|
SECTION
5.08.
|
Conversion
Event; Termination of Conversion Rights
|
78
|
|
SECTION
5.09.
|
Taxes
on Shares Issued
|
82
|
|
SECTION
5.10.
|
Reservation
of Shares; Shares to be Fully Paid; Compliance with Governmental
Requirements
|
82
|
|
SECTION
5.11.
|
Responsibility
of Trustee
|
83
|
|
SECTION
5.12.
|
Notice
to Holders Prior to Certain Actions
|
84
|
|
SECTION
5.13.
|
Conversion
Cap
|
85
|
|
SECTION
5.14.
|
General
Provisions Applicable to Conversion
|
85
|
|
|
ARTICLE
SIX COVENANTS
|
86
|
|
SECTION
6.01.
|
Payment
of Notes
|
86
|
|
SECTION
6.02.
|
Maintenance
of Office or Agency
|
86
|
|
SECTION
6.03.
|
Corporate
Existence
|
86
|
|
SECTION
6.04.
|
Payment
of Taxes
|
87
|
|
SECTION
6.05.
|
Maintenance
of Properties
|
87
|
|
SECTION
6.06.
|
Compliance
Certificate; Notice of Default
|
87
|
|
SECTION
6.07.
|
Waiver
of Stay, Extension or Usury Laws
|
88
|
|
SECTION
6.08.
|
Limitations
on Additional Indebtedness
|
88
|
|
SECTION
6.09.
|
Limitations
on Restricted Payments
|
92
|
|
SECTION
6.10.
|
Limitations
on Liens
|
95
|
|
SECTION
6.11.
|
Limitations
on Asset Sales
|
95
|
|
SECTION
6.12.
|
Limitations
on Transactions with Affiliates
|
99
|
|
SECTION
6.13.
|
Limitations
on Dividend and Other Restrictions Affecting Restricted
Subsidiaries
|
101
|
|
SECTION
6.14.
|
Additional
Note Guarantees
|
103
|
|
SECTION
6.15.
|
Further
Assurances
|
104
|
|
SECTION
6.16.
|
Reports
to Holders
|
105
|
|
SECTION
6.17.
|
Limitations
on Designation of Unrestricted Subsidiaries
|
106
|
|
SECTION
6.18.
|
Limitation
on the Issuance or Sale of Equity Interests of Restricted
Subsidiaries
|
107
|
|
SECTION
6.19.
|
Information
Regarding Collateral
|
107
|
|
SECTION
6.20.
|
Impairment
of Security Interest
|
108
|
|
SECTION
6.21.
|
Insurance
|
108
|
|
SECTION
6.22.
|
Consolidated
Secured Debt Ratio
|
108
|
|
|
ARTICLE
SEVEN SUCCESSOR CORPORATION
|
109
|
|
SECTION
7.01.
|
Mergers,
Consolidations, Etc
|
109
|
|
|
ARTICLE
EIGHT DEFAULT AND REMEDIES
|
111
|
|
SECTION
8.01.
|
Events
of Default
|
111
|
|
SECTION
8.02.
|
Acceleration
|
113
|
|
SECTION
8.03.
|
Other
Remedies
|
114
|
|
SECTION
8.04.
|
Waiver
of Past Defaults
|
114
|
|
SECTION
8.05.
|
Control
by Majority
|
114
|
|
SECTION
8.06.
|
Limitation
on Suits
|
115
|
|
SECTION
8.07.
|
Rights
of Holders to Receive Payment
|
115
|
|
SECTION
8.08.
|
Collection
Suit by Trustee
|
115
|
|
SECTION
8.09.
|
Trustee
May File Proofs of Claim
|
116
|
|
SECTION
8.10.
|
Priorities
|
116
|
|
SECTION
8.11.
|
Undertaking
for Costs
|
117
|
|
|
ARTICLE
NINE TRUSTEE
|
117
|
|
SECTION
9.01.
|
Duties
of Trustee
|
117
|
|
SECTION
9.02.
|
Rights
of Trustee
|
118
|
|
SECTION
9.03.
|
Individual
Rights of Trustee
|
119
|
|
SECTION
9.04.
|
Trustee’s
Disclaimer
|
119
|
|
SECTION
9.05.
|
Notice
of Default
|
120
|
|
SECTION
9.06.
|
Reports
by Trustee to Holders
|
120
|
|
SECTION
9.07.
|
Compensation
and Indemnity
|
120
|
|
SECTION
9.08.
|
Replacement
of Trustee
|
121
|
|
SECTION
9.09.
|
Successor
Trustee by Merger, Etc
|
122
|
|
SECTION
9.10.
|
Eligibility;
Disqualification
|
122
|
|
SECTION
9.11.
|
Preferential
Collection of Claims Against the Issuer
|
123
|
|
SECTION
9.12.
|
Notice
of Payment of Additional Interest
|
123
|
|
|
ARTICLE
TEN DISCHARGE OF INDENTURE; DEFEASANCE
|
123
|
|
SECTION
10.01.
|
Termination
of the Issuer’s Obligations
|
123
|
|
SECTION
10.02.
|
Legal
Defeasance and Covenant Defeasance
|
124
|
|
SECTION
10.03.
|
Conditions
to Legal Defeasance or Covenant Defeasance
|
125
|
|
SECTION
10.04.
|
Application
of Trust Money
|
127
|
|
SECTION
10.05.
|
Repayment
to the Issuer
|
127
|
|
SECTION
10.06.
|
Reinstatement
|
127
|
|
|
ARTICLE
ELEVEN AMENDMENTS, SUPPLEMENTS AND WAIVERS
|
128
|
|
SECTION
11.01.
|
Without
Consent of Holders
|
128
|
|
SECTION
11.02.
|
With
Consent of Holders
|
129
|
|
SECTION
11.03.
|
Compliance
with the Trust Indenture Act
|
131
|
|
SECTION
11.04.
|
Revocation
and Effect of Consents
|
131
|
|
SECTION
11.05.
|
Notation
on or Exchange of Notes
|
131
|
|
SECTION
11.06.
|
Trustee
to Sign Amendments, Etc.
|
132
|
|
|
ARTICLE
TWELVE SECURITY DOCUMENTS
|
132
|
|
SECTION
12.01.
|
Collateral
and Security Documents
|
132
|
|
SECTION
12.02.
|
Recordings
and Opinions
|
133
|
|
SECTION
12.03.
|
Release
of Collateral
|
134
|
|
SECTION
12.04.
|
Certificates
of the Trustee
|
136
|
|
SECTION
12.05.
|
Suits
to Protect the Collateral
|
136
|
|
SECTION
12.06.
|
Authorization
of Receipt of Funds by the Trustee Under the Security
Documents
|
136
|
|
SECTION
12.07.
|
Purchaser
Protected
|
136
|
|
SECTION
12.08.
|
Powers
Exercisable by Receiver or Trustee
|
137
|
|
SECTION
12.09.
|
Release
Upon Termination of the Issuer’s Obligations
|
137
|
|
SECTION
12.10.
|
Noteholder
Collateral Agent
|
138
|
|
SECTION
12.11.
|
Compensation
and Indemnity
|
142
|
|
SECTION
12.12.
|
Intercreditor
Agreement, Collateral Agreement and Other Security
Documents
|
142
|
|
|
ARTICLE
THIRTEEN NOTE GUARANTEE
|
143
|
|
SECTION
13.01.
|
Unconditional
Guarantee
|
143
|
|
SECTION
13.02.
|
Subordination
|
144
|
|
SECTION
13.03.
|
Limitation
on Guarantor Liability
|
144
|
|
SECTION
13.04.
|
Execution
and Delivery of Note Guarantee
|
144
|
|
SECTION
13.05.
|
Release
of a Guarantor
|
145
|
|
SECTION
13.06.
|
Waiver
of Subrogation
|
146
|
|
SECTION
13.07.
|
Immediate
Payment
|
146
|
|
SECTION
13.08.
|
No
Set-Off
|
147
|
|
SECTION
13.09.
|
Guarantee
Obligations Absolute
|
147
|
|
SECTION
13.10.
|
Note
Guarantee Obligations Continuing
|
147
|
|
SECTION
13.11.
|
Note
Guarantee Obligations Not Reduced
|
147
|
|
SECTION
13.12.
|
Note
Guarantee Obligations Reinstated
|
147
|
|
SECTION
13.13.
|
Note
Guarantee Obligations Not Affected
|
148
|
|
SECTION
13.14.
|
Waiver
|
149
|
|
SECTION
13.15.
|
No
Obligation to Take Action Against the Issuers
|
149
|
|
SECTION
13.16.
|
Dealing
with the Issuer and Others
|
149
|
|
SECTION
13.17.
|
Default
and Enforcement
|
150
|
|
SECTION
13.18.
|
Acknowledgment
|
150
|
|
SECTION
13.19.
|
Costs
and Expenses
|
150
|
|
SECTION
13.20.
|
No
Merger or Waiver; Cumulative Remedies
|
150
|
|
SECTION
13.21.
|
Survival
of Note Guarantee Obligations
|
150
|
|
SECTION
13.22.
|
Note
Guarantee in Addition to Other Guarantee Obligations
|
151
|
|
SECTION
13.23.
|
Severability
|
151
|
|
SECTION
13.24.
|
Successors
and Assigns
|
151
|
|
|
ARTICLE
FOURTEEN MISCELLANEOUS
|
151
|
|
SECTION
14.01.
|
Trust
Indenture Act Controls
|
151
|
|
SECTION
14.02.
|
Notices
|
151
|
|
SECTION
14.03.
|
Communications
by Holders with Other Holders
|
152
|
|
SECTION
14.04.
|
Certificate
and Opinion as to Conditions Precedent
|
152
|
|
SECTION
14.05.
|
Statements
Required in Certificate or Opinion
|
153
|
|
SECTION
14.06.
|
Rules
by Paying Agent or Registrar
|
153
|
|
SECTION
14.07.
|
Legal
Holidays
|
153
|
|
SECTION
14.08.
|
Governing
Law
|
153
|
|
SECTION
14.09.
|
No
Adverse Interpretation of Other Agreements
|
154
|
|
SECTION
14.10.
|
No
Recourse Against Others
|
154
|
|
SECTION
14.11.
|
Successors
|
154
|
|
SECTION
14.12.
|
Duplicate
Originals
|
154
|
|
SECTION
14.13.
|
Severability
|
154
|
|
SECTION
14.14.
|
Senior
Indebtedness
|
154
|
|
SECTION
14.15.
|
Intercreditor
Agreement Governs
|
154
|
|
SECTION
14.16.
|
Intercreditor
Agreement, Collateral Agreement and Security Documents
|
155
|
|
SECTION
14.17.
|
Calculations
|
155
|
|
SECTION
14.18.
|
Waiver
of Jury Trial
|
155
|
|
SECTION
14.19.
|
Force
Majeure.
|
155
|
|
|
|
|
Signatures
|
S-1
|
Exhibit
A
|
-
|
Form
of Note
|
Exhibit
B
|
-
|
Form
of Notation of Subsidiary Guarantee
|
Exhibit
C
|
-
|
Form
of Legends
|
Exhibit
D
|
-
|
Form
of Certificate To Be Delivered in Connection with Transfers of Temporary
Regulation S Global Note
|
Exhibit
E
|
-
|
Form
of Certificate To Be Delivered in Connection with Transfers to Non-QIB
Accredited Investors
|
Exhibit
F
|
-
|
Form
of Certificate To Be Delivered in Connection with Transfers Pursuant to
Regulation S
|
Exhibit
G
|
-
|
Common
Stock Legend
|
Exhibit
H
|
-
|
Form
of Conversion Event Notice
|
Exhibit
I
|
-
|
Form
of Fundamental Change of Control Purchase Notice
|
Exhibit
J
|
-
|
Form
of Election Notice
|
Schedule
I
|
-
|
Reference
Table for Calculation of Additional Shares
|
Schedule
II
|
-
|
Net
Book Values of Real Properties
|
Note:
This
Table of Contents shall not, for any purpose, be deemed to be part of this
Indenture.
INDENTURE
dated as of August 31, 2010 among U.S. Concrete, Inc., a Delaware corporation
(the “
Issuer
”), and each
of the guarantors named herein and from time to time a party hereto (each, a
“
Guarantor
” and
together, the “
Guarantors
”), and U.S. Bank
National Association, a national banking association, as Trustee (the “
Trustee
”).
The
Issuer has duly authorized the creation of an issue of 9.5% Convertible Secured
Notes due 2015 and, to provide therefor, the Issuer and the Guarantors have duly
authorized the execution and delivery of this Indenture. All things
necessary to make the Notes, when duly issued and executed by the Issuer and
authenticated and delivered hereunder, the valid and binding obligations of the
Issuer and to make this Indenture a valid and binding agreement of the Issuer
and the Guarantors has been done.
For and
in consideration of the premises and the purchase of the Notes by the Holders
thereof, the parties hereto covenant and agree, for the equal and proportionate
benefit of all Holders, as follows:
ARTICLE ONE
DEFINITIONS
AND INCORPORATION BY REFERENCE
SECTION 1.01.
|
Definitions.
|
Set forth
below are certain defined terms used in this Indenture.
“
10-day VWAP
” means the average
of the daily volume weighted average price of the Issuer’s Common Stock on the
national securities exchange or over-the-counter market (e.g., OTC Bulletin
Board or Pink OTC Markets Inc.) on which the Common Stock is then listed or
quoted for trading as reported by Bloomberg L.P. (based on the Trading Day from
9:30 a.m. (New York City time) to 4:02 p.m. (New York City
time)) for the relevant 10 consecutive Trading Days when such formula is
used.
“
144A Global Note
” has the
meaning given to such term in Section 2.01.
“
ABL Collateral
” means “ABL
Priority Collateral” as defined in the Intercreditor Agreement.
“
ABL Debt
” means all
Indebtedness and letters of credit of the Issuer or any Subsidiary of the Issuer
outstanding under any ABL Facility and all other Obligations under any ABL
Facility (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization of the Issuer or any Subsidiary of the Issuer,
regardless of whether or not a claim for post-filing interest is allowed in such
proceedings).
“
ABL Facility
” means one or
more debt facilities (including the Credit Agreement), indentures or commercial
paper facilities or other agreements, in each case with banks or other lenders
or investors providing for credit loans, notes, receivables financing (including
through the sale of receivables to such lenders or to special purpose entities
formed to borrow from such lenders against such receivables) or letters of
credit, in each case, as amended, restated, amended and restated, modified,
supplemented, renewed, refunded, replaced, restructured or refinanced in whole
or in part from time to time (including any agreement extending the maturity
thereof or increasing the amount of available borrowings thereunder or adding
additional borrowers or guarantors thereunder), whether by the same or any other
agent, lender or group of lenders (or any affiliate of such agent, lender or
group of lenders).
“
Acquired Indebtedness
” means
(1) with respect to any Person that becomes a Restricted Subsidiary after
the Issue Date, Indebtedness of such Person and its Subsidiaries existing at the
time such Person becomes a Restricted Subsidiary whether or not incurred in
connection with, or in contemplation of, such Person becoming a Restricted
Subsidiary and (2) with respect to the Issuer or any Restricted Subsidiary,
any Indebtedness of a Person (other than the Issuer or a Restricted Subsidiary)
existing at the time such Person is merged with or into the Issuer or a
Restricted Subsidiary, or Indebtedness expressly assumed by the Issuer or any
Restricted Subsidiary in connection with the acquisition of an asset or assets
from another Person, whether or not such Indebtedness was incurred by such other
Person in connection with, or in contemplation of, such merger or
acquisition.
“
Additional Interest
” has the
meaning set forth in the Registration Rights Agreement.
“
Additional Shares
” has the
meaning specified in Section 5.07.
“
Affiliate
” of any Person means
any other Person which directly or indirectly controls or is controlled by, or
is under direct or indirect common control with, the referent
Person. For purposes of Section 6.12 only, Affiliates shall be
deemed to include, with respect to any Person, any other Person (1) which
beneficially owns 10% or more of any class of the Voting Stock of the referent
Person or (2) of which 10% or more of the Voting Stock is beneficially
owned by the referenced Person. For purposes of this definition and
the definition of “Permitted Holder,” “
control
” of a Person shall
mean the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise.
“
Agent
” means any Registrar or
Paying Agent.
“
amend
” means to amend,
supplement, restate, amend and restate, renew , replace or otherwise modify; and
“
amendment
” shall have a
correlative meaning.
“
asset
” means any asset or
property.
“
Asset Acquisition
”
means
(1) An
Investment by the Issuer or any Restricted Subsidiary of the Issuer in any other
Person if, as a result of such Investment, such Person shall become a Restricted
Subsidiary of the Issuer, or shall be merged with or into the Issuer or any
Restricted Subsidiary of the Issuer, or
(2) The
acquisition by the Issuer or any Restricted Subsidiary of the Issuer of all or
substantially all of the assets of any other Person or any division or line of
business of any other Person.
“
Asset Sale
” means any sale,
issuance, conveyance, transfer, lease, assignment or other disposition by the
Issuer or any Restricted Subsidiary to any Person other than the Issuer or any
Restricted Subsidiary (including by means of a sale and leaseback transaction or
a merger or consolidation or sale of Equity Interests of any Restricted
Subsidiary (other than directors’ qualify shares)) (collectively, for purposes
of this definition, a “
transfer
”), in one transaction
or a series of related transactions, of any assets of the Issuer or any of its
Restricted Subsidiaries other than in the ordinary course of
business. For purposes of this definition, the term “Asset Sale”
shall not include:
(1) Transfers
of cash or Cash Equivalents;
(2) Transfers
of assets (including Equity Interests) that are governed by, and made in
accordance with, Section 7.01 or any transfer that constitutes a
Fundamental Change of Control under this Indenture;
(3) Permitted
Investments and Restricted Payments permitted under
Section 6.09;
(4) The
creation or realization of any Lien permitted under this Indenture;
(5) Transfers
of surplus, damaged, worn-out or obsolete equipment or assets that, in the
Issuer’s reasonable judgment, are no longer used or useful in the business of
the Issuer or its Restricted Subsidiaries;
(6) Sales
or grants of licenses or sublicenses to use the patents, trade secrets, know-how
and other intellectual property, and licenses, leases or subleases of other
assets, of the Issuer or any Restricted Subsidiary to the extent not materially
interfering with the business of the Issuer and the Restricted
Subsidiaries;
(7) Any
transfer or series of related transfers that, but for this clause, would be
Asset Sales, if after giving effect to such transfers, the aggregate Fair Market
Value of the assets transferred in such transaction or any such series of
related transactions does not exceed $5.0 million;
(8) To
the extent allowable under Section 1031 of the Internal Revenue Code of
1986, any exchange of assets for like property (excluding any boot thereon) for
use in a business similar to that of the Issuer or any Restricted Subsidiary;
provided
, that if any
property that is so disposed is Collateral, the Issuer or the applicable
Restricted Subsidiary will provide Liens on such exchanged for like property
under and in accordance with this Indenture and the Security
Documents;
(9) The
unwinding of any Hedging Obligations;
(10) Any
sale and leaseback transactions permitted by this Indenture;
(11) Any
issuance or sale of Equity Interests in, or Indebtedness or other securities of,
an Unrestricted Subsidiary;
(12) The
lease or sublease of any real or personal property in the ordinary course of
business;
(13) The
transfer, sale or other disposition resulting from any condemnation or other
taking of, any property or assets of the Issuer or any Restricted
Subsidiary;
(14) Any
sale or transfer of any interest in the Excluded Joint Venture; and
(15) Termination
of leases and subleases.
“
Asset Sale Proceeds Account
”
means one or more deposit accounts or securities accounts holding the proceeds
of any sale or disposition of any Notes Collateral.
“
Attributable Debt
” means in
respect of a sale and leaseback transaction means, at the time of determination,
the present value of the obligation of the lessee for net rental payments during
the remaining term of the lease included in such sale and leaseback transaction
including any period for which such lease has been extended or may, at the
option of the lessor, be extended. Such present value shall be
calculated using a discount rate equal to the rate of interest implicit in such
transaction, determined in accordance with GAAP;
provided, however
, that if
such sale and leaseback transaction results in a Capitalized Lease Obligation,
the amount of Indebtedness represented thereby will be determined in accordance
with the definition of “Capitalized Lease Obligations.”
“
Bank Collateral Agent
” means
JPMorgan Chase Bank, N.A. and any successor under the Credit Agreement, or if
there is no Credit Agreement, the “Collateral Agent” designated pursuant to the
terms of any ABL Facility.
“
Banking Services
” means each
and any of the following bank services provided to the Issuer or any Subsidiary
by any lender under an ABL Facility or any of its Affiliates: (a)
credit cards for commercial customers (including, without limitation,
“commercial credit cards” and purchasing cards), (b) stored value cards and (c)
treasury management services (including, without limitation, controlled
disbursement, automated clearinghouse transactions, return items, overdrafts and
interstate depository network services).
“
Banking Services Obligations
”
of a Person means any and all obligations of such Person, whether absolute or
contingent and howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and substitutions
therefor) in connection with Banking Services.
“
Bankruptcy Law
” means Title 11
of the United States Code, as amended, or any similar federal or state law for
the relief of debtors.
“
Board of Directors
” means,
with respect to any Person, (i) in the case of any corporation, the board
of directors of such Person, (ii) in the case of any limited liability
company, the board of managers of such Person, (iii) in the case of any
partnership, the Board of Directors of the general partner of such Person and
(iv) in any other case, the functional equivalent of the foregoing or, in
each case, other than for purposes of the definition of “Fundamental Change of
Control,” any duly authorized committee of such body.
“
Business Day
” means a day
other than a Saturday, Sunday or other day on which banking institutions in the
City of New York are authorized or required by law to close.
“
Capital Stock
” means, with
respect to any Person, any and all shares of stock of a corporation, partnership
interests or other equivalent interests (however designated, whether voting or
non-voting and in such Person’s equity, entitling the holder to receive a share
of the profits and losses, and a distribution of assets, after liabilities, of
such Person).
“
Capitalized Lease
” means a
lease required to be capitalized for financial reporting purposes in accordance
with GAAP.
“
Capitalized Lease Obligations
”
of any Person means the obligations of such Person to pay rent or other amounts
under a Capitalized Lease, and the amount of such obligation shall be the
capitalized amount thereof determined in accordance with GAAP.
“
Cash Equivalents
”
means:
(1) Marketable
obligations issued or directly and fully guaranteed or insured by the United
States or any agency or instrumentality thereof (
provided,
that the full faith
and credit of the United States is pledged in support thereof), maturing within
360 days of the date of acquisition thereof;
(2) Demand
and time deposits and certificates of deposit or acceptances, maturing within
360 days of the date of acquisition thereof, of any financial institution that
is a member of the Federal Reserve System having combined capital and surplus
and undivided profits of not less than $500 million and is assigned at least a
“B” rating by Thomson Financial BankWatch;
(3) Readily
marketable direct obligations (or certificates representing an ownership
interest in such obligations) of any state of the United States of America
(including any agency or instrumentality thereof) for the payment of which the
full faith and credit of such state is pledged and which are not callable or
redeemable at the issuer’s option,
provided
that:
(i) the
long-term debt of such state is rated, at the time of the Investment, “A-3” or
“A-” or higher according to Moody’s or S&P (or such similar equivalent
rating by at least one “nationally recognized statistical rating organization”
(as defined in Rule 436 under the Securities Act)); and
(ii) such
obligations mature not more than one year from the date of acquisition
thereof;
(4) Commercial
paper maturing no more than 270 days from the date of creation thereof issued by
a corporation that is not the Issuer or an Affiliate of the Issuer, and is
organized under the laws of any State of the United States or the District of
Columbia and rated at least A-1 by S&P or at least P-1 by
Moody’s;
(5) Repurchase
obligations with a term of not more than 30 days for underlying securities of
the types described in clause (1) above entered into with any commercial bank
meeting the specifications of clause (2) above; and
(6) Investments
in money market or other mutual funds substantially all of whose assets comprise
securities of the types described in clauses (1) through (5) above.
“
Close of Business
” means
5:00 p.m. New York City time.
“
Collateral
” means all the
assets and properties subject to the Liens created by the Security Documents
(which shall not include Excluded Assets).
“
Collateral Agreement
” means
the Pledge and Security Agreement dated the Issue Date (as amended, amended and
restated, supplemented renewed, refunded, replaced, restructured or otherwise
modified from time to time, whether by the same or any other agent, lender or
group of lenders (or any affiliate of such agent, lender or group of lenders)
among the Issuer, the Guarantors party thereto and the Noteholder Collateral
Agent.
“
Common Stock
” means the common
stock, $0.001 par value per share, of the Issuer as it exists on the date of
this Indenture or any other shares of capital stock of the Issuer into which the
Common Stock shall be reclassified or changed or, in the event of a merger,
consolidation or other similar transaction involving the Issuer that is
otherwise permitted hereunder in which the Issuer is not the surviving
corporation, the common stock, common equity interests or depositary shares or
other certificates representing common equity interests of such surviving
corporation or its direct or indirect parent corporation.
“
Consolidated Amortization
Expense
” for any period means the amortization expense and depletion
expense of the Issuer and the Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
“
Consolidated Cash Flow
” for
any period means, without duplication, the sum of the amounts for such period
of
(1) Consolidated
Net Income,
plus
(2) In
each case only to the extent (and in the same proportion) deducted in
determining Consolidated Net Income and with respect to the portion of
Consolidated Net Income attributable to any Restricted Subsidiary only if a
corresponding amount would be permitted at the date of determination to be
distributed to the Issuer by such Restricted Subsidiary without prior approval
(that has not been obtained), pursuant to the terms of its charter and all
agreements (other than any municipal loan or related agreements entered into in
connection with the incurrence of industrial revenue bonds), instruments,
judgments, decrees, orders, statutes, rules and governmental regulations
applicable to such Restricted Subsidiary or its stockholders,
(a) Consolidated
Income Tax Expense,
(b) Consolidated
Amortization Expense (but only to the extent not included in Consolidated
Interest Expense),
(c) Consolidated
Depreciation Expense,
(d) Consolidated
Interest Expense,
(e) Restructuring
Expenses, and
(f) All
other non-cash items reducing the Consolidated Net Income (excluding any
non-cash charge that results in an accrual of a reserve for cash charges in any
future period) for such period,
in each
case determined on a consolidated basis in accordance with GAAP,
minus
(3) The
aggregate amount of all non-cash items, determined on a consolidated basis, to
the extent such items increased Consolidated Net Income for such period
(excluding (i) the accrual of revenue consistent with past practice and (ii)
reversals of prior accruals on reserves for cash items previously included in
the calculation of Consolidated Cash Flow, in each case in accordance with
GAAP).
“
Consolidated Depreciation
Expense
” for any period means the depreciation expense of the Issuer and
the Restricted Subsidiaries for such period, determined on a consolidated basis
in accordance with GAAP.
“
Consolidated Income Tax
Expense
” for any period means the provision for taxes of the Issuer and
the Restricted Subsidiaries for such period, determined on a consolidated basis
in accordance with GAAP.
“
Consolidated Interest Expense
”
for any period means the sum, without duplication, of the total interest expense
(less interest income) of the Issuer and the Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP and including
without duplication,
(1) Imputed
interest on Capitalized Lease Obligations,
(2) Commissions,
discounts and other fees and charges owed with respect to letters of credit
securing financial obligations, bankers’ acceptance financing and receivables
financings,
(3) The
net costs associated with Hedging Obligations,
(4) The
interest portion of any deferred payment obligations,
(5) All
other non-cash interest expense,
(6) Capitalized
interest,
(7) The
product of (a) all dividend payments on any series of Disqualified Equity
Interests of the Issuer or any Preferred Stock of any Restricted Subsidiary
(other than any such Disqualified Equity Interests or any Preferred Stock held
by the Issuer or a Wholly Owned Restricted Subsidiary or to the extent paid in
Qualified Equity Interests),
multiplied by
(b) a
fraction, the numerator of which is one and the denominator of which is one
minus
the then current
combined federal, state and local statutory tax rate of the Issuer and the
Restricted Subsidiaries, expressed as a decimal,
(8) All
interest payable with respect to discontinued operations, and
(9) All
interest on any Indebtedness described in clause (7) or (8) of the definition of
“Indebtedness”;
provided,
that such interest
shall be included in Consolidated Interest Expense only to the extent that the
amount of the related Indebtedness is reflected on the balance sheet of the
Issuer or any Restricted Subsidiary,
less
, to the extent included
in such total interest expense, (A) the amortization during such period of
capitalized financing costs associated with the Transactions and (B) the
amortization during such period of other capitalized financing
costs.
Consolidated
Interest Expense shall be calculated excluding unrealized gains and losses with
respect to Hedging Obligations.
“
Consolidated Net Income
” for
any period means the net income (or loss) of the Issuer and the Restricted
Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP;
provided,
that there shall be excluded from such net income (or loss) (to the extent
otherwise included therein), without duplication:
(1) The
net income (or loss) of any Person (other than a Restricted Subsidiary) in which
any Person other than the Issuer and the Restricted Subsidiaries has an
ownership interest, except to the extent that cash in an amount equal to any
such income has actually been received by the Issuer or any of its Wholly Owned
Restricted Subsidiaries during such period;
(2) Except
to the extent includible in the consolidated net income of the Issuer pursuant
to the foregoing clause (1) or otherwise in accordance with the definition of
Consolidated Secured Debt Ratio, the net income (or loss) of any Person that
accrued prior to the date that (a) such Person becomes a Restricted
Subsidiary or is merged into or consolidated with the Issuer or any Restricted
Subsidiary or (b) the assets of such Person are acquired by the Issuer or
any Restricted Subsidiary;
(3) The
net income of any Restricted Subsidiary during such period to the extent that
the declaration or payment of dividends or similar distributions by such
Restricted Subsidiary of that income at the date of determination is not
permitted, directly or indirectly by operation of the terms of its charter or
any agreement (other than any municipal loan or related agreements entered into
in connection with the incurrence of industrial revenue bonds), instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Subsidiary or its stockholders during such period, unless otherwise waived,
except that the Issuer’s equity in a net loss of any such Restricted Subsidiary
for such period shall be included in determining Consolidated Net
Income;
(4) Net
income (loss) from disposed or discontinued operations and any gain (or loss) in
disposal of discontinued operations;
(5) Any
gain (or loss), together with any related provisions for taxes on any such gain
(or the tax effect of any such loss), realized during such period by the Issuer
or any Restricted Subsidiary upon (a) the acquisition of any securities, or
the extinguishment of any Indebtedness, of the Issuer or any Restricted
Subsidiary or (b) any Asset Sale (including for purposes of this clause (5)
any asset sale contemplated by clause (14) of the definition of Asset Sale) by
the Issuer or any Restricted Subsidiary;
(6) Gains
and losses due solely to fluctuations in currency values and the related tax
effects according to GAAP;
(7) Unrealized
gains and losses with respect to Hedging Obligations;
(8) The
cumulative effect of any change in accounting principles;
(9) Any
amortization or write-offs of debt issuance or deferred financing costs,
premiums and prepayment penalties, and all other costs and expenses, in each
case, paid or charged during such period to the extent attributable to the
Transactions;
(10) Gains
and losses realized upon the refinancing of any Indebtedness of the Issuer or
any Restricted Subsidiary;
(11) Any
extraordinary, nonrecurring or unusual gain (or extraordinary, nonrecurring or
unusual loss), together with any related provision for taxes on any such
extraordinary, nonrecurring or unusual gain (or the tax effect of any such
extraordinary, nonrecurring or unusual loss) (including, other than for purposes
of Section 6.09, any Restructuring Expenses, any expenses or charges
related to any issuance of Equity Interests, Investments, acquisition,
disposition, recapitalization or issuance, repayment, refinancing, amendment or
modification of Indebtedness) realized by the Issuer or any Restricted
Subsidiary during such period;
(12) Non-cash
compensation charges or other non-cash expenses or charges arising from the
grant of or issuance or repricing of Equity Interests or other equity-based
awards or any amendment or substitution of any such Equity Interests or other
equity-based awards;
(13) Any
goodwill or asset impairment charges or write-offs subsequent to the Issue Date
or amortization of other intangibles, in each case in accordance with
GAAP;
(14) Any
expenses or reserves for liabilities to the extent that the Issuer or any
Restricted Subsidiary is entitled to indemnification therefor under binding
agreements;
provided,
that any liabilities for which the Issuer or such Restricted Subsidiary is not
actually indemnified shall reduce Consolidated Net Income in the period in which
it is determined that the Issuer or such Restricted Subsidiary will not be
indemnified;
(15) Any
restoration to income of any contingency reserve, except to the extent that
provisions for such reserve was made out of Consolidated Net Income accrued at
any time following the Issue Date;
(16) Any
charges or credits relating to the adoption of fresh start accounting
principles;
(17) Without
duplication of clause (5) above, any net after-tax gains or losses (less all
fees and expenses or charges relating thereto) attributable to the early
extinguishment of Indebtedness, Hedging Obligations or other derivative
instruments entered in relation to the Indebtedness extinguished;
and
(18) Any
gain or loss resulting from mark-to-market requirement of any derivative
security, including the Notes.
In
addition, any return of capital with respect to an Investment that increased the
Restricted Payments Basket pursuant to Section 6.09(a)(ii)(4) or decreased
the amount of Investments outstanding pursuant to clause (16) the definition of
“Permitted Investments” shall be excluded from Consolidated Net Income for
purposes of calculating the Restricted Payments Basket.
“
Consolidated Net Tangible
Assets
” means the aggregate amount of assets of the Issuer (less
applicable reserves and other properly deductible items) after deducting
therefrom (to the extent otherwise included therein) (a) all current
liabilities (other than the obligations under this Indenture or current
maturities of long-term Indebtedness), and (b) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the books and records of the Issuer and the
Restricted Subsidiaries on a consolidated basis and in accordance with
GAAP.
“
Consolidated Secured Debt
Ratio
” means, as of any date of determination, the ratio of
(a) consolidated total Indebtedness of the Issuer and its Restricted
Subsidiaries on the date of determination that constitutes the Notes, any Other
Pari Passu Lien Obligations and any indebtedness incurred under the Credit
Agreement (including any letters of credit issued thereunder) to (b) the
aggregate amount of Consolidated Cash Flow for the then most recent four fiscal
quarters for which internal financial statements of the Issuer and its
Restricted Subsidiaries are available (the “
Four-Quarter Period
”) ending
on or prior to the relevant date of determination (the “
Relevant Determination
Date
”). For purposes of this definition, Consolidated Cash
Flow shall be calculated after giving effect on a pro forma basis for the period
of such calculation to:
(1) The
incurrence of any Indebtedness or the issuance of any Preferred Stock of the
Issuer or any Restricted Subsidiary (and the application of the proceeds
thereof) and any repayment, repurchase, redemption, defeasance or other
discharge of Indebtedness or redemption of other Preferred Stock (and the
application of the proceeds therefrom) (other than the incurrence or repayment
of Indebtedness in the ordinary course of business for working capital purposes
pursuant to any revolving credit arrangement) occurring during the Four-Quarter
Period or at any time subsequent to the last day of the Four-Quarter Period and
on or prior to the Relevant Determination Date, as if such incurrence,
repayment, repurchase or redemption, defeasance or other discharge of or
issuance, as the case may be (and the application of the proceeds thereof),
occurred on the first day of the Four-Quarter Period; and
(2) Any
Asset Sale or Asset Acquisition (including, without limitation, any Asset
Acquisition giving rise to the need to make such calculation as a result of the
Issuer or any Restricted Subsidiary (including any Person who becomes a
Restricted Subsidiary as a result of such Asset Acquisition) incurring Acquired
Indebtedness and also including any Consolidated Cash Flow occurring during the
Four-Quarter Period or at any time subsequent to the last day of the
Four-Quarter Period and on or prior to the Relevant Determination Date, as if
such Asset Sale or Asset Acquisition (including the incurrence of, or assumption
or liability for, any such Indebtedness or Acquired Indebtedness) occurred on
the first day of the Four-Quarter Period.
For
purposes of this definition, whenever pro forma effect is to be given to any pro
forma event, the pro forma calculations will be made on a basis that is
consistent with Article 11 of Regulation S-X under the Securities Act and
shall include, for the avoidance of doubt, synergies, operating improvements,
operating expense reductions and other cost savings to the extent allowable,
calculated in accordance with Article 11 of Regulation S-X under the Securities
Act. If any Indebtedness bears a floating rate of interest and is
being given pro forma effect, the interest on such Indebtedness will be
calculated as if the rate in effect on the Relevant Determination Date had been
the applicable rate for the entire period (taking into account any Hedging
Obligations applicable to such Indebtedness if such Hedging Obligations have a
remaining term in excess of 12 months as of the Relevant Determination
Date).
“
Contribution Indebtedness
”
means Indebtedness of the Issuer or any Restricted Subsidiary in an aggregate
principal amount equal to the product of (i) the aggregate amount of cash
contributions (other than Excluded Contributions, Restricted Payments made
pursuant to Section 6.09(b)(ii) or Disqualified Stock) or cash contributed
by the Issuer or a Restricted Subsidiary of the Issuer) made to the common
equity capital of the Company or any Restricted Subsidiary after the Issue Date
multiplied by (ii) 0.50.
“
Conversion Agent
” means the
Trustee or such other office or agency designated by the Issuer where the Notes
may be presented for conversion.
“
Conversion Event
” shall be
deemed to occur on the first Trading Day following the date that the closing
price of the Issuer’s Common Stock (as reported by Bloomberg L.P.) for at least
20 Trading Days in a period of 30 consecutive Trading Days exceeds 150% of the
Conversion Price.
“
Conversion Price
” means, per
share of Common Stock, $1,000 divided by the applicable Conversion Rate, subject
to adjustment as set forth herein.
“
Conversion Rate
” means
initially 95.23809524 shares of Common Stock per $1,000 principal amount of
Notes, subject to adjustment as set forth herein.
“
Corporate Trust Office
” means
the corporate trust office of the Trustee located at 150 Fourth Avenue
North, 2
nd
Floor,
Nashville, Tennessee 37219, Attention: Corporate Trust Department, or such other
office, designated by the Trustee by written notice to the Issuer, at which at
any particular time its corporate trust business shall be
administered.
“
Credit Agreement
” means the
Credit Agreement dated the Issue Date by and among the Issuer, as Borrower,
JPMorgan Chase Bank, N.A, as administrative agent, and JPMorgan Securities Inc.,
as Sole Book-runner and Lead Arranger, Wells Fargo Capital Finance, LLC, as
Documentation Agent and Lead Arranger, the lenders named therein, including any
notes, guarantees, collateral and security documents, instruments and agreements
executed in connection therewith, and in each case as amended, restated, amended
and restated, supplemented, extended, renewed, refunded, replaced, restructured
or refinanced in whole or in part from time to time.
“
Custodian
” means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
“
Default
” means (1) any
Event of Default or (2) any event, act or condition that, after notice or
the passage of time or both, would be an Event of Default.
“
Depositary
” means The
Depository Trust Company, New York, New York, or a successor thereto
registered under the Exchange Act or other applicable statute or
regulation.
“
Designated Preferred Stock
”
means preferred stock of the Issuer (other than Disqualified Equity Interests)
that is issued for cash (other than to the Issuer or any of its Subsidiaries or
an employee stock plan or trust established by the Issuer or any of its
Subsidiaries) and is so designated as Designated Preferred Stock, pursuant to an
Officers’ Certificate, on the date of issuance thereof, the cash proceeds of
which are excluded from the calculation set forth in Section 6.09(a)(ii)(2)
hereof.
“
Discharge of ABL Debt
” means
(a) the payment in cash of all obligations outstanding and unpaid under the ABL
Facility (including, without limitation, principal, interest, break-funding and
increased cost reimbursement, fees and expenses) and the cash collateralization
or other satisfactory arrangement of letters of credit then outstanding
thereunder, in each case, contemporaneously with or after the termination or
expiration of commitments under such ABL Facility and (b) the payment in cash or
cash collateralization of Swap Obligations and Banking Services Obligations that
are secured by a Lien on ABL Collateral.
“
Disqualified Equity Interests
”
of any Person means any class of Equity Interests of such Person that, by its
terms, or by the terms of any related agreement or of any security into which it
is convertible, puttable or exchangeable, is, or upon the happening of any event
or the passage of time would be, required to be redeemed by such Person, whether
or not at the option of the holder thereof, or matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, in whole or in
part, on or prior to the date which is 91 days after the final Maturity Date of
the Notes;
provided
,
however
, that any class
of Equity Interests of such Person that, by its terms, authorizes such Person to
satisfy in full its obligations with respect to the payment of dividends or upon
maturity, redemption (pursuant to a sinking fund or otherwise) or repurchase
thereof or otherwise by the delivery of Equity Interests that are not
Disqualified Equity Interests, and that is not convertible, puttable or
exchangeable for Disqualified Equity Interests or Indebtedness, will not be
deemed to be Disqualified Equity Interests so long as such Person satisfies its
obligations with respect thereto solely by the delivery of Equity Interests that
are not Disqualified Equity Interests;
provided
,
further
,
however
, that any Equity
Interests that would not constitute Disqualified Equity Interests but for
provisions thereof giving holders thereof (or the holders of any security into
or for which such Equity Interests is convertible, exchangeable or exercisable)
the right to require the Issuer to redeem such Equity Interests upon the
occurrence of a change in control or an asset sale occurring prior to the 91st
day after the final Maturity Date of the Notes shall not constitute Disqualified
Equity Interests if the change in control or asset sale provisions applicable to
such Equity Interests are no more favorable to such holders than the provisions
set forth in Article Three and Section 6.11 respectively, and such
Equity Interests provide that the Issuer will not redeem any such Equity
Interests pursuant to such provisions prior to the Issuer’s purchase of the
Notes as required pursuant to the provisions set forth in Article Three and
6.11 respectively.
“
Equity Interests
” of any
Person means (1) any and all shares or other equity interests (including
common stock, preferred stock, limited liability company interests and
partnership interests) in such Person and (2) all rights to purchase,
warrants or options (whether or not currently exercisable), participations or
other equivalents of or interests in (however designated) such shares or other
interests in such Person.
“
Exchange Act
” means the U.S.
Securities Exchange Act of 1934, as amended.
“
Excluded Assets
” means
(a) Excluded Equity, (b) those assets that would constitute ABL
Collateral but as to which the Bank Collateral Agent shall not have required a
lien or security interest (other than such forbearance by the Bank Collateral
Agent after the Discharge of ABL Debt, (c) any Trademark (as defined in the
Collateral Agreement) applications filed in the United States Patent and
Trademark Office on the basis of any Grantor’s, as applicable, “intent-to-use”
such trademark, unless and until acceptable evidence of use of the Trademark (as
defined in the Collateral Agreement) has been filed with the United States
Patent and Trademark Office pursuant to Section 1(c) or Section 1(d)
of the Lanham Act (15 U.S.C. 1051, et seq.),
provided
that any such
Trademark (as defined in the Collateral Agreement) applications shall
automatically be included in the Collateral upon the filing of acceptable
evidence of use of such Trademark (as defined in the Collateral Agreement),
(d) Equipment (as defined in the Collateral Agreement) and the related
accessions and proceeds owned by any Grantor that is subject to a purchase money
Lien or a Capital Lease to the extent such purchase money Lien or Capital Lease
is a Permitted Lien if the contract to other agreement in which such Lien is
granted (or in the documentation providing for such Capital Lease or purchase
money lien) prohibits or requires the consent of any Person other than a Grantor
as a condition to the creation of any other Lien on such Equipment, (e) any
interest in any real property (other than Material Real Property or Collateral
constituting As-Extracted Collateral), including without limitation any
leasehold interests (other than solely to the extent required to create and
perfect a security interest in as-extracted collateral which is part of the ABL
Collateral), (f) any assets the perfection of which would require notation
of a lien on a certificate of title (other than solely to the extent such assets
are part of the ABL Collateral) and (g) Special Property other than the
following:
(a) The
right to receive any payment of money (including Accounts, General Intangibles
and Payment Intangibles) or any other rights referred to in Sections 9-406,
9-407, 9-408, 9-409 of the UCC to the extent that such Sections of the UCC
are effective to limit the prohibitions or restrictions which make such property
“Special Property”; and
(b) Any
Proceeds, substitutions or replacements of any Special Property (unless such
Proceeds, substitutions or replacements would constitute Special
Property).
“
Excluded Contributions
” means
the net cash proceeds or Cash Equivalents received by the Issuer after the Issue
Date from:
(1) contributions
to its common equity capital; and
(2) the
sale (other than to the Issuer or to a Subsidiary of the Issuer or to any
management equity plan or stock option plan or any other management or employee
benefit plan or agreement of the Issuer or any Subsidiary of the Issuer) of
Qualified Equity Interests (other than Disqualified Stock and Designated
Preferred Stock) of the Issuer;
in each
case designated as Excluded Contributions pursuant to an Officers’ Certificate,
the proceeds of which are excluded from the calculation set forth in
Section 6.09(a)(ii)(2) hereof.
“
Excluded Equity
” means Equity
Interests solely to the extent:
(a) In
excess of 66% of the issued and outstanding voting Equity Interests of any
Foreign Subsidiary;
(b) Equity
Interests issued by the Excluded Joint Venture; or
(c) The
inclusion of such Equity Interests in the Collateral would require separate
financial statements for a Subsidiary of the Issuer to be filed with the SEC (or
any successor federal agency) pursuant to Rule 3-16 of Regulation S-X
(or any successor law or regulation), as in effect from time to
time.
“
Excluded Joint Venture
” means
Superior Materials Holdings LLC and its direct and indirect
Subsidiaries.
“
Ex-Dividend Date
” means the
first date on which the Common Stock trade on the applicable exchange or in the
applicable market, regular way, without the right to receive the relevant
issuance or distribution.
“
Fair Market Value
” means, with
respect to any asset, the price (after taking into account any liabilities
relating to such asset) that would be negotiated in an arm’s-length transaction
for cash between a willing seller and a willing and able buyer, neither of which
is under any compulsion to complete the transaction. Fair Market
Value (other than of any asset with a public trading market) in excess of $5.0
million shall be determined by the Board of Directors of the Issuer acting
reasonably and in good faith and shall be evidenced by a board resolution
delivered to the Trustee. Fair Market Value (other than of any asset
with a public trading market) in excess of $20.0 million shall be determined by
an Independent Financial Advisor, which determination shall be evidenced by an
opinion addressed to the Board of Directors of the Issuer and delivered to the
Trustee.
“
Foreign Subsidiary
” means any
Restricted Subsidiary of the Issuer which is not organized under the laws of
(x) the United States or any state thereof or (y) the District of
Columbia.
“
Four-Quarter Period
” has the
meaning given to such term in the definition of “Consolidated Secured Debt
Ratio.”
“
Fundamental
Change of Control
” will be
deemed to occur at such time as:
(i) The
Issuer consolidates with or merges with or into another Person (other than any
Subsidiary of the Issuer and its outstanding Voting Stock is reclassified into,
converted for or converted into the right to receive any other property or
security, or the Issuer sells, conveys, transfers or leases all or substantially
all of its properties and assets to any Person (other than its Subsidiary);
provided
, that the
foregoing shall not constitute a Fundamental Change of Control if
(x) Persons that beneficially own the Issuer’s Voting Stock immediately
prior to the transaction own, directly or indirectly, a majority of the Voting
Stock of the surviving or transferee Person immediately after the transaction in
substantially the same proportion as their ownership of the Issuer’s Voting
Stock immediately prior to the transaction or (y) such transaction is a
consolidation, merger or sale, lease, conveyance or other disposition the
purpose of which is to effect the Issuer’s redomiciling;
(ii) Any
“person” or “group”, other than the Issuer or any of its Subsidiaries or any
employee benefit plan of the Issuer or such Subsidiary, is or becomes the
“beneficial owner,” directly or indirectly, of more than 50% of the total voting
power in the aggregate of all classes of the Issuer’s capital stock then
outstanding and entitled to vote generally in elections of directors;
or
(iii) During
any period of 12 consecutive months after the Issue Date, Persons who at the
beginning of such 12 month period constituted the Issuer’s Board of Directors,
together with any new Persons whose election was approved by a vote of a
majority of the Persons then still comprising its Board of Directors who were
either members of the Board of Directors at the beginning of such period or
whose election, designation or nomination for election was previously so
approved, cease for any reason to constitute a majority of the Issuer’s Board of
Directors.
For
purposes of this definition, (i) ”beneficial owner” is used as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, (ii) ”group” has the meaning
it has in Sections 13(d) and 14(d) of the Exchange Act and
(iii) ”person” is used with the same meaning as that used within Rule 13d-3
under the Exchange Act, in each case whether or not applicable.
A
“Fundamental Change of Control” shall be deemed not to have occurred in the case
of a merger or consolidation described in clause (i) of the definition of
Fundamental Change of Control if (x) at least 90% of the consideration paid
for the Issuer’s Common Stock (other than cash payments for fractional shares
and cash payments pursuant to dissenter’s appraisal rights) in the merger or
consolidation consists of common stock of a United States or non-United States
company traded on a United States national securities exchange (or which will be
so traded or quoted when issued or exchanged in connection with such
transaction) and (y) the market capitalization of the acquiror in such
merger or consolidation is at least equal to or greater than the market
capitalization of the Issuer on the Trading Day immediately preceding the day on
which such merger or consolidation is publicly announced.
“
GAAP
” means generally accepted
accounting principles set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession of the United
States, as in effect on the Issue Date.
“
Grantors
” means the Issuer and
the Guarantors.
“
guarantee
” means a direct or
indirect guarantee by any Person of any Indebtedness of any other Person and
includes any obligation, direct or indirect, contingent or otherwise, of such
Person: (1) to purchase or pay (or advance or supply funds for
the purchase or payment of) Indebtedness of such other Person (whether arising
by virtue of partnership arrangements, or by agreements to keep-well, to
purchase assets, goods, securities or services (unless such purchase
arrangements are on arm’s-length terms and are entered into in the ordinary
course of business), to take-or-pay, or to maintain financial statement
conditions or otherwise); or (2) entered into for purposes of assuring in
any other manner the obligee of such Indebtedness of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part);
“
guarantee
,” when used
as a verb, and “
guaranteed
” have correlative
meanings.
“
Guarantors
” means
(1) each Restricted Subsidiary of the Issuer on the Issue Date (other than
any Foreign Subsidiaries and the Excluded Joint Venture) and (2) each other
Person that is required to, or at the election of the Issuer does, become a
Guarantor by the terms of this Indenture after the Issue Date, in each case,
until such Person is released from its Note Guarantee in accordance with the
terms of this Indenture.
“
Hedging Obligations
” of any
Person means the obligations of such Person under swap, cap, collar, forward
purchase or similar agreements or arrangements dealing with interest rates,
currency exchange rates or commodity prices, either generally or under specific
contingencies.
“
Holder
” means any registered
holder, from time to time, of the Notes.
“
incur
” means, with respect to
any Indebtedness or Obligation, incur, create, issue, assume, guarantee or
otherwise become directly or, indirectly liable, contingently or otherwise, with
respect to such Indebtedness or Obligation;
provided,
that (1) the
Indebtedness of a Person existing at the time such Person became a Restricted
Subsidiary shall be deemed to have been incurred by such Restricted Subsidiary
and (2) the accrual of interest, the accretion of original issue discount
or the accretion or accumulation of dividends on any Equity Interests shall not
be deemed to be an incurrence of Indebtedness.
“
Indebtedness
” of any Person at
any date means, without duplication:
(1) All
liabilities, contingent or otherwise, of such Person for borrowed
money;
(2) All
obligations of such Person evidenced by bonds, debentures, notes, other similar
instruments or letters of credit (or reimbursement obligations with respect
thereto);
(3) All
reimbursement obligations of such Person in respect of letters of credit,
letters of guaranty, bankers’ acceptances and similar credit
transactions;
(4) All
obligations of such Person to pay the deferred and unpaid purchase price of
property or services due more than 60 days after such property is acquired or
services completed, except trade payables and accrued expenses incurred by such
Person in the ordinary course of business in connection with obtaining goods,
materials or services;
(5) The
amount of all Disqualified Equity Interests of such Person calculated in
accordance with GAAP (whether classified as debt, equity or
mezzanine);
(6) All
Capitalized Lease Obligations of such Person or Attributable Debt in respect of
sale and leaseback transactions;
(7) All
Indebtedness of others secured by a Lien on any asset of such Person, whether or
not such Indebtedness is assumed by such Person;
(8) All
Indebtedness of others guaranteed by such Person to the extent of such
guarantee;
provided,
that Indebtedness of the Issuer or its Subsidiaries that is guaranteed by the
Issuer or the Issuer’s Subsidiaries shall only be counted once in the
calculation of the amount of Indebtedness of the Issuer and its Subsidiaries on
a consolidated basis;
(9) To
the extent not otherwise included in this definition, Hedging Obligations of
such Person;
(10) All
obligations of such Person under conditional sale or other title retention
agreements relating to assets purchased by such Person, except trade payables
incurred by such Person in the ordinary course of business; and
(11) Indebtedness
of any partnership in which such Person is a general partner (other than to the
extent that the instrument or agreement evidencing such Indebtedness expressly
provides that such Indebtedness is recourse only to the partnership and not to
the general partner).
The
amount of any Indebtedness which is incurred at a discount to the principal
amount at maturity thereof as of any date shall be deemed to have been incurred
at the accreted value thereof as of such date. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above, the maximum liability
of such Person for any such contingent obligations at such date and, in the case
of clause (7), the lesser of (a) the Fair Market Value of any asset subject
to a Lien securing the Indebtedness of others on the date that the Lien attaches
and (b) the amount of the Indebtedness secured.
Notwithstanding
the foregoing, Indebtedness shall not include any liability for Federal, state,
local or other taxes owed or owing to any governmental entity.
“
Indenture
” means this
Indenture, as amended or supplemented from time to time in accordance with the
terms hereof.
“
Independent Financial Advisor
”
means an accounting, appraisal or investment banking firm of nationally
recognized standing that is, in the reasonable judgment of the Issuer’s Board of
Directors, disinterested and independent with respect to the Issuer and its
Affiliates.
“
Institutional Accredited
Investor
” or “
IAI
” means an “accredited
investor” with the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
“
Intercreditor Agreement
” means
the Intercreditor Agreement dated as of the Issue Date among the Bank Collateral
Agent, the Trustee, the Noteholder Collateral Agent, the Issuer and each
Guarantor, as it may be amended, amended and restated, modified, supplemented,
extended, renewed or replaced from time to time in accordance with the Indenture
or other intercreditor agreements among the Trustee, the Noteholder Collateral
Agent, an agent for lenders providing an ABL Facility from time to time, in each
case as it may be amended, modified, supplemented, extended, renewed or
replaced.
“
interest
” means, with respect
to the Notes, unless the context requires otherwise, interest and Additional
Interest, if any, on the Notes.
“
Interest Payment Date
” means
the Stated Maturity of an installment of interest on the Notes and shall mean
each March 1, June 1, September 1 and December 1 of each year.
“
Investments
” of any Person
means, with respect to any Person, all direct or indirect investments by such
Person in other Persons (including Affiliates) in the form of:
(1) All
loans, advances or capital contributions or other credit extensions constituting
Indebtedness of such other Person, and any guarantee of Indebtedness of any
other Person;
(2) All
purchases (or other acquisitions for consideration) by such Person of
Indebtedness, Equity Interests or other securities of any other Person (other
than any such purchase that constitutes a Restricted Payment of the type
described in clause (2) of the definition thereof);
(3) All
other items that would be classified as investments on a balance sheet of such
Person prepared in accordance with GAAP; and
(4) The
Designation of any Subsidiary as an Unrestricted Subsidiary.
Except as
otherwise expressly specified in this definition, the amount of any Investment
(other than an Investment made in cash) shall be the Fair Market Value thereof
on the date such Investment is made. The amount of Investment
pursuant to clause (4) shall be the Designation Amount determined in accordance
with Section 6.17. If the Issuer or any Restricted Subsidiary
sells or otherwise disposes of any Equity Interests of any Restricted
Subsidiary, or any Restricted Subsidiary issues any Equity Interests, in either
case, such that, after giving effect to any such sale or disposition, such
Person is no longer a Restricted Subsidiary, the Issuer shall be deemed to have
made an Investment on the date of any such sale or other disposition equal to
the Fair Market Value of the Equity Interests of and all other Investments in
such Restricted Subsidiary retained. Notwithstanding the foregoing,
purchases or redemptions of Equity Interests of the Issuer shall be deemed not
to be Investments.
“
Issue Date
” means the date on
which the Notes are originally issued.
“
Last Reported Sale Price
” of
Common Stock on any Trading Day means the closing sale price per share (or if no
closing sale price is reported, the average of the bid and ask prices or, if
more than one, the average of the average bid and the average ask prices) on
that day as reported on the principal United States securities exchange on which
shares of Common Stock are then traded. If the Common Stock is not
listed for trading on a United States national securities exchange on the
relevant date, the “Last Reported Sale Price” of Common Stock will be the last
quoted bid price per share of Common Stock in the over-the-counter market on the
relevant date as reported by the OTC Bulletin Board or Pink OTC Markets Inc. or
similar organization on which the Common Stock is then quoted. If the
Common Stock is not so quoted, the “Last Reported Sale Price” of Common Stock
will be as determined by a United States nationally recognized securities dealer
retained by the Issuer for that purpose. The “Last Reported Sale
Price” of Common Stock will be determined without reference to extended or after
hours trading.
“
Lien
” means, with respect to
any asset, any mortgage, deed of trust, lien (statutory or other), pledge,
charge, security interest or other encumbrance of any kind or nature in respect
of such asset, whether or not filed, recorded or otherwise perfected under
applicable law, including any conditional sale or other title retention
agreement.
“
Material Real Property
” means
any owned real property (or any interest in owned real property) having a net
book value in excess of $700,000.
“
Maturity Date
” means August
31, 2015.
“Maximum ABL Debt Amount”
means, on any date of determination, the amount of (i) (1) the aggregate
principal amount of ABL Debt then outstanding (with letters of credit being
deemed to have a principal amount equal to the maximum potential liability of
the Issuer and the Restricted Subsidiaries thereunder) which principal amount
shall not exceed $80.0 million
less
(2) to the extent a permanent repayment and/or commitment reduction
is required thereunder as a result of the application, the aggregate amount of
Net Available Proceeds applied to repayments under the Credit Agreement in
accordance with Section 6.11,
plus
(ii) the aggregate
amount of all then outstanding Banking Services Obligations and the then
applicable net aggregate obligation amount of all then outstanding Swap
Obligations incurred with any lender under an ABL Facility (or an affiliate of
such lender), in the case of each of the obligations under this clause (ii), to
the extent secured under any ABL Facility,
plus
(iii) all accrued and
unpaid interest
accruing in
respect of or attributable to, but only in respect of or attributable to, the
aggregate principal amount of ABL Debt at any one time not to exceed the amount
referred to in clause (i) above, fees, indemnities (other than unasserted,
contingent indemnity obligations) and other obligations (other than principal
and interest) relating to the foregoing.
“
Moody’s
” means Moody’s
Investors Service, Inc. and its successors.
“
Mortgages
” means mortgages,
deeds of trust, leasehold mortgages, assignments of leases and rents,
modifications and other security documents delivered pursuant to
Section 6.15.
“
Net Available Proceeds
” means,
with respect to any Asset Sale, the proceeds thereof in the form of cash or Cash
Equivalents, net of
(1) Brokerage
commissions and other fees and expenses (including fees, discounts and expenses
of legal counsel, accountants, investment banks, consultants and placement
agents) of such Asset Sale;
(2) Provisions
for taxes payable as a result of such Asset Sale (after taking into account any
available tax credits or deductions and any tax sharing
arrangements);
(3) Amounts
required to be paid to any Person (other than the Issuer or any Restricted
Subsidiary) owning a beneficial interest in the assets subject to the Asset Sale
or having a Lien thereon;
(4) Payments
of unassumed liabilities (not constituting Indebtedness) relating to the assets
sold at the time of, or within 30 days after the date of, such Asset
Sale;
(5) Appropriate
amounts to be provided by the Issuer or any Restricted Subsidiary, as the case
may be, as a reserve required in accordance with GAAP against any adjustment in
the sale price of such asset or assets or liabilities associated with such Asset
Sale and retained by the Issuer or any Restricted Subsidiary, as the case may
be, after such Asset Sale, including pensions and other postemployment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale, all as
reflected in an Officers’ Certificate delivered to the Trustee;
provided
,
however
, that any amounts
remaining after adjustments, revaluations or liquidations of such reserves shall
constitute Net Available Proceeds; and
(6) Any
portion of the purchase price from an Asset Sale placed in escrow (whether as a
reserve for adjustment of the purchase price, or for satisfaction of indemnities
in respect of such Asset Sale) in accordance with GAAP;
provided
,
however
, that the termination
of any such escrow, Net Available Proceeds shall be increased by the amount of
any portion of funds released from escrow to the Issuer or any Restricted
Subsidiary.
“
Non-Recourse Indebtedness
”
means:
(1) As
to which neither the Issuer nor any Restricted Subsidiary (a) provides
credit support of any kind (including any undertaking, agreement or instrument
that would constitute Indebtedness), (b) is directly or indirectly liable
as a guarantor or otherwise, or (c) constitutes the lender;
(2) No
default with respect to which would permit upon notice, lapse of time or both
any holder of any other Indebtedness of the Issuer or any Restricted Subsidiary
to declare a default on such other Indebtedness or cause the payment of the
Indebtedness to be accelerated or payable prior to its Stated Maturity;
and
(3) As
to which the lenders have been notified or acknowledged in writing that they
will not have any recourse to the stock (other than the stock of an Unrestricted
Subsidiary pledged by the Issuer or any Restricted Subsidiary) or assets of the
Issuer and the Restricted Subsidiaries.
“
Non-U.S. Person
” has the
meaning assigned to such term in Regulation S.
“
Note Documents
” means the
Notes, the Notes Guarantees, the Indenture, the Security Documents, the
Registration Rights Agreement and the Intercreditor Agreement.
“
Note Guarantee
” means the
guarantee by each Guarantor of the Issuer’s payment obligations under this
Indenture and the Notes, executed pursuant to this Indenture.
“
Noteholder Collateral Agent
”
means U.S. Bank National Association, as Noteholder Collateral Agent, and any
successor thereto in such capacity.
“
Noteholder Secured Parties
”
means the Trustee, Noteholder Collateral Agent, each Holder and each other
holder of, or obligee in respect of, any obligations in respect of the Notes
outstanding at such time and the beneficiaries of each indemnification
obligation undertaken by a Note Party under any Note Document.
“
Note Parties
” means the Issuer
and the Guarantors.
“
Notes
” means, collectively,
the Issuer’s 9.5% Convertible Secured Notes due 2015 issued in accordance with
Section 2.02 treated as a single class of securities under this Indenture,
as amended or supplemented from time to time in accordance with the terms of
this Indenture.
“
Notes Collateral
” means
substantially all of the assets (excluding all Excluded Assets) that are owned
or hereafter acquired by the Issuer or by any Guarantor to the extent pledged or
required to be pledged to secure the Notes on a first-priority basis in favor of
the Noteholder Secured Parties in accordance with the Intercreditor Agreement,
this Indenture and the Security Documents, including, to the extent constituting
Collateral, all to the extent owned or hereafter acquired by the Issuer or by
any Guarantor, (i) Equity Interests in any Subsidiary of the Issuer, (ii)
Material Real Property, (iii) Equipment (other than mixer trucks), (iv)
Intellectual Property, (v) other Collateral to the extent not constituting
ABL Collateral and (v) Proceeds of Notes Collateral, including the Asset Sale
Proceeds Account;
provided
that after the
Discharge of ABL Debt secured by the ABL Collateral and subject to the terms,
conditions and provisions of the Intercreditor Agreement, this Indenture and the
Security Documents, all Collateral shall constitute Notes
Collateral. All capitalized terms used in this definition and not
otherwise defined in this Indenture shall have the meaning attributed thereto in
the Uniform Commercial Code for the State of New York.
“
Obligation
” means any
principal (when due, upon acceleration, upon redemption, upon mandatory
repayment or repurchase pursuant to a mandatory offer to purchase or otherwise),
premium, interest, penalties, fees, indemnification, reimbursements, costs,
expenses, damages and other liabilities payable under the documentation
governing any Indebtedness, including all interest accrued or accruing after the
commencement of any bankruptcy, insolvency or reorganization or similar case or
proceeding at the contract rate (including, without limitation, any contract
rate applicable upon default) specified in the relevant documentation, whether
or not the claim for such interest is allowed as a claim in such case or
proceeding.
“
Offering Memorandum
” means the
offering memorandum of the Issuer relating to the offering of the Notes dated
August 16, 2010 (including any documents incorporated by reference
therein).
“
Officer
” means any of the
following of the Issuer: the Chairman of the Board of Directors, the
Chief Executive Officer, the Chief Financial Officer, the President, any Vice
President, the Treasurer or the Secretary.
“
Officers’ Certificate
” means a
certificate signed by two Officers.
“
Open of Business
” means
9:00 a.m. New York City time.
“
Opinion of Counsel
” means a
written opinion from legal counsel who is reasonably acceptable to the
Trustee. The counsel may be an employee of, or counsel to, the
Issuer, a Guarantor or the Trustee.
“
Other Pari Passu Lien
Obligations
” means any other Refinancing Indebtedness that refinances or
refunds (or successive refinancings and refundings) any Notes and all
Obligations with respect to such Indebtedness;
provided
, that such
Indebtedness shall (a) have a stated maturity date that is equal to or
longer than the Notes, (b) contain terms and covenants that are no more
restrictive than the terms and covenants under the Notes, (c) contain terms
and covenants that are more restrictive than the terms and covenants under the
Notes so long as prior to or substantially simultaneously with the issuance of
any such Indebtedness, the Notes and the Indenture are amended to contain any
such more restrictive terms and covenants and (d) be secured by an interest
in the Collateral that ranks
pari passu
or junior to the
security interest and Liens of the Noteholder Collateral Agent in the Collateral
for the benefit of the Noteholder Secured Parties.
“
Pari Passu Indebtedness
” means
any Indebtedness of the Issuer or any Guarantor that ranks
pari
passu
in right of payment
with the Notes or the Note Guarantees, as applicable.
“
Perfection Certificate
” shall
mean any Perfection Certificate substantially in the form delivered on the Issue
Date.
“
Permanent Regulation S Global
Note
” has the meaning given to such term in
Section 2.01.
“
Permitted Business
” means the
businesses engaged in by the Issuer and its Subsidiaries on the Issue Date as
described in the Offering Memorandum and businesses that are reasonably related
thereto, reasonable extensions thereof or necessary or desirable to facilitate
any such business, and any unrelated business to the extent that it is not
material in size as compared with the Issuer’s business as a whole.
“
Permitted Investment
”
means:
(1) (i) Investments
by the Issuer or any Guarantor in (a) any Restricted Subsidiary that is a
Guarantor or (b) any Person that will become immediately after such
Investment a Restricted Subsidiary that is a Guarantor or that will merge or
consolidate into the Issuer or any Restricted Subsidiary that is a Guarantor and
(ii) Investments by any Restricted Subsidiary that is not a Guarantor in
any other Restricted Subsidiary;
(2) Investments
in the Issuer by any Restricted Subsidiary;
(3) Hedging
Obligations incurred in compliance with Section 6.08;
(4) Cash
and Cash Equivalents;
(5) Receivables
and trade credit owing to the Issuer or any Restricted Subsidiary if created or
acquired in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms;
provided, however,
that such
trade terms may include such concessionary trade terms as the Issuer or any such
Restricted Subsidiary deems reasonable under the circumstances;
(6) Investments
in securities of trade creditors or customers received upon foreclosure or
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade creditors or customers;
(7) Investments
made by the Issuer or any Restricted Subsidiary as a result of consideration
received in connection with an Asset Sale made in compliance with
Section 6.11;
(8) Lease,
utility and other similar deposits in the ordinary course of
business;
(9) Investments
made by the Issuer or a Restricted Subsidiary for consideration consisting only
of Qualified Equity Interests;
(10) Stock,
obligations or securities received in settlement of debts created in the
ordinary course of business and owing to the Issuer or any Restricted Subsidiary
or in satisfaction of judgments;
(11) Guarantees
of Indebtedness permitted to be incurred under this Indenture;
(12) Advances,
loans, rebates and extensions of credit to suppliers, customers and vendors in
the ordinary course of business in an aggregate amount, together with the
aggregate amount of Indebtedness under clause (xiii) of the definition of
“Permitted Indebtedness” not to exceed $2.5 million at any time
outstanding;
(13) Payroll,
travel, relocation, commission and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as operating
expenses for accounting purposes and that are made in the ordinary course of
business;
(14) Investments
in existence on the Issue Date (including Investments in the Excluded Joint
Venture) or made pursuant to binding commitments existing on the Issue Date and
any Investment consisting of an extension, modification, renewal, replacement,
refunding or refinancing of any Investment existing on, or made pursuant to a
binding commitment existing on the Issue Date;
provided
that the amount of
such Investment may be increased (a) as required by the terms of such Investment
as in existence on the date of this Indenture or (b) as may otherwise be
permitted under this Indenture;
(15) Prepaid
expenses, negotiable instruments held for collection and workers’ compensation,
performance and other similar deposits in the ordinary course of
business;
(16) Investments
in an aggregate amount not to exceed, at any one time outstanding, not to exceed
the greater of $5.0 million and 2.5% of Consolidated Net Tangible Assets at the
time of such Investment (with each Investment being valued as of the date made
and without regard to subsequent changes in value);
(17) Investments
by the Issuer and its Restricted Subsidiaries consisting of deposits, prepayment
and other credits to suppliers or landlords made in the ordinary course of
business, including such Investments in connection with the entry into any new
hauling arrangements contemplated as of the date of this
Indenture;
(18) Any
Investment acquired by the Issuer or any of its Restricted Subsidiaries
(a) in exchange for any other Investment or accounts receivable held by the
Issuer or any such Restricted Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of the Issuer of such
other Investment or accounts receivable, or (b) as a result of a
foreclosure by the Issuer or any of its Restricted Subsidiaries with respect to
any secured Investment or other transfer of title with respect to any secured
Investment in default;
(19) Any
Investment by the Issuer or a Restricted Subsidiary of the Issuer in a Person
engaged in a Permitted Business (other than an Investment in an Unrestricted
Subsidiary) having an aggregate Fair Market Value, taken together with all other
Investments made pursuant to this clause (19) that are at the time outstanding,
not to exceed the greater of (a) $15.0 million and (b) 10% of Consolidated Net
Tangible Assets at the time of such Investment (with the Fair Market Value of
each Investment being measured at the time made and without giving effect to
subsequent changes in value), at any one time outstanding;
provided
,
however
, that if any
Investment pursuant to this clause (19) is made in any Person that is not a
Restricted Subsidiary of the Issuer at the date of the making of such Investment
and such Person becomes a Restricted Subsidiary of the Issuer after such date,
such Investment shall thereafter be deemed to have been made pursuant to clause
(1) above and shall cease to have been made pursuant to this clause (19) for so
long as such Person continues to be a Restricted Subsidiary;
(20) Investments
consisting of the licensing, sublicensing or contribution of intellectual
property pursuant to joint marketing arrangements with other
Persons;
(21) Investments
acquired after the date of this Indenture as a result of the acquisition by the
Issuer or any Restricted Subsidiary of the Issuer of another Person, including
by way of a merger, amalgamation or consolidation with or into the Issuer or any
of its Restricted Subsidiaries in a transaction that is not prohibited by
Article Seven hereof after the date of this Indenture to the extent that
such Investments were not made in contemplation of such acquisition, merger,
amalgamation or consolidation and were in existence on the date of such
acquisition, merger, amalgamation or consolidation;
(22) Investments
consisting of purchases and acquisitions of inventory, supplies, materials and
equipment or purchases of contract rights or licenses of intellectual property
or leases, in each case, in the ordinary course of business;
(23) Any
acquisition of assets or Equity Interests solely in exchange for, or out of the
net cash proceeds received from, the issuance of Equity Interests (other than
Disqualified Stock) of the Issuer or any contribution to the common equity of
the Issuer;
provided
that the amount of any such net cash proceeds that are utilized for any such
Investment pursuant to this clause (23) will be excluded from
Section 6.09(a)(ii)(4);
(24)
Investments
by the Issuer or any Restricted Subsidiary in the Excluded Joint Venture in an
aggregate amount not to exceed $7.0 million
; and
(25) For
purposes of this definition, in the event that a proposed Investment (or portion
thereof) meets the criteria of more than one of the categories of Permitted
Investments described in clause (1) through (24) above, or is otherwise
entitled to be incurred or made pursuant to Section 6.09, the Issuer will
be entitled to classify, or later reclassify, such Investment (or portion
thereof) in one or more of such categories set forth above or pursuant to
Section 6.09.
The
amount of Investments outstanding at any time pursuant to clause (16) above
shall be deemed to be reduced:
(a) Upon
the disposition or repayment of or return on any Investment made pursuant to
clause (16) above, as the case may be, by an amount equal to the return of
capital with respect to such Investment to the Issuer or any Restricted
Subsidiary (to the extent not included in the computation of Consolidated Net
Income); and
(b) Upon
a Redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, by an
amount equal to the lesser of (x) the Fair Market Value of the Issuer’s
proportionate interest in such Subsidiary immediately following such
Redesignation, and (y) the aggregate amount of Investments in such
Subsidiary that increased (and did not previously decrease) the amount of
Investments outstanding pursuant to clause (16).
“
Permitted Liens
” means the
following types of Liens:
(1) Liens
on the Collateral securing the ABL Debt not to exceed the Maximum ABL Debt
Amount and Banking Services Obligations and Swap Obligations (whose priority
shall be governed by the Intercreditor Agreement);
(2) Liens
for taxes, assessments or governmental charges or claims either (a) not
delinquent or (b) contested in good faith by appropriate proceedings and as
to which the Issuer or the Restricted Subsidiaries shall have set aside on its
books such reserves or other appropriate provisions as may be required pursuant
to GAAP;
(3) Statutory
Liens of landlords and Liens of carriers, warehousemen, mechanics, suppliers,
materialmen, repairmen and other Liens imposed by law incurred in the ordinary
course of business for sums not yet delinquent or being contested in good faith,
if such reserve or other appropriate provision, if any, as shall be required by
GAAP shall have been made in respect thereof;
(4) Liens
incurred or deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money);
(5) Liens
upon specific items of inventory or other goods and proceeds of any Person
securing such Person’s obligations in respect of bankers’ acceptances issued or
created for the account of such Person to facilitate the purchase, shipment or
storage of such inventory or other goods;
(6) Judgment
Liens not giving rise to a Default so long as such Liens are adequately bonded
and any appropriate legal proceedings which may have been duly initiated for the
review of such judgment have not been finally terminated or the period within
which the proceedings may be initiated has not expired, which are being
contested in good faith and for which adequate reserves have been made to the
extent required by GAAP;
(7) Survey
exceptions, easements, rights-of-way, zoning restrictions, non-monetary
encumbrances and other similar charges, restrictions or encumbrances in respect
of real property or immaterial imperfections of title which do not, in the
aggregate, impair in any material respect the ordinary conduct of the business
of the Issuer and the Restricted Subsidiaries taken as a whole;
(8) Liens
securing reimbursement obligations with respect to letters of credit which
encumber documents and other assets relating to such letters of credit and
products and proceeds thereof;
(9) Liens
encumbering deposits made to secure obligations arising from statutory,
regulatory, contractual or warranty requirements of the Issuer or any Restricted
Subsidiary, including rights of offset and setoff;
(10) (A) Bankers’
Liens, rights of setoff and other similar Liens existing solely with respect to
cash and Cash Equivalents on deposit in one or more accounts maintained by the
Issuer or any Restricted Subsidiary, in each case granted in the ordinary course
of business in favor of the bank or banks with which such accounts are
maintained, securing amounts owing to such bank with respect to cash management
and operating account arrangements, including those involving pooled accounts
and netting arrangements;
provided,
that in no case
shall any such Liens secure (either directly or indirectly) the repayment of any
Indebtedness; and (B) Liens (i) of a collection bank arising under
Section 4-208 of the Uniform Commercial Code (or equivalent statutes) on
items in the course of collection and (ii) in favor of a banking
institution arising as a matter of law encumbering deposits (including the right
of set-off) and which are within the general parameters customary in the banking
industry;
(11) Leases
or subleases granted to others that do not materially interfere with the
ordinary course of business of the Issuer or any Restricted
Subsidiary;
(12) Liens
arising from filing precautionary Uniform Commercial Code financing statements
regarding leases;
(13) Liens
securing the Notes outstanding on the Issue Date, and Liens securing Other Pari
Passu Lien Obligations, the Note Guarantees relating thereto and any Obligations
with respect to such Notes, Other Pari Passu Liens Obligations and Note
Guarantees;
provided,
that such Liens with respect to Other Pari Passu Lien Obligations do not extend
to any additional assets not securing the Notes;
(14) Liens
existing on the Issue Date securing Indebtedness outstanding on the Issue
Date;
(15) Liens
in favor of the Issuer or a Guarantor;
(16) Liens
securing Indebtedness and related obligations (including Hedging Obligations and
cash management obligations incurred in the ordinary course and not for
speculative purposes) permitted pursuant to clauses (iv) or (viii)(a) of
Section 6.08(b) and Refinancing Indebtedness of such, in each case, to the
extent such Liens in respect of Hedging Obligations are subject to the
Intercreditor Agreement or another intercreditor agreement substantially
consistent with and no less favorable to the Holders in any material respect
than the Intercreditor Agreement and treated as “ABL Priority Liens” (as defined
in the Intercreditor Agreement) under the applicable intercreditor
agreement;
(17) Liens
securing Purchase Money Indebtedness and Capitalized Lease Obligations;
provided,
that such Liens
shall not extend to any asset other than the specified asset being financed and
additions and improvements thereon;
(18) Liens
securing Indebtedness permitted to be incurred under Section 6.08(b)(xi);
provided,
that the
Liens securing such Indebtedness (i) are solely on acquired property or Equity
Interests of the acquired entity, and the proceeds thereof or (ii) do not extend
to assets not subject to such Lien at the time of acquisition (other than
improvements thereon) and are no more favorable to the lienholders than those
securing such Indebtedness prior to the incurrence of such Indebtedness by the
Issuer or a Restricted Subsidiary;
(19) Liens,
other than those securing Indebtedness permitted to be incurred under
Section 6.08, on assets of a Person existing at the time such Person is
acquired or merged with or into or consolidated with the Issuer or any such
Restricted Subsidiary (and not created in anticipation or contemplation
thereof);
(20) Liens
to secure Refinancing Indebtedness of Indebtedness secured by Liens referred to
in the foregoing clauses (13), (16) ,(17), (18), (19) and this clause (20);
provided,
that such
Liens (i) do not extend to any additional assets (other than improvements
thereon and replacements thereof and proceeds) and (ii) are of the same priority
as any such Liens prior to such refinancing;
(21) Liens
in favor of customs and revenue authorities arising as a matter of law to secure
payment of customs duties in connection with the importation of
goods;
(22) Liens
with respect to obligations that do not in the aggregate exceed $5.0 million at
any one time outstanding;
(23) Liens
encumbering property or assets under construction arising from progress or
partial payments by a customer of the Issuer or any of its Restricted
Subsidiaries relating to such property or assets;
(24) Liens
on property of, or on shares of stock or Indebtedness of, any Person existing at
the time (A) such Person becomes a Restricted Subsidiary of the Issuer or
(B) such Person or such property is acquired by the Issuer or any
Restricted Subsidiary;
provided,
that such Liens do
not extend to any other assets of the Issuer or any Restricted Subsidiary and
such Lien secures only those obligations which it secures on the date of such
acquisition (and extensions, renewals, refinancings and replacements
thereof);
(25) Liens
solely on any cash earnest money deposits made by the Issuer or any of its
Restricted Subsidiaries in connection with any letter of intent or purchase
agreement permitted under this Indenture;
(26) Liens
encumbering reasonable customary initial deposits and margin deposits and
similar Liens attaching to brokerage accounts incurred in the ordinary course of
business and not for speculative purposes;
(27) Liens
on insurance policies and proceeds thereof, or other deposits, to secure
insurance premium financings;
(28) Liens
on cash, Cash Equivalents or other property arising in connection with the
defeasance, discharge or redemption of Indebtedness;
(29) Liens
arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into in the ordinary course of
business;
(30) Customary
Liens granted in favor of a trustee (including the Trustee) to secure fees and
other amounts owing to such trustee under an indenture or other agreement
pursuant to which Indebtedness not prohibited by this Indenture is issued
including this Indenture;
(31) Liens
on assets or the Capital Stock of Foreign Subsidiaries securing Indebtedness of
Foreign Subsidiaries to the extent not pledged as Notes Collateral;
and
(32) (i)
With respect to real property owned by the Issuer or applicable Restricted
Subsidiary, Liens encumbering any leases or subleases of real property leased to
a third party and not incurred in connection with Indebtedness, which do not
materially distract from the use of the property subject thereto and that do
not, in the aggregate, impair in any material respect the ordinary conduct of
the business of the Issuer and the Restricted Subsidiaries, taken as a whole and
(ii) with respect to any real property leased by the Issuer or any Restricted
Subsidiary, any Liens on the title of such property not created by the Issuer or
the Restricted Subsidiary, as applicable.
For
purposes of determining compliance with this definition, (a) Permitted
Liens need not be incurred solely by reference to one category of Permitted
Liens described above but are permitted to be incurred in part under any
combination thereof and (b) in the event that a Lien (or any portion
thereof) meets the criteria of one or more categories of Permitted Liens
described above, the Issuer shall, in its sole discretion, classify (or later
reclassify) such item of Permitted Liens (or any portion thereof) in any manner
that complies with this definition and will only be required to include the
amount and type of such item of Permitted Liens in one of the above clauses and
such Lien will be treated as having been incurred pursuant to only one of such
clauses.
“
Person
” means any individual,
corporation, partnership, limited liability company, joint venture, incorporated
or unincorporated association, joint-stock company, trust, unincorporated
organization or government or other agency or political subdivision thereof or
other entity of any kind.
“
Plan of Liquidation
” with
respect to any Person, means a plan that provides for, contemplates or the
effectuation of which is preceded or accompanied by (whether or not
substantially contemporaneously, in phases or
otherwise): (1) the sale, lease, conveyance or other disposition
of all or substantially all of the assets of such Person otherwise than as an
entirety or substantially as an entirety; and (2) the distribution of all
or substantially all of the proceeds of such sale, lease, conveyance or other
disposition of all or substantially all of the remaining assets of such Person
to holders of Equity Interests of such Person.
“
Preferred Stock
” means, with
respect to any Person, any and all preferred or preference stock or other equity
interests (however designated) of such Person whether now outstanding or issued
after the Issue Date.
“
principal
” means, with respect
to the Notes, the principal of, and premium, if any, on the Notes.
“
Private Placement Legend
”
means the legends initially set forth on the Notes in the form set forth in
Exhibit C
.
“
Purchase Money Indebtedness
”
means Indebtedness, including Capitalized Lease Obligations, of the Issuer or
any Restricted Subsidiary, in each case, incurred for the purpose of financing
all or any part of the purchase price, lease or mortgage financing (including
such Indebtedness as lessee) of property, plant or equipment used in the
business of the Issuer or any Restricted Subsidiary or the cost of installation,
construction or improvement thereof, and the payment of any sales or other taxes
associated therewith;
provided, however
, that
(1) the amount of such Indebtedness shall not exceed such purchase price or
cost and payment and (2) such Indebtedness shall be incurred within one
year after such acquisition of such asset by the Issuer or such Restricted
Subsidiary or such installation, construction or improvement.
“
Purchaser Group
” means Monarch
Alternative Capital LP, Whitebox Advisors, LLC and York Capital Management
Global Advisors, LLC, in each case including any of their respective related
funds and Affiliates.
“
Purchaser Party
” means any
beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act) who acquired Notes from the Issuer on the Issue Date.
“
Qualified Equity Interests
”
means Equity Interests of the Issuer other than Disqualified Equity Interests;
provided,
that such
Equity Interests shall not be deemed Qualified Equity Interests to the extent
sold or owed to a Subsidiary of the Issuer or financed, directly or indirectly,
using funds (1) borrowed from the Issuer or any Subsidiary of the Issuer
until and to the extent such borrowing is repaid or (2) contributed,
extended, guaranteed or advanced by the Issuer or any Subsidiary of the Issuer
(including, without limitation, in respect of any employee stock ownership or
benefit plan).
“
Qualified Institutional Buyer
”
or “
QIB
” shall have the
meaning specified in Rule 144A under the Securities Act.
“
Record Date
” means the
applicable Record Date specified in the Notes;
provided,
that if any such
date is not a Business Day, the Record Date shall be the first day immediately
succeeding such specified day that is a Business Day.
“
redeem
” means to redeem,
repurchase, purchase, defease, retire, discharge or otherwise acquire or retire
for value; and “
redemption
” shall have a
correlative meaning.
“
Redemption Date
,” when used
with respect to any Note to be redeemed, means the date fixed for such
redemption pursuant to this Indenture and the Notes.
“
Redemption Price
,” when used
with respect to any Note to be redeemed, means the price fixed for such
redemption, payable in immediately available funds, pursuant to this Indenture
and the Notes.
“
refinance
” means to refinance,
repay, prepay, replace, renew, refund, redeem, defease or retire.
“
Refinancing Indebtedness
”
means Indebtedness of the Issuer or a Restricted Subsidiary issued in exchange
for, or the proceeds from the issuance and sale or disbursement of which are
used to redeem, extend, renew, replace, defease, refund or refinance in whole or
in part, any Indebtedness of the Issuer or any Restricted Subsidiary (the “
Refinanced Indebtedness
”);
provided
that:
(1) The
principal amount (or accreted value, in the case of Indebtedness issued at a
discount) of the Refinancing Indebtedness does not exceed the principal amount
(or accreted value, as the case may be) of the Refinanced Indebtedness plus the
amount of accrued and unpaid interest on the Refinanced Indebtedness, any
premiums and defeasance costs paid to the holders of the Refinanced Indebtedness
and reasonable expenses incurred in connection with the incurrence of the
Refinancing Indebtedness;
(2) The
Refinancing Indebtedness is the obligation of the same Person as that of the
Refinanced Indebtedness;
(3) If
the Refinanced Indebtedness was subordinated in right of payment to the Notes or
the Note Guarantees, as the case may be, then such Refinancing Indebtedness, by
its terms, is subordinate in right of payment to the Notes or the Note
Guarantees, as the case may be, at least to the same extent as the Refinanced
Indebtedness, and if the Refinanced Indebtedness was
pari passu
in right of
payment with the Notes or the Note Guarantees, as the case may be, then the
Refinancing Indebtedness ranks
pari passu
with, or is
subordinated in right of payment to, the Notes or the Note Guarantees, as the
case may be;
(4) The
Refinancing Indebtedness has a final Stated Maturity either (a) no earlier
than the Refinanced Indebtedness being repaid or amended or (b) after the
Maturity Date of the Notes;
provided,
that (x) if
the Refinancing Indebtedness is subordinated in right of payment to the Notes or
the Note Guarantees, then such Refinancing Indebtedness shall have a final
Stated Maturity after the Maturity Date of the Notes and (y) if the
Refinancing Indebtedness is with respect to Refinanced Indebtedness that was
Subordinated Indebtedness, then such Refinancing Indebtedness shall have a
maturity date no earlier than the Maturity Date of the Notes; and
(5) The
portion, if any, of the Refinancing Indebtedness that is scheduled to mature on
or prior to the Maturity Date of the Notes has a Weighted Average Life to
Maturity at the time such Refinancing Indebtedness is incurred that is equal to
or greater than the Weighted Average Life to Maturity of the portion of the
Refinanced Indebtedness being repaid that is scheduled to mature on or prior to
the Maturity Date of the Notes;
provided,
that (x) if
the Refinancing Indebtedness is subordinated in right of payment to the Notes or
the Note Guarantees, then no portion of such Refinancing Indebtedness shall
mature until after the Maturity Date of the Notes and (y) if the
Refinancing Indebtedness is with respect to Refinanced Indebtedness that was
Subordinated Indebtedness, then no portion of such Refinancing Indebtedness
shall mature before the Maturity Date of the Notes.
“
Registration Rights Agreement
”
means the Registration Rights Agreement dated as of the Issue Date among the
Issuer, the Guarantors and the Purchaser Parties.
“
Regulation D
” means Regulation
D under the Securities Act.
“
Regulation S
” means
Regulation S under the Securities Act.
“
Relevant Determination Date
”
has the meaning given to such term in the definition of “Consolidated Secured
Debt Ratio.”
“
Requirement of Law
” means,
collectively, any and all requirements of any governmental authority including
any and all laws, ordinances, rules, regulations or similar statutes or case
law.
“
Responsible Officer
” means,
when used with respect to the Trustee, any officer in the Corporate Trust Office
of the Trustee to whom any corporate trust matter is referred because of such
officer’s knowledge of and familiarity with the particular subject and shall
also mean any officer who shall have direct responsibility for the
administration of this Indenture.
“
Restricted Payment
” means any
of the following:
(1) The
declaration or payment of any dividend or any other distribution on Equity
Interests of the Issuer or any Restricted Subsidiary or any payment made to the
direct or indirect holders (in their capacities as such) of Equity Interests of
the Issuer or any Restricted Subsidiary, including, without limitation, any
payment in connection with any merger or consolidation involving the Issuer but
excluding (a) dividends or distributions payable solely in Qualified Equity
Interests or through accretion or accumulation of such dividends on such Equity
Interests, (b) in the case of Restricted Subsidiaries, dividends or
distributions payable to the Issuer or to a Restricted Subsidiary (
provided
that such dividends
or distributions be to the Issuer or a Guarantor if made by a Guarantor),
(c) any dividend or other distribution for which an adjustment of the
Conversion Rate is made in accordance with Article Five and (d) any
dividend, distribution or interest payment made to a Holder of Notes or Common
Stock issuable upon conversion of the Notes in accordance with this
Indenture;
(2) The
redemption of any Equity Interests of the Issuer or any Restricted Subsidiary,
or any equity holder of the Issuer, including, without limitation, any payment
in connection with any merger or consolidation involving the Issuer but
excluding any such Equity Interests held by the Issuer or any Restricted
Subsidiary;
(3) Any
Investment other than a Permitted Investment; or
(4) Any
prepayment with respect to or redemption, repurchase, retirement, defeasance or
other acquisition for consideration of principal or sinking fund payment, as the
case may be, in respect of Subordinated Indebtedness, in each case prior to the
scheduled payment date or maturity or prior to any scheduled repayment of
principal or sinking fund payment.
“
Restricted Security
” means a
Note that constitutes a “Restricted Security” within the meaning of Rule
144(a)(3) under the Securities Act;
provided
,
however
, that the Trustee
shall be entitled to request and conclusively rely on an Opinion of Counsel with
respect to whether any Note constitutes a Restricted Security.
“
Restricted Subsidiary
” means
any Subsidiary of the Issuer other than an Unrestricted Subsidiary. As of
the Issue Date, all Subsidiaries of the Issuer shall be Restricted
Subsidiaries.
“
Restructuring Expenses
” means
losses, expenses and charges incurred in connection with restructuring within
the Issuer and/or one or more Restricted Subsidiaries, including in connection
with integration of acquired businesses or Persons, disposition of one or more
Subsidiaries or businesses, exiting of one or more lines of businesses and
relocation, disposition or consolidation of facilities, including severance,
curtailments or modifications of pension plans, lease termination and other
non-ordinary-course, non-operating costs and expenses in connection
therewith.
“
Rule 144A
” means
Rule 144A under the Securities Act.
“
S&P
” means Standard &
Poor’s Ratings Services, a division of the McGraw-Hill Companies, Inc., and its
successors.
“
SEC
” means the United States
Securities and Exchange Commission.
“
Secretary’s Certificate
” means
a certificate signed by the Secretary of the Issuer.
“
Securities Act
” means the
United States Securities Act of 1933, as amended.
“
Security Documents
” means the
Collateral Agreement and any security agreements, pledge agreements, mortgages,
collateral assignments and related agreements, in each case as amended,
supplemented, restated, renewed, refunded, replaced, restructured, repaid,
refinanced or otherwise modified from time to time, creating the security
interests in the property and assets (other than Excluded Assets) of each
Grantor.
“
Shelf Registration Statement
”
has the meaning assigned to it in the Registration Rights
Agreement.
“
Significant Subsidiary
” means
(1) any Restricted Subsidiary that would be a “significant subsidiary” as
defined in Regulation S-X promulgated pursuant to the Securities Act as
such Regulation is in effect on the Issue Date and (2) any Restricted
Subsidiary that, when aggregated with all other Restricted Subsidiaries that are
not otherwise Significant Subsidiaries and as to which any event described in
clause (xi) or (xii) under Section 8.01 has occurred and is continuing, or
which are being released from their Note Guarantees (in the case of clause (x)
of Section 11.02(b), would constitute a Significant Subsidiary under clause
(1) of this definition.
“
Special Property
”
means:
(a) Any
contract, General Intangible, permit, lease or license held by any Grantor that
validly prohibits the creation by such Grantor of a security interest
therein;
(b) Any
contract, General Intangible, permit, lease or license held by any Grantor to
the extent that any Requirement of Law applicable thereto prohibits the creation
of a security interest therein;
(c) Any
contract, General Intangible, permit, lease or license held by any Grantor to
the extent that the creation by such Grantor of a security interest therein is
permitted only with the consent of another party, if the requirement to obtain
such consent is legally enforceable and such consent has not been
obtained;
(d) Any
property owned on the date hereof or acquired after the date hereof by any
Grantor that is subject to a Lien permitted by either clause (14), (18), (19) or
(20) of the definition of Permitted Liens if the contract or agreement pursuant
to which such Lien is granted validly prohibits the creation of any other Lien
on such property or requires the consent of another party to create such Lien,
if the requirement to obtain such consent is legally enforceable and such
consent has not been obtained.
provided
,
however
, that to the extent
such property constitutes Special Property due to a prohibition on the creation
of any security interest or other Lien in the relevant permit, lease, license,
contract or other agreement or by Requirement of Law applicable thereto, then in
each case described in clauses (a), (b), (c) or (d) of this definition, such
property shall constitute “Special Property” only to the extent and for so long
as such permit, lease, license, contract or other agreement or Requirement of
Law applicable thereto validly prohibits the creation of a security interest or
Lien on such property in favor of the Noteholder Collateral Agent or such
permit, lease, license, contract, other agreement or Requirement of Law validly
requires any consent not obtained thereunder in order for the Issuer or a
Guarantor to create a security interest therein and, upon the termination or
waiver of such prohibition or requirement (howsoever occurring), such property
shall cease to constitute “Special Property”;
and
provided
,
further
, that clauses (a),
(b), (c) and (d) of this definition shall not be construed to limit, impair or
otherwise affect the Noteholder Secured Parties’ continuing security interests
in any Grantor’s rights to or interests of any Grantor in (x) monies due or to
become due under any such contract, license, agreement, instrument or other
document (to the extent not prohibited by such contract, license, agreement,
instrument or other document and applicable law), or (y) any proceeds from the
sale, license, lease or other disposition of any such contract, license,
agreement, instrument or other document.
“
Stated Maturity
” means, with
respect to any installment of interest or principal on any Indebtedness, the
date on which such payment of interest or principal is scheduled to be paid in
the documentation governing such Indebtedness, and shall not include any
contingent obligations to repay, redeem or repurchase any such interest or
principal prior to the date originally scheduled for the payment
thereof.
“
Subordinated Indebtedness
”
means Indebtedness of the Issuer or any Restricted Subsidiary that is expressly
subordinated in right of payment to the Notes or the Note Guarantees,
respectively. For the avoidance of doubt, (i) unsecured Indebtedness is
not subordinated to secured Indebtedness merely because it is unsecured and (ii)
senior Indebtedness is not subordinated Indebtedness merely because it has a
junior lien priority with respect to the same collateral.
“
Subsidiary
” means, with
respect to any Person:
(1) Any
corporation, limited liability company, association or other business entity of
which more than 50% of the total voting power of the Equity Interests entitled
(without regard to the occurrence of any contingency) to vote in the election of
the Board of Directors thereof are at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person (or a combination thereof); and
(2) Any
partnership (a) the sole general partner or the managing general partner of
which is such Person or a Subsidiary of such Person or (b) the only general
partners of which are such Person or of one or more Subsidiaries of such Person
(or any combination thereof).
Unless
otherwise specified, “Subsidiary” refers to a Subsidiary of the Issuer.
The Excluded Joint Venture shall not be a Subsidiary of the Issuer or any
Restricted Subsidiary for purposes of this Indenture.
“
Swap Agreements
” means any
agreement with respect to any swap, forward, future or derivative transaction or
option or similar agreement involving, or settled by reference to, one or more
rates, currencies, commodities, equity or debt instruments or securities, or
economic, financial or pricing indices or measures of economic, financial or
pricing risk or value or any similar transaction or any combination of these
transactions;
provided
that no phantom stock or similar plan providing for payments only on account of
services
provided
by
current or former directors, officers, employees or consultants of the Issuer or
any Subsidiaries shall be a Swap Agreement.
“
Swap Obligations
” of a Person
means any and all obligations of such Person, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired (including all
renewals, extensions and modifications thereof and substitutions therefor),
under any and all Swap Agreements.
“
Temporary Regulation S Global
Note
” has the meaning given to such term in
Section 2.01.
“
Total Leverage Ratio
” means,
as of any date of determination, the ratio of (a) consolidated total
Indebtedness (excluding the Capitalized Lease Obligations, Purchase Money
Indebtedness and Non-Recourse Indebtedness) of the Issuer and its Restricted
Subsidiaries to (b) the aggregate amount of Consolidated Cash Flow for the
then most recent four fiscal quarters for which internal financial statements of
the Issuer and its Restricted Subsidiaries are available, in each case with such
pro forma and other adjustments to such consolidated total Indebtedness and
Consolidated Cash Flow as are consistent with the adjustment provisions set
forth in the definition of Consolidated Secured Debt Ratio.
“
Trading Day
” means a day
during which trading in securities generally occurs on the principal United
States securities exchange on which the Common Stock is then listed or, if the
Common Stock is not listed on a United States national securities exchange, then
on the principal other market on which the Common Stock is then traded or
quoted.
“
Transactions
” means,
collectively, (a) the execution, delivery and performance by the Issuer and
the Guarantors of the Indenture, Collateral Agreement, Intercreditor Agreement
and other related documents to which they are a party and the issuance of the
Notes thereunder, (b) the execution, delivery and performance the Issuer
and the Subsidiaries party thereto of the Credit Agreement, Intercreditor
Agreement and related security documents on the Issue Date and borrowing
thereunder, (c) restructuring of the Issuer pursuant to the plan of
reorganization to be confirmed and consummated in one or more voluntary cases
under Chapter 11 of the Bankruptcy Code to be commenced by the Issuer in the
United States Bankruptcy Court for the District of Delaware and (d) the
payment of related fees and expenses.
“
Trust Indenture Act
” or “
TIA
” means the Trust Indenture
Act of 1939, as amended.
“
Trustee
” means the party named
as such in this Indenture until a successor replaces it in accordance with the
provisions of this Indenture and thereafter means such successor.
“
Uniform Commercial Code
” or
“
UCC
” means the Uniform
Commercial Code as in effect in the relevant jurisdiction from time to
time. Unless otherwise specified, references to the Uniform Commercial
Code herein refer to the New York Uniform Commercial Code.
“
Unrestricted Subsidiary
” means
(1) any Subsidiary that at the time of determination shall be designated an
Unrestricted Subsidiary by the Board of Directors of the Issuer in accordance
with Section 6.17 and (2) any Subsidiary of an Unrestricted
Subsidiary.
“
U.S. Government Obligations
”
means direct non-callable obligations of, or obligations guaranteed by, the
United States of America for the payment of which guarantee or obligations the
full faith and credit of the United States of America is pledged.
“
U.S. Legal Tender
” means such
coin or currency of the United States of America that at the time of payment
shall be legal tender for the payment of public and private debts.
“
Voting Stock
” with respect to
any Person, means securities of any class of Equity Interests of such Person
entitling the holders thereof (whether at all times or only so long as no senior
class of stock or other relevant equity interest has voting power by reason of
any contingency) to vote in the election of members of the Board of Directors of
such Person.
“
Weighted Average Life to
Maturity
” when applied to any Indebtedness at any date, means the number
of years obtained by dividing (1) the sum of the products obtained by
multiplying (a) the amount of each then remaining installment, sinking
fund, serial maturity or other required payment of principal, including payment
at final maturity, in respect thereof by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment by (2) the then outstanding principal amount of
such Indebtedness.
“
Wholly Owned Restricted
Subsidiary
” means a Restricted Subsidiary of which 100% of the Equity
Interests (except for directors’ qualifying shares or certain minority interests
owned by other Persons solely due to local law requirements that there be more
than one stockholder, but which interest is not in excess of what is required
for such purpose) are owned directly by the Issuer or through one or more Wholly
Owned Restricted Subsidiaries.
SECTION 1.02.
|
Other
Definitions
.
|
Term
|
|
Section
|
144A
Global Note
|
|
Section 2.01
|
acceleration
declaration
|
|
Section
8.02
|
Accrued
Interest
|
|
Section
5.03(b)
|
Additional
Shares
|
|
Section
5.07(b)
|
Affiliate
Transaction
|
|
Section
6.12(a)
|
Authentication
Order
|
|
Section
2.02
|
Cap
Conversion Dates
|
|
Section
5.08(c)
|
Cash
Conversion Amount
|
|
Section
5.08(e)
|
Cash
Conversion Payment Date
|
|
Section
5.08(i)
|
Conversion
Cap
|
|
Section
5.13
|
Conversion
Date
|
|
Section
5.02(a)(iv)
|
Conversion
Event
|
|
Section
5.08(a)
|
Conversion
Event Notice
|
|
Section
5.08(a)
|
Term
|
|
Section
|
Conversion
Notice
|
|
Section
5.02(a)(i)
|
Conversion
Payment Date
|
|
Section
5.02(b)
|
Conversion
Termination Date
|
|
Section
5.08(b)
|
Covenant
Defeasance
|
|
Section
10.02(c)
|
Deposit
Bank
|
|
Section
4.01(b)(vii)
|
Designation
|
|
Section
6.17(a)
|
Designation
Amount
|
|
Section
6.17(a)(ii)
|
Distributed
Assets
|
|
Section
5.04(d)(v)
|
Effective
Date
|
|
Section
5.07(c)
|
Election
Notice
|
|
Section
5.08(c)
|
Event
of Default
|
|
Section
8.01
|
Excess
Proceeds
|
|
Section
6.11(d)(iii)
|
Expiration
Date
|
|
Section
5.04(f)
|
Expiration
Time
|
|
Section
5.04(f)
|
Four
Quarter Period
|
|
Section
5.04(f)
|
Fundamental
Change of Control Issuer Notice
|
|
Section
3.01(b)
|
Fundamental
Change of Control Purchase Date
|
|
Section
3.01(a)
|
Fundamental
Change of Control Purchase Notice
|
|
Section
3.01(c)(i)
|
Fundamental
Change of Control Purchase Price
|
|
Section
3.01(a)
|
Global
Notes
|
|
Section
2.01
|
Guarantee
Obligations
|
|
Section
13.01
|
Guarantors
|
|
Preamble
|
IAI
Global Note
|
|
Section
2.01
|
indenture
securities
|
|
Section
1.03
|
indenture
security holder
|
|
Section
1.03
|
indenture
to be qualified
|
|
Section
1.03
|
indenture
trustee
|
|
Section
1.03
|
institutional
trustee
|
|
Section
1.03
|
Issuer
|
|
Preamble
|
Legal
Defeasance
|
|
Section
10.02(b)
|
Make
Whole Payment
|
|
Section
5.07(f)
|
Net
Proceeds Offer
|
|
Section
6.11(e)(i)
|
Net
Proceeds Payment Date
|
|
Section
6.11(g)(2)
|
Net
Proceeds Surplus
|
|
Section
6.11(f)
|
obligor
|
|
Section
1.03
|
Offered
Price
|
|
Section
6.11(e)(ii)
|
Pari
Passu Indebtedness Price
|
|
Section
6.11(e)(ii)
|
Participants
|
|
Section
2.15(a)
|
Paying
Agent
|
|
Section
2.03
|
Payment
Amount
|
|
Section
6.11(e)(i)
|
Permanent
Regulation S Global Note,
|
|
Section
2.01
|
Permitted
Indebtedness
|
|
Section
6.08(b)
|
Physical
Notes
|
|
Section
2.01
|
Premises
|
|
Section
6.15
|
Public
Spin-Off
|
|
Section
5.04(d)(v)
|
Term
|
|
Section
|
Public
Spin-Off Valuation Period
|
|
Section
5.04(d)(v)
|
Redemption
Price
|
|
Section
4.01(a)
|
Redesignation
|
|
Section
6.17(d)
|
Reference
Property
|
|
Section
5.05(b)
|
Registrar
|
|
Section
2.03
|
Regulation S
Global Note
|
|
Section
2.01
|
Relevant
Determination Date
|
|
Section
1.01
|
Remaining
Notes
|
|
Section
5.08(g)
|
Restricted
Payments Basket
|
|
Section
6.09(a)(ii)
|
Share
Price
|
|
Section
5.07(c)
|
Successor
|
|
Section
7.01(a)(i)(2)
|
Temporary
Regulation S Global Note
|
|
Section
2.01
|
Trigger
Event
|
|
Section
5.04(d)(v)
|
Trustee
|
|
Preamble
|
SECTION 1.03.
|
Incorporation by
Reference of Trust Indenture Act
.
|
Whenever
this Indenture refers to a provision of the Trust Indenture Act, such provision
is incorporated by reference in, and made a part of, this Indenture. The
following Trust Indenture Act terms used in this Indenture have the following
meanings:
“
indenture securities
”
means the Notes.
“
indenture security
holder
” means a Holder.
“
indenture to be
qualified
” means this Indenture.
“
indenture trustee
” or
“
institutional
trustee
” means the Trustee.
“
obligor
” on the
indenture securities means the Issuer, any Guarantor or any other obligor on the
Notes.
All other
Trust Indenture Act terms used in this Indenture that are defined by the Trust
Indenture Act, defined by Trust Indenture Act reference to another statute or
defined by SEC rule and not otherwise defined herein have the meanings assigned
to them therein.
SECTION 1.04.
|
Rules of
Construction
.
|
Unless
the context otherwise requires:
(i) A
term has the meaning assigned to it;
(ii) An
accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;
(iii) “or”
is not exclusive;
(iv) Words
in the singular include the plural, and words in the plural include the
singular;
(v) Provisions
apply to successive events and transactions;
(vi) “herein,”
“hereof” and other words of similar import refer to this Indenture as a whole
and not to any particular Article, Section or other
subdivision;
(vii) The
words “including,” “includes” and similar words shall be deemed to be followed
by “without limitation” and
(viii) Capitalized
words used in the definition of Notes Collateral and Excluded Assets shall be
deemed to have the meanings attributed thereto in the Uniform Commercial Code
for the State of New York.
ARTICLE TWO
THE
NOTES
SECTION 2.01.
|
Form and
Dating
.
|
The Notes
and the Trustee’s certificate of authentication shall be substantially in the
form of
Exhibit A
hereto. The Notes may have notations, legends or endorsements required by
law, stock exchange rule or usage. The Issuer shall approve the form of
the Notes and any notation, legend or endorsement on them, which approval can be
evidenced by execution thereof. Each Note shall be dated the date of its
issuance and show the date of its authentication. Each Note shall have an
executed Note Guarantee from each of the Guarantors existing on the Issue Date
endorsed thereon substantially in the form of
Exhibit B
.
The terms
and provisions contained in the Notes and the Note Guarantees shall constitute,
and are hereby expressly made, a part of this Indenture and, to the extent
applicable, the Issuer, the Guarantors and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and to
be bound thereby.
Notes
will be offered and sold in the United States in reliance on Regulation D.
Notes offered and sold to “Qualified Institutional Buyers” as defined in
Rule 144A shall be issued initially in the form of one or more permanent
global Notes in registered form, substantially in the form set forth in
Exhibit A
(each
a “
144A Global Note
”),
deposited with the Trustee, as custodian for the Depositary, duly executed by
the Issuer (and having an executed Note Guarantee from each of the Guarantors
endorsed thereon) and authenticated by the Trustee as hereinafter
provided
and shall bear the
legends set forth in
Exhibit C
.
Notes
offered and sold to Institutional Accredited Investors shall be issued initially
in the form of one or more permanent global Notes in registered form,
substantially in the form set forth in
Exhibit A
(the
“
IAI Global Note
”),
deposited with the Trustee, as custodian for the Depositary, duly executed by
the Issuer (and having an executed Note Guarantee from each of the Guarantors
endorsed thereon) and authenticated by the Trustee as hereinafter
provided
and shall bear the
legends set forth in
Exhibit C
.
Notes
offered and sold in offshore transactions in reliance on Regulation S shall
be issued initially in the form of a single temporary global Note in registered
form, substantially in the form of
Exhibit A
(the
“
Temporary Regulation S
Global Note
”), deposited with the Trustee, as custodian for the
Depositary, duly executed by the Issuer (and having an executed Note Guarantee
from each of the Guarantors endorsed thereon) and authenticated by the Trustee
as hereinafter
provided
and shall bear the legends set forth in
Exhibit C
.
Reasonably promptly following the date that is 40 days after the later of the
commencement of the offering of the Notes in reliance on Regulation S and the
Issue Date, upon receipt by the Trustee and the Issuer of a duly executed
certificate certifying that the Holder of the beneficial interest in the
Temporary Regulation S Global Note is a Non-U.S. Person, substantially in
the form of
Exhibit D
from
the Depositary, a single permanent global Note in registered form substantially
in the form of
Exhibit A
(the
“
Permanent Regulation S
Global Note
,” and together with the Temporary Regulation S Global
Note, the “
Regulation S
Global Note
” and together with the 144A Global Note and the IAI Global
Note, the “
Global
Notes
”) duly executed by the Issuer (and having an executed Note
Guarantee from each of the Guarantors endorsed thereon) and authenticated by the
Trustee as hereinafter
provided
shall be deposited
with the Trustee, as custodian for the Depositary, and the Registrar shall
reflect on its books and records the cancellation of the Temporary Regulation S
Global Note and the issuance of the Permanent Regulation S Global
Note.
The
aggregate principal amount of the Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depositary, as hereinafter
provided
. Notes issued
in exchange for interests in a Global Note pursuant to Section 2.16 may be
issued in the form of permanent certificated Notes in registered form in
substantially the form set forth in
Exhibit A
and
bearing the applicable legends, if any (the “
Physical Notes
”).
SECTION 2.02.
|
Execution,
Authentication and Denomination
.
|
One
Officer of the Issuer (who shall have been duly authorized by all requisite
corporate actions) shall sign the Notes for such Issuer by manual or facsimile
signature. One Officer of a Guarantor (who shall have been duly authorized
by all requisite corporate actions) shall sign the Note Guarantee for such
Guarantor by manual or facsimile signature.
If an
Officer whose signature is on a Note or Note Guarantee, as the case may be, was
an Officer at the time of such execution but no longer holds that office at the
time the Trustee authenticates the Note, the Note shall nevertheless be
valid.
A Note
(and the Note Guarantees in respect thereof) shall not be valid until an
authorized signatory of the Trustee manually signs the certificate of
authentication on the Note. The signature shall be conclusive evidence
that the Note has been authenticated under this Indenture.
The
aggregate principal amount of Notes that may be authenticated and delivered
under this Indenture is limited to $55,000,000, except for Notes authenticated
and delivered upon registration of, or in exchange for, or in lieu of, other
Notes pursuant to Section 2.06, Section 2.07, and
Section 2.10.
The Notes
shall be known and designated as the “9.5% Convertible Senior Notes due 2015” of
the Issuer. The principal amount shall be payable at the Maturity
Date.
The
Trustee shall authenticate the Notes on the Issue Date upon a written order
of the Company in the form of a certificate of an Officer of the Company (an
“
Authentication
Order
”). The Authentication Order shall specify the amount of Notes
to be authenticated and the date on which the Notes are to be authenticated and
whether the Notes are to be issued as certificated Notes or Global Notes or such
other information as the Trustee may reasonably request.
The
Trustee may appoint an authenticating agent reasonably acceptable to the Issuer
to authenticate Notes. Unless otherwise
provided
in the appointment,
an authenticating agent may authenticate Notes whenever the Trustee may do
so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Issuer and Affiliates of the
Issuer. The Trustee shall have the right to decline to authenticate and
deliver any Notes under this Indenture if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken or if the Trustee in good
faith shall determine that such action would expose the Trustee to personal
liability.
The Notes
shall be issuable only in registered form without coupons in denominations of
$1,000 and integral multiples thereof.
SECTION 2.03.
|
Registrar and Paying
Agent
.
|
The
Issuer shall maintain or cause to be maintained an office or agency in the
Borough of Manhattan, The City of New York, where (a) Notes may be
presented or surrendered for registration of transfer or for exchange (“
Registrar
”), (b) Notes
may, subject to Section 2 of the Notes, be presented or surrendered for
payment (“
Paying Agent
”)
and (c) notices and demands to or upon the Issuer in respect of the Notes
and this Indenture may be served. The Issuer may also from time to time
designate one or more other offices or agencies where the Notes may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations;
provided
,
however
, that no such
designation or rescission shall in any manner relieve the Issuer of its
obligation to maintain or cause to be maintained an office or agency in the
Borough of Manhattan, The City of New York, for such purposes. The
Issuer may act as Registrar or Paying Agent, except that for the purposes of
Article Ten, neither the Issuer nor any Affiliate of the Issuer shall act
as Paying Agent. The Registrar shall keep a register of the Notes and of
their transfer and exchange and the entries in such register shall be conclusive
as to the ownership of each of the Notes, absent manifest error. The
Issuer, upon notice to the Trustee, may have one or more co-registrars and one
or more additional paying agents reasonably acceptable to the Trustee. The
term “Registrar” includes any co-registrar and the term “Paying Agent” includes
any additional paying agent. The Issuer initially appoints the Trustee as
Registrar and Paying Agent until such time as the Trustee has resigned or a
successor has been appointed.
The
Issuer shall enter into an appropriate agency agreement with any Agent not a
party to this Indenture, which agreement shall implement the provisions of this
Indenture that relate to such Agent. The Issuer shall notify the Trustee,
in advance, of the name and address of any such Agent. If the Issuer fails
to maintain a Registrar or Paying Agent, the Trustee shall act as
such.
SECTION 2.04.
|
Paying Agent to Hold
Assets in Trust
.
|
The
Issuer shall require each Paying Agent other than the Trustee or the Issuer or
any Subsidiary to agree in writing that, subject to Article Twelve, each
Paying Agent shall hold in trust for the benefit of Holders or the Trustee all
assets held by the Paying Agent for the payment of principal of, or interest on,
the Notes (whether such assets have been distributed to it by the Issuer or any
other obligor on the Notes), and shall notify the Trustee of any Default by the
Issuer (or any other obligor on the Notes) in making any such payment. The
Issuer at any time may require a Paying Agent to distribute all assets held by
it to the Trustee and account for any assets disbursed and the Trustee may at
any time during the continuance of any payment Default, upon written request to
a Paying Agent, require such Paying Agent to distribute all assets held by it to
the Trustee and to account for any assets distributed. Upon distribution
to the Trustee of all assets that shall have been delivered by the Issuer to the
Paying Agent, the Paying Agent shall have no further liability for such
assets.
SECTION 2.05.
|
Holder
Lists
.
|
The
Trustee shall preserve in as current a form as is reasonably practicable the
most recent list available to it of the names and addresses of Holders. If
the Trustee is not the Registrar, the Issuer shall furnish to the Trustee at
least seven (7) Business Days prior to each Interest Payment Date and at
such other times as the Trustee may request in writing a list, in such form and
as of such date as the Trustee may reasonably require, of the names and
addresses of Holders, which list may be conclusively relied upon by the
Trustee.
SECTION 2.06.
|
Transfer and
Exchange
.
|
Subject
to Sections 2.15 and 2.16, when Notes are presented to the Registrar with a
request to register the transfer of such Notes or to exchange such Notes for an
equal principal amount of Notes of other authorized denominations, the Registrar
shall register the transfer or make the exchange as requested if its
requirements for such transaction are met;
provided
,
however
, that the Notes
surrendered for transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer in form satisfactory to the Issuer and the
Registrar, duly executed by the Holder thereof or his or her attorney duly
authorized in writing. To permit registrations of transfers and exchanges,
the Issuer shall execute and the Trustee shall authenticate Notes at the
Registrar’s request. No service charge shall be made for any registration
of transfer or exchange, but the Issuer may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in connection
therewith.
Without
the prior written consent of the Issuer, the Registrar shall not be required to
register the transfer of or exchange of any Note (i) during a period
beginning at the opening of business 15 days before the mailing of a notice of
redemption of Notes and ending at the Close of Business on the day of such
mailing, (ii) selected for redemption in whole or in part pursuant to
Article Five, except the unredeemed portion of any Note being redeemed in
part, and (iii) beginning at the opening of business on any Record Date and
ending on the Close of Business on the related Interest Payment
Date.
Any
Holder of a beneficial interest in a Global Note shall, by acceptance of such
beneficial interest, agree that transfers of beneficial interests in such Global
Notes may be effected only through a book-entry system maintained by the Holder
of such Global Note (or its agent) in accordance with the applicable legends
thereon, and that ownership of a beneficial interest in the Note shall be
required to be reflected in a book-entry system.
SECTION 2.07.
|
Replacement
Notes
.
|
If a
mutilated Note is surrendered to the Trustee or if the Holder of a Note claims
that the Note has been lost, destroyed or wrongfully taken, the Issuer shall
issue and the Trustee shall authenticate a replacement Note if the Trustee’s
requirements are met. Such Holder must provide an indemnity bond or other
indemnity, sufficient in the judgment of both the Issuer and the Trustee, to
protect the Issuer, the Trustee or any Agent from any loss which any of them may
suffer if a Note is replaced. The Issuer may charge such Holder for its
reasonable out-of-pocket expenses in replacing a Note pursuant to this
Section 2.07, including reasonable fees and expenses of counsel and of the
Trustee.
Every
replacement Note is an additional obligation of the Issuer and every replacement
Note Guarantee shall constitute an additional obligation of the Guarantor
thereof.
The
provisions of this Section 2.07 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of lost, destroyed or wrongfully taken Notes.
SECTION 2.08.
|
Outstanding
Notes
.
|
Notes
outstanding at any time are all the Notes that have been authenticated by the
Trustee except those cancelled by it, those delivered to it for cancellation and
those described in this Section as not outstanding. A Note does not
cease to be outstanding because the Issuer, the Guarantors or any of their
respective Affiliates hold the Note (subject to the provisions of
Section 2.09).
If a Note
is replaced pursuant to Section 2.07 (other than a mutilated Note
surrendered for replacement), it ceases to be outstanding unless a Responsible
Officer of the Trustee receives proof satisfactory to it that the replaced Note
is held by a
bona fide
purchaser. A mutilated Note ceases to be outstanding upon surrender of
such Note and replacement thereof pursuant to
Section 2.07.
If the
principal amount of any Note is considered paid under Section 6.01, it
ceases to be outstanding and interest ceases to accrue. If on a Redemption
Date or the Maturity Date the Trustee or Paying Agent (other than the Issuer or
an Affiliate thereof) holds U.S. Legal Tender or U.S. Government Obligations
sufficient to pay all of the principal and interest due on the Notes payable on
that date, then on and after that date such Notes cease to be outstanding and
interest on them ceases to accrue.
SECTION 2.09.
|
Treasury
Notes
.
|
In
determining whether the Holders of the required principal amount of Notes have
concurred in any direction, waiver or consent, Notes owned by the Issuer or any
of its Affiliates shall be disregarded, except that, for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that a Responsible Officer of the
Trustee actually knows are so owned shall be disregarded.
SECTION 2.10.
|
Temporary
Notes
.
|
Until
definitive Notes are ready for delivery, the Issuer may prepare and the Trustee
shall authenticate temporary Notes. Temporary Notes shall be substantially
in the form of definitive Notes but may have variations that the Issuer
considers appropriate for temporary Notes. Without unreasonable delay, the
Issuer shall prepare and the Trustee shall authenticate definitive Notes in
exchange for temporary Notes. Until such exchange, temporary Notes shall
be entitled to the same rights, benefits and privileges as definitive
Notes. Notwithstanding the foregoing, so long as the Notes are represented
by a Global Note, such Global Note may be in typewritten form.
SECTION 2.11.
|
Cancellation
.
|
The
Issuer at any time may deliver Notes to the Trustee for cancellation. The
Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for transfer, exchange or payment. The Trustee, or at
the direction of the Trustee, the Registrar or the Paying Agent (other than the
Issuer or a Subsidiary), and no one else, shall cancel and, at the written
direction of the Issuer, shall dispose of all Notes surrendered for transfer,
exchange, payment or cancellation in accordance with its customary
procedures. Subject to Section 2.07, the Issuer may not issue new
Notes to replace Notes that it has paid or delivered to the Trustee for
cancellation. If the Issuer or any Guarantor shall acquire any of the
Notes, such acquisition shall not operate as a redemption or satisfaction of the
Indebtedness represented by such Notes unless and until the same are surrendered
to the Trustee for cancellation pursuant to this Section 2.11.
SECTION 2.12.
|
Defaulted
Interest
.
|
If the
Issuer defaults in a payment of interest on the Notes, it shall pay the
defaulted interest, plus (to the extent lawful) any interest payable on the
defaulted interest, in any lawful manner. The Issuer may pay the defaulted
interest to the persons who are Holders on a subsequent special record date,
which date shall be the fifteenth day next preceding the date fixed by the
Issuer for the payment of defaulted interest or the next succeeding Business Day
if such date is not a Business Day. At least 15 days before any such
subsequent special record date, the Issuer shall mail to each Holder, with a
copy to the Trustee, a notice that states the subsequent special record date,
the payment date and the amount of defaulted interest, and interest payable on
such defaulted interest, if any, to be paid.
SECTION 2.13.
|
Cusip
Numbers
.
|
The
Issuer in issuing the Notes may use “CUSIP” numbers, and if so, the Trustee
shall use the “CUSIP” numbers in notices of redemption or exchange as a
convenience to Holders;
provided
,
however
, that any such notice
may state that no representation is made as to the correctness or accuracy of
the “CUSIP” numbers printed in the notice or on the Notes, and that reliance may
be placed only on the other identification numbers printed on the Notes.
The Issuer will promptly notify the Trustee of any change in the “CUSIP”
numbers.
SECTION 2.14.
|
Deposit of
Moneys
.
|
Subject
to Section 2 of the Notes, prior to 11:00 a.m. New York City time
on each Interest Payment Date, Maturity Date, Redemption Date, Fundamental
Change of Control Payment Date, Conversion Payment Date, Conversion Termination
Date and Net Proceeds Payment Date, the Issuer shall have deposited with the
Paying Agent in immediately available funds money sufficient to make cash
payments, if any, due on such Interest Payment Date, Maturity Date, Redemption
Date, Fundamental Change of Control Payment Date, Conversion Payment Date,
Conversion Termination Date and Net Proceeds Payment Date, as the case may be,
in a timely manner which permits the Paying Agent to remit payment to the
Holders on such Interest Payment Date, Maturity Date, Redemption Date,
Fundamental Change of Control Payment Date, Conversion Payment Date, Conversion
Termination Date and Net Proceeds Payment Date, as the case may be.
SECTION 2.15.
|
Book-Entry Provisions
for Global Notes
.
|
(a)
General
. The
Global Notes initially shall (i) be registered in the name of the
Depositary or the nominee of such Depositary, (ii) be delivered to the
Trustee as custodian for such Depositary and (iii) bear legends as set
forth in
Exhibit C
, as
applicable.
Members
of, or participants in, the Depositary (“
Participants
”) shall have no
rights under this Indenture with respect to any Global Note held on their behalf
by the Depositary, or the Trustee as its custodian, or under the Global Note,
and the Depositary may be treated by the Issuer, the Trustee and any agent of
the Issuer or the Trustee as the absolute owner of the Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Issuer, the Trustee or any agent of the Issuer or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and
Participants, the operation of customary practices governing the exercise of the
rights of a Holder of any Note.
(b)
Global Notes
.
Transfers of Global Notes shall be limited to transfers in whole, but not in
part, to the Depositary, its successors or their respective nominees.
Interests of beneficial owners in the Global Notes may be transferred or
exchanged for Physical Notes in accordance with the rules and procedures of the
Depositary and the provisions of Section 2.16;
provided
, that in no event
shall a beneficial interest in a Global Note be credited, or a Physical Note
which is not a Restricted Security be issued, to a Person who is an affiliate
(as defined in Rule 144 under the Securities Act) of the Issuer. In
addition, Physical Notes shall be transferred to all beneficial owners in
exchange for their beneficial interests in Global Notes if (i) the
Depositary notifies the Issuer that it is unwilling or unable to act as
Depositary for any Global Note, the Issuer so notifies the Trustee in writing
and a successor Depositary is not appointed by the Issuer within 90 days of such
notice or (ii) the Issuer, at its option, and subject to the procedures of
the Depositary, notifies the Trustee in writing that it elects to cause the
issuance of the Notes in the form of Physical Notes under this Indenture.
Upon any issuance of a Physical Note in accordance with this
Section 2.15(b) the Trustee is required to register such Physical Note in
the name of, and cause the same to be mailed to, such person or persons (or the
nominee of any thereof). All such Physical Notes shall bear the applicable
legends, if any.
(c)
Transfer or Exchange of a
Position of the Beneficial Interest in a Global Note
. In connection
with any transfer or exchange of a portion of the beneficial interest in a
Global Note to beneficial owners pursuant to paragraph (b) of this
Section 2.15, the Registrar shall (if one or more Physical Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of such Global Note in an amount equal to the principal amount
of the beneficial interest in the Global Note to be transferred, and the Issuer
shall execute, and the Trustee shall authenticate and deliver, one or more
Physical Notes of authorized denominations in an aggregate principal amount
equal to the principal amount of the beneficial interest in the Global Note so
transferred.
(d)
Transfer of a Global Note as
an Entirety
. In connection with the transfer of a Global Note as an
entirety to beneficial owners pursuant to paragraph (b) of this
Section 2.15, such Global Note shall be deemed to be surrendered to the
Trustee for cancellation, and (i) the Issuer shall execute, (ii) the
Guarantors shall execute notations of Note Guarantees on and (iii) the
Trustee shall upon written instructions from the Issuer authenticate and
deliver, to each beneficial owner identified by the Depositary in exchange for
its beneficial interest in such Global Note, an equal aggregate principal amount
of Physical Notes of authorized denominations.
(e)
Physical Notes
.
Any Physical Note constituting a Restricted Security delivered in exchange for
an interest in a Global Note pursuant to paragraph (b) or (c) of this
Section 2.15 shall, except as otherwise
provided
by
Section 2.16, bear the Private Placement Legend.
(f)
Proxies
. The
Holder of any Global Note may grant proxies and otherwise authorize any Person,
including Participants and Persons that may hold interests through Participants,
to take any action which a Holder is entitled to take under this Indenture or
the Notes.
SECTION 2.16.
|
Special Transfer and
Exchange Provisions
.
|
(a)
Transfers to Non-QIB
Institutional Accredited Investors
. The following provisions shall
apply with respect to the registration of any proposed transfer of a Restricted
Security to any Institutional Accredited Investor which is not a
QIB:
(i) The
Registrar shall register the transfer of any Restricted Security, whether or not
such Note bears the Private Placement Legend, if (x) the requested transfer
is after the expiration of the applicable holding period with respect thereto
set forth in Rule 144(d) of the Securities Act;
provided
,
however
, that neither the
Issuer nor any Affiliate of the Issuer has held any beneficial interest in such
Note, or portion thereof, at any time on or prior to the expiration of the
applicable holding period with respect thereto set forth in Rule 144(d) of the
Securities Act or (y) the proposed transferee has delivered to the
Registrar a certificate substantially in the form of
Exhibit E
hereto
and any legal opinions and certifications as may be reasonably requested by the
Trustee and the Issuer;
(ii) If
the proposed transferee is a Participant and the Notes to be transferred consist
of Physical Notes which after transfer are to be evidenced by an interest in the
IAI Global Note, upon receipt by the Registrar of the Physical Note and
(x) written instructions given in accordance with the Depositary’s and the
Registrar’s procedures and (y) the certificate, if required, referred to in
clause (y) of paragraph (i) above (and any legal opinion or other
certifications), the Registrar shall register the transfer and reflect on its
books and records the date and an increase in the principal amount of the IAI
Global Note in an amount equal to the principal amount of Physical Notes to be
transferred, and the Registrar shall cancel the Physical Notes so transferred;
and
(iii) If
the proposed transferor is a Participant seeking to transfer an interest in a
Global Note, upon receipt by the Registrar of (x) written instructions
given in accordance with the Depositary’s and the Registrar’s procedures and
(y) the certificate, if required, referred to in clause (y) of
paragraph (i) above, the Registrar shall register the transfer and reflect
on its books and records the date and (A) a decrease in the principal
amount of the Global Note from which such interests are to be transferred in an
amount equal to the principal amount of the Notes to be transferred and
(B) an increase in the principal amount of the IAI Global Note in an amount
equal to the principal amount of the Notes to be transferred.
(b)
Transfers to
QIBs
. The following provisions shall apply with respect to the
registration of any proposed transfer of a Restricted Security to a
QIB:
(i) The
Registrar shall register the transfer of any Restricted Security, whether or not
such Note bears the Private Placement Legend, if (x) the requested transfer
is after the expiration of the applicable holding period with respect thereto
set forth in Rule 144(d) of the Securities Act;
provided
,
however
, that neither the
Issuer nor any Affiliate of the Issuer has held any beneficial interest in such
Note, or portion thereof, at any time on or prior to the expiration of the
applicable holding period with respect thereto set forth in Rule 144(d) of the
Securities Act or (y) such transfer is being made by a proposed transferor
who has checked the box provided for on the applicable Global Note stating, or
has otherwise advised the Issuer and the Registrar in writing, that the sale has
been made in compliance with the provisions of Rule 144A to a transferee who has
signed the certification provided for on the applicable Global Note stating, or
has otherwise advised the Issuer and the Registrar in writing, that it is
purchasing the Note for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a QIB
within the meaning of Rule 144A, and is aware that the sale to it is being made
in reliance on Rule 144A and acknowledges that it has received such information
regarding the Issuer as it has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon its foregoing representations in order to claim the exemption from
registration provided by Rule 144A;
(ii) If
the proposed transferee is a Participant and the Notes to be transferred consist
of Physical Notes which after transfer are to be evidenced by an interest in the
144A Global Note, upon receipt by the Registrar of the Physical Note and written
instructions given in accordance with the Depositary’s and the Registrar’s
procedures, the Registrar shall register the transfer and reflect on its book
and records the date and an increase in the principal amount of the 144A Global
Note in an amount equal to the principal amount of Physical Notes to be
transferred, and the Registrar shall cancel the Physical Notes so transferred;
and
(iii) If
the proposed transferor is a Participant seeking to transfer an interest in the
IAI Global Note or the Regulation S Global Note, upon receipt by the
Registrar of written instructions given in accordance with the Depositary’s and
the Registrar’s procedures, the Registrar shall register the transfer and
reflect on its books and records the date and (A) a decrease in the
principal amount of the IAI Global Note or the Regulation S Global Note, as
the case may be, in an amount equal to the principal amount of the Notes to be
transferred and (B) an increase in the principal amount of the 144A Global
Note in an amount equal to the principal amount of the Notes to be
transferred.
(c)
Transfers of Interests in
the Temporary Regulation S Global Note
. The following
provisions shall apply with respect to the registration of any proposed transfer
of interests in the Temporary Regulation S Global Note:
(i) The
Registrar shall register the transfer of an interest in the Temporary
Regulation S Global Note, whether or not such Global Note bears the Private
Placement Legend if the proposed transferor has delivered to the Registrar a
certificate substantially in the form of
Exhibit E
stating, among other things, that the proposed transferee is a Non-U.S. Person
(except for a transfer to a Purchaser Party);
(ii) If
the proposed transferee is a Participant, upon receipt by the Registrar of the
documents referred to in clause (i)(x) above, if required, and instructions
given in accordance with the Depositary’s and the Registrar’s procedures, the
Registrar shall reflect on its books and records the date and amount of such
transfer of an interest in the Temporary Regulation S Global
Note.
(d)
Transfers to Non-U.S.
Persons
. The following provisions shall apply with respect to any
transfer of a Restricted Security to a Non-U.S. Person under Regulation
S:
(i) The
Registrar shall register any proposed transfer of a Restricted Security to a
Non-U.S. Person upon receipt of a certificate substantially in the form of
Exhibit F
from
the proposed transferor and such certifications, legal opinions and other
information as the Trustee or the Issuer may reasonably request;
and
(ii) (a)
If the proposed transferor is a Participant holding a beneficial interest in the
Rule 144A Global Note or the IAI Global Note or the Note to be transferred
consists of Physical Notes, upon receipt by the Registrar of (x) the
documents required by paragraph (i) and (y) instructions in accordance
with the Depositary’s and the Registrar’s procedures, the Registrar shall
reflect on its books and records the date and a decrease in the principal amount
of the Rule 144A Global Note or the IAI Global Note, as the case may be, in an
amount equal to the principal amount of the beneficial interest in the Rule 144A
Global Note or the IAI Global Note, as the case may be, to be transferred or
cancel the Physical Notes to be transferred, and (b) if the proposed
transferee is a Participant, upon receipt by the Registrar of instructions given
in accordance with the Depositary’s and the Registrar’s procedures, the
Registrar shall reflect on its books and records the date and an increase in the
principal amount of the Permanent Regulation S Global Note in an amount
equal to the principal amount of the Rule 144A Global Note, the IAI Global Note
or the Physical Notes, as the case may be, to be transferred.
(e)
Restrictions on Transfer and
Exchange of Global Notes
. Notwithstanding any other provisions of
this Indenture, a Global Note may not be transferred as a whole except by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary.
(f)
Private Placement
Legend
. Upon the transfer, exchange or replacement of Notes not
bearing the Private Placement Legend unless otherwise required by applicable
law, the Registrar shall deliver Notes that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Notes bearing the
Private Placement Legend, the Registrar shall deliver only Notes that bear the
Private Placement Legend unless (i) there is delivered to the Trustee an
Opinion of Counsel reasonably satisfactory to the Issuer and the Trustee to the
effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act or (ii) such Note has been offered and sold (including pursuant to the
Shelf Registration Statement) pursuant to an effective registration statement
under the Securities Act.
(g)
General
. By its
acceptance of any Note bearing the Private Placement Legend, each Holder of such
a Note acknowledges the restrictions on transfer of such Note set forth in this
Indenture and in the Private Placement Legend and agrees that it will transfer
such Note only as provided in this Indenture.
The
Registrar shall retain copies of all letters, notices and other written
communications received pursuant to Section 2.15 or Section 2.16 as
long as there are any Notes outstanding. The Issuer shall have the right
to inspect and make copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable written
notice to the Registrar.
The
Trustee shall have no obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer imposed under this Indenture or
under applicable law with respect to any transfer of any interest in any Note
(including any transfers between or among Depositary Participants or beneficial
owners of interests in any Global Note) other than to require delivery of such
certificates and other documentation or evidence as are expressly required by,
and to do so if and when expressly required by the terms of, this Indenture, and
to examine the same to determine substantial compliance as to form with the
express requirements hereof.
The
Trustee shall have no responsibility for the actions or omissions of the
Depositary, or the accuracy of the books and records of the
Depositary.
(h)
Cancellation and/or
Adjustment of Global Note
. At such time as all beneficial interests
in a particular Global Note have been exchanged for Physical Notes or a
particular Global Note has been redeemed, repurchased or canceled in whole and
not in part, each such Global Note shall be returned to or retained
and canceled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for or transferred to a Person who will take delivery thereof
in the form of a beneficial interest in another Global Note or for Physical
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such
increase.
(i)
Automatic Exchange from
Global Note Constituting a Restricted Security or Physical Note Constituting a
Restricted Security to Global Note Which Is Not a Restricted
Security
. At the option of the Issuer and upon compliance with the
following procedures, beneficial interests in a Global Note constituting a
Restricted Security or Physical Note constituting a Restricted Security shall be
exchanged for beneficial interests in a Global Note, which is not a Restricted
Security. In order to effect such exchange, the Issuer shall provide
written notice to the Trustee instructing the Trustee to (i) direct the
depositary to transfer the specified amount of the outstanding beneficial
interests in a particular Global Note constituting a Restricted Security or
Physical Note constituting a Restricted Security to a Global Note, which is not
a Restricted Security, and provide the depositary with all such information as
is necessary for the depositary to appropriately credit and debit the relevant
Holder accounts and (ii) provide prior written notice to all Holders of the
applicable Global Note constituting a Restricted Security or Physical Note
constituting a Restricted Security of such exchange, which notice must include
the date such exchange is proposed to occur, the CUSIP number of the relevant
Global Note constituting a Restricted Security or Physical Note constituting a
Restricted Security and the CUSIP number of the Global Note, which is not a
Restricted Security, into which such Holders’ beneficial interests will be
exchanged. As a condition to any such exchange pursuant to this Section
2.16(i), the Trustee shall be entitled to receive from the Issuer, and rely upon
conclusively without any liability, an Officers’ Certificate and an Opinion of
Counsel to the Issuer, in form and in substance reasonably satisfactory to the
Trustee, to the effect that such transfer of beneficial interests to the Global
Note, which is not a Restricted Security, shall be affected in compliance with
the Securities Act. The Issuer may request from Holders such information
it reasonably determines is required in order to be able to deliver such
Officers’ Certificate and Opinion of Counsel. Upon such exchange of
beneficial interests pursuant to this Section 2.16(i), the Registrar shall
reflect on its books and records the date of such transfer and a decrease and
increase, respectively, in the principal amount of the applicable Global Note
constituting a Restricted Security or Physical Note constituting a Restricted
Security and the Global Note, which is not a Restricted Security, respectively,
equal to the principal amount of beneficial interests
transferred. Following any such transfer pursuant to this Section
2.16(i) of all of the beneficial interests in a Global Note constituting a
Restricted Security or Physical Note constituting a Restricted Security, such
Global Note constituting a Restricted Security or Physical Note constituting a
Restricted Security shall be cancelled.
(j)
Transfer of Securities Held
by Affiliates
. Notwithstanding anything to the contrary in
this Section 2.16 any certificate (i) evidencing a Note that has been
transferred to an Affiliate (as defined in Rule 405 of the Securities Act) of
the Issuer, as evidenced by a notation on the certificate of transfer or
certificate of exchange for such transfer or in the representation letter
delivered in respect thereof, or (ii) evidencing a Note that has been acquired
from an Affiliate (other than by an Affiliate) in a transaction or a chain of
transactions not involving any public offering, as evidenced by a notation on
the certificate of transfer or certificate of exchange for such transfer or in
the representation letter delivered in respect thereof, shall, until one year
after the last date on which either the Issuer or any Affiliate of the Issuer
was an owner of such Note, in each case, be in the form of a permanent Physical
Note and bear the Private Placement Legend subject to the restrictions in this
Section 2.16. The Registrar shall retain copies of all letters,
notices and other written communications received pursuant to this Section
2.16(j). The Issuer, at its sole cost and expense, shall have the
right to inspect and make copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable advance
written notice to the Trustee.
ARTICLE THREE
PURCHASE
AT OPTION OF HOLDERS UPON
A
FUNDAMENTAL CHANGE OF CONTROL
SECTION 3.01.
|
Purchase at the Option
of Holders upon a Fundamental Change of
Control.
|
(a)
Generally
. If there
shall occur a Fundamental Change of Control at any time prior to the Maturity
Date of the Notes, then each Holder shall have the right, at such Holder’s
option, to require the Issuer to purchase all of such Holder’s Notes, or any
portion thereof in principal amount that is equal to $1,000 or an integral
multiple thereof, on a date specified by the Issuer that is not less than 25
Business Days nor more than 30 Business Days after the Fundamental Change of
Control, subject to extension to comply with applicable law (the “
Fundamental Change of Control
Purchase Date
”), at a purchase price in cash equal to 100% of the
principal amount thereof, together with accrued and unpaid interest thereon to,
but excluding, the Fundamental Change of Control Purchase Date (the “
Fundamental Change of Control
Purchase Price
”), subject to the satisfaction by the Holder of the
requirements set forth in Section 3.01(c);
provided, however
, if the
Fundamental Change of Control Purchase Date occurs after a Record Date and on or
prior to the Interest Payment Date to which it relates, the Issuer will pay
accrued and unpaid interest to the Holder of record as of the corresponding
Record Date and the Fundamental Change of Control Purchase Price payable to the
Holder of such Note will be 100% of the principal amount of such
Note.
No
failure of the Issuer to give the foregoing notices and no defect therein shall
limit any Holder’s purchase rights or affect the validity of the proceedings for
the purchase of the Notes pursuant to this Section 3.01.
(c)
Delivery of Fundamental
Change of Control Purchase Notice By Holders
. For Notes to be purchased
at the option of the Holder, the Holder must deliver to the Paying Agent, at any
time after the occurrence of the Fundamental Change of Control and prior to
Close of Business, on the Business Day immediately preceding the Fundamental
Change of Control Purchase Date,
(1) If
the Notes are Physical Notes, the certificate numbers of the Holder’s Notes to
be delivered for purchase or if such Notes are not Physical Notes, the Holder’s
notice must comply with the appropriate procedures of the Depositary and its
direct and indirect participants;
(2) The
portion of the principal amount of the Holder’s Notes to be purchased, which
must be $1,000 or an integral multiple thereof; and
(3) That
the Holder’s Notes are to be purchased by the Issuer pursuant to the applicable
provisions of the Notes and this Indenture.
(4) Delivery
or book-entry transfer of the Notes to the Trustee (or other Paying Agent
appointed by the Issuer) at any time after delivery of the Fundamental Change of
Control Purchase Notice (together with all necessary endorsements) at the
applicable Corporate Trust Office of the Trustee (or other Paying Agent
appointed by the Issuer), such delivery being a condition to receipt by the
Holder of the Fundamental Change of Control Purchase Price therefor;
provided,
that such
Fundamental Change of Control Purchase Price shall be so paid pursuant to this
Section 3.01 only if the Notes so delivered to the Trustee (or other Paying
Agent appointed by the Issuer) shall conform in all respects to the description
thereof in the related Fundamental Change of Control Purchase Notice and no
written notice of withdrawal in accordance and complying with Section 3.03
shall have been received by the Paying Agent at any time prior to the Close of
Business on the Business Day immediately preceding the Fundamental Change of
Control Purchase Date.
All
questions as to the validity, eligibility (including time of receipt) and
acceptance of Notes for purchase shall be determined by the Issuer, whose
determination shall be final and binding absent manifest error. The
Issuer shall purchase from the Holder thereof, pursuant to this
Section 3.01, a portion of a Note, if the principal amount of such portion
is $1,000 or an integral multiple thereof. Provisions of this Indenture that
apply to the purchase of all of a Note shall apply to the purchase of such
portion of such Note. The Paying Agent shall promptly notify the
Issuer of the receipt by it of any Fundamental Change of Control Purchase Notice
or written notice of withdrawal thereof.
(d)
No Payment During Events of
Default
. Notwithstanding the foregoing, no Notes may be
purchased by the Issuer at the option of the Holders pursuant to this
Section 3.01 if an Event of Default has occurred and is continuing other
than an Event of Default that is cured by the payment of the Fundamental Change
of Control Purchase Price on the Fundamental Change of Control Purchase
Date.
Any
purchase by the Issuer contemplated pursuant to the provisions of this
Section 3.01 shall be consummated by the delivery to the Trustee of the
consideration to be received by the Holder promptly following the later of the
Fundamental Change of Control Purchase Date or the time of the book-entry
transfer or delivery of the Notes.
SECTION 3.02.
|
Fundamental Change of
Control Issuer Notice.
|
(a)
The Fundamental Change of
Control Issuer Notice
. The Fundamental Change of Control
Issuer Notice shall:
(i) State
the Fundamental Change of Control Purchase Price including the amount of
interest accrued and unpaid per $1,000 principal amount of Notes to, but
excluding, the Fundamental Change of Control Purchase Date and the Fundamental
Change of Control Purchase Date to which the Fundamental Change of Control
Issuer Notice relates;
(ii) State
the event constituting the Fundamental Change of Control and the Effective Date
of the Fundamental Change of Control;
(iii) State
whether the Fundamental Change of Control Purchase Price will be paid in
cash;
(iv) State
that Holders must exercise their right to elect purchase prior to Close of
Business on the Business Day immediately preceding the Fundamental Change of
Control Purchase Date by sending a Fundamental Change of Control Purchase Notice
to the Paying Agent;
(v) State
the name and address of the Paying Agent;
(vi) State
that Notes must be surrendered to the Paying Agent to collect the Fundamental
Change of Control Purchase Price;
(vii) State
that a Holder may withdraw its Fundamental Change of Control Purchase Notice in
whole or in part at any time prior to Close of Business on the Business Day
immediately preceding the Fundamental Change of Control Purchase Date by
delivering a valid written notice of withdrawal in accordance with
Section 3.03;
(viii) State
that the Notes are then convertible, the Conversion Rate and any adjustments to
the Conversion Rate resulting from the Fundamental Change of Control transaction
(pursuant to Section 3.01) and expected changes in cash, shares or other
property deliverable upon conversion of the Notes as a result of the occurrence
of the Fundamental Change of Control;
(ix)
State that if Notes are converted in connection with a Fundamental Change of
Control (rather than repurchased) a Holder shall be entitled to receive
Additional Shares and a Make Whole Payment (as defined in Section 5.07(b)
and Section 5.07(f));
(x) State
the number of Additional Shares and Make Whole Payment that would be payable as
a result of such Fundamental Change of Control transaction, if any, if the Notes
are converted in connection with such Fundamental Change of Control
(rather than repurchased);
(xi) State
that for Notes to be converted in connection with a Fundamental Change of
Control, Notes must be converted at any time on or after the Effective Date of
the Fundamental Change of Control but prior to the Close of Business on the
Fundamental Change of Control Purchase Date;
(xii) State
that Notes as to which a Fundamental Change of Control Purchase Notice has been
given by a Holder may be converted and the Additional Shares and Make Whole
Payment received only if a Fundamental Change of Control Purchase Notice is not
given or is withdrawn in accordance with the terms of this Indenture;
and
(xiii) State
the CUSIP number of the Notes.
(b)
Other
Matters
. A Fundamental Change of Control Issuer Notice may be
given by the Issuer or, at the Issuer’s request, the Trustee shall give such
Fundamental Change of Control Issuer Notice in the Issuer’s name and at the
Issuer’s expense;
provided
, that the text of
the Fundamental Change of Control Issuer Notice shall be prepared by the
Issuer.
The
Issuer will, to the extent required, (i) comply with the provisions of
Rule 13e-4 and Rule 14e-1 (or any successor provision) and any other
tender offer rules under the Exchange Act that may be applicable at the time of
the purchase of the Notes, (ii) file the related Schedule TO (or any
successor schedule, form or report) under the Exchange Act and
(iii) otherwise comply with all federal and state securities laws so as to
permit the rights and obligations under Section 3.01 to be exercised in the
time and in the manner specified in Section 3.01.
Notwithstanding
the foregoing, the Issuer will not be required to make an offer to purchase the
Notes pursuant to this Article Three after the Maturity Date or after the
Conversion Termination Date.
No
failure of the Issuer to give the foregoing notices and no defect therein shall
limit any Holder’s purchase rights or affect the validity of the proceedings for
the purchase of Notes pursuant to this Section 3.02.
SECTION 3.03.
|
Effect of Fundamental
Change of Control Purchase Notice;
Withdrawal.
|
(a)
Right to Receive Fundamental
Change of Control Purchase Price
. Upon receipt by the Paying
Agent of the Fundamental Change of Control Purchase Notice specified in
Section 3.01(c), the Holder of the Notes in respect of which such
Fundamental Change of Control Purchase Notice was given shall (unless such
Fundamental Change of Control Purchase Notice is validly withdrawn in accordance
with Section 3.03(b)) thereafter be entitled to receive solely the
Fundamental Change of Control Purchase Price with respect to such
Notes. Such Fundamental Change of Control Purchase Price shall be
paid to such Holder, subject to receipt of funds and/or the Notes by the Paying
Agent, promptly following the later of (x) the Fundamental Change of
Control Purchase Date with respect to such Notes (
provided
the Holder has
satisfied the conditions in Section 3.01(a)) and (y) the time of
book-entry transfer or delivery of such Notes to the Paying Agent by the Holder
thereof in the manner required by Section 3.01. The Notes in
respect of which a Fundamental Change of Control Purchase Notice has been given
by the Holder thereof may not be converted pursuant to Article Five hereof
on or after the date of delivery of such Fundamental Change of Control Purchase
Notice unless such Fundamental Change of Control Purchase Notice has first been
validly withdrawn pursuant to Section 3.03(b).
(b)
Withdrawal of Fundamental
Change of Control Purchase Notice
. A Fundamental Change of
Control Purchase Notice may be withdrawn (in whole or in part) by means of a
written notice of withdrawal delivered to the Paying Agent at any time prior to
Close of Business time on the Business Day immediately preceding the Fundamental
Change of Control Purchase Date, specifying:
(i) If
the Notes are Physical Notes, the certificate numbers of the withdrawn Notes, or
if such Notes are not Physical Notes, the notice must comply with appropriate
procedures of the Depositary and its direct and indirect
participants;
(ii) The
principal amount of the Notes with respect to which notice of withdrawal is
being submitted, which must be $1,000 or integral multiples thereof;
and
(iii) The
principal amount, if any, of such Notes which remains subject to the original
Fundamental Change of Control Purchase Notice and which has been or will be
delivered for purchase by the Issuer, which must be $1,000 or integral multiples
thereof.
If a
Fundamental Change of Control Purchase Notice is properly withdrawn, the Issuer
shall not be obligated to purchase the Notes listed on the
Fundamental Change of Control Purchase Notice nor pay the Fundamental Change of
Control Purchase Price therefor.
SECTION 3.04.
|
Deposit of Fundamental
Change of Control Purchase
Price.
|
(a)
Deposit of
Funds
. No later than 11:00 a.m. New York City time
on the Fundamental Change of Control Purchase Date, the Issuer shall deposit
with the Paying Agent (or, if the Issuer or a Subsidiary or an Affiliate of
either of them is acting as the Paying Agent, shall segregate and hold in trust
as provided herein) an amount in cash (in immediately available funds if
deposited on such Fundamental Change of Control Purchase Date) sufficient to pay
the Fundamental Change of Control Purchase Price, of all the Notes or portions
thereof that are to be purchased as of the Fundamental Change of Control
Purchase Date. The Issuer shall promptly notify the Trustee in
writing of the amount of any deposits of cash made pursuant to this
Section 3.04. The Issuer shall be entitled to make any deposit
of funds contemplated by this Section 3.04 under arrangements designed to
permit such funds to generate interest or other income for the Issuer, and the
Issuer shall be entitled to receive all interest and other income earned by any
funds while such funds shall be deposited as contemplated by this
Article Three,
provided,
that the Issuer
shall maintain on deposit funds sufficient to satisfy all payments which the
deposit arrangement shall have been established to satisfy.
(b)
Interest shall cease to
Accrue
. If on the Fundamental Change of Control Purchase Date
the Paying Agent holds funds sufficient to pay the Fundamental Change of Control
Purchase Price of the Notes that Holders have elected to require the Issuer to
purchase in accordance with Section 3.01(a), then, as of the Fundamental
Change of Control Purchase Date, (i) such Notes will cease to be
outstanding and interest will cease to accrue thereon and (ii) all other
rights of the Holder in respect thereof will terminate (other than the right to
receive the Fundamental Change of Control Purchase Price and previously accrued
and unpaid interest upon delivery or transfer of such Notes). This
will be the case whether or not book-entry transfer of the Notes has been made
or the Notes have been delivered to the Paying Agent.
SECTION 3.05.
|
Notes Purchased in
Whole or in Part; Repayment to the
Issuer.
|
(a)
Notes Purchased in Whole or
in Part
. Any Note that is to be purchased, whether in whole or
in part, shall be surrendered at the office of the Paying Agent (with, if the
Issuer or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Issuer and the Trustee duly executed by,
the Holder thereof or such Holder’s attorney duly authorized in writing) and the
Issuer shall execute and the Trustee shall authenticate and deliver to the
Holder of such Note, without service charge, a new Note or Notes, of any
authorized denomination as requested by such Holder in aggregate principal
amount equal to, and in exchange for, the portion of the principal amount of the
Note so surrendered which is not purchased;
provided,
that in no event
shall a Note of a principal amount of $1,000 or less be redeemed in
part.
(b)
Repayment to the
Issuer
. The Paying Agent shall return to the Issuer any cash
that remains unclaimed, together with interest, if any, thereon, held by it for
the payment of the Fundamental Change of Control Purchase Price;
provided,
that to the extent
that the aggregate amount of cash deposited by the Issuer pursuant to
Section 3.04 exceeds the aggregate Fundamental Change of Control Purchase
Price of the Notes or portions thereof which the Issuer is obligated to purchase
as of the Fundamental Change of Control Purchase Date, then as soon as
practicable following the Fundamental Change of Control Purchase Date, the
Paying Agent shall return any such excess to the Issuer.
ARTICLE FOUR
REDEMPTION
SECTION 4.01.
|
Redemption at the
Option of the Issuer.
|
(a)
Redemption at the Option of
the Issuer Following Conversion Termination Date
. Notes may
not be redeemed by the Issuer in whole or in part at any time, except as
provided in this Article Four. On or after the Conversion
Termination Date, the Issuer may, at its option, redeem outstanding Notes, in
whole or in part, out of funds legally available therefor, at any time or from
time to time, subject to the notice provisions and provisions for partial
redemption described below, at a price (the “
Redemption Price
”) equal to
100% of the principal amount thereof, plus accrued and unpaid
interest, if any, to, but excluding, the Conversion Termination Date, plus, the
Cash Conversion Amount, if any, in respect of the Notes to be redeemed;
provided
, that Notes subject
to redemption under this Article Four shall not include any Notes specified
for conversion pursuant to an Election Notice as described in
Section 5.08(c). Subject to the Conversion Cap and
Section 4.02, the Issuer may elect to pay the Cash Conversion Amount, in
whole or in part, in shares of its Common Stock.
(b)
Notice of
Redemption
. In case the Issuer shall desire to exercise the
right to redeem the Notes pursuant to this Section 4.01, it shall fix a
date for redemption, and it, or at its request (which request must be delivered
to the Trustee at least ten (10) Business Days prior to the date the
Trustee is requested to give notice as described below unless a shorter period
is agreed to by the Trustee) the Trustee in the name of and at the expense of
the Issuer, shall mail or cause to be mailed a notice of such redemption at
least fifteen (15) and not more than forty-five (45) days prior to the
Redemption Date to the Holders of the Notes to be redeemed. In any
case, failure to give notice to a Holder or any defect in the notice to the
Holder of any Notes designated for redemption shall not affect the validity of
the proceedings for the redemption of any other Note.
In
addition to any information required by law, each such notice of redemption
shall specify the following:
(i) The
principal amount of Notes to be redeemed,
(ii) The
date fixed for redemption;
(iii) The
Redemption Price at which such Notes are to be redeemed (including the Cash
Conversion Amount);
(iv) The
place or places of payment, and that payment will be made upon presentation and
surrender of the physical certificate or certificates representing such
Notes;
(v) That
the Redemption Price, will be paid as specified in said notice and whether the
Cash Conversion Amount will be paid in cash or in shares of Common Stock or a
combination of cash and shares of Common Stock, and if payable all or in part in
Common Stock, the method of calculating the amount of Common Stock to be
delivered on the applicable payment date;
(vi) That
interest on such Notes ceased to accrue as of the Conversion Termination Date in
accordance with this Indenture, and
On or
prior to the date fixed for redemption specified in the notice of redemption
given as provided in this Section 4.01(b), the Issuer will deposit with a
bank or trust company having an office or agency in the Borough of Manhattan,
The City of New York and having a combined capital and surplus of at least
$50,000,000 (the “
Deposit Bank
”) an amount in
cash sufficient to redeem on the date fixed for redemption all the Notes so
called for redemption at the appropriate Redemption Price, together with the
Cash Conversion Amount, if any;
provided,
that if such
payment is made on the date fixed for redemption it must be received by the
Deposit Bank by 11:00 a.m. New York City time, on such
date. The Issuer shall be entitled to make any deposit of funds
contemplated by this Section 4.01 under arrangements designed to permit
such funds to generate interest or other income for the Issuer, and the Issuer
shall be entitled to receive all interest and other income earned by any funds
while such funds shall be deposited as contemplated by this Article Four,
provided,
that the
Issuer shall maintain on deposit funds sufficient to satisfy all payments which
the deposit arrangement shall have been established to satisfy. If the
conditions precedent to the disbursement of any funds deposited by the Issuer
pursuant to this Article Four shall not have been satisfied within two
years after the establishment of such funds, then (i) such funds shall be
returned to the Issuer upon its request, (ii) after such return, such funds
shall be free of any trust which shall have been impressed upon them,
(iii) the person entitled to the payment for which such funds shall have
been originally intended shall have the right to look only to the Issuer for
such payment, subject to applicable escheat laws, and (iv) the trustee
which shall have held such funds shall be relieved of any responsibility for
such funds upon the return of such funds to the Issuer.
If fewer
than all the outstanding Notes are to be redeemed, Notes to be redeemed shall be
selected by the Issuer from outstanding Notes not previously called for
redemption by lot or pro rata (as near as may be) or by any other equitable
method determined by the Issuer in its sole discretion.
(c)
Payment of Redemption
Price
. If notice of redemption has been given as above
provided
, on and after the
date fixed for redemption (unless the Issuer shall default in the payment of the
Redemption Price, together with the Cash Conversion Amount), such Notes shall be
deemed no longer outstanding and the Holders thereof shall have no right in
respect of such Notes except the right to receive the Redemption Price thereof
and the Cash Conversion Amount, if any.
If fewer
than all Notes represented by any certificate are redeemed, a new certificate
shall be issued representing the unredeemed Notes without cost to the Holder
thereof.
SECTION 4.02.
|
Payment of Cash
Conversion Amount in Shares
of Common
Stock.
|
Subject
to the Conversion Cap, the Issuer may elect to pay the Cash Conversion Amount by
delivery of shares of its Common Stock if and only if the conditions of
Section 5.08(f) have been satisfied.
SECTION 4.03.
|
No other Redemption
Rights.
|
No
sinking fund, mandatory redemption or other similar provision shall apply to the
Notes.
ARTICLE FIVE
CONVERSION
SECTION 5.01.
|
Right to
Convert.
|
(a)
Conversion
. Subject
to and upon compliance with the provisions of this Indenture, each Holder shall
have the right, at such Holder’s option, at any time to convert the principal
amount of its Notes, or any portion of such principal amount which is $1,000 or
an integral multiple thereof, into shares of Common Stock;
provided
, that a Holder’s
right to convert Notes shall terminate upon the occurrence of a Conversion Event
as provided in Section 5.08.
Notwithstanding
the foregoing, if a Holder of Notes has submitted Notes for purchase under
Article Three, the Holder may convert such Notes only if the Holder first
withdraws its Fundamental Change of Control Purchase Notice pursuant to
Section 3.03(b).
(b)
Conversion in Whole or in
Part
. Provisions of this Indenture that apply to conversion of
all of a Note also apply to conversion of a portion of a Note.
SECTION 5.02.
|
Conversion
Procedure.
|
(a)
Conversion
Notice
. Each Note shall be convertible at the office of the
Conversion Agent. In order to exercise the conversion right with
respect to any interest in Global Notes, the Holder must complete the
appropriate instruction form for conversion pursuant to the Depositary’s
book-entry conversion program, furnish appropriate endorsements and transfer
documents if required by the Issuer or the Trustee or Conversion Agent and any
transfer taxes if required pursuant to Section 5.09. In order to exercise
the conversion right with respect to any Physical Notes, the Holder of any such
Notes to be converted, in whole or in part, shall:
(ii) Deliver
such notice, which is irrevocable, and the Note to a Conversion
Agent;
(iii) If
required, furnish appropriate endorsements and transfer documents;
and
The date
on which the Holder satisfies all of the applicable requirements set forth above
is the “
Conversion Date
.”
Each
conversion shall be deemed to have been effected as to any such Notes (or
portion thereof) on the date on which the requirements set forth above in
Section 5.02(a) have been satisfied as to such Notes (or portion thereof);
provided, however
, that
the person in whose name any certificate or certificates for shares of Common
Stock shall be issuable upon such conversion shall be deemed to have become as
of the relevant Conversion Date the Holder of record of the shares of Common
Stock represented thereby;
provided
,
further
, that in case of any
such surrender on any date when the share transfer books of the Issuer shall be
closed, the Person or Persons in whose name the certificate or certificates for
such shares are to be issued shall be deemed to have become the record Holder
thereof for all purposes on the next day on which such share transfer books are
open, but such conversion shall be at the Conversion Rate in effect on the date
upon which such Notes shall be surrendered. All shares of Common
Stock delivered upon conversion of the Notes will, upon delivery, be duly
authorized, validly issued and fully paid and non assessable, free and clear of
all Liens and not subject to any preemptive rights.
(c)
Trustee
. Upon
the conversion of an interest in Global Notes, the Trustee (or other Conversion
Agent appointed by the Issuer) shall make a notation on such Global Notes as to
the reduction in the principal amount represented thereby. The Issuer shall
notify the Trustee in writing of any conversions of Notes effected through any
Conversion Agent other than the Trustee.
(d)
Legend
. Each
share certificate representing shares of Common Stock issued upon conversion of
the Notes that are Restricted Notes shall bear the legend in substantially the
form of
Exhibit G
hereto.
SECTION 5.03.
|
Settlement upon
Conversion.
|
(a)
Number of
Shares
. With respect to any conversion of Notes, the Issuer
shall, subject to the provisions of this Article Five, deliver to
converting Holders, in respect of each $1,000 principal amount of Notes being
converted, a number of shares of Common Stock equal to the then Conversion
Rate.
(c)
Payment of Accrued Interest
in Shares of Common Stock
. The Issuer may elect to pay the
Accrued Interest to any Holder by delivery of shares of its Common Stock if and
only if the following conditions have been satisfied:
(i) The
shares of Common Stock deliverable in payment of the Accrued Interest shall have
a fair market value as of the Conversion Date of not less than the Accrued
Interest;
For
purposes of this Section 5.03(c), the fair market value of shares of Common
Stock shall be determined by the Issuer and shall be equal to 95% of the average
of the 10-day VWAP of the Common Stock for the 10 consecutive Trading Days
immediately preceding the Conversion Date. The Issuer shall provide
such Holder written notice prior to the Conversion Payment Date that it will pay
all or a portion of the Accrued Interest in shares of Common Stock.
(ii) Payment
of the Accrued Interest may not be made in Common Stock unless such stock is, or
shall have been, approved for listing on the United States national securities
exchange on which the Issuer’s Common Stock may then be listed prior to the
Conversion Payment Date;
provided
that the foregoing
restriction shall not apply if the Issuer’s Common Stock is not then so listed
on a United States national securities exchange;
(iii) All
shares of Common Stock which may be issued will be issued out of the Issuer’s
authorized but unissued Common Stock and, will upon issue, be duly and validly
issued and fully paid and non-assessable free of any preemptive rights;
and
(iv) Payment
of the Accrued Interest may not be made in Common Stock to any Person to the
extent such payment would cause such Person to become a “beneficial owner” (as
determined pursuant to Section 13 of the Exchange Act) of securities of the
Issuer in excess of the Conversion Cap as provided in Section 5.13;
provided
, that the foregoing
shall not prevent the Issuer from making a payment in Common Stock to any other
Person.
If all
the conditions set forth above are not satisfied, the Accrued Interest shall be
paid by the Issuer only in cash.
(d)
No Fractional
Shares
. The Issuer shall not issue fractional shares upon
conversion of Notes. If multiple Notes shall be surrendered for
conversion at one time by the same Holder, the number of full shares which shall
be issuable upon conversion (and the number of fractional shares, if any, for
which cash shall be delivered) shall be computed on the basis of the aggregate
principal amount of the Notes (or specified portions thereof to the extent
permitted hereby) so surrendered. If any fractional share would be
issuable upon the conversion of any Notes, the Issuer shall make payment an
amount in cash for the current market value of the fractional
shares. The current market value of a fractional share shall be
determined (calculated to the nearest 1/1000th of a share) by multiplying the
Last Reported Sale Price of the Common Stock on the relevant Conversion Date by
such fractional share and rounding the product to the nearest whole
cent. The Issuer shall not issue fractional shares upon payment of
Accrued Interest. If any fractional share would be issuable upon such
payment, the Issuer shall make payment in an amount of such fractional share in
cash.
(e)
Satisfaction of
Conversion
. By delivery to the Holder of the full number of
shares of Common Stock, together with any cash payment for fractional shares,
issuable upon conversion, and amounts equal to the Accrued Interest, whether
paid in cash or in shares of Common Stock in accordance with
Section 5.03(c), the Issuer will be deemed to satisfy in full its
obligation to pay the principal amount of the Notes and all accrued and unpaid
interest to, but not including, the Conversion Date.
SECTION 5.04.
|
Adjustment of
Conversion Rate.
|
The
Conversion Rate shall be adjusted from time to time by the Issuer as
follows:
(a)
Dividends and
Distributions
. In case the Issuer shall, at any time or from
time to time while any of the Notes are outstanding, pay a dividend in shares of
Common Stock or make a distribution in shares of Common Stock, in each case, to
all or substantially all holders of Common Stock, the Conversion Rate will be
adjusted based on the following formula:
CR
1
= CR
0
x OS
1
/ OS
0
Where
CR
0
= the
Conversion Rate in effect at Close of Business on the Trading Day immediately
preceding the Ex-Dividend Date for such dividend or distribution;
CR
1
= the
Conversion Rate in effect immediately after the Open of Business on the
Ex-Dividend Date for such dividend or distribution;
OS
0
= the
number of shares of Common Stock outstanding at Close of Business on the Trading
Day immediately preceding the Ex-Dividend Date for such dividend or
distribution; and
OS
1
= the
number of shares of Common Stock that would be outstanding immediately after the
Open of Business on the Ex-Dividend Date and solely as a result of and giving
effect to such dividend or distribution.
Any
adjustment made pursuant to this Section 5.04(a) shall become effective
immediately prior to Open of Business on the Ex-Dividend Date for such dividend
or distribution. If any dividend or distribution that is the subject of this
Section 5.04(a) is declared but not so paid or made, the Conversion Rate
shall be readjusted, effective as of the date the Issuer publicly announces its
decision not to make such dividend or distribution, to the Conversion Rate that
would then be in effect if such dividend or distribution had not been declared.
For purposes of this Section 5.04(a), the number of shares of Common Stock
outstanding at Close of Business on the Trading Day immediately preceding the
Ex-Dividend Date for such dividend or distribution shall not include shares of
Common Stock held in treasury. The Issuer will not pay any dividend or make any
distribution on Common Stock held in treasury.
(b)
Subdivisions and
Combinations
. In case outstanding shares of Common Stock shall
be subdivided into a greater number of shares of Common Stock or combined into a
smaller number of shares of Common Stock (in each case, other than in connection
with a Fundamental Change of Control), the Conversion Rate will be adjusted
based on the following formula:
CR
1
= CR
0
x OS
1
/ OS
0
Where
CR
0
= the
Conversion Rate in effect at Close of Business on the Trading Day immediately
preceding the effective date of such subdivision or combination;
CR
1
= the
Conversion Rate in effect immediately after the Open of Business on the
effective date of such subdivision or combination;
OS
0
= the
number of shares of Common Stock outstanding at Close of Business on the Trading
Day immediately preceding the effective date of such subdivision or combination;
and
OS
1
= the
number of shares of Common Stock that would be outstanding immediately after the
Open of Business on the effective date of such subdivision or combination, and
solely as a result of and giving effect to, such subdivision or
combination.
Any
adjustment made pursuant to this Section 5.04(b) shall become effective
immediately prior to Open of Business on the effective date of such subdivision
or combination. If any subdivision or combination that is the subject
of this Section 5.04(b) is declared but not so made, the Conversion Rate
shall be readjusted, effective as of the date the Issuer publicly announces its
decision not to effect such subdivision or combination to the Conversion Rate
that would then be in effect if such subdivision or combination had not been
declared. For purposes of this Section 5.04(b), the number of
shares of Common Stock outstanding at Close of Business on the Trading Day
immediately preceding the effective date of such subdivision or combination for
such subdivision or combination shall not include shares of Common Stock held in
treasury.
(c)
Rights, Warrants or
Options
. In case the Issuer shall issue rights (other than
rights issued pursuant to a stockholder rights plan, and then in accordance with
Section 5.04(n)), warrants or options to all or substantially all holders
of Common Stock entitling them to purchase, for a period expiring within 60
calendar days of the date of issuance, Common Stock at an aggregate price per
share less than the average of the Last Reported Sale Prices of Common Stock
during the 10 consecutive Trading Day period ending on the Trading Day
immediately preceding the time of announcement of the distribution, the
Conversion Rate will be adjusted based on the following formula:
CR
1
= CR
0
x (OS
0
+ X)/
(OS
0
+Y)
Where
CR
0
= the
Conversion Rate in effect at Close of Business on the Trading Day immediately
preceding the Ex-Dividend Date for such issuance;
CR
1
= the
Conversion Rate in effect immediately after the Open of Business on the
Ex-Dividend Date for such issuance;
OS
0
= the
number of shares of Common Stock outstanding at Close of Business on the Trading
Day immediately preceding the Ex-Dividend Date for such issuance;
X = the
total number of shares of Common Stock issuable pursuant to such rights,
warrants or options; and
Y = the
number of shares of Common Stock equal to the quotient of (x) the aggregate
price payable to exercise such rights, warrants or options divided by
(y) the average of the Last Reported Sale Prices of Common Stock during the
10 consecutive Trading Day period ending on the Trading Day immediately
preceding the date of announcement of the issuance of such rights, warrants or
options.
Any
adjustment made pursuant to this Section 5.04(c) shall become effective
immediately prior to Open of Business on the Ex-Dividend Date for such issuance.
In the event that such rights, warrants or options described in this
Section 5.04(c) are not so issued, the Conversion Rate shall be readjusted,
effective as of the date the Issuer publicly announces its decision not to issue
such rights, warrants or options to the Conversion Rate that would then be in
effect if such issuance had not been declared. To the extent that such rights,
warrants or options are not exercised prior to their expiration or shares of
Common Stock are otherwise not delivered pursuant to such rights, warrants or
options upon the exercise of such rights, warrants or options the Conversion
Rate shall be readjusted to the Conversion Rate that would then be in effect had
the adjustments made upon the issuance of such rights, warrants or options been
made on the basis of the delivery of only the number of shares of Common Stock
actually delivered. In determining the aggregate price payable to exercise such
rights, warrants or options there shall be taken into account any consideration
received by the Issuer for such rights, warrants or options and the value of
such consideration (if other than cash, to be determined in good faith by the
Issuer’s Board of Directors). For purposes of this Section 5.04(c), the
number of shares of Common Stock outstanding at Close of Business on the Trading
Day immediately preceding the Ex-Dividend Date for such issuance shall not
include shares of Common Stock held in treasury. The Issuer will not issue any
rights, warrants or options in respect of shares of Common Stock held in
treasury.
(d)
Other Distributions; Public
Spin-Off
. In case the Issuer shall, by dividend or otherwise,
distribute to all or substantially all holders of its outstanding Common Stock,
evidences of the Issuer’s indebtedness or assets, including securities but
excluding:
(i) Any
dividends or distributions referred to in Section 5.04(a)
above;
(ii) Shares
delivered in connection with subdivisions of Common Stock referred to in
Section 5.04(b) above;
(iii) Any
rights, warrants or options referred to in Section 5.04(c)
above;
(iv) Any
dividends or distributions referred to in Section 5.04(e) below; and,
or
CR
1
= CR
0
x (SP
0
/ (SP
0
–
FMV))
Where
CR
0
= the
Conversion Rate in effect at Close of Business on the Trading Day immediately
preceding the Ex-Dividend Date for such distribution;
CR
1
= the
Conversion Rate in effect on the Ex-Dividend Date for such
distribution;
SP
0
= the
average of the Last Reported Sale Prices of Common Stock during the 10
consecutive Trading Day period ending on the Trading Day immediately preceding
the Ex-Dividend Date for such distribution; and
FMV = the
Fair Market Value (as determined in good faith by the Issuer’s Board of
Directors) on the Ex-Dividend Date for such distribution of the Distributed
Assets so distributed, expressed as an amount per share of Common
Stock.
If the
transaction that gives rise to an adjustment pursuant to this
Section 5.04(d) is, however, one pursuant to which the payment of a
dividend or other distribution on Common Stock consists of shares of Capital
Stock of any class or series of, or similar equity interests in, a Subsidiary or
other business unit of the Issuer (i.e., a “spin-off”) that are, or when issued,
will be, traded or listed on The Nasdaq Global Market, the Nasdaq Global Select
Market, the New York Stock Exchange or any other United States national
securities exchange or market (a “
Public Spin-Off
”), the
Conversion Rate will be adjusted based on the following
formula:
CR
1
= CR
0
x
(FMV
0
+ MP
0
)
/ MP
0
Where
CR
0
= the
Conversion Rate in effect at Close of Business on the Trading Day immediately
preceding the Ex-Dividend Date for such distribution;
CR
1
= the
Conversion Rate in effect on the Ex-Dividend Date for such
distribution;
FMV
0
= the
average of the Last Reported Sale Prices of the Distributed Assets applicable to
one share of Common Stock during the 10 consecutive Trading Day period
commencing on and including the effective date of the Public Spin-Off (the “
Public Spin-Off Valuation
Period
”); and
MP
0
= the
average of the Last Reported Sale Prices of Common Stock during the Public
Spin-Off Valuation Period.
Any
adjustment made pursuant to this Section 5.04(d) shall become effective
immediately prior to Open of Business on the 10
th
Trading
Day from and including the date of the spin-off;
provided
that in respect of
any conversion within 10 Trading Days following the effective date of a
spin-off, references in this paragraph (d) to 10 Trading Days shall be
deemed replaced with such lesser number of Trading Days as have elapsed between
the effective Date of such spin-off and the Conversion Date with respect to the
applicable Conversion Rate. If any dividend or distribution of the
type described in this Section 5.04(d) is declared but not so paid or made,
the Conversion Rate shall be immediately readjusted, effective as of the date
the Issuer publicly announces its decision not to pay such dividend or
distribution, to the Conversion Rate that would then be in effect if such
dividend or distribution had not been declared. If an adjustment to
the Conversion Rate is required pursuant to this Section 5.04(d) during any
settlement period in respect of Notes that have been tendered for conversion,
delivery of the related conversion consideration will be delayed to the extent
necessary in order to complete the calculations provided for in this
Section 5.04(d).
Rights,
warrants or options distributed by the Issuer to all holders of Common Stock
entitling the holders thereof to subscribe for or purchase shares of the
Issuer’s Capital Stock (either initially or under certain circumstances), which
rights, warrants or options, until the occurrence of a specified event or events
(“
Trigger Event
”): (i) are
deemed to be transferred with such shares of Common Stock; (ii) are not
exercisable; and (iii) are also issued in respect of future issuances of
shares of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 5.04 (and no adjustment to the Conversion Rate
under this Section 5.04 will be required) until the occurrence of the
earliest Trigger Event, whereupon such rights, warrants or options shall be
deemed to have been distributed and an appropriate adjustment (if any is
required) to the Conversion Rate shall be made under this Section 5.04(d),
except as set forth in Section 5.04(n). If any such rights, warrants or
options are subject to events, upon the occurrence of which such rights,
warrants or options become exercisable to purchase different securities,
evidences of indebtedness or other assets, then the date of the occurrence of
any and each such event shall be deemed to be the date of distribution and
Trigger Date with respect to new rights, warrants or options with such rights
(and a termination or expiration of the existing rights, warrants or options
without exercise by any of the holders thereof), except as set forth in
Section 5.04(n). In addition, except as set forth in Section 5.04(n),
in the event of any distribution (or deemed distribution) of rights, warrants or
options, or any Trigger Event or other event (of the type described in the
preceding sentence) with respect thereto that was counted for purpose of
calculating a distribution amount for which an adjustment to the Conversion Rate
under this Section 5.04 was made (including any adjustment contemplated by
Section 5.04(n)), (1) in the case of any such rights, warrants or
options that shall all have been redeemed or repurchased without exercise by any
holders thereof, the Conversion Rate shall be readjusted upon such final
redemption or repurchase to give effect to such distribution or Trigger Event,
as the case may be, as though it were a cash distribution, equal to the per
share redemption or repurchase price received by a holder or holders of Common
Stock with respect to such rights, warrants or options (assuming such holder had
retained such rights, warrants or options), made to all holders of Common Stock
as of the date of such redemption or repurchase, and (2) in the case of
such rights, warrants or options that shall have expired or been terminated
without exercise by any holders thereof, the Conversion Rate shall be readjusted
as if such rights, warrants or options had not been issued.
No
adjustment to the Conversion Rate shall be made pursuant to this
Section 5.04(d) in respect of rights, warrants or options distributed or
deemed distributed on any Trigger Event to the extent that such rights, warrants
or options are actually distributed or reserved by the Issuer for distribution
to Holders of Notes upon conversion by such Holders of Notes to Common
Stock.
(e)
Cash
Distributions
. In case the Issuer shall pay a dividend or
otherwise distribute to all or substantially all holders of its Common Stock a
dividend or other distribution of exclusively cash excluding any dividend
or distribution in connection with the liquidation, dissolution or winding up of
the Issuer, whether voluntary or involuntary, the Conversion Rate will be
adjusted based on the following formula:
CR
1
= CR
0
x (SP
0
/ (SP
0
–
C))
Where
CR
0
= the
Conversion Rate in effect at Close of Business on the Trading Day immediately
preceding the Ex-Dividend Date for such distribution;
CR
1
= the
Conversion Rate in effect immediately after the Open of Business on the
Ex-Dividend Date for such distribution;
SP
0
= the
average of the Last Reported Sale Prices of Common Stock during the 10
consecutive Trading Day period ending on the Trading Day immediately preceding
the Ex-Dividend Date for such distribution; and
C = the
amount in cash per share of Common Stock the Issuer distributes to holders of
Common Stock.
Any
adjustment made pursuant to this Section 5.04(e) shall become effective
immediately prior to Open of Business on the Ex-Dividend Date for such dividend
or distribution. If any dividend or distribution of the type described in this
Section 5.04(e) is declared but not so paid or made, the Conversion Rate
shall be immediately readjusted, effective as of the date the Issuer publicly
announces its decision not to pay such dividend or distribution, to the
Conversion Rate that would then be in effect if such dividend or distribution
had not been declared.
CR
1
= CR
0
x (AC +
(SP
1
x
OS
1
))
/ (SP
1
x OS
0
)
Where
CR
0
= the
Conversion Rate in effect at Close of Business on the Trading Day immediately
following the Expiration Date;
CR
1
= the
Conversion Rate in effect immediately after the Open of Business on the second
Trading Day immediately following the Expiration Date;
AC = the
Fair Market Value (as determined in good faith by the Issuer’s Board of
Directors), on the Expiration Date, of the aggregate value of all cash and any
other consideration paid or payable for Common Stock validly tendered or
exchanged and not withdrawn as of the Expiration Date;
OS
0
= the
number of shares of Common Stock outstanding immediately before the Expiration
Time (prior to giving effect to such tender or exchange offer);
and
SP
1
= the
average of the Last Reported Sale Prices of Common Stock during the 10
consecutive Trading Day period commencing on, and including, the Trading Day
immediately after the Expiration Date.
Any
adjustment pursuant to this Section 5.04(f) shall become effective
immediately following the Open of Business on the second Trading Day immediately
following the Expiration Date. If the Issuer or one of its
Subsidiaries is obligated to purchase Common Stock pursuant to any such tender
or exchange offer, but the Issuer or such Subsidiary is permanently prevented by
applicable law from effecting any such purchases or all such purchases are
rescinded, the Conversion Rate shall be readjusted to be the Conversion Rate
that would then be in effect if such tender or exchange offer had not been made.
Except as set forth in the preceding sentence, if the application of this
Section 5.04(f) to any tender offer or exchange offer would result in a
decrease in the Conversion Rate, no adjustment shall be made for such tender
offer or exchange offer under this Section 5.04(f). If an adjustment to the
Conversion Rate is required pursuant to this Section 5.04(f) during any
settlement period in respect of Notes that have been tendered for conversion,
delivery of the related conversion consideration will be delayed to the extent
necessary in order to complete the calculations provided for in this
Section 5.04(f).
(g)
No
Adjustment
. In cases where the Fair Market Value of
Distributed Assets and cash, other than with respect to a Public Spin-Off, as to
which Section 5.04(d) and 5.04(e) apply, applicable to one share of Common
Stock, distributed to holders of Common Stock:
(i) Equals
or exceeds the average of Last Reported Sale Prices of Common Stock during the
10 consecutive Trading Day period ending on the Trading Day immediately
preceding the Ex-Dividend Date for such distribution, or
(ii) The
average of the Last Reported Sale Prices of Common Stock during the 10
consecutive Trading Day period ending on the Trading Day immediately preceding
the Ex-Dividend Date for such distribution exceeds the Fair Market Value of such
Distributed Assets or cash so distributed by less than $1.00,
rather
than being entitled to an adjustment in the Conversion Rate, the Holder of a
Note will be entitled to receive upon conversion, in addition to Common Stock,
the Distributed Assets or cash, as applicable, that such Holder would have been
entitled to receive if such Holder had been a record holder of Common Stock (on
an as converted basis at the then applicable Conversion Rate) on the Record Date
for determining the stockholders entitled to receive the
distribution.
(h)
Increases to Conversion
Rate
. In addition to those Conversion Rate adjustments
required by Sections 5.04(a), 5.04(b), 5.04(c), 5.04(d), 5.04(e) and 5.04(f), to
the extent permitted by applicable law and subject to the applicable rules of
any stock exchange on which the Issuer’s Common Stock is listed at the relevant
time, the Issuer from time to time may increase the Conversion Rate by a
specified amount for a period of at least 20 Business Days, if the increase is
irrevocable during the period and the Issuer’s Board of Directors shall have
made a determination that such increase would be in the best interest of the
Issuer, which determination shall be conclusive. Whenever the Conversion Rate is
increased pursuant to the preceding sentence, the Issuer shall mail to Holders
of record of the Notes a notice of increase, which notice will be given at least
15 calendar days prior to the effective date of any such increase, and such
notice shall state the increased Conversion Rate and the period during which it
will be in effect.
To the
extent permitted by applicable law and subject to the applicable rules of any
stock exchange on which the Issuer’s Common Stock is listed at the relevant
time, the Issuer may also (but is not required to) to make such increases to the
Conversion Rate, in addition to those required by Sections 5.04(a), 5.04(b),
5.04(c), 5.04(d), 5.04(e) and 5.04(f), as the Issuer’s Board of Directors
considers to be advisable to avoid or diminish any income tax to holders of
Common Stock resulting from any dividend or distribution of Common Stock (or
rights to acquire Common Stock) or from any event treated as such for income tax
purposes.
The
Issuer shall not take any voluntary action to increase the Conversion Rate of
the Notes pursuant to this Section 5.04(h) without complying, if
applicable, with the shareholder approval rules of any stock exchange on which
the Issuer’s Common Stock is listed at the relevant time.
(i)
Calculations; No Further
Adjustments
. All calculations under this Article Five
shall be made by the Issuer and not by the Trustee or Conversion Agent, and
shall be made to the nearest cent or to the nearest one-ten thousandth
(1/10,000th) of a share of Common Stock, as the case may be. The
Conversion Rate shall not be adjusted except as specifically set forth in this
Section 5.04. Without limiting the foregoing, the Conversion
Rate shall not be adjusted for (A) the issuance of any shares of Common
Stock pursuant to any present or future plan providing for the reinvestment of
dividends or interest payable on the Issuer’s securities or the investment of
additional optional amounts in shares of Common Stock under any plan;
(B) the issuance of any shares of Common Stock or options or rights to
purchase such shares pursuant to any of the Issuer’s present or future employee,
director, trustee or consultant benefit plans, employee agreements or
arrangements or programs including the Management Incentive Plan; (C) a
change in the par value of Common Stock or (D) the issuance of shares of
Common Stock or any securities convertible into or exchangeable or exercisable
for shares of the Issuer’s Common Stock or rights to purchase shares of Common
Stock or such convertible, exchangeable or exercisable securities or the payment
of cash upon repurchase or redemption thereof, except as otherwise provided in
this Section 5.04.
(j)
Announcement of
Adjustments
. Whenever the Conversion Rate is adjusted as
herein provided, the Issuer will publicly announce through a reputable national
newswire in the United States the relevant information, file such press release
with the SEC on Form 8-K and make this information available on the Issuer’s
website. In addition, the Issuer shall promptly file with the Trustee and any
Conversion Agent other than the Trustee an Officers’ Certificate setting forth
the Conversion Rate after such adjustment and setting forth a brief statement of
the facts requiring such adjustment. Unless and until a Trust Officer of the
Trustee shall have received such Officers’ Certificate, the Trustee and the
Conversion Agent (
provided
the Conversion Agent
is not the Issuer) shall not be deemed to have knowledge of any adjustment of
the Conversion Rate and may assume that the last Conversion Rate of which each
had knowledge is still in effect. Promptly after delivery of such certificate,
the Issuer shall prepare a notice of such adjustment of the Conversion Rate
setting forth the adjusted Conversion Rate and the date on which each adjustment
became effective and shall mail such notice of such adjustment of the Conversion
Rate to each Holder of each Note at its last address appearing on the register
of the Holders, within 20 calendar days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of any such
adjustment.
(k)
Calculation of Shares
Outstanding; Treasury Stock
. For purposes of this
Section 5.04, the number of shares of Common Stock at any time outstanding
shall not include shares of Common Stock held in the treasury of the Issuer but
shall include shares of Common Stock issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Issuer will not pay
any dividend or make any distribution on Common Stock held in the treasury of
the Issuer.
(l)
Participation of Holders in
Distribution
. Notwithstanding any of the foregoing clauses in
this Section 5.04, the applicable Conversion Rate will not be adjusted
pursuant to this Section 5.04 if the Holders of the Notes are permitted to
participate (as a result of holding the Notes and contemporaneously with holders
of Common Stock) in any of the transactions that would otherwise give rise to
adjustment pursuant to this Section 5.04 as if such Holders of the Notes
held a number of shares of Common Stock equal to the applicable Conversion Rate
one Business Day prior to the effective date of the applicable transaction,
multiplied by the principal amount (expressed in thousands) of Notes held by
such Holder, without having to convert their Notes.
(m)
Limitation or
Adjustment
. In no event shall the Conversion Price be reduced
below $0.01, subject to adjustment for share splits and combination and similar
events.
(n)
Rights
Plan
. If the Issuer has in effect a rights plan while any
Notes remain outstanding, Holders of Notes shall receive, upon a conversion of
such Notes, in addition to such shares of Common Stock, rights under the
Issuer’s stockholder rights plan unless, prior to such conversion, the rights
have expired, terminated or been redeemed or unless the rights have separated
from Common Stock. If the rights provided for in any rights plan that
the Issuer’s Board of Directors may adopt have separated from the Common Stock
in accordance with the provisions of the rights plan so that Holders of Notes
would not be entitled to receive any rights in respect of Common Stock that the
Issuer delivers upon conversion of Notes, the Issuer shall adjust the conversion
rate at the time of separation as if the Issuer had distributed to all holders
of the Issuer’s Common Stock, shares of Capital Stock, evidences of indebtedness
or other assets or property in accordance with Section 5.04(d), subject to
readjustment upon the subsequent expiration, termination or redemption of such
rights.
SECTION 5.05.
|
Effect of
Reclassification, Consolidation, Merger or
Sale.
|
If any of
the following events occur:
(a) Any
recapitalization, reclassification or change of the outstanding shares of Common
Stock (other than a change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a subdivision or combination),
or
(b) Any
consolidation, merger or combination of the Issuer with or into another Person,
or any sale, lease, transfer, conveyance or other disposition of all or
substantially all of the Issuer’s assets and those of the Issuer’s Subsidiaries
taken as a whole to any other Person or Persons (other than to one or more of
its subsidiaries), in each case, as a result of which holders of all or
substantially all of the Common Stock receive stock, other securities or other
property or assets (including cash or any combination thereof) with respect to
or in exchange for such Common Stock, the Issuer or the successor or purchasing
corporation, as the case may be, shall execute with the Trustee a supplemental
indenture (which shall comply with the Trust Indenture Act as in force at the
date of execution of such supplemental indenture, if such supplemental indenture
is then required to so comply) providing that from and after the effective date
of such transaction each such Note shall, without the consent of any Holders of
Notes, become convertible into, in lieu of the Common Stock otherwise
deliverable, the same type (in the same proportion) of the consideration that
the holders of Common Stock received in such reclassification, change,
consolidation, merger, sale, lease, transfer, conveyance or other disposition
(such consideration, the “
Reference Property
”). In all
cases, the conditions relating to conversion of Notes specified herein
(including in Sections 5.01 and 5.02, in each case, to the extent
applicable, and Section 5.04) (modified as appropriate in the good faith
judgment of the Issuer’s Board of Directors to apply properly to the Reference
Property in lieu of Common Stock), the provisions of Section 5.03 relating
to the Issuer’s satisfaction of the conversion obligation upon conversion of
Notes and the provisions of Section 5.13 relating to the Conversion Cap
shall continue to apply following such transaction. If such
transaction also constitutes a Fundamental Change of Control, a Holder
converting Notes in connection with such Fundamental Change of Control will be
entitled to receive Additional Shares and the Make Whole Payment in accordance
with Section 5.07 in the Fundamental Change of Control. If such
transaction causes Common Stock to be converted into the right to receive more
than a single type of consideration (determined based in part upon any form of
stockholder election), the Reference Property shall be deemed to be the kind and
amount of consideration elected to be received by a majority of shares of Common
Stock voted for such an election (if electing between two types of
consideration) or a plurality of shares of Common Stock voted for such an
election (if electing between more than two types of consideration), as the case
may be. The Issuer may not become a party to any such transaction unless its
terms are consistent with the foregoing. Such supplemental indenture shall
provide for adjustments that shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Article Five, as determined in good
faith by the Issuer or successor or purchasing corporation.
If, in
the case of any such reclassification, change, consolidation, merger, sale,
lease, transfer, conveyance or other disposition, the stock or other securities
and assets received thereupon by a holder of Common Stock includes shares of
stock or other securities and assets of a corporation other than the successor
or purchasing corporation, as the case may be, in such reclassification, change,
consolidation, merger, sale, lease, transfer, conveyance or other disposition,
then such supplemental indenture shall also be executed by such other
corporation and shall contain such additional provisions to protect the
interests of the Holders of the Notes as the Issuer’s Board of Directors shall
reasonably consider necessary by reason of the foregoing, including to the
extent practicable the provisions providing for the conversion rights set forth
in this Article Five.
The
Issuer shall cause notice of the execution of such supplemental indenture to be
mailed or delivered to each Holder, at the address of such Holder as it appears
on the register of the Notes maintained by the Registrar, within 20 calendar
days after execution thereof. Simultaneously with providing such notice, the
Issuer shall announce through a reputable national newswire in the United States
the relevant information and make this information available on the Issuer’s
website. Failure to deliver such notice shall not affect the legality or
validity of such supplemental indenture.
The
foregoing provisions of this Section 5.05 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, sales, leases,
transfers, conveyances or other dispositions.
If this
Section 5.05 applies to any event or occurrence, Section 5.04 shall
not apply.
None of
the foregoing provisions shall affect the right of a Holder of Notes to convert
such Holder’s Notes into shares of Common Stock at any time, subject to
Section 5.08.
SECTION 5.06.
|
Adjustments of
Prices.
|
Whenever
any provision of this Indenture requires a calculation of the Last Reported Sale
Prices over a span of multiple days, the Issuer will make appropriate
adjustments determined by the Issuer or its agents to account for any adjustment
to the Conversion Rate that becomes effective, or any event requiring an
adjustment to the Conversion Rate where the Ex-Dividend Date of the event
occurs, at any time during the period from which such prices are to be
calculated. Such adjustments will be effective as of the effective
date of the adjustment to the Conversion Rate.
SECTION 5.07.
|
Adjustment Upon
Fundamental Change of
Control.
|
(a) In
connection with any Fundamental Change of Control, the Issuer shall provide to
the Holders of the Notes and the Trustee the notice in respect of such
Fundamental Change of Control as contemplated by
Section 3.01(a).
(d) The
Share Prices set forth in the column headings of the table in
Schedule I
hereto shall be adjusted as of any date on which the Conversion Rate of the
Notes is otherwise adjusted. The adjusted Share Prices shall equal the Share
Prices applicable immediately prior to such adjustment, multiplied by a
fraction, the numerator of which is the Conversion Rate immediately prior to
such adjustment giving rise to the share price adjustment and the denominator of
which is the Conversion Rate as so adjusted. The number of Additional Shares set
forth in such table shall be adjusted in the same manner as the Conversion Rate
as set forth in Section 5.04.
(e) The
exact Share Prices and Effective Dates may not be set forth in the table in
Schedule I
, in
which case:
(i) If
the Share Price is between two Share Price amounts in the table or the Effective
Date is between two Effective Dates in the table, the number of Additional
Shares by which the Conversion Rate will be increased will be determined by a
straight-line interpolation between the number of Additional Shares set forth
for the higher and lower Share Price amounts and the earlier and later Effective
Dates, as applicable, based on a 365-day year.
(ii) If
the Share Price is greater than $28.00 per share (subject to adjustment as set
forth in clause (d) of this Section 5.07), no Additional Shares will
be added to the Conversion Rate.
(iii) If
the Share Price is less than $6.21 per share (subject to adjustment as set forth
in clause (d) of this Section 5.07), no Additional Shares will be
added to the Conversion Rate.
Notwithstanding
the foregoing, in no event shall the total number of Additional Shares added to
the Conversion Rate exceed 65.793 per $1,000 principal amount of Notes, subject
to adjustments in the same manner as the Conversion Rate as set forth in
Section 5.04 as set forth in clause (c) of this
Section 5.07.
(g) A
Purchaser Party shall not be entitled to receive Additional Shares or the Make
Whole Payment upon a Fundamental Change of Control, notwithstanding any
conversion of such Purchaser Party’s Notes, if such Fundamental Change of
Control (i) is a merger, consolidation or sale with or into such Purchaser
Party, or any member of any “group” of which such Purchaser Party is a member or
any of their respective Affiliates; (ii) is a transaction specified in
clause (ii) of the definition of “Fundamental Change of Control” if such
Purchaser Party or any of its Affiliates is a “person” or a member of a “group”
for purposes of such definition or (iii) if the nominees of any such
Purchaser Party, or any member of any “group” of which such Purchaser Party is a
member or any of their respective Affiliates constitutes one or more of new
members of the Board of Directors effecting such Fundamental Change of
Control.
For
purposes of this Section 5.08(g), “group” has the meaning it has in
Sections 13(d) and 14(d) of the Exchange Act and “person” is used with the
same meaning as that used within Rule 13d-3 under the Exchange Act, in each case
whether or not applicable.
(h) The
Issuer will notify Holders, the Trustee and the Conversion Agent of the
anticipated Effective Date of any Fundamental Change of Control on or prior to
the later of (i) 10 calendar days prior to such Effective Date and
(ii) 10 calendar days following the date on which the Issuer becomes aware
(or should have become aware) of such anticipated Effective Date. The
Issuer shall publicly announce such information through a reputable national
newswire in the United States, file such press release with the SEC on Form 8-K
and shall make such information available on the Issuer’s website.
(i)
Notwithstanding
Section 5.07(f), the Issuer may elect to pay the Make Whole Payment in
shares of Common Stock if and only if the following conditions shall have been
satisfied:
(i) The
shares of Common Stock deliverable in payment of the Make Whole Payment shall
have a fair market value as of the Conversion Date of not less than the Make
Whole Payment.
For
purposes of this Section 5.07(i), the fair market value of shares of Common
Stock shall be determined by the Issuer and shall be equal to 95% of the average
of the 10-day VWAP of the Common Stock for the 10 consecutive Trading Days
immediately preceding the Effective Date;
provided,
that if the
Fundamental Change of Control is a merger or consolidation pursuant to clause
(i) of the definition of Fundamental Change of Control and all of the
Issuer’s Common Stock is exchanged for common stock of the acquiror (or
successor entity) in such Fundamental Change of Control, the number of shares of
Issuer Common Stock issuable hereunder shall be determined by dividing the Make
Whole Payment by the implied price per share paid for the Issuer Common Stock in
such Fundamental Change of Control, with such resulting shares of Issuer Common
Stock being treated in the same manner as all other shares of Issuer Common
Stock in such Fundamental Change of Control (e.g., exchanged for shares of
Common Stock or other property of such acquiror (or successor) in the same
proportion as Issuer Common Stock in such Fundamental Change of
Control);
(ii) Payment
of the Make Whole Payment may not be made in Common Stock unless such stock is,
or shall have been, approved for listing on a United States national securities
exchange on which the Issuer’s Common Stock may then be listed prior to the date
of payment of the Make Whole Payment;
provided
that the foregoing
restriction shall not apply if the Issuer’s Common Stock is not then so listed
on a United States national securities exchange;
(iii) All
shares of Common Stock which may be issued will be issued out of authorized but
unissued common stock and will upon issue, be duly issued, fully paid and
non-assessable, free and clear of all preemptive rights; and
(iv) Payment
of the Make Whole Payment may not be made in Common Stock (or securities of the
acquiror (or successor)) to any Person to the extent such payment would cause
such Person to become a “beneficial owner” (as determined pursuant to Section 13
of the Exchange Act) of securities of the Issuer in excess of the Conversion Cap
as provided in Section 5.13;
provided
, that the foregoing
shall not prevent the Issuer from making a payment in Common Stock to any other
Person.
In
connection with the payment of the Make Whole Payment in shares of Common Stock,
no fractional shares or scrip representing fractional shares shall be issued
upon conversion of the Notes. If any fractional shares or scrip would
be so issuable, the Issuer shall make a payment of the remaining Make Whole
Payment in cash.
If all
the conditions set forth above are not satisfied, the Make Whole Payment shall
be paid by the Issuer only in cash.
SECTION 5.08.
|
Conversion
Event
;
Termination of Conversion
Rights.
|
No
failure of the Issuer to deliver the foregoing notices and no defect therein
shall limit a Holders rights hereunder or affect the validity of the proceedings
pursuant to this Section 5.08.
(d)
Conversion Event
Notice
. The Conversion Event Notice delivered by the Issuer
shall be in the form set forth on
Exhibit H
hereto
and shall state the amount of the Cash Conversion Amount and whether the payment
of the Cash Conversion Amount shall be made in cash, shares of Common Stock or a
combination of cash and shares of Common Stock and the method of calculating the
Cash Conversion Amount payment.
In
addition to any other information provided by the Issuer, a Conversion Event
Notice shall:
(i) State
the events constituting the Conversion Event and the Conversion Rate then
applicable to the Notes;
(ii) State
that the right to convert Notes shall terminate immediately prior to the Open of
Business on the date that is 46 days following the date of Conversion Event
Notice;
(iii) State
that holders may convert Notes up to the Conversion Cap at any time prior to the
Close of Business on the Business Day immediately preceding the Conversion
Termination Date;
(iv) State
that any Holders who cannot convert the full amount of their Notes prior to the
Conversion Termination Date due to the Conversion Cap may send an Election
Notice to the Issuer in the form attached as an exhibit to such conversion Event
Notice (which shall be in the form of
Exhibit J
hereof) and may elect to convert such Notes on any date or dates prior to the
date that is 180 days following the Conversion Termination Date.
(v) State
that except for Notes specified for conversion pursuant to an Election Notice,
any Notes not otherwise converted prior to the Conversion Termination Date may
be redeemed at the option of the Issuer at any time in accordance with
Article Four and shall also state the Redemption Price
therefor;
(vi) State
that interest shall cease to accrue on all Notes as of the Conversion
Termination Date;
(vii) State
that certain covenants (to be specified in such Conversion Event Notice)
contained in the Indenture shall cease to have any further force or effect as of
the Conversion Termination Date and shall state such other provisions of this
Indenture that shall no longer apply, including release of Collateral securing
the Notes in accordance with Section 12.09; and
(viii) State
the amount of the Cash Conversion Amount, if any, payable on all Notes as a
result of the Conversion Event and the dates which such Cash Conversion Amount
may be paid.
(f)
Payment of Cash Conversion
Amount in Shares of Common Stock
. Notwithstanding
Section 5.08(e), the Issuer may elect to pay the Cash Conversion Amount by
delivery of shares of its Common Stock if and only if the following conditions
have been satisfied:
(i) The
shares of Common Stock deliverable in payment of the Cash Conversion Amount
shall have a fair market value as of the Conversion Termination Date of not less
than the Cash Conversion Amount.
For
purposes of this Section 5.08(f), the fair market value of shares of Common
Stock shall be determined by the Issuer and shall be equal to 95% of the average
of the 10-day VWAP of the Common Stock for the 10 consecutive Trading Days
immediately preceding the Conversion Termination Date. The Issuer
shall provide such Holder written notice prior to the applicable Cash Conversion
Payment Date (as defined below) that it will pay all or a portion of the Cash
Conversion Amount in shares of Common Stock.
(ii) Payment
of the Cash Conversion Amount may not be made in Common Stock unless such stock
is, or shall have been, approved for listing on the United States national
securities exchange on which the Issuer’s Common Stock may then be listed prior
to the Conversion Payment Date;
provided
that the foregoing
restriction shall not apply if the Issuer’s Common Stock is then not so listed
on a United States national securities exchange;
(iii) All
shares of Common Stock which may be issued will be issued out of the Issuer’s
authorized but unissued Common Stock and, will upon issue, be duly and validly
issued and fully paid and non-assessable free of any preemptive rights;
and
(iv) Payment
of the Cash Conversion Amount may not be made to any Holder in Common Stock to
the extent such payment would cause such Person to become a “beneficial owner”
(as determined pursuant to Section 13 of the Exchange Act) of securities of the
Issuer in excess of the Conversion Cap as provided in Section 5.13;
provided
, that the foregoing
shall not prevent the Issuer from making a payment in Common Stock to any other
Person.
In
connection with the payment of the Cash Conversion Amount in shares of Common
Stock, no fractional shares or scrip representing fractional shares shall be
issued upon conversion of the Notes. If any fractional shares or
scrip otherwise would be so issuable, the Issuer shall make a payment of the
remaining Cash Conversion Amount in cash.
If all of
the conditions set forth in this Section 5.08(f) are not satisfied in
accordance with the terms thereof, the Cash Conversion Amount shall be paid by
the Issuer only in cash.
(g)
Effect of Conversion
Termination Date
. On and after the Conversion Termination
Date, interest shall cease to accrue on the Notes. In addition, and
after the Conversion Termination Date, the following provisions of this
Indenture shall cease to have any further force and effect with respect to any
Notes not converted in connection with a Conversion Event (whether prior to the
Conversion Termination Date or pursuant to an Election Notice) (the “
Remaining
Notes
”):
(i) Article Three
(Purchase at Option of Holders upon a Fundamental Change of
Control)
(ii) Article Five
(Conversion (other than this Section 5.08, and paragraph five of
Section 5.10, Section 5.13, Section 5.14 and
Section 5.16)
(iii) Section 6.04
(Payment of Taxes)
(iv) Section 6.05
(Maintenance of Properties)
(v) Section 6.06
(Compliance Certificate; Notice of Default)
(vi) Section 6.07
(Waiver of Stay, Extension or Usury Laws)
(vii) Section 6.08
(Limitations on Additional Indebtedness)
(viii) Section 6.09
(Limitations on Restricted Payments)
(ix) Section 6.10
(Limitations on Liens)
(x) Section 6.11
(Limitations on Asset Sales)
(xi) Section 6.12
(Limitations on Transactions with Affiliates)
(xii) Section 6.13
(Limitations on Dividend and Other Restrictions Affecting Restricted
Subsidiaries)
(xiii) Section 6.14
(Additional Note Guarantees)
(xiv) Section 6.15
(Further Assurances)
(xv) Section 6.16
(Reports to Holders)
(xvi) Section 6.17
(Limitations on Designation of Unrestricted Subsidiaries)
(xvii) Section 6.18
(Limitation on the Issuance or Sale of Equity Interests of Restricted
Subsidiaries)
(xviii) Section 6.19
(Information Regarding Collateral)
(xix) Section 6.20
(Impairment of Security Interest)
(xx) Section 6.21
(Insurance)
(xxi) Article Seven
(Successor Corporation)
(xxii) Section 8.01
(Events of Default) (other than clauses (i), (ii), (vi), (xi) and (xii)
thereof).
With
respect to the outstanding Remaining Notes, the Issuer and the Guarantors may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply shall not constitute an Event
of Default under Section 8.01 hereof, but, except as specified above, the
remainder of this Indenture and such Remaining Notes shall be
unaffected thereby.
(h) Remaining
Notes may be redeemed in whole or in part at the option of the Issuer at any
time or from time to time following the Conversion Termination Date in
accordance with Article Four.
(i)
On the Conversion Termination Date for all Notes converted during
the period from the date of the Conversion Event Notice to the Close of Business
on the Business Day immediately preceding the Conversion Termination
Date;
(ii) On
the date or dates specified for conversion in an Election Notice;
and
(iii) On
the date of redemption or at maturity, as applicable for any Remaining
Notes.
SECTION 5.09.
|
Taxes on Shares
Issued
.
|
Any issue
of share certificates on conversions of Notes shall be made without charge to
the converting Holder for any documentary, transfer, stamp or any similar tax in
respect of the issue thereof, and the Issuer shall pay any and all documentary,
stamp or similar issue or transfer taxes that may be payable in respect of the
issue or delivery of shares of Common Stock on conversion of Notes pursuant
hereto. The Issuer shall not, however, be required to pay any such tax which may
be payable in respect of any transfer involved in the issue and delivery of
shares in any name other than that of the Holder of any Notes converted, and the
Issuer shall not be required to issue or deliver any such share certificate
unless and until the person or persons requesting the issue thereof shall have
paid to the Issuer the amount of such tax or shall have established to the
satisfaction of the Issuer that such tax has been paid.
SECTION 5.10.
|
Reservation of Shares; Shares to be
Fully Paid; Compliance with Governmental
Requirements
.
|
The
Issuer shall at all times maintain out of its authorized but unissued shares of
Common Stock enough shares to permit the issuance of shares of Common Stock upon
the conversion, in accordance herewith, of all of the Notes. The
shares of Common Stock due upon conversion of a Global Note shall be delivered
by the Issuer in accordance with the Depositary’s customary
practices. All shares of Common Stock which may be issued upon
conversion of the Notes shall be validly issued, fully paid and non-assessable
and shall be free of preemptive or similar rights and free from all liens,
taxes, charges or adverse changes.
Before
taking any action that would cause an adjustment increasing the Conversion Rate
to an amount that would cause the Conversion Price to be reduced below the then
par value, if any, of the shares of Common Stock issuable upon conversion of the
Notes, the Issuer will take all corporate action which may, in the opinion of
its counsel, be necessary in order that the Issuer may validly and legally issue
shares of such Common Stock at such adjusted Conversion Price.
The
Issuer covenants to take all such actions as may be required for the payment in
accordance herewith of shares of Common Stock, if any, deliverable upon the
conversion of any Notes, including the acceptance of such shares of Common Stock
into the book-entry system maintained by the Depositary. Without limiting the
generality of the foregoing, the Issuer further covenants that, (i) if any
shares of Common Stock to be provided for the purpose of conversion of Notes
hereunder require registration with or approval of any governmental authority
under any federal or state law before such shares may be validly issued upon
conversion, the Issuer will in good faith and as expeditiously as possible, to
the extent then permitted by the rules and interpretations of the Commission (or
any successor thereto), endeavor to secure such registration or approval, as the
case may be and (ii) if at any time Common Stock shall be listed on any
national securities exchange or automated quotation system, the Issuer will, if
permitted by the rules of such exchange or automated quotation system, list and
keep listed, so long as Common Stock shall be so listed on such exchange or
automated quotation system, all shares of Common Stock issuable upon conversion
of the Notes;
provided,
that if the rules of such exchange or automated quotation system permit the
Issuer to defer the listing of such shares of Common Stock until the first
conversion of the Notes into Common Stock in accordance with the provisions of
this Indenture, the Issuer covenants to list such shares of Common Stock
issuable upon conversion of the Notes in accordance with the requirements of
such exchange or automated quotation system at such time.
SECTION 5.11.
|
Responsibility of
Trustee
.
|
The
Trustee and any other Conversion Agent shall not at any time be under any duty
or responsibility to any Holder to determine the Conversion Rate or whether any
facts exist which may require any adjustment of the Conversion Rate, or with
respect to the nature or extent or calculation of any such adjustment when made,
or with respect to the method employed, or herein or in any supplemental
indenture provided to be employed, in making the same. The Trustee and any other
Conversion Agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any Common Stock, or of any securities or property,
which may at any time be issued or delivered upon the conversion of any Notes;
and the Trustee and any other Conversion Agent make no representations with
respect thereto. Neither the Trustee nor any Conversion Agent shall be
responsible for any failure of the Issuer to issue, transfer or deliver any
shares of Common Stock or share certificates or other securities or property or
cash upon the surrender of any Notes for the purpose of conversion or to comply
with any of the duties, responsibilities or covenants of the Issuer contained in
this Article Five. Without limiting the generality of the foregoing,
neither the Trustee nor any Conversion Agent shall be under any responsibility
to determine the correctness of any provisions contained in any supplemental
indenture entered into pursuant to Section 5.05 relating either to the kind
or amount of shares of stock or securities or property (including cash)
receivable by Holders upon the conversion of their Notes after any event
referred to in such Section 5.05 or to any adjustment to be made with
respect thereto, but, may accept as conclusive evidence of the correctness of
any such provisions, and shall be protected in relying upon, the Officers’
Certificate (which the Issuer shall be obligated to file with the Trustee prior
to the execution of any such supplemental indenture) with respect
thereto.
SECTION 5.12.
|
Notice to Holders Prior to Certain
Actions
.
|
In
case:
(a) The
Issuer shall pay a dividend (or any other distribution) on shares of Common
Stock that would require an adjustment in the Conversion Rate pursuant to
Section 5.06; or
(b) The
Issuer shall issue rights, warrants or options to the holders of all or
substantially all of the shares of Common Stock to subscribe for or purchase any
shares of any class of Capital Stock or any other rights or warrants;
or
(c) Of
any reclassification or change of the outstanding shares of Common Stock (other
than change in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination), or of any
consolidation or merger of the Issuer with or into another Person, or any sale,
lease, transfer, conveyance or other disposition of all or substantially all of
the Issuer’s assets and those of the Issuer’s Subsidiaries taken as a whole to
any other Person or Persons; or
(d) Liquidation,
dissolution or winding up of the Issuer, whether voluntary or
involuntary;
then, in
each case, the Issuer shall cause to be filed with the Trustee and the
Conversion Agent and to be mailed to each Holder at such Holder’s address
appearing on register of Holders as promptly as practicable but in any event at
least 30 days prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of
such dividend or distribution of Common Stock rights, warrants, cash or other
assets, debt securities or rights to purchase the Issuer’s securities, or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution or rights are to be
determined, or (y) the date on which such reclassification, change,
consolidation, merger, sale, lease, transfer, conveyance or other disposition or
liquidation, dissolution or winding up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their shares of Common Stock for securities or
other property deliverable upon such reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding up. Failure to give such
notice, or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up.
Notwithstanding
anything to the contrary in this Indenture, (a) a Person or any Affiliate
thereof holding the Notes shall not be entitled to convert any Notes (and the
Issuer shall not so convert any Notes), (b) the Issuer shall not be
entitled to settle any cash payments owing to any Person of Notes in shares of
its Common Stock and (iii) shares of any acquiror (or successor) shall not
be issued upon conversion pursuant to the adjustment mechanisms contained in
Section 5.05 in connection with a transaction governed by Section 5.05
or upon a Fundamental Change of Control to the extent, and only to the extent,
such conversion, share settlement or issuance would cause such Person, together
with its Affiliates, to become a beneficial owner (as determined pursuant to
Section 13 of the Exchange Act and Rules 13d-3 and 13d-5 thereunder)
of more than 9.9% of the issued and outstanding shares of Common Stock (or such
equivalent shares of an acquiror or successor) (the
“
Conversion Cap
”
). The Issuer
shall, within three Business Days of delivery by a Holder of a Conversion
Notice, notify such Holder in writing of (i) the number of shares of Common
Stock that would be issuable to such Holder if such conversion requested in such
Conversion Notice were effected in full and (ii) the number of issued and
outstanding shares of Common Stock of the Issuer as of the most recent date such
information is available to the Issuer. Whereupon, within three
Business Days of such notice, the Issuer shall issue to such Holder the number
of shares of Common Stock issuable upon conversion up to the Conversion
Cap. In connection with the performance of this Section 5.13, such
Holder agrees to furnish to the Issuer any information reasonably requested by
the Issuer in connection with the Conversion Cap amount
calculations. Notwithstanding anything to the contrary, to the extent
any such issuance would cause a Holder or an Affiliate thereof to be a
“beneficial owner” of more than 9.9% of the issued and outstanding shares of
Common Stock (or successor shares), such conversion, share settlement or
issuance upon conversion as the case may be shall be void and of no
effect. The limitations set forth in this Section 5.13 may not
be waived at any time by any Holder. Any acquiror (or successor) or
the Issuer shall expressly assume the obligations of the Issuer in this
Section 5.13 with respect to the Notes in connection with any transaction
governed by Section 5.05 or otherwise in connection with a Fundamental
Change of Control.
SECTION 5.14.
|
General Provisions Applicable to
Conversion
.
|
(a) Provisions
of this Indenture that apply to conversion of all of a Note also apply to
conversion of a portion of a Note.
A Holder
of Notes is not entitled to any rights of a holder of Common Stock until such
Holder has converted its Notes, and only to extent such Notes are deemed to have
been converted into shares of Common Stock pursuant to this
Section 5.14.
ARTICLE SIX
COVENANTS
SECTION 6.01.
|
Payment of
Notes
.
|
The
Issuer shall pay the principal of (and premium, if any) and interest on the
Notes in the manner provided in the Notes, the Registration Rights Agreement and
this Indenture. An installment of principal of, or interest on, the
Notes shall be considered paid on the date it is due if the Trustee or Paying
Agent (other than the Issuer or an Affiliate thereof) holds on that date U.S.
Legal Tender designated for and sufficient to pay the
installment. Interest on the Notes will be computed on the basis of a
360-day year comprised of twelve 30-day months.
The
Issuer shall pay interest on overdue principal (including, without limitation,
post petition interest in a proceeding under any Bankruptcy Law), and overdue
interest, to the extent lawful, at the rate equal to 2%
per annum
in excess of the
then applicable rate on the Notes.
SECTION 6.02.
|
Maintenance of Office or
Agency
.
|
The
Issuer shall maintain in the Borough of Manhattan, The City of New York,
the office or agency required under Section 2.03 (which may be an office of
the Trustee or an affiliate of the Trustee or Registrar). The Issuer
shall give prompt written notice to the Trustee of the location, and any change
in the location, of such office or agency. If at any time the Issuer
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the Trustee set
forth in Section 14.02.
The
Issuer may also from time to time designate one or more other offices or
agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations. The
Issuer will give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or
agency.
The
Issuer hereby initially designates U.S. Bank National Association, located at
100 Wall Street, New York, NY 10005,
Attention: Corporate
Trust, as such office of the Issuer in accordance with
Section 2.03.
SECTION 6.03.
|
Corporate
Existence
.
|
Except as
otherwise permitted by Article Seven, the Issuer shall do or cause to be
done all things reasonably necessary to preserve and keep in full force and
effect its corporate existence and the corporate, partnership or other existence
of each of its Restricted Subsidiaries in accordance with the respective
organizational documents of each such Restricted Subsidiary and the material
rights (charter and statutory) and material franchises of the Issuer and each of
its Restricted Subsidiaries;
provided
,
however
, that the Issuer
shall not be required to preserve any such right, franchise or corporate
existence with respect to itself or any Restricted Subsidiary, if the loss
thereof would not, individually or in the aggregate, have a material adverse
effect on the Issuer and the Guarantors, taken as a whole.
SECTION 6.04.
|
Payment of
Taxes
.
|
The
Issuer and the Guarantors shall, and shall cause each of the Restricted
Subsidiaries to, pay or discharge or cause to be paid or discharged, before the
same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed upon it or any of the Restricted
Subsidiaries or upon the income, profits or property of it or any of the
Restricted Subsidiaries and (b) all lawful claims for labor, materials and
supplies which, in each case, if unpaid, might by law become a liability or Lien
upon the property of it or any of the Restricted Subsidiaries which would
reasonably be expected to have a material adverse effect on the Issuer and the
Guarantors taken as a whole;
provided
,
however
, that the Issuer and
the Guarantors shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount the
applicability or validity is being contested in good faith by appropriate
actions and for which appropriate provision has been made, or any such tax,
assessment, charge or claim that would not reasonably be expected to have a
material adverse effect on the Issuer and the Guarantors taken as a
whole.
SECTION 6.05.
|
Maintenance of
Properties
.
|
The
Issuer shall cause all material properties owned by or leased by it or any of
its Restricted Subsidiaries used or useful to the conduct of its business or the
business of any of its Restricted Subsidiaries to be maintained and kept in
normal condition, repair and working order and supplied with all necessary
equipment and shall cause to be made all repairs, renewals, replacements, and
betterments thereof, all as in its judgment may be necessary, so that the
business carried on in connection therewith may be conducted at all times in a
commercially productive manner;
provided
,
however
, that nothing in this
Section 6.05 shall prevent the Issuer or any of its Restricted Subsidiaries
from discontinuing the use, operation or maintenance of any of such properties,
or disposing of any of them, if such discontinuance or disposal is desirable in
the conduct of the business of the Issuer or any such Restricted Subsidiary, and
if such discontinuance or disposal would not, individually or in the aggregate,
have a material adverse effect on the ability of the Issuer or the Guarantors to
perform each of their respective obligations hereunder;
provided
,
further
, that nothing in this
Section 6.05 shall prevent the Issuer or any of its Restricted Subsidiaries
from discontinuing or disposing of any properties to the extent otherwise
permitted by this Indenture.
SECTION 6.06.
|
Compliance Certificate; Notice of
Default
.
|
(a) The
Issuer shall deliver to the Trustee, within 120 days after the close of each
fiscal year, an Officers’ Certificate stating that a review of the activities of
the Issuer and its Subsidiaries has been made under the supervision of the
signing Officers with a view to determining whether the Issuer and the
Guarantors have kept, observed, performed and fulfilled their obligations under
this Indenture and further stating, as to each such Officer signing such
certificate, that to the best of such Officer’s knowledge, the Issuer and the
Guarantors during such preceding fiscal year has kept, observed, performed and
fulfilled each and every such covenant and no Default occurred during such year
and at the date of such certificate there is no Default that has occurred and is
continuing or, if such signers do know of such Default, the certificate shall
specify such Default and what action, if any, the Issuer is taking or proposes
to take with respect thereto. The Officers’ Certificate shall also
notify the Trustee should the Issuer elect to change the manner in which it
fixes the fiscal year end.
(b) The
Issuer shall deliver to the Trustee promptly and in any event within 15 days
after any Officer of the Issuer becomes aware of the occurrence of any Default
in an Officers’ Certificate specifying the Default and what action, if any, the
Issuer is taking or proposes to take with respect thereto.
SECTION 6.07.
|
Waiver of Stay, Extension or Usury
Laws
.
|
The
Issuer and each Guarantor covenants (to the extent permitted by applicable law)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive such Issuer or such
Guarantor from paying all or any portion of the principal of and/or interest on
the Notes or the Note Guarantee of any such Guarantor as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture, and (to the extent permitted by
applicable law) each hereby expressly waives all benefit or advantage of any
such law, and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been
enacted.
SECTION 6.08.
|
Limitations on Additional
Indebtedness
.
|
(a) The
Issuer will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, incur any Indebtedness.
(b) Notwithstanding
Section 6.08(a), the Issuer and the Restricted Subsidiary shall be
permitted to incur “Permitted Indebtedness”. Each of the following
shall be permitted (the “
Permitted
Indebtedness
”):
(i)
Indebtedness of the Issuer or
any Guarantor under the ABL Facility in an aggregate principal amount at any
time outstanding not to exceed $80.0 million (with letters of credit being
deemed to have a principal amount equal to the maximum potential liability of
the Issuer or such Guarantor)
less
, to the extent a
permanent repayment and/or commitment reduction is required thereunder as a
result of such application, the aggregate amount of Net Available Proceeds
applied to repayments under the Credit Agreement in accordance with
Section 6.11;
(ii) The
Notes issued on the Issue Date and the Note Guarantees in respect
thereof;
(iii) Indebtedness
of the Issuer and the Restricted Subsidiaries to the extent outstanding on the
Issue Date (other than Indebtedness referred to in clauses (i) and (ii)
above, and immediately following the Issue Date after giving effect to the
intended use of proceeds of the Notes);
(iv) Indebtedness
under Hedging Obligations (including Swap Obligations) of the Issuer or any
Restricted Subsidiary in the ordinary course and not for the purpose of
speculation;
(v) Indebtedness
of the Issuer owed to a Restricted Subsidiary and Indebtedness of any Restricted
Subsidiary owed to the Issuer or any other Restricted Subsidiary;
provided
,
however
, (a) that upon
any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or such
Indebtedness being owed to any Person other than the Issuer or a Restricted
Subsidiary, the Issuer or such Restricted Subsidiary, as applicable, shall be
deemed to have incurred Indebtedness not permitted by this clause (v);
(b) any such Indebtedness made by a Note Party shall be evidenced by a
promissory note pledged to the Noteholder Collateral Agent for the ratable
benefit of the Noteholder Secured Parties pursuant to the Collateral Agreement;
and (c) any such Indebtedness made by Note Parties to Subsidiaries that are
not Guarantors is either a Permitted Investment or permitted by
Section 6.09;
(vi) Indebtedness
in respect of bid, performance, surety bonds, statutory, appeal, export or
import, indemnities, customs or revenue bonds or similar instruments in the
ordinary course of business and workers’ compensation claims, self-insurance
obligations and bankers acceptances issued for the account of the Issuer or any
Restricted Subsidiary in the ordinary course of business, including guarantees
or obligations of the Issuer or any Restricted Subsidiary with respect to
letters of credit supporting such bid, performance, surety bonds and workers’
compensation claims, self-insurance obligations and bankers
acceptances;
(vii) Purchase
Money Indebtedness incurred by the Issuer or any Restricted Subsidiary, and
Refinancing Indebtedness thereof, in an aggregate amount not to exceed at any
time outstanding the greater of $20.0 million and 12.5% of Consolidated Net
Tangible Assets at the time of the incurrence;
(viii) Indebtedness
arising from (a) the honoring by a bank or other financial institution of a
check, draft or similar instrument inadvertently (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary course of business;
provided
,
however
, that such
Indebtedness is extinguished within five (5) Business Days of incurrence and (b)
without duplication of clause (a), Banking Services Obligations;
(ix) Indebtedness
arising in connection with endorsement of instruments for deposit in the
ordinary course of business;
(x) Refinancing
Indebtedness with respect to Indebtedness incurred pursuant to clause
(ii), (iii), (xi) or (xii) of this Section 6.08(b) or this clause
(x);
(xi) (A)
Acquired Indebtedness of the Issuer or any Restricted Subsidiary, and (B)
Indebtedness incurred by the Issuer or any Restricted Subsidiary in
contemplation of, or in connection with, or to provide all or any part of the
funds or credit support utilized to consummate, the transaction or series of
related transactions pursuant to which such Person became a Subsidiary of or was
otherwise acquired by the Issuer or a Restricted Subsidiary or was merged with
or into or consolidated with the Issuer or a Restricted Subsidiary of the
Issuer;
provided
that
such Indebtedness shall not exceed the greater of $15.0 million or 10% of the
Consolidated Net Tangible Assets at the time of incurrence; and
(xii)
Acquired Indebtedness of the Issuer or any Restricted
Subsidiary assumed or acquired in connection with a transaction governed by, and
effected in accordance with, Section 7.01(a) (except to the extent such
Acquired Indebtedness was incurred in connection with or in contemplation of
such acquisition);
(xiii)
Indemnification, adjustment of purchase price, earn-out or similar obligations,
in each case, incurred or assumed in connection with the acquisition or
disposition of any business or assets of the Issuer or any Restricted Subsidiary
or Equity Interests of a Restricted Subsidiary, other than guarantees of
Indebtedness incurred by any Person acquiring all or any portion of such
business, assets or Capital Stock for the purpose of financing any such
acquisition;
provided,
that the maximum aggregate liability in respect of all such obligations
outstanding under this clause (xiii) shall at no time exceed (a) in
the case of an acquisition, $5.0 million (
provided
that the amount of
such liability shall be deemed to be the amount thereof, if any, reflected on
the balance sheet of the Issuer or any Restricted Subsidiary (
e.g.
, the amount of such
liability shall be deemed to be zero if no amount is reflected on such balance
sheet)) and (b) in the case of a disposition, the gross proceeds actually
received by the Issuer and the Restricted Subsidiaries in connection with such
disposition;
(xiv) Any
other Indebtedness of the Issuer or any Restricted Subsidiary if, after giving
effect thereto, the Total Leverage Ratio does not exceed 5.00:1.00;
(xv)
Indebtedness of the
Issuer
or any Restricted Subsidiary incurred in the ordinary course of
business under guarantees of Indebtedness of suppliers, licensees, franchisees
or customers in an aggregate amount, together with the aggregate amount of
Investments under clause (12) of the definition of “Permitted Investments,” not
to exceed $5.0 million at any time outstanding;
(xvi) The
issuance by any of the Issuer’s Restricted Subsidiaries to the Issuer or to any
of its Restricted Subsidiaries of shares of preferred stock;
provided
,
however
, that:
(1) any
subsequent issuance or transfer of Equity Interests that results in any such
preferred stock being held by a Person other than the Issuer or a Restricted
Subsidiary of the Issuer; and
(2) any
sale or other transfer of any such preferred stock to a Person that is not
either the Issuer or a Restricted Subsidiary of the Issuer, will be deemed, in
each case, to constitute an issuance of such preferred stock by such Restricted
Subsidiary that was not permitted by this clause (xvi)
(xvii) (A)
The guarantee by the Issuer or any Restricted Subsidiary of the Issuer of
Indebtedness of the Issuer or a Restricted Subsidiary of the Issuer, in each
case, to the extent that the guaranteed Indebtedness was permitted to be
incurred by another provision of this Section 6.08 and (B)
guarantees by the Issuer or any Restricted Subsidiary of the Issuer provided to
the Excluded Joint Venture to the extent permitted by clause (24) of the
definition of “Permitted Investments”;
(xviii) Contribution
Indebtedness;
(xix) The
incurrence by the Issuer or any Restricted Subsidiary of Indebtedness consisting
of obligations to pay insurance premiums in an amount not to exceed the annual
premiums in respect of such insurance premiums at any one time
outstanding;
(xx) Indebtedness
related to unfunded pension fund and other employee benefit plan obligations and
liabilities to the extent they are permitted to remain unfunded under applicable
law;
(xxi) Indebtedness
supported by one or more letters of credit issued under the ABL Facility in
accordance with clause (i);
provided
that the amount of
Indebtedness permitted to be incurred under this clause (xxi) supported by any
such letter(s) of credit shall not exceed the amount of such letter(s) of
credit;
(xxii) Indebtedness
issued by the Issuer or any Guarantor to current or former officers, directors
and employees, their respective estates, spouses or former spouses to finance
the purchase or redemption of Equity Interests of Company or any of its direct
or indirect parent companies permitted by Section 6.09(b)(iv) hereof not in
excess of $2.0 million at any time outstanding;
(xxiii) The
incurrence by the Issuer or any Restricted Subsidiary of additional Indebtedness
or the issuance by the Issuer of Disqualified Stock or the issuance by any
Restricted Subsidiary of preferred stock in an aggregate principal amount (or
accreted value, as applicable) or liquidation value at any time outstanding,
including all Indebtedness incurred to renew, refund, refinance, replace,
defease or discharge any Indebtedness or liquidation value incurred pursuant to
this clause (xxii), not to exceed $5.0 million; and
(xxiv)
Indebtedness of the Issuer or any Restricted Subsidiaries in an amount not to
exceed $1.5 million and incurred in connection with the sale of the Excluded
Joint Venture;
provided
that any such Indebtedness shall be unsecured.
(c) For
purposes of determining compliance with this Section 6.08, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Indebtedness described in clauses (i) through (xxiv)
above, the Issuer shall classify and may reclassify, in its sole discretion,
such item of Indebtedness and may divide, classify and reclassify such
Indebtedness in more than one of the types of Indebtedness described, except
that Indebtedness incurred under the Credit Agreement on the Issue Date by the
Issuer or any Guarantor shall be deemed to have been incurred under clause (i)
above. In addition, for purposes of determining any particular amount
of Indebtedness under this covenant, guarantees, Liens or letter of credit
obligations supporting Indebtedness otherwise included in the determination of
such particular amount shall not be included so long as incurred by a Person
that could have incurred such Indebtedness.
SECTION 6.09.
|
Limitations on Restricted
Payments
.
|
(a) The
Issuer will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, make any Restricted Payment if at the time of such Restricted
Payment:
(i)
A Default shall have occurred and be continuing or shall
occur as a consequence thereof; or
(ii) The
amount of such Restricted Payment, when added to the aggregate amount of all
other Restricted Payments made after the Issue Date (other than Restricted
Payments made pursuant to clause (ii), (iii), (iv), (v), (vi), (viii), (ix) or
(x) of Section 6.09(b)), exceeds the sum (the “
Restricted Payments Basket
”)
of (without duplication):
(1) 50%
of Consolidated Net Income for the period (taken as one accounting period) from
the beginning of the first fiscal quarter commencing after the Issue Date to the
end of the Issuer’s most recently ended fiscal quarter for which consolidated
financial statements are available (or, if such Consolidated Net Income shall be
a deficit, minus 100% of such aggregate deficit),
plus
(2) Subject
to Section 6.09(b)(ii), 100% of the aggregate net cash proceeds received by
the Issuer and 100% of the Fair Market Value at the time of receipt of assets
other than cash, if any, received by the Issuer, either (x) as
contributions to the common equity of the Issuer after the Issue Date or
(y) from the issuance and sale of Qualified Equity Interests after the
Issue Date, other than (a) any such proceeds or assets received from a
Subsidiary of the Issuer; (b) Excluded Contributions; or
(c) Designated Preferred Stock,
plus
(3) The
aggregate amount by which Indebtedness (other than any Subordinated
Indebtedness) incurred by the Issuer or any Restricted Subsidiary subsequent to
the Issue Date is reduced on the Issuer’s balance sheet upon the conversion or
exchange (other than by a Subsidiary of the Issuer) into Qualified Equity
Interests (less the amount of any cash, or the fair value of assets, distributed
by the Issuer or any Restricted Subsidiary upon such conversion or exchange
(other than payments of interest with respect thereto),
plus
(4) In
the case of the disposition or repayment of or return on any Investment that was
treated as a Restricted Payment made after the Issue Date, an amount (to the
extent not included in the computation of Consolidated Net Income) equal to the
lesser of (i) 100% of the aggregate amount received by the Issuer or any
Restricted Subsidiary in cash or other property (valued at the Fair Market Value
thereof) as the return of capital with respect to such Investment and
(ii) the amount of such Investment that was treated as a Restricted
Payment,
plus
(5) Upon
a Redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, the
lesser of (i) the Fair Market Value of the Issuer’s proportionate interest
in such Subsidiary immediately following such Redesignation, and (ii) the
aggregate amount of the Issuer’s Investments in such Subsidiary to the extent
such Investments reduced the Restricted Payments Basket and were not previously
repaid or otherwise reduced.
(b) The
foregoing provisions will not prohibit:
(i)
The payment by the Issuer or any Restricted Subsidiary
of any dividend or the consummation of any redemption within 60 days after the
date of declaration of the dividend or giving or any redemption notice, if on
the date of declaration or notice, the payment or redemption would have complied
with the provisions of this Indenture;
(ii) The
making of any Restricted Payment in exchange for, or out of or with the net cash
proceeds of the substantially concurrent issuance and sale (other than to a
Subsidiary of the Issuer) of, Qualified Equity Interests of the Issuer or from
the substantially concurrent contribution of common equity capital to the
Issuer;
provided
, that
net cash proceeds from the issuance and sale of Qualified Equity Interests or
from contributions to equity capital of the Issuer under this clause (ii) shall
not be included for purpose of calculating amounts under
Section 6.09(a)(ii)(2);
(iii) The
redemption of Subordinated Indebtedness of the Issuer or any Restricted
Subsidiary (a) in exchange for, or out of the proceeds of the substantially
concurrent issuance and sale of, Qualified Equity Interests, (b) in
exchange for, or out of the proceeds of the substantially concurrent incurrence
of, Refinancing Indebtedness permitted to be incurred under Section 6.08
and the other terms of this Indenture;
(iv) Payments
by the Issuer to redeem Equity Interests of the Issuer held by officers,
directors or employees or former officers, directors or employees (or their
transferees, estates or beneficiaries under their estates), upon their death,
disability, retirement, severance or termination of employment or service;
provided,
that the aggregate
cash consideration paid for all such redemptions shall not exceed the sum of
(A) $2.0 million during any calendar year (with unused amounts being
available to be used in the following calendar year, but not in any succeeding
calendar year) plus (B) the amount of any net cash proceeds received by or
contributed to the Issuer from the issuance and sale after the Issue Date of
Qualified Equity Interests of the Issuer to its officers, directors or employees
that have not been applied to the payment of Restricted Payments pursuant to
this clause (iv), plus (C) the net cash proceeds of any “key-man” life
insurance policies that have not been applied to the payment of Restricted
Payments pursuant to this clause (iv);
(v) Payments
of cash, dividends, distributions, advances or other Restricted Payments by the
Issuer or any Restricted Subsidiary to allow the payment of cash in lieu of the
issuance of fractional shares or upon the purchase, redemption or acquisition of
fractional shares, including in connection with (i) the exercise of options
or warrants, (ii) the conversion or exchange of Equity Interests,
(iii) stock dividends, splits or combinations or business combinations, or
(iv) the conversion of the Notes or any payment made with respect
thereto;
(vi) Repurchases
of Equity Interests (i) deemed to occur upon the exercise of stock options
or other similar stock-based awards under equity plans of the Issuer or any of
the Issuer’s Restricted Subsidiaries, warrants or other Equity Interests to the
extent such Equity Interests represent a portion of the exercise price of those
stock options, other similar stock-based awards under equity plans of the Issuer
or any Restricted Subsidiary, warrants or other Equity Interests or (ii) in
connection with a gross up for tax withholding related to such Equity
Interests;
(vii) Additional
Restricted Payments of $5.0 million;
(viii) Restricted
Payments that are made with Excluded Contributions;
(ix)
The redemption, of Indebtedness that is contractually subordinated to the
Notes pursuant to provisions similar to those described in Section 3.01 or
Section 6.11 hereof;
provided
that, prior to such
redemption, the Issuer (or a third party to the extent permitted by this
Indenture) has made a Change of Control Offer or Asset Sale Offer, as the case
may be, with respect to the Notes as a result of such Fundamental Change of
Control or Asset Sale, as the case may be, and has repurchased all Notes validly
tendered and not withdrawn in connection with such Fundamental Change of Control
Offer or Asset Sale Offer, as the case may be;
(x)
The distribution, as a dividend or otherwise, of shares of Capital Stock
of, or Indebtedness owed to the Issuer or a Restricted Subsidiary of the Issuer
by, Unrestricted Subsidiaries;
(xi) Any
Restricted Payment made in connection with the Transactions;
(xii) Payments
and distributions to dissenting stockholders pursuant to applicable law,
pursuant to or in connection with a consolidation, merger or transfer of all or
substantially all of the assets of the Issuer and its Restricted Subsidiaries
taken as a whole that complies with the terms of this Indenture, including
Article Seven hereof; or
(xiii) Repurchases
of the Notes;
provided,
that (a) in
the case of any Restricted Payment pursuant to clause (iii)(c) above, no Default
shall have occurred and be continuing or occur as a consequence thereof and
(b) no issuance and sale of Qualified Equity Interests pursuant to clause
(ii), (iii) or (iv)(B) above shall increase the Restricted Payments
Basket.
For
purposes of determining compliance with this Section 6.09, in the event
that a Restricted Payment meets the criteria of more than one of the categories
of Restricted Payments described in clauses (i) through (xiii) of
Section 6.09(b) hereof, or is entitled to be incurred pursuant to
Section 6.09(a) hereof, the Issuer will be entitled to classify such
Restricted Payment (or portion thereof) on the date of its payment or later
reclassify such Restricted Payment (or portion thereof) in any manner that
complies with this Section 6.09.
SECTION 6.10.
|
Limitations on
Liens
.
|
The
Issuer shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, create, incur, assume or permit or suffer to exist any Lien of any
nature whatsoever against any assets of the Issuer or any Restricted Subsidiary
(including Equity Interests of a Restricted Subsidiary but excluding Equity
Interests or assets of the Excluded Joint Venture), whether owned at the Issue
Date or thereafter acquired, or any proceeds therefrom, or assign or otherwise
convey any right to receive income or profits therefrom securing any
Indebtedness (other than Permitted Liens).
SECTION 6.11.
|
Limitations on Asset
Sales
.
|
(a) The
Issuer will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, consummate any Asset Sale unless:
(i)
The Issuer or such
Restricted Subsidiary receives consideration at the time of such Asset Sale at
least equal to the Fair Market Value of the assets included in such Asset
Sale;
(ii) Either
at least 75% of the total consideration received in such Asset Sale consists of
cash or Cash Equivalents; and
(iii) With
respect to any Asset Sale of any Notes Collateral, the Net Available Proceeds
from such Asset Sale are paid directly by the purchaser thereof to an Asset Sale
Proceeds Account over which the Noteholder Collateral Agent has a fully
perfected first-priority lien (subject to Permitted Liens) pursuant to
arrangements reasonably satisfactory to the Noteholder Collateral Agent for
application in accordance with this Section 6.11.
(b) For
purposes of clause (ii) of Section 6.11(a), the following shall be deemed
to be cash:
(i)
The amount (without
duplication) of any Indebtedness (other than Subordinated Indebtedness) of the
Issuer or such Restricted Subsidiary that is expressly assumed by the transferee
in such Asset Sale and with respect to which the Issuer or such Restricted
Subsidiary, as the case may be, is unconditionally released by the holder of
such Indebtedness,
(ii) The
amount of any obligations received from such transferee that are within 90 days
converted by the Issuer or such Restricted Subsidiary to cash (to the extent of
the cash actually so received), and
(iii) The
Fair Market Value of (i) any assets (other than securities) received by the
Issuer or any Restricted Subsidiary to be used by it in the Permitted Business,
(ii) Equity Interests in a Person that is a Restricted Subsidiary or in a
Person engaged in a Permitted Business that shall become a Restricted Subsidiary
immediately upon the acquisition of such Person by the Issuer or (iii) a
combination of (i) and (ii).
(c) If
at any time any non-cash consideration received by the Issuer or any Restricted
Subsidiary, as the case may be, pursuant to Section 6.11(b)(ii) above in
connection with any Asset Sale is repaid or converted into or sold or otherwise
disposed of for cash (other than interest received with respect to any such
non-cash consideration), then the date of such repayment, conversion or
disposition shall be deemed to constitute the date of an Asset Sale hereunder
and the Net Available Proceeds thereof shall be applied in accordance with this
Section 6.11.
(d) If
the Issuer or any Restricted Subsidiary engages in an Asset Sale, the Issuer or
such Restricted Subsidiary shall, by no later than 12 months following the later
of the consummation thereof and the Issuer’s or Restricted Subsidiary’s receipt
of the Net Available Proceeds, have applied all or any of the Net Available
Proceeds therefrom to:
(i)
If such Net Available Proceeds are
proceeds of an Asset Sale of any asset that constitutes Collateral, prepay
permanently or repay permanently any Indebtedness secured by such Collateral
Security Documents;
provided
, that if such Net
Available Proceeds are proceeds of an Asset Sale of ABL Collateral, such Net
Available Proceeds shall be applied as required under the ABL
Facility;
(ii) If
such Net Available Proceeds are proceeds of any Asset Sale (other than an Asset
Sale of Collateral), to permanently reduce any Other Pari Passu Indebtedness;
provided
,
however
, that if any Pari
Passu Indebtedness is so reduced, the Issuer will equally and ratably reduce
Indebtedness under the Notes by making an offer to all holders of Notes to
purchase at a purchase price equal to 100% of the principal amount thereof, plus
accrued and unpaid interest, if any, the pro rata principal amount of the Notes;
or
(iii) (A)
invest in the purchase of assets (other than securities) to be used by the
Issuer or any Restricted Subsidiary in, or make capital expenditure with respect
to, the Permitted Business, (B) acquire Equity Interests in a Person that
is a Guarantor or in a Person engaged in a Permitted Business that shall become
a Guarantor immediately upon the consummation of such acquisition or (C) a
combination of (A) and (B). The Issuer will be deemed to have
complied with the provisions set forth in clause (d) of this
Section 6.11 if (i) within 365 days after the Asset Sale that
generated the Net Available Proceeds, the Issuer (or the applicable Restricted
Subsidiary) has entered into and not abandoned or rejected a binding agreement
to acquire all or substantially all of the assets of, or any Equity Interests of
another Permitted Business or to make a capital expenditure or acquire other
assets that are used or useful in a Permitted Business or to make a capital
expenditure or acquire other assets that are used or useful in a Permitted
Business and that acquisition or capital expenditure is thereafter completed
within 180 days after the end of such 365-day period or (ii) in the event
such binding agreement described in the preceding clause (i) is canceled or
terminated for any reason before such Net Available Proceeds are applied, the
Issuer (or the applicable Restricted Subsidiary) enters into another such
binding commitment within 180 days of such cancellation or termination of the
prior binding commitment;
provided
that if any second
binding commitment is later canceled or terminated for any reason or not entered
into before such Net Available Proceeds are applied within 180 days of such
second binding commitment, then such Net Available Proceeds shall constitute
Excess Proceeds
(as defined
below). In addition, during the period following the entering into of
a binding agreement with respect to an Asset Sale and prior to the consummation
thereof (which period cannot exceed 365 days), cash (whether or not actual Net
Available Proceeds of such Asset Sale) used for the purposes described in
subclause (A), (B) and (C) of this clause (iii) that are
designated as uses in accordance with this clause (iii), and not previously
or subsequently so designated in respect of any other Asset Sale, shall be
deemed to be Net Available Proceeds applied in accordance with this
clause (iii).
The
amount of Net Available Proceeds not applied or invested as provided in this
Section 6.11(d) will constitute “
Excess
Proceeds
.”
(e) When
the aggregate amount of Excess Proceeds equals or exceeds $15.0 million, the
Issuer will be required to make an offer to purchase from all Holders and, if
applicable, make an offer to purchase or redeem any Other Pari Passu Lien
Obligations of the Issuer the provisions of which require the Issuer to do so
with the proceeds from any Asset Sales, in an aggregate principal amount of
Notes and such Other Pari Passu Lien Obligations equal to the amount of such
Excess Proceeds as follows:
(iii) If
the aggregate Offered Price of Notes validly tendered and not withdrawn by
Holders thereof exceeds the
pro rata
portion of the
Payment Amount allocable to the Notes, Notes to be purchased will be selected on
a
pro rata
basis;
and
(iv) Upon
completion of such Net Proceeds Offer in accordance with the foregoing
provisions, the amount of Excess Proceeds with respect to which such Net
Proceeds Offer was made shall be deemed to be zero, if applicable, and released
from the Asset Sale Proceeds Account.
(g) Upon
the commencement of a Net Proceeds Offer, the Issuer shall send, by first class
mail, a notice to the Trustee and to each Holder at is registered
address. The notice shall contain all instructions and materials
necessary to enable such Holder to tender Notes pursuant to the Net Proceeds
Offer. Any Net Proceeds Offer shall be made to all
Holders. The notice, which shall govern the terms of the Net Proceeds
Offer, shall state:
(i)
That the Net Proceeds Offer is being
made pursuant to this Section;
(ii) The
Payment Amount, the Offered Price, and the date on which Notes tendered and
accepted for payment shall be purchased, which date shall be at least 30 days
and not later than 60 days from the date such notices is mailed (the “
Net Proceeds Payment
Date
”);
(iii) That
any Notes not tendered or accepted for payment shall continue to accrue
interest;
(iv) That,
unless the Issuer defaults in making such payment, any Notes accepted for
payment pursuant to the Net Proceeds Offer shall cease to accrue interest on and
after the Net Proceeds Payment Date;
(v)
That Holders electing to have any Notes
purchased pursuant to any Net Proceeds Offer shall be required to surrender the
Notes, with the form entitled “Option of Holder to Elect Purchase” on the
reverse of the Note completed, or transfer by book-entry transfer, to the
Issuer, a Depositary, if appointed by the Issuer, or the Paying Agent at the
address specified in the notice at least three days before the Net Proceeds
Payment Date;
(vi) That
Holders shall be entitled to withdraw their election if the Issuer, the
Depositary or the Paying Agent, as the case may be, receives, not later than the
Net Proceeds Payment Date, a notice setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and a statement
that such Holder is withdrawing his election to have such Note
purchased;
(vii) That
if the aggregate principal amount of Notes surrendered by Holders exceeds the
Payment Amount, the Issuer shall select the Notes to be purchased on a
pro rata
basis (with such
adjustments as may be deemed appropriate by the Issuer so that only Notes in
denominations of $1,000, or integral multiples thereof, shall be purchased);
and
(viii) That
Holders whose Notes were purchased only in part shall be issued new Notes equal
in principal amount to the unpurchased portion of the Notes surrendered (or
transferred by book-entry).
(h) On
the Net Proceeds Payment Date, the Issuer shall, to the extent
lawful: (1) accept for payment all Notes or portions thereof
properly tendered pursuant to the Net Proceeds Offer, subject to pro ration if
the aggregate Notes tendered exceed the Payment Amount allocable to the Notes;
(2) deposit with the Paying Agent U.S. Legal Tender equal to the lesser of
the Payment Amount allocable to the Notes and the amount sufficient to pay the
Offered Price in respect of all Notes or portions thereof so tendered; and
(3) deliver or cause to be delivered to the Trustee the Notes so accepted
together with an Officers’ Certificate stating the aggregate principal amount of
Notes or portions thereof being repurchased by the Issuer. The Issuer
shall publicly announce the results of the Net Proceeds Offer on the Net
Proceeds Payment Date.
(i) The
Paying Agent shall promptly mail to each Holder of Notes so tendered the Offered
Price for such Notes, and the Trustee shall promptly authenticate pursuant to an
Authentication Order and mail (or cause to be transferred by book-entry) to each
Holder a new Note equal in principal amount to any unrepurchased portion of the
Notes surrendered, if any;
provided,
that each such new
Note shall be in principal amount of $1,000 or an integral multiple
thereof. However, if the Net Proceeds Payment Date is on or after an
interest Record Date and on or before the related Interest Payment Date, any
accrued and unpaid interest shall be paid to the Person in whose name a Note is
registered at the Close of Business on such Record Date, and no Additional
Interest shall be payable to Holders who tender Notes pursuant to the Net
Proceeds Offer.
(j) The
Issuer will comply with applicable tender offer rules, including the
requirements of Rule 14e-1 under the Exchange Act and any other applicable laws
and regulations in connection with the purchase of Notes pursuant to a Net
Proceeds Offer. To the extent that the provisions of any securities
laws or regulations conflict with the provisions of this Section 6.11, the
Issuer shall comply with the applicable securities laws and regulations and will
not be deemed to have breached its obligations under this Section 6.11 by
virtue of this compliance.
SECTION 6.12.
|
Limitations on Transactions with
Affiliates
.
|
(a) The
Issuer will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, in one transaction or a series of related transactions, sell, lease,
transfer or otherwise dispose of any of its assets to, or purchase any assets
from, or enter into any contract, agreement, understanding, loan, advance or
guarantee with, or for the benefit of, any Affiliate (an “
Affiliate Transaction
”),
unless:
(i)
Such Affiliate Transaction is on
terms that are no less favorable to the Issuer or the relevant Restricted
Subsidiary than those that would have been obtained in a comparable transaction
at such time on an arm’s-length basis by the Issuer or that Restricted
Subsidiary from a Person that is not an Affiliate of the Issuer or that
Restricted Subsidiary; and
(ii) The
Issuer delivers to the Trustee:
(x) With
respect to any Affiliate Transaction involving aggregate value in excess of
$5.0 million, an Officers’ Certificate certifying that such Affiliate
Transaction complies with clause (1) above and (x) a Secretary’s
Certificate which sets forth and authenticates a resolution that has been
adopted by a majority of the directors of the Issuer who are disinterested with
respect to such Affiliate Transaction, approving such Affiliate Transaction or
(y) if there are no such disinterested directors, a written opinion
described in clause (y) below; and
(y) With
respect to any Affiliate Transaction involving aggregate value of $10.0 million
or more, the certificates described in the preceding clause (x) and a
written opinion as to the fairness of such Affiliate Transaction to the Issuer
or such Restricted Subsidiary from a financial point of view issued by an
Independent Financial Advisor to the Board of Directors of the
Issuer.
(b) The
foregoing restrictions shall not apply to:
(i)
Transactions exclusively between or among
(a) the Issuer and one or more Restricted Subsidiaries or (b) Restricted
Subsidiaries;
(ii) Reasonable
director, officer and employee compensation (including bonuses) and other
benefits (including retirement, health, stock option and other benefit plans),
indemnification arrangements, compensation, employment and severance agreements,
in each case approved by the Board of Directors;
(iii) The
entering into of a tax sharing agreement, or payments pursuant thereto, between
the Issuer and/or one or more Subsidiaries, on the one hand, and any other
Person with which the Issuer or such Subsidiaries are required or permitted to
file a consolidated tax return or with which the Issuer or such Subsidiaries are
part of a consolidated group for tax purposes, on the other hand, which payments
by the Issuer and the Restricted Subsidiaries are not in excess of the tax
liabilities that would have been payable by them on a stand-alone
basis;
(iv) Any
Restricted Payments which are made in accordance with Section 6.09, any
Permitted Investment or any Permitted Lien;
(v) Entering
into an agreement that provides registration rights to the shareholders of the
Issuer or amending any such agreement with shareholders of the Issuer and the
performance of such agreements;
(vi) Any
transaction with a joint venture or similar entity which would constitute an
Affiliate Transaction solely because the Issuer or a Restricted Subsidiary owns
an equity interest in or otherwise controls such joint venture or similar
entity;
provided,
that
no Affiliate of the Issuer or any of its Subsidiaries other than the Issuer or a
Restricted Subsidiary shall have a beneficial interest in such joint venture or
similar entity;
(vii) Any
merger, consolidation or reorganization of the Issuer with an Affiliate, solely
for the purposes of (a) reorganizing to facilitate an initial public
offering of securities of the Issuer or any holding company of the Issuer,
(b) forming a holding company or (c) reincorporating the Issuer in a
new jurisdiction;
(viii) (a)
Any agreement in effect on the Issue Date and disclosed in the Offering
Memorandum, as in effect on the Issue Date or as thereafter amended or replaced
in any manner, that, taken as a whole, is not more adverse to the interests of
the Holders in any material respect than such agreement as it was in effect on
the Issue Date or (b) any transaction pursuant to any agreement referred to
in the immediately preceding clause (a);
(ix) Any
contributions to the common equity capital of the Issuer;
(x) Pledges
of Equity Interests of Unrestricted Subsidiaries;
(xi) The
Transactions and/or the payment of any reasonable fees or expenses to the extent
incurred as of the Issue Date in connection therewith if documented as of Issue
Date;
(xii) Transactions
with an Affiliate where the only consideration paid is Qualified Equity
Interests of the Issuer;
(xiii) Payment
of loans (or cancellation of loans) to employees or consultants in the ordinary
course of business in aggregate amount not to exceed $2.0 million;
or
(xiv) Supply
and purchase contracts with joint ventures entered into the ordinary course of
business consistent with past practice.
SECTION 6.13.
|
Limitations on Dividend and Other
Restrictions Affecting Restricted
Subsidiaries
.
|
The
Issuer will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, create or otherwise cause or permit to exist or become effective any
consensual encumbrance or consensual restriction on the ability of any
Restricted Subsidiary to:
(a) Pay
dividends or make any other distributions on or in respect of its Equity
Interests;
(b)
Make loans or advances or pay any Indebtedness or other obligation
owed to the Issuer or any other Restricted Subsidiary; or
(c) Transfer
any of its assets to the Issuer or any other Restricted Subsidiary;
except
for:
(i)
Encumbrances or restrictions existing under
or by reason of applicable law, regulation or order;
(ii) Encumbrances
or restrictions existing under, or otherwise required by or imposed pursuant to
the terms of Note Documents;
(iii) Non-assignment
provisions of any contract or any lease entered into in the ordinary course of
business;
(iv) Encumbrances
or restrictions existing under or required by or otherwise imposed pursuant to
the terms of agreements existing on the date of this Indenture (including,
without limitation, the Credit Agreement) as in effect on that
date;
(v) Restrictions
relating to any Lien permitted under this Indenture imposed by the holder of, or
otherwise required by or imposed pursuant to the terms of such
Lien;
(vi) Restrictions
imposed under any agreement to sell assets permitted under this Indenture to any
Person pending the closing of such sale;
(vii) Any
instrument governing Acquired Indebtedness, which encumbrance or restriction is
not applicable to any Person, or the properties or assets of any Person, other
than the Person or the properties or assets of the Person so
acquired;
(viii) Any
other agreement governing Indebtedness entered into after the Issue Date that
contains encumbrances and restrictions that are not materially more restrictive,
taken as a whole, with respect to any Restricted Subsidiary than those in effect
on the Issue Date with respect to that Restricted Subsidiary pursuant to
agreements in effect on the Issue Date;
(ix) Customary
provisions in partnership agreements, limited liability company organizational
governance documents, joint venture, asset sale and stock sale agreements and
other similar agreements entered into in the ordinary course of business that
restrict the transfer of ownership interests in such partnership, limited
liability company, joint venture or similar Person;
(x) Purchase
Money Indebtedness incurred in compliance with Section 6.08 that impose
restrictions of the nature described in clause (c) above on the assets
acquired;
(xi) Restrictions
on cash or other deposits or net worth imposed by suppliers or landlords under
contracts entered into in the ordinary course of business;
(xii) Encumbrances
or restrictions contained in security agreements or mortgages securing
Indebtedness of a Restricted Subsidiary to the extent such encumbrances or
restrictions restrict the transfer of assets subject to such security agreements
or mortgages;
(xiii)
Encumbrances or restrictions contained in Indebtedness of Foreign Subsidiaries,
or municipal loan or related agreements entered into in connection with the
incurrence of industrial revenue bonds, permitted to be incurred under this
Indenture;
provided,
that any such encumbrances or restrictions are ordinary and customary with
respect to the type of Indebtedness being incurred under the relevant
circumstances and do not, in the good faith judgment of the Board of Directors
of the Issuer, materially impair the Issuer’s ability to make payment on the
Notes when due; and
(xiv)
Any encumbrances or restrictions imposed by
any amendments or refinancings of the contracts, instruments or obligations
referred to in clauses (i) through (xiii) above;
provided,
that such
amendments or refinancings are no more materially restrictive, taken as a whole,
with respect to such encumbrances and restrictions than those prior to such
amendment or refinancing.
SECTION 6.14.
|
Additional Note
Guarantees
.
|
(a) The
Issuer shall cause each Subsidiary (including any newly formed or newly acquired
Subsidiary or newly designated Restricted Subsidiary) (other than any designated
Unrestricted Subsidiary, Foreign Subsidiary or the Excluded Joint Venture) to,
within twenty (20) days of its acquisition, formation or designation
to:
(i)
In case of a newly formed or newly acquired
Subsidiary, be designated as a Restricted Subsidiary;
(ii) Execute
and deliver to the Trustee (a) a supplemental indenture pursuant to which
such Restricted Subsidiary shall unconditionally guarantee all of the Issuer’s
obligations under the Notes and this Indenture, (b) a notation of guarantee
in respect of its Note Guarantee, in each case in form and substance reasonably
satisfactory to the Trustee;
(iii) Subject
to the terms, conditions and provisions of Section 6.15 and Article 12, pledge
its assets and have its stock pledged as Collateral pursuant to the Security
Documents and execute and deliver to the Trustee (a) a supplement to the
Collateral Agreement, (b) a supplement to the Intercreditor Agreement and
(c) other applicable Security Documents, in each case in form and substance
reasonably satisfactory to the Trustee; and
(iv) Deliver
to the Trustee one or more opinions of counsel that such documents required by
Section 6.14(a)(i), (x) have been duly authorized, executed and
delivered by such Restricted Subsidiary and (y) constitute a valid and
legally binding obligation of such Restricted Subsidiary in accordance with
their terms.
Thereafter,
such Restricted Subsidiary shall be a Guarantor for all purposes of this
Indenture.
(b) Notwithstanding
Section 6.14(a), a Guarantor will be automatically and unconditionally
released and discharged from its obligations under its Note Guarantee, this
Indenture and the Registration Rights Agreement under the circumstances set
forth in Section 13.05. The form of the Note Guarantee is
attached hereto as
Exhibit B
.
To the
extent required by applicable law or the Security Documents, or upon reasonable
request of the Trustee, the Issuer shall, and shall cause each Guarantor to, at
their sole expense, subject to the terms, conditions and provisions of the
Intercreditor Agreement, and the Security Documents
promptly: (1) execute, acknowledge and deliver such Security
Documents, the Intercreditor Agreement, instruments, financing statements,
certificates, notices and other documents, make such filings, recordations and
take such other actions as may be reasonably required by applicable law or as
may be reasonably necessary or advisable to create and perfect, protect, assure,
transfer, confirm or enforce first priority and second priority (as applicable)
Liens and security interests in respect of the Collateral (including, without
limitation, the filing of financing statements under the Uniform Commercial
Code, and customary short-form security agreements with respect to Intellectual
Property with the U.S. Patent and Trademark Office and the U.S. Copyright Office
and recording of Mortgages on each Material Real Property or other real property
constituting Collateral); and (2) subject to the terms, conditions and
provisions of the Intercreditor Agreement and the Security Documents, promptly
deliver to the Noteholder Collateral Agent certificates, if any, representing
the capital stock and membership interests of the Guarantors. In
addition, from time to time, the Issuer will reasonably promptly secure the
obligations under the Indenture, Security Documents and Intercreditor Agreement
by pledging or creating, or causing to be pledged or created, perfected security
interests with respect to the Collateral, in each case to the extent reasonably
requested by the Trustee, and in accordance with the Security Documents
(including the Intercreditor Agreement). Such security interests and
Liens will be created under the Security Documents in form and substance
reasonably satisfactory to the Trustee, and the Issuer shall deliver or cause to
be delivered to Trustee all such instruments and documents (including
certificates, legal opinions, title insurance policies and lien searches) as the
Trustee shall reasonably request to evidence compliance with this
covenant. The Issuer agrees to provide promptly after reasonable
request by the Trustee such evidence as to the perfection and priority status of
each such security interest and Lien. In furtherance of the
foregoing, the Issuer will give prompt notice to the Trustee of the acquisition
by it or any of the Guarantors after the Issue Date of any new Material Real
Property. With respect to any fee interest in any Material Real
Property located in the United States (individually and collectively, the “
Premises
”) owned by the Issuer
or a Guarantor on the Issue Date or acquired by the Issuer or a Guarantor after
the Issue Date, the Issuer or Guarantor shall, in case of properties existing on
the Issue Date, within 75 days after the Issue Date and, in case of future
acquired properties, within 75 days of such acquisition, as applicable, deliver
to the Noteholder Collateral Agent the following documents and instruments with
respect to any such acquired Material Real Property that does not constitute an
Excluded Asset:
(a) The
Issuer shall deliver to the Noteholder Collateral Agent, as mortgagee, fully
executed counterparts of Mortgages duly executed by the Issuer or the applicable
Guarantor, together with evidence of the completion (or reasonably satisfactory
arrangements for the completion) of all recordings and filings of such Mortgages
(and payment of any taxes or fees in connection therewith) as may be reasonably
necessary to create a valid, perfected Lien against the properties purported to
be covered thereby;
(b) The
Issuer shall deliver to the Noteholder Collateral Agent, at the Issuer’s sole
cost and expense, mortgagee’s title insurance policies in favor of the
Noteholder Collateral Agent, as mortgagee for the ratable benefit of itself and
the Holders of the Notes in an amount equal to 110% of the net book value of the
applicable Material Real Property (such net book value for each Material Real
Property existing as of the Issue Date is set forth on
Schedule II
), and in
the form necessary, with respect to the property purported to be covered by such
Mortgage, to insure that that the interests created by the Mortgage constitute
valid Liens thereon free and clear of all Liens other than Permitted Liens, and
such policies shall also include, to the extent available, such other advisable
lenders’ endorsements and shall be accompanied by evidence of the payment in
full of all premiums thereon; and
(c) The
Issuer shall, or shall cause the Guarantors to, deliver to the Noteholder
Collateral Agent, at the Issuer’s sole cost and expense, with respect to each
such Material Real Property, (i) corporate and local law Opinions of
Counsel, as the Noteholder Collateral Agent or the Trustee shall reasonably
request (which opinions shall confirm, among other things, the due
authorization, execution and delivery and the enforceability of such Mortgages
in accordance with their terms), (ii) ALTA surveys in form and substance
reasonably acceptable to the title company to cause the title company to remove
the standard survey exception and to issue a survey endorsement with respect to
each of the title policies referenced in Section 6.15(b), and
(iii) such affidavits that the title company shall reasonably request in
connection with the issuance of the title policies referenced in
Section 6.15(b).
SECTION 6.16.
|
Reports to
Holders
.
|
Whether
or not required by the SEC, so long as any Notes are outstanding, the Issuer
will furnish to the Holders of Notes, or file electronically with the SEC
through the SEC’s Electronic Data Gathering, Analysis and Retrieval System (or
any successor system), within the time periods that would be applicable to the
Issuer if it were subject to Section 13(a) or 15(d) of the Exchange
Act:
(i)
All quarterly and annual
financial and other information that would be required to be contained in a
filing with the SEC on Forms 10-Q and 10-K if the Issuer were required to file
these Forms; and
(ii) All
current reports that would be required to be filed with the SEC on Form 8-K if
the Issuer were required to file these reports.
In
addition, whether or not required by the SEC, the Issuer will file a copy of all
of the information and reports referred to in clauses (i) and (ii) above with
the SEC for public availability within the time periods specified in the SEC’s
rules and regulations (unless the SEC will not accept the filing) and make the
information available to securities analysts and prospective investors upon
request.
Notwithstanding
anything to the contrary, the Issuer will be deemed to have complied with its
obligations in the preceding two paragraphs following the filing of the Shelf
Registration Statement and prior to the effectiveness thereof if the Shelf
Registration Statement includes the information specified in clause (i) above at
the times it would otherwise be required to file such Forms. If any
direct or indirect parent of the Issuer has complied with the reporting
requirements of Section 13 or 15(d) of the Exchange Act, if applicable, and
has furnished the Holders of Notes, or filed electronically with the SEC’s
Electronic Data Gathering, Analysis and Retrieval System (or any successor
system), the reports described herein with respect to such parent (including any
financial information required by Regulation S-X relating to the Issuer and
the Guarantors), the Issuer shall be deemed to be in compliance with the
provisions of this Section 6.16.
The
Issuer and the Guarantors have agreed that, for so long as any Notes remain
outstanding, the Issuer will furnish to the Holders and to securities analysts
and prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act. Until
the filing of the Shelf Registration Statement, nothing herein shall be
construed to require the Issuer to include in any such reports any information
specified in Rule 3-10 or 3-16 of Regulation S-X.
SECTION 6.17.
|
Limitations on Designation of
Unrestricted Subsidiaries
.
|
(a) The
Issuer may designate any Subsidiary (including any newly formed or newly
acquired Subsidiary) of the Issuer as an “Unrestricted Subsidiary” under this
Indenture (a “
Designation
”) only
if:
(i)
No Default shall have
occurred and be continuing at the time of or after giving effect to such
Designation; and
(b) No
Subsidiary shall be Designated as an “Unrestricted Subsidiary” if such
Subsidiary or any of its Subsidiaries owns (i) (A) any Equity Interests
(other than Qualified Equity Interests) of the Issuer or (B) any Equity
Interests of any Restricted Subsidiary that is not a Subsidiary of the
Subsidiary to be so Designated or (ii) is a Person with respect to which neither
the Issuer nor any Restricted Subsidiary has any direct or indirect obligations
(A) to subscribe for additional Equity Interests or (B) to maintain or
preserve the Person’s financial condition or cause the Person to achieve any
specified levels of operating results, unless such obligation is a Permitted
Investment or is otherwise permitted under Section 6.09.
(c) If,
at any time, any Unrestricted Subsidiary fails to meet the requirements of
Section 6.17(a) and (b) as an Unrestricted Subsidiary, it shall
thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture
and any Indebtedness of the Subsidiary and any Liens on assets of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary as of the
date and, if the Indebtedness is not permitted to be incurred under
Section 6.08 or the Lien is not permitted under Section 6.10, the
Issuer shall be in default of the applicable Section.
(i)
No Default shall have occurred and be continuing
at the time of and after giving effect to such Redesignation; and
(ii) All
Liens, Indebtedness and Investments of such Unrestricted Subsidiary outstanding
immediately following such Redesignation would, if incurred or made at such
time, have been permitted to be incurred or made for all purposes of this
Indenture.
(e) All
Designations and Redesignations must be evidenced by resolutions of the Board of
Directors of the Issuer, delivered to the Trustee, certifying compliance with
the foregoing provisions.
SECTION 6.18.
|
Limitation on the Issuance or Sale of
Equity Interests of Restricted
Subsidiaries
.
|
[RESERVED]
SECTION 6.19.
|
Information Regarding
Collateral
.
|
(a) The
Issuer will furnish to the Noteholder Collateral Agent and the Trustee, with
respect to the Issuer or any Guarantor, prompt written notice at least fifteen
(15) days prior to any change in such Person’s (i) corporate name,
(ii) jurisdiction of organization or formation, (iii) identity or
corporate structure or (iv) Federal Taxpayer Identification
Number. The Issuer also agrees promptly to notify the Noteholder
Collateral Agent and the Trustee if any material portion of the Collateral is
damaged or destroyed.
(b) Each
year, at the time of delivery of the annual financial statements with respect to
the preceding fiscal year, the Issuer shall deliver to the Trustee a certificate
of a financial officer setting forth the information required pursuant to the
Perfection Certificate or confirming that there has been no change in such
information since the date of the prior delivered Perfection
Certificate.
SECTION 6.20.
|
Impairment of Security
Interest
.
|
The
Issuer will not, and will not permit any of its Restricted Subsidiaries to, take
or knowingly or negligently omit to take, any action which action or omission
would reasonably be expected to have the result of materially impairing the
security interest with respect to the Collateral for the benefit of Noteholder
Secured Parties, except as expressly permitted by Articles Eleven or Twelve, the
Security Documents or the Intercreditor Agreement.
SECTION 6.21.
|
Insurance
.
|
(a) The
Issuer and Guarantors (x) will cause any insurance policies covering any
Collateral to be endorsed or otherwise amended to include a customary lender’s
loss payable endorsement, in form and substance reasonably satisfactory to the
Trustee, which endorsement shall provide that, from and after the Issue Date,
subject to the terms, conditions and provisions of the Intercreditor Agreement,
if the insurance carrier shall have received written notice from the Trustee of
the occurrence and continuance of an Event of Default, the insurance carrier
shall pay all proceeds otherwise payable to the Grantors under such policies
directly to the Trustee during the continuance of an Event of Default;
(y) cause each such policy to provide that it shall not be canceled,
modified or not renewed (i) by reason of nonpayment of premium upon not
less than 10 days’ prior written notice thereof by the insurer to the Trustee
(giving the Trustee the right to cure defaults in the payment of premiums) or
(ii) for any other reason upon not less than 30 days’ prior written notice
thereof by the insurer to the Trustee; (c) will deliver to the Trustee,
prior to the cancellation, modification or nonrenewal of any such policy of
insurance, a draft copy of a renewal or replacement policy (or other evidence of
renewal of a policy previously delivered to the Trustee) and reasonably promptly
thereafter deliver a duplicate original copy of such policy together with
evidence reasonably satisfactory to the Trustee of payment of the premium as
required by such insurance.
(b) The
Grantors will notify the Trustee promptly whenever any separate insurance
concurrent in form or contributing in the event of loss with that required to be
maintained under this covenant is taken out by any Grantor; and promptly deliver
to the Trustee a duplicate copy of such policy or policies.
SECTION 6.22.
|
Consolidated Secured Debt
Ratio
.
|
Commencing
April 1, 2012, the Issuer will not permit the Consolidated Secured Debt Ratio as
at the last day of each fiscal month for any period set forth below to
exceed:
Period
|
|
Consolidated
Secured Debt Ratio
|
April
1, 2012 — March 31, 2013
|
|
7.50
: 1.00
|
April
1, 2013 — March 31, 2014
|
|
7.00
: 1.00
|
April
1, 2014 — March 31, 2015
|
|
6.75
: 1.00
|
April
1, 2015 — and thereafter
|
|
6.50
: 1.00
|
ARTICLE SEVEN
SUCCESSOR
CORPORATION
SECTION 7.01.
|
Mergers, Consolidations,
Etc
.
|
(a) The
Issuer will not, directly or indirectly, in a single transaction or a series of
related transactions, (i) consolidate or merge with or into another Person
(other than a merger with an Affiliate solely for the purpose of and with the
effect of changing the Issuer’s jurisdiction of incorporation to another State
of the United States or forming a holding company for the Issuer (
provided
that such holding
company becomes a Guarantor)), or sell, lease, transfer, convey or otherwise
dispose of or assign all or substantially all of the assets of the Issuer or the
Issuer and the Restricted Subsidiaries (taken as a whole) or (ii) adopt a
Plan of Liquidation unless, in either case:
(i)
Either:
(1) The
Issuer will be the surviving or continuing Person; or
(2) The
Person formed by or surviving such consolidation or merger or to which such
sale, lease, conveyance or other disposition shall be made (or, in the case of a
Plan of Liquidation, any Person to which assets are transferred) (collectively,
the “
Successor
”) is a corporation,
limited liability company or limited partnership organized and existing under
the laws of any State of the United States or the District of Columbia, and the
Successor expressly assumes, by supplemental indenture, security documents and
intercreditor agreement in form and substance reasonably satisfactory to the
Trustee, all of the obligations of the Issuer under the Notes, this Indenture,
the applicable Security Documents, the Intercreditor Agreement and the
Registration Rights Agreement;
provided,
that if such Person
is a limited liability company or a partnership, such Person will form a Wholly
Owned Restricted Subsidiary that is a corporation and cause such Subsidiary to
become a co-issuer of the Notes; and
(ii) Immediately
prior to and immediately after giving effect to such transaction and the
assumption of the obligations as set forth in clause (i)(B) above and the
incurrence of any Indebtedness to be incurred in connection therewith, and the
use of any net proceeds therefrom on a pro forma basis, no Default shall have
occurred and be continuing.
For
purposes of this Section 7.01(a), any Indebtedness of the Successor which
was not Indebtedness of the Issuer immediately prior to the transaction shall be
deemed to have been incurred in connection with such transaction.
(b) Except
as provided in Section 13.05, no Guarantor may consolidate with or merge
with or into (whether or not such Guarantor is the surviving Person) another
Person, unless:
(i)
Either:
(1) Such
Guarantor will be the surviving or continuing Person; or
(2) The
Person formed by or surviving any such consolidation or merger assumes, by
supplemental indenture, security documents and intercreditor agreement in form
and substance reasonably satisfactory to the Trustee, all of the obligations of
such Guarantor under the Note Guarantee of such Guarantor, this Indenture, the
applicable Security Documents, the Intercreditor Agreement and the Registration
Rights Agreement, and is a corporation, limited liability company or limited
partnership organized and existing under the laws of any State of the United
States or the District of Columbia; and
(ii) Immediately
after giving effect to such transaction, no Default shall have occurred and be
continuing.
(c) For
purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries, the Equity Interests of which constitute all or substantially all
of the properties and assets of the Issuer, will be deemed to be the transfer of
all or substantially all of the properties and assets of the
Issuer.
(d) Upon
any consolidation, combination or merger of the Issuer or a Guarantor, or any
transfer of all or substantially all of the assets of the Issuer in accordance
with the foregoing, in which the Issuer or such Guarantor is not the continuing
obligor under the Notes or its Note Guarantee, except as provided in
Section 13.05, the surviving entity formed by such consolidation or into
which the Issuer or such Guarantor is merged or the Person to which the
conveyance, lease or transfer is made will succeed to, and be substituted for,
and may exercise every right and power of, the Issuer or such Guarantor under
this Indenture, the Notes, the Note Guarantees, the Security Documents and
Intercreditor Agreement with the same effect as if such surviving entity had
been named therein as the Issuer or such Guarantor and, except in the case of a
lease, the Issuer or such Guarantor, as the case may be, will be released from
the obligation to pay the principal of and interest on the Notes or in respect
of its Note Guarantee, as the case may be, and all of the Issuer’s or such
Guarantor’s other obligations and covenants under the Notes, this Indenture and
its Note Guarantee, if applicable.
(e) Notwithstanding
the foregoing, any Restricted Subsidiary may consolidate with, merge with or
into or convey, transfer or lease, in one transaction or a series of
transactions, all or substantially all of its assets to the Issuer or another
Restricted Subsidiary;
provided,
that if any party
to any such transaction is a Note Party, the surviving entity, as the case may
be, shall be a Note Party.
ARTICLE EIGHT
DEFAULT
AND REMEDIES
SECTION
8.01.
|
Events of
Default.
|
Each of
the following is an “
Event of
Default
”:
(i)
Failure by the Issuer to pay interest on any
of the Notes when it becomes due and payable and the continuance of any such
failure for thirty (30) days;
(ii)
Failure by the Issuer to pay the principal on any of
the Notes when it becomes due and payable, whether at Stated Maturity, upon
redemption, upon a Fundamental Change of Control Purchase Date, upon
acceleration or otherwise;
(iii)
Failure by the Issuer to comply with its obligations
to convert Notes in accordance with this Indenture upon exercise of a Holder’s
conversion right herein and such failure continues for a period of ten (10)
days;
(iv)
Failure by the Issuer to provide a Fundamental Change
of Control Notice to Holders in accordance with the terms of this Indenture and
such failure continues for a period of ten (10) days;
(v)
Failure by the Issuer to issue Additional Shares or
make the relevant Make Whole Payment in accordance with this Indenture and such
failure continues for a period of ten (10) days;
(vi)
Failure by the Issuer to pay the Cash Conversion
Amount in accordance with this Indenture and such failure continues for a period
of fifteen (15) days;
(vii)
Failure by the Issuer to comply with Section 7.01 or
in respect of its obligations to purchase Notes upon a Fundamental Change of
Control as described in Section 3.01 (whether or not such compliance is
prohibited by the subordination provisions of this Indenture);
(viii)
Failure by the Issuer or any Guarantor (A) to comply with
any other agreement or covenant in this Indenture (other than
Section 6.22), the Security Documents or the Intercreditor Agreement and
continuance of this failure for 60 days after notice of the failure has been
given to the Issuer by the Trustee or by the Holders of at least 25% of the
aggregate principal amount of the Notes then outstanding and (B) to comply with
the covenant provided in Section 6.22 and continuance of this failure to
comply for 30 days after notice of the failure has been given to the Issuer by
the Trustee or by Holders of at least 25% of the aggregate principal amount of
the Notes then outstanding;
(ix)
Event of default under any mortgage, indenture or
other instrument or agreement under which there is issued Indebtedness of the
Issuer or any Restricted Subsidiary, whether such Indebtedness now exists or is
incurred after the Issue Date, if such event of default is a default relating to
a failure to pay at stated maturity thereof or would enable or permit the holder
or holders thereof or any trustee or agent on their behalf to cause such
Indebtednesss to become due and payable prior to scheduled maturity and such
event of default continues for a period of twenty (20) days,
provided,
that the principal
amount of such Indebtedness, together with any other Indebtedness with respect
to which a default has occurred and is continuing, aggregates $10.0 million or
more;
(x)
One or more final non-appealable judgments or
orders that exceed $10.0 million in the aggregate (net of amounts covered by
insurance or bonded) for the payment of money have been entered by a court or
courts of competent jurisdiction against the Issuer or any Restricted Subsidiary
and such judgment or judgments have not been satisfied, stayed, annulled,
discharged or rescinded within 60 days after the applicable judgment becomes
final and non-appealable;
(xi)
The Issuer or any Significant Subsidiary pursuant to
or within the meaning of any Bankruptcy Law:
(1)
Commences a voluntary case,
(2)
Consents to the entry of an order for relief
against it in an involuntary case,
(3)
Consents to the appointment of a Custodian of
it or for all or substantially all of its assets, or
(4)
Makes a general assignment for the benefit of
its creditors;
(xii)
A court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(1)
Is for relief against the Issuer or any
Significant Subsidiary as debtor in an involuntary case,
(2)
Appoints a Custodian of the Issuer or any
Significant Subsidiary or a Custodian for all or substantially all of the assets
of the Issuer or any Significant Subsidiary, or
(3)
Orders the liquidation of the Issuer or any
Significant Subsidiary,
and the
order or decree remains unstayed and in effect for 60 consecutive
days;
(xiii)
Any Note Guarantee of any Significant Subsidiary ceases to
be in full force and effect (other than in accordance with the terms of such
Note Guarantee and this Indenture) or is declared null and void and
unenforceable or found to be invalid or any Guarantor denies its liability under
its Note Guarantee (other than by reason of release of a Guarantor from its Note
Guarantee in accordance with the terms of this Indenture and the Note
Guarantee); or
(xiv)
Any security interest and Lien purported to be created by
any Security Document with respect to any Collateral, individually or in the
aggregate, having a fair market value in excess of $5.0 million at any time
shall cease to be in full force and effect, or shall cease to give the
Noteholder Collateral Agent, for the benefit of the applicable Noteholder
Secured Parties, the Liens, rights, powers and privileges purported to be
created and granted thereby (including a perfected first priority security
interest in and Lien on, all of the Collateral thereunder (except as otherwise
expressly provided in the Indenture, the Intercreditor Agreement or Security
Documents)) in favor of the Noteholder Collateral Agent, or shall be asserted by
the Issuer or any other Guarantor not to be, (or any action shall be taken by
the Issuer or any Guarantor to discontinue unless otherwise permitted) a valid,
perfected, first priority (except as otherwise expressly provided in the
Indenture, the Intercreditor Agreement or Security Documents) security interest
in or Lien on the Collateral covered thereby; except in each case to the extent
that any such loss of perfection or priority results from the failure of the
Trustee or Noteholder Collateral Agent to maintain possession of certificates
actually delivered to it representing securities pledged under the Security
Documents) or take other actions required to maintain the creation, perfection
or priority of such security interest and Lien.
SECTION 8.02.
|
Acceleration.
|
If an
Event of Default specified in clause (xi) or (xii) of Section 8.01 with
respect to the Issuer occurs, all outstanding Notes shall become due and payable
without any further action or notice. If an Event of Default (other than
an Event of Default specified in clause (xi) or (xii) of Section 8.01 with
respect to the Issuer) shall have occurred and be continuing under this
Indenture, the Trustee, by written notice to the Issuer, or the Holders of at
least 25% in aggregate principal amount of the Notes then outstanding, by
written notice to the Issuer and the Trustee, may declare (an “
acceleration declaration
”) all
amounts owing under the Notes to be due and payable immediately. Upon such
acceleration declaration, the aggregate principal of and accrued and unpaid
interest on the outstanding Notes shall become due and payable immediately;
provided
,
however
, that after such
acceleration, but before a judgment or decree based on acceleration, the Holders
of a majority in aggregate principal amount of such outstanding Notes may
rescind and annul such acceleration:
(i)
If the rescission would not conflict with any
judgment or decree;
(ii)
If all existing Events of Default have been
cured or waived except nonpayment of principal and interest that has become due
solely because of this acceleration;
(iii)
To the extent the payment of such interest is lawful, interest on overdue
installments of interest and overdue principal, which has become due otherwise
than by such declaration of acceleration, has been paid;
(iv)
If the Issuer has paid to the Trustee its reasonable
compensation and reimbursed the Trustee of its expenses, disbursements and
advances; and
(v)
In the event of a cure or waiver of an Event of Default of the type set forth in
Section 8.01(xi) or (xii), the Trustee shall have received an Officers’
Certificate and an Opinion of Counsel that such Event of Default has been cured
or waived.
No such
rescission shall affect any subsequent Default or impair any right consequent
thereto.
SECTION 8.03.
|
Other
Remedies.
|
Subject
to the terms, conditions, and provisions of the Intercreditor Agreement, an
Event of Default occurs and is continuing, the Trustee may pursue any available
remedy by proceeding at law or in equity to collect the payment of principal of,
or interest on, the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The
Trustee may maintain a proceeding even if it does not possess any of the Notes
or does not produce any of them in the proceeding. A delay or omission by
the Trustee or any Holder in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or constitute a waiver of
or acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative to the extent
permitted by law.
SECTION 8.04.
|
Waiver of Past
Defaults.
|
Subject
to Sections 2.09, 8.07 and 11.02, the Holders of a majority in principal
amount of the outstanding Notes (which may include consents obtained in
connection with a tender offer or exchange offer of Notes) by notice to the
Trustee may waive an existing Default and its consequences, except a continuing
Default in the payment of principal of, or interest on, any Note as specified in
Section 8.01(i) or (ii);
provided
,
however
, that the Holders of
a majority in aggregate principal amount of the then-outstanding Notes may
rescind an acceleration and its consequences, including any related payment
default that resulted from such acceleration. The Issuer shall deliver to
the Trustee an Officers’ Certificate stating that the requisite percentage of
Holders have consented to such waiver and attaching copies of such
consents. When a Default is waived, it is cured and ceases.
SECTION 8.05.
|
Control by
Majority.
|
The
Holders of not less than a majority in principal amount of the outstanding Notes
may direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
it. Subject to Section 9.01, however, the Trustee may refuse to
follow any direction that conflicts with any law or this Indenture, that the
Trustee determines may be unduly prejudicial to the rights of another Holder, or
that may involve the Trustee in personal liability;
provided,
that the Trustee
may take any other action deemed proper by the Trustee which is not inconsistent
with such direction.
In the
event the Trustee takes any action or follows any direction pursuant to this
Indenture, the Trustee shall be entitled to indemnification against any loss or
expense caused by taking such action or following such direction.
SECTION 8.06.
|
Limitation on
Suits.
|
No Holder
will have any right to institute any proceeding with respect to this Indenture
or for any remedy thereunder, unless the Trustee:
(i)
has failed to act for a period of 60 days
after receiving written notice of a continuing Event of Default by such Holder
and a request to act by Holders of at least 25% in aggregate principal amount of
Notes outstanding;
(ii)
has been offered indemnity satisfactory to it in its reasonable judgment;
and
(iii) has
not received from the Holders of a majority in aggregate principal amount of the
outstanding Notes a direction inconsistent with such request.
However,
such limitations do not apply to a suit instituted by a Holder of any Note for
enforcement of payment of the principal of or interest on such Note on or after
the due date therefor (after giving effect to the grace period specified in
Section 8.01(i)).
A Holder
may not use this Indenture to prejudice the rights of another Holder or to
obtain a preference or priority over such other Holder.
SECTION 8.07.
|
Rights of Holders to
Receive Payment.
|
Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of, and interest on, a Note, on or after the respective due
dates therefor, or to bring suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the
consent of the Holder.
SECTION 8.08.
|
Collection Suit by
Trustee.
|
If a
Default in payment of principal or interest specified in Section 8.01(i) or
(ii) occurs and is continuing, the Trustee may recover judgment in its own name
and as trustee of an express trust against the Issuer or any other obligor on
the Notes for the whole amount of principal and accrued interest and fees
remaining unpaid, together with interest on overdue principal and, to the extent
that payment of such interest is lawful, interest on overdue installments of
interest, in each case at the rate
per annum
borne by the Notes
and such further amount as shall be sufficient to cover the costs and expenses
of collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
SECTION 8.09.
|
Trustee May File
Proofs of Claim.
|
The
Trustee may file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any
claim for the compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel) and the Holders allowed in any judicial proceedings
relating to the Issuer, their creditors or their property and shall be entitled
and empowered to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same, and any Custodian in
any such judicial proceedings is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agent and counsel, and any other amounts due the
Trustee under Section 9.07. Nothing herein contained shall be deemed
to authorize the Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such
proceeding. The Trustee shall be entitled to participate as a member of
any official committee of creditors in the matters as it deems necessary or
advisable.
SECTION 8.10.
|
Priorities.
|
If the
Trustee or Noteholder Collateral Agent collects any money or property pursuant
to this Article Eight, it shall pay out the money or property (subject to
the Intercreditor Agreement) in the following order:
First:
to the Trustee and Noteholder Collateral Agent for amounts due under
Section 9.07 or Section 12.11;
Second:
to Holders for interest accrued on the Notes, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Notes for
interest;
Third:
to Holders for principal amounts due and unpaid on the Notes, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Notes for principal; and
Fourth:
to the Issuer or, if applicable, the Guarantors, as their respective interests
may appear.
The
Trustee, upon prior notice to the Issuer, may fix a record date and payment date
for any payment to Holders pursuant to this Section 8.10.
SECTION 8.11.
|
Undertaking for
Costs.
|
In any
suit for the enforcement of any right or remedy under this Indenture or in any
suit against the Trustee or Noteholder Collateral Agent for any action taken or
omitted by it as Trustee or Noteholder Collateral Agent, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys’ fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This
Section 8.11 does not apply to a suit by the Trustee or Noteholder
Collateral Agent, a suit by a Holder pursuant to Section 8.07, or a suit by
a Holder or Holders of more than 10% in principal amount of the outstanding
Notes.
ARTICLE NINE
TRUSTEE
SECTION 9.01.
|
Duties of
Trustee.
|
(a)
If a Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b)
Except during the continuance of a
Default:
(i)
The Trustee need perform only those duties as
are specifically set forth herein or in the Trust Indenture Act and no duties,
covenants, responsibilities or obligations shall be implied in this Indenture
against the Trustee.
(ii)
In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates (including
Officers’ Certificates) or opinions (including Opinions of Counsel and opinions
relating to fair market value) furnished to the Trustee and conforming to the
requirements of this Indenture. However, in the case of any such
certificates or opinions which by any provision hereof are specifically required
to be furnished to the Trustee, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of this
Indenture.
(c)
Notwithstanding anything to the contrary
herein, the Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i)
This paragraph does not limit the effect of
Section 9.01(b).
(ii)
The Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts.
(iii)
The Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to
Section 8.05.
(d)
No provision of this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or to take or omit
to take any action under this Indenture or take any action at the request or
direction of Holders if it shall have reasonable grounds for believing that
repayment of such funds is not assured to it.
(e)
Whether or not therein expressly so provided,
every provision of this Indenture that in any way relates to the Trustee is
subject to this Section 9.01.
(f)
The Trustee shall not be liable for interest
on any money received by it except as the Trustee may agree in writing with the
Issuer. Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g)
In the absence of bad faith, negligence or
willful misconduct on the part of the Trustee, the Trustee shall not be
responsible for the application of any money by any Paying Agent other than the
Trustee.
SECTION 9.02.
|
Rights of
Trustee.
|
Subject
to Section 9.01:
(a)
The Trustee may rely conclusively on any
resolution, certificate (including any Officers’ Certificate), statement,
instrument, opinion (including any Opinion of Counsel), notice, request,
direction, consent, order, bond, debenture, or other paper or document believed
by it to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in the
document.
(b)
Before the Trustee acts or refrains from
acting, it may require an Officers’ Certificate and an Opinion of Counsel, which
shall conform to the provisions of Section 14.05. The Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on such Officers’ Certificate or Opinion of Counsel.
(c)
The Trustee may act through its attorneys and
agents and shall not be responsible for the misconduct or negligence of any
agent (other than an agent who is an employee of the Trustee) appointed with due
care.
(d)
The Trustee shall not be liable for any action
it takes or omits to take in good faith which it reasonably believes to be
authorized or within its rights or powers under this Indenture.
(e)
The Trustee may consult with counsel of its
selection and the advice or opinion of such counsel as to matters of law shall
be full and complete authorization and protection from liability in respect of
any action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(f)
The Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the Holders pursuant to the provisions of
this Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity satisfactory to it against the costs, expenses and
liabilities which may be incurred therein or thereby.
(g)
The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate
(including any Officers’ Certificate), statement, instrument, opinion (including
any Opinion of Counsel), notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled, upon reasonable notice to the Issuer, to
examine the books, records, and premises of the Issuer, personally or by agent
or attorney at the sole cost of the Issuer.
(h)
The Trustee shall not be required to give any
bond or surety in respect of the performance of its powers and duties
hereunder.
(i)
The permissive rights of the Trustee to do
things enumerated in this Indenture shall not be construed as
duties.
(j)
Except with respect to Section 6.01
and 6.06, the Trustee shall have no duty to inquire as to the performance of the
Issuer with respect to the covenants contained in Article Six. In
addition, the Trustee shall not be deemed to have knowledge of an Event of
Default except (i) any Default or Event of Default occurring pursuant to
Sections 6.01, 8.01(i) or 8.01(ii) or (ii) any Default or Event of
Default of which the Trustee shall have received written
notification.
(k)
The rights, privileges, protections,
immunities and benefits given to the Trustee, including, without limitation, its
right to be indemnified, are extended to, and shall be enforceable by, the
Trustee in each of its capacities hereunder, and to each agent, custodian and
other Person employed to act hereunder.
(l)
Delivery of reports to the Trustee pursuant
to Section 6.16 hereof shall not constitute actual knowledge of, or notice
to, the Trustee of the information contained therein.
SECTION 9.03.
|
Individual Rights of
Trustee.
|
The
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer, its Subsidiaries or its
respective Affiliates with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the
Trustee must comply with Sections 9.10 and 9.11.
SECTION 9.04.
|
Trustee’s
Disclaimer.
|
The
Trustee shall not be responsible for and makes no representation as to the
validity or adequacy of this Indenture or the Notes, it shall not be accountable
for the Issuer’s use of the proceeds from the Notes, and it shall not be
responsible for any statement of the Issuer in this Indenture or any document
issued in connection with the sale of Notes or any statement in the Notes other
than the Trustee’s certificate of authentication. The Trustee makes no
representations with respect to the effectiveness or adequacy of this
Indenture.
SECTION 9.05.
|
Notice of
Default.
|
If a
Default occurs and is continuing and the Trustee receives actual notice of such
Default, the Trustee shall mail to each Holder notice of the uncured Default
within 30 days after such Default occurs. Except in the case of a Default
in payment of principal of, or interest on, any Note, including an accelerated
payment and the failure to make a payment on the Change of Control Payment Date
pursuant to a Change of Control Offer or the Net Proceeds Payment Date pursuant
to a Net Proceeds Offer, or a Default in complying with the provisions of
Article Seven, the Trustee may withhold the notice if and so long as the
Board of Directors, the executive committee, or a trust committee of directors
and/or Responsible Officers, of the Trustee in good faith determines that
withholding the notice is in the interest of the Holders.
SECTION 9.06.
|
Reports by Trustee to
Holders.
|
Within 60
days after each September 1, beginning with September 1, 2011, the Trustee
shall, to the extent that any of the events described in Trust Indenture Act
§ 313(a) occurred within the previous twelve months, but not otherwise,
mail to each Holder a brief report dated as of such date that complies with
Trust Indenture Act § 313(a). The Trustee also shall comply with
Trust Indenture Act §§ 313(b), 313(c) and 313(d).
A copy of
each report at the time of its mailing to Holders shall be mailed to the Issuer
and filed with the SEC and each securities exchange, if any, on which the Notes
are listed.
The
Issuer shall notify the Trustee if the Notes become listed on any securities
exchange or of any delisting thereof and the Trustee shall comply with Trust
Indenture Act § 313(d).
SECTION 9.07.
|
Compensation and
Indemnity.
|
The
Issuer shall pay to the Trustee from time to time such compensation as the
Issuer and the Trustee shall from time to time agree in writing for its services
hereunder. The Trustee’s compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Issuer shall reimburse
the Trustee upon request for all reasonable disbursements, expenses and advances
(including reasonable fees and expenses of counsel) incurred or made by it in
addition to the compensation for its services, except any such disbursements,
expenses and advances as may be attributable to the Trustee’s negligence, bad
faith or willful misconduct. Such expenses shall include the reasonable
fees and expenses of the Trustee’s agents and counsel.
The
Issuer shall indemnify each of the Trustee or any predecessor Trustee and its
agents for, and hold them harmless against, any and all loss, damage, claims
including taxes (other than taxes based upon, measured by or determined by the
income of the Trustee), liability or expense (including reasonable fees and
expenses of counsel) incurred by them except for such actions to the extent
caused by any negligence, bad faith or willful misconduct on their part, arising
out of or in connection with the acceptance or administration of this trust
including the reasonable costs and expenses of defending themselves against or
investigating any claim or liability in connection with the exercise or
performance of any of the Trustee’s rights, powers or duties hereunder
(including the costs and expenses of enforcing this Indenture against the Issuer
or the Guarantors (including this Section 9.07)). The Trustee shall
notify the Issuer promptly of any claim asserted against the Trustee or any of
its agents for which it may seek indemnity,
provided
,
however
, that the failure to
so notify the Issuer shall not relieve the Issuer of any liability that it may
have to the Trustee hereunder (except to the extent that the Issuer is
materially prejudiced or otherwise forfeits substantive rights or defenses by
reason of such failure). The Issuer shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee and its agents subject to the
claim may have separate counsel and the Issuer shall pay the reasonable fees and
expenses of such counsel;
provided
,
however
, that the Issuer will
not be required to pay such fees and expenses if there is no conflict of
interest between the Issuer and the Trustee and its agents subject to the claim
in connection with such defense as reasonably determined by the Trustee.
The Issuer need not pay for any settlement made without its written consent,
which consent shall not be unreasonably withheld or delayed. The Issuer
need not reimburse any expense or indemnify against any loss or liability to the
extent incurred by the Trustee through the Trustee’s negligence, bad faith or
willful misconduct.
To secure
the Issuer’s payment obligations in this Section 9.07, the Trustee shall
have a Lien prior to the Notes against all money or property held or collected
by the Trustee, in its capacity as Trustee, except money or property held in
trust to pay principal and interest on particular Notes.
When the
Trustee incurs expenses or renders services after a Default specified in
Section 8.01(xi) or (xii) occurs, such expenses and the compensation for
such services shall be paid to the extent allowed under any Bankruptcy
Law.
Notwithstanding
any other provision in this Indenture, the foregoing provisions of this
Section 9.07 shall survive the satisfaction and discharge of this Indenture
or the appointment of a successor Trustee.
SECTION 9.08.
|
Replacement of
Trustee.
|
The
Trustee may resign at any time by so notifying the Issuer in writing. The
Holders of a majority in principal amount of the outstanding Notes may remove
the Trustee by so notifying the Issuer and the Trustee and may appoint a
successor Trustee. The Issuer may remove the Trustee if:
(i)
The Trustee fails to comply with
Section 9.10;
(ii)
The Trustee is adjudged a bankrupt or an insolvent;
(iii) A
receiver or other public officer takes charge of the Trustee or its property;
or
(iv) The
Trustee becomes incapable of acting.
If the
Trustee resigns or is removed or if a vacancy exists in the office of Trustee
for any reason, the Issuer shall notify each Holder of such event and shall
promptly appoint a successor Trustee. Within one year after the successor
Trustee takes office, the Holders of a majority in principal amount of the Notes
may appoint a successor Trustee to replace the successor Trustee appointed by
the Issuer.
A
successor Trustee shall deliver a written acceptance of its appointment to the
retiring Trustee and to the Issuer. Immediately after that, the retiring
Trustee shall transfer, after payment of all sums then owing to the Trustee
pursuant to Section 9.07, all property held by it as Trustee to the
successor Trustee, subject to the Lien provided in Section 9.07, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. A successor Trustee shall mail notice of its
succession to each Holder.
If a
successor Trustee does not take office within 60 days after the retiring Trustee
resigns or is removed, the retiring Trustee, the Issuer or the Holders of at
least 10% in principal amount of the outstanding Notes may petition any court of
competent jurisdiction for the appointment of a successor Trustee at the expense
of the Issuer.
If the
Trustee fails to comply with Section 9.10, any Holder may petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
Notwithstanding
replacement of the Trustee pursuant to this Section 9.08, the Issuer’s
obligations under Section 9.07 shall continue for the benefit of the
retiring Trustee.
SECTION 9.09.
|
Successor Trustee by
Merger, Etc.
|
If the
Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
resulting, surviving or transferee corporation without any further act shall, if
such resulting, surviving or transferee corporation is otherwise eligible
hereunder, be the successor Trustee;
provided,
that such
corporation shall be otherwise qualified and eligible under this
Article Nine.
SECTION 9.10.
|
Eligibility;
Disqualification.
|
This
Indenture shall always have a Trustee who satisfies the requirement of Trust
Indenture Act §§ 310(a)(1), 310(a)(2) and 310(a)(5). The Trustee
shall have a combined capital and surplus of at least $50.0 million as set forth
in its most recent published annual report of condition. The Trustee shall
comply with Trust Indenture Act § 310(b);
provided
,
however
, that there shall be
excluded from the operation of Trust Indenture Act § 310(b)(1) any
indenture or indentures under which other securities, or certificates of
interest or participation in other securities, of the Issuer are outstanding, if
the requirements for such exclusion set forth in Trust Indenture Act
§ 310(b)(1) are met. The provisions of Trust Indenture Act § 310
shall apply to the Issuer and any other obligor of the Notes.
SECTION 9.11.
|
Preferential
Collection of Claims Against the
Issuer.
|
The
Trustee, in its capacity as Trustee hereunder, shall comply with Trust Indenture
Act § 311(a), excluding any creditor relationship listed in Trust Indenture
Act § 311(b). A Trustee who has resigned or been removed shall be
subject to Trust Indenture Act § 311(a) to the extent
indicated.
SECTION 9.12.
|
Notice of Payment of
Additional Interest.
|
In the
event that the Issuer is required to pay Additional Interest pursuant to the
terms of the Registration Rights Agreement, the Issuer shall provide a written
notice to the Trustee of the Issuer’s obligation to pay Additional Interest no
later than 15 days prior to the next Interest Payment Date, which notice shall
set forth the amount of the Additional Interest to be paid by the Issuer.
The Trustee shall not at any time be under any duty or responsibility to any
Holders to determine whether Additional Interest is payable and the amount
thereof.
ARTICLE TEN
DISCHARGE
OF INDENTURE; DEFEASANCE
SECTION 10.01.
|
Termination of the
Issuer’s Obligations.
|
The
Issuer may terminate its obligations under the Notes, this Indenture and the
Security Documents and the obligations of the Guarantors under the Note
Guarantees, this Indenture and the Security Documents and this Indenture and the
Security Documents shall cease to be of further effect, except those obligations
referred to in the penultimate paragraph of this Section 10.01,
if:
(i)
All the Notes that have been authenticated and
delivered (except lost, stolen or destroyed Notes which have been replaced or
paid and Notes for whose payment money has been deposited in trust or segregated
and held in trust by the Issuer and thereafter repaid to the Issuer or
discharged from this trust) have been delivered to the Trustee for cancellation,
or
(ii)
(a) All Notes not delivered to the
Trustee for cancellation otherwise have become due and payable, will become due
and payable, or may be called for redemption, within one year and the Issuer has
irrevocably deposited or caused to be deposited with the Trustee funds in trust
sufficient to pay and discharge the entire Indebtedness (including all principal
and accrued interest) on the Notes not theretofore delivered to the Trustee for
cancellation,
(1)
The Issuer has paid all sums then due and
payable by it under this Indenture, and
(2)
The Issuer has delivered irrevocable
instructions to the Trustee to apply the deposited money toward the payment of
the Notes at maturity or on the Redemption Date, as the case may
be.
In
addition, the Issuer must deliver an Officers’ Certificate and an Opinion of
Counsel stating that all conditions precedent to satisfaction and discharge have
been complied with.
In the
case of clause (ii) of this Section 10.01, and subject to the next sentence
and notwithstanding the foregoing paragraph, the Issuer’s obligations in
Sections 2.05, 2.06, 2.07, 2.08, Article Five, 6.01, 6.02, 6.03 (as to
legal existence of the Issuer only), 9.07, 10.05 and 10.06 shall survive until
the Notes are no longer outstanding pursuant to the last paragraph of
Section 2.08. After the Notes are no longer outstanding, the Issuer’s
obligations in Sections 9.07, 10.05 and 10.06 shall survive.
After
such delivery or irrevocable deposit, the Trustee upon request shall acknowledge
in writing the discharge of the Issuer’s obligations under the Notes and this
Indenture except for those surviving obligations specified above.
SECTION 10.02.
|
Legal Defeasance and
Covenant Defeasance.
|
(a)
The Issuer may, at its option and at any time,
elect to have either paragraph (b) or (c) below be applied to all
outstanding Notes upon compliance with the conditions set forth in
Section 10.03.
(b)
Upon the Issuer’s exercise under
Section 10.02(a) hereof of the option applicable to this
Section 10.02(b), the Issuer and the Guarantors shall, subject to the
satisfaction of the conditions set forth in Section 10.03, be deemed to
have been discharged from their obligations with respect to all outstanding
Notes, Note Guarantees and the Security Documents on the date the conditions set
forth below are satisfied (hereinafter, “
Legal Defeasance
”). For
this purpose, Legal Defeasance means that the Issuer and the Guarantors shall be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes, the Note Guarantees, this Indenture and the Security
Documents which shall thereafter be deemed to be “outstanding” only for the
purposes of Section 10.04 hereof and the other Sections of this
Indenture referred to in (i)and (ii)below, and to have satisfied all its other
obligations under such Notes and this Indenture and the Guarantors shall be
deemed to have satisfied all of their obligations under the Note Guarantees,
this Indenture and the Security Documents (and the Trustee and the Noteholder
Collateral Agent, on demand of and at the expense of the Issuer, shall execute
proper instruments acknowledging the same), except for the following provisions
which shall survive until otherwise terminated or discharged
hereunder:
(i)
The rights of Holders of outstanding Notes to
receive, solely from the trust fund described in Section 10.04 hereof, and
as more fully set forth in such Section 10.04, payments in respect of the
principal of, premium, if any, and interest on such Notes when such payments are
due;
(ii)
The Issuer’s obligations with respect to such
Notes under Article Two and Section 6.02 hereof;
(iii)
The rights, powers, trusts, duties and
immunities of the Trustee and Noteholder Collateral Agent hereunder and the
Issuer’s and Guarantors’ obligations in connection therewith; and
(iv)
The provisions of this Article Ten
applicable to Legal Defeasance.
Subject
to compliance with this Article Ten, the Issuer may exercise its option
under this Section 10.02(b) notwithstanding the prior exercise of its
option under Section 10.02(c) hereof.
(c)
Upon the Issuer’s exercise under paragraph
(a) hereof of the option applicable to this paragraph (c), the Issuer and
the Guarantors shall, subject to the satisfaction of the conditions set forth in
Section 10.03 hereof, be released from their respective obligations under
the covenants contained in ARTICLE Three (solely with rights to the Holders
purchase option upon a Fundamental Change of Control), Sections 6.03 (other
than with respect to the legal existence of the Issuer), 6.04, 6.05 and
6.08 through 6.21 and ARTICLES Seven, Twelve and Thirteen hereof and the
Security Documents with respect to the outstanding Notes on and after the date
the conditions set forth in Section 10.03 are satisfied (hereinafter,
“
Covenant Defeasance
”),
and the Notes shall thereafter be deemed not “outstanding” for the purposes of
any direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed “outstanding” for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect
to the outstanding Notes, the Issuer and the Guarantors may omit to comply with
and shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute an Event of Default under
Section 8.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby. In addition, upon
the Issuer’s exercise under paragraph (a) hereof of the option applicable
to this paragraph (c), subject to the satisfaction of the conditions set forth
in Section 10.03 hereof, clauses (vii), (viii), (ix), (x), (xiii) and (xiv)
of Section 8.01 hereof shall not constitute Events of Default.
SECTION 10.03.
|
Conditions to Legal
Defeasance or Covenant
Defeasance.
|
The
following shall be the conditions to the application of either
Section 10.02(b) or 10.02(c) hereof to the outstanding Notes:
(i)
The Issuer must irrevocably deposit with the
Trustee, in trust, for the benefit of the Holders, U.S. Legal Tender, U.S.
Government Obligations or a combination thereof, in such amounts as will be
sufficient (without reinvestment), in the opinion of a nationally recognized
firm of independent public accountants selected by the Issuer, to pay the
principal of and interest on the Notes on the stated date for payment or on the
Redemption Date of the principal or installment of principal of or interest on
the Notes,
(ii)
In the case of Legal Defeasance, the Issuer
shall have delivered to the Trustee an Opinion of Counsel in the United States
confirming that:
(1)
The Issuer has received from, or there has
been published by the Internal Revenue Service, a ruling, or
(2)
Since the date of this Indenture, there has
been a change in the applicable United States federal income tax
law,
in either
case to the effect that, and based thereon this Opinion of Counsel shall confirm
that, the Holders will not recognize income, gain or loss for United States
federal income tax purposes as a result of such Legal Defeasance and will be
subject to United States federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Legal
Defeasance had not occurred,
(iii)
In the case of Covenant Defeasance, the Issuer
shall have delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders will not
recognize income, gain or loss for United States federal income tax purposes as
a result of such Covenant Defeasance and will be subject to United States
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if the Covenant Defeasance had not
occurred,
(iv)
No Default shall have occurred and be
continuing on the date of such deposit (other than a Default resulting from the
borrowing of funds to be applied to such deposit),
(v)
The Legal Defeasance or Covenant Defeasance
shall not result in a breach or violation of, or constitute a Default under this
Indenture or a default under any other material agreement or instrument to which
the Issuer or any of its Subsidiaries is a party or by which the Issuer or any
of its Subsidiaries is bound (other than any such Default or default resulting
solely from the borrowing of funds to be applied to such deposit),
(vi)
The Issuer shall have delivered to the Trustee
an Officers’ Certificate stating that the deposit was not made by it with the
intent of preferring the Holders over any other of its creditors or with the
intent of defeating, hindering, delaying or defrauding any other of its
creditors or others, and
(vii)
The Issuer shall have delivered to the Trustee
an Officers’ Certificate and an Opinion of Counsel, each stating that the
conditions provided for in, in the case of the Officers’ Certificate, clauses
(i) through (vi) and, in the case of the Opinion of Counsel, clauses (ii) and/or
(iii) and (v) of this Section 10.03 have been complied with.
SECTION 10.04.
|
Application of Trust
Money.
|
The
Trustee or Paying Agent shall hold in trust U.S. Legal Tender and U.S.
Government Obligations deposited with it pursuant to this Article Ten, and
shall apply the deposited U.S. Legal Tender and the money from U.S. Government
Obligations in accordance with this Indenture to the payment of the principal of
and the interest on the Notes. The Trustee shall be under no obligation to
invest said U.S. Legal Tender and U.S. Government Obligations, except as it may
agree with the Issuer.
The
Issuer shall pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the U.S. Legal Tender and U.S. Government
Obligations deposited pursuant to Section 10.03 or the principal and
interest received in respect thereof, other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding
Notes.
Anything
in this Article Ten to the contrary notwithstanding, the Trustee shall
deliver or pay to the Issuer from time to time upon the Issuer’s request any
U.S. Legal Tender and U.S. Government Obligations held by it as provided in
Section 10.03 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
SECTION 10.05.
|
Repayment to the
Issuer.
|
The
Trustee and the Paying Agent shall pay to the Issuer upon request any money held
by them for the payment of principal or interest that remains unclaimed for two
years;
provided,
that
the Trustee or such Paying Agent, before being required to make any payment, may
at the expense of the Issuer cause to be published once in a newspaper of
general circulation in the City of New York or mail to each Holder entitled
to such money notice that such money remains unclaimed and that after a date
specified therein which shall be at least 30 days from the date of such
publication or mailing any unclaimed balance of such money then remaining will
be repaid to the Issuer. After payment to the Issuer, Holders entitled to
such money must look to the Issuer for payment as general creditors unless an
applicable law designates another Person.
SECTION 10.06.
|
Reinstatement.
|
If the
Trustee or Paying Agent is unable to apply any U.S. Legal Tender and U.S.
Government Obligations in accordance with this Article Ten by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, or if the funds deposited with the Trustee to effect Covenant
Defeasance are insufficient to pay the principal of, and interest on, the Notes
when due, the Issuer’s obligations under this Indenture, and the Notes shall be
revived and reinstated as though no deposit had occurred pursuant to this
Article Ten until such time as the Trustee or Paying Agent is permitted to
apply all such U.S. Legal Tender and U.S. Government Obligations in accordance
with this Article Ten;
provided,
that if the Issuer
has made any payment of interest on, or principal of, any Notes because of the
reinstatement of its obligations, the Issuer shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the U.S. Legal Tender
and U.S. Government Obligations held by the Trustee or Paying
Agent.
ARTICLE ELEVEN
AMENDMENTS,
SUPPLEMENTS AND WAIVERS
SECTION 11.01.
|
Without Consent of
Holders.
|
(a)
Subject to Section 11.03, the Issuer and
the Trustee and the Noteholder Collateral Agent together, may amend or
supplement this Indenture, the Notes, the Note Guarantees or any other Note
Documents without notice to or consent of any Holder:
(i)
To cure any ambiguity, defect or
inconsistency;
(ii)
To provide for uncertificated Notes in addition to
or in place of certificated Notes;
(iii)
To provide for the assumption of the Issuer’s
obligations to the Noteholder Secured Parties in the case of a merger,
consolidation or sale of all or substantially all of the assets, in accordance
with Article Seven;
(iv)
To release any Guarantor from any of its obligations
under its Note Guarantee or this Indenture (to the extent permitted by this
Indenture);
(v)
To add any Subsidiary of the Issuer as a
Guarantor;
(vi)
To make any change that would provide additional
rights or benefits to the Holders or would not materially adversely affect the
rights of any Holder;
(vii)
In the case of this Indenture, to comply with requirements
of the SEC in order to effect or maintain the qualification of this Indenture
under the Trust Indenture Act;
(viii)
To add additional assets as Collateral or otherwise enter
into additional or supplemental Security Documents;
(ix)
To release Collateral from the Lien pursuant to the
Indenture, the Security Documents and the Intercreditor Agreement when permitted
or required by such agreements;
(x)
To make, complete or confirm any grant of
Collateral permitted or required by this Indenture or any of the Security
Documents or to the extent required under the Intercreditor Agreement, to
conform any Security Documents to reflect amendments or other modifications to
comparable provisions under ABL Facility security documents; or
(xi)
To amend the Intercreditor Agreement pursuant to
Section 10.5 thereof or otherwise enter into an Intercreditor Agreement in
respect of an ABL Facility permitted hereby;
provided,
that the Issuer has
delivered to the Trustee and Noteholder Collateral Agent an Opinion of Counsel
and an Officers’ Certificate, each stating that such amendment or supplement
complies with the provisions of this Section 11.01.
(b)
After an amendment, supplement or waiver under
this Section 11.01 becomes effective, the Issuer shall mail to the Holders
affected thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Issuer to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such amendment, supplement or waiver.
SECTION 11.02.
|
With Consent of
Holders.
|
(a)
Subject to Sections 8.07 and 11.03, the
Issuer, the Guarantors and the Trustee and Noteholder Collateral Agent together,
with the written consent (which may include consents obtained in connection with
a tender offer or exchange offer for Notes) of the Holder or Holders of at least
a majority in aggregate principal amount of the Notes then outstanding may amend
or supplement this Indenture, the Notes or the Note Guarantees or other Note
Documents, without notice to any other Holders. Subject to
Sections 8.07 and 11.03, the Holder or Holders of a majority in aggregate
principal amount of the outstanding Notes may waive compliance with any
provision of this Indenture, the Notes or the Note Guarantees or the other Note
Documents without notice to any other Holders;
(b)
Notwithstanding Section 11.02(a), without
the consent of each Holder affected, no amendment or waiver may:
(i)
Reduce, or change the maturity, of the
principal of any Note;
(ii)
Reduce the rate of or extend the time for payment of
interest on any Note;
(iii)
Reduce any amounts payable upon redemption,
conversion or any Fundamental Change of Control or Conversion Event or change
the date on, or the circumstances under, which any Notes are subject to
redemption or purchase (other than provisions of Article Three and
Section 6.11, except that if a Fundamental Change of Control has occurred,
no amendment or other modification of the obligation of the Issuer to repurchase
the Notes upon a Fundamental Change of Control shall be made without the consent
of each Holder of the Notes affected);
(iv)
Reduce the Fundamental Change of Control Purchase
Price, the number of Additional Shares or Make Whole Payment in connection with
a Fundamental Change of Control or the Cash Conversion Amount in connection with
a Conversion Event or amend or modify in any manner adverse to the Holders the
Issuer’s obligations to make such payments;
(v)
Make any Note payable in money or currency other
than that stated in the Notes;
(vi)
Expressly subordinate in right of payment such Note
or any Note Guarantee to any other Indebtedness of the Issuer or any
Guarantor;
(vii)
Reduce the percentage of Holders necessary to consent to an
amendment or waiver to this Indenture or the Notes;
(viii)
Waive a continuing default in the payment of principal of or
premium or interest on any Notes (except a rescission of acceleration of the
Notes by the Holders thereof as provided in this Indenture and a waiver of the
payment default that resulted from such acceleration);
(ix)
Impair the rights of Holders to receive payments of
principal of or interest on the Notes on or after the due date therefor or to
institute suit for the enforcement of any payment on the Notes;
(x)
Release any Guarantor that is a Significant
Subsidiary from any of its obligations under its Note Guarantee or this
Indenture, except as permitted by this Indenture;
(xi)
Make any change in these amendment and waiver
provisions; or
(xii)
Make any change that adversely affects the conversion
rights of any Holder of the Notes, including any change to the provisions set
forth in Article Five.
In
addition, without the consent of the Holders of at least 66⅔% in principal
amount of the Notes then outstanding, (a) no amendment to this Indenture,
the Notes, the Note Guarantees or other Note Documents may release all or
substantially all of the Collateral from the Liens securing the Notes and
(b) no amendment to, or waiver of, the provisions of this Indenture, the
Notes, the Note Guarantees or other Note Documents may alter the priority of the
Liens securing the Collateral in any manner that adversely affects the rights of
the Holders of the Notes, in each case other than in accordance with the terms
of the applicable Note Documents.
(c)
It shall not be necessary for the consent of
the Holders under this Section 11.02 to approve the particular form of
any proposed amendment, supplement or waiver but it shall be sufficient if such
consent approves the substance thereof.
(d)
A consent to any amendment, supplement or
waiver under this Indenture by any Holder given in connection with an exchange
(in the case of an exchange offer) or a tender (in the case of a tender offer)
of such Holder’s Notes will not be rendered invalid by such tender or
exchange.
(e)
After an amendment, supplement or waiver under
this Section 11.02 becomes effective, the Issuer shall mail to the Holders
affected thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Issuer to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such amendment, supplement or waiver.
SECTION 11.03.
|
Compliance with the
Trust Indenture Act.
|
From the
date on which this Indenture is qualified under the Trust Indenture Act, every
amendment, waiver or supplement of this Indenture, the Notes or the Note
Guarantees shall comply with the Trust Indenture Act as then in
effect.
SECTION 11.04.
|
Revocation and Effect
of Consents.
|
Until an
amendment, waiver or supplement becomes effective, a consent to it by a Holder
is a continuing consent by the Holder and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the consenting Holder’s Note,
even if notation of the consent is not made on any Note. However, any such
Holder or subsequent Holder may revoke the consent as to his Note or portion of
his Note by notice to the Trustee or the Issuer received before the date on
which the Trustee receives an Officers’ Certificate certifying that the Holders
of the requisite principal amount of Notes have consented (and not theretofore
revoked such consent) to the amendment, supplement or waiver.
The
Issuer may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders entitled to consent to any amendment, supplement or
waiver, which record date shall be prior to the first solicitation of such
consent. If a record date is fixed, then notwithstanding the last sentence
of the immediately preceding paragraph, those Persons who were Holders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to revoke any consent previously given, whether or not such Persons
continue to be Holders after such record date. No such consent shall be
valid or effective for more than 120 days after such record date. The
Issuer shall inform the Trustee in writing of the fixed record date if
applicable.
After an
amendment, supplement or waiver becomes effective, it shall bind every Holder,
unless it makes a change described in any of clauses (i) through (xii) of
Section 11.02(b), in which case, the amendment, supplement or waiver shall
bind only each Holder of a Note who has consented to it and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder’s Note;
provided,
that any such
waiver shall not impair or affect the right of any Holder to receive payment of
principal of, and interest on, a Note, on or after the respective due dates
therefor, or to bring suit for the enforcement of any such payment on or after
such respective dates without the consent of such Holder.
SECTION 11.05.
|
Notation on or
Exchange of Notes.
|
If an
amendment, supplement or waiver changes the terms of a Note, the Issuer may
require the Holder of the Note to deliver it to the Trustee. The Issuer
shall provide the Trustee with an appropriate notation on the Note about the
changed terms and cause the Trustee to return it to the Holder at the Issuer’s
expense. Alternatively, if the Issuer or the Trustee so determines, the
Issuer in exchange for the Note shall issue, and the Trustee shall authenticate,
a new Note that reflects the changed terms. Failure to make the
appropriate notation or issue a new Note shall not affect the validity and
effect of such amendment, supplement or waiver.
SECTION 11.06.
|
Trustee to Sign
Amendments, Etc.
|
The
Trustee and the Noteholder Collateral Agent shall execute any amendment,
supplement or waiver authorized pursuant to this Article Eleven;
provided,
that the Trustee
and the Noteholder Collateral Agent may, but shall not be obligated to, execute
any such amendment, supplement or waiver which affects the Trustee’s or
Noteholder Collateral Agent’s own rights, duties or immunities under this
Indenture. The Trustee and Noteholder Collateral Agent shall be entitled
to receive, and shall be fully protected in relying upon, an Opinion of Counsel
and an Officers’ Certificate each stating that the execution of any amendment,
supplement or waiver authorized pursuant to this Article Eleven is
authorized or permitted by this Indenture and that such amendment is the legal,
valid and binding obligation of the Issuer enforceable against the Issuer in
accordance with its terms and complies with the provisions of this
Indenture. Such Opinion of Counsel shall be at the expense of the
Issuer.
ARTICLE TWELVE
SECURITY
DOCUMENTS
SECTION 12.01.
|
Collateral and
Security Documents.
|
The due
and punctual payment of the principal of and interest on the Notes when and as
the same shall be due and payable, whether on an Interest Payment Date, at
maturity, by acceleration, repurchase, redemption or otherwise, and interest on
the overdue principal of and interest on the Notes and payment of all other
Obligations of the Issuer and the Guarantors to the Holders, the Trustee or the
Noteholder Collateral Agent under this Indenture, the Notes, the Intercreditor
Agreement and the Security Documents, according to the terms hereunder or
thereunder, shall be secured by (i) first-priority Liens and security
interests on the Notes Collateral, subject to Permitted Liens and
(ii) second-priority Liens and security interests in the ABL Collateral,
subject to the first-priority Liens and security interests securing Obligations,
Swap Obligations and Banking Services Obligations, incurred under the ABL
Facilities or in respect of Swap Obligations and Banking Services Obligations
with lenders (or their Affiliates) under the ABL Facilities up to the Maximum
ABL Debt Amount and Permitted Liens, in each case as provided in the Security
Documents which the Issuer and the Guarantors, as the case may be, have entered
into as reasonably requested by the Noteholder Collateral Agent hereafter
delivered as required or permitted by this Indenture, the Collateral Documents
and the Intercreditor Agreement. The Trustee and the Issuer hereby
acknowledge and agree that the Noteholder Collateral Agent holds the Collateral
in trust for the benefit of the Noteholder Secured Parties, in each case
pursuant to the terms of the Security Documents and the Intercreditor
Agreement. Each Holder, by accepting a Note, consents and agrees to the
terms of the Security Documents (including the provisions providing for the
possession, use, release and foreclosure of Collateral) and the Intercreditor
Agreement as the same may be in effect or may be amended from time to time in
accordance with their terms and this Indenture and the Intercreditor Agreement,
and authorizes and directs the Noteholder Collateral Agent to enter into the
Security Documents and the Intercreditor Agreement and to perform its
obligations and exercise its rights thereunder in accordance therewith;
provided
,
however
, that if any of the
provisions of the Security Documents limit, qualify or conflict with the duties
imposed by the provisions of the TIA (if this Indenture is qualified under the
TIA), the TIA shall control. The Issuer shall deliver to the Noteholder
Collateral Agent copies of all documents pursuant to the Security Documents, and
will do or cause to be done all such acts and things as may be reasonably
required by the next sentence of this Section 12.01, to assure and confirm
to the Noteholder Collateral Agent the security interest in the Collateral
contemplated hereby, by the Security Documents or any part thereof, as from time
to time constituted, so as to render the same available for the security and
benefit of this Indenture and of the Notes secured hereby, according to the
intent and purposes herein expressed. The Issuer shall, and shall cause
the Subsidiaries of the Issuer to, use its commercially reasonable efforts to
take any and all actions reasonably required to cause the Security Documents to
create and maintain, as security for the Obligations, a valid and enforceable,
except as enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or other similar laws affecting
creditors’ rights generally and general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in equity),
perfected Lien and security interest (subject to Permitted Liens) in and on all
of the Collateral (subject to the terms of the Intercreditor Agreement), in
favor of the Noteholder Collateral Agent for the benefit of the Secured Parties,
in each case subject to and in accordance with the terms of the Security
Documents.
SECTION 12.02.
|
Recordings and
Opinions.
|
(a)
To the extent applicable (if this Indenture is
qualified under the TIA), the Issuer will cause TIA § 313(b), relating to
reports, and TIA § 314(d), relating to the release of property or
securities subject to the Lien of the Security Documents, to be complied
with.
(b)
Any release of Collateral permitted by
Section 12.03 hereof will be deemed not to impair the Liens under this
Indenture, the Collateral Agreement and the other Security Documents in
contravention thereof. Any certificate or opinion required by TIA § 314(d)
may be made by an officer or legal counsel, as applicable, of the Issuer except
in cases where TIA § 314(d) requires that such certificate or opinion be
made by an independent Person, which Person will be an independent engineer,
appraiser or other expert selected by or reasonably satisfactory to the
Trustee.
(c)
Notwithstanding anything to the contrary in
this Section 12.02, the Issuer will not be required to comply with all or
any portion of TIA § 314(d) if it reasonably determines that under the
terms of TIA § 314(d) or any interpretation or guidance as to the meaning
thereof of the SEC and its staff, including “no action” letters or exemptive
orders, all or any portion of TIA § 314(d) is inapplicable to any release
or series of releases of Collateral. In addition, and without limiting the
generality of the foregoing, the Subsidiaries of the Issuer may, among other
things, without any release or consent by the Trustee (and without the delivery
of any Officers’ Certificate or any other documents under this Indenture, except
as specified in this Section 12.02(c), but otherwise in compliance with the
covenants of this Indenture and the Security Documents, conduct ordinary course
activities with respect to the Collateral including, without limitation
(i) selling or otherwise disposing of, in any transaction or series of
related transactions, any property subject to the Liens and security interests
created by this Indenture or any of the Security Documents which has become worn
out, defective or obsolete or not used or useful in the business;
(ii) abandoning, terminating, canceling, releasing or making alterations in
or substitutions of any leases or contracts subject to the Liens and security
interests created by the Security Documents; (iii) surrendering or
modifying any franchise, license or permit subject to the Liens and security
interests created by the Security Documents which it may own or under which it
may be operating; (iv) altering, repairing, replacing or changing the
location or position of and adding to its structures, machinery, systems,
equipment, fixtures and appurtenances; (v) granting a license of any
intellectual property; (vi) selling, transferring or otherwise disposing of
inventory in the ordinary course of business; (vii) collecting accounts
receivable in the ordinary course of business or selling, liquidating, factoring
or otherwise disposing of accounts receivable in the ordinary course of
business; (viii) making cash payments (including for the repayment of
Indebtedness or interest and in connection with the Issuer’s cash management
activities) from cash that is at any time part of the Collateral in the ordinary
course of business that are not otherwise prohibited by this Indenture or the
Security Documents; and (ix) abandoning any intellectual property which is no
longer used or useful in the Issuer’s business. The Issuer must deliver to
the Trustee within 30 calendar days following the end of each fiscal year (or
such later date as the Trustee shall agree), an Officers’ Certificate to the
effect that all releases and withdrawals during the preceding fiscal year (or
since the date of this Indenture, in the case of the first such certificate) in
which no release or consent of the Trustee was obtained in the ordinary course
of the Issuer’s and its Subsidiaries’ business were not prohibited by this
Indenture. Notwithstanding any of the foregoing to the contrary, the
Trustee shall execute and deliver to the Issuer all documents reasonably
requested to evidence any such releases of Collateral. In addition, in
lieu of releasing the Liens created by any of the Mortgages, the Trustee or
Collateral Agent will, at the request of the Issuer, to the extent necessary to
facilitate future savings of mortgage recording tax in states that impose such
taxes, assign such Liens to any such new lender or collateral
agent.
SECTION 12.03.
|
Release of
Collateral.
|
(a)
Subject to Section 12.02 hereof,
Collateral may be released from the Lien and security interest created by the
Security Documents at any time or from time to time in accordance with the
provisions of the Security Documents, the Intercreditor Agreement or as provided
hereby. The Issuer and the Guarantors will be entitled to a release of
property and other assets included in the Collateral from the Liens securing the
Notes, and the Trustee (subject to its receipt of an Officer Certificate and
Opinion of Counsel as provided below) shall release, or instruct the Noteholder
Collateral Agent to release, as applicable, the same from such Liens at the
Issuer’s sole cost and expense, under one or more of the following
circumstances:
(i)
To enable the Issuer or any Guarantor to sell,
exchange or otherwise dispose of any of the Collateral to the extent not
prohibited under Section 6.11;
(ii)
In the case of a Guarantor that is released
from its Guarantee with respect to the Notes, the release of the property and
assets of such Guarantor;
(iii)
Pursuant to an amendment or waiver in
accordance with Article Nine of this Indenture;
(iv)
Pursuant to the terms of the Intercreditor
Agreement; or
(v)
If the Notes have been discharged or defeased
pursuant to Section 10.01 or Section 10.02;
provided
, that in the case of
any release in whole pursuant to clauses (i), (ii) and (iii) above, all amounts
owing at such time to the Trustee under this Indenture, the Notes, the Notes
Guarantees, the Security Documents and the Intercreditor Agreement have been
paid
.
Upon
receipt of an Officers’ Certificate and an Opinion of Counsel certifying that
all conditions precedent under the Indenture and the Security Documents (and TIA
Section 314(d) (if this Indenture is qualified under the TIA)), if any, to
such release have been met and any necessary or proper instruments of
termination, satisfaction or release prepared by the Issuer, the Trustee shall,
or shall cause the Noteholder Collateral Agent, to execute, deliver or
acknowledge (at the Issuer’s expense) such instruments or releases to evidence
the release of any Collateral permitted to be released pursuant to this
Indenture or the Security Documents or the Intercreditor Agreement. Neither the
Trustee nor the Noteholder Collateral Agent shall be liable for any such release
undertaken in good faith in reliance upon any such Officer Certificate or
Opinion of Counsel, and notwithstanding any term hereof or in any Security
Document to the contrary, the Trustee and Noteholder Collateral Agent shall not
be under any obligation to release any such Lien and security interest, or
execute and deliver any such instrument of release, satisfaction or termination,
unless and until it receives such Officer Certificate and Opinion of
Counsel.
Notwithstanding
any provision to the contrary herein, upon the request of the Issuer accompanied
by an Officers’ Certificate and Opinion of Counsel (that each action is in
compliance with the terms of this Indenture, Intercreditor Agreement and the
Security Documents) the Trustee shall instruct the Noteholder Collateral Agent
to execute and deliver UCC financing statement amendments or releases (which
shall be in form and substance reasonably satisfactory to the Noteholder
Collateral Agent and prepared by the Issuer or such Grantor) solely to the
extent necessary to delete property or assets not required to be subject to a
Lien under the Security Documents from the description of assets in any
previously filed financing statements. If requested in writing by the Issuer or
any Grantor, the Trustee shall instruct the Noteholder Collateral Agent to
execute and deliver such documents, instruments or statements (which shall be
prepared in form and substance reasonably satisfactory to the Noteholder
Collateral Agent and by the Issuer or such Grantor) and to take such other
action as the Issuer may reasonably request to evidence or confirm that such
property or assets not required to be subject to a Lien under the Security
Documents described in the immediately preceding sentence has been
released from the Liens of each of the Security Documents. The Noteholder
Collateral Agent shall execute and deliver such documents, instruments and
statements and shall take all such actions promptly upon receipt of such
instructions from the Issuer, any Grantor or the Trustee.
SECTION 12.04.
|
Certificates of the
Trustee.
|
In the
event that the Issuer wishes to release Collateral in accordance with this
Indenture, the Security Documents and the Intercreditor Agreement at a time when
the Trustee is not itself also the Noteholder Collateral Agent and the Issuer
has delivered the certificates and documents required by the Security Documents
and Section 12.03 hereof, and, based on an Opinion of Counsel pursuant to
Section 14.04, will deliver a certificate to the Noteholder Collateral
Agent setting forth such determination. The Trustee, however, shall have
no duty to confirm the legality, genuineness, accuracy, contents or validity of
such documents (or any signature appearing therein), its sole duty being to
certify its receipt of such documents which, on their face (and assuming that
they are what they purport to be), conform to § 314(d) of the
TIA.
SECTION 12.05.
|
Suits to Protect the
Collateral.
|
Subject
to the provisions of Article Nine hereof and the terms, conditions and
provisions of the Intercreditor Agreement, the Trustee in its sole discretion
and without the consent of the Holders, on behalf of the Holders, may or may
direct the Noteholder Collateral Agent to take all actions it deems necessary or
appropriate in order to:
(a)
Enforce any of the terms of the Security
Documents; and
(b)
Collect and receive any and all amounts
payable in respect of the obligations hereunder.
Subject
to the terms, conditions and provisions of this Indenture and the Security
Documents and the Intercreditor Agreement, the Trustee shall have power to
institute and to maintain such suits and proceedings as it may deem expedient to
prevent any impairment of the Collateral by any acts which may be unlawful or in
violation of any of the Security Documents or this Indenture, and such suits and
proceedings as the Trustee, in its sole discretion, may deem expedient to
preserve or protect its interests and the interests of the Holders in the
Collateral (including power to institute and maintain suits or proceedings to
restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or order
would impair the Lien on the Collateral or be prejudicial to the interests of
the Holders or the Trustee). Nothing in this Section 12.05 shall be
considered to impose any such duty or obligation to act on the part of the
Trustee.
SECTION 12.06.
|
Authorization of
Receipt of Funds by the Trustee Under the Security
Documents.
|
Subject
to the terms, conditions and provisions of the Intercreditor Agreement, the
Trustee is authorized to receive any funds for the benefit of the Holders
distributed under the Security Documents, and to make further distributions of
such funds to the Holders according to the provisions of this
Indenture.
SECTION 12.07.
|
Purchaser
Protected.
|
In no
event shall any purchaser in good faith of any property purported to be released
hereunder be bound to ascertain the authority of the Noteholder Collateral Agent
or the Trustee to execute the release or to inquire as to the satisfaction of
any conditions required by the provisions hereof for the exercise of such
authority or to see to the application of any consideration given by such
purchaser or other transferee; nor shall any purchaser or other transferee of
any property or rights permitted by this Article Twelve to be sold be under
any obligation to ascertain or inquire into the authority of the Issuer or the
applicable Guarantor to make any such sale or other transfer.
SECTION 12.08.
|
Powers Exercisable by
Receiver or Trustee.
|
In case
the Collateral shall be in the possession of a receiver or trustee, lawfully
appointed, the powers conferred in this Article Twelve upon the Issuer or a
Guarantor with respect to the release, sale or other disposition of such
property may be exercised by such receiver or trustee, and an instrument signed
by such receiver or trustee shall be deemed the equivalent of any similar
instrument of the Issuer or a Guarantor or of any officer or officers thereof
required by the provisions of this Article Twelve; and if the Trustee shall
be in the possession of the Collateral under any provision of this Indenture,
then such powers may be exercised by the Trustee.
SECTION 12.09.
|
Release Upon
Termination of the Issuer’s
Obligations.
|
In the
event that the Issuer delivers to the Trustee, in form and substance reasonably
acceptable to it, an Officers’ Certificate certifying that (i) payment in
full of the principal of, together with accrued and unpaid interest on, the
Notes and all other Obligations under this Indenture, the Guarantees and the
Security Documents that are due and payable at or prior to the time such
principal, together with accrued and unpaid interest, are paid, (ii) the
Issuer shall have discharged its obligations under Section 10.01 or
exercised its legal defeasance option or its covenant defeasance option under
Section 10.02, in each case in compliance with the provisions of
Article Ten, or (iii) with respect to Remaining Notes only, a
Conversion Event has occurred, the Trustee shall deliver to the Issuer and the
Noteholder Collateral Agent a notice stating that the Trustee, on behalf of the
Holders, disclaims and gives up any and all rights it has in or to the
Collateral (other than with respect to funds held by the Trustee pursuant to
Article Ten), and any rights it has under the Security Documents, and upon
receipt by the Noteholder Collateral Agent of such notice, the Noteholder
Collateral Agent shall be deemed not to hold a Lien in the Collateral on behalf
of the Trustee and shall do or cause to be done all acts reasonably necessary or
reasonably requested by the Issuer to evidence the release of such Lien as soon
as is reasonably practicable or otherwise deliver any such Collateral to the
applicable Guarantor (including without limitation, execution and filing of Lien
releases, instruments, documents and return of any Collateral then in its
possession).
SECTION 12.10.
|
Noteholder Collateral
Agent.
|
(a)
The Trustee and each of the Holders by
acceptance of the Notes hereby designates and appoints the Noteholder Collateral
Agent as its agent under this Indenture, the Collateral Agreement, the Security
Documents and the Intercreditor Agreement and the Trustee and each of the
Holders by acceptance of the Notes hereby irrevocably authorizes the Noteholder
Collateral Agent to take such action on its behalf under the provisions of this
Indenture, the Collateral Agreement, the Security Documents and the
Intercreditor Agreement and to exercise such powers and perform such duties as
are expressly delegated to the Noteholder Collateral Agent by the terms of this
Indenture, the Collateral Agreement, the Security Documents and the
Intercreditor Agreement, together with such powers as are reasonably incidental
thereto. The Noteholder Collateral Agent agrees to act as such on the
express conditions contained in this Section 12.10. Notwithstanding
any provision to the contrary contained elsewhere in this Indenture, the
Collateral Agreement, the Security Documents and the Intercreditor Agreement,
the Noteholder Collateral Agent shall not have any duties or responsibilities,
except those expressly set forth herein, nor shall the Noteholder Collateral
Agent have or be deemed to have any fiduciary relationship with the Trustee, any
Holder or any Grantor, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Indenture, the
Collateral Agreement, the Security Documents and the Intercreditor Agreement or
otherwise exist against the Noteholder Collateral Agent. Without limiting
the generality of the foregoing sentence, the use of the term “agent” in this
Indenture with reference to the Noteholder Collateral Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law. Instead, such term is used merely
as a matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties.
Except as expressly otherwise provided in this Indenture, the Noteholder
Collateral Agent shall have and may use its sole discretion with respect to
exercising or refraining from exercising any discretionary rights or taking or
refraining from taking any actions which the Noteholder Collateral Agent is
expressly entitled to take or assert under this Indenture, the Collateral
Agreement, the Security Documents and the Intercreditor Agreement, including the
exercise of remedies pursuant to Article Eight, and any action so taken or
not taken shall be deemed consented to by the Trustee and the
Holders.
(b)
The Noteholder Collateral Agent may execute
any of its duties under this Indenture, the Security Documents or the
Intercreditor Agreement by or through agents, employees, attorneys-in-fact or
through its Related Persons and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Noteholder
Collateral Agent shall not be responsible for the negligence or misconduct of
any agent, employee, attorney-in-fact or Related Person that it selects as long
as such selection was made without negligence or willful misconduct (other than
any employee).
(c)
None of the Noteholder Collateral Agent, any
of its respective Related Persons shall (i) be liable for any action taken
or omitted to be taken by any of them under or in connection with this Indenture
or the transactions contemplated hereby (except for its own gross negligence,
willful misconduct or bad faith) or under or in connection with the Collateral
Agreement, any Security Document or Intercreditor Agreement or the transactions
contemplated thereby (except for its own gross negligence, bad faith or willful
misconduct), or (ii) be responsible in any manner to any of the Trustee or
any Holder for any recital, statement, representation, warranty, covenant or
agreement made by the Issuer or any Grantor or Affiliate of any Grantor, or any
officer or Related Person thereof, contained in this or any Indenture, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Noteholder Collateral Agent under or in connection with, this
or any other Indenture, the Collateral Agreement, the Security Documents or the
Intercreditor Agreement, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this or any other Indenture, the Collateral
Agreement, the Security Documents or the Intercreditor Agreement, or for any
failure of any Grantor or any other party to this Indenture, the Collateral
Agreement, the Security Documents or the Intercreditor Agreement to perform its
obligations hereunder or thereunder. None of the Noteholder Collateral
Agent or any of its respective Related Persons shall be under any obligation to
the Trustee or any Holder to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this or any
other Indenture, the Collateral Agreement, the Security Documents or the
Intercreditor Agreement or to inspect the properties, books, or records of any
Grantor or any Grantor’s Affiliates.
(d)
The Noteholder Collateral Agent shall be
entitled to rely, and shall be fully protected in relying, upon any writing,
resolution, notice, consent, certificate, affidavit, letter, facsimile, or
telephone message, statement, or other document or conversation believed by it
in good faith to be genuine and correct and to have been signed, sent, or made
by the proper Person or Persons, and upon advice and statements of legal counsel
(including, without limitation, counsel to any Grantor), independent accountants
and other experts and advisors selected by the Noteholder Collateral
Agent. The Noteholder Collateral Agent shall be fully justified in failing
or refusing to take any action under this or any other Indenture, the Security
Documents or the Intercreditor Agreement unless it shall first receive such
advice or concurrence of the Trustee as it deems appropriate and, if it so
requests, it shall first be indemnified to its reasonable satisfaction by the
Holders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Noteholder
Collateral Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this or any other Indenture, the Security
Documents or the Intercreditor Agreement in accordance with a request or consent
of the Trustee and such request and any action taken or failure to act pursuant
thereto shall be binding upon all of the Holders.
(e)
The Noteholder Collateral Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default, unless the Noteholder Collateral Agent shall have received written
notice from the Trustee or a Grantor referring to this Indenture, describing
such Default or Event of Default and stating that such notice is a “notice of
default.” The Noteholder Collateral Agent shall take such action with
respect to such Default or Event of Default as may be requested by the Trustee
in accordance with Article Eight (subject to Section 12.10);
provided
,
however
, that unless and
until the Noteholder Collateral Agent has received any such request, the
Noteholder Collateral Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable.
(f) U.S.
Bank National Association and its respective Affiliates (and any successor
Noteholder Collateral Agent and its affiliates) may make loans to, issue letters
of credit for the account of, accept deposits from, acquire equity interests in
and generally engage in any kind of banking, trust, financial advisory,
underwriting, or other business with any Grantor and its Affiliates as though it
was not the Noteholder Collateral Agent hereunder and without notice to or
consent of the Trustee. The Trustee and the Holders acknowledge that,
pursuant to such activities, U.S. Bank National Association or its respective
Affiliates (and any successor Noteholder Collateral Agent and its affiliates)
may receive information regarding any Grantor or its Affiliates (including
information that may be subject to confidentiality obligations in favor of any
such Grantor or such Affiliate) and acknowledge that the Noteholder Collateral
Agent shall not be under any obligation to provide such information to the
Trustee or the Holders. Nothing herein shall impose or imply any obligation on
the part of the U.S. Bank National Association (or any successor Noteholder
Collateral Agent) to advance funds.
(g) The
Noteholder Collateral Agent may resign at any time upon thirty (30) days prior
written notice to the Trustee and the Grantors, such resignation to be effective
upon the acceptance of a successor agent to its appointment as Noteholder
Collateral Agent. If the Noteholder Collateral Agent resigns under
this Indenture, the Trustee, subject to the consent of the Issuer (which shall
not be unreasonably withheld and which shall not be required during a continuing
Event of Default), shall appoint a successor Noteholder Collateral
Agent. If no successor noteholder collateral agent is appointed prior
to the intended effective date of the resignation of the Noteholder Collateral
Agent (as stated in the notice of resignation), the Noteholder Collateral Agent
may appoint, after consulting with the Trustee, subject to the consent of the
Issuer (which shall not be unreasonably withheld and which shall not be required
during a continuing Event of Default), a successor noteholder collateral
agent. If no successor noteholder collateral agent is appointed and
consented to by the Issuer pursuant to the preceding sentence within thirty (30)
days after the intended effective date of resignation (as stated in the notice
of resignation) the Noteholder Collateral Agent shall be entitled to petition a
court of competent jurisdiction to appoint a successor. Upon the
acceptance of its appointment as successor noteholder collateral agent
hereunder, such successor noteholder collateral agent shall succeed to all the
rights, powers and duties of the retiring Noteholder Collateral Agent, and the
term “Noteholder Collateral Agent” shall mean such successor noteholder
collateral agent, and the retiring Noteholder Collateral Agent’s appointment,
powers and duties as the Noteholder Collateral Agent shall be
terminated. After the retiring Noteholder Collateral Agent’s
resignation hereunder, the provisions of this 12.10 (and Section 12.11) shall
continue to inure to its benefit and the retiring Noteholder Collateral Agent
shall not by reason of such resignation be deemed to be released from liability
as to any actions taken or omitted to be taken by it while it was the Noteholder
Collateral Agent under this Indenture.
(h) The
Trustee shall initially act as Noteholder Collateral Agent and shall be
authorized to appoint co-Noteholder Collateral Agents as necessary in its sole
discretion. Except as otherwise explicitly provided herein or in the Security
Documents or the Intercreditor Agreement, neither the Noteholder Collateral
Agent nor any of its respective officers, directors, employees or agents or
other Related Persons shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
any other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The Noteholder Collateral Agent shall
be accountable only for amounts that it actually receives as a result of the
exercise of such powers, and neither the Noteholder Collateral Agent nor any of
its officers, directors, employees or agents shall be responsible for any act or
failure to act hereunder, except for its own willful misconduct, gross
negligence or bad faith.
(i) The
Trustee, as such and as Noteholder Collateral Agent, is authorized and directed
to (i) enter into the Collateral Agreement and the Security Documents,
(ii) enter into the Intercreditor Agreement, (iii) bind the Holders on
the terms as set forth in the Collateral Agreement and the Security Documents
and the Intercreditor Agreement and (iv) perform and observe its
obligations under the Collateral Agreement and the Security Documents and the
Intercreditor Agreement.
(j) The
Trustee agrees that it shall not (and shall not be obliged to), and shall not
instruct the Noteholder Collateral Agent to, unless specifically requested to do
so by a majority of the Holders, take or cause to be taken any action to enforce
its rights under this Indenture or against any Grantor, including the
commencement of any legal or equitable proceedings, to foreclose any Lien on, or
otherwise enforce any security interest in, any of the Collateral.
If at any
time or times the Trustee shall receive (i) by payment, foreclosure,
set-off or otherwise, any proceeds of Collateral or any payments with respect to
the Obligations arising under, or relating to, this Indenture, except for any
such proceeds or payments received by the Trustee from the Noteholder Collateral
Agent pursuant to the terms of this Indenture, or (ii) payments from the
Noteholder Collateral Agent in excess of the amount required to be paid to the
Trustee pursuant to Article Eight, the Trustee shall promptly turn the same over
to the Noteholder Collateral Agent, in kind, and with such endorsements as may
be required to negotiate the same to the Noteholder Collateral
Agent.
(k) The
Trustee is each Holder’s agent for the purpose of perfecting the Holders’
security interest in assets which, in accordance with Article 9 of the
Uniform Commercial Code can be perfected only by possession. Should
the Trustee obtain possession of any such Collateral, upon request from the
Issuer, the Trustee shall notify the Noteholder Collateral Agent thereof, and,
promptly upon the Noteholder Collateral Agent’s request therefor shall deliver
such Collateral to the Noteholder Collateral Agent or otherwise deal with such
Collateral in accordance with the Noteholder Collateral Agent’s
instructions.
(l) The
Noteholder Collateral Agent shall have no obligation whatsoever to the Trustee
or any of the Holders to assure that the Collateral exists or is owned by any
Grantor or is cared for, protected, or insured or has been encumbered, or that
the Noteholder Collateral Agent’s Liens have been properly or sufficiently or
lawfully created, perfected, protected, maintained or enforced or are entitled
to any particular priority, or to determine whether all or the Grantor’s
property constituting collateral intended to be subject to the Lien and security
interest of the Security Documents has been properly and completely listed or
delivered, as the case may be, or the genuineness, validity, marketability or
sufficiency thereof or title thereto, or to exercise at all or in any particular
manner or under any duty of care, disclosure, or fidelity, or to continue
exercising, any of the rights, authorities, and powers granted or available to
the Noteholder Collateral Agent pursuant to this Indenture, any Security
Document or the Intercreditor Agreement, it being understood and agreed that in
respect of the Collateral, or any act, omission, or event related thereto, the
Noteholder Collateral Agent may act in any manner it may deem appropriate, in
its sole discretion given the Noteholder Collateral Agent’s own interest in the
Collateral and that the Noteholder Collateral Agent shall have no other duty or
liability whatsoever to the Trustee or any Holder as to any of the
foregoing.
(m) No
provision of this Indenture, the Collateral Agreement, the Intercreditor
Agreement or any Security Document shall require the Noteholder Collateral Agent
(or the Trustee) to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder or
thereunder or to take or omit to take any action hereunder or thereunder or take
any action at the request or direction of Holders (or the Trustee in the case of
the Noteholder Collateral Agent) if it shall have reasonable grounds for
believing that repayment of such funds is not assured to it.
(n) The
Noteholder Collateral Agent (i) shall not be liable for any action it takes
or omits to take in good faith which it reasonably believes to be authorized or
within its rights or powers, or for any error of judgment made in good faith by
a Responsible Officer, unless it is proved that the Noteholder Collateral Agent
was grossly negligent in ascertaining the pertinent facts, (ii) shall not
be liable for interest on any money received by it except as the Noteholder
Collateral Agent may agree in writing with the Issuer (and money held in trust
by the Noteholder Collateral Agent need not be segregated from other funds
except to the extent required by law) and (iii) may consult with counsel of
its selection and the advice or opinion of such counsel as to matters of law
shall be full and complete authorization and protection from liability in
respect of any action taken, omitted or suffered by it in good faith and in
accordance with the advice or opinion of such counsel. The grant of permissive
rights or powers to the Noteholder Collateral Agent shall not be construed to
impose duties to act.
(o) Neither
the Noteholder Collateral Agent nor the Trustee shall be liable for delays or
failures in performance resulting from acts beyond its control. Such
acts shall include but not be limited to acts of God, strikes, lockouts, riots,
acts of war, epidemics, governmental regulations superimposed after the fact,
fire, communication line failures, computer viruses, power failures, earthquakes
or other disasters. Neither the Noteholder Collateral Agent nor the
Trustee shall be liable for any indirect, special or consequential damages
(included but not limited to lost profits) whatsoever, even if it has been
informed of the likelihood thereof and regardless of the form of
action.
SECTION 12.11.
Compensation and
Indemnity
.
The
Noteholder Collateral Agent shall be entitled to the compensation and indemnity
set forth in Section 9.07 (with the references to the Trustee therein being
deemed to refer to the Noteholder Collateral Agent).
SECTION 12.12.
Intercreditor Agreement,
Collateral Agreement and Other Security Documents
.
The
Trustee and Noteholder Collateral Agent is each hereby directed and authorized
to execute and deliver the Intercreditor Agreement, the Collateral Agreement and
any other Security Documents in which it is named as a party. It is
hereby expressly acknowledged and agreed that, in doing so, the Trustee and the
Noteholder Collateral Agent are not responsible for the terms or contents of
such agreements, or for the validity or enforceability thereof, or the
sufficiency thereof for any purpose. Whether or not so expressly stated therein,
in entering into, or taking (or forbearing from) any action under pursuant to,
the Intercreditor Agreement, the Collateral Agreement or any other Security
Documents, the Trustee and Noteholder Collateral Agent each shall have all of
the rights, immunities, indemnities and other protections granted to it under
this Indenture (in addition to those that may be granted to it under the terms
of such other agreement or agreements).
ARTICLE THIRTEEN
NOTE
GUARANTEE
SECTION 13.01.
Unconditional
Guarantee
.
Subject
to the provisions of this Article Thirteen, each of the Guarantors hereby,
jointly and severally, unconditionally and irrevocably guarantees to each Holder
of a Note authenticated and delivered by the Trustee and to the Trustee and the
other Noteholder Secured Parties and their respective successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes,
the other Note Documents or the obligations of the Issuer or any other
Guarantors to the Holders or the Trustee or the other Noteholder Secured Parties
hereunder or thereunder: (a) (x) the due and punctual payment of
the principal of, premium, if any, and interest on the Notes when and as the
same shall become due and payable, whether at maturity, upon redemption or
repurchase, by acceleration or otherwise, (y) the due and punctual payment
of interest on the overdue principal and (to the extent permitted by law)
interest, if any, on the Notes and (z) the due and punctual payment and
performance of all other obligations of the Issuer and all other obligations of
the other Guarantors (including under the Note Guarantees) under the Note
Documents, in each case, to the Holders, the Trustee or the other Noteholder
Secured Parties hereunder or thereunder (including amounts due the Trustee or
the Noteholder Collateral Agent under Section 9.07 or Section 12.11,
respectively, hereof), all in accordance with the terms hereof and thereof
(collectively, the “
Guarantee
Obligations
”); and (b) in case of any extension of time of payment
or renewal of any Notes or any of such other obligations, the due and punctual
payment and performance of Guarantee Obligations in accordance with the terms of
the extension or renewal, whether at maturity, upon redemption or repurchase, by
acceleration or otherwise. Failing payment when due of any amount so
guaranteed, or failing performance of any other obligation of the Issuer to the
Holders under this Indenture, under the Notes or under the other Note Documents,
for whatever reason, each Guarantor shall be obligated to pay, or to perform or
cause the performance of, the same immediately. A Default under this
Indenture, the Notes or the other Note Documents shall constitute an event of
default under the Note Guarantees, and shall entitle the Holders of Notes to
accelerate the obligations of the Guarantors thereunder in the same manner and
to the same extent as the obligations of the Issuer.
Each of
the Guarantors hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Notes, this Indenture or the Note Documents, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any provisions hereof or thereof, any release of any other Guarantor, the
recovery of any judgment against the Issuer, any action to enforce the same,
whether or not a Note Guarantee is affixed to any particular Note, or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a Guarantor. To the fullest extent permitted by law, each
of the Guarantors hereby waives the benefit of diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Issuer, any right to require a proceeding first against the Issuer,
protest, notice and all demands whatsoever and covenants that its Note Guarantee
shall not be discharged except by complete performance of the obligations
contained in the Notes, this Indenture and this Note Guarantee and the other
Note Documents. This Note Guarantee is a guarantee of payment and not
of collection. If any Holder or the Trustee or the Noteholder
Collateral Agent is required by any court or otherwise to return to the Issuer
or to any Guarantor, or any custodian, trustee, liquidator or other similar
official acting in relation to the Issuer or such Guarantor, any amount paid by
the Issuer or such Guarantor to the Trustee or such Holder, this Note Guarantee,
to the extent theretofore discharged, shall be reinstated in full force and
effect. Each Guarantor further agrees that, as between it, on the one
hand, and the Holders of Notes and the Trustee and the Noteholder Collateral
Agent, on the other hand, (a) subject to this Article Thirteen, the
maturity of the obligations guaranteed hereby may be accelerated as provided
in Article Eight for the purposes of this Note Guarantee, notwithstanding
any stay, injunction or other prohibition preventing such acceleration in
respect of the obligations guaranteed hereby, and (b) in the event of any
acceleration of such obligations as provided in Article Eight hereof, such
obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantors for the purpose of this Note Guarantee.
SECTION 13.02.
Subordination
.
The
Issuer and each Guarantor hereby agree that all Indebtedness and other monetary
obligations owed by it to the Issuer or any Restricted Subsidiary of the Issuer
shall be fully subordinated to the indefeasible payment in full in cash of the
obligations with respect to the Note Documents.
SECTION 13.03.
Limitation on Guarantor
Liability
.
Each
Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it
is the intention of all such parties that the Note Guarantee of such Guarantor
not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy
Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar federal, foreign or state law to the extent applicable to any
Note Guarantee. To effectuate the foregoing intention, the Trustee,
the Holders and the Guarantors hereby irrevocably agree that the obligations of
such Guarantor under its Note Guarantee and this Article Thirteen
shall be limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor (including any guarantee
under the Credit Agreement) that are relevant under such laws, and
after giving effect to any collections from, rights to receive contribution from
or payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under this Article Thirteen, result in the
obligations of such Guarantor under its Note Guarantee not constituting a
fraudulent transfer or conveyance. Each Guarantor that makes a
payment for distribution under its Note Guarantee is entitled to a contribution
from each other Guarantor in a
pro rata
amount based on the
adjusted net assets of each Guarantor.
SECTION 13.04.
Execution and Delivery of
Note Guarantee
.
To
further evidence its Note Guarantee set forth in Section 13.01, each Guarantor
hereby agrees that a notation of such Note Guarantee, substantially in the form
of
Exhibit B
hereto, shall be endorsed on each Note authenticated and delivered by the
Trustee. Such Note Guarantee shall be executed on behalf of each
Guarantor by either manual or facsimile signature of one Officer or other person
duly authorized by all necessary corporate action of each Guarantor who shall
have been duly authorized to so execute by all requisite corporate
action. The validity and enforceability of any Note Guarantee shall
not be affected by the fact that it is not affixed to any particular
Note.
Each of
the Guarantors hereby agrees that its Note Guarantee set forth in Section 13.01
shall remain in full force and effect notwithstanding any failure to endorse on
each Note a notation of such Note Guarantee.
If an
Officer of a Guarantor whose signature is on this Indenture or a Note Guarantee
no longer holds that office at the time the Trustee authenticates the Note on
which such Note Guarantee is endorsed or at any time thereafter, such
Guarantor’s Note Guarantee of such Note shall nevertheless be
valid.
The
delivery of any Note by the Trustee, after the authentication thereof hereunder,
shall constitute due delivery of any Note Guarantee set forth in this Indenture
on behalf of each Guarantor.
SECTION 13.05.
Release of a
Guarantor
A
Guarantor shall be released from its obligations under its Note Guarantee and
its obligations under this Indenture and the Registration Rights
Agreement:
(i) In
the event of a sale or other disposition of all or substantially all of the
assets of such Guarantor, by way of merger, consolidation or otherwise;
provided,
that Net Available
Proceeds of such sale or other disposition are applied in accordance with the
applicable provisions of this Indenture, including without limitation Section
6.11 hereof; or
(ii) in
connection with any sale or other disposition of Capital Stock of that Guarantor
to a Person that is not (either before or after giving effect to such
transaction) the Company or a Restricted Subsidiary of the Company, if the sale
or other disposition does not violate Section 6.11 hereof and the Guarantor
ceases to be a Restricted Subsidiary of the Company as a result of the sale or
other disposition;
(iii) If
such Guarantor is designated as an Unrestricted Subsidiary or otherwise ceases
to be a Restricted Subsidiary, in each case in accordance with the provisions of
this Indenture, upon effectiveness of such designation or when it first ceases
to be a Restricted Subsidiary, respectively; or
(iv) If
the Issuer exercises its legal defeasance option or its covenant defeasance
option pursuant to Section 10.02 and 10.03, if the Issuer’s obligations under
the Indenture are discharged in accordance Section 10.01 or with respect to
Remaining Notes, if a Conversion Event has occurred.
The
Trustee shall execute an appropriate instrument prepared by the Issuer
evidencing the release of a Guarantor from its obligations under its Note
Guarantee upon receipt of a request by the Issuer or such Guarantor accompanied
by an Officers’ Certificate and an Opinion of Counsel certifying as to the
compliance with this Section 13.05;
provided
,
however
, that the legal
counsel delivering such Opinion of Counsel may rely as to matters of fact on one
or more Officers’ Certificates of the Issuer.
Except as
set forth in Articles Six and Seven and this Section 13.05, nothing contained in
this Indenture or in any of the Notes shall prevent any consolidation or merger
of a Guarantor with or into the Issuer or another Guarantor or shall prevent any
sale or conveyance of the property of a Guarantor as an entirety or
substantially as an entirety to the Issuer or another Guarantor.
SECTION 13.06.
Waiver of
Subrogation
.
Until
this Indenture is discharged and all of the Notes are discharged and paid in
full, each Guarantor hereby irrevocably waives and agrees not to exercise any
claim or other rights which it may now or hereafter acquire against the Issuer
or any other Guarantor that arise from the existence, payment, performance or
enforcement of the Issuer’s obligations or any other Guarantor’s obligations, in
each case under the Notes or this Indenture or the other Note Documents and such
Guarantor’s obligations under this Note Guarantee and this Indenture or the
other Note Documents, in any such instance including, without limitation, any
right of subrogation, reimbursement, exoneration, contribution, indemnification,
and any right to participate in any claim or remedy of the Holders or other
Noteholder Secured Parties against the Issuer or any other Guarantor, whether or
not such claim, remedy or right arises in equity, or under contract, statute or
common law, including, without limitation, the right to take or receive from the
Issuer or any other Guarantor, directly or indirectly, in cash or other assets
or by set-off or in any other manner, payment or security on account of such
claim or other rights. If any amount shall be paid to any Guarantor
in violation of the preceding sentence and any amounts owing to the Trustee or
the Holders of Notes or other Noteholder Secured Parties under the Notes, this
Indenture, the other Note Documents or any other document or instrument
delivered under or in connection with such agreements or instruments, shall not
have been paid in full, such amount shall have been deemed to have been paid to
such Guarantor for the benefit of, and held in trust for the benefit of, the
Trustee or the Holders or the other Noteholder Secured Parties and shall
forthwith be paid to the Trustee for the benefit of itself or such Holders or
other Noteholder Secured Parties to be credited and applied to the obligations
in favor of the Trustee or the Holders or other Noteholder Secured Parties, as
the case may be, whether matured or unmatured, in accordance with the terms of
this Indenture. Each Guarantor acknowledges that it will receive
direct and indirect benefits from the financing arrangements contemplated by
this Indenture and that the waiver set forth in this Section 13.06 is knowingly
made in contemplation of such benefits.
SECTION 13.07.
Immediate
Payment
.
Each
Guarantor agrees to make immediate payment to the Trustee on behalf of the
Holders of all Guarantee Obligations owing or payable to the respective Holders
upon receipt of a demand for payment therefor by the Trustee to such Guarantor
in writing.
SECTION 13.08.
No
Set-Off
.
Each
payment to be made by a Guarantor hereunder in respect of the Guarantee
Obligations shall be payable in the currency or currencies in which such
Guarantee Obligations are denominated, and, to the fullest extent permitted by
law, shall be made without set-off, counterclaim, reduction or diminution of any
kind or nature.
SECTION 13.09.
Guarantee Obligations
Absolute
.
The
obligations of each Guarantor hereunder are and shall be absolute and
unconditional and any monies or amounts expressed to be owing or payable by each
Guarantor hereunder which may not be recoverable from such Guarantor on the
basis of a Note Guarantee shall be recoverable from such Guarantor as a primary
obligor and principal debtor in respect thereof.
SECTION 13.10.
Note Guarantee Obligations
Continuing
.
The
obligations of each Guarantor hereunder shall be continuing and shall remain in
full force and effect until all such obligations have been paid and satisfied in
full. Each Guarantor agrees with the Trustee that it will from time
to time deliver to the Trustee suitable acknowledgments of this continued
liability hereunder and under any other instrument or instruments in such form
as counsel to the Trustee may advise and as will prevent any action brought
against it in respect of any default hereunder being barred by any statute of
limitations now or hereafter in force and, in the event of the failure of a
Guarantor so to do, it hereby irrevocably appoints the Trustee the attorney and
agent of such Guarantor to make, execute and deliver such written acknowledgment
or acknowledgments or other instruments as may from time to time become
necessary or advisable, in the judgment of the Trustee on the advice of counsel,
to fully maintain and keep in force the liability of such Guarantor
hereunder.
SECTION 13.11.
Note Guarantee Obligations
Not Reduced
.
The
obligations of each Guarantor hereunder shall not be satisfied, reduced or
discharged solely by the payment of such principal, premium, if any, interest,
fees and other monies or amounts as may at any time prior to discharge of this
Indenture pursuant to Article Ten be or become owing or payable under or by
virtue of or otherwise in connection with the Notes or this Indenture or the
other Note Documents.
SECTION 13.12.
Note Guarantee Obligations
Reinstated
.
The
obligations of each Guarantor hereunder shall continue to be effective or shall
be reinstated, as the case may be, if at any time any payment which would
otherwise have reduced the obligations of any Guarantor hereunder (whether such
payment shall have been made by or on behalf of the Issuer or by or on behalf of
a Guarantor) is rescinded or reclaimed from any of the Holders upon the
insolvency, bankruptcy, liquidation or reorganization of the Issuer or any
Guarantor or otherwise, all as though such payment had not been
made. If demand for, or acceleration of the time for, payment by the
Issuer or any other Guarantor is stayed upon the insolvency, bankruptcy,
liquidation or reorganization of the Issuer or such Guarantor, all such
Indebtedness otherwise subject to demand for payment or acceleration shall
nonetheless be payable by each Guarantor as provided herein.
SECTION 13.13.
Note Guarantee Obligations
Not Affected
.
To the
fullest extent permitted by law, the obligations of each Guarantor hereunder
shall not be affected, impaired or diminished in any way by any act, omission,
matter or thing whatsoever, occurring before, upon or after any demand for
payment hereunder (and whether or not known or consented to by any Guarantor or
any of the Holders) which, but for this provision, might constitute a whole or
partial defense to a claim against any Guarantor hereunder or might operate to
release or otherwise exonerate any Guarantor from any of its obligations
hereunder or otherwise affect such obligations, whether occasioned by default of
any of the Holders or otherwise, including, without limitation:
(a) Any
limitation of status or power, disability, incapacity or other circumstance
relating to the Issuer or any other Person, including any insolvency,
bankruptcy, liquidation, reorganization, readjustment, composition, dissolution,
winding-up or other proceeding involving or affecting the Issuer or any other
Person;
(b) Any
irregularity, defect, unenforceability or invalidity in respect of any
Indebtedness or other obligation of the Issuers or any other Person under this
Indenture, the Notes, other Note Documents or any other document or
instrument;
(c) Any
failure of the Issuer or any other Guarantor, whether or not without fault on
its part, to perform or comply with any of the provisions of this Indenture, the
Notes, other Note Documents or any Note Guarantee, or to give notice thereof to
a Guarantor;
(d) The
taking or enforcing or exercising or the refusal or neglect to take or enforce
or exercise any right or remedy from or against the Issuer or any other Person
or their respective assets or the release or discharge of any such right or
remedy;
(e) The
granting of time, renewals, extensions, compromises, concessions, waivers,
releases, discharges and other indulgences to the Issuer or any other
Person;
(f) Any
change in the time, manner or place of payment of, or in any other term of, any
of the Notes, or any other amendment, variation, supplement, replacement or
waiver of, or any consent to departure from, any of the Notes or this Indenture,
including, without limitation, any increase or decrease in the principal amount
of or premium, if any, or interest on any of the Notes;
(g) Any
change in the ownership, control, name, objects, businesses, assets, capital
structure or constitution of the Issuer or a Guarantor;
(h) Any
merger or amalgamation of the Issuer or a Guarantor with any Person or
Persons;
(i) The
occurrence of any change in the laws, rules, regulations or ordinances of any
jurisdiction by any present or future action of any governmental authority or
court amending, varying, reducing or otherwise affecting, or purporting to
amend, vary, reduce or otherwise affect, any of the Guarantee Obligations or the
obligations of a Guarantor under its Note Guarantee; and
(j) Any
other circumstance, including release of a Guarantor pursuant to Section 13.05
(other than by complete, irrevocable payment) that might otherwise constitute a
legal or equitable discharge or defense of the Issuer under this Indenture or
the Notes or of a Guarantor in respect of its Note Guarantee
hereunder.
Without
in any way limiting the provisions of Section 13.01, each Guarantor hereby
waives notice of acceptance hereof, notice of any liability of any Guarantor
hereunder, notice or proof of reliance by the Holders upon the obligations of
any Guarantor hereunder, and diligence, presentment, demand for payment on the
Issuer, protest, notice of dishonor or non-payment of any of the Guarantee
Obligations, or other notice or formalities to the Issuer or any Guarantor of
any kind whatsoever.
SECTION 13.15.
No Obligation to Take Action
Against the Issuers
.
Neither
the Trustee nor any other Person shall have any obligation to enforce or exhaust
any rights or remedies against the Issuer or any other Person or any property of
the Issuer or any other Person before the Trustee is entitled to demand payment
and performance by any or all Guarantors of their liabilities and obligations
under their Note Guarantees or under this Indenture.
SECTION 13.16.
Dealing with the Issuer and
Others
.
The
Holders, without releasing, discharging, limiting or otherwise affecting in
whole or in part the obligations and liabilities of any Guarantor hereunder and
without the consent of or notice to any Guarantor, may
(a) Grant
time, renewals, extensions, compromises, concessions, waivers, releases,
discharges and other indulgences to the Issuer or any other Person;
(b) Take
or abstain from taking security or collateral from the Issuer or from perfecting
security or collateral of the Issuers;
(c) Release,
discharge, compromise, realize, enforce or otherwise deal with or do any act or
thing in respect of (with or without consideration) any and all collateral,
mortgages or other security given by the Issuer or any third party with respect
to the obligations or matters contemplated by this Indenture or the
Notes;
(d) Accept
compromises or arrangements from the Issuer;
(e) Apply
all monies at any time received from the Issuer or from any security upon such
part of the Guarantee Obligations as the Holders may see fit or change any such
application in whole or in part from time to time as the Holders may see fit;
and
(f) Otherwise
deal with, or waive or modify their right to deal with, the Issuers and all
other Persons and any security as the Holders or the Trustee may see
fit.
SECTION 13.17.
Default and
Enforcement
.
If any
Guarantor fails to pay in accordance with Section 13.07 hereof, subject to the
terms, conditions and provisions of the Intercreditor Agreement, the Trustee may
proceed in its name as trustee hereunder in the enforcement of the Note
Guarantee of any such Guarantor and such Guarantor’s obligations thereunder and
hereunder by any remedy provided by law, whether by legal proceedings or
otherwise, and to recover from such Guarantor the obligations.
SECTION 13.18.
Acknowledgment
.
Each
Guarantor hereby acknowledges communication of the terms of this Indenture and
the Notes and consents to and approves of the same.
SECTION 13.19.
Costs and
Expenses
.
Each
Guarantor shall pay promptly following written demand (including documentation
reasonably supporting such demand) by the Trustee or Noteholder Collateral Agent
any and all reasonable costs, fees and expenses (including, without limitation,
reasonable legal fees on a solicitor and client basis) incurred by the Trustee
or Noteholder Collateral Agent, its agents, advisors and counsel or any of the
Holders in enforcing any of their rights under any Note Guarantee.
SECTION 13.20.
No Merger or Waiver;
Cumulative Remedies
.
No Note
Guarantee shall operate by way of merger of any of the obligations of a
Guarantor under any other agreement, including, without limitation, this
Indenture. No failure to exercise and no delay in exercising, on the
part of the Trustee or the Holders, any right, remedy, power or privilege
hereunder or under this Indenture or the Notes, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder or under this Indenture or the Notes preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges in the Note
Guarantee and under this Indenture, the Notes and any other document or
instrument between a Guarantor and/or the Issuers and the Trustee are cumulative
and not exclusive of any rights, remedies, powers and privilege provided by
law.
SECTION 13.21.
Survival of Note Guarantee
Obligations
.
Without
prejudice to the survival of any of the other obligations of each Guarantor
hereunder, the obligations of each Guarantor under Section 13.01 shall survive
the payment in full of the Guarantee Obligations and shall be enforceable
against such Guarantor, to the fullest extent permitted by law, without regard
to and without giving effect to any defense, right of offset or counterclaim
available to or which may be asserted by the Issuers or any
Guarantor.
SECTION 13.22.
Note Guarantee in Addition
to Other Guarantee Obligations
.
The
obligations of each Guarantor under its Note Guarantee and this Indenture are in
addition to and not in substitution for any other obligations to the Trustee or
to any of the Holders in relation to this Indenture or the Notes and any
guarantees or security at any time held by or for the benefit of any of
them.
SECTION 13.23.
Severability
.
Any
provision of this Article Thirteen which is prohibited or unenforceable in any
jurisdiction shall not invalidate the remaining provisions and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction unless its removal
would substantially defeat the basic intent, spirit and purpose of this
Indenture and this Article Thirteen.
SECTION 13.24.
Successors and
Assigns
.
Each Note
Guarantee shall be binding upon and inure to the benefit of each Guarantor and
the Trustee and the other Holders and other Noteholder Secured Parties and their
respective successors and permitted assigns, except that no Guarantor may assign
any of its obligations hereunder or thereunder, except as permitted by Article
Seven.
ARTICLE FOURTEEN
MISCELLANEOUS
SECTION 14.01.
Trust
Indenture Act
Controls
.
If this
Indenture is qualified under the TIA and any provision of this Indenture limits,
qualifies, or conflicts with another provision which is required or deemed to be
included in this Indenture by the TIA, such required or deemed provision shall
control.
Any
notices or other communications required or permitted hereunder shall be in
writing, and shall be sufficiently given if made by hand delivery, by telex, by
nationally recognized overnight courier service, by telecopier or registered or
certified mail, postage prepaid, return receipt requested, addressed as
follows:
if to the
Issuer or a Guarantor:
c/o U.S.
Concrete, Inc.
2925
Briarpark, Suite 1050
Houston,
TX 77042
Attention: General
Counsel
Telephone:
Facsimile:
if to the
Trustee or Noteholder Collateral Agent:
U.S. Bank
National Association
150
Fourth Avenue North, 2
nd
Floor
Nashville,
Tennessee 37219
Attention: Corporate
Trust Department – U.S. Concrete
Facsimile:
615-251-0737
With a
copy to:
U.S. Bank
National Association
100 Wall
Street
New York,
NY 10005
Attention: Corporate
Trust Department – U.S. Concrete
Facsimile: 615-251-0737
Each of
the Issuer and the Trustee and Noteholder Collateral Agent by written notice to
each other such Person may designate additional or different addresses for
notices to such Person. Any notice or communication to the Issuer and
the Trustee and Noteholder Collateral Agent, shall be deemed to have been given
or made as of the date so delivered if personally delivered; when replied to;
when receipt is acknowledged, if telecopied; five (5) calendar days after
mailing if sent by registered or certified mail, postage prepaid (except that a
notice of change of address shall not be deemed to have been given until
actually received by the addressee); and next Business Day if by nationally
recognized overnight courier service.
Any
notice or communication mailed to a Holder shall be mailed to him by first class
mail or other equivalent means at his address as it appears on the registration
books of the Registrar and shall be sufficiently given to him if so mailed
within the time prescribed.
Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
SECTION 14.03.
Communications by Holders
with Other Holders
.
Holders
may communicate pursuant to Trust Indenture Act § 312(b) with other Holders
with respect to their rights under this Indenture, the Notes or the Note
Guarantees. The Issuer, the Trustee, the Registrar and any other
Person shall have the protection of Trust Indenture Act
§ 312(c).
SECTION 14.04.
Certificate and Opinion as
to Conditions Precedent
.
Upon any
request or application by the Issuer to the Trustee to take any action under
this Indenture, the Issuer shall furnish to the Trustee at the request of the
Trustee:
(i) An
Officers’ Certificate, in form and substance reasonably satisfactory to the
Trustee, stating that, in the opinion of the signers, all conditions precedent
to be performed or effected by the Issuer, if any, provided for in this
Indenture relating to the proposed action have been complied with;
and
(ii) An
Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
SECTION 14.05.
Statements Required in
Certificate or Opinion
.
Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture, other than the Officers’ Certificate required by
Section 6.06, shall include:
(i) A
statement that the Person making such certificate or opinion has read such
covenant or condition;
(ii) A
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based;
(iii) A
statement that, in the opinion of such Person, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to
whether or not such covenant or condition has been complied with or satisfied;
and
(iv) A
statement as to whether or not, in the opinion of each such Person, such
condition or covenant has been complied with;
provided
,
however
, that with respect to
matters of fact, an Opinion of Counsel may rely on an Officers’ Certificate or
certificates of public officials.
SECTION 14.06.
Rules by Paying Agent or
Registrar
.
The
Paying Agent or Registrar may make reasonable rules and set reasonable
requirements for their functions.
SECTION 14.07.
Legal
Holidays
.
If a
payment date is not a Business Day, payment may be made on the next succeeding
day that is a Business Day.
SECTION 14.08.
Governing
Law
.
THIS
INDENTURE, THE NOTES AND THE NOTE GUARANTEES WILL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 14.09.
No Adverse Interpretation of
Other Agreements
.
This
Indenture may not be used to interpret another indenture, loan or debt agreement
of any of the Issuer or any of its Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
SECTION 14.10.
No Recourse Against
Others
.
No
director, officer, employee, incorporator, stockholder, member or manager of the
Issuer or any Guarantor shall have any liability for any obligations of the
Issuer under the Notes or this Indenture or of any Guarantor under its Note
Guarantee or this Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of Notes
by accepting a Note waives and releases all such liability. Such
waiver and release are part of the consideration for issuance of the
Notes.
SECTION 14.11.
Successors
.
All
agreements of the Issuer and the Guarantors in this Indenture, the Notes and the
Note Guarantees shall bind their respective successors. All
agreements of the Trustee and Noteholder Collateral Agent in this Indenture
shall bind their respective successors.
SECTION 14.12.
Duplicate
Originals
.
All
parties may sign any number of copies of this Indenture. Each signed
copy or counterpart shall be an original, but all of them together shall
represent the same agreement.
SECTION 14.13.
Severability
.
To the
extent permitted by applicable law, in case any one or more of the provisions in
this Indenture, in the Notes or in the Note Guarantees shall be held invalid,
illegal or unenforceable, in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions shall not in any way be affected or impaired thereby, it
being intended that all of the provisions hereof shall be enforceable to the
full extent permitted by law.
SECTION 14.14.
Senior
Indebtedness
.
The
Issuer and each Guarantor hereby designate the obligations with respect to the
Note Documents as senior Indebtedness which is senior in right of payment in
full in cash to any subordinated Indebtedness of the Issuer or any
Guarantor.
SECTION 14.15.
Intercreditor Agreement
Governs
.
Reference
is made to the Intercreditor Agreement. Notwithstanding anything to
the contrary contained herein, each Holder, by its acceptance of a Note,
(a) consents to the subordination of Liens provided for in the
Intercreditor Agreement, (b) agrees that it will be bound by and will take
no actions contrary to the provisions of the Intercreditor Agreement,
(c) authorizes and instructs the Trustee and Noteholder Collateral Agent to
enter into the Intercreditor Agreement as Trustee and Noteholder Collateral
Agent, respectively, and on behalf of such Holder and (d) agrees this
Indenture and the other Note Documents are subject to the terms, conditions and
provisions of the Intercreditor Agreement. The foregoing provisions
are intended as an inducement to the lenders under the Credit Agreement to
extend credit and such lenders are intended third party beneficiaries of such
provisions and the provisions of the Intercreditor Agreement.
SECTION 14.16.
Intercreditor Agreement,
Collateral Agreement and Security Documents
.
In the
event of any conflict between (a) this Indenture (on the one hand) and
(b) the Intercreditor Agreement, the Collateral Agreement and the Security
Documents (on the other hand), the provisions of the Intercreditor Agreement,
the Collateral Agreement and the Security Documents shall control.
SECTION 14.17.
Calculations
.
Except as
otherwise provided herein, the Issuer (or its agents) will be responsible for
making all calculations called for under this Indenture or the
Notes. The Issuer (or its agents) will make all such calculations in
good faith and, absent manifest error, its calculations will be final and
binding on Holders. The Issuer (or its agents) upon request will
provide a schedule of its calculations to each of the Trustee and the Conversion
Agent, and each of the Trustee and Conversion Agent is entitled to rely
conclusively upon the accuracy of such calculations without independent
verification. The Trustee will deliver a copy of such schedule to any
Holder upon the written request of such Holder.
SECTION 14.18.
Waiver of Jury
Trial
.
EACH OF
THE ISSUER, THE GUARANTORS, THE NOTEHOLDER COLLATERAL AGENT AND THE TRUSTEE
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
RELATING TO THE INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 14.19.
Force
Majeure.
In no
event shall the Trustee or the Noteholder Collateral Agent be responsible or
liable for any failure or delay in the performance of its obligations under this
Indenture arising out of or caused by, directly or indirectly, forces beyond its
reasonable control, including without limitation strikes, work stoppages,
accidents, acts of war or terrorism, civil, or military disturbances, nuclear or
natural catastrophes or acts of God, and interruptions, loss or malfunctions of
utilities, communications or computer (software or hardware)
services.
SIGNATURES
IN
WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed all as of the date first written above.
U.S.
CONCRETE, INC., as Issuer
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
Michael W. Harlan
|
|
Title:
Chief Executive Officer and President
|
|
|
GUARANTORS:
|
|
ALBERTA
INVESTMENTS, INC.
|
ALLIANCE
HAULERS, INC.
|
ATLAS
REDI-MIX, LLC
|
ATLAS-TUCK
CONCRETE, INC.
|
BEALL
CONCRETE ENTERPRISES, LLC
|
BEALL
INDUSTRIES, INC.
|
BEALL
INVESTMENT CORPORATION, INC.
|
BEALL
MANAGEMENT, INC.
|
HAMBURG
QUARRY LIMITED LIABILITY COMPANY
|
REDI-MIX
CONCRETE, L.P.
|
REDI-MIX
GP, LLC
|
REDI-MIX,
LLC
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
Michael W. Harlan
|
|
Title:
President
|
Signature
Page to Indenture
KURTZ
GRAVEL COMPANY
|
SUPERIOR
HOLDINGS, INC.
|
TITAN
CONCRETE INDUSTRIES, INC.
|
USC
ATLANTIC, INC.
|
USC
MICHIGAN, INC.
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
Michael W. Harlan
|
|
Title:
Vice President and Secretary
|
|
|
EASTERN
CONCRETE MATERIALS, INC.
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
Michael W. Harlan
|
|
Title:
President and Secretary
|
Signature
Page to Indenture
AMERICAN
CONCRETE PRODUCTS, INC.
|
BRECKENRIDGE
READY MIX, INC.
|
BUILDERS’
REDI-MIX, LLC
|
BWB,
INC. OF MICHIGAN
|
CENTRAL
CONCRETE SUPPLY CO., INC.
|
CENTRAL
PRECAST CONCRETE, INC.
|
INGRAM
CONCRETE, LLC
|
MG,
LLC
|
SAN
DIEGO PRECAST CONCRETE, INC.
|
SMITH
PRE-CAST, INC.
|
SIERRA
PRECAST, INC.
|
SUPERIOR
CONCRETE MATERIALS, INC.
|
U.S.
CONCRETE ON-SITE, INC.
|
USC
MANAGEMENT CO., LLC
|
USC
PAYROLL, INC.
|
USC
TECHNOLOGIES, INC.
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
Curt M. Lindeman
|
|
Title:
Vice President and Secretary
|
|
|
LOCAL
CONCRETE SUPPLY & EQUIPMENT, LLC
|
MASTER
MIX CONCRETE, LLC
|
MASTER
MIX, LLC
|
NYC
CONCRETE MATERIALS, LLC
|
PEBBLE
LANE ASSOCIATES, LLC
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
Curt M. Lindeman
|
|
Title:
President and Secretary
|
Signature
Page to Indenture
CONCRETE
ACQUISITION III, LLC
|
CONCRETE
ACQUISITION IV, LLC
|
CONCRETE
ACQUISITION V, LLC
|
CONCRETE
ACQUISITION VI, LLC
|
CONCRETE
XXXIII ACQUISITION, INC.
|
CONCRETE
XXXIV ACQUISITION, INC.
|
CONCRETE
XXXV ACQUISITION, INC.
|
CONCRETE
XXXVI ACQUISITION, INC.
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
Curt M. Lindeman
|
|
Title:
President
|
Signature
Page to Indenture
RIVERSIDE
MATERIALS, LLC
|
|
|
By:
|
/s/ Wallace H. Johnson
|
|
Name:
Wallace H. Johnson
|
|
Title:
President and Secretary
|
Signature
Page to Indenture
U.S.
BANK NATIONAL ASSOCIATION,
|
as
Trustee and Noteholder Collateral Agent
|
|
|
By:
|
/s/ Wally Jones
|
|
Name:
Wally Jones
|
|
Title:
Vice President
|
Signature
Page to Indenture
EXHIBIT
A
[Insert
the Temporary Regulation S Global Note Legend, if applicable pursuant to the
provisions of the Indenture]
[Insert
the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]
[Insert
the Private Placement Legend, if applicable pursuant to the provisions of the
Indenture]
U.S.
CONCRETE, INC.
9.5%
Convertible Secured Notes 2015
CUSIP
No.
U.S.
CONCRETE, INC., a Delaware corporation (the “
Issuer
”), for value received
promises to pay to ____________ or its registered assigns, the principal sum of
[or such other amount as is provided in a schedule attached hereto]
1
on August 31,
2015.
Interest
Payment Dates: March 1, June 1, September 1 and December 1,
commencing December 1, 2010.
Record
Dates: February 15, May 15, August 15 and November 15.
Reference
is made to the further provisions of this Note contained herein, which will for
all purposes have the same effect as if set forth at this place.
1
|
This
language should be included only if the Note is issued in global
form.
|
IN
WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by
facsimile by its duly authorized officer.
Dated: [ ],
201_
U.S.
CONCRETE, INC., as Issuer
|
|
|
By:
|
|
|
Name:
|
|
Title:
|
FORM OF
TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is
one of the 9.5% Convertible Secured Notes due 2015 described in the
within-mentioned Indenture.
Dated: [ ],
201_
U.S.
BANK NATIONAL ASSOCIATION,
|
as
Trustee
|
|
|
By:
|
|
|
Authorized
Signatory
|
(Reverse
of Note)
9.5%
Convertible Secured Notes due 2015
Capitalized
terms used herein shall have the meanings assigned to them in the Indenture
referred to below unless otherwise indicated. All references to
“interest” herein, unless the context requires otherwise, shall include
“Additional Interest.”
1.
Interest
. U.S.
Concrete, Inc., a Delaware corporation (the “
Issuer
”) promises to pay
interest on the principal amount of this Note at 9.5% per annum from August 31,
2010 until maturity. The Issuer will pay interest quarterly on March
1, June 1, September 1 and December 1 of each year, or if any such day is not a
Business Day, on the next succeeding Business Day (each an “
Interest Payment Date
”),
commencing December 1, 2010. Interest on the Notes will accrue from
the most recent date to which interest has been paid or, if no interest has been
paid, from the date of original issuance. The Issuer shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand to the extent lawful at the rate equal to 2%
per annum
in excess of the
then applicable rate on the Notes; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent
lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
[Until
this Temporary Regulation S Global Note is exchanged for one or more Permanent
Regulation S Global Notes, the Holder hereof shall not be entitled to receive
payments of interest hereon; until so exchanged in full, this Temporary
Regulation S Global Note shall in all other respects be entitled to the same
benefits as other Notes under the Indenture.]
2
2.
Method of
Payment
. The Issuer will pay interest on the Notes to the
Persons who are registered Holders of Notes at the Close of Business on the
February 15, May 15, August 15 or November 15 next preceding the Interest
Payment Date (each a
“Record
Date”
), even if such Notes are canceled after such record date and on or
before such Interest Payment Date, except as provided in Section 2.12 of the
Indenture with respect to defaulted interest. The Notes will be
issued in denominations of $1,000 and integral multiples thereof. The
Issuer shall pay principal, premium, if any, and interest on the Notes in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts (“
U.S. Legal
Tender
”). Principal, premium, if any, and interest on the
Notes will be payable at the office or agency of the Issuer maintained for such
purpose except that, at the option of the Issuer, the payment of interest may be
made by check mailed to the Holders of the Notes at their respective addresses
set forth in the register of Holders of Notes;
provided,
that for Holders
that have given wire transfer instructions to the Issuer at least three Business
Days prior to the applicable payment date, the Issuer will make all payments of
principal, premium and interest by wire transfer of immediately available funds
to the accounts specified by the Holders thereof. Until otherwise
designated by the Issuer, the Issuer’s office or agency in New York will be
the office of the Trustee maintained for such purpose.
2
For Temporary Regulation S Global Note only.
3.
Paying Agent and
Registrar
. Initially, U.S. Bank National Association, the
Trustee under the Indenture, will act as Paying Agent and
Registrar. The Issuer may change any Paying Agent or Registrar
without notice to any Holder. Except as provided in the Indenture,
the Issuer or any of their Subsidiaries may act in any such
capacity.
4.
Indenture
. The
Issuer issued the Notes under an Indenture dated as of August 31, 2010 (“
Indenture
”) by and among the
Issuer, the Guarantors, the Trustee and Collateral Agent. The terms
of the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S.
Code §§ 77aaa-77bbbb) (the “
Trust Indenture
Act
”). The Notes are subject to all such terms, and Holders
are referred to the Indenture and the Trust Indenture Act for a statement of
such terms.
5.
Conversion
.
(a)
Optional Conversion
.
Subject to and in compliance with the provisions of the Indenture (including
without limitation the conditions of conversion of this Note set forth in the
Indenture), the Holder hereof has the right, at its option, to convert the
principal amount hereof or any portion of such principal which is $1,000 or an
integral multiple thereof, into shares of Common Stock at the applicable
Conversion Rate. The initial Conversion Rate is 95.23809524 shares of
Common Stock $1,000 principal amount of the Notes (equivalent to a Conversion
Price of approximately $10.50), subject to adjustment in certain events
described in the Indenture. Upon conversion, the Issuer will issue shares of
Common Stock as set forth in the Indenture. No fractional shares will be issued
upon any conversion, but an adjustment and payment in cash will be made, as
provided in the Indenture, in respect of any fraction of a share which would
otherwise be issuable upon the surrender of any Notes for
conversion. Notes in respect of which a Holder is exercising its
right to require repurchase on a Fundamental Change of Control Purchase Date may
be converted only if such Holder withdraws its election to exercise such right
in accordance with the terms of the Indenture.
(b)
Termination of Conversion
Right Upon Occurrence of a Conversion Event
. Subject to and in
compliance with the provisions of the Indenture (including without limitation
the conditions of conversion of this Note set forth in the Indenture), upon
occurrence of a Conversion Event the right to convert Notes shall terminate as
of 5:00 p.m. New York City time on the date that is 45 days following
the date the Issuer shall send notice of the occurrence of the Conversion Event
(the
“Conversion Event
Notice”)
. The Conversion Termination Date shall be the date
that is 46 days following the Conversion Event Notice. Any Notes not
converted prior to the Conversion Termination Date as a result of the Conversion
Cap (specified in (e) below), may, at such Holder’s option, be converted into
shares of the Common Stock on a date or dates prior to the date that is 180 days
following the Conversion Event Termination Date provided that a Holder must send
an election notice (an
“Election Notice”
) specifying
such later conversion to the Issuer prior to the Conversion Termination
Date. Any Notes not converted in connection with a Conversion Event
may be redeemed, in whole or in part, at the Issuer’s option at any time prior
to the Maturity Date in accordance with Paragraph 7 hereof.
If a
Conversion Event occurs on or prior to the second anniversary of the Issue Date,
in addition to the shares of Common Stock issuable upon conversion or
any amounts received upon redemption or at maturity, the Holders shall receive
an amount in cash equal to the Cash Conversion Amount (which, at the election of
the Issuer and subject to satisfaction of certain conditions specified in the
Indenture, may be paid in shares of Common Stock).
As of the
Conversion Termination Date, the interest on the Notes shall cease to accrue,
certain covenants and certain other provisions shall no longer have any force or
effect as specified in the Indenture and the Collateral securing the Notes and
Note Guarantees shall be released.
(c)
Conversion in Connection
with the Fundamental Change of Control
. If a Holder converts
its Notes in connection with a Fundamental Change of Control, the Issuer shall
(i) increase the Conversion Rate for the Notes so surrendered for
conversion by a number of Additional Shares of Common Stock as described in the
Indenture and (ii) pay to such Holder in cash the Make Whole Payment equal
to the total amount of interest that would have accrued and become payable on
such Notes from, but excluding, the Effective Date through, and including,
August 31, 2013 (but including any accrued and unpaid interest on the Notes from
the Issue Date through and including the Effective Date). The Make
Whole Payment shall be made on the applicable Conversion Payment
Date. Notwithstanding the above and subject to satisfaction of
certain conditions specified in the Indenture, at the election of the Issuer,
the Make Whole Payment may be paid in shares of its Common Stock.
(d)
Payment of Accrued
Interest
. Upon conversion and without duplication, Holders
shall receive a separate cash payment for Accrued Interest, which, at the
election of the Issuer (subject to satisfaction of certain conditions specified
in the Indenture), may be paid in shares of its Common Stock.
(e)
Conversion
Cap
. Notwithstanding anything to the contrary in this Note and
the Indenture, (i) a “beneficial owner” (as determined pursuant to
Section 13 of the Exchange Act) of the Notes shall not be entitled to
convert any Notes, (ii) the Issuer shall not be entitled to settle any cash
payments owing to any beneficial owner of Notes in shares of its Common Stock
and (iii) shares of any acquiror (or successor) shall not be issued upon
conversion pursuant to the adjustment mechanism contained in the Indenture or in
connection with a transaction governed by the provisions of the Indenture or
upon a Fundamental Change of Control to the extent, and only to the
extent, such conversion or share settlement would cause such Person, together
with its Affiliates, to become a beneficial owner of more than 9.9%
of the issued and outstanding shares of Common Stock (or such equivalent shares
of an acquiror or a successor) (the
“Conversion
Cap”
).
6.
Repurchase at
the Option of Holder
(a)
Upon a Fundamental Change of
Control
. Subject to and in compliance with the provisions of the
Indenture (including without limitation the conditions of conversion of this
Note set forth in Paragraph 5), upon occurrence of a Fundamental Change of
Control, the Holders shall have a right to require the Issuer to repurchase all
or a portion of their Notes at 100% of their principal amount, plus accrued and
unpaid interest, if any, thereon to but excluding the Fundamental Change of
Control Purchase Date.
(b)
From Net Proceeds of Certain
Sales and Dispositions
. The Issuer is, subject to certain
conditions and exceptions, obligated to make an offer to purchase Notes at 100%
of their principal amount, plus accrued and unpaid interest, if any, thereon to
the date of repurchase, with certain net cash proceeds of certain sales or other
dispositions of assets in accordance with the Indenture.
7.
Redemption at the Option of
the Issuer
. On or after the Conversion Termination Date, the Issuer may,
at its option, redeem the Notes, in whole or in part, out of funds legally
available therefor, at any time or from time to time, subject to the notice
provisions and provisions for partial redemption described in the Indenture, at
a price (the “
Redemption
Price
”) equal to 100% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the date fixed for redemption (the
“Redemption Date”
) plus the
Cash Conversion Amount;
provided
, that the Issuer may
redeem only such Notes not otherwise specified for conversion pursuant to an
Election Notice. The Issuer shall pay the Redemption Price in respect
of such Notes subject to redemption on the Redemption Date in accordance with
the provisions of the Indenture. The Issuer may elect to pay the Cash
Conversion Amount, in whole or in part, in shares of its Common
Stock.
8.
Notice of
Redemption
. Notice of redemption will be mailed by first class
mail at least 15 days but not more than 45 days before the Redemption Date to
each Holder of Notes to be redeemed at its registered address. Notes
in denominations larger than $1,000 may be redeemed in part. If any
Note is to be redeemed in part only, the notice of redemption that relates to
such Note shall state the portion of the principal amount thereof to be
redeemed. A new Note in principal amount equal to the unredeemed
portion thereof will be issued in the name of the Holder thereof upon
cancellation of the original Note. On and after the Redemption Date
interest ceases to accrue on Notes or portions thereof called for
redemption.
9.
Mandatory
Redemption
.
The Issuer shall
not be required to make any sinking fund, mandatory redemption or other similar
payments with respect to the Notes.
10.
Denominations, Transfer,
Exchange
. The Notes are in registered form without coupons in
denominations of $1,000 and integral multiples thereof. The transfer
of Notes may be registered and Notes may be exchanged as provided in the
Indenture. The Registrar and the Trustee may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and the
Issuer may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Issuer and the Registrar are not
required to transfer or exchange any Note selected for
redemption. Also, the Issuer and the Registrar are not required to
transfer or exchange any Notes for a period of 15 days before a selection of
Notes to be redeemed.
[This
Temporary Regulation S Global Note is exchangeable in whole or in part for one
or more Global Notes only (i) on or after the termination of the 40-day
distribution compliance period (as defined in Regulation S) and (ii) upon
presentation of certificates (accompanied by an Opinion of Counsel, if
applicable) required by Article 2 of the Indenture. Upon exchange of
this Temporary Regulation S Global Note for one or more Global Notes, the
Trustee shall cancel this Temporary Regulation S Global Note.]
3
3
For Temporary Regulation S Global Note only.
11.
Persons Deemed
Owners
. The registered Holder of a Note may be treated as its
owner for all purposes.
12.
Amendment, Supplement and
Waiver
. The Note Documents may be amended or supplemented only
as provided in the Indenture.
13.
Defaults and
Remedies
. If a Default occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the then outstanding Notes
generally may declare all the Notes to be due and payable
immediately. Notwithstanding the foregoing, in the case of a Default
arising from certain events of bankruptcy or insolvency as set forth in the
Indenture, with respect to the Issuer, all outstanding Notes will become due and
payable without further action or notice. Holders of the Notes may
not enforce the Indenture, the Security Documents, Intercreditor Agreement or
the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee or Noteholder Collateral Agent in its exercise of
any trust or power. The Trustee and Noteholder Collateral Agent may
withhold from Holders of the Notes notice of any continuing Default (except a
Default relating to the payment of principal or interest including an
accelerated payment or the failure to make a payment on the Fundamental Change
of Control Purchase Date, or payment in connection with a Conversion Event, on
the Net Proceeds Payment Date pursuant to a Net Proceeds Offer or a Default in
complying with the provisions of Article Seven of the Indenture) if they
determine that withholding notice is in their interest. The Holders
of a majority in aggregate principal amount of the Notes then outstanding by
notice to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default and its consequences under the Indenture except a continuing
Default in the payment of interest on, or the principal of, or the premium on,
the Notes.
14.
Restrictive
Covenants
. The Indenture contains certain covenants that,
among other things, limit the ability of the Issuer and its Restricted
Subsidiaries to make restricted payments, to incur indebtedness, to create
liens, to sell assets, to permit restrictions on dividends and other payments by
Restricted Subsidiaries of the Issuer, to consolidate, merge or sell all or
substantially all of its assets or to engage in transactions with
affiliates. The limitations are subject to a number of important
qualifications and exceptions. The Issuer must annually report to the
Trustee on compliance with such limitations and other provisions in the
Indenture.
15.
No Recourse Against
Others
. No director, officer, employee, incorporator,
stockholder, member or manager of the Issuer or any Guarantor shall have any
liability for any obligations of the Issuer under the Notes or the Indenture, or
of any Guarantor under its Note Guarantee or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Notes by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
16.
Note
Guarantees
. This Note will be entitled to the benefits of
certain Note Guarantees made for the benefit of the
Holders. Reference is hereby made to the Indenture for a statement of
the respective rights, limitations of rights, duties and obligations thereunder
of the Guarantors, the Trustee and the Holders.
17.
Security
Interest
. The Notes will be secured, to the extent and in the
manner provided in the Security Documents, by (i) a first priority Lien on
the Notes Collateral (subject to Permitted Liens), and (ii) a second
priority Lien on the ABL Collateral (subject to Permitted
Liens). Each Holder of Notes, by its acceptance of a Note, consents
and agrees to the terms of each Security Document and the Intercreditor
Agreement, authorizes and directs the Trustee to appoint U.S. Bank National
Association as Noteholder Collateral Agent on the Issue Date and directs the
Noteholder Collateral Agent to enter into the Security Documents and the
Intercreditor Agreement, and authorizes and empowers each of the Trustee and the
Noteholder Collateral Agent to bind the Holders of Notes as set forth in the
Security Documents and the Intercreditor Agreement and to perform its respective
obligations and exercise its respective rights and powers
thereunder. In the event of any conflict between (a) the
Indenture (on the one hand) and (b) the Intercreditor Agreement and the
Security Documents (on the other hand), the provisions of the Intercreditor
Agreement and Security Documents shall control unless such compliance would
violate the TIA.
18.
Trustee Dealings with the
Issuer
. Subject to certain terms, the Trustee or Noteholder
Collateral Agent under the Indenture, in its individual or any other capacity,
may become the owner or pledgee of Notes and may otherwise deal with the Issuer,
their Subsidiaries or their respective Affiliates as if it were not the Trustee
or Noteholder Collateral Agent.
19.
Authentication
. This
Note shall not be valid until authenticated by the manual signature of the
Trustee or an authenticating agent.
20.
Abbreviations
. Customary
abbreviations may be used in the name of a Holder or an assignee, such
as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entirety), JT TEN (= joint tenants with right of survivorship and not as tenants
in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
21.
Additional Rights of Holders
of Restricted Global Notes and Restricted Definitive Notes
. In
addition to the rights provided to Holders of Notes under the Indenture, Holders
of Registrable Securities (as defined in the Registration Rights Agreement) will
have all the rights set forth in the Registration Rights Agreement dated as of
August 31, 2010, among the Issuer, the Guarantors and the other parties named on
the signature pages thereof (the “
Registration Rights
Agreement
”).
22.
CUSIP
Numbers
. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuer has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
23.
Governing
Law
.
This
Note shall be governed by, and construed in accordance with, the laws of the
State of New York.
The
Issuer will furnish to any Holder upon written request and without charge a copy
of the Note Documents.
ASSIGNMENT
FORM
I or we
assign and transfer this Note to
(Print or
type name, address and zip code of assignee or transferee)
(Insert
Social Security or other identifying number of assignee or
transferee)
and
irrevocably appoint _______________________________________ agent to transfer
this Note on the books of the Issuer. The agent may substitute
another to act for him.
Dated: _______________________
|
|
Signed:
|
|
|
|
|
(Sign
exactly as name appears on
|
|
|
|
the
other side of this
Note)
|
Signature
Guarantee:
|
|
|
Participant
in a recognized Signature Guarantee
Medallion
Program (or other signature guarantor
program
reasonably acceptable to the
Trustee)
|
In
connection with any transfer of this Note occurring prior to the date which is
the date following the expiration of the applicable holding period set forth in
Rule 144(d) of the Securities Act of this Note, the undersigned confirms that it
has not utilized any general solicitation or general advertising in connection
with the transfer and is making the transfer pursuant to one of the
following:
[
Check
One
]
(1)
___
|
to
the Issuer or a subsidiary thereof;
or
|
(2)
___
|
to
a person who the transferor reasonably believes is a “qualified
institutional buyer” pursuant to and in compliance with Rule 144A under
the Securities Act of 1933, as amended (the “Securities Act”);
or
|
(3)
___
|
to
an institutional “accredited investor” (as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act) that has furnished to the
Trustee a signed letter containing certain representations and agreements
(the form of which letter can be obtained from the Trustee);
or
|
(4)
___
|
outside
the United States to a non-“U.S. person” as defined in Rule 902 of
Regulation S under the Securities Act in compliance with Rule 904 of
Regulation S under the Securities Act;
or
|
(5)
___
|
pursuant
to the exemption from registration provided by Rule 144 under the
Securities Act or pursuant to another exemption available under the
Securities Act; or
|
(6)
___
|
pursuant
to an effective registration statement under the Securities
Act.
|
and
unless the box below is checked, the undersigned confirms that such Note is not
being transferred to an “affiliate” of the Issuer as defined in Rule 144 under
the Securities Act (an “Affiliate”):
¨
The
transferee is an Affiliate of the Issuer.
Unless
one of the foregoing items (1) through (6) is checked, the Trustee will
refuse to register any of the Notes evidenced by this certificate in the name of
any person other than the registered Holder thereof;
provided
,
however
, that if item (3),
(4) or (5) is checked, the Issuer or the Trustee may require, prior to
registering any such transfer of the Notes, in their sole discretion, such
written legal opinions, certifications (including an investment letter in the
case of box (3) or (4)) and other information as the Trustee or the Issuer
has reasonably requested to confirm that such transfer is being made pursuant to
an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act.
If none
of the foregoing items (1) through (6) are checked, the Trustee or
Registrar shall not be obligated to register this Note in the name of any person
other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 2.16 of the
Indenture shall have been satisfied.
Dated:
_______________________
|
|
Signed:
|
|
|
|
|
(Sign
exactly as name appears on the other
|
|
|
|
side
of this Note)
|
Signature
Guarantee:
|
Participant
in a recognized Signature Guarantee Medallion Program (or other signature
guarantor program reasonably acceptable to the
Trustee)
|
TO BE
COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The
undersigned represents and warrants that it is purchasing this Note for its own
account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a “qualified institutional buyer”
within the meaning of Rule 144A under the Securities Act and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Issuer as the undersigned has requested
pursuant to Rule 144A or has determined not to request such information and that
it is aware that the transferor is relying upon the undersigned’s foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.
Dated:
_______________________
|
|
|
NOTICE:
To be executed by an executive
officer
|
OPTION OF
HOLDER TO ELECT PURCHASE
If you
want to elect to have this Note purchased by the Issuer pursuant to
Article Three or Section 6.11 of the Indenture, check the appropriate
box:
Article Three Section 6.11
If you
want to elect to have only part of this Note purchased by the Issuer pursuant to
Article Three or Section 6.11 of the Indenture, state the amount (in
denominations of $1,000 and integral multiples
thereof): $___________
Dated: _______________________
|
|
Signed:
|
|
|
|
|
(Sign
exactly as name
|
|
|
|
appears
on the other
|
|
|
|
side
of this Note)
|
Signature
Guarantee:
|
|
|
|
Participant
in a recognized Signature Guarantee
Medallion
Program (or other signature guarantor
program
reasonably acceptable to the Trustee)
|
|
CONVERSION
NOTICE
If you
want to convert this Note into Common Stock of the Issuer, check the
box:
¨
To
convert only part of this Note, state the principal amount to be converted into
shares of Common Stock (which must be $1,000 or an integral multiple of thereof,
the “
Conversion
Shares
”):
$
4
State the
principal amount of the Notes held not subject to conversion
$________.
State the
aggregate number of shares of Common Stock of the Issuer beneficially owned as
of the date of this notice __________.
The
Issuer and the Trustee shall be entitled to rely upon the representation
herein. The Issuer shall not be in breach of any provision of the
Indenture or the Note with respect to the Conversion Shares issued in reliance
on such information and shall have no liability (and shall be indemnified by the
undersigned for any liability) as a result of the issuance of any Conversion
Shares to the undersigned in excess of the Conversion Cap issued in reliance on
such information.
¨
If
you want the Conversion Shares to be issued to you in the form of a
physical certificate
(instead of via the Direct Registration System), fill out the form below
with respect to the name of
the person in whose name the physical certificate is to be
issued
:
(
Insert such person’s social security
or tax ID no
.)
(
Print or type such person’s name,
address and zip code
)
NOTE: If you do not check
the box above and provide the requested information, the Conversion Shares will
be issued to you via the Direct Registration System.
Date:_____________________________
Signed:________________________________
Name:
_________________________ Phone
Number: _____________________________
(Sign
exactly as your name appears on the other side of this Note)
Signature
Guarantee:
NOTE: Signatures must be guaranteed by
an “eligible guarantor institution” meeting the requirements of the Registrar,
which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“
STAMP
”) or such other “signature guarantee
program” as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act of
1934, as amended
.
4
|
State
the (1) principal amount of Notes held not subject to conversion and (2)
aggregate number of shares of common stock of the Issuer held as of the
date of this notice.
|
SCHEDULE
OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
5
The
following exchanges of a part of this Global Note for an interest in another
Global Note or for a Physical Note, or exchanges of a part of another Global
Note or Physical Note for an interest in this Global Note, have been
made:
Date of Exchange
|
|
Amount of decrease in
Principal Amount of
this Global Note
|
|
|
Amount of increase in
Principal Amount of
this Global Note
|
|
|
Principal Amount of
this Global Note
following such decrease
(or increase)
|
|
|
Signature of
authorized officer of
Trustee or Note
Custodian
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
5
|
This
schedule should be included only if the Note is issued in global
form.
|
EXHIBIT
B
NOTE
GUARANTEE
For value
received, each of the undersigned (including any successor Person under the
Indenture) hereby unconditionally guarantees, jointly and severally, to the
extent set forth in the Indenture (as defined below) to the Holder of this Note
the payment of principal, premium, if any, and interest on this Note in the
amounts and at the times when due and interest on the overdue principal,
premium, if any, and interest, if any, of this Note when due, if lawful, and, to
the extent permitted by law, the payment or performance of all other obligations
of the Issuer under the Indenture or the Notes or other Note Documents, to the
Holder of this Note and the Trustee and other Noteholder Secured Parties, all in
accordance with and subject to the terms and limitations of this Note, the
Indenture, including Article Thirteen thereof, and this Note
Guarantee. This Note Guarantee will become effective in accordance
with Article Thirteen of the Indenture and its terms shall be evidenced
therein. The validity and enforceability of any Note Guarantee shall
not be affected by the fact that it is not affixed to any particular
Note.
Capitalized
terms used but not defined herein shall have the meanings ascribed to them in
the Indenture dated as of August 31, 2010, among U.S. Concrete, Inc., a Delaware
corporation (the “Issuer”), the Guarantors named therein and U.S. Bank National
Association, as trustee (the “Trustee”), as amended or supplemented (the
“Indenture”).
The
obligations of the undersigned to the Holders of Notes and to the Trustee
pursuant to this Note Guarantee and the Indenture are expressly set forth in
Article Thirteen of the Indenture and reference is hereby made to the
Indenture for the precise terms of the Note Guarantee and all of the other
provisions of the Indenture to which this Note Guarantee relates.
No
director, officer, employee, incorporator, stockholder, member or manager of any
Guarantor, as such, shall have any liability for any obligations of such
Guarantors under such Guarantors’ Note Guarantee or the Indenture or for any
claim based on, in respect of, or by reason of, such obligation or its
creation.
This Note Guarantee shall be governed
by, and construed in accordance with, the laws of the State of
New York
.
This Note
Guarantee is subject to release upon the terms set forth in the
Indenture.
IN
WITNESS WHEREOF, each Guarantor has caused its Note Guarantee to be duly
executed.
Date:
EXHIBIT
C
FORM
OF LEGENDS
Each
Global Note and Physical Note that constitutes a Restricted Security shall bear
the following legend (the “Private Placement Legend”) on the face thereof until
the expiration of the applicable holding period with respect thereto set forth
in Rule 144(d) of the Securities Act, unless otherwise agreed by the Issuer and
the Holder thereof or if such legend is no longer required by
Section 2.16(f) of the Indenture:
This
note (or its predecessor) was originally issued in a transaction exempt from
registration under the United States Securities Act of 1933 (the “Securities
Act”), and this note may not be offered, sold or otherwise transferred in the
absence of such registration or an applicable exemption
therefrom. Each purchaser of this note is hereby notified that the
seller of this note may be relying on the exemption from the provisions of
Section 5 of the Securities Act provided by Rule 144A
thereunder.
The
holder of this note agrees for the benefit of the Issuer and the Guarantors that
(a) this note may be offered, resold, pledged or otherwise transferred,
only (i) so long as such security is eligible for resale pursuant to Rule
144A, in the United States to a person whom the seller reasonably believes is a
qualified institutional buyer (as defined in Rule 144A under the Securities Act)
in a transaction meeting the requirements of rule 144A, (ii) outside the
United States in an offshore transaction in accordance with Rule 904 under the
Securities Act, (iii) pursuant to an exemption from registration under the
securities act provided by Rule 144 thereunder (if available) or
(iv) pursuant to an effective registration statement under the Securities
Act, in each of cases (i) through (iv) in accordance with any
applicable securities laws of any state of the United States, and (b) the
holder will, and each subsequent holder is required to, notify any purchaser of
this note from it of the resale restrictions referred to in
(a) above.
Each
Global Note authenticated and delivered hereunder shall also bear the following
legend:
This
note is a Global Note within the meaning of the Indenture hereinafter referred
to and is registered in the name of a Depositary or a nominee of a Depositary or
a successor Depositary. This note is not exchangeable for notes
registered in the name of a person other than the Depositary or its nominee
except in the limited circumstances described in the indenture, and no transfer
of this note (other than a transfer of this note as a whole by the Depositary to
a nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary) may be registered except in the limited
circumstances described in the Indenture.
Unless
this certificate is presented by an authorized representative of the Depositary
Trust Company, a New York Corporation (“DTC”), to the Issuer or its agent
for registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested
by an authorized representative of DTC (and any payment is made to Cede &
Co. or to such other entity as is requested by an authorized representative of
DTC), any transfer, pledge or other use hereof for value or otherwise by or to
any person is wrongful inasmuch as the registered owner hereof, Cede & Co.,
has an interest herein.
Transfers
of this Global Note shall be limited to transfers in whole, but not in part, to
nominees of Cede & Co. or to a successor thereof or such successor’s nominee
and transfers of portions of this Global Note shall be limited to transfers made
in accordance with the restrictions set forth in Section 2.16 of the
Indenture.
Each
Temporary Regulation S Global Note shall also bear the following
legend:
The
rights attaching to this Temporary Regulation S Global Note, and the conditions
and procedures governing its exchange for certificated Notes, are as specified
in the Indenture. Neither the Holder nor the beneficial owners of
this Temporary Regulation S Global Note shall be entitled to receive payment of
interest hereon.
EXHIBIT
D
FORM
OF CERTIFICATE TO BE DELIVERED IN CONNECTION WITH TRANSFERS OF TEMPORARY
REGULATION S GLOBAL NOTE
___________________,_______
U.S. Bank
National Association
60
Livingston Avenue
1st Floor
– Bond Drop Window
St. Paul,
MN 55107
Attn.:
Corporate Trust Department – U.S. Concrete
|
Re:
|
U.S.
Concrete, Inc. (the “Issuer”)
|
|
9.5% Convertible
Secured Notes due 2015 (the
“Notes”)
|
Dear
Sirs:
This
letter relates to U.S. $ ______________ principal amount of Notes represented by
a certificate (the “
Legended
Certificate
”) which bears a legend outlining restrictions upon transfer
of such Legended Certificate. Pursuant to Section 2.16(c) of the
Indenture (the “
Indenture
”) dated as of August
31, 2010 relating to the Notes, we hereby certify that we are (or we will hold
such securities on behalf of) a person outside the United States (or to a
Purchaser Party (as defined in the Indenture)) to whom the Notes could be
transferred in accordance with Rule 904 of Regulation S promulgated under
the U.S. Securities Act of 1933, as amended.
You, as
Trustee, the Issuer, counsel for the Issuer and others are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby. Terms
used in this letter have the meanings set forth in
Regulation S.
Very
truly yours,
|
|
[Name
of Holder]
|
|
By:
|
|
|
Authorized
Signature
|
EXHIBIT
E
FORM
OF CERTIFICATE TO BE
DELIVERED
IN CONNECTION WITH
TRANSFERS
TO NON-QIB INSTITUTIONAL ACCREDITED INVESTORS
[ ],
[ ]
U.S. Bank
National Association
60
Livingston Avenue
1st Floor
– Bond Drop Window
St. Paul,
MN 55107
Attn.:
Corporate Trust Department – U.S. Concrete
Ladies
and Gentlemen:
In
connection with our proposed purchase of 9.5% Convertible Secured Notes due 2015
(the “
Notes
”) of U.S.
CONCRETE, INC., a Delaware corporation (the “
Issuer
”), we confirm
that:
1. We
understand that any subsequent transfer of the Notes is subject to certain
restrictions and conditions set forth in the Indenture relating to the Notes
(the “Indenture”) and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended (the
“Securities Act”), and all applicable state securities laws.
2. We
understand that the offer and sale of the Notes have not been registered under
the Securities Act, and that the Notes may not be offered, sold, pledged or
otherwise transferred except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts
for which we are acting as hereinafter stated, that if we should sell, offer,
pledge or otherwise transfer any Notes, we will do so only (i) to the
Issuer or any of its subsidiaries, (ii) so long as such security is
eligible for resale pursuant to Rule 144A, inside the United States in a
transaction meeting the requirements of Rule 144A under the Securities Act to a
person who we reasonably believe to be a “qualified institutional buyer” (as
defined in Rule 144A under the Securities Act), (iii) inside the United
States to an institutional “accredited investor” (as defined below) that is
purchasing at least $250,000 of Notes for its own account or for the account of
an institutional accredited investor and who, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to the Trustee (as
defined in the Indenture) a signed letter containing certain representations and
agreements relating to the restrictions on transfer of the Notes (the form of
which letter can be obtained from the Trustee), (iv) outside the United
States to a person that is not a U.S. person (as defined in Rule 902 under the
Securities Act) in accordance with Regulation S promulgated under the Securities
Act, (v) pursuant to the exemption from registration provided by Rule 144
under the Securities Act (if available) or another available exemption under the
Securities Act or (vi) pursuant to an effective registration statement
under the Securities Act, and we further agree to provide to any person
purchasing any of the Notes from us a notice advising such purchaser that
resales of the Notes are restricted as stated herein.
3. We
are not acquiring the Notes for or on behalf of, and will not transfer the Notes
to, any pension or welfare plan (as defined in Section 3 of the Employee
Retirement Income Security Act of 1974, as amended) or plan (as defined in
Section 4975 of the Internal Revenue Code of 1986, as amended), except as
permitted in the Section entitled “Notice to Investors” of the Offering
Memorandum.
4. We
understand that, on any proposed resale of any Notes, we will be required to
furnish to the Trustee and the Issuer such certification, legal opinions and
other information as the Trustee and the Issuer may reasonably require to
confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
5. We
are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2),
(3) or (7) of Regulation D under the Securities Act) and have such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of our investment in the Notes, and we and any
accounts for which we are acting are each able to bear the economic risk of our
or their investment, as the case may be.
6. We
are acquiring the Notes purchased by us for our account or for one or more
accounts (each of which is an institutional “accredited investor”) as to each of
which we exercise sole investment discretion.
You, as
Trustee, the Issuer, counsel for the Issuer and others are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceeding or
official inquiry with respect to the matters covered hereby.
Very
truly yours,
|
|
[Name
of Transferee]
|
|
By:
|
|
|
Name:
|
|
Title:
|
EXHIBIT
F
FORM
OF CERTIFICATE TO BE DELIVERED
IN
CONNECTION WITH TRANSFERS
PURSUANT
TO REGULATION S
[ ],
[ ]
U.S. Bank
National Association
60
Livingston Avenue
1st Floor
– Bond Drop Window
St. Paul,
MN 55107
Attn.:
Corporate Trust Department – U.S. Concrete
|
Re:
|
U.S.
Concrete, Inc. (the “Issuer”)
|
|
9.5% Convertible
Secured Notes due 2015 (the
“Notes”)
|
Ladies
and Gentlemen:
In
connection with our proposed sale of
$[ ] aggregate principal amount
of the Notes, we confirm that such sale has been effected pursuant to and in
accordance with Regulation S under the U.S. Securities Act of 1933, as amended
(the “Securities Act”), and, accordingly, we represent that:
(1) the
offer of the Notes was not made to a person in the United States;
(2) either
(a) at the time the buy offer was originated, the transferee was outside
the United States or we and any person acting on our behalf reasonably believed
that the transferee was outside the United States, or (b) the transaction
was executed in, on or through the facilities of a designated offshore
securities market and neither we nor any person acting on our behalf knows that
the transaction has been prearranged with a buyer in the United
States;
(3) no
directed selling efforts have been made in the United States in contravention of
the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as
applicable;
(4) the
transaction is not part of a plan or scheme to evade the registration
requirements of the Securities Act; and
(5) we
have advised the transferee of the transfer restrictions applicable to the
Notes.
You, as
Trustee, the Issuer, counsel for the Issuer and others are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby. Terms
used in this certificate have the meanings set forth in Regulation
S.
Very
truly yours,
|
|
[Name
of Transferor]
|
|
|
By:
|
|
|
Authorized
Signatory
|
EXHIBIT
G
COMMON
STOCK LEGEND
THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR
ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE OFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION UNDER THE SECURITIES ACT. BY ITS ACQUISITION HEREOF, OR OF A
BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS
THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL
BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT
EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT,
AND
(2) AGREES
FOR THE BENEFIT OF U.S. CONCRETE, INC. (THE “COMPANY”) THAT IT WILL NOT OFFER,
SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST
HEREIN PRIOR TO DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST
ORIGINAL ISSUE DATE HEREOF OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE
144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER, AND
(Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW,
EXCEPT:
(A) TO
THE COMPANY OR ANY SUBSIDIARY THEREOF, OR
(B) PURSUANT
TO A REGISTRATION STATEMENT WHICH HAS BEEN BECOME EFFECTIVE UNDER THE SECURITIES
ACT, OR
(C) FOR
SO LONG AS THE SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER AS DEFINED IN
RULE 144A THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, ALL IN COMPLIANCE WITH RULE 144A, OR
(D) PURSUANT
TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, INCLUDING RULE 144, IF AVAILABLE.
PRIOR TO
ANY OFFER, SALE, PLEDGE OR TRANSFER PURSUANT TO CLAUSE (2)(D) ABOVE THE COMPANY
AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN
ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH
THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS
MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT.
EXHIBIT
H
FORM
OF CONVERSION EVENT NOTICE
_______________, ____
[Name of
the Holder]
[Address
of the Holder]
|
Re:
|
U.S.
Concrete, Inc. (the “Issuer”)
|
|
9.5% Convertible
Secured Notes due 2015 (the
“Notes”)
|
Dear
Sirs;
This is a
Conversion Event Notice as defined in Section 5.08 of the Indenture dated
as of August 31, 2010 (the “
Indenture
”) among the Issuer,
the guarantors from time to time party thereto and U.S. Bank National
Association, as Trustee. Terms used but not defined herein shall have
the meanings ascribed to them in the Indenture.
We hereby
notify you that
1. On
[ ]
6
,
[ ]
7
occurred, which constitutes the Conversion Event pursuant to the
Indenture;
2. The
Conversion Rate applicable to the Notes is
[ ]
8
;
3. The
right to convert Notes will terminate on
[ ],
the date that is 46 days following the date of this Conversion Event Notice (the
“Conversion Termination
Date”
);
4. Holders
may convert Notes up to the Conversion Cap at any time prior to the Close of
Business on
[ ],
the Business Day immediately preceding the Conversion Termination
Date;
5. Any
Holders who cannot convert the full amount of their Notes prior to the
Conversion Termination Date due to the Conversion Cap may send an Election
Notice to us in the form attached hereto (Exhibit J to the Indenture) and
may elect to convert Notes on any date or dates prior to the date that is 180
days following the Conversion Termination Date;
6
|
Insert
the date of the Conversion Event.
|
7
|
Describe
Conversion Event.
|
8
|
Insert
Conversion Rate.
|
6. Except
as otherwise provided in an Election Notice, any Notes not otherwise converted
prior to the Conversion Termination Date may be redeemed at our option in
accordance with Article Four of the Indenture;
7. Interest
shall cease to accrue on all Notes as of (but not including) the Conversion
Termination Date;
8. The
following covenants
[ ]
contained in the Indenture shall cease to have any further force or effect as of
the Conversion Termination Date and the following provisions of the Indenture
shall no longer apply
[ ]
and the Collateral securing the Notes and the Note Guarantees will be released;
and
9. The
Cash Conversion Amount payable on all Notes as a result of the Conversion Event
is $[ ] and will be
paid on
[ ].
U.S.
CONCRETE, INC.
|
|
By:
|
|
|
Name:
|
|
Title:
|
EXHIBIT
I
FORM
OF FUNDAMENTAL CHANGE OF CONTROL PURCHASE NOTICE
_______________, ____
U.S. Bank
National Association
60
Livingston Avenue
1st Floor
– Bond Drop Window
St. Paul,
MN 55107
Attn.:
Corporate Trust Department – U.S. Concrete
|
Re:
|
U.S.
Concrete, Inc. (the “Issuer”)
|
|
9.5% Convertible
Secured Notes due 2015 (the
“Notes”)
|
Dear
Sirs:
This is a
Fundamental Change of Control Purchase Notice as defined in Section 3.01(c)
of the Indenture dated as of August 31, 2010 (the “
Indenture
”) among the Issuer,
the guarantors from time to time party thereto and U.S. Bank National
Association, as Trustee. Terms used but not defined herein shall have
the meanings ascribed to them in the Indenture.
Certificate
No(s). of Notes:
(if
Physical Notes)
I intend
to deliver the following aggregate principal amount of Notes for purchase by the
Issuer pursuant to Section 3.01 of the Indenture (in minimum denomination
of $1,000 and integral multiples thereof):
$
I hereby
certify that I am [ ] / am not
[ ] a Purchaser Party (as defined in the
Indenture).
I hereby
agree that the Notes will be purchased as of the Fundamental Change of Control
Purchase Date pursuant to the terms and conditions thereof and of the
Indenture.
Signed:
________________
EXHIBIT
J
FORM OF ELECTION
NOTICE
U.S.
Concrete, Inc.
[ ]
[ ]
T: [ ]
F: [ ]
Attention:
[ ]
|
Re:
|
9.5% Convertible
Secured Notes due 2015 (the
“Notes”)
|
Dear
Sirs:
This is a
Election Notice as defined in Section 5.08(c) of the Indenture dated as of
August 31, 2010 (the “
Indenture
”) among U.S.
Concrete, Inc. (the “Issuer”), the guarantors from time to time party thereto
and U.S. Bank National Association, as Trustee. Terms used but not
defined herein shall have the meanings ascribed to them in the
Indenture.
Certificate
No(s). of Notes:
(if
certificated)
I intend
to deliver the following aggregate principal amount of Notes for conversion by
the Issuer pursuant to Section 5.08 of the Indenture (in minimum
denomination of $1,000 and integral multiples thereof):
$
and
request such Notes to be converted into the shares of Common Stock on the Issuer
on [ ].
As of the
date hereof I am the beneficial owner of
[ ]
of shares of Common Stock.
Signed:
________________
Exhibit
4.3
REGISTRATION
RIGHTS AGREEMENT
by and
among
U.S.
CONCRETE, INC.
the
GUARANTORS named herein
and the
HOLDERS party hereto
TABLE OF
CONTENTS
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Page
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|
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1.(a)
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Definitions
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1
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(b)
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Interpretation
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6
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2.
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General;
Securities Subject to this Agreement
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7
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(a)
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Grant
of Rights
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7
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(b)
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Transfer
of Registration Rights
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7
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3.
|
Shelf
Registrations
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7
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(a)
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Filings
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7
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|
(b)
|
Additional
Electing Holders
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8
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(c)
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Suspension
Periods
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8
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(d)
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Other
Registration Rights
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9
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(e)
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Additional
Interest and Liquidated Damages
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9
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|
|
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|
4.
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Piggyback
Takedowns
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10
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(a)
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Right
to Piggyback
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10
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(b)
|
Priority
on Primary Piggyback Takedowns
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10
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|
(c)
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Selection
of Underwriters
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10
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|
|
|
|
5.
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Holdback
Agreements
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10
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|
|
|
|
6.
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Registration
Procedures
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11
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(a)
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Obligations
of the Company
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11
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(b)
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Additional
Obligations of the Company
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12
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(c)
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Seller
Requirements
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15
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|
|
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7.
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Registration
Expenses
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16
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|
|
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8.
|
Indemnification;
Contribution
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16
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|
(a)
|
Indemnification
by the Company
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16
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|
(b)
|
Indemnification
by Holders
|
17
|
|
(c)
|
Conduct
of Indemnification Proceedings
|
17
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(d)
|
Contribution
|
18
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|
|
|
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9.
|
Participation
in Underwritten Offering/Sale of Registrable Securities
|
19
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|
|
|
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10.
|
Rule
144 and Rule 144A; Other Exemptions
|
19
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|
|
|
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11.
|
Miscellaneous
|
20
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|
(a)
|
Stock
Splits, etc.
|
20
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|
(b)
|
No
Inconsistent Agreements
|
20
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|
(c)
|
Remedies
|
20
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|
(d)
|
Amendments
and Waivers
|
20
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|
(e)
|
Notices
|
20
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|
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|
Page
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|
|
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|
|
(f)
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Successors
and Assigns
|
21
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(g)
|
Headings
|
21
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|
(h)
|
GOVERNING
LAW
|
21
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(i)
|
Jurisdiction
|
21
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(j)
|
WAIVER
OF JURY TRIAL
|
22
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(k)
|
Severability
|
22
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(l)
|
Rules
of Construction
|
22
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|
(m)
|
Entire
Agreement
|
22
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|
(n)
|
Further
Assurances
|
22
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|
(o)
|
FWP
Consent
|
23
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|
(p)
|
Other
Agreements
|
23
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|
|
|
|
Annex
A
|
Notice
and Questionnaire
|
A-1
|
REGISTRATION
RIGHTS AGREEMENT
THIS
REGISTRATION RIGHTS AGREEMENT (this “
Agreement
”) is made
as of August 31, 2010, by and among U.S. Concrete, Inc., a Delaware
corporation (the “
Company
”), each of
the direct and indirect domestic subsidiaries of the Company identified on the
signature page hereto (collectively, the “
Guarantors
”) and any
parties purchasing Notes (as defined below) pursuant to the Note Purchase
Agreement (as defined below) (each a “
Holder
” and
collectively, the “
Holders
”).
WHEREAS,
in connection with the Plan of Reorganization of the Company under Chapter 11 of
the United States Bankruptcy Code, the Company has issued $55,000,000 aggregate
principal amount of its 9.5% Convertible Secured Notes due 2015 (the “
Notes
”) (i) to
certain parties subscribing to purchase Notes pursuant to the Note Purchase
Agreement dated as of August 26, 2010 (the “
Note Purchase
Agreement
”) and (ii) to certain parties pursuant to that certain
Support Agreement, dated as of August 13, 2010, by and among the Company
and the put option parties named therein. The Notes are issued
pursuant to the Indenture and are convertible into shares of Common Stock of the
Company in accordance with the terms set forth in the Indenture;
and
WHEREAS,
the parties hereto desire to provide for, among other things, the grant of
registration rights with respect to the Registrable Securities (as hereinafter
defined).
NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto agree as follows:
1. (a)
Definitions
. As
used in this Agreement, and unless the context requires a different meaning, the
following terms have the meanings indicated:
“
Additional Interest
”
has the meaning set forth in Section 3(e) hereof.
“
Affiliate
” means,
with respect to a Person, any other Person which directly or indirectly controls
or is controlled by, or is under direct or indirect common control with, the
referent Person.
“
Automatic Shelf Registration
Statement
” means an “automatic shelf registration statement” as defined
in Rule 405 promulgated under the Securities Act.
“
Beneficial Owner
” has
the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under
the Exchange Act, except that in calculating the beneficial ownership of any
particular “person” (as that term is used in Section 13(d)(3) of the
Exchange Act), such “person” will be deemed to have beneficial ownership of all
securities that such “person” has the right to acquire by conversion or exercise
of other securities, whether such right is currently exercisable or is
exercisable only after the passage of time. The terms “
beneficially owns
”
and
beneficially
owned
” have a corresponding meaning.
“
Board of Directors
”
means the board of directors of the Company (or any duly authorized committee
thereof).
“
Business Day
” means
any day other than a Saturday, Sunday or other day on which commercial banks in
the State of New York are authorized or required by law or executive order
to close.
“
Commission
” means the
United States Securities and Exchange Commission or any successor governmental
agency.
“
Common Stock
” means
(i) the common stock, par value $0.001 per share, of the Company,
(ii) any securities of the Company or any successor or assign of the
Company into which such stock is reclassified or reconstituted or into which
such stock is converted or otherwise exchanged in connection with a combination
of shares, recapitalization, merger, sale of assets, consolidation or other
reorganization or otherwise or (iii) any securities received as a dividend
or distribution in respect of the securities described in clauses (i) and (ii)
above.
“
Common Stock Form S-1
Shelf
” has the meaning set forth in Section 3(a)
hereof.
“
Common Stock Registration
Deadline
” has the meaning set forth in Section 3(a)
hereof.
“
Company
” has the
meaning set forth in the preamble to this Agreement.
“
control
” (including,
with correlative meanings, the terms “controlling,” “controlled by” and “under
common control with”) means, unless otherwise noted, the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
“
Conversion Price
” has
the meaning set forth in the Indenture.
“
Counsel to the
Holders
” means, with respect to any Piggyback Takedown, one (1) counsel
selected by the Holders of a Majority of the Registrable Securities requested to
be included in such Piggyback Takedown.
“
Disclosure Package
”
means, with respect to any offering of Registrable Securities, (i) the
preliminary Prospectus, (ii) each Free Writing Prospectus and
(iii) all other information, in each case, that is deemed, under
Rule 159 promulgated under the Securities Act, to have been conveyed to
purchasers of securities at the time of sale of such securities (including,
without limitation, a contract of sale).
“
Electing Holder
”
means a Holder of Registrable Securities who provided the Company with a Notice
and Questionnaire.
“
Exchange Act
” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission thereunder.
“
FINRA
” means the
Financial Industry Regulatory Authority.
“
Form S-1 Shelf Registration
Statements
” has the meaning set forth in Section 3(a)
hereof.
“
Form S-3 Shelf Registration
Statement
” has the meaning set forth in Section 3(a)
hereof.
“
Free Writing
Prospectus
” means any “free writing prospectus” as defined in
Rule 405 promulgated under the Securities Act.
“
Hedging Counterparty
”
means a broker-dealer registered under Section 15(b) of the Exchange Act or
an Affiliate thereof.
“
Hedging Transaction
”
means any transaction involving a security linked to the Registrable Securities
or any security that would be deemed to be a “derivative security” (as defined
in Rule 16a-1(c) promulgated under the Exchange Act) with respect to the
Registrable Securities or transaction (even if not a security) which would (were
it a security) be considered such a derivative security, or which transfers some
or all of the economic risk of ownership of the Registrable Securities,
including, without limitation, any forward contract, equity swap, put or call,
put or call equivalent position, collar, non-recourse loan, sale of an
exchangeable security or similar transaction. For the avoidance of
doubt, the following transactions shall be deemed to be Hedging
Transactions:
(i) transactions
by a Holder in which a Hedging Counterparty engages in short sales of
Registrable Securities pursuant to a Prospectus and may use Registrable
Securities to close out its short position;
(ii) transactions
pursuant to which a Holder sells short Registrable Securities pursuant to a
Prospectus and delivers Registrable Securities to close out its short
position;
(iii) transactions
by a Holder in which the Holder delivers, in a transaction exempt from
registration under the Securities Act, Registrable Securities to the Hedging
Counterparty who will then publicly resell or otherwise transfer such
Registrable Securities pursuant to a Prospectus or an exemption from
registration under the Securities Act; and
(iv) a
loan or pledge of Registrable Securities to a Hedging Counterparty who may then
become a selling stockholder and sell the loaned securities or, in an event of
default in the case of a pledge, sell the pledged securities, in each case, in a
public transaction pursuant to a Prospectus.
“
Holder
” and “
Holders
” shall mean
each Person for so long as it holds any Registrable Securities and each of its
successors and assigns and direct and indirect transferees who Beneficially Own
Registrable Securities.
“
Holder Free Writing
Prospectus
” means each Free Writing Prospectus prepared by or on behalf
of the relevant Holder or used or referred to by such Holder in connection with
the offering of Registrable Securities.
“
Indemnified Party
”
has the meaning set forth in Section 8(c) hereof.
“
Indemnifying Party
”
has the meaning set forth in Section 8(c) hereof.
“
Indenture
” means the
indenture, dated as of the date hereof, as amended or supplemented from time to
time, among the Company, the Guarantors and the Trustee.
“
Issue Date
” means the
date of the original issuance of the Notes.
“
Liability
” has the
meaning set forth in Section 8(a) hereof.
“
Lock-Up Period
” has
the meaning set forth in Section 5 hereof.
“
Notes
” has the
meaning set forth in the preamble to this Agreement.
“
Note Registration
Deadline
” has the meaning set forth in Section 3(a) hereof..
“
Notes Shelf Registration
Statement
” has the meaning set forth in Section 3(a)
hereof.
“
Notice and
Questionnaire
” means a written notice delivered to the Company in the
form attached as Annex A hereto.
“
Person
” means any
individual, firm, corporation, partnership, limited liability company, trust,
incorporated or unincorporated association, joint venture, joint stock company,
limited liability company, government (or an agency or political subdivision
thereof) or other entity of any kind, and shall include any successor (by merger
or otherwise) of such entity.
“
Piggyback Takedown
”
has the meaning set forth in Section 4(a) hereof.
“
Prospectus
” means the
prospectus related to any Registration Statement (whether preliminary or final
or any prospectus supplement, including, without limitation, a prospectus or
prospectus supplement that discloses information previously omitted from a
prospectus filed as part of an effective registration statement in reliance on
Rule 415, 430A, 430B or 430C under the Securities Act, as amended or
supplemented by any amendment or prospectus supplement), including
post-effective amendments, and all materials incorporated by reference in such
prospectus.
“
Registrable
Securities
” means any and all (i) Notes, (ii) shares of Common
Stock issuable or issued upon conversion of the Notes and (iii) shares of Common
Stock issued by the Company in order to pay interest and/or premiums and/or
other amounts to the Holders in accordance with the provisions of the
Indenture. Registrable Securities held by any Holder will cease to be
Registrable Securities, when (A) a Registration Statement covering such
Registrable Securities has been declared effective under the Securities Act by
the Commission and such Registrable Securities have been disposed of pursuant to
such effective Registration Statement, (B) such securities (other than
Registrable Securities that are Notes) have been disposed of pursuant to
Rule 144 promulgated under the Securities Act, (C) the entire amount
of the Registrable Securities held by any Holder may be sold by such Holder, in
the opinion of counsel reasonably satisfactory to the Company, without any
limitation as to volume, manner of sale or information requirements pursuant to
Rule 144 promulgated under the Securities Act or (D) they have ceased
to be outstanding.
“
Registration Default
”
has the meaning set forth in Section 3(e) hereof.
“
Registration
Expenses
” means all expenses (other than underwriting discounts and
commissions) arising from or incident to the registration of the sale of
Registrable Securities in compliance with this Agreement, including, without
limitation, (i) Commission, stock exchange, FINRA (including, without
limitation, fees, charges and disbursements of counsel in connection with FINRA
registration) and other registration and filing fees, (ii) all fees and
expenses incurred in connection with complying with any securities or blue sky
laws (including, without limitation, fees, charges and disbursements of counsel
in connection with blue sky qualifications of the Registrable Securities),
(iii) all printing, messenger and delivery expenses, (iv) the fees,
charges and disbursements of counsel to the Company and of its independent
public accountants and any other accounting and legal fees, charges and expenses
incurred by the Company (including, without limitation, any expenses arising
from any special audits or “comfort letters” required in connection with or
incident to any registration), (v) with respect to the shares of Common
Stock that are Registrable Securities, the fees and expenses incurred in
connection with the listing of the Registrable Securities on any national
securities exchange if the Common Stock of the Company is then so listed, and
(vi) reasonable fees, charges and disbursements of Counsel to the Holders
in connection with any Piggyback Takedown.
“
Registration
Statement
” means any registration statement filed pursuant to the
Securities Act.
“
Securities Act
” means
the Securities Act of 1933, as amended, and the rules and regulations of the
Commission promulgated thereunder.
“
Selling Expenses
”
means all expenses (including any underwriting fees, discounts, selling
commissions and stock transfer taxes) applicable to all Registrable Securities
registered by the Holders other than Registration Expenses.
“
Shelf
” has the
meaning set forth in Section 3(a) hereof.
“
Shelf Registration
”
means a registration of securities pursuant to a Registration Statement filed
with the Commission in accordance with and pursuant to Rule 415 promulgated
under the Securities Act (or any successor rule in effect).
“
Shelf Registration
Statements
” has the meaning set forth in Section 3(a)
hereof.
“
Suspension Period
”
has the meaning set forth in Section 3(c) hereof.
“
TIA
” means Trust
Indenture Act of 1939, as amended.
“
Trustee
” means U.S.
Bank National Association, until a successor replaces it in accordance with the
applicable provisions of the Indenture and thereafter means the successor
serving under the Indenture.
“
underwritten
offering
” of securities means a public offering of securities registered
under the Securities Act in which an underwriter, placement agent or other
intermediary participates in the distribution of such securities.
(b)
Interpretation
. Unless
otherwise noted:
(i) All
references to laws, rules, regulations and forms in this Agreement shall be
deemed to be references to such laws, rules, regulations and forms, as amended
from time to time or, to the extent replaced, the comparable successor laws,
rules, regulations and forms thereto in effect at the time.
(ii) All
references to agencies, self-regulatory organizations or governmental entities
in this Agreement shall be deemed to be references to the comparable successor
thereto.
(iii) All
references to agreements and other contractual instruments shall be deemed to be
references to such agreements or other instruments as they may be amended,
waived, supplemented or modified from time to time.
(iv) All
references to any amount of securities (including Registrable Securities) shall
be deemed to be a reference to such amount measured on an as-converted or
as-exercised basis.
2.
General; Securities Subject
to this Agreement
.
(a)
Grant of
Rights
. The
Company hereby grants registration rights with respect to the Registrable
Securities to the Holders upon the terms and conditions set forth in this
Agreement.
(b)
Transfer of Registration
Rights
. Any
Registrable Securities that are pledged or made the subject of a Hedging
Transaction, which Registrable Securities are not ultimately disposed of by the
Holder pursuant to such pledge or Hedging Transaction shall be deemed to remain
“Registrable Securities,” notwithstanding the release of such pledge or the
completion of such Hedging Transaction.
3.
Shelf
Registrations
.
(a)
Filings
. The
Company shall use its commercially reasonable efforts to file on or prior to
September 1, 2011 (the “
Note Registration
Deadline
”) a Registration Statement for a Shelf Registration on Form S-1
covering the resale by the Electing Holders of all the Notes that constitute
Registrable Securities as of such date, on a delayed or continuous basis (the
“
Notes Form S-1
Shelf
”). The Company shall use commercially reasonable efforts
to cause the registration statement to become effective as soon as practicable
following such filing. The Company shall use its commercially
reasonable efforts to file on or prior to February 28, 2011 (the “
Common Stock Registration
Deadline
”) a Registration Statement for a Shelf Registration on
Form S-1 covering the resale of all the shares of Common Stock that
constitute Registrable Securities by the Electing Holders, on a delayed or
continuous basis (the “
Common Stock Form S-1
Shelf
” and, together with the Notes Form S-1 Shelf, the “
Form S-1 Shelf Registration
Statements
”). The Company shall give written notice of the
filing of each of the Form S-1 Shelf Registration Statements at least fifteen
(15) days prior to filing each such Registration Statement to all Holders of
Registrable Securities and shall include in such Registration Statements all
Registrable Securities of Electing Holders. Notwithstanding the
foregoing, each Shelf Registration Statement shall be on Form S-3 (or similar
short form) if the Company shall then be eligible to use such form; provided
that the Company shall use its commercially reasonable efforts to convert each
of the Form S-1 Shelf Registration Statements on Form S-1 (or similar long
form) to a Registration Statement for a Shelf Registration on Form S-3 (the
“
Form S-3 Shelf
Registration Statement
,” and together with the Form S-1 Shelf
Registration Statements, the “
Shelf Registration
Statements
”) on Form S-3 as soon as practicable after the Company becomes
eligible to use Form S-3. The Company shall maintain each Shelf
Registration Statement in accordance with the terms hereof. For the
avoidance of doubt, if all of the Notes have ceased to constitute Registrable
Securities by the Note Registration Deadline, no Notes Form S-1 Shelf shall be
required to be filed.
(b)
Additional Electing
Holders
. From
and after the date a Shelf Registration Statement is initially effective, as
promptly as is practicable after receipt of a proper Notice and Questionnaire,
and in any event within (x) ten (10) Business Days after the date such Notice
and Questionnaire is received by the Company or (y) if a Notice and
Questionnaire is so received during a Suspension Period, five (5) Business Days
after the expiration of such Suspension Period, the Company shall, if required
by applicable law, file with the Commission a post-effective amendment to the
Shelf Registration Statement or prepare and, if required by applicable law, file
a supplement or supplements to the related Prospectus or a supplement or
amendment to any document incorporated therein by reference or file any other
required document so that the Electing Holder is named as a selling
securityholder in the Shelf Registration Statement and the related Prospectus in
such a manner as to permit such Holder to deliver such Prospectus to purchasers
of the Registrable Securities in accordance with applicable law and, if the
Company shall file a post-effective amendment to the Shelf Registration
Statement and such amendment is not automatically effective, use reasonable
efforts to cause such post-effective amendment to be declared or to otherwise
become effective under the Securities Act as promptly as is practicable;
provided that in no event shall the Company be required to make more than one
such filing during any twenty (20) Business Day period and, in addition, if the
Shelf Registration Statement is not an automatic shelf registration statement,
the Company shall not be required to make more than one such filing in any
calendar quarter; provided, further, that if such Notice and Questionnaire is
delivered during a Suspension Period, the Company shall so inform the Holder
delivering such Notice and Questionnaire and shall take the actions set forth
above upon expiration of the Suspension Period in accordance with
Section 3(c). Notwithstanding anything contained herein to the
contrary, the Company shall be under no obligation to name any Holder that is
not an Electing Holder as a selling securityholder in any Shelf Registration
Statement or related Prospectus; provided, however, that any Holder that becomes
an Electing Holder pursuant to the provisions of this Section 3(b) (whether
or not such Holder was an Electing Holder at the time the Shelf Registration
Statement was declared or otherwise became effective) shall be named as a
selling securityholder in the Shelf Registration Statement or related Prospectus
in accordance with the requirements of this Section (b).
(c)
Suspension
Periods
. Upon
written notice to the Holders of Registrable Securities, (x) the Company
shall be entitled to suspend, for a period of time, the use of any Registration
Statement or Prospectus if the Board of Directors determines in its good faith
judgment, after consultation with counsel, that the Registration Statement or
any Prospectus may contain an untrue statement of a material fact or omits any
fact necessary to make the statements in the Registration Statement or
Prospectus not misleading and (y) the Company shall not be required to
amend or supplement the Registration Statement, any related Prospectus or any
document incorporated therein by reference if the Board of Directors determines
in its good faith judgment, after consultation with counsel, that such amendment
would reasonably be expected to have a material adverse effect on any proposal
or plan of the Company to effect a merger, acquisition, disposition, financing,
reorganization, recapitalization or similar transaction, in each case that is
material to the Company (in case of each clause (x) and (y), a “
Suspension Period
”);
provided that (A) there are no more than two (2) Suspension Periods in
any 12-month period, (B) the duration of all Suspension Periods may not
exceed ninety (90) days in the aggregate in any 12-month period, and
(C) the Company shall use its good faith efforts to amend the Registration
Statement and/or Prospectus to correct such untrue statement or omission as soon
as reasonably practicable.
(d)
Other Registration
Rights
. The
Company represents and warrants that as of the date of this Agreement it is not
a party to, or otherwise subject to, any other agreement granting registration
rights to any other Person with respect to any securities of the
Company.
(e)
Additional Interest and
Liquidated Damages
. Subject
to the Company’s ability to declare Suspension Periods with respect to clause
(ii) below, if (i) the Common Stock Form S-1 Shelf is not filed by the
Common Stock Registration Deadline or the Notes Form S-1 Shelf is not filed by
the Note Registration Deadline, or (ii) any Registration Statement required
by this Agreement is filed and declared effective but shall thereafter cease to
be effective or fail to be usable for its intended purpose for more than 45 days
(each such event referred to in clauses (i) and (ii), a “
Registration
Default
”), the Company and the Guarantors hereby agree:
(A) The
Company shall pay additional interest (“
Additional Interest
”)
to each Holder of Notes that are Registrable Securities over and above the
interest set forth in the title of the Notes for the period of occurrence of
such Registration Default(s) until such time as no Registration Default is in
effect in an amount in cash equal to 0.25% per annum on the aggregate principal
amount of the Notes that are Registrable Securities, which rate shall increase
by 0.25% per annum for each subsequent 90-day period during which such
Registration Default continues, but in no event shall such increase exceed 1.00%
per annum; provided, that such Additional Interest shall only be payable with
respect to such Registrable Securities that are Notes which are Restricted
Securities (as defined in the Indenture). Following the cure of all
Registration Defaults relating to any particular Notes that are Registrable
Securities, the Additional Interest will cease to accrue from the date of such
cure and the interest rate on the Notes that are Registrable Securities will
revert to the original interest rate born by such Notes;
provided
,
however
, that, if
after the date such Additional Interest ceases to accrue, a new Registration
Default shall occur, Additional Interest may again commence accruing pursuant to
the foregoing provisions.
(B) Any
amounts of Additional Interest will be payable semi-annually in arrears on the
interest payment dates of the Notes set forth in the Indenture to Holders of
record of the applicable Notes on the applicable dates of record set forth in
the Indenture.
4.
Piggyback
Takedowns
.
(a)
Right to
Piggyback
. If
the Company proposes to file a Registration Statement with respect to an
underwritten offering of any of its securities for its own account (other than a
Registration Statement on Form S-4 or S-8) (a “
Piggyback Takedown
”)
the Company shall give prompt written notice to all Holders of Registrable
Securities of its intention to effect such Piggyback Takedown. In the
case of a Piggyback Takedown that is an offering under a Shelf Registration,
such notice shall be given not less than seven (7) Business Days prior to the
expected date of commencement of marketing efforts for such Piggyback
Takedown. In the case of a Piggyback Takedown that is an offering
under a Registration Statement that is not a Shelf Registration Statement, such
notice shall be given not less than seven (7) Business Days prior to the
expected date of filing of such Registration Statement. The Company
shall, subject to the provisions of Section 4(b) below, include in such
Piggyback Takedown, as applicable, all Registrable Securities that constitute
Common Stock with respect to which the Company has received written requests for
inclusion therein within five (5) Business Days after sending the Company’s
notice. Notwithstanding anything to the contrary contained herein,
the Company may determine not to proceed with any Piggyback Takedown upon
written notice to the Holders of Registrable Securities requesting to include
their Registrable Securities in such Piggyback Takedown.
(b)
Priority on Primary
Piggyback Takedowns
. If
a Piggyback Takedown is an underwritten primary registration on behalf of the
Company, and the managing underwriters for a Piggyback Takedown advise the
Company that in their reasonable opinion the number of securities requested to
be included in such Piggyback Takedown exceeds the number which can be sold in
an orderly manner in such offering within a price range acceptable to the
Company, the Company shall include in such Piggyback Takedown the number which
can be so sold in the following order of priority: (i) first, the
securities the Company proposes to sell, (ii) second, the Registrable
Securities requested to be included in such Piggyback Takedown (pro rata among
the Holders of such Registrable Securities on the basis of the number of
Registrable Securities requested to be included therein by each such Holder),
and (iii) third, other securities requested to be included in such
Piggyback Takedown.
(c)
Selection of
Underwriters
. If
any Piggyback Takedown is an underwritten offering, the Company will have the
sole right to select the investment banker(s) and manager(s) for the
offering.
5.
Holdback
Agreements
.
In
connection with any Piggyback Takedown, no Holder who “beneficially owns” (as
such term is defined under and determined pursuant to Rule 13d-3
promulgated under the Exchange Act) five percent (5%) or more of the outstanding
shares of Common Stock on as converted basis, shall effect any public sale or
distribution (including sales pursuant to Rule 144) of equity securities of
the Company, as applicable, or any securities convertible into or exchangeable
or exercisable for such securities, without prior written consent from the
Company, and subject to reasonable and customary exceptions to be agreed, during
the seven (7) days prior to and the 90-day period beginning on the date of
pricing of such Piggyback Takedown (the “
Lock-Up Period
”),
except as part of the Piggyback Takedown, and (i) unless the underwriters
managing the Piggyback Takedown otherwise agree and (ii) only if such
Lock-Up Period is applicable on substantially similar terms to the Company and
the executive officers and directors of the Company. If (x) the
Company issues an earnings release or other material news or a material event
relating to the Company and its subsidiaries occurs during the last 17 days of
the Holdback Period or (y) prior to the expiration of the Holdback Period, the
Company announces that it will release earnings results during the 16-day period
beginning upon the expiration of the Holdback Period, then to the extent
necessary for a managing or co-managing underwriter of an underwritten offering
required hereunder to comply with FINRA Rule 2711(f)(4), the Holdback Period
shall be extended until 18 days after the earnings release or the occurrence of
the material news or event, as the case may be (such period the “
Holdback
Extension
”). The Company may impose stop-transfer instructions
with respect to its securities that are subject to the forgoing restriction
until the end of such period, including any period of Holdback
Extension. Each Holder requesting to sell Registrable Securities in
connection with such Piggyback Takedown agrees to execute a lock-up agreement in
favor of the Company’s underwriters to such effect,
subject to reasonable and
customary exceptions, and other exceptions as may be agreed by the Holders and
the underwriters,
and, in any event, that the Company’s underwriters in
any relevant Piggyback Takedown shall be third party beneficiaries of this
Section 5. The provisions of this Section 5 will no longer apply to a
Holder once such Holder ceases to hold Registrable Securities.
6.
Registration
Procedures
.
(a)
Obligations of the
Company
. Whenever
registration of Registrable Securities has been requested pursuant to
Section 3 or Section 4
hereof, the Company
shall use its commercially reasonable efforts to effect the registration and
sale of such Registrable Securities in accordance with the intended method of
distribution thereof and the following provisions shall apply in connection
therewith:
(i) No
Holder shall be entitled to be named as a selling securityholder in Resale Shelf
Registration Statement as of the time of its initial effectiveness or at any
time thereafter, and no Holder shall be entitled to use the Prospectus for
resales of Registrable Securities at any time, unless such Holder has become and
“Electing Holder” by returning a duly completed and signed Notice and
Questionnaire to the Company by the deadline for response set forth therein and
has provided any other information reasonably requested in writing by the
Company.
(ii) Each
Electing Holder agrees to furnish promptly to the Company all information
required to be disclosed in order to make information previously furnished to
the Company by such holder not materially misleading and any other information
regarding such holder and the distribution of such holder’s Registrable
Securities as the Company may from time to time reasonably request in
writing.
(iii) Each
Electing Holder agrees to notify the Company as promptly as practicable of any
inaccuracy or change in information previously furnished by such Electing Holder
to the Company or of the occurrence of any event in either case as a result of
which any Prospectus relating to such registration contains or would contain an
untrue statement of a material fact regarding such Electing Holder or such
Electing Holder’s intended method of disposition of such Registrable Securities
or omits to state any material fact regarding such Electing Holder or such
Electing Holder’s intended method of disposition of such Registrable Securities
required to be stated therein or necessary to make the statements therein not
misleading, and promptly to furnish to the Company (i) any additional
information required to correct and update any previously furnished information
or required so that such Prospectus shall not contain, with respect to such
Electing Holder or the disposition of such Registrable Securities, an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(ii) any other information regarding such Electing Holder and the
distribution of such Registrable Securities as may be required to be disclosed
in the Shelf Registration Statement under applicable law or pursuant to
Commission comments.
(b)
Additional Obligations of
the Company
. The
Company will as expeditiously as possible:
(i) before
filing a Registration Statement or a Prospectus or any amendments or supplements
thereto in connection with any Piggyback Takedown, at the Company’s expense,
furnish to the Electing Holders upon written request from such Electing Holder
whose securities are covered by the Registration Statement, copies of all such
documents, other than documents that are incorporated by reference, proposed to
be filed and such other documents reasonably requested by such Holders, which
documents shall be subject to the review and comments of the Counsel to such
Holders;
(ii) notify
each Electing Holder of Registrable Securities whose securities are covered by
the Registration Statement of the filing and effectiveness of the Registration
Statement and prepare and file with the Commission such amendments and
supplements to such Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective for
a period ending on the date on which all Registrable Securities have been sold
under the Registration Statement applicable to such Shelf Registration or have
otherwise ceased to be Registrable Securities and notify each Electing Holder of
the filing and effectiveness of such amendments and supplements, and comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such Registration Statement;
(iii) furnish
to each Electing Holder selling Registrable Securities
without charge, such
number of copies of the applicable Registration Statement, each amendment and
supplement thereto, the Prospectus included in such Registration Statement
(including each preliminary Prospectus, final Prospectus, and any other
Prospectus (including any Prospectus filed under Rule 424, Rule 430A
or Rule 430B promulgated under the Securities Act and any “issuer free
writing prospectus” as such term is defined under Rule 433 promulgated
under the Securities Act)), all exhibits and other documents filed therewith and
such other documents as such seller
may reasonably request
including in order to facilitate the disposition of the Registrable Securities
owned by such Holder, and upon request, a copy of any and all transmittal
letters or other correspondence to or received from, the Commission or any other
governmental authority relating to such offer;
(iv) use
its commercially reasonable efforts (A) to register or qualify such
Registrable Securities under such other securities or “blue sky” laws of such
jurisdictions as any seller reasonably requests, (B) to keep such
registration or qualification in effect for so long as such Registration
Statement remains in effect, and (C) to do any and all other acts and
things which may be reasonably necessary or advisable to enable such Electing
Holder to consummate the disposition in such jurisdictions of the Registrable
Securities owned by such Electing Holder (provided that the Company shall not be
required to (A) qualify generally to do business in any jurisdiction where
it would not otherwise be required to qualify but for this subsection,
(B) subject itself to taxation in any such jurisdiction or (C) consent
to general service of process in any such jurisdiction);
(v) notify
each Electing Holder selling Registrable Securities at any time when a
Prospectus relating to the applicable Registration Statement is required to be
delivered under the Securities Act;
(A) upon
discovery that, or upon the happening of any event as a result of which, such
Registration Statement, or the Prospectus or Free Writing Prospectus relating to
such Registration Statement, or any document incorporated or deemed to be
incorporated therein by reference contains an untrue statement of a material
fact or omits any fact necessary to make the statements in the Registration
Statement or the Prospectus or Free Writing Prospectus relating thereto not
misleading or otherwise requires the making of any changes in such Registration
Statement, Prospectus, Free Writing Prospectus or document, and, at the request
of any such Electing Holder and subject to the Company’s ability to declare
Suspension Periods pursuant to Section 3(c), the Company shall promptly
prepare a supplement or amendment to such Prospectus or Free Writing Prospectus,
furnish a reasonable number of copies of such supplement or amendment to each
such seller of such Registrable Securities, and file such supplement or
amendment with the Commission so that, as thereafter delivered to the purchasers
of such Registrable Securities, such Prospectus or Free Writing Prospectus as so
amended or supplemented shall not contain an untrue statement of a material fact
or omit to state any fact necessary to make the statements therein not
misleading,
(B) as
promptly as practicable after the Company becomes aware of any request by the
Commission or any Federal or state governmental authority for amendments or
supplements to a Registration Statement or related Prospectus or Free Writing
Prospectus covering Registrable Securities or for additional information
relating thereto,
(C) as
promptly as practicable after the Company becomes aware of the issuance or
threatened issuance by the Commission of any stop order suspending or
threatening to suspend the effectiveness of a Registration Statement covering
the Registrable Securities or
(D) as
promptly as practicable after the receipt by the Company of any notification
with respect to the suspension of the qualification or exemption from
qualification of any Registrable Security for sale in any jurisdiction, or the
initiation or threatening of any proceeding for such purpose;
(vi) use
its commercially reasonable efforts to cause all such Registrable Securities, if
the Company’s Common Stock is then listed on a securities exchange or included
for quotation in a recognized trading market, to continue to be so listed or
included;
(vii) provide
and cause to be maintained a transfer agent and registrar for all such
Registrable Securities that are Common Stock from and after the effective date
of the applicable Registration Statement;
(viii) permit
any Electing Holder and Counsel to the Holders, in connection with a Piggyback
Takedown (including, but not limited to, reviewing, commenting on and attending
all meetings), review and comment upon any such Registration Statement and any
Prospectus supplements relating to a Piggyback Takedown, if
applicable;
(ix) in
the event of the issuance or threatened issuance of any stop order suspending
the effectiveness of a Registration Statement, or of any order suspending or
preventing the use of any related Prospectus or suspending the qualification of
any Registrable Securities included in such Registration Statement for sale in
any jurisdiction, the Company shall use its commercially reasonable efforts
promptly to (i) prevent the issuance of any such stop order, and in the
event of such issuance, to obtain the withdrawal of such order and
(ii) obtain the withdrawal of any order suspending or preventing the use of
any related Prospectus or Free Writing Prospectus or suspending qualification of
any Registrable Securities included in such Registration Statement for sale in
any jurisdiction at the earliest practicable date;
(x) provide
a CUSIP number for the Registrable Securities prior to the effective date of the
first Registration Statement that includes Registrable Securities;
(xi) if
requested by any participating Electing Holder promptly include in a Prospectus
supplement or amendment such information as the Holder may reasonably request,
including in order to permit the intended method of distribution of such
securities, and make all required filings of such Prospectus supplement or such
amendment as soon as reasonably practicable after the Company has received such
request;
(xii) in
the case of certificated Registrable Securities, cooperate with the
participating Holders of Registrable Securities and the managing underwriters to
facilitate the timely preparation and delivery of certificates (not bearing any
legends) representing Registrable Securities sold pursuant to a Shelf
Registration Statement;
(xiii) use
its commercially reasonable efforts to take all other actions necessary to
effect the registration and sale of the Registrable Securities contemplated
hereby;
(xiv) cause
the Registrable Securities covered by such Registration Statement to be
registered with or approved by such other governmental agencies or authorities,
as may be reasonably necessary by virtue of the business and operations of the
Company to enable the seller or sellers of Registrable Securities to consummate
the disposition of such Registrable Securities;
(xv) within
the deadlines specified by the Securities Act and the rules promulgated
thereunder, make all required filings of all Prospectuses and Free Writing
Prospectuses with the Commission;
(xvi) cause
the Indenture to be qualified under the TIA not later than the effective date of
the Notes Form S-1 Shelf; and, in connection therewith, cooperate with the
Trustee and the Holders of the Notes to effect such changes to the Indenture as
may be required for such Indenture to be so qualified in accordance with the
terms of the TIA; and to execute and use its commercially reasonable efforts to
cause the Trustee to execute, all documents that may be required to effect such
changes and all other forms and documents required to be filed with the
Commission to enable such Indenture to be so qualified in a timely manner;
and
(xvii) within
the deadlines specified by the Securities Act and the rules promulgated
thereunder, make all required filing fee payments in respect of any Registration
Statement or Prospectus used under this Agreement (and any offering covered
thereby).
(c)
Seller
Requirements
. In
connection with any offering under any Registration Statement under this
Agreement, each Electing Holder (i) shall promptly furnish to the Company
in writing such information with respect to such Holder and the intended method
of disposition of its Registrable Securities as the Company may reasonably
request or as may be required by law or regulations for use in connection with
any related Registration Statement or Prospectus (or amendment or supplement
thereto) and all information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not contain a
material misstatement of fact or necessary to cause such Registration Statement
or Prospectus (or amendment or supplement thereto) not to omit a material fact
with respect to such Holder necessary in order to make the statements therein
not misleading; (ii) shall comply with the Securities Act and the Exchange
Act and all applicable state securities laws and comply with all applicable
regulations in connection with the registration and the disposition of the
Registrable Securities; and (iii) shall not use any Free Writing Prospectus
without the prior written consent of the Company. If any Electing
Holder of Registrable Securities fails to provide such information required to
be included in such Registration Statement by applicable securities laws or
otherwise necessary or desirable in connection with the disposition of such
Registrable Securities in a timely manner after written request therefor, the
Company may exclude such Electing Holder’s Registrable Securities from a
registration under Sections 3 or 4 hereof.
Each
Person that has securities registered for resale on a Registration Statement
filed hereunder agrees that, upon receipt of any notice contemplated in
Section 3(c), such Person will forthwith discontinue the disposition of its
Registrable Securities pursuant to the applicable Registration
Statement.
7.
Registration
Expenses
. All
Registration Expenses shall be borne by the Company. All Selling
Expenses relating to Registrable Securities registered shall be borne by the
Holders of such Registrable Securities pro rata on the basis of the number of
Registrable Securities sold.
8.
Indemnification;
Contribution
.
(a)
Indemnification by the
Company
. The
Company agrees to indemnify and hold harmless each Holder, its partners,
directors, officers, Affiliates, stockholders, members, managers, employees,
agents, trustees and each Person who controls (within the meaning of
Section 15 of the Securities Act) such Holder from and against any and all
losses, claims, damages, liabilities and expenses, or any action or proceeding
in respect thereof (including any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim, damage,
liability or action, whether or not the indemnified party is a party to any
proceeding) (each, a “
Liability
” and
collectively, “
Liabilities
”),
arising out of or based upon (a) any untrue, or allegedly untrue, statement
of a material fact contained in any Disclosure Package, any Registration
Statement, any Prospectus, any Free Writing Prospectus or in any amendment or
supplement thereto; and (b) the omission or alleged omission to state in
any Disclosure Package, any Registration Statement, any Prospectus, any Free
Writing Prospectus or in any amendment or supplement thereto any material fact
required to be stated therein or necessary to make the statements therein not
misleading under the circumstances in which such statements were made; provided,
however, that the Company shall not be held liable in any such case to the
extent that any such Liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission contained
in such Disclosure Package, Registration Statement, Prospectus, Free Writing
Prospectus or such amendment or supplement thereto in reliance upon and in
conformity with information concerning such Holder furnished in writing to the
Company by or on behalf of such Holder expressly for inclusion therein,
including, without limitation, the information furnished to the Company pursuant
to Section 6(c) hereof. The Company shall also provide customary
indemnities to any underwriters of the Registrable Securities, their officers,
directors and employees and each Person who controls such underwriters (within
the meaning of Section 15 of the Securities Act) to the same extent as provided
above with respect to the indemnification of the Holders of Registrable
Securities.
(b)
Indemnification by
Holders
. In
connection with any offering in which a Holder is participating pursuant to
Section 3 or 4 hereof, such Holder agrees severally (and not jointly) to
indemnify and hold harmless the Company, its partners, directors, officers,
Affiliates, stockholders, members, managers, employees, agents, trustees, the
other Holders, any underwriter retained by the Company and each Person who
controls the Company, the other Holders or such underwriter (within the meaning
of Section 15 of the Securities Act) to the same extent as the foregoing
indemnity from the Company to the Holders (including indemnification of their
respective partners, directors, officers, Affiliates, stockholders, members,
employees, trustees and controlling Persons), but only to the extent that
Liabilities arise out of or are based upon a statement or alleged statement or
an omission or alleged omission that was made in reliance upon and in conformity
with information with respect to such Holder furnished in writing to the Company
by or on behalf of such Holder expressly for use in such Disclosure Package,
Registration Statement, Prospectus, Free Writing Prospectus or such amendment or
supplement thereto, including, without limitation, the information furnished to
the Company pursuant to Section 6(c) hereof;
provided
,
however
, that the
total amount to be indemnified by such Holder pursuant to this Section 8(b)
shall be limited to the net proceeds (after deducting underwriters’ discounts
and commissions) received by such Holder in the offering to which such
Disclosure Package, Registration Statement, Prospectus, Free Writing Prospectus
or such amendment or supplement thereto relates.
(c)
Conduct of Indemnification
Proceedings
. Any
Person entitled to indemnification or contribution hereunder (the “
Indemnified Party
”)
agrees to give prompt written notice to the indemnifying party (the “
Indemnifying Party
”)
after the receipt by the Indemnified Party of any written notice of the
commencement of any action, suit, proceeding or investigation or threat thereof
made in writing for which the Indemnified Party intends to claim indemnification
or contribution pursuant to this Agreement;
provided
,
however
, that the
failure to so notify the Indemnifying Party shall not relieve the Indemnifying
Party of any Liability that it may have to the Indemnified Party hereunder
(except to the extent that the Indemnifying Party is materially prejudiced or
otherwise forfeits substantive rights or defenses by reason of such
failure). If notice of commencement of any such action is
given to the Indemnifying Party as above provided, the Indemnifying Party
shall be entitled to participate in and, to the extent it may wish, jointly with
any other Indemnifying Party similarly notified, to assume the defense of such
action at its own expense, with counsel chosen by it and reasonably
satisfactory to such Indemnified Party. Each Indemnified Party shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the reasonable and documented out-of-pocket fees and
expenses of such counsel shall be paid by the Indemnified Party unless
(i) the Indemnifying Party agrees to pay the same, (ii) the
Indemnifying Party fails to assume the defense of such action with counsel
reasonably satisfactory to the Indemnified Party or (iii) the named parties
to any such action (including any impleaded parties) include both the
Indemnifying Party and the Indemnified Party and such parties have been advised
by such counsel that either (x) representation of such Indemnified Party
and the Indemnifying Party by the same counsel would be inappropriate under
applicable standards of professional conduct or (y) there may be one or
more legal defenses available to the Indemnified Party which are different from
or additional to those available to the Indemnifying Party. In any of
such cases, the Indemnifying Party shall not have the right to assume the
defense of such action on behalf of such Indemnified Party, it being understood,
however, that the Indemnifying Party shall not be liable for the reasonable and
documented out-of-pocket fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for all Indemnified Parties and all
such reasonable and documented out-of-pocket fees and expenses shall be
reimbursed as incurred. No Indemnifying Party shall be liable for any
settlement entered into without its written consent, which consent shall not be
unreasonably withheld. No Indemnifying Party shall, without the
consent of such Indemnified Party, effect any settlement of any pending or
threatened proceeding in respect of which such Indemnified Party is a party and
indemnity has been sought hereunder by such Indemnified Party, unless such
settlement includes an unconditional release of such Indemnified Party from all
liability for claims that are the subject matter of such
proceeding. Notwithstanding the foregoing, if at any time an
Indemnified Party shall have requested the Indemnifying Party to reimburse the
Indemnified Party for fees and expenses of counsel as contemplated by this
Section 8, the Indemnifying Party agrees that it shall be liable for any
settlement of any proceeding effected without the Indemnifying Party’s written
consent if (i) such settlement is entered into more than thirty business
days after receipt by the Indemnifying Party of the aforesaid request and
(ii) the Indemnifying Party shall not have reimbursed the Indemnified Party
in accordance with such request or contested the reasonableness of such fees and
expenses prior to the date of such settlement.
(d)
Contribution
. If
the indemnification provided for in this Section 8 from the Indemnifying
Party is unavailable to an Indemnified Party hereunder or insufficient to hold
harmless an Indemnified Party in respect of any Liabilities referred to herein,
then each Indemnifying Party, in lieu of indemnifying such Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such Liabilities in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions which resulted in such Liabilities, as well as any other
relevant equitable considerations. The relative faults of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the
Liabilities referred to above shall be deemed to include, subject to the
limitations set forth in Sections 8(a), 8(b) and 8(c) hereof, any
reasonable and documented out-of-pocket legal or other fees, charges or expenses
reasonably incurred by such party in connection with any investigation or
proceeding;
provided
, that the
total amount to be contributed by any Holder shall be limited to the net
proceeds (after deducting the underwriters’ discounts and commissions) received
by such Holder in the offering.
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 8(d) were determined by pro rata allocation
or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. No Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(e) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
9.
Participation in
Underwritten Offering/Sale of Registrable Securities
.
(a) No
Person may participate in any underwritten offering hereunder unless such Person
(i) agrees to sell such Person’s securities on the basis provided in any
underwriting arrangements in customary form entered into pursuant to this
Agreement and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements; provided, that the
Holders included in any underwritten registration shall make only those
representations and warranties to the Company or the underwriters as are
customary for similar transactions and such other representations and warranties
that the underwriters may reasonably request that are agreed by any such
Holder.
(b) Each
Person that has securities registered on a Registration Statement filed
hereunder agrees that, upon receipt of any notice contemplated in Section
3(e)(ii), such Person will forthwith discontinue the disposition of its
Registrable Securities pursuant to the applicable Registration
Statement.
10.
Rule 144 and
Rule 144A; Other Exemptions
. With
a view to making available to the Holders of Registrable Securities the benefits
of Rule 144 and Rule 144A promulgated under the Securities Act and
other rules and regulations of the Commission that may at any time permit a
Holder of Registrable Securities to sell securities of the Company to the public
without registration, the Company covenants that it will (i) file in a
timely manner all reports and other documents required, if any, to be filed by
it under the Securities Act and the Exchange Act and the rules and regulations
adopted thereunder and (ii) make available information necessary to comply
with Rule 144 and Rule 144A, if available with respect to resales of
the Registrable Securities under the Securities Act, at all times, all to the
extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by (x) Rule 144 and Rule 144A
promulgated under the Securities Act (if available with respect to resales of
the Registrable Securities), as such rules may be amended from time to time or
(y) any other rules or regulations now existing or hereafter adopted by the
Commission. Upon the reasonable request of any Holder of Registrable
Securities, the Company will deliver to such Holder a written statement as to
whether it has complied with such information
11.
Miscellaneous
.
(a)
Stock Splits,
etc.
The
provisions of this Agreement shall be appropriately adjusted for any stock
dividends, splits, reverse splits, combinations recapitalizations and the like
occurring after the date hereof.
(b)
No Inconsistent
Agreements
. The
Company shall not enter into any agreement with respect to its securities that
is inconsistent with the rights granted to the Holders in this
Agreement.
(c)
Remedies
. The
Holders, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, shall be entitled to seek specific performance of
their rights under this Agreement. All rights and remedies existing
under this Agreement are cumulative to, and not exclusive of, any rights or
remedies available under this Agreement or otherwise.
(d)
Amendments and
Waivers
. This
Agreement may be amended with the consent of the Company and the Company may
take any action herein prohibited, or omit to perform any act herein required to
be performed by it, only if the Company shall have obtained the written consent
of the Holders of at least a majority of the Registrable Securities then
outstanding to such amendment, action or omission to act;
provided
that no such
amendment, action or omission that adversely affects, alters or changes the
interests of any Holder in a manner different than all other Holders shall be
effective against such Holder without the prior written consent of such
Holder.
No waiver
of any terms or conditions of this Agreement shall operate as a waiver of any
other breach of such terms and conditions or any other term or condition, nor
shall any failure to enforce any provision hereof operate as a waiver of such
provision or of any other provision hereof. No written waiver hereunder, unless
it by its own terms explicitly provides to the contrary, shall be construed to
effect a continuing waiver of the provisions being waived and no such waiver in
any instance shall constitute a waiver in any other instance or for any other
purpose or impair the right of the party against whom such waiver is claimed in
all other instances or for all other purposes to require full compliance with
such provision. The failure of any party to enforce any provision of
this Agreement shall not be construed as a waiver of such provision and shall
not affect the right of such party thereafter to enforce each provision of this
Agreement in accordance with its terms.
(e)
Notices
. All
notices, demands and other communications provided for or permitted hereunder
shall be made in writing and shall be made by registered or certified
first-class mail, return receipt requested, telecopy, electronic transmission,
courier service or personal delivery:
(i) If
to the Company:
2925
Briarpark, Suite 1050
Houston,
TX 77042
Telecopy:
(713) 499-6201
Attention:
General Counsel
|
(ii)
|
If
to any Holder, at its address as it appears in the books and records of
the Company.
|
All such
notices, demands and other communications shall be deemed to have been duly
given when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial courier service; five (5) Business Days
after being deposited in the mail, postage prepaid, if mailed; and when receipt
is acknowledged, if telecopied, or electronically transmitted. Any
party may by notice given in accordance with this Section 12(e) designate
another address or Person for receipt of notices hereunder.
(f)
Successors and
Assigns
. This
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties including each Holder of any Registrable
Securities, provided that nothing herein shall be deemed to permit any
assignment, transfer or other disposition of Registrable Securities in violation
of the terms of the Indenture. If any transferee of any Holder shall
acquire Registrable Securities, in any manner, whether by operation of law or
otherwise, such Registrable Securities shall be held subject to and benefit from
all of the terms of this Agreement, and by taking and holding such Registrable
Securities, such person shall be conclusively deemed to have agreed to be bound
by and to perform all of the terms and provisions of this Agreement and such
person shall be entitled to receive the benefits hereof.
(g)
Headings
. The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.
(h)
GOVERNING
LAW
.
THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
(i)
Jurisdiction
. Any
action or proceeding against any party hereto relating in any way to this
Agreement or the transactions contemplated hereby may be brought and enforced in
the federal or state courts in the State of New York, and each party, on
behalf of itself and its respective successors and assigns, irrevocably consents
to the jurisdiction of each such court in respect of any such action or
proceeding. Each party, on behalf of itself and its respective
successors and assigns, irrevocably consents to the service of process in any
such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, return receipt requested, to such person or
entity at the address for such person or entity set forth in Section 12(d)
hereof of this Agreement or such other address such person or entity shall
notify the other in writing. The foregoing shall not limit the right
of any person or entity to serve process in any other manner permitted by law or
to bring any action or proceeding, or to obtain execution of any judgment, in
any other jurisdiction.
Each
party, on behalf of itself and its respective successors and assigns, hereby
irrevocably waives any objection that it may now or hereafter have to the laying
of venue of any action or proceeding arising under or relating to this Agreement
or the transactions contemplated hereby in any court located in the State of
New York or located in any other jurisdiction chosen by the Company in
accordance with Section 12(i) hereof. Each party, on behalf of
itself and its respective successors and assigns, hereby irrevocably waives any
claim that a court located in the State of New York is not a convenient
forum for any such action or proceeding.
Each
party, on behalf of itself and its respective successors and assigns, hereby
irrevocably waives, to the fullest extent permitted by applicable United States
federal and state law, all immunity from jurisdiction, service of process,
attachment (both before and after judgment) and execution to which he might
otherwise be entitled in any action or proceeding relating in any way to this
Agreement or the transactions contemplated hereby in the courts of the State of
New York, of the United States or of any other country or jurisdiction, and
hereby waives any right he might otherwise have to raise or claim or cause to be
pleaded any such immunity at or in respect of any such action or
proceeding.
(j)
WAIVER OF JURY
TRIAL
. EACH
PARTY, ON BEHALF OF ITSELF AND ITS RESPECTIVE SUCCESSORS AND ASSIGNS, HEREBY
IRREVOCABLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
ACTION BASED UPON, OR ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
(k)
Severability
. If
any one or more of the provisions contained herein, or the application thereof
in any circumstance, is held invalid, illegal or unenforceable in any respect
for any reason, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions hereof shall not be in
any way impaired.
(l)
Rules of
Construction
. Unless
the context otherwise requires, references to sections or subsections refer to
sections or subsections of this Agreement. Terms defined in the
singular have a comparable meaning when used in the plural, and vice
versa.
(m)
Entire
Agreement
. This
Agreement is intended by the parties as a final expression of their agreement
and intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto with respect to the subject matter contained
herein. There are no restrictions, promises, representations,
warranties or undertakings with respect to the subject matter contained herein,
other than those set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings among the parties with
respect to such subject matter.
(n)
Further
Assurances
. Each
of the parties shall execute such documents and perform such further acts as may
be reasonably required or desirable to carry out or to perform the provisions of
this Agreement.
(o)
FWP
Consent
. No
Electing Holder shall use a Holder Free Writing Prospectus without the prior
written consent of the Company, which consent shall not be unreasonably
withheld.
(p)
Other
Agreements
. Nothing
contained in this Agreement shall be deemed to be a waiver of, or release from,
any obligations any party hereto may have under, or any restrictions on the
transfer of Registrable Securities or other securities of the Company imposed
by, any other agreement.
[Remainder
of page intentionally left blank]
IN
WITNESS WHEREOF, the undersigned have executed, or have caused to be executed,
this Registration Rights Agreement on the date first written above.
COMPANY:
|
|
U.S.
CONCRETE, INC.
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
Michael W. Harlan
|
|
Title:
Chief Executive Officer and President
|
|
|
GUARANTORS:
|
|
ALBERTA
INVESTMENTS, INC.
|
ALLIANCE
HAULERS, INC.
|
ATLAS
REDI-MIX, LLC
|
ATLAS-TUCK
CONCRETE, INC.
|
BEALL
CONCRETE ENTERPRISES, LLC
|
BEALL
INDUSTRIES, INC.
|
BEALL
INVESTMENT CORPORATION, INC.
|
BEALL
MANAGEMENT, INC.
|
HAMBURG
QUARRY LIMITED LIABILITY COMPANY
|
REDI-MIX
CONCRETE, L.P.
|
REDI-MIX
GP, LLC
|
REDI-MIX,
LLC
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
Michael W. Harlan
|
|
Title:
President
|
Signature
Page to the Registration Rights Agreement
KURTZ
GRAVEL COMPANY
|
SUPERIOR
HOLDINGS, INC.
|
TITAN
CONCRETE INDUSTRIES, INC.
|
USC
ATLANTIC, INC.
|
USC
MICHIGAN, INC.
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
Michael W. Harlan
|
|
Title:
Vice President and Secretary
|
|
|
EASTERN
CONCRETE MATERIALS, INC.
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
Michael W. Harlan
|
|
Title:
President and Secretary
|
Signature
Page to the Registration Rights Agreement
AMERICAN
CONCRETE PRODUCTS, INC.
|
BRECKENRIDGE
READY MIX, INC.
|
BUILDERS’
REDI-MIX, LLC
|
BWB,
INC. OF MICHIGAN
|
CENTRAL
CONCRETE SUPPLY CO., INC.
|
CENTRAL
PRECAST CONCRETE, INC.
|
INGRAM
CONCRETE, LLC
|
MG,
LLC
|
SAN
DIEGO PRECAST CONCRETE, INC.
|
SMITH
PRE-CAST, INC.
|
SIERRA
PRECAST, INC.
|
SUPERIOR
CONCRETE MATERIALS, INC.
|
U.S.
CONCRETE ON-SITE, INC.
|
USC
MANAGEMENT CO., LLC
|
USC
PAYROLL, INC.
|
USC
TECHNOLOGIES, INC.
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
Curt M. Lindeman
|
|
Title:
Vice President and Secretary
|
|
|
LOCAL
CONCRETE SUPPLY & EQUIPMENT, LLC
|
MASTER
MIX CONCRETE, LLC
|
MASTER
MIX, LLC
|
NYC
CONCRETE MATERIALS, LLC
|
PEBBLE
LANE ASSOCIATES, LLC
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
Curt M. Lindeman
|
|
Title:
President and Secretary
|
Signature
Page to the Registration Rights Agreement
CONCRETE
ACQUISITION III, LLC
|
CONCRETE
ACQUISITION IV, LLC
|
CONCRETE
ACQUISITION V, LLC
|
CONCRETE
ACQUISITION VI, LLC
|
CONCRETE
XXXIII ACQUISITION, INC.
|
CONCRETE
XXXIV ACQUISITION, INC.
|
CONCRETE
XXXV ACQUISITION, INC.
|
CONCRETE
XXXVI ACQUISITION, INC.
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
Curt M. Lindeman
|
|
Title:
President
|
Signature
Page to the Registration Rights Agreement
RIVERSIDE
MATERIALS, LLC
|
|
|
By:
|
/s/ Wallace H. Johnson
|
|
Name:
Wallace H. Johnson
|
|
Title:
President and Secretary
|
Signature
Page to the Registration Rights Agreement
Annex A
Notice
and Questionnaire
The
undersigned beneficial holder of 9.5% Convertible Secured Notes due 2015 (the
“Notes”) of U.S. Concrete, Inc. (the “Company”) and/or common stock, par value
$0.001 per share, of the Company (including common stock issuable upon the
conversion of the Notes or in order to pay interest and/or premium and/or other
amounts to the Holders in accordance with the provisions of the Indenture) which
are Registrable Securities understands that the Company intends to file or has
filed with the Securities and Exchange Commission (the “Commission”) a
registration statement (the “Resale Shelf Registration Statement”) for the
registration and resale under Rule 415 of the Securities Act of 1933, as
amended (the “Securities Act”), of the Registrable Securities, in accordance
with the terms of the registration rights agreement (the “Registration Rights
Agreement”), among the Company and the Holders named therein. A copy of the
Registration Rights Agreement is available from the Company upon request at the
address set forth below. All capitalized terms not otherwise defined herein
shall have the meaning ascribed thereto in the Registration Rights
Agreement.
Each
beneficial holder of Registrable Securities (each a “beneficial owner”) is
entitled to the benefits of the Registration Rights Agreement. In order to sell,
or otherwise dispose of, any Registrable Securities pursuant to the Resale Shelf
Registration Statement, a beneficial owner of Registrable Securities generally
will be required to be named as a selling securityholder in the related
prospectus, deliver a prospectus to purchasers of Registrable Securities and be
bound by those provisions of the Registration Rights Agreement applicable to
such beneficial owner (including certain indemnification provisions as described
below). Beneficial owners that do not complete this Notice and
Questionnaire and deliver it to the Company as provided below will not be named
as selling securityholders in the prospectus and, therefore, will not be
permitted to sell any Registrable Securities pursuant to the Resale Shelf
Registration Statement.
Certain
legal consequences arise from being named as a selling securityholder in the
Resale Shelf Registration Statement and the related prospectus. Accordingly,
holders and beneficial owners of Registrable Securities are advised to consult
their own securities law counsel regarding the consequences of being named or
not being named as a selling securityholder in the Resale Shelf Registration
Statement and the related prospectus.
NOTICE
The
undersigned beneficial owner (the “Selling Securityholder”) of Registrable
Securities hereby gives notice to the Company of its intention to sell or
otherwise dispose of Registrable Securities beneficially owned by it and listed
below in Item 3 (unless otherwise specified under such Item 3) pursuant to the
Resale Shelf Registration Statement. The undersigned, by signing and returning
this Notice and Questionnaire, understands that it will be bound by the terms
and conditions of this Notice and Questionnaire and the Registration Rights
Agreement.
Pursuant
to the Registration Rights Agreement, the undersigned has agreed to indemnify
and hold harmless the Company’s directors and officers and each person, if any,
who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), from and against certain losses arising in
connection with statements concerning the undersigned that are made in the
Resale Shelf Registration Statement or the related prospectus in reliance upon
the information provided in this Notice and Questionnaire.
If the
Selling Securityholder transfers all or any portion of the Registrable
Securities listed in Item 3 below after the date on which such information is
provided to the Company, the Selling Securityholder agrees to notify the
transferee(s) at the time of the transfer of its rights and obligations
under this Notice and Questionnaire and the Registration Rights
Agreement.
QUESTIONNAIRE
Please
respond to every item, even if your response is “none.” If you need more space
for any response, please attach additional sheets of paper. Please be sure to
indicate your name and the number of the item being responded to on each such
additional sheet of paper, and to sign each such additional sheet of paper
before attaching it to this Questionnaire. Please note that you may be asked to
answer additional questions depending on your responses to the following
questions.
If you
have any questions about the contents of this Questionnaire or as to who should
complete this Questionnaire, please contact the General Counsel of the Company
at telephone
number: [ ].
The
undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate and
complete:
1.
|
Your
Identity and Background as the Beneficial Owner of the Registrable
Securities.
|
(a) Your
full legal name:
|
(b)
|
Your
business address (including street address) (or residence if no business
address), telephone number and facsimile
number:
|
Address:
Telephone
No.:
Fax
No.:
|
(c)
|
Are
you a broker-dealer registered pursuant to Section 15 of the Exchange
Act?
|
|
(d)
|
If
your response to Item 1(c) above is no, are you an “affiliate” of a
broker-dealer registered pursuant to Section 15 of the Exchange
Act?
|
For the
purposes of this Item 1(d), an “affiliate” of a registered broker-dealer
includes any person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such broker-dealer, and does not include any individuals employed by such
broker-dealer or its affiliates.
|
(e)
|
Full
legal name of person through which you hold the Registrable Securities
(i.e., name of your broker or the DTC participant, if applicable, through
which your Registrable Securities are
held):
|
Name of
Broker:
DTC
No.:
Contact
person:
Telephone
No.:
2.
|
Your
Relationship with the Company.
|
|
(a)
|
Have
you or any of your affiliates, officers, directors or principal equity
holders (owners of 5% or more of the equity securities of the undersigned)
held any position or office or have you had any other material
relationship with the Company (or its predecessors or affiliates) within
the past three years?
|
|
(b)
|
If
your response to Item 2(a) above is yes, please state the nature and
duration of your relationship with the
Company:
|
3.
|
Your
Interest in the Registrable
Securities.
|
|
(a)
|
State
the type and amount of Registrable Securities beneficially owned by
you:
|
State the
CUSIP No(s). of such Registrable Securities beneficially owned by
you:
|
(b)
|
Other
than as set forth in your response to Item 3(a) above, do you
beneficially own any other securities of the
Company?
|
|
(c)
|
If
your answer to Item 3(b) above is yes, state the type, the aggregate
amount and CUSIP No. of such other securities of the Company
beneficially owned by you:
|
Type:
Aggregate
amount:
CUSIP
No.:
|
(d)
|
Did
you acquire the securities listed in Item 3(a) above in the ordinary
course of business?
|
|
(e)
|
At
the time of your purchase of the securities listed in Item
3(a) above, did you have any agreements or understandings, direct or
indirect, with any person to distribute the
securities?
|
|
(f)
|
If
your response to Item 3(e) above is yes, please describe such
agreements or understandings:
|
4.
|
Nature
of your Beneficial Ownership.
|
|
(a)
|
Check
if the beneficial owner set forth in your response to Item 1(a) is
any of the below:
|
|
(i)
|
A
reporting company under the Exchange Act.
¨
|
|
(ii)
|
A
majority-owned subsidiary of a reporting company under the Exchange Act.
¨
|
|
(iii)
|
A
registered investment fund under the 1940 Act.
¨
|
|
(b)
|
If
the beneficial owner of the Registrable Securities set forth in your
response to Item 1 (a) above is a limited partnership, state the
names of the general partner(s) of such limited
partnership:
|
|
(i)
|
With
respect to each general partner listed in Item 4(b) above who is not
a natural person and is not publicly-held, name each shareholder (or
holder of partnership interests, if applicable) of such general partner.
If any of these named shareholders are not natural persons or
publicly-held entities, please provide the same information. This process
should be repeated until you reach natural persons or a publicly-held
entity.
|
|
(c)
|
Name
your controlling shareholder(s) (the “Controlling Entity”). If the
Controlling Entity is not a natural person and is not a publicly-held
entity, name each shareholder of such Controlling Entity. If any of these
named shareholders are not natural persons or publicly-held entities,
please provide the same information. This process should be repeated until
you reach natural persons or a publicly-held
entity.
|
|
(i)
|
(A) Full
legal name of Controlling Entity(ies) or natural person(s) who
has/have sole or shared voting or dispositive power over the Registrable
Securities:
|
(B) Business
address (including street address) (or residence if no business address),
telephone number and facsimile number of such person(s):
Address:
Telephone
No.:
Fax
No.:
(C) Name
of shareholders:
|
(ii)
|
(A) Full
legal name of Controlling
Entity(ies):
|
(B) Business
address (including street address) (or residence if no business address),
telephone number and facsimile number of such person(s):
Address:
Telephone
No.:
Fax
No.:
|
(iii)
|
Name
of shareholders:
|
Except as
set forth below, the undersigned Selling Securityholder intends to distribute
the Registrable Securities listed above in Item (3) only as follows (if at
all): All or any portion of such Registrable Securities may be sold
from time to time directly by the undersigned Selling Securityholder or,
alternatively, through one or more underwriters, broker-dealers or
agents. Such Registrable Securities may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of sale,
at varying prices determined at the time of sale, or at negotiated
prices. Such sales may be effected in transactions (which may involve
crosses or block transactions) (i) on any national securities exchange or
quotation service on which the Registrable Securities may be listed or quoted at
the time of sale, (ii) in the over-the-counter market, (iii) in transactions
otherwise than on such exchanges or services or in the over-the-counter market,
or (iv) through the writing of options, whether such options are listed on an
options exchange or otherwise, (v) ordinary brokerage transactions and
transactions in which the broker-dealer solicits purchasers, (vi) block trades
in which the broker-dealer will attempt to sell the shares as agent but may
position and resell a portion of the block as principal to facilitate the
transaction, (vii) purchases by a broker-dealer as principal and resale by the
broker-dealer for its account, (viii) an exchange distribution in accordance
with the rules of the applicable exchange, (ix) privately negotiated
transactions, (x) short sales, (xi) sales pursuant to Rule 144 or Rule 144A,
(xii) broker-dealers may agree with the selling securityholder to sell a
specified number of shares at a stipulated price per share, (xiii) a combination
of any such methods of sale, and (xiv) any other method permitted pursuant to
applicable law. In connection with sales of the Registrable
Securities or otherwise, the Selling Securityholder may enter into hedging
transactions with broker-dealers, which may in turn engage in short sales of the
Registrable Securities in the course of hedging the positions they
assume. The Selling Securityholder may also sell Registrable
Securities short and deliver Registrable Securities to close out such short
positions, or loan or pledge Registrable Securities to broker-dealers that in
turn may sell such Registrable Securities.
State any
exceptions here:
Note:
In no event will such
method(s) of distribution take the form of an underwritten offering of the
Registrable Securities without the prior written agreement of the
Company.
The
undersigned acknowledges its obligation to comply with the provisions of the
Exchange Act and the rules thereunder relating to stock manipulation,
particularly Regulation M thereunder (or any successor rules or
regulations), in connection with any offering of Registrable Securities pursuant
to the Registration Rights Agreement. The undersigned agrees that neither it nor
any person acting on its behalf will engage in any transaction in violation of
such provisions.
The
undersigned beneficial owner and selling securityholder hereby acknowledges its
obligations under the Registration Rights Agreement to indemnify and hold
harmless certain persons as set forth therein. Pursuant to the Registration
Rights Agreement, the Company has agreed under certain circumstances to
indemnify the undersigned beneficial owner and selling securityholder against
certain liabilities.
In
accordance with the undersigned’s obligation under the Registration Rights
Agreement to provide such information as may be required by law for inclusion in
the Resale Shelf Registration Statement, the undersigned agrees to promptly
notify the Company of any inaccuracies or changes in the information provided
herein that may occur subsequent to the date hereof at any time while the Resale
Shelf Registration Statement remains effective.
All
notices to the beneficial owner hereunder and pursuant to the Registration
Rights Agreement shall be made in writing to the undersigned at the address set
forth in Item 1(b) of this Notice and Questionnaire.
By
signing below, the undersigned acknowledges that it is the beneficial owner of
the Registrable Securities set forth herein, represents that the information
provided herein is accurate, consents to the disclosure of the information
contained in this Notice and Questionnaire and the inclusion of such information
in the Resale Shelf Registration Statement and the related prospectus. The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of the Resale Shelf Registration
Statement and the related prospectus.
Once this
Notice and Questionnaire is executed by the undersigned beneficial owner and
received by the Company, the terms of this Notice and Questionnaire, and the
representations and warranties contained herein, shall be binding on, shall
inure to the benefit of and shall be enforceable by the respective successors,
heirs, personal representatives and assigns of the Company and the undersigned
beneficial owner. This Notice and Questionnaire shall be governed in all
respects by the laws of the State of New York, without giving effect to
rules governing the conflict of laws.
IN WITNESS WHEREOF
, the
undersigned, by authority duly given, has caused this Notice and Questionnaire
to be executed and delivered either in person or by its duly authorized
agent.
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NAME
OF BENEFICIAL OWNER:
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(Please
Print)
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Signature:
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Date:
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PLEASE
RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO U.S. CONCRETE,
INC. AS FOLLOWS:
U.S.
Concrete, Inc.
2925
Briarpark, Suite 1050
Houston,
TX 77042
Telecopy:
(713) 499-6201
Attention: General
Counsel
This
Notice and Questionnaire must be returned within ten (10) days after receipt of
the Company’s notice with respect to the filing of a Shelf Registration
Statement pursuant to Section 3 of the Registration Rights Agreement in order to
include Registrable Securities in such Shelf Registration
Statement.
Exhibit
4.4
PLEDGE
AND SECURITY AGREEMENT
THIS
PLEDGE AND SECURITY AGREEMENT (as it may be amended, restated, supplemented or
modified from time to time, the “
Agreement
”)
is entered into as of August 31, 2010 by and among U.S. CONCRETE, INC., a
Delaware corporation (the “
Issuer
”
and a “
Grantor
”),
the domestic Subsidiaries of the Issuer identified on the signature pages hereto
as Grantors (each a “
Grantor
”,
and collectively with the Issuer, the “
Grantors
”),
and U.S. BANK NATIONAL ASSOCIATION, a national banking association, in its
capacity as noteholder collateral agent (the “
Noteholder
Collateral Agent
”) for the holders of the notes issued pursuant to the
Indenture referred to below.
PRELIMINARY
STATEMENT
The
Grantors, the Trustee and the Noteholder Collateral Agent are entering into an
Indenture dated as of August 31, 2010 (as it may be amended, restated,
supplemented or modified from time to time, the “
Indenture
”)
pursuant to which the Issuer will issue 9.5% Convertible Secured Notes due 2015
(the “
Notes
”). Each
Grantor is entering into this Agreement in order to induce the purchase of the
Notes by the Holders and to secure the following (the “
Secured Obligations
”) (i) in
case of the Issuer, the Obligations under the Indenture and (ii) in the case of
the Grantors (other than the Issuer), the Obligations that the Grantors have
agreed to guarantee pursuant to Article Thirteen of the Indenture.
ACCORDINGLY,
the Grantors and the Noteholder Collateral Agent, on behalf of the Noteholder
Secured Parties, hereby agree as follows:
ARTICLE
I
DEFINITIONS
1.1
Terms Defined in
Indenture
. All
capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Indenture.
1.2
Terms Defined in
UCC
. Terms
defined in the UCC which are not otherwise defined in this Agreement are used
herein as defined in the UCC.
1.3
Definitions of Certain Terms
Used Herein
. As
used in this Agreement, in addition to the terms defined in the Preliminary
Statement, the following terms shall have the following meanings:
“
ABL
Obligations Payment Date
” shall have the meaning set forth in the
Intercreditor Agreement.
“
Accounts
”
shall have the meaning set forth in Article 9 of the UCC.
“
Account
Debtors
” means any Person obligated on an Account.
“
Administrative
Agent
” means JPMorgan Chase Bank, N.A., together with its successors and
assigns, in its capacity as administrative agent under the Credit Agreement,
dated as of the date hereof, between the Grantors, the Administrative Agent and
lenders party thereto (as it may be amended, restated, supplemented or modified
from time to time).
“
Article
”
means a numbered article of this Agreement, unless another document is
specifically referenced.
“
As-Extracted
Collateral
” shall have the meaning set forth in Article 9 of the
UCC.
“
Chattel
Paper
” shall have the meaning set forth in Article 9 of the
UCC.
“
Closing
Date
” means the date of the Indenture.
“
Collateral
”
shall have the meaning set forth in
Article
II
.
“
Collateral
Access Agreement
” means any landlord waiver or other agreement, in form
and substance reasonably satisfactory to the Noteholder Collateral Agent,
between the Noteholder Collateral Agent and any third party (including any
bailee, consignee, customs broker, or other similar Person) in possession of any
Collateral or any landlord of Issuer or any Restricted Subsidiary for any real
property where any Collateral is located, as such landlord waiver or other
agreement may be amended, restated, supplemented or otherwise modified from time
to time.
“
Collateral
Deposit Account
” shall have the meaning set forth in
Section
7.1(a)
.
“
Collateral
Report
” means any certificate (including the Perfection Certificate or
certificate required pursuant to Section 4.1(a)), report or other document
delivered by any Grantor to the Noteholder Collateral Agent or any Noteholder
Secured Party with respect to the Collateral pursuant to the
Indenture.
“
Collection
Account
” shall have the meaning set forth in
Section
7.1(b)
.
“
Commercial
Tort Claims
” means the commercial tort claims (as that term is defined in
Article 9 of the UCC), including, without limitation, those commercial tort
claims set forth on
Exhibit
J
.
“
Commodity
Account Control Agreement
” means an agreement, in form and substance
reasonably satisfactory to the Noteholder Collateral Agent, among the Issuer or
any Restricted Subsidiary, a commodity intermediary holding the Issuer’s or any
Restricted Subsidiary’s assets, including funds and commodity contracts, and the
Noteholder Collateral Agent with respect to collection and control of all
deposits, commodity contracts and other balances held in a commodity account
maintained by any the Issuer or any Restricted Subsidiary with such commodity
intermediary.
“
Commodity
Accounts
” shall have the meaning set forth in Article 9 of the
UCC.
“
Concentration
Account
” shall have the meaning set forth in the Credit
Agreement.
“
Control
”
shall have the meaning set forth in Article 8 or, if applicable, in Section
9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.
“
Control
Account
”
means a
Securities Account or Commodity Account that is the subject of an effective
Securities Account Control Agreement or Commodity Account Control Agreement and
that is maintained by the Issuer or any Restricted Subsidiary with a securities
or commodity intermediary. “Control Account” includes all Financial
Assets held in a Securities Account or a Commodity Account and all certificates
and instruments, if any, representing or evidencing the Financial Assets
contained therein.
“
Copyrights
”
means, with respect to any Person, all of such Person’s right, title, and
interest in and to the following: (a) all copyrights, rights and
interests in copyrights, works protectable by copyright, copyright
registrations, and copyright applications; (b) all renewals of any of the
foregoing; (c) the right to sue for past, present, and future infringements of
any of the foregoing; and (d) all rights corresponding to any of the foregoing
throughout the world.
“
Default
”
means any event or condition which constitutes an Event of Default or which upon
notice, lapse of grace period or both would, unless cured or waived, become an
Event of Default.
“
Deposit
Account Control Agreement
” means an agreement, in form and substance
reasonably satisfactory to the Noteholder Collateral Agent, among the Issuer or
any Restricted Subsidiary, a banking institution holding the Issuer’s or any
Restricted Subsidiary’s funds, and the Noteholder Collateral Agent with respect
to collection and control of all deposits and balances held in a deposit account
maintained by the Issuer or any Restricted Subsidiary with such banking
institution.
“
Deposit
Accounts
” shall have the meaning set forth in Article 9 of the
UCC.
“
Documents
”
shall have the meaning set forth in Article 9 of the UCC.
“
Equipment
”
shall have the meaning set forth in Article 9 of the UCC.
“
Event of
Default
” has the meaning assigned to such term in the
Indenture.
“
Excluded
Assets
” has the meaning assigned to such term in the
Indenture.
“
Excluded
Deposit Accounts
” means (i) the Permitted Utility Deposit Account, (ii)
payroll, withholding tax and other accounts for which the funds on deposit
therein pertain to Liens permitted under clause (4) of the definition of
“Permitted Liens” in the Indenture (provided that neither the Issuer nor any
Subsidiary may maintain funds in any such account in excess of amounts which are
actually accrued (or in the case of fiduciary accounts, otherwise required to be
maintained therein) to its employees or the relevant Governmental Authority or
other beneficiary of such account) and (iii) other deposit accounts (the “
Other Excluded Deposit
Accounts
”) so long as the following conditions are satisfied: (1) all
deposits into and balances maintained in the Other Excluded Deposit Accounts
shall be in the ordinary course of business and (2) to the extent the aggregate
balances in all Other Excluded Deposit Accounts at any time exceed $300,000 for
a period of longer than 3 Business Days the Issuer shall, or shall cause the
relevant Subsidiary to, either (A) cause such amounts in excess of $300,000 to,
within 3 Business Days, be transferred to a Deposit Account subject to a Deposit
Account Control Agreement or (B) cause one or more Other Excluded Deposit
Accounts to become subject to a Deposit Account Control Agreement so that, after
giving effect to the actions in clauses (A) and/or (B) the aggregate balance on
deposit in all Other Excluded Deposit Accounts shall not at any time exceed
$300,000 for a period longer than 3 Business Days.
“
Exhibit
”
refers to a specific exhibit to this Agreement, unless another document is
specifically referenced.
“
Financial
Asset
” has the meaning given to such term in the UCC.
“
Fixtures
”
shall have the meaning set forth in Article 9 of the UCC.
“
General
Intangibles
” shall have the meaning set forth in Article 9 of the
UCC.
“
Goods
”
shall have the meaning set forth in Article 9 of the UCC.
“
Governmental
Authority
” means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or function of or pertaining to government.
“
Instruments
”
shall have the meaning set forth in Article 9 of the UCC.
“
Intellectual
Property
” means, collectively, all rights, priorities and privileges of
any Grantor relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including Copyrights,
Licenses, Patents, Trademarks, trade secrets and Internet domain names, and all
rights to sue at law or in equity for any infringement or other impairment
thereof, including the right to receive all proceeds and damages
therefrom.
“
Intercompany
Note
” means any promissory note evidencing loans made by any Grantor to
any of its Subsidiaries or another Grantor.
“
Intercreditor
Agreement
” means that certain Intercreditor Agreement by and among the
Administrative Agent, the Noteholder Collateral Agent and the Grantors dated as
of August [31], 2010 (as amended, restated, supplemented or modified from time
to time).
“
Inventory
”
shall have the meaning set forth in Article 9 of the UCC.
“
Investment
Property
” shall have the meaning set forth in Article 9 of the UCC and
shall include all Equity Interests in Subsidiaries regardless of whether such
Equity Interests are classified as “Investment Property” in Article 9 of the
UCC.
“
Letter-of-Credit
Rights
” shall have the meaning set forth in Article 9 of the
UCC.
“
Licenses
”
means, with respect to any Person, all of such Person’s right, title, and
interest in and to (a) any and all licensing agreements or similar arrangements
in and to its Patents, Copyrights, or Trademarks, and (b) all rights to sue for
past, present, and future breaches thereof.
“
Lock
Boxes
” shall have the meaning set forth in
Section
7.1(a)
.
“
Lock Box
Agreements
” shall have the meaning set forth in
Section
7.1(a)
.
“
Patents
”
means, with respect to any Person, all of such Person’s right, title, and
interest in and to: (e) any and all patents and patent applications;
(f) all inventions and improvements described and claimed therein; (g) all
reissues, divisions, continuations, extensions, and continuations-in-part
thereof; (h) all rights to sue for past, present, and future infringements
thereof; and (i) all rights corresponding to any of the foregoing throughout the
world.
“
Permitted
Utility Deposit Account
” means any Deposit Accounts held by the Issuer or
any of its Subsidiaries that is funded in connection with a deposit provided to
any utility company as a result of the bankruptcy proceedings, provided that the
aggregate balance on deposit in all Permitted Utility Deposit Accounts shall not
at any time exceed $500,000.
“
Pledged
Collateral
” means all Instruments, Securities and other Investment
Property of the Grantors, whether or not physically delivered to the Noteholder
Collateral Agent pursuant to this Agreement.
“
Receivables
”
means the Accounts, Chattel Paper, Documents, Instruments and any other rights
or claims to receive money which are General Intangibles or which are otherwise
included as Collateral.
“
Required
Secured Parties
” means, the Noteholder Collateral Agent acting at the
direction of the Holders of not less than a majority in principal amount of the
outstanding Notes.
“
Rolling
Stock Collateral
” means all Trucks owned by the Grantors other than any
Trucks subject to a Lien permitted by clause (20) of the definition of
“Permitted Liens” of the Indenture or which do not otherwise constitute ABL
Priority Collateral.
“
Section
”
means a numbered section of this Agreement, unless another document is
specifically referenced.
“
Securities
Account Control Agreement
” means an agreement, in form and substance
reasonably satisfactory to the Noteholder Collateral Agent, among the Issuer or
any Restricted Subsidiary, a securities intermediary holding the Issuer’s or any
Restricted Subsidiary’s assets, including funds and securities, and the
Noteholder Collateral Agent with respect to collection and control of all
deposits, securities and other balances held in a securities account maintained
by the Issuer or any Restricted Subsidiary with such securities
intermediary.
“
Securities
Accounts
” shall have the meaning set forth in Article 8 of the
UCC.
“
Security
”
shall have the meaning set forth in Article 8 of the UCC.
"
Specified
Equity Interests
" means (i) certificate number 1 issued by Concrete
XXXIII Acquisition, Inc. for 1000 shares of common stock, (ii) certificate
number 1 issued by Concrete XXXIV Acquisition, Inc. for 1000 shares of common
stock, (iii) certificate number 1 issued by Concrete XXXV Acquisition, Inc. for
1000 shares of common stock, (iv) certificate number 1 issued by Concrete XXXVI
Acquisition, Inc. for 1000 shares of common stock (v) certificate number 4
issued by Titan Concrete Industries, Inc. for 1,000 shares of common stock and
(vi) certificate number 126 issued by Kurtz Gravel Company for 5,484 shares of
common stock.
“
Stock
Rights
” means all dividends, instruments or other distributions and any
other right or property which the Grantors shall receive or shall become
entitled to receive for any reason whatsoever with respect to, in substitution
for or in exchange for any Equity Interest constituting Collateral, any right to
receive an Equity Interest and any right to receive earnings, in which the
Grantors now have or hereafter acquire any right, issued by an issuer of such
Equity Interest.
“
Supporting
Obligations
” shall have the meaning set forth in Article 9 of the
UCC.
“
Trademarks
”
means, with respect to any Person, all of such Person’s right, title, and
interest in and to the following: (a) all trademarks (including
service marks), trade names, trade dress and trade styles and the registrations
and applications for registration thereof and the goodwill of the business
symbolized by the foregoing; (b) all renewals of the foregoing; (c) all rights
to sue for past, present, and future infringements of the foregoing, including
the right to settle suits involving claims and demands for royalties owing; and
(d) all rights corresponding to any of the foregoing throughout the
world.
“
Trucks
”
means the ready-mix concrete trucks and the mixing drums affixed thereto owned
any Grantor.
“
UCC
”
means the Uniform Commercial Code, as in effect from time to time, of the State
of New York or of any other state the laws of which are required as a result
thereof to be applied in connection with the attachment, perfection or priority
of, or remedies with respect to, Noteholder Collateral Agent’s or any Noteholder
Secured Party’s Lien on any Collateral.
The
foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms.
1.4
Terms
Generally
. The
definitions of terms herein shall apply equally to the singular and plural forms
of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter
forms. The words “include,” “includes” and “including” shall be
deemed to be followed by the phrase “without limitation.” The word
“will” shall be construed to have the same meaning and effect as the word
“shall.” Unless the context requires otherwise (a) any definition of
or reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, amended and restated, supplemented or otherwise modified,
renewed, extended, replaced or refinanced, (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s permitted
successors and assigns and, in the case of any Governmental Authority, any other
Governmental Authority that shall have succeeded to any or all of the functions
thereof, (c) the words “herein,” “hereof” and “hereunder,” and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
“asset” and “property” shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights, (f) all references to
“knowledge” of the Issuer or any Restricted Subsidiary means the actual
knowledge of a Responsible Officer, (g) references to any law shall include all
statutory and regulatory provisions consolidating, amending, replacing,
supplementing or interpreting such Law (including by succession of comparable
successor laws).
1.5
Times of
Day
.
Unless
otherwise specified, all references herein to times of day shall be references
to Central time (daylight or standard, as applicable).
1.6
Timing of Payment of
Performance
. When
the payment of any obligation or the performance of any covenant, duty or
obligation is stated to be due or performance required on a day which is not a
Business Day, the date of such payment or performance shall extend to the
immediately succeeding Business Day.
1.7
Certifications
. All
certifications to be made hereunder by an officer or representative of any
Grantor shall be made by such person in his or her capacity solely as an officer
or a representative of such Grantor, on such Grantor’s behalf and not in such
Person’s individual capacity.
ARTICLE
II
GRANT OF SECURITY
INTEREST
Each
Grantor hereby pledges, collaterally assigns and grants to the Noteholder
Collateral Agent, on behalf of and for the ratable benefit of the Noteholder
Secured Parties, a security interest in all of its right, title and interest in,
to and under the following personal property, whether now owned by or owing to,
or hereafter acquired by or arising in favor of such Grantor (including under
any trade name or derivations thereof), and whether owned or consigned by or to,
or leased from or to, such Grantor, and regardless of where located (all of
which will be collectively referred to as the “
Collateral
”):
(a) all
Accounts;
(b) all
Chattel Paper;
(c) all
Documents;
(d) all
Equipment (including all Trucks);
(e) all
Fixtures;
(f) all
General Intangibles;
(g) all
Goods;
(h) all
Instruments;
(i) all
Intellectual Property;
(j) all
Inventory (including As-Extracted Collateral);
(k) all
Investment Property (including all Capital Stock of Subsidiaries);
(l) all
cash or cash equivalents;
(m) all
letters of credit, Letter-of-Credit Rights and Supporting
Obligations;
(n)
all Deposit Accounts with any
bank or other financial institution;
(o) all
Commodity Accounts;
(p) all
Securities Accounts;
(q) all
Commercial Tort Claims;
(r) all
As-Extracted Collateral;
(s) and
all accessions to, substitutions for and replacements, proceeds (including Stock
Rights), insurance proceeds and products of the foregoing, together with all
books and records, customer lists, credit files, computer files, programs,
printouts and other computer materials and records related thereto and any
General Intangibles at any time evidencing or relating to any of the
foregoing;
to secure
the prompt and complete payment and performance of the Secured Obligations;
provided, however, that “
Collateral
” (and each
defined term used in the definition of Collateral) shall not include any
Excluded Assets; and
provided
,
further
, that if and when any
property shall cease to be an Excluded Assets, such property shall be deemed at
all times from and after such date to constitute Collateral.
ARTICLE
III
REPRESENTATIONS AND
WARRANTIES
Each
Grantor represents and warrants to the Noteholder Collateral Agent and the
Noteholder Secured Parties that:
3.1
Title, Perfection and
Priority
. Such
Grantor has good and valid rights in or the power to transfer the Collateral and
title to the Collateral with respect to which it has purported to grant a
security interest hereunder, free and clear of all Liens except for Liens
permitted under
Section 4.1(e)
, and
has full organizational power and authority to grant to the Noteholder
Collateral Agent the security interest in such Collateral pursuant
hereto. When financing statements have been filed in the appropriate
offices against such Grantor in the locations listed on
Exhibit H
and the
form security agreements attached as
Exhibit K
have been
timely filed with the United States Patent and Trademark Office and the United
States Copyright Office, as applicable, and the payment of all filing and
recordation fees associated therewith, the Noteholder Collateral Agent will,
except as set forth in and subject to the terms, conditions and provisions of
the Intercreditor Agreement, have a fully perfected first priority security
interest in that Collateral of the Grantor in which a security interest may be
perfected by filing, subject only to Liens permitted under
Section 4.1(e)
;
provided, however, that additional filings may be necessary to perfect the
Noteholder Collateral Agent’s security interest in any Intellectual Property
acquired after the date hereof. Notwithstanding the foregoing,
nothing in this Agreement shall require any Grantor to make any filings or take
any actions to record or perfect the Noteholder Collateral Agent’s security
interest in any Intellectual Property outside the United States.
3.2
Type and Jurisdiction of
Organization, Organizational and Identification Numbers
. The
type of entity of such Grantor, its state of organization, the organizational
number issued to it by its state of organization and its federal employer
identification number as of the Closing Date are set forth on
Exhibit
A
.
3.3
Principal
Location
. Such
Grantor’s mailing address and the location of its place of business (if it has
only one) or its chief executive office (if it has more than one place of
business), as of the Closing Date is disclosed in
Exhibit
A
.
3.4
Collateral
Locations
. All
of such Grantor’s locations where tangible Collateral is located as of the
Closing Date are listed on
Exhibit A
(other than
Inventory and Equipment in transit, Equipment out for repair or refurbishment,
Inventory and Equipment maintained at a customer location, and Inventory and
Equipment in the possession of employees or Subsidiaries in the ordinary course
of business). As of the Closing Date, all of said locations are owned
by such Grantor except for locations (a) which are leased by the Grantor as
lessee or sublessee and designated in
Annex A
of
Exhibit A
and (b) at
which Inventory is held in a public warehouse or is otherwise held by a bailee
or on consignment as designated in
Annex A
of
Exhibit
A
.
3.5
Deposit Accounts, Commodity
Accounts and Securities Accounts
. All
of such Grantor’s Deposit Accounts, Commodity Accounts and Securities Accounts
as of the Closing Date are listed on
Exhibit
B
.
3.6
Exact
Names
. Such
Grantor’s name in which it has executed this Agreement is the exact name as it
appears in such Grantor’s organizational documents, as amended, as filed with
such Grantor’s jurisdiction of organization. Except as set forth on
Exhibit
A
, as of the Closing Date, such Grantor has not, during the past five
years, been known by or used any other legal name, or currently is not known by
or does not use any other corporate or fictitious name.
3.7
Letter-of-Credit Rights and
Chattel Paper
.
Exhibit C
lists all
Letter-of-Credit Rights and Chattel Paper valued individually in excess of
$100,000 of such Grantor as of the Closing Date. All action by such
Grantor necessary to protect and perfect the Noteholder Collateral Agent’s Lien
on each item listed on
Exhibit C
(including,
subject to the Intercreditor Agreement, the delivery of all originals and the
placement of a legend on all Chattel Paper as required hereunder) has been duly
taken to the extent requested by the Noteholder Collateral
Agent. Upon taking of all such actions, the Noteholder Collateral
Agent will have a fully perfected second priority security interest in the
Collateral listed on
Exhibit C
, subject
only to the prior Lien of the Administrative Agent and to Liens permitted under
Section
4.1(e)
.
3.8
Accounts and Chattel
Paper
.
(a) The
names of the obligors, amounts owing, due dates and other information with
respect to its Accounts and Chattel Paper are and will be correctly stated in
all material respects in all records of such Grantor relating thereto and in all
invoices and Collateral Reports with respect thereto furnished to the Noteholder
Collateral Agent by such Grantor from time to time. As of the time
when each Account or each item of Chattel Paper arises, such Grantor shall be
deemed to have represented and warranted that such Account or Chattel Paper, as
the case may be, and all records relating thereto, are genuine and in all
material respects what they purport to be. For the avoidance of
doubt, subsequent Collateral Reports may qualify records, invoices and other
information previously furnished to the Noteholder Collateral
Agent.
(b) With
respect to its Accounts, except as specifically disclosed on the most recent
Collateral Report, (i) RESERVED; (ii) all Accounts represent bona fide sales of
Inventory or rendering of services to Account Debtors in the ordinary course of
such Grantor’s business and are not evidenced by a judgment, Instrument or
Chattel Paper; and (iii) to such Grantor’s knowledge, there are no setoffs,
claims or disputes existing or asserted against such Grantor with respect
thereto and such Grantor has not made any agreement with any Account Debtor for
any extension of time for the payment thereof, any compromise or settlement for
less than the full amount thereof, any release of any Account Debtor from
liability therefor, or any deduction therefrom except a discount or allowance
allowed by such Grantor in the ordinary course of its business for prompt
payment and disclosed to the Noteholder Collateral Agent.
(c) In
addition, with respect to all of its Accounts, (i) no payments have been or
shall be made thereon except payments immediately delivered to a Lock Box or a
Collateral Deposit Account as required pursuant to
Section
7.1
;
and (ii) to such Grantor’s knowledge, all Account Debtors have the capacity to
contract.
3.9
Inventory
. With
respect to any of its Inventory scheduled or listed on the most recent
Collateral Report, (a) such Inventory (other than Inventory (i) in transit, (ii)
maintained at a customer location and (iii) in the possession of employees or
Subsidiaries in the ordinary course of business) is located at one of such
Grantor’s locations set forth on
Exhibit
A
, (b) no Inventory (other than Inventory (i) in transit, (ii)
maintained at a customer location and (iii) in the possession of employees or
Subsidiaries in the ordinary course of business) is now, or shall at any time or
times hereafter be stored at any other location except as permitted by
Section
4.1(g)
,
(c) such Grantor has good and merchantable title to such Inventory and such
Inventory is not subject to any Lien or security interest or document whatsoever
except for the Lien granted to the Noteholder Collateral Agent, for the benefit
of the Noteholder Collateral Agent and the Noteholder Secured Parties, and
except for Liens permitted by
Section
4.1(e)
,
(d) such Inventory is not subject to any licensing, patent, royalty, trademark,
trade name or copyright agreements with any third parties which would require
any consent of any third party upon sale or disposition of that Inventory or the
payment of any monies to such third parties pursuant to such agreements upon
such sale or other disposition, (e) such Inventory has been produced in
accordance with the Federal Fair Labor Standards Act of 1938, as amended, and
all rules, regulations and orders thereunder and (f) the completion of
manufacture, sale or other disposition of such Inventory by the Noteholder
Collateral Agent following an Event of Default shall not require the consent of
any Person (other than consents applicable to Noteholder Collateral Agent
generally and not as a result of this Agreement, landlord consents to the extent
not otherwise obtained and any consents applicable under the Intercreditor
Agreement) and shall not constitute a breach or default under any contract or
agreement to which such Grantor is a party or to which such property is
subject.
3.10
Intellectual
Property
. As
of the date hereof, such Grantor does not own any patents, patent applications,
trademark applications or registrations or copyright registrations except as set
forth in
Exhibit
D
. This Agreement is effective to create a valid and
continuing Lien and, upon the timely filing of appropriate financing statements
in the offices listed on
Exhibit H
and this
Agreement (or other short form security agreements attached as
Exhibit K
) with the
United States Copyright Office and the United States Patent and Trademark
Office, and the payment of all filing and recordation fees associated therewith,
fully perfected and, subject only to the Liens permitted by
Section 4.1(e)
, first
priority security interests in favor of the Noteholder Collateral Agent on such
Grantor’s Patents, Trademarks and Copyrights; provided that additional filings
may be necessary to perfect the Noteholder Collateral Agent’s security interest
in any Intellectual Property acquired after the date hereof; except as set forth
in the terms, conditions and provisions of the Intercreditor Agreement, such
perfected security interests are enforceable (subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law) as such as against any and all
creditors of and purchasers from such Grantor; and (subject to the
qualifications set forth in
Section 3.1
and this
Section 3.10
)
all action necessary to protect and perfect the Noteholder Collateral Agent’s
Lien on such Grantor’s Patents, Trademarks or Copyrights shall have been duly
taken. Notwithstanding the foregoing, nothing in this Agreement shall
require any Grantor to make any filings or take any actions to record or perfect
the Noteholder Collateral Agent’s security interest in any Intellectual Property
outside the United States.
3.11
Filing
Requirements
. As
of the Closing Date, all Rolling Stock Collateral is described on
Part I
of
Exhibit
E
. As of the Closing Date, none of the Collateral owned by it
is of a type for which security interests or liens may be perfected by filing
under any federal statute except for Patents, Trademarks and Copyrights held by
such Grantor and described in
Exhibit
D
. The legal description, county and street address of each
property on which any Inventory constituting As-Extracted Collateral as of the
Closing Date are located is set forth in
Exhibit F
together
with the name and address of the record owner of each such
property.
3.12
No Financing Statements,
Security Agreements
. No
financing statement or security agreement describing all or any portion of the
Collateral which has not lapsed or been terminated naming such Grantor as debtor
has been filed or is of record in any jurisdiction except (a) for financing
statements or security agreements naming the Noteholder Collateral Agent on
behalf of the Noteholder Secured Parties as the secured party, (b) as to which a
duly authorized termination statement relating to such financing statement or
other instrument has been delivered to the Noteholder Collateral Agent on the
Closing Date and (c) as permitted by
Section
4.1(e)
.
3.13
Pledged
Collateral
.
(a)
Exhibit G
sets forth
a complete and accurate list of all Pledged Collateral which constitute Equity
Interests owned by such Grantor or which represents Indebtedness owed to such
Grantor. Such Grantor is the direct, sole beneficial owner and sole
holder of record of such Pledged Collateral as being owned by it, free and clear
of any Liens, except for Liens permitted by
Section
4.1(e)
. Such Grantor further represents and warrants that (i)
all Pledged Collateral owned by it constituting an Equity Interest has been (to
the extent such concepts are relevant with respect to such Pledged Collateral)
duly authorized, validly issued, are fully paid and non-assessable, (ii) with
respect to any certificates delivered to the Noteholder Collateral Agent
representing an Equity Interest, either such certificates are Securities as
defined in Article 8 of the UCC as a result of actions by the issuer or
otherwise, or, if such certificates are not Securities, such Grantor has so
informed the Noteholder Collateral Agent so that it may take steps to perfect
its security interest therein as a General Intangible, (iii) all such Pledged
Collateral held by a securities intermediary is covered by a control agreement
among such Grantor, the securities intermediary and the Noteholder Collateral
Agent pursuant to which the Noteholder Collateral Agent has Control (subject to
the terms, conditions and provisions of the Intercreditor Agreement) and (iv) to
such Grantor’s knowledge and except as otherwise disclosed to the Noteholder
Collateral Agent, all Pledged Collateral which represents Indebtedness owed to
such Grantor has been duly authorized, authenticated or issued and delivered by
the issuer of such Indebtedness, is the legal, valid and binding obligation of
such issuer and such issuer (subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law) is not in default thereunder; provided that,
with regard to clause (iii) above, the Issuer may maintain a Securities Account
with Merrill Lynch which is not a Control Account for the sole purpose of
depositing therein deferred compensation payments on behalf of its employees and
officers in accordance with the Issuer’s existing incentive plan for which
accounts are maintained at Merrill Lynch (or any of its Affiliates) (the “
Merrill
Lynch Account
”); provided further that the aggregate amount from time to
time on deposit therein shall not exceed and amount equal to (x) $500,000 minus
all distributions or withdrawals made from the Merrill Lynch Account on or after
the Closing Date plus (y) the amount, if any, earned on the amounts on deposit
in the Merrill Lynch Account.
(b) Except
as set forth on
Exhibit
G
as of the Effective Date, (i) none
of the Pledged Collateral owned by it has been issued or transferred in
violation in any material respect of the securities registration, securities
disclosure or similar laws of any jurisdiction to which such issuance or
transfer may be subject, (ii) there are existing no options, warrants, calls or
commitments of any character whatsoever relating to such Pledged Collateral and
(iii) no consent, approval, authorization, or other action by, and no giving of
notice, filing with, any governmental authority or any other Person is required
for the pledge by such Grantor of such Pledged Collateral pursuant to this
Agreement or for the execution, delivery and performance of this Agreement by
such Grantor, or for the exercise by the Noteholder Collateral Agent of the
voting or other rights provided for in this Agreement or for the remedies in
respect of the Pledged Collateral pursuant to this Agreement, except as may be
required in connection with such disposition by laws affecting the offering and
sale of securities generally, those that have been obtained or made and are in
full force and effect and except as set forth in the terms, conditions and
provisions of the Intercreditor Agreement.
(c) Except
as set forth in
Exhibit G
, as of the
Closing Date, such Grantor owns 100% of the issued and outstanding Equity
Interests which constitute Pledged Collateral owned by it and none of the
Pledged Collateral which represents Indebtedness owed to such Grantor (other
than any Intercompany Note) is subordinated in right of payment to other
Indebtedness or subject to the terms of an indenture.
ARTICLE
IV
COVENANTS
From the
date of this Agreement, and thereafter until this Agreement is terminated in
accordance with
Section 8.14
, each
Grantor agrees that:
4.1
General
.
(a)
Collateral Records;
Collateral Reports
. Such Grantor will maintain complete and
accurate books and records with respect to the Collateral owned by
it. Each year, at the time of delivery of the annual financial
statements with respect to the preceding fiscal year, the Issuer shall deliver
to the Trustee a certificate of a financial officer setting forth the
information required pursuant to the Perfection Certificate or confirming that
there has been no change in such information since the date of the prior
delivered Perfection Certificate.
(b)
Authorization
to File Financing Statements; Ratification
. Such Grantor
hereby authorizes the Noteholder Collateral Agent to file, and if requested will
promptly deliver to the Noteholder Collateral Agent, all financing statements
and other documents and take such other actions as may from time to time be
requested by the Noteholder Collateral Agent in order to maintain a perfected
(subject to the qualifications in
Section
3.1
) and, except as set forth in the terms, conditions and
provisions of the Intercreditor Agreement, first priority security interest in
and, if applicable, Control of, the Collateral owned by such Grantor, subject to
Liens permitted under
Section
4.1(e)
. Any financing statement filed by the
Noteholder Collateral Agent may be filed in any filing office in any UCC
jurisdiction and may (i) indicate such Grantor’s Collateral (A) as “all assets”
of the Grantor or words of similar effect, regardless of whether any particular
asset comprised in the Collateral falls within the scope of Article 9 of the UCC
or such jurisdiction, or (B) by any other description which reasonably describes
the Collateral, and (ii) contain any other information required by part 5 of
Article 9 of the UCC for the sufficiency or filing office acceptance of any
financing statement or amendment, including (A) whether such Grantor is an
organization, the type of organization and any organization identification
number issued to such Grantor, and (B) in the case of a financing statement
filed as a fixture filing or indicating such Grantor’s Collateral as
As-Extracted Collateral or timber to be cut, a sufficient description of real
property to which the Collateral relates. In respect of financing
statements indicating each Grantor’s Collateral as As-Extracted Collateral
located in the State of New Jersey, the Grantors hereby agree to deliver to the
Noteholder Collateral Agent within 15 days after the date hereof a legal opinion
in form substantially as that delivered to the Administrative Agent and which
opinion relates to the perfection of such financing statements. Such
Grantor also agrees to furnish any such information to the Noteholder Collateral
Agent promptly upon its reasonable request therefor. Such Grantor
also ratifies its authorization for the Noteholder Collateral Agent to have
filed in any UCC jurisdiction any initial financing statements or amendments
thereto if filed prior to the date hereof. Notwithstanding the
authorization provided to the Noteholder Collateral Agent in this Section
4.1(b), each Grantor shall be responsible for filing (and in furtherance of such
obligation, each Grantor is hereby authorized to file) any and all financing
statements or continuations thereof or amendments thereto and shall promptly
furnish copies of the filed statements to the Noteholder Collateral
Agent.
(c)
Further
Assurances
. Such Grantor will, promptly following the
Noteholder Collateral Agent’s reasonable request, furnish to the Noteholder
Collateral Agent, as often as the Noteholder Collateral Agent requests,
statements and schedules further identifying and describing the Collateral owned
by it and such other reports and information in connection with its Collateral
as the Noteholder Collateral Agent may reasonably request, all in such detail as
the Noteholder Collateral Agent may specify. Such Grantor also agrees
to take any and all actions necessary to defend title to the Collateral against
all persons and to defend the security interest of the Noteholder Collateral
Agent in its Collateral and the priority thereof against any Lien not expressly
permitted hereunder.
(d)
Disposition of
Collateral
. Such Grantor will not sell, lease or otherwise
dispose of the Collateral owned by it except for dispositions permitted pursuant
to Section 6.11 of the Indenture (or consented to in writing pursuant to Section
11.06 of the Indenture).
(e)
Liens
. Such
Grantor will not create, incur, or suffer to exist any Lien on the Collateral
owned by it except (i) the security interest created by this Agreement, and (ii)
other Liens permitted pursuant to Section 6.10 of the Indenture.
(f)
Other Financing
Statements
. Such Grantor will not authorize the filing of any
financing statement naming it as debtor covering all or any portion of the
Collateral owned by it, except as permitted by
Section
4.1(e)
. Such Grantor acknowledges that it is not authorized to
file any financing statement or amendment or termination statement with respect
to any financing statement without the prior written consent of the Noteholder
Collateral Agent, subject to such Grantor’s rights under Section 9-509(d)(2) of
the UCC.
(g)
Locations
. Such
Grantor will not maintain any Collateral (other than (i) Inventory and Equipment
in transit, (ii) Equipment out for repair or refurbishment, (iii) Inventory and
Equipment maintained at a customer location, and (iv) Inventory and Equipment in
the possession of employees or Subsidiaries in the ordinary course of business)
owned by it at any location other than those locations listed on
Exhibit
A
or otherwise disclosed to the
Noteholder Collateral Agent in accordance with
Section
4.15
.
(a)
Certain Agreements on
Receivables
. Such Grantor will not make or agree to make any
discount, credit, rebate or other reduction in the original amount owing on a
Receivable or accept in satisfaction of a Receivable less than the original
amount thereof, except that, prior to the occurrence and continuance of an Event
of Default, such Grantor may or agree to reduce the amount of Accounts arising
from the sale of Inventory in accordance with its present policies and in the
ordinary course of business.
(b)
Collection of
Receivables
. Except as otherwise provided in this Agreement,
such Grantor will do all things commercially reasonable to collect and enforce,
at such Grantor’s sole expense, all amounts due or hereafter due to such Grantor
under the Receivables owned by it.
(c)
Delivery of
Invoices
. Such Grantor will deliver to the Noteholder
Collateral Agent immediately upon its request after the occurrence and during
the continuance of an Event of Default duplicate invoices with respect to each
Account owned by it bearing such language of collateral assignment as the
Noteholder Collateral Agent shall specify.
(d)
[Reserved.]
(e)
Electronic Chattel
Paper
. Within three Business Days of obtaining such electronic
chattel paper, such Grantor shall take all steps necessary to grant the
Noteholder Collateral Agent Control of all electronic chattel paper valued
individually in excess of $100,000 in accordance with the UCC and all
“transferable records” as defined in each of the Uniform Electronic Transactions
Act and the Electronic Signatures in Global and National Commerce
Act.
4.3
Inventory and
Equipment
.
(a)
Maintenance of
Goods
. Such Grantor will do all things commercially reasonable
to maintain, preserve, protect and keep its Inventory and the Equipment
necessary in the conduct of its business in good repair and working and saleable
condition, except for damaged or defective goods arising in the ordinary course
of such Grantor’s business and except for ordinary wear and tear and casualty
and condemnation in respect of the Equipment, except where failure to do so
could not reasonably be expected to have a material adverse effect on the Issuer
and the Grantors, taken as a whole.
(b)
[Reserved.]
(c)
[Reserved.]
(d)
Equipment
Such
Grantor shall not permit any Equipment to become a fixture with respect to Real
Property or to become an accession with respect to other personal property with
respect to which real or personal property the Noteholder Collateral Agent does
not have a Lien.
(e)
Titled
Vehicles
. Within 60 days following the acquisition of any
Rolling Stock Collateral (or, if the deadline under the corresponding provision
of the ABL Collateral Documents is extended, such later deadline), such Grantor
will give the Noteholder Collateral Agent and the Administrative Agent (or any
of its agents) notice of its acquisition of any Rolling Stock Collateral covered
by a Certificate of Title and provide and/or file all documents or instruments
necessary to have the Lien of the Noteholder Collateral Agent noted on any such
Certificate of Title or with the appropriate state office.
4.4
Delivery of Instruments,
Securities, Chattel Paper and Documents
. Each
Grantor will (a) deliver to the Noteholder Collateral Agent (i) immediately upon
execution of this Agreement the originals of all Securities constituting
Collateral owned by it (other than the Specified Equity Interests), including
Certificated Securities representing Equity Interests in any Subsidiary of the
Issuer (other than the Specified Equity Interests) and (ii) within fifteen days
after the date hereof the Specified Equity Interests, or any replacements
thereof, together with a legal opinion from outside counsel to the Issuer, in
substantially the same form as delivered on the date hereof regarding the
perfection of the Noteholder Collateral Agent's security interest with respect
to the Specified Equity Interests, or any replacements thereof, (b) hold in
trust for the Noteholder Collateral Agent upon receipt and promptly thereafter
deliver to the Noteholder Collateral Agent any such Securities constituting
Collateral, (c) subject to the terms, conditions and provisions of the
Intercreditor Agreement, within three Business Days of the Noteholder Collateral
Agent’s request, deliver to the Noteholder Collateral Agent (and thereafter hold
in trust for the Noteholder Collateral Agent upon receipt and immediately
deliver to the Noteholder Collateral Agent) any document evidencing or
constituting Collateral and (d) upon the Noteholder Collateral Agent’s request,
deliver to the Noteholder Collateral Agent a duly executed amendment to this
Agreement, in substantially the form of
Exhibit I
hereto (the
“
Amendment
”),
pursuant to which such Grantor will pledge such additional
Collateral. Such Grantor hereby authorizes the Noteholder Collateral
Agent to attach each Amendment to this Agreement and agrees that all additional
Collateral owned by it set forth in such Amendments shall be considered to be
part of the Collateral.
4.5
Uncertificated Pledged
Collateral
. Subject
to the terms, conditions and provisions
of the
Intercreditor Agreement, such Grantor will permit the Noteholder Collateral
Agent from time to time to cause the appropriate issuers (and, if held with a
securities intermediary, such securities intermediary) of uncertificated
securities or other types of Pledged Collateral owned by it not represented by
certificates to mark their books and records with the numbers and face amounts
of all such uncertificated securities or other types of Pledged Collateral not
represented by certificates and all rollovers and replacements therefor to
reflect the Lien of the Noteholder Collateral Agent granted pursuant to this
Agreement. With respect to any Pledged Collateral owned by it, upon
the Noteholder Collateral Agent’s reasonable request, such Grantor will take any
actions necessary to cause (a) the issuers of uncertificated securities which
are Pledged Collateral and (b) any securities intermediary which is the holder
of any such Pledged Collateral (other than the Merrill Lynch Account), to cause
the Noteholder Collateral Agent to have and retain Control over such Pledged
Collateral (subject to the terms, conditions and provisions of the Intercreditor
Agreement). Without limiting the foregoing, such Grantor will, with
respect to any such Pledged Collateral held with a securities intermediary
(other than the Merrill Lynch Account), cause such securities intermediary to
enter into a Securities Control Agreement with the Noteholder Collateral Agent,
(subject to the terms, conditions and provisions of the Intercreditor
Agreement).
4.6
Pledged
Collateral
.
(a)
Changes in
Capital Structure of Issuers
. Except to the extent permitted
by the terms of the Indenture, such Grantor will not (i) permit or allow any
Subsidiary, the Equity Interests of which constitute Pledged Collateral owned by
it, to dissolve, merge, liquidate, retire any of its Equity Interests or other
Instruments or Securities evidencing ownership, reduce its capital, sell or
encumber all or substantially all of its assets (except for Liens permitted
pursuant to
Section
4.1(e)
and sales of assets permitted pursuant to
Section
4.1(d)
), or (ii) vote any such Pledged Collateral in favor of any
of the foregoing.
(b)
Registration
of Pledged Collateral
. Subject to the terms, conditions and
provisions of the Intercreditor Agreement, upon the occurrence and during the
continuance of an Event of Default, such Grantor will permit any
registerable Pledged Collateral owned by it to be registered in the name of the
Noteholder Collateral Agent or its nominee at any time at the option of the
Required Secured Parties.
(c)
Exercise of
Rights in Pledged Collateral
.
(i) Without
in any way limiting the foregoing and subject to clause
(ii)
below, such Grantor shall have the right to exercise
all voting rights or other rights relating to the Pledged Collateral owned by it
for all purposes not in violation of this Agreement, the Indenture, the
Intercreditor Agreement or any other Loan Document;
provided
however
,
that
no vote or
other right shall be exercised or action taken for the purpose of impairing the
enforcement rights of the Noteholder Collateral Agent in respect of such Pledged
Collateral except as may be incidental to actions otherwise permitted under such
documents.
(ii) Such
Grantor will permit the Noteholder Collateral Agent or its nominee at any time
after the occurrence and during the continuance of an Event of Default, and with
prior notice, to exercise all voting rights or other rights relating to the
Pledged Collateral owned by it, including
, without limitation, exchange,
subscription or any other rights, privileges, or options pertaining to any
Equity Interest or Investment Property constituting such Pledged Collateral as
if it were the absolute owner thereof.
(iii) Such
Grantor shall be entitled to collect and receive for its own use all dividends,
distributions and interest paid in respect of the Pledged Collateral owned by it
to the extent not in violation of the Indenture
other than
, upon the
occurrence and during the continuance of an Event of Default, any of the
following distributions and payments (collectively referred to as the “
Excluded
Payments
”): (A) dividends and interest paid or payable other
than in cash in respect of such Pledged Collateral, and instruments and other
property received, receivable or otherwise distributed in respect of, or in
exchange for, any Pledged Collateral; (B) dividends and other distributions paid
or payable in cash in respect of such Pledged Collateral in connection with a
partial or total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in capital of an issuer; and (C) cash paid,
payable or otherwise distributed, in respect of principal of, or in redemption
of, or in exchange for, such Pledged Collateral;
provided however, that
until
actually paid, all rights to such distributions shall remain subject to the Lien
created by this Agreement; and
(iv) All
Excluded Payments in respect of any of the Pledged Collateral owned by such
Grantor, whenever paid or made, shall, subject to the terms, conditions and
provisions of the Intercreditor Agreement, upon the occurrence and during the
continuance of an Event of Default, be delivered to the Noteholder Collateral
Agent to hold as Pledged Collateral and shall, if received by such Grantor, be
received in trust for the benefit of the Noteholder Collateral Agent, be
segregated from the other property or funds of such Grantor, and, subject to the
terms, conditions and provisions of the Intercreditor Agreement, be forthwith
delivered to the Noteholder Collateral Agent as Pledged Collateral in the same
form as so received (with any necessary endorsement).
(v) After
the Noteholder Collateral Agent acknowledges that all Events of Default have
been cured or waived in accordance with the provisions of the Indenture, and so
long as the Secured Obligations shall not have been accelerated, each Grantor
shall have the right to exercise the voting and other consensual rights and
powers that it would have otherwise been entitled to pursuant to this
Section
4.6
, and receive dividends and other distributions it would
have been authorized to receive pursuant to this
Section
4.6
. After the Noteholder Collateral Agent
acknowledges that all Events of Default have been cured or waived in accordance
with the provisions of the Indenture, any dividend or distribution paid to the
Noteholder Collateral Agent shall upon the request of the Grantors (except to
the extent theretofore applied to the Secured Obligations) promptly be returned
to the Grantors.
4.7
Intellectual
Property
.
(a) Subject
to the terms set forth in the Intercreditor Agreement, such Grantor will use its
commercially reasonable efforts to secure all consents and approvals necessary
or appropriate for the assignment to or benefit of the Noteholder Collateral
Agent of any License held by such Grantor and to enforce the security interests
granted hereunder.
(b) Such
Grantor shall notify the Noteholder Collateral Agent promptly after a
Responsible Officer of such Grantor has actual knowledge that any application or
registration for any material Patent, Trademark or Copyright (now or hereafter
existing) owned by such Grantor may become abandoned (except for Patents,
Trademarks or Copyrights expiring at the end of their statutory terms), or of
any adverse determination in any proceeding (other than office actions issued in
the ordinary course of prosecution of any patent application or application to
register any other Intellectual Property) against such Grantor regarding such
Grantor’s ownership of any material Patent, Trademark or Copyright, its right to
register the same, or to keep and maintain the same, in each case, to the extent
the same could reasonably be expected to have, individually or in the aggregate,
a material adverse effect on the Grantors, taken as a whole.
(c) If
such Grantor, either directly or through any agent, employee, licensee or
designee, files an application for the registration of any Patent, Trademark or
Copyright with the United States Patent and Trademark Office or the United
States Copyright Office, such Grantor shall promptly give the Noteholder
Collateral Agent written notice thereof concurrently with the delivery of a
Compliance Certificate under the Indenture, and, upon request of the Noteholder
Collateral Agent, such Grantor shall execute and deliver any and all security
agreements as the Noteholder Collateral Agent may request to evidence the
Noteholder Collateral Agent’s first priority security interest on such Patent,
Trademark or Copyright.
(d) Except
as determined by such Grantor in its reasonable business judgment (exercised in
good faith), such Grantor shall take all actions that are necessary or requested
by the Noteholder Collateral Agent to pursue each application (and to obtain the
relevant registration) and to maintain the validity and enforceability of each
registration of its material Patents, Trademarks and Copyrights (now or
hereafter existing) owned by such Grantor.
(e) Such
Grantor shall, unless it shall reasonably determine that such Patent, Trademark
or Copyright is not material to the conduct of its business or operations, take
all actions deemed appropriate under the circumstances in the exercise of its
reasonable business judgment (exercised in good faith) to protect such Patent,
Trademark or Copyright owned by such Grantor, including if appropriate under the
circumstances bringing suit and recovering all damages therefor. In
the event that such Grantor institutes suit because any of its Patents,
Trademarks or Copyrights constituting Collateral is infringed upon, or
misappropriated or diluted by a third party, such Grantor shall comply with
Section
4.8
.
4.8
Commercial Tort
Claims
. Such
Grantor shall promptly, and in any event within five Business Days after a
Responsible Officer of such Grantor has actual knowledge of such commercial tort
claim, notify the Noteholder Collateral Agent of any commercial tort claim (as
defined in the UCC) individually in excess of $100,000 acquired by it and,
unless the Noteholder Collateral Agent otherwise consents, such Grantor shall
enter into an amendment to this Agreement, substantially in the form of
Exhibit I
hereto,
granting to Noteholder Collateral Agent a second priority security interest
(subject to Liens permitted by
Section 4.1(e)
) in
such commercial tort claim.
4.9
Letter-of-Credit
Rights
. If
such Grantor is or becomes the beneficiary of a letter of credit, having a face
or stated amount individually in excess of $100,000, it shall promptly, and in
any event within three Business Days after becoming a beneficiary, notify the
Noteholder Collateral Agent thereof and use commercially reasonable efforts to
cause the issuer and/or confirmation bank to (a) consent to the assignment of
any Letter-of-Credit Rights to the Noteholder Collateral Agent and (b) agree to
direct all payments thereunder to a Deposit Account at the Noteholder Collateral
Agent or subject to a Deposit Account Control Agreement for application to the
Secured Obligations, in accordance with Section 6.11 of the Indenture, all in
form and substance reasonably satisfactory to the Noteholder Collateral
Agent.
4.10
Federal, State or Municipal
Claims
. Such
Grantor will promptly notify the Noteholder Collateral Agent upon obtaining
knowledge of any Collateral with a value in excess of $100,000 which constitutes
a claim against the United States government or any state or local government or
any instrumentality or agency thereof, the assignment of which claim is
restricted by federal, state or municipal law.
4.11
No
Interference
. Such
Grantor agrees that it will not interfere with any right, power and remedy of
the Noteholder Collateral Agent provided for in this Agreement or now or
hereafter existing at law or in equity or by statute or otherwise, or the
exercise or beginning of the exercise by the Noteholder Collateral Agent of any
one or more of such rights, powers or remedies.
4.12
Insurance
.
(a) In
the event any Collateral is located in any area that has been designated by the
Federal Emergency Management Agency as a “Special Flood Hazard Area”, such
Grantor shall purchase and maintain flood insurance on such Collateral
(including any personal property which is located on any real property leased by
such Loan Party within a “
Special
Flood Hazard Area
”). The amount of flood insurance required by
this Section shall be the amount maintained by the Grantors on the Effective
Date or such other amount as the Noteholder Collateral Agent may reasonably
request.
(b) All
insurance policies required hereunder and under Section 6.21 of the Indenture
shall name the Noteholder Collateral Agent (for the benefit of the Noteholder
Collateral Agent and the Noteholder Secured Parties) as an additional insured or
as loss payee, as applicable, and commencing no later than September 20, 2010
shall contain loss payable clauses or mortgagee clauses, through endorsements in
form and substance reasonably satisfactory to the Noteholder Collateral Agent,
which provide that: (i) subject to the terms, conditions and provisions of the
Intercreditor Agreement, all proceeds thereunder with respect to any Collateral
shall be payable to the Noteholder Collateral Agent; (ii) no such insurance
shall be affected by any act or neglect of the insured or owner of the property
described in such policy; and (iii) such policy and loss payable or mortgagee
clauses may be canceled, amended, or terminated only upon at least thirty days
prior written notice (ten days in the case of non-payment of premium) given to
the Noteholder Collateral Agent.
(c) All
premiums on any such insurance shall be paid when due by such Grantor, and
copies of the policies delivered to the Noteholder Collateral
Agent. If such Grantor fails to obtain any insurance as required by
this Section, the Noteholder Collateral Agent may obtain such insurance at the
Borrower’s expense. By purchasing such insurance, the Noteholder
Collateral Agent shall not be deemed to have waived any Default arising from the
Grantor’s failure to maintain such insurance or pay any premiums
therefor.
4.13
Collateral Access
Agreements
. Such Grantor shall use commercially reasonable
efforts for a period not to exceed 90 days to obtain a Collateral Access
Agreement, from the lessor of each leased property, mortgagee of owned property
or bailee or consignee with respect to any warehouse, processor or converter
facility or other location (other than any (i) worksite or customer location or
(ii) location leased by a Grantor on the date hereof solely to the extent that
in respect of such location (a) collateral access agreement has been executed by
such lessor, mortgagee, bailee or consignee in favor of the Administrative Agent
or (b) such Grantor has expended commercially reasonable efforts within the 30
days prior to the date hereof to obtain a collateral access agreement in favor
of the Administrative Agent from such lessor, mortgagee, bailee or consignee)
where Collateral is stored or located, which agreement or letter shall provide
access rights, contain a waiver or subordination of all Liens or claims that the
landlord, mortgagee, bailee or consignee may assert against the Collateral at
that location, and shall otherwise be reasonably satisfactory in form and
substance to the Noteholder Collateral Agent. Such Grantor shall
timely and fully pay and perform its obligations under all leases and other
agreements (subject to any grace periods therein) with respect to each leased
location or third party warehouse where any Collateral with a value exceeding
$250,000 is or may be located.
4.14
Control
Agreements
. Such
Grantor will provide to the Noteholder Collateral Agent upon the Noteholder
Collateral Agent’s reasonable request, (a) a Commodity Account Control Agreement
duly executed on behalf of each commodities intermediary holding a Commodity
Account of such Grantor as set forth in the Agreement, (b) a Securities Account
Control Agreement duly executed on behalf of each securities intermediary
holding a Securities Account (other than the Merrill Lynch Account) of such
Grantor as set forth in the Agreement and (c) a Deposit Account Control
Agreement duly executed on behalf of each financial institution holding a
Deposit Account (other than an Excluded Deposit Account and, so long as the
Control Representative (as defined in the Intercreditor Agreement) enters into a
Deposit Account Control Agreement with respect thereto, any Deposit Accounts
located at JP Morgan Chase Bank, N.A.) of such Grantor;
provided that
,if the
Administrative Agent decides to forego obtaining a Deposit Account Control
Agreement, Commodity Account Control Agreement or Securities Account Control
Agreement with respect to any Deposit Account, Commodity Account or Securities
Account, as applicable, then such Grantor shall be deemed to have no obligation
to obtain a Deposit Account Control Agreement, Commodity Account Control
Agreement or Securities Acccount Control Agreement hereunder.
4.15
Change of Name or Location;
Change of Fiscal Year
. Such
Grantor shall not change its chief executive office, principal place of
business, mailing address, corporate offices or warehouses or locations at which
Collateral is held or stored, or the location of its records concerning the
Collateral as set forth in the Agreement unless the Noteholder Collateral Agent
shall have received at least 15 days prior written notice of such change;
provided, that any new
location shall be in the continental U.S. Such grantor shall not (a)
change its name as it appears in official filings in the state of its
incorporation or organization, (b) change the type of entity that it is, (c)
change its organization identification number, if any, issued by its state of
incorporation or other organization, or (d) change its state of incorporation or
organization, in each case, unless the Noteholder Collateral Agent shall have
received at least 15 days prior written notice of such change.
4.16
New
Subsidiaries
. Pursuant
to Sections 6.14 and 6.15 of the Indenture, any new direct or indirect domestic
Subsidiary (whether by acquisition, creation or designation) of the Issuer is
required to enter into this Agreement by executing and delivering in favor of
the Noteholder Collateral Agent an instrument in the form of
Annex
I
. Upon the execution and delivery of
Annex I
by such new
domestic Subsidiary, such domestic Subsidiary shall become a Grantor hereunder
with the same force and effect as if originally named as a Grantor
herein. The execution and delivery of any instrument adding an
additional Grantor as a party to this Agreement shall not require the consent of
any Grantor hereunder (except to the extent obtained on or prior to the date of
its execution and delivery of such Instrument). The rights and
obligations of each Grantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Grantor hereunder.
ARTICLE
V
EVENTS OF DEFAULT AND
REMEDIES
5.1
Remedies
.
(a) Upon
the occurrence and during the continuance of an Event of Default, the Noteholder
Collateral Agent may, subject to the terms, conditions and provisions of the
Indenture and the Intercreditor Agreement, exercise any or all of the following
rights and remedies:
(i) those
rights and remedies provided in this Agreement, the Indenture, the Intercreditor
Agreement or any other Note Document;
provided that,
this
Section
5.1(a)
shall not be understood to limit any rights or remedies available to the
Noteholder Collateral Agent and the Noteholder Secured Parties prior to an Event
of Default;
(ii) those
rights and remedies available to a secured party under the UCC (whether or not
the UCC applies to the affected Collateral) or under any other applicable law
(including, without limitation, any law governing the exercise of a bank’s right
of setoff or bankers’ lien) when a debtor is in default under a security
agreement;
(iii) give
notice of sole control or any other instruction under any Deposit Account
Control Agreement or and other control agreement with any securities
intermediary and take any action therein with respect to such
Collateral;
(iv) without
notice (except as specifically provided in
Section
8.1 or
elsewhere herein), demand or advertisement of any kind to any Grantor or any
other Person, peaceably enter the premises of any Grantor where any Collateral
is located (through self-help and without judicial process) to collect, receive,
assemble, process, appropriate, sell, lease, assign, grant an option or options
to purchase or otherwise dispose of, deliver, or realize upon, the Collateral or
any part thereof in one or more parcels at public or private sale or sales
(which sales may be adjourned or continued from time to time with or without
notice and may take place at any Grantor’s premises or elsewhere), for cash, on
credit or for future delivery without assumption of any credit risk, and upon
such other terms as the Noteholder Collateral Agent may deem commercially
reasonable; and
(v) immediately
after written notice to the applicable Grantor, transfer and register in its
name or in the name of its nominee the whole or any part of the Pledged
Collateral, to exchange certificates or instruments representing or evidencing
Pledged Collateral for certificates or instruments of smaller or larger
denominations, to exercise the voting and all other rights as a holder with
respect thereto, to collect and receive all cash dividends, interest, principal
and other distributions made thereon and to otherwise act with respect to the
Pledged Collateral as though the Noteholder Collateral Agent was the outright
owner thereof.
(b) The
Noteholder Collateral Agent, on behalf of the Noteholder Secured Parties, may
comply with any applicable state or federal law requirements in connection with
a disposition of the Collateral and compliance will not be considered to
adversely affect the commercial reasonableness of any sale of the
Collateral.
(c) The
Noteholder Collateral Agent shall have the right upon any such public sale or
sales and, to the extent permitted by law, upon any such private sale or sales,
to purchase for the benefit of the Noteholder Collateral Agent and the
Noteholder Secured Parties, the whole or any part of the Collateral so sold,
free of any right of equity redemption, which equity redemption the Grantor
hereby expressly releases.
(d) Until
the Noteholder Collateral Agent is able to effect a sale, lease, or other
disposition of Collateral, the Noteholder Collateral Agent shall have the right
to hold or use Collateral, or any part thereof, to the extent that it deems
appropriate for the purpose of preserving Collateral or its value or for any
other purpose deemed appropriate by the Noteholder Collateral
Agent. The Noteholder Collateral Agent may, if it so elects, seek the
appointment of a receiver or keeper to take possession of Collateral and to
enforce any of the Noteholder Collateral Agent’s remedies (for the benefit of
the Noteholder Collateral Agent and Noteholder Secured Parties), with respect to
such appointment without prior notice or hearing as to such
appointment.
(e) Notwithstanding
the foregoing, except as required by applicable law, neither the Noteholder
Collateral Agent nor the Noteholder Secured Parties shall be required to (i)
make any demand upon, or pursue or exhaust any of their rights or remedies
against, any Grantor, any other obligor, guarantor, pledgor or any other Person
with respect to the payment of the Secured Obligations or to pursue or exhaust
any of their rights or remedies with respect to any Collateral therefor or any
direct or indirect guarantee thereof, (ii) marshal the Collateral or any
guarantee of the Secured Obligations or to resort to the Collateral or any such
guarantee in any particular order, or (iii) effect a public sale of any
Collateral.
(f) Each
Grantor recognizes that the Noteholder Collateral Agent may be unable to effect
a public sale of any or all the Pledged Collateral and may be compelled to
resort to one or more private sales thereof in accordance with clause (a)
above. Each Grantor also acknowledges that any private sale may
result in prices and other terms less favorable to the seller than if such sale
were a public sale and, notwithstanding such circumstances, agrees that any such
private sale shall not be deemed to have been made in a commercially
unreasonable manner solely by virtue of such sale being private. The
Noteholder Collateral Agent shall be under no obligation to delay a sale of any
of the Pledged Collateral for the period of time necessary to permit any Grantor
or the issuer of the Pledged Collateral to register such securities for public
sale under the Securities Act of 1933, as amended, or under applicable state
securities laws, even if the applicable Grantor and the issuer would agree to do
so.
5.2
Grantor’s Obligations Upon
Default
. Upon
the request of the Noteholder Collateral Agent after the occurrence and during
the continuance of an Event of Default, subject to the terms, conditions and
provisions of the Intercreditor Agreement, each Grantor will:
(a) assemble
and make available to the Noteholder Collateral Agent the tangible Collateral
and all books and records relating thereto at any place or places specified by
the Noteholder Collateral Agent, whether at a Grantor’s premises or elsewhere;
and
(b) permit
the Noteholder Collateral Agent, by the Noteholder Collateral Agent’s
representatives and agents, to enter, occupy and use any premises where all or
any part of the Collateral, or the books and records relating thereto, or both,
are located, to take possession of all or any part of the Collateral or the
books and records relating thereto, or both, to remove all or any part of the
Collateral or the books and records relating thereto, or both, and to conduct
sales of the Collateral, without any obligation to pay the Grantor for such use
and occupancy.
(c) furnish
to the Noteholder Collateral Agent, or cause an issuer of Pledged Collateral to
furnish to the Noteholder Collateral Agent, any information regarding the
Pledged Collateral in such detail as the Noteholder Collateral Agent may
specify; and
(d) at
its own expense, cause the independent certified public accountants then engaged
by each Grantor to prepare and deliver to the Noteholder Collateral Agent and
each Noteholder Secured Party, at any time, and from time to time, promptly upon
the Noteholder Collateral Agent’s request, the following reports with respect to
the applicable Grantor: (i) a reconciliation of all Accounts; (ii) an
aging of all Accounts; (iii) trial balances; and (iv) a test verification of
such Accounts.
5.3
Grant of Intellectual
Property License
. For
the purpose of enabling the Noteholder Collateral Agent to exercise the rights
and remedies under this
Article V
at and
during the continuance of such time as the Noteholder Collateral Agent shall be
lawfully entitled to exercise such rights and remedies in accordance with the
Intercreditor Agreement, each Grantor hereby (a) grants to the Noteholder
Collateral Agent, for the benefit of the Noteholder Collateral Agent and the
Noteholder Secured Parties, an irrevocable, nonexclusive license (exercisable
without payment of royalty or other compensation to any Grantor) to use, license
or sublicense any Intellectual Property rights now owned or hereafter acquired
by such Grantor, and wherever the same may be located, and including in such
license access to all media in which any of the licensed items may be recorded
or stored and to all computer software and programs used for the compilation or
printout thereof and (b) irrevocably agrees that the Noteholder Collateral Agent
may sell any of such Grantor’s Inventory directly to any person, including
without limitation persons who have previously purchased the Grantor’s Inventory
from such Grantor and in connection with any such sale or other enforcement of
the Noteholder Collateral Agent’s rights under this Agreement, may sell
Inventory which bears any Trademark owned by or licensed to such Grantor and any
Inventory that is covered by any Copyright owned by or licensed to such Grantor
and the Noteholder Collateral Agent may finish any work in process and affix any
Trademark owned by or licensed to such Grantor and sell such Inventory as
provided herein.
5.4
Waivers
. Each
Grantor hereby waives any and all rights that it may otherwise have (whether any
such right is contractual or exists pursuant to the articles of incorporation or
bylaws of any relevant entity or under applicable law) that would interfere with
this Agreement or the exercise by Noteholder Collateral Agent of any rights or
remedies granted to it pursuant to this Agreement. Without limiting
the generality of the foregoing, (a) U.S. Concrete, Inc. and Beall Industries,
Inc. hereby waive any transfer restriction on the stock of Beall Industries,
Inc., including, without limitation, any right of first refusal or right of
first offer set forth in Section 6.10 of the Bylaws of Beall Industries, Inc.,
(b) U.S. Concrete, Inc. and Central Precast Concrete, Inc. hereby waive any
transfer restriction on the stock of Central Precast Concrete, Inc., including,
without limitation, any right of first refusal or right of first offer set forth
in Section 4 of the Articles of Incorporation of Central Precast Concrete, Inc.,
and (c) U.S. Concrete, Inc. and Superior Holdings, Inc. hereby waive any
transfer restriction on the stock of Superior Holdings, Inc., including, without
limitation, any right of first refusal or right of first offer set forth in
Article V of the Articles of Incorporation of Superior Holdings,
Inc.
ARTICLE
VI
ACCOUNT VERIFICATION;
ATTORNEY IN FACT; PROXY
6.1
Account
Verification
. Subject
to the terms, conditions and provisions of the Intercreditor Agreement, the
Noteholder Collateral Agent may at any time, in the Noteholder Collateral
Agent’s own name, in the name of a nominee of the Noteholder Collateral Agent,
or in the name of any Grantor communicate (by mail, telephone, facsimile or
otherwise) with the Account Debtors of any such Grantor, parties to contracts
with any such Grantor and obligors in respect of Instruments of any
such Grantor to verify with such Persons, to the Noteholder Collateral Agent’s
reasonable satisfaction, the existence, amount, terms of, and any other matter
relating to, Accounts, Instruments, Chattel Paper, payment intangibles and/or
other Receivables.
6.2
Authorization for Secured
Party to Take Certain Action
.
(a) Subject
to the terms, conditions and provisions of the Intercreditor Agreement, each
Grantor irrevocably authorizes the Noteholder Collateral Agent at any time and
from time to time in the sole discretion of the Noteholder Collateral Agent and
appoints the Noteholder Collateral Agent as its attorney in fact, subject to
clause (b) of this
Section 6.2
, (i) to
execute on behalf of such Grantor as debtor and to file financing statements
necessary or desirable in the Noteholder Collateral Agent’s sole discretion to
perfect (subject to the qualifications set forth in
Section 3.1
) and to
maintain the perfection and priority of the Noteholder Collateral Agent’s
security interest in the Collateral, (ii) to endorse and collect any cash
proceeds of the Collateral, (iii) to file a carbon, photographic or other
reproduction of this Agreement or any financing statement with respect to the
Collateral as a financing statement and to file any other financing statement or
amendment of a financing statement (which does not add new collateral or add a
debtor) in such offices as the Noteholder Collateral Agent in its sole
discretion deems necessary or desirable to perfect (subject to the
qualifications set forth in
Section 3.1
) and to
maintain the perfection and priority of the Noteholder Collateral Agent’s
security interest in the Collateral, (iv) to contact and enter into one or more
agreements with the issuers of uncertificated securities which are Pledged
Collateral or with securities intermediaries holding Pledged Collateral as may
be necessary or advisable to give the Noteholder Collateral Agent Control over
such Pledged Collateral, subject to the terms set forth in the Intercreditor
Agreement, (v) to apply the proceeds of any Collateral received by the
Noteholder Collateral Agent to the Secured Obligations as provided in
Section 7.3
, (vi)
upon five Business Days’ prior notice, to discharge past due taxes, assessments,
charges, fees or Liens on the Collateral (except for such Liens as are
specifically permitted hereunder), (vii) to contact Account Debtors for any
reason, (viii) to demand payment or enforce payment of the Receivables in the
name of the Noteholder Collateral Agent or such Grantor and to endorse any and
all checks, drafts, and other instruments for the payment of money relating to
the Receivables, (ix) to sign such Grantor’s name on any invoice or bill of
lading relating to the Receivables, drafts against any Account Debtor of the
Grantor, assignments and verifications of Receivables, (x) to exercise all of
such Grantor’s rights and remedies with respect to the collection of the
Receivables and any other Collateral, (xi) to settle, adjust, compromise, extend
or renew the Receivables, (xii) to settle, adjust or compromise any legal
proceedings brought to collect Receivables, (xiii) to prepare, file and sign
such Grantor’s name on a proof of claim in bankruptcy or similar document
against any Account Debtor of such Grantor, (xiv) to prepare, file and sign such
Grantor’s name on any notice of Lien, assignment or satisfaction of Lien or
similar document in connection with the Receivables, (xv) to change the address
for delivery of mail addressed to such Grantor to such address as the Noteholder
Collateral Agent may designate and to receive, open and dispose of all mail
addressed to such Grantor, and (xvi) to do all other acts and things necessary
to carry out this Agreement; and such Grantor agrees to reimburse the Noteholder
Collateral Agent promptly following written demand (including documentation
reasonably supporting such request) for any reasonable payment made or any
reasonable out-of-pocket expense incurred by the Noteholder Collateral Agent in
connection with any of the foregoing;
provided that
, this
authorization shall not relieve such Grantor of any of its obligations under
this Agreement or under the Indenture.
(b) All
acts of said attorney or designee are hereby ratified and
approved. The powers conferred on the Noteholder Collateral Agent,
for the benefit of the Noteholder Collateral Agent and Noteholder Secured
Parties, under this
Section 6.2
are
solely to protect the Noteholder Collateral Agent’s interests in the Collateral
and shall not impose any duty upon the Noteholder Collateral Agent or any
Noteholder Secured Party to exercise any such powers. The Noteholder
Collateral Agent agrees that, except for the powers granted in
Sections 6.2(a)(i)
,
(a)(iii)
, and
(a)(v)
, , it
shall not exercise any power or authority granted to it under the power of
attorney unless an Event of Default has occurred and is
continuing.
6.3
Proxy
. SUBJECT
TO THE TERMS, CONDITIONS AND PROVISIONS OF THE INTERCREDITOR AGREEMENT, EACH
GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE NOTEHOLDER COLLATERAL
AGENT AS ITS PROXY AND ATTORNEY-IN-FACT (AS SET FORTH IN
SECTION 6.2
ABOVE)
WITH RESPECT TO ITS PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE SUCH PLEDGED
COLLATERAL, WITH FULL POWER OF SUBSTITUTION TO DO SO. IN ADDITION TO
THE RIGHT TO VOTE ANY SUCH PLEDGED COLLATERAL, THE APPOINTMENT OF THE NOTEHOLDER
COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO
EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF
SUCH PLEDGED COLLATERAL WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING
WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND
VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE,
AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF
ANY SUCH PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY
PERSON (INCLUDING THE ISSUER OF SUCH PLEDGED COLLATERAL OR ANY OFFICER OR AGENT
THEREOF), UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT.
6.4
Nature of Appointment;
Limitation of Duty
. THE
APPOINTMENT OF THE NOTEHOLDER COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT IN
THIS ARTICLE VI IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE
DATE ON WHICH THIS AGREEMENT IS TERMINATED IN ACCORDANCE WITH
SECTION
8.14
. NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NEITHER THE
NOTEHOLDER COLLATERAL AGENT, NOR ANY NOTEHOLDER SECURED PARTY, NOR ANY OF THEIR
RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES
SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED HEREUNDER OR
OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO
SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE TO
THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT (OR THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS OR REPRESENTATIVES) AS FINALLY DETERMINED BY A COURT OF
COMPETENT JURISDICTION; PROVIDED THAT, IN NO EVENT SHALL THEY BE LIABLE FOR ANY
SPECIAL, PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL LOSS OR DAMAGES OF ANY
KIND WHATSOEVER (INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFIT)
IRRESPECTIVE OF WHETHER THE NOTEHOLDER COLLATERAL AGENT OR OTHER NOTEHOLDER
SECURED PARTY HAS BEEN ADVISED OF THE LIKELIHOOD OF SUCH LOSS OR DAMAGE AND
REGARDLESS OF THE FORM OF ACTION.
ARTICLE
VII
COLLECTION AND APPLICATION
OF COLLATERAL PROCEEDS; DEPOSIT ACCOUNTS
7.1
Collection of
Accounts
. Subject
to the terms, conditions and provisions of the Intercreditor
Agreement:
(a) On
or before the Closing Date, each Grantor shall (i) execute and deliver to the
Noteholder Collateral Agent Deposit Account Control Agreements for each Deposit
Account (other than Excluded Deposit Accounts) maintained by such Grantor into
which all cash, checks or other similar payments relating to or constituting
payments made in respect of Accounts will be deposited (a “
Collateral
Deposit Account
”), which Collateral Deposit Accounts (as of the Closing
Date) are identified as such on Exhibit B, and (ii) establish lock box service
(the “
Lock
Boxes
”) with the bank(s) set forth in Exhibit B, which lock boxes shall
be subject to irrevocable lockbox agreements in the form provided by or
otherwise acceptable to the Noteholder Collateral Agent (subject to the terms,
conditions and provisions of the Intercreditor Agreement) and shall be
accompanied promptly upon request of the Notes Collateral Agent by an
acknowledgment by the bank where the Lock Box is located of the Lien of the
Noteholder Collateral Agent granted hereunder and of irrevocable instructions to
wire all amounts collected therein to the Collection Account (a “
Lock Box
Agreement
”). After the Closing Date, each Grantor will comply
with the terms of
Section
7.2
.
(b) Each
Grantor shall direct all of its Account Debtors to forward payments directly to
Lock Boxes subject to Lock Box Agreements. Subject to the terms,
conditions and provisions of the Intercreditor Agreement, the Noteholder
Collateral Agent shall have access to the Lock Boxes at all times and each
Grantor shall take all actions necessary to grant the Noteholder Collateral
Agent such access. At no time shall any Grantor remove any item from
a Lock Box or from a Collateral Deposit Account without the Noteholder
Collateral Agent’s prior written consent (subject to the terms, conditions and
provisions of the Intercreditor Agreement). If any Grantor should
refuse or neglect to promptly notify any Account Debtor to forward payments
directly to a Lock Box subject to a Lock Box Agreement after written notice from
the Administrative Agent, the Noteholder Collateral Agent shall, notwithstanding
the language set forth in
Section
6.2(b)
be entitled to make such notification directly to
such Account Debtor. If notwithstanding the foregoing instructions,
any Grantor receives any proceeds of any Receivables, such Grantor shall receive
such payments as the Noteholder Collateral Agent’s trustee (subject to the
terms, conditions and provisions of the Intercreditor Agreement), and shall
immediately deposit all cash, checks or other similar payments related to or
constituting payments made in respect of Receivables received by it to a
Collateral Deposit Account. All funds deposited into any Lock Box
subject to a Lock Box Agreement or a Collateral Deposit Account will be swept on
a daily basis into a collection account maintained by the Company with the
Administrative Agent or, upon the ABL Obligations Payment Date, at any other
depositary bank (so long as such collection account is subject to a springing
Deposit Account Control in favor of the Noteholder Collateral Agent), as the
case may be in accordance with the terms, conditions and provisions of the
Intercreditor Agreement (the “
Collection
Account
”).
(c) Notwithstanding
anything to the contrary contained herein, in no event shall the Grantors be
required to deposit any amounts received in respect of the Notes Collateral in
any Collateral Deposit Account or Collection Account or otherwise direct such
amounts or proceeds to a Lockbox.
7.2
Covenant Regarding New
Deposit Accounts; Lock Boxes
. Before opening or replacing any
Collateral Deposit Account, other Deposit Account, or establishing a new Lock
Box (other than Excluded Deposit Accounts), each Grantor shall cause each bank
or financial institution in which it seeks to open (i) a Deposit Account, to
enter into a Deposit Account Control Agreement with the Noteholder Collateral
Agent in order to give the Noteholder Collateral Agent Control of such Deposit
Account, or (ii) a Lock Box, to enter into a Lock Box Agreement with the
Noteholder Collateral Agent in order to give the Noteholder Collateral Agent
Control of the Lock Box. In the case of Deposit Accounts or Lock
Boxes maintained with Noteholder Secured Parties and their Affiliates, the terms
of such letter shall be subject to the provisions of the Indenture regarding
setoffs.
7.3
Application of Proceeds;
Deficiency
.
(a) All
amounts deposited in the Collection Account shall be deemed received by the
Noteholder Collateral Agent and shall, after having been credited to the
Collection Account, be applied (and allocated) by in accordance with the
Intercreditor Agreement. Subject to the terms, conditions and provisions of the
Intercreditor Agreement, the Noteholder Collateral Agent shall require all other
cash proceeds of the Collateral, which are not required to be applied to the
Secured Obligations or the ABL Obligations pursuant to Intercreditor Agreement,
to be deposited in a special non-interest bearing cash collateral account with
the Noteholder Collateral Agent and held there as security for the Secured
Obligations. No Grantor shall have any control whatsoever over said
cash collateral account. Any such proceeds of the Collateral shall be
applied in the order set forth in the Intercreditor Agreement unless a court of
competent jurisdiction shall otherwise direct. Subject to the terms,
conditions and provisions of the Intercreditor Agreement, the balance, if any,
after all of the Secured Obligations have been satisfied, shall be deposited by
the Noteholder Collateral Agent into the Company’s general operating
account. The Grantors shall remain liable for any deficiency if the
proceeds of any sale or disposition of the Collateral are insufficient to pay
all Secured Obligations, including any attorneys’ fees and other expenses
incurred by the Noteholder Collateral Agent or any Noteholder Secured Party to
collect such deficiency.
(b) Upon
the ABL Obligations Payment Date, (i) the provisions in
Section 7.3(a)
above
shall automatically terminate, (ii) the Noteholder Collateral Agent agrees to
terminate any Deposit Account Control Agreements applicable to the Concentration
Account and any other Deposit Account set up for full cash dominion and (iii)
the Noteholder Collateral Agent shall enter into one or more new springing cash
dominion Deposit Account Control Agreements with respect to the Concentration
Account and any such other Deposit Account that is set up for full cash
dominion.
ARTICLE
VIII
GENERAL
PROVISIONS
8.1
Waivers
. To
the extent permitted by Applicable Law, each Grantor hereby
waives
notice of the time and place of any public sale or the time after which any
private sale or other disposition of all or any part of the Collateral may be
made. To the extent such notice may not be waived under applicable
law, any notice made shall be deemed reasonable if sent to the Grantors,
addressed as set forth in
Article IX
, at least
ten days prior to (a) the date of any such public sale or (b) the time after
which any such private sale or other disposition may be made. To the
maximum extent permitted by applicable law, each Grantor waives all claims,
damages, and demands against the Noteholder Collateral Agent or any Noteholder
Secured Party arising out of the repossession, retention or sale of the
Collateral, except to the extent such as arise out of the gross negligence or
willful misconduct of the Noteholder Collateral Agent or such Noteholder Secured
Party (or any of their respective affiliates, officers, directors, employees,
agents or representatives) as finally determined by a court of competent
jurisdiction. To the extent it may lawfully do so, each Grantor
absolutely and irrevocably waives and relinquishes the benefit and advantage of,
and covenants not to assert against the Noteholder Collateral Agent or any
Noteholder Secured Party, any valuation, stay, appraisal, extension, moratorium,
redemption or similar laws and any and all rights or defenses it may have as a
surety now or hereafter existing which, but for this provision, might be
applicable to the sale of any Collateral made under the judgment, order or
decree of any court, or privately under the power of sale conferred by this
Agreement, or otherwise. Except as otherwise specifically provided
herein, each Grantor hereby waives presentment, demand, protest or any notice
(to the maximum extent permitted by applicable law) of any kind in connection
with this Agreement or any Collateral.
8.2
Limitation on
Noteholder Collateral Agent’s and Noteholder Secured Parties’ Duty with Respect
to the Collateral
. The
Noteholder Collateral Agent shall have no
obligation
to clean-up or otherwise prepare the Collateral for sale. The
Noteholder Collateral Agent and each Noteholder Secured Party shall use
reasonable care with respect to the Collateral in its possession or under its
control. Neither the Noteholder Collateral Agent nor any Noteholder
Secured Party shall have any other duty as to any Collateral in its possession
or control or in the possession or control of any agent or nominee of the
Noteholder Collateral Agent or such Noteholder Secured Party other than to
account for money received, or any income thereon or as to the preservation of
rights against prior parties or any other rights pertaining
thereto. To the extent that applicable law imposes duties on the
Noteholder Collateral Agent to exercise remedies in a commercially reasonable
manner, each Grantor acknowledges and agrees that it is commercially reasonable
for the Noteholder Collateral Agent (a) to fail to incur expenses deemed
significant by the Noteholder Collateral Agent to prepare Collateral for
disposition or otherwise to transform raw material or work in process into
finished goods or other finished products for disposition, (b) to fail to obtain
third party consents for access to Collateral to be disposed of, or to obtain
or, if not required by other law, to fail to obtain governmental or third party
consents for the collection or disposition of Collateral to be collected or
disposed of, (c) to fail to exercise collection remedies against Account Debtors
or other Persons obligated on Collateral or to remove Liens on or any adverse
claims against Collateral, (d) to exercise collection remedies against Account
Debtors and other Persons obligated on Collateral directly or through the use of
collection agencies and other collection specialists, (e) to advertise
dispositions of Collateral through publications or media of general circulation,
whether or not the Collateral is of a specialized nature, (f) to contact other
Persons, whether or not in the same business as such Grantor, for expressions of
interest in acquiring all or any portion of such Collateral, (g) to hire one or
more professional auctioneers to assist in the disposition of Collateral,
whether or not the Collateral is of a specialized nature, (h) to dispose of
Collateral by utilizing internet sites that provide for the auction of assets of
the types included in the Collateral or that have the reasonable capacity of
doing so, or that match buyers and sellers of assets, (i) to dispose of assets
in wholesale rather than retail markets, (j) to disclaim disposition warranties,
such as title, possession or quiet enjoyment, (k) to purchase insurance or
credit enhancements to insure the Noteholder Collateral Agent against risks of
loss, collection or disposition of Collateral or to provide to the Noteholder
Collateral Agent a guaranteed return from the collection or disposition of
Collateral, or (l) to the extent deemed appropriate by the Noteholder Collateral
Agent, to obtain the services of other brokers, investment bankers, consultants
and other professionals to assist the Noteholder Collateral Agent in the
collection or disposition of any of the Collateral. Each Grantor
acknowledges that the purpose of this
Section
8.2
is to provide non-exhaustive indications of what actions or omissions by the
Noteholder Collateral Agent would be commercially reasonable in the Noteholder
Collateral Agent’s exercise of remedies against the Collateral and that other
actions or omissions by the Noteholder Collateral Agent shall not be deemed
commercially unreasonable solely on account of not being indicated in this
Section
8.2
. Without
limitation upon the foregoing, nothing contained in this
Section
8.2
shall
be construed to grant any rights to any Grantor or to impose any duties on the
Noteholder Collateral Agent that would not have been granted or imposed by this
Agreement or by applicable law in the absence of this
Section
8.2
.
8.3
Compromises and Collection
of Collateral
. The
Grantors and the Noteholder Collateral Agent recognize that setoffs,
counterclaims, defenses and other claims may be asserted by obligors with
respect to certain of the Accounts, that certain of the Accounts may be or
become uncollectible in whole or in part and that the expense and probability of
success in litigating a disputed Account may exceed the amount that reasonably
may be expected to be recovered with respect to a Account. In view of
the foregoing, each Grantor agrees that, subject to the terms, conditions and
provisions of the Intercreditor Agreement, the Noteholder Collateral Agent may
at any time and from time to time, if an Event of Default has occurred and is
continuing, compromise with the obligor on any Account, accept in full payment
of any Account such amount as the Noteholder Collateral Agent in its sole
discretion shall determine or abandon any Account, and any such action by the
Noteholder Collateral Agent shall be commercially reasonable so long as the
Noteholder Collateral Agent acts in good faith based on information known to it
at the time it takes any such action.
8.4
Secured Party Performance of
Debtor Obligations
. Subject
to the terms, conditions and provisions of the Intercreditor Agreement, without
having any obligation to do so, upon the occurrence and during the continuance
of an Event of Default, and upon prior notice to the extent required under this
Agreement, the Noteholder Collateral Agent may perform or pay any obligation
which any Grantor has agreed to perform or pay in this Agreement and the
Grantors shall reimburse the Noteholder Collateral Agent for any amounts paid by
the Noteholder Collateral Agent pursuant to this
Section
8.4
. The Grantors’ obligation to reimburse the Noteholder
Collateral Agent pursuant to the preceding sentence shall be a Secured
Obligation payable promptly upon written demand (including documentation
reasonably supporting such request).
8.5
Specific
Performance of Certain Covenants
. Each
Grantor acknowledges and
agrees
that a breach of any of the covenants contained in
Section
4.1(d)
,
Section
4.1(e)
,
Section
4.4
,
Section
4.5
,
Section
4.6
,
Section
4.7
,
Section
4.8
,
Section
4.9
,
Section
4.10
,
Section
4.12
,
Section
4.13
,
Section
4.14
,
Section
4.15
,
Section
4.16
,
Section
5.2
,
or
Section
8.7
or in
Article
VII
will cause irreparable injury to the Noteholder Collateral Agent
and the Noteholder Secured Parties, that the Noteholder Collateral Agent and the
Noteholder Secured Parties have no adequate remedy at law in respect of such
breaches and therefore agrees, without limiting the right of the Noteholder
Collateral Agent or the Noteholder Secured Parties to seek and obtain specific
performance of other obligations of the Grantors contained in this Agreement,
that the covenants of the Grantors contained in the Sections referred to in this
Section
8.5
shall be specifically enforceable against the
Grantors.
8.6
Dispositions Not
Authorized
. No
Grantor is authorized to sell or otherwise dispose of the Collateral except as
set forth in
Section
4.1(d)
and notwithstanding any course of dealing between any Grantor and
the Noteholder Collateral Agent or other conduct of the Noteholder Collateral
Agent, no authorization to sell or otherwise dispose of the Collateral (except
as set forth in
Section 4.1(d)
) shall
be binding upon the Noteholder Collateral Agent or the Noteholder Secured
Parties unless such authorization is in accordance with Section 12.03 of the
Indenture.
8.7
No Waiver; Amendments;
Cumulative Remedies
. No
delay or omission of the Noteholder Collateral Agent or any Noteholder Secured
Party to exercise any right or remedy granted under this Agreement shall impair
such right or remedy or be construed to be a waiver of any Default or an
acquiescence therein, and any single or partial exercise of any such right or
remedy shall not preclude any other or further exercise thereof or the exercise
of any other right or remedy. No waiver, amendment or other variation
of the terms, conditions or provisions of this Agreement whatsoever shall be
valid unless in writing signed by the Noteholder Collateral Agent with the
concurrence or at the direction of the Noteholder Secured Parties required under
Section 11.02 of the Indenture and then only to the extent in such writing
specifically set forth. All rights and remedies contained in this
Agreement or by law afforded shall be cumulative and all shall be available to
the Noteholder Collateral Agent and the Noteholder Secured Parties until the
Secured Obligations have been paid in full (other than unasserted contingent
indemnification obligations).
8.8
Limitation by Law;
Severability of Provisions
. All
rights, remedies and powers provided in this Agreement may be exercised only to
the extent that the exercise thereof does not violate any applicable provision
of law, and all the provisions of this Agreement are intended to be subject to
all applicable mandatory provisions of law that may be controlling and to be
limited to the extent necessary so that they shall not render this Agreement
invalid, unenforceable or not entitled to be recorded or registered, in whole or
in part. Any provision in this Agreement that is held to be
inoperative, unenforceable, or invalid in any jurisdiction shall, as to that
jurisdiction, be inoperative, unenforceable, or invalid without affecting the
remaining provisions in that jurisdiction or the operation, enforceability, or
validity of that provision in any other jurisdiction, and to this end the
provisions of this Agreement are declared to be severable.
8.9
Reinstatement
. This
Agreement shall remain in full force and effect and continue
to be
effective should any petition be filed by or against any Grantor for liquidation
or reorganization, should any Grantor become insolvent or make an assignment for
the benefit of any creditor or creditors or should a receiver or trustee be
appointed for all or any significant part of any Grantor’s assets, and shall
continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Secured Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Secured Obligations, whether as a
“voidable preference,” “fraudulent conveyance,” or otherwise, all as though such
payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Secured Obligations shall be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned.
8.10
Benefit of
Agreement
. The
terms and provisions of this Agreement shall be binding upon and inure to the
benefit of the Grantors, the Noteholder Collateral Agent and the Noteholder
Secured Parties and their respective permitted successors and assigns (including
all persons who become bound as a debtor to this Agreement), except that no
Grantor shall have the right to assign its rights or delegate its obligations
under this Agreement or any interest herein, without the prior written consent
of the Noteholder Collateral Agent. No sales of participations,
assignments, transfers, or other dispositions of any agreement governing the
Secured Obligations or any portion thereof or interest therein shall in any
manner impair the Lien granted to the Noteholder Collateral Agent, for the
benefit of the Noteholder Collateral Agent and the Noteholder Secured Parties,
hereunder.
8.11
Survival of
Representations
. All
representations and warranties of the Grantors contained in this Agreement shall
survive the execution and delivery of this Agreement.
8.12
Taxes and
Expenses
. Any
taxes (including income taxes) payable or ruled payable by Federal or State
authority in respect of this Agreement shall be paid by the Grantors, together
with interest and penalties, if any. The Grantors shall reimburse the
Noteholder Collateral Agent (and in respect of enforcement of this Agreement,
any other Noteholder Secured Party) for any and all reasonable and out-of-pocket
expenses (including reasonable and out-of-pocket attorneys’, auditors’,
accounts’, experts or other agents fees and expenses) paid or incurred by the
Noteholder Collateral Agent in connection with (i) the preparation, execution,
delivery, administration, collection and enforcement of this Agreement and in
the audit, analysis, administration, custody, collection, preservation, use or
operation, or sale of, collection from or other realization upon, the Collateral
(including the expenses and charges associated with any periodic or special
audit of the Collateral) or (ii) the failure by the Grantors to perform or
observe any of the provisions of this Agreement
.
Any and all costs and expenses incurred by the Grantors in the performance of
actions required pursuant to the terms hereof shall be borne solely by the
Grantors.
8.13
Headings
. The
title of and section headings in this Agreement are for convenience of reference
only, and shall not govern the interpretation of any of the terms and provisions
of this Agreement.
8.14
Termination and
Release
. Subject
to the terms, conditions and provisions of the Intercreditor
Agreement.
(a) This
Agreement shall continue in effect (notwithstanding the fact that from time to
time there may be no Secured Obligations outstanding) until the Indenture has
terminated pursuant to its express terms and all of the Secured Obligations
(other than unasserted contingent indemnification obligations) have been paid in
full whereupon the security interest created hereunder shall automatically
terminate and be released.
(b) Any
Subsidiary shall automatically be released from its obligations hereunder and
the security interest in the Collateral of such Subsidiary shall be
automatically released upon (i) the consummation of any transaction permitted by
the Indenture (or consented to in writing pursuant to Section 9.02 of the
Indenture) as a result of which such Subsidiary ceases to be a Subsidiary of the
Issuer or (ii) the effectiveness of any written consent to the release in
accordance with Section 12.03 of the Indenture.
(c) Upon
(i) any sale, transfer or other disposition by any Grantor of Collateral that is
permitted under the Indenture (other than to another Grantor), (ii) the
effectiveness of any written consent to the release of security interest granted
hereby in any Collateral pursuant to Section 12.03 of the Indenture or (iii) any
release of Liens pursuant to Section 4.2 of the Intercreditor Agreement, the
security interest of the Noteholder Collateral Agent in such Collateral and any
other security interests granted hereby in such Collateral shall be
automatically released.
(d) Upon
the termination or release of any security interest created hereunder or release
of Collateral, the Noteholder Collateral Agent will, upon request by and at the
expense of any Grantor, execute and deliver to such Grantor such documents as
such Grantor shall reasonably request to evidence the termination of the
security interest created hereunder or the release of such Collateral, as the
case may be. Upon any release of Collateral pursuant to this
Section 8.14
, none of
the Noteholder Secured Parties shall have any continuing right or interest in
such Collateral or the Proceeds of such Collateral.
8.15
Entire
Agreement
. This
Agreement embodies the entire agreement and understanding between the Grantors
and the Noteholder Collateral Agent relating to the Collateral and supersedes
all prior agreements and understandings between the Grantors and the Noteholder
Collateral Agent relating to the Collateral.
8.16
CHOICE OF
LAW
. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT
TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
8.17
CONSENT TO
JURISDICTION
. EACH
GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY U.S.
FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND EACH GRANTOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT
OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT. EACH PARTY HERETO IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW
OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING
HEREIN SHALL LIMIT THE RIGHT OF THE NOTEHOLDER COLLATERAL AGENT OR ANY
NOTEHOLDER SECURED PARTY TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN THE COURTS
OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY GRANTOR
AGAINST THE NOTEHOLDER COLLATERAL AGENT OR ANY NOTEHOLDER SECURED PARTY OR ANY
AFFILIATE OF THE AGENT OR ANY NOTEHOLDER SECURED PARTY INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN
NEW YORK, NEW YORK.
8.18
WAIVER OF JURY
TRIAL
. EACH
GRANTOR, THE NOTEHOLDER COLLATERAL AGENT AND EACH NOTEHOLDER SECURED PARTY
HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
8.19
Indemnity
. Each
Grantor hereby agrees to indemnify the Noteholder Collateral Agent and the
Noteholder Secured Parties, and their respective successors, assigns, agents and
employees (each, an “
Indemnitee
”), from
and against any and all liabilities, damages, penalties, suits, costs, and
expenses of any kind and nature (including, without limitation, all expenses of
litigation or preparation therefor whether or not the Noteholder Collateral
Agent or any Noteholder Secured Party is a party thereto) imposed on, incurred
by or asserted against the Noteholder Collateral Agent or the Noteholder Secured
Parties, or their respective successors, assigns, agents and employees, in any
way relating to or arising out of this Agreement, or the manufacture, purchase,
acceptance, rejection, ownership, delivery, lease, possession, use, operation,
condition, sale, return or other disposition of any Collateral (including,
without limitation, latent and other defects, whether or not discoverable by the
Noteholder Collateral Agent or the Noteholder Secured Parties or any Grantor,
and any claim for Patent, Trademark or Copyright infringement);
provided
that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, penalties, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or such Indemnitee’s Related Parties or (y) arise from any
dispute solely among Indemnitees. WITHOUT LIMITATION OF THE FOREGOING
BUT SUBJECT TO ANY LIMITATION CONTAINED THEREIN, IT IS THE INTENTION OF EACH
GRANTOR AND EACH GRANTOR AGREES THAT THE FOREGOING INDEMNITIES SHALL APPLY TO
EACH INDEMNITEE WITH RESPECT TO LOSSES, CLAIMS, DAMAGES, PENALTIES, LIABILITIES
AND RELATED EXPENSES (INCLUDING, WITHOUT LIMITATION, ALL EXPENSES OF LITIGATION
OR PREPARATION THEREFOR), WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT
OF THE NEGLIGENCE OF SUCH (AND/OR ANY OTHER) INDEMNITEE.
8.20
Counterparts
. This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. Delivery of
an executed counterpart of a signature page of this Agreement by facsimile or
other electronic communication (including via email PDF) shall be effective as
delivery of a manually executed counterpart of this Agreement.
8.21
Intercreditor
Agreement
. Notwithstanding
anything to the contrary contained in this Agreement, the Liens, security
interests and rights granted pursuant to this Agreement shall be subject to the
terms, provisions and conditions of (and the exercise of any right or remedy by
the Noteholder Collateral Agent hereunder or thereunder shall be subject to the
terms and conditions of), the Intercreditor Agreement. In the event
of any conflict between this Agreement and the Intercreditor Agreement, the
Intercreditor Agreement shall control, and no right, power, or remedy granted to
the Noteholder Collateral Agent hereunder shall be exercised by the Noteholder
Collateral Agent, and no direction shall be given by the Noteholder Collateral
Agent in contravention of, the Intercreditor Agreement. To the extent
that any covenants, representations or warranties set forth in this Agreement
are untrue or incorrect solely as a result of the delivery to, or grant of
possession or control to, the Noteholder Collateral Agent in accordance with
this
Section
8.21
, such representation or warranty shall not be deemed to be untrue or
incorrect for purposes of this Agreement.
8.22
Force
Majeure
. In no
event shall the Noteholder Collateral Agent be responsible or liable for any
failure of delay in the performance of its obligations under this Agreement
arising out of or caused by, directly or indirectly, forces beyond its
reasonable control, including without limitation strikes, work stoppages,
accidents, acts of war or terrorism, civil or military disturbances, nuclear or
natural catastrophes or acts of God, and interruptions, loss or malfunction of
utilities, communication, or computer (software or hardware)
services.
8.23
Perfection in Certain
Collateral
. Notwithstanding anything herein to the contrary,
the Noteholder Collateral Agent agrees with the Grantors that, if and for so
long as, in the reasonable judgment of the Required Secured Parties (confirmed
in writing by notice delivered by the Noteholder Collateral Agent to the
Issuer), the cost of perfecting the Noteholder Collateral Agent’s Lien in any
item of Collateral shall be excessive in view of the benefits to be obtained by
the Noteholder Secured Parties from such perfection, the Grantors shall be
excused from the requirement that the Noteholder Collateral Agent’s Lien in such
item of Collateral be perfected until such time as the Required Secured Parties
shall confirm in writing to the Issuer that, in their reasonable judgment, such
situation no longer exists. The Required Secured Parties may, but
shall not be obligated to, grant extensions of time for the perfection of
security interests in particular items of Collateral (including extensions
beyond the Closing Date for the perfection of security interests in any item of
Collateral existing on such date) where the Required Secured Parties reasonably
determine, in consultation with the Issuer, that perfection of the Noteholder
Collateral Agent’s Lien in such item of Collateral cannot be accomplished
without undue efforts or expense within the time or times provided therefor or
otherwise required by this Agreement or the other Note Documents.
8.24
ABL Priority
Collateral
.
Notwithstanding anything to the contrary contained in this Agreement, if any
deadline with respect to ABL Priority Collateral to provide any information, any
agreements with third parties or a perfected security interest to the
Administrative Agent under the ABL Collateral Documents is extended or waived,
then any such corresponding deadline hereunder (if any) shall also be
automatically extended or waived, as applicable, hereunder.
ARTICLE
IX
NOTICES
9.1
Sending
Notices
. Any
notice required or permitted to be given under this Agreement shall be sent by
United States mail, telecopier, personal delivery or nationally established
overnight courier service, and shall be deemed received (a) when received, if
sent by hand or overnight courier service, or mailed by certified or registered
mail notices or (b) when sent, if sent by telecopier (except that, if not given
during normal business hours for the recipient, shall be deemed to have been
given at the opening of business on the next Business Day for the recipient), in
each case addressed to the Grantors at the notice address set forth on
Exhibit A
, and to the
Noteholder Collateral Agent and the Noteholder Secured Parties at the addresses
set forth in accordance with Section 14.02 of the Indenture.
9.2
Change in Address for
Notices
. Each
of the Grantors, the Noteholder Collateral Agent and the Noteholder Secured
Parties may change the address for service of notice upon it by a notice in
writing to the other parties.
ARTICLE
X
THE NOTEHOLDER COLLATERAL
AGENT
U.S. Bank
National Association has been appointed Noteholder Collateral Agent for the
Noteholder Secured Parties hereunder pursuant to Article Nine and Section 12.10
of the Indenture. It is expressly understood and agreed by the
parties to this Agreement that any authority conferred upon the Noteholder
Collateral Agent hereunder is subject to the terms of the delegation of
authority made by the Noteholder Secured Parties to the Noteholder Collateral
Agent pursuant to the Indenture, and that the Noteholder Collateral Agent has
agreed to act (and any successor Noteholder Collateral Agent shall act) as such
hereunder only on the express conditions contained in such Article Nine and
Section 12.10 of the Indenture. Any successor Noteholder Collateral
Agent appointed pursuant to Article Nine of the Indenture shall be entitled to
all the rights, interests and benefits of the Noteholder Collateral Agent
hereunder.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the Grantors and the Noteholder Collateral Agent have executed
this Agreement as of the date first above written.
GRANTORS:
|
|
U.S.
CONCRETE, INC., a Delaware corporation
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
Michael W. Harlan
|
|
Title:
Chief Executive Officer and President
|
|
|
ALBERTA
INVESTMENTS, INC.
|
ALLIANCE
HAULERS, INC.
|
ATLAS
REDI-MIX, LLC
|
ATLAS-TUCK
CONCRETE, INC.
|
BEALL
CONCRETE ENTERPRISES, LLC
|
BEALL
INDUSTRIES, INC.
|
BEALL
INVESTMENT CORPORATION, INC.
|
BEALL
MANAGEMENT, INC.
|
HAMBURG
QUARRY LIMITED LIABILITY COMPANY
|
REDI-MIX
CONCRETE, L.P.
|
REDI-MIX
GP, LLC
|
REDI-MIX,
LLC
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name: Michael
W. Harlan
|
|
Title: President
|
|
|
KURTZ
GRAVEL COMPANY
SUPERIOR
HOLDINGS,
INC.
|
TITAN
CONCRETE INDUSTRIES, INC.
|
USC
ATLANTIC, INC.
|
USC
MICHIGAN, INC.
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
Michael W. Harlan
|
|
Title:
Vice President and
Secretary
|
Signature
Page to Notes Pledge and Security Agreement
EASTERN
CONCRETE MATERIALS, INC.
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
Michael W. Harlan
|
|
Title:
President and
Secretary
|
Signature
Page to Notes Pledge and Security Agreement
AMERICAN
CONCRETE PRODUCTS, INC.
|
BRECKENRIDGE
READY MIX, INC.
|
BUILDERS’
REDI-MIX, LLC
|
BWB,
INC. OF MICHIGAN
|
CENTRAL
CONCRETE SUPPLY CO., INC.
|
CENTRAL
PRECAST CONCRETE, INC.
|
INGRAM
CONCRETE, LLC
|
MG,
LLC
|
SAN
DIEGO PRECAST CONCRETE, INC.
|
SMITH
PRE-CAST, INC.
|
SIERRA
PRECAST, INC.
|
SUPERIOR
CONCRETE MATERIALS, INC.
|
U.S.
CONCRETE ON-SITE, INC.
|
USC
MANAGEMENT CO., LLC
|
USC
PAYROLL, INC.
|
USC
TECHNOLOGIES, INC.
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
Curt M. Lindeman
|
|
Title:
Vice President and Secretary
|
|
|
LOCAL
CONCRETE SUPPLY & EQUIPMENT, LLC
|
MASTER
MIX CONCRETE, LLC
|
MASTER
MIX, LLC
|
NYC
CONCRETE MATERIALS, LLC
|
PEBBLE
LANE ASSOCIATES, LLC
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
Curt M. Lindeman
|
|
Title:
President and Secretary
|
Signature
Page to Notes Pledge and Security Agreement
CONCRETE
ACQUISITION III, LLC
|
CONCRETE
ACQUISITION IV, LLC
|
CONCRETE
ACQUISITION V, LLC
|
CONCRETE
ACQUISITION VI, LLC
|
CONCRETE
XXXIII ACQUISITION, INC.
|
CONCRETE
XXXIV ACQUISITION, INC.
|
CONCRETE
XXXV ACQUISITION, INC.
|
CONCRETE
XXXVI ACQUISITION, INC.
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
Curt M. Lindeman
|
|
Title:
President
|
Signature
Page to Notes Pledge and Security Agreement
RIVERSIDE
MATERIALS, LLC
|
|
|
By:
|
/s/ Wallace H. Johnson
|
|
Name:
Wallace H. Johnson
|
|
Title:
President and Secretary
|
Signature
Page to Notes Pledge and Security Agreement
U.S.
BANK NATIONAL ASSOCIATION,
as
Noteholder Collateral Agent
|
|
|
By:
|
/s/ Wally Jones
|
|
Name: Wally
Jones
|
|
Title: Vice
President
|
Signature
Page to Notes Pledge and Security Agreement
Exhibit
10.1
|
CREDIT
AGREEMENT
dated
as of
August
31, 2010
among
U.S.
CONCRETE, INC.
The
Lenders Party Hereto
and
JPMORGAN
CHASE BANK, N.A.,
as
Administrative Agent
J.P.
MORGAN SECURITIES INC.,
as
Sole Bookrunner and Lead Arranger
WELLS
FARGO CAPITAL FINANCE, LLC,
as
Documentation Agent and Lead Arranger
CHASE
BUSINESS CREDIT
|
TABLE OF
CONTENTS
|
|
Page
|
|
Article
I
|
|
Definitions
|
|
|
|
Section 1.01
|
Defined
Terms
|
1
|
Section 1.02
|
Classification
of Loans and Borrowings
|
33
|
Section 1.03
|
Terms
Generally
|
33
|
Section 1.04
|
Accounting
Terms; GAAP
|
33
|
Section 1.05
|
Times
of Day
|
34
|
Section 1.06
|
Timing
of Payment of Performance
|
34
|
Section 1.07
|
Certifications
|
34
|
|
Article II
|
|
The Credits
|
|
|
|
Section 2.01
|
Commitments
|
34
|
Section 2.02
|
Loans
and Borrowings
|
34
|
Section 2.03
|
Requests
for Revolving Borrowings
|
35
|
Section 2.04
|
Protective
Advances
|
36
|
Section 2.05
|
Swingline
Loans and Overadvances
|
36
|
Section 2.06
|
Letters
of Credit.
|
38
|
Section 2.07
|
Funding
of Borrowings
|
43
|
Section 2.08
|
Interest
Elections
|
43
|
Section 2.09
|
Termination
and Reduction of Commitments
|
44
|
Section 2.10
|
Repayment
of Loans; Evidence of Debt
|
45
|
Section 2.11
|
Prepayment
of Loans
|
46
|
Section 2.12
|
Fees
|
47
|
Section 2.13
|
Interest
|
48
|
Section 2.14
|
Alternate
Rate of Interest
|
49
|
Section 2.15
|
Increased
Costs
|
49
|
Section 2.16
|
Break
Funding Payments
|
50
|
Section 2.17
|
Taxes
|
51
|
Section 2.18
|
Payments
Generally; Allocation of Proceeds; Sharing of Set-offs
|
53
|
Section 2.19
|
Mitigation
Obligations; Replacement of Lenders
|
55
|
Section 2.20
|
Defaulting
Lenders
|
56
|
Section 2.21
|
Returned
Payments
|
58
|
|
Article III
|
|
Representations and Warranties
|
|
|
|
Section 3.01
|
Organization;
Powers
|
58
|
Section 3.02
|
Authorization;
Enforceability
|
58
|
Section 3.03
|
Governmental
Approvals; No Conflicts
|
58
|
Section 3.04
|
Financial
Condition; No Material Adverse Change
|
58
|
Section 3.05
|
Properties
|
59
|
Section 3.06
|
Litigation
and Environmental Matters
|
59
|
Section 3.07
|
Compliance
with Laws and Agreements
|
60
|
Section 3.08
|
Investment
Company Status
|
60
|
Section 3.09
|
Taxes
|
60
|
Section 3.10
|
ERISA
|
60
|
Section 3.11
|
Disclosure
|
61
|
Section 3.12
|
Material
Agreements
|
61
|
Section 3.13
|
Solvency
|
61
|
Section 3.14
|
Insurance
|
62
|
Section 3.15
|
Capitalization
and Subsidiaries
|
62
|
Section 3.16
|
Security
Interest in Collateral
|
62
|
Section 3.17
|
Employment
Matters
|
62
|
Section 3.18
|
Common
Enterprise
|
63
|
Section 3.19
|
Margin
Regulations
|
63
|
|
Article IV
|
|
Conditions
|
|
|
|
Section 4.01
|
Effective
Date
|
63
|
Section 4.02
|
Each
Credit Event
|
67
|
Section 4.03
|
Determinations
Under Sections 4.01 and 4.02
|
68
|
Section 4.04
|
Post-Closing
Conditions
|
68
|
|
Article V
|
|
Affirmative Covenants
|
|
|
|
Section 5.01
|
Financial
Statements; Borrowing Base and Other Information
|
69
|
Section 5.02
|
Notices
of Material Events
|
73
|
Section 5.03
|
Existence;
Conduct of Business
|
74
|
Section 5.04
|
Payment
of Obligations
|
74
|
Section 5.05
|
Maintenance
of Properties
|
74
|
Section 5.06
|
Books
and Records; Inspection Rights
|
75
|
Section 5.07
|
Compliance
with Laws
|
75
|
Section 5.08
|
Use
of Proceeds
|
75
|
Section 5.09
|
Insurance
|
75
|
Section 5.10
|
Casualty
and Condemnation
|
76
|
Section 5.11
|
Appraisals
|
76
|
Section 5.12
|
Depository
Banks
|
76
|
Section 5.13
|
Additional
Collateral; Further Assurances
|
76
|
Section 5.14
|
Field
Examinations
|
77
|
Article VI
|
|
Negative Covenants
|
|
|
|
Section 6.01
|
Indebtedness
|
78
|
Section 6.02
|
Liens
|
80
|
Section 6.03
|
Fundamental
Changes
|
82
|
Section 6.04
|
Investments,
Loans, Advances, Guarantees and Acquisitions
|
82
|
Section 6.05
|
Asset
Sales
|
84
|
Section 6.06
|
Sale
and Leaseback Transactions
|
85
|
Section 6.07
|
Swap
Agreements
|
85
|
Section 6.08
|
Restricted
Payments; Certain Payments of Indebtedness
|
86
|
Section 6.09
|
Transactions
with Affiliates
|
87
|
Section 6.10
|
Restrictive
Agreements
|
87
|
Section 6.11
|
Amendment
of Material Documents
|
88
|
Section 6.12
|
Capital
Expenditures
|
88
|
Section 6.13
|
Fixed
Charge Coverage Ratio
|
88
|
Section 6.14
|
End
of Fiscal Year and Fiscal Quarters
|
89
|
|
Article VII
|
|
Events of Default
|
|
Article VIII
|
|
The Administrative Agent
|
|
Article IX
|
|
Miscellaneous
|
|
|
|
Section 9.01
|
Notices
|
95
|
Section 9.02
|
Waivers;
Amendments
|
96
|
Section 9.03
|
Expenses;
Indemnity; Damage Waiver
|
98
|
Section 9.04
|
Successors
and Assigns
|
100
|
Section 9.05
|
Survival
|
104
|
Section 9.06
|
Counterparts;
Integration; Effectiveness
|
104
|
Section 9.07
|
Severability
|
104
|
Section 9.08
|
Right
of Setoff
|
104
|
Section 9.09
|
Governing
Law; Jurisdiction; Consent to Service of Process
|
105
|
Section 9.10
|
WAIVER
OF JURY TRIAL
|
106
|
Section 9.11
|
Headings
|
106
|
Section 9.12
|
Confidentiality
|
106
|
Section 9.13
|
Several
Obligations; Nonreliance; Violation of Law
|
107
|
Section 9.14
|
USA
PATRIOT Act
|
107
|
Section 9.15
|
Disclosure
|
108
|
Section 9.16
|
Appointment
for Perfection
|
108
|
Section 9.17
|
Interest
Rate Limitation
|
108
|
Section 9.18
|
Intercreditor
Agreement
|
108
|
|
Article X
|
|
Loan Guaranty
|
|
|
|
Section 10.01
|
Guaranty
|
109
|
Section 10.02
|
Guaranty
of Payment
|
109
|
Section 10.03
|
No
Discharge or Diminishment of Loan Guaranty
|
109
|
Section 10.04
|
Defenses
Waived
|
110
|
Section 10.05
|
Rights
of Subrogation
|
110
|
Section 10.06
|
Reinstatement;
Stay of Acceleration
|
110
|
Section 10.07
|
Information
|
111
|
Section 10.08
|
Termination
|
111
|
Section 10.09
|
Taxes
|
111
|
Section 10.10
|
Maximum
Liability
|
111
|
Section 10.11
|
Contribution
|
112
|
Section 10.12
|
Liability
Cumulative
|
112
|
SCHEDULES
:
Commitment
Schedule
Schedule 2.06
|
—
|
Existing
Letters of Credit
|
Schedule 3.05
|
—
|
Properties
|
Schedule 3.06
|
—
|
Disclosed
Matters
|
Schedule 3.09
|
—
|
Taxes
|
Schedule 3.10
|
—
|
ERISA
|
Schedule 3.12
|
—
|
Material
Agreements
|
Schedule 3.14
|
—
|
Insurance
|
Schedule 3.15
|
—
|
Capitalization
and Subsidiaries
|
Schedule 3.17
|
—
|
Employment
Matters
|
Schedule 6.01
|
—
|
Existing
Indebtedness
|
Schedule 6.02
|
—
|
Existing
Liens
|
Schedule 6.05
|
—
|
Asset
Sales
|
Schedule 6.04
|
—
|
Existing
Investments
|
Schedule 6.09
|
—
|
Transactions
with Affiliates
|
Schedule 6.10
|
—
|
Existing
Restrictions
|
EXHIBITS
:
Exhibit
A
|
—
|
Form
of Assignment and Assumption
|
Exhibit
B
|
—
|
[Reserved.]
|
Exhibit
C
|
—
|
Form
of Borrowing Base Certificate
|
Exhibit
D
|
—
|
Form
of Compliance Certificate
|
Exhibit
E
|
—
|
Joinder
Agreement
|
DEFINITIONS
|
Page
|
|
|
Account
|
1
|
Account
Debtor
|
1
|
Acquisition
|
1
|
Act
|
107
|
Adjusted
LIBO Rate
|
1
|
Adjusted
One Month LIBOR Rate
|
1
|
Administrative
Agent
|
1
|
Administrative
Questionnaire
|
1
|
Affiliate
|
2
|
Aggregate
Credit Exposure
|
2
|
Aggregates
|
2
|
Agreement
|
1
|
Applicable
Margin
|
2
|
Applicable
Percentage
|
2
|
Applicable
Unused Commitment
Fee
Rate
|
2
|
Appraisal
|
2
|
Approved
Fund
|
2
|
Assignment
and Assumption
|
2
|
Auto-Extension
Letter of Credit
|
42
|
Availability
|
2
|
Availability
Block
|
2
|
Availability
Period
|
3
|
Available
Revolving Commitment
|
3
|
Banking
Services
|
3
|
Banking
Services Obligations
|
3
|
Banking
Services Reserves
|
3
|
Board
|
3
|
Borrower
|
3
|
Borrowing
|
3
|
Borrowing
Base
|
3
|
Borrowing
Base Certificate
|
4
|
Borrowing
Base Collateral
|
4
|
Borrowing
Base Contributors
|
4
|
Borrowing
Request
|
4
|
Business
Day
|
4
|
Capital
Expenditures
|
4
|
Capital
Lease
|
4
|
Capital
Lease Obligations
|
5
|
CB
Floating Rate
|
5
|
CBFR
|
5
|
Change
in Control
|
5
|
Change
in Law
|
5
|
Charges
|
108
|
Chase
|
5
|
Class
|
5
|
Code
|
6
|
Collateral
|
6
|
Collateral
Access Agreement
|
6
|
Collateral
Documents
|
6
|
Collection
Account
|
6
|
Commercial
LC Exposure
|
6
|
Commitment
|
6
|
Commitment
Schedule
|
6
|
Consolidated
Net Tangible Assets
|
6
|
Control
|
6
|
Controlled
|
6
|
Controlled
Disbursement Account
|
6
|
Controlling
|
6
|
Credit
Exposure
|
7
|
Customary
Permitted Liens
|
7
|
Default
|
8
|
Defaulting
Lender
|
8
|
Deposit
Account
|
8
|
Depreciation
Amount
|
8
|
DIP
Credit Agreement
|
9
|
Disclosed
Matters
|
9
|
Document
|
9
|
dollars
|
9
|
EBITDA
|
9
|
Effective
Date
|
9
|
Eligible
Accounts
|
9
|
Eligible
Aggregates Inventory
|
13
|
Eligible
Inventory
|
13
|
Eligible
Trucks
|
14
|
Environmental
Laws
|
14
|
Environmental
Liability
|
14
|
Equity
Interests
|
14
|
Equity
Issuance
|
15
|
ERISA
|
15
|
ERISA
Affiliate
|
15
|
ERISA
Event
|
15
|
Eurodollar
|
15
|
Event
of Default
|
15
|
Events
of Default
|
89
|
Exchange
Act
|
5
|
Excluded
Collateral
|
15
|
Excluded
Issuances
|
15
|
Excluded
Joint Venture
|
16
|
Excluded
JV Assets
|
16
|
Excluded
JV Equity
|
16
|
Excluded
Taxes
|
16
|
Existing
Letters of Credit
|
16
|
FATCA
|
16
|
FCRR
Test
|
16
|
Federal
Funds Effective Rate
|
16
|
Financial
Officer
|
16
|
Fixed
Charge Coverage Ratio
|
17
|
Fixed
Charges
|
17
|
Foreign
Lender
|
17
|
Foreign
Payee
|
17
|
Foreign
Subsidiary
|
17
|
Funding
Account
|
17
|
GAAP
|
17
|
Governmental
Authority
|
17
|
Guarantee
|
17
|
Guaranteed
Obligations
|
18
|
guarantor
|
18
|
Hazardous
Materials
|
18
|
Indebtedness
|
18
|
Indemnified
Taxes
|
18
|
Indemnitee
|
100
|
Information
|
106
|
Initial
Availability Block Period
|
19
|
Intercreditor
Agreement
|
19
|
Interest
Election Request
|
19
|
Interest
Expense
|
19
|
Interest
Payment Date
|
19
|
Interest
Period
|
19
|
Inventory
|
19
|
Investment
|
19
|
Issuing
Bank
|
19
|
Joinder
Agreement
|
19
|
Land
|
20
|
LC
Collateral Account
|
42
|
LC
Disbursement
|
20
|
LC
Exposure
|
20
|
Lead
Arrangers
|
20
|
Lenders
|
20
|
Letter
of Credit
|
20
|
LIBO
Rate
|
20
|
Lien
|
20
|
Loan
Documents
|
21
|
Loan
Guarantor
|
21
|
Loan
Guaranty
|
21
|
Loan
Parties
|
21
|
Loans
|
21
|
Material
Adverse Effect
|
21
|
Material
Agreements
|
21
|
Material
Indebtedness
|
21
|
Material
Real Property
|
22
|
Maturity
Date
|
22
|
Maximum
Liability
|
22
|
Maximum
Rate
|
108
|
Moody’s
|
22
|
Mortgages
|
22
|
Multiemployer
Plan
|
22
|
Net
Capital Expenditures
|
22
|
Net
Income
|
22
|
Net
Orderly Liquidation Value Inventory Rate
|
22
|
Net
Orderly Liquidation Value Of Eligible Trucks
|
23
|
Net
Proceeds
|
23
|
Non-Consenting
Lender
|
23
|
Non-Extension
Notice Date
|
42
|
Non-Paying
Guarantor
|
23
|
Non-Recourse
Indebtedness
|
23
|
Notes
Agent
|
24
|
Notes
Priority Collateral
|
24
|
Obligated
Party
|
24
|
Obligations
|
24
|
Off-Balance
Sheet Liability
|
24
|
Other
Taxes
|
24
|
Overadvance
|
24
|
parent
|
31
|
Participant
|
24
|
Payee
|
51
|
Paying
Guarantor
|
24
|
PBGC
|
24
|
Permitted
Acquisition
|
24
|
Permitted
Discretion
|
26
|
Permitted
Investments
|
26
|
Person
|
27
|
Plan
|
27
|
Prepayment
Event
|
27
|
primary
obligor
|
18
|
Prime
Rate
|
27
|
Pro
Forma Basis
|
27
|
Projections
|
27
|
Protective
Advance
|
28
|
Real
Property
|
28
|
Register
|
28
|
Related
Parties
|
28
|
Reorganization
Plan
|
28
|
Report
|
28
|
Required
Lenders
|
28
|
Requirement
of Law
|
28
|
Reserves
|
28
|
Responsible
Officer
|
29
|
Restricted
Payment
|
29
|
Revolving
Commitment
|
29
|
Revolving
Exposure
|
29
|
Revolving
Lender
|
29
|
Revolving
Loan
|
29
|
S&P
|
29
|
Secured
Obligations
|
29
|
Secured
Parties
|
29
|
Security
Agreement
|
30
|
Senior
Notes
|
30
|
Senior
Notes Account
|
30
|
Senior
Notes Agreement
|
30
|
Senior
Notes Documents
|
30
|
Service
Agreement
|
30
|
Servicer
|
30
|
Settlement
|
38
|
Settlement
Date
|
38
|
Standby
LC Exposure
|
30
|
Statutory
Reserve Rate
|
30
|
Subordinated
Indebtedness
|
31
|
subsidiary
|
31
|
Subsidiary
|
31
|
Supermajority
Revolving Lenders
|
31
|
Swap
Agreement
|
31
|
Swap
Obligations
|
31
|
Swingline
Exposure
|
31
|
Swingline
Lender
|
32
|
Swingline
Loan
|
32
|
Taxes
|
32
|
Transactions
|
32
|
Trucks
|
32
|
Trustee
|
32
|
Type
|
32
|
UCC
|
32
|
Unfunded
Pension Liability
|
32
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Unliquidated
Obligations
|
32
|
Withdrawal
Liability
|
33
|
Withholding
Agent
|
33
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CREDIT
AGREEMENT dated as of August 31, 2010 (as it may be amended, modified or
supplemented from time to time, this “
Agreement
”),
among
U.S. CONCRETE,
INC.
(the “
Borrower
”),
the other Loan Parties party hereto from time to time, the Lenders party hereto,
and
JPMORGAN CHASE BANK,
N.A.
, as Administrative Agent.
The
parties hereto agree as follows:
ARTICLE
I
Definitions
Section
1.01
Defined
Terms
. As used in this Agreement, the following terms have the
meanings specified below:
“
Account
”
has the meaning assigned to such term in the Security Agreement.
“
Account
Debtor
” means any Person obligated on an Account.
“
Acquisition
”
means any transaction, or any series of related transactions, consummated on or
after the date of this Agreement, by which any Loan Party (a) acquires all or
substantially all of the assets of any Person or any division or line of
business of any other Person, whether through purchase of assets, merger or
otherwise or (b) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of related transactions) at least a majority
(in number of votes) of the Equity Interests in a Person which has ordinary
voting power for the election of directors or other similar management personnel
of a Person (other than Equity Interests having such power only by reason of the
happening of a contingency) or a majority of the outstanding Equity Interests in
a Person.
“
Adjusted
LIBO Rate
” means, with respect to any Eurodollar Borrowing for any
Interest Period or for any CBFR Borrowing, an interest rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for
such Interest Period multiplied by (b) the Statutory Reserve Rate.
“
Adjusted
One Month LIBOR Rate
” means an interest rate per annum equal to the sum
of (a) 1.0% per annum
plus
(b)
the Adjusted LIBO Rate for a one-month Interest Period on such day (or if such
day is not a Business Day, the immediately preceding Business Day); provided
that, for the avoidance of doubt, the Adjusted LIBO Rate for any day shall be
based on the rate appearing on the Reuters Screen LIBOR01 Page (or on any
successor or substitute page) at approximately 11:00 a.m., London time on such
day (without any rounding).
“
Administrative
Agent
” means JPMorgan Chase Bank, N.A., in its capacity as administrative
agent for the Lenders hereunder and its successors and permitted
assigns.
“
Administrative
Questionnaire
” means an Administrative Questionnaire in a form supplied
by the Administrative Agent.
“
Affiliate
”
means, with respect to a specified Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.
“
Aggregate
Credit Exposure
” means, at any time, the aggregate Credit Exposure of all
the Lenders.
“
Aggregate
s
”
means all stone, sand, gravel, limestone and similar minerals, including, but
not limited to, all such materials that constitute “as-extracted collateral”
under the UCC (but excluding oil and gas).
“
Applicable
Margin
” means 2.75% per annum with respect to CBFR Loans and 3.75% per
annum with respect to Eurodollar Loans.
“
Applicable
Percentage
” means, with respect to any Lender, with respect to Revolving
Loans, LC Exposure, Swingline Loans, Overadvances, Protective Advances or
Aggregate Credit Exposure, a percentage equal to a fraction the numerator of
which is such Lender’s Revolving Commitment and the denominator of which is the
aggregate Revolving Commitment of all Revolving Lenders (if the Revolving
Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon such Lender’s share of the aggregate Revolving Exposures
at that time); provided that in the case of
Section 2.20
when a
Defaulting Lender shall exist, any such Defaulting Lender’s Revolving Commitment
shall be disregarded in the calculation.
“
Applicable
Unused Commitment Fee Rate
” means 0.75% per annum.
“
Appraisal
”
means each appraisal referenced in
Section 4.01(x)
, and
any appraisal that is conducted after the Effective Date pursuant to
Section 5.11
,
for the purpose of
calculating certain components of the Borrowing Base, in form and substance
reasonably satisfactory to the Administrative Agent and performed by an
appraiser that is reasonably satisfactory to the Administrative
Agent.
“
Approved
Fund
” has the meaning assigned to such term in
Section
9.04
.
“
Assignment
and Assumption
” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by
Section
9.04
), and accepted by the Administrative Agent, substantially in the
form of
Exhibit
A
or any other form approved by the Administrative Agent.
“
Availability
”
means, at any time, an amount equal to (a) the lesser of (i) the Revolving
Commitment and (ii) the Borrowing Base
minus
(b)
the sum of (i) Revolving Exposure of all Lenders and (ii) the Availability
Block.
“
Availability
Block
”
means an amount equal to (a) $15,000,000 for the Initial Availability Block
Period, and (b) at all times after the Initial Availability Block Period,
unless and until the FCCR Test has been satisfied, $15,000,000 plus $1,000,0000
for each month after the expiration of the Initial Availability Block Period, up
to a maximum Availability Block of $20,000,000. If the FCCR Test is
satisfied at any time after the Initial Availability Block Period, the
Availability Block will be eliminated and shall not be
reimposed.
“
Availability
Period
” means the period from and including the Effective Date to but
excluding the earlier of the Maturity Date and the date of termination of the
Commitments.
“
Available
Revolving Commitment
” means, at any time, the Revolving Commitment then
in effect
minus
the Revolving Exposure of all Revolving Lenders at such time.
“
Banking
Services
” means each and any of the following bank services provided to
any Loan Party by any Lender or, during the period it is a Lender, any of its
Affiliates: (a) credit cards for commercial customers (including,
without limitation, “commercial credit cards” and purchasing cards), (b) stored
value cards and (c) treasury management services (including, without limitation,
controlled disbursement, automated clearinghouse transactions, return items,
overdrafts and interstate depository network services).
“
Banking
Services Obligations
” of the Loan Parties means any and all obligations
of the Loan Parties, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor) in connection with Banking
Services.
“
Banking
Services Reserves
” means all Reserves which the Administrative Agent from
time to time establishes in its Permitted Discretion for Banking Services then
provided or outstanding.
“
Board
”
means the Board of Governors of the Federal Reserve System of the United States
of America.
“
Borrower
”
means
U.S.
Concrete, Inc., a Delaware corporation.
“
Borrowing
”
means (a) Revolving Loans of the same Type, made, converted or continued on the
same date and, in the case of Eurodollar Loans, as to which a single Interest
Period is in effect, (b) a Swingline Loan, (c) a Protective Advance and (d) an
Overadvance.
“
Borrowing
Base
” means, at any time, (a) the sum of (i) the product of 85% and the
face amount of all Eligible Accounts of the Borrowing Base Contributors
(calculated net, without duplication, of all finance charges, late fees and
other fees that are unearned, unpaid sales, excise or similar taxes, and credits
or allowances granted at such time), (ii) the lesser of (x) the product of
85%
multiplied by
the
Net Orderly Liquidation Value Inventory Rate of the Eligible Inventory of the
Borrowing Base Contributors (valued at the lower of cost or market on a
first-in, first-out basis) and (y) the sum of (1) 50% of the Eligible
Inventory (other than Eligible Aggregates Inventory) of the Borrowing Base
Contributors and (2) 65% of the Eligible Aggregates Inventory of the
Borrowing Base Contributors (in each case, valued at the lower of cost or market
on a first-in, first-out basis) and (iii) the lesser of (x) $15,000,000 or
(y) the sum of (3) the product of 85%
multiplied by
(A) the
Net Orderly Liquidation Value Of Eligible Trucks of the Borrowing Base
Contributors as of the date of the latest Appraisal
minus
(B) the Net Orderly Liquidation Value Of Eligible Trucks that have been sold
since the date of the latest Appraisal of Eligible Trucks,
plus
(4)
the product of 80% of the cost of newly acquired Eligible Trucks (net of any
discounts, rebates or credits and excluding any fees, expenses, sales taxes,
other taxes and delivery charges) of the Borrowing Base Contributors since the
date of the latest Appraisal and
minus
(5) the Depreciation Amount applicable to Eligible Trucks of the Borrowing Base
Contributors,
minus
(b) all
Reserves then in effect. The Administrative Agent may, in its Permitted
Discretion, reduce the advance rates set forth above, adjust Reserves or reduce
one or more of the other elements used in computing the Borrowing Base; provided
that any such reduction in advance rates, adjustment in Reserves or reduction in
the elements used in computing the Borrowing Base shall only become effective
upon not less than one (1) Business Day’s notice to the Borrower (during which
period the Administrative Agent shall be available to discuss any such proposed
reduction or adjustment with the Borrower). The Borrowing Base at any
time shall be determined by reference to the most recent Borrowing Base
Certificate delivered to the Administrative Agent in compliance with the terms
hereof.
“
Borrowing
Base Certificate
” means a certificate, signed and certified as accurate
and complete by a Financial Officer of the Borrower, in substantially the form
of
Exhibit C
or
another form which is acceptable to the Administrative Agent in its sole
discretion.
“
Borrowing
Base Collateral
” means the Accounts, Inventory and Trucks (other than
Excluded Collateral) included in the Borrowing Base.
“
Borrowing
Base Contributors
” means, at any time, the Borrower and each Loan Party
owning Borrowing Base Collateral.
“
Borrowing
Request
” means a request by the Borrower for a Borrowing in accordance
with
Section
2.02
.
“
Business
Day
” means any day that is not a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to remain
closed;
provided
that, when
used in connection with a Eurodollar Loan, the term “
Business Day
” shall
also exclude any day on which banks are not open for dealings in dollar deposits
in the London interbank market.
“
Capital
Expenditures
” means, without duplication, any expenditure for any
purchase or other acquisition of any asset which would be classified as a fixed
or capital asset on a consolidated balance sheet of the Borrower and its
Subsidiaries prepared in accordance with GAAP;
provided
that such term shall
not include amounts expended (i) during such period as a part of the
consideration for, or assets acquired in connection with, any Permitted
Acquisition or obligations assumed in any Permitted Acquisition and (ii) to
replace or repair assets, equipment or other property lost, destroyed, damaged
or condemned, solely (except for any applicable deductible retainage, co-payment
or similar deduction or reduction in reimbursement) to the extent of the amount
of reimbursement (whether pursuant to insurance or indemnity claims) that such
Person has actually received in respect of such lost, destroyed, damaged or
condemned assets.
“
Capital
Lease
” means, with respect to any Person, any lease of, or other
arrangement conveying the right to use, property by such Person as lessee that
would be accounted for as a capital lease on a balance sheet of such Person
prepared in conformity with GAAP.
“
Capital
Lease Obligations
” of any Person means the obligations of such Person to
pay rent or other amounts under any Capital Lease, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
“
CB
Floating Rate
” means the Prime Rate; provided that the CB Floating Rate
shall never be less than the Adjusted One Month LIBOR Rate for a one-month
Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day). Any change in the CB Floating
Rate due to a change in the Prime Rate or the Adjusted One Month LIBOR Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Adjusted One Month LIBOR Rate, respectively.
“
CBFR
”,
when used in reference to any Loan or Borrowing, refers to whether such Loan, or
the Loans comprising such Borrowing, are bearing interest at a rate determined
by reference to the CB Floating Rate.
“
Change in
Control
” means the occurrence of any of the following: (a) any
person or group of persons (within the meaning of Section 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the “
Exchange
Act
”)) shall have acquired beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Exchange Act) of
50% or more of the issued and outstanding voting securities within the meaning
of Rule 13d-5(b) of the Exchange Act of the Borrower, (b) during any period of
twelve consecutive calendar months commencing from and after the Effective Date,
individuals who, at the beginning of such period, constituted the board of
directors of the Borrower (together with any new directors whose election by the
board of directors of the Borrower or whose nomination for election by the
stockholders of the Borrower was approved by a vote of at least a majority of
the directors then still in office who either were directors at the beginning of
such period or whose elections or nomination for election was previously so
approved) cease for any reason other than death or disability to constitute a
majority of the directors then in office or (c) a Fundamental Change of Control
(as defined in the Senior Notes Agreement).
“
Change in
Law
” means, in each case after the Effective Date, (a) the adoption
of any law, rule or regulation, (b) any change in any law, rule or regulation or
in the interpretation or application thereof by any Governmental Authority or
(c) compliance by any Lender or the Issuing Bank (or, for purposes of
Section 2.15(b)
, by
any lending office of such Lender or by such Lender’s or the Issuing Bank’s
holding company, if any) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or issued after
the Effective Date;
provided
however, for
purposes of this Agreement, the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, guidelines or directives in connection
therewith are deemed to have gone into effect and to have been adopted after the
Effective Date.
“
Chase
”
means JPMorgan Chase Bank, N.A., a national banking association, in its
individual capacity, and its successors and permitted assigns.
“
Class
”,
when used in reference to any Loan or Borrowing, refers to whether such Loan, or
the Loans comprising such Borrowing, are Revolving Loans, Swingline Loans,
Protective Advances or Overadvances.
“
Code
”
means the Internal Revenue Code of 1986, as amended from time to
time.
“
Collateral
”
means any and all property of a Loan Party, now existing or hereafter acquired,
that may at any time be or become subject to a security interest or Lien in
favor of the Administrative Agent, on behalf of itself and the Lenders, to
secure payment of the Secured Obligations pursuant to the Collateral
Documents.
“
Collateral
Access Agreement
” has the meaning assigned to such term in the Security
Agreement.
“
Collateral
Documents
” means, collectively, the Security Agreement, the Mortgages and
any other documents granting a Lien upon the Collateral as security for payment
of the Secured Obligations.
“
Collection
Account
” has the meaning assigned to such term in the Security
Agreement.
“
Commercial
LC Exposure
” means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding commercial Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements relating to commercial Letters of
Credit that have not yet been reimbursed by or on behalf of the Borrower at such
time. The Commercial LC Exposure of any Lender at any time shall be
its Applicable Percentage of the total Commercial LC Exposure at such
time.
“
Commitment
”
means, with respect to each Lender, the sum of such Lender’s Revolving
Commitment. The initial amount of each Lender’s Commitment is set
forth on the
Commitment Schedule
,
or in the Assignment and Assumption pursuant to which such Lender shall have
assumed its Commitment, as applicable.
“
Commitment
Schedule
” means the Schedule attached hereto identified as
such.
“
Consolidated
Net Tangible Assets
” means the aggregate amount of assets of the
Borrower and its Subsidiaries (less applicable reserves and other properly
deductible items) after deducting therefrom (to the extent otherwise included
therein) (a) all current liabilities (other than the obligations under the
Senior Notes Agreement or current maturities of long-term Indebtedness), and (b)
all goodwill, trade names, trademarks, patents, unamortized debt discount and
expense and other like intangibles, all as set forth on the books and records of
the Borrower and its Subsidiaries on a consolidated basis and in accordance with
GAAP.
“
Control
”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. “
Controlling
”
and “
Controlled
”
have meanings correlative thereto.
“
Controlled
Disbursement Account
” means, collectively, account # 826095606, and
any replacement or additional accounts of the Borrower maintained with the
Administrative Agent as a cash management account pursuant to and under any
agreement between the Borrower and the Administrative Agent, as modified,
amended or supplemented from time to time, and through which all disbursements
of the Borrower, any Loan Party and any designated Subsidiary of the Borrower
are made and settled on a daily basis with no uninvested balance remaining
overnight.
“
Credit
Exposure
” means, as to any Lender at any time, the sum of (a) such
Lender’s Revolving Exposure at such time,
plus
(b)
an amount equal to its Applicable Percentage, if any, of the aggregate principal
amount of Protective Advances outstanding at such time.
“
Customary
Permitted Liens
” means, with respect to any Person, any of the following
Liens:
(a) Liens
with respect to the payment of taxes, assessments or governmental charges in
each case (i) that are not yet due or that are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves or other
appropriate provisions are being maintained to the extent required by GAAP or
(ii) in respect of which the aggregate liability of such Person does not exceed
$1,500,000 at any time;
(b) Liens
of landlords arising by statute and liens of suppliers, mechanics, carriers,
materialmen, warehousemen or workmen and other liens imposed by law created in
the ordinary course of business (i) for amounts not yet due or that are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves or other appropriate provisions are being maintained to the
extent required by GAAP or (ii) in respect of which the aggregate liability of
such Person does not exceed $1,500,000 at any time;
(c) deposits
and pledges of cash, Permitted Investments and Deposit Accounts made in the
ordinary course of business in connection with workers’ compensation,
unemployment insurance or other types of social security benefits or other
ordinary course statutory obligations or to secure the performance of bids,
tenders, sales, contracts (other than for the repayment of borrowed money) and
surety, appeal, customs, bid or performance bonds;
(d) encumbrances
arising by reason of zoning restrictions, easements, licenses, reservations,
covenants, rights-of-way, utility easements, building restrictions and other
similar encumbrances on the use of Real Property not materially detracting from
the value of such Real Property or not materially interfering with the ordinary
conduct of the business conducted and proposed to be conducted at such Real
Property;
(e) encumbrances
arising under leases, subleases, licenses or sublicenses of Real Property that
do not, in the aggregate, materially detract from the value of such Real
Property or interfere with the ordinary conduct of the business conducted and
proposed to be conducted at such Real Property;
(f) Liens
affecting the fee title of any leased Real Property which are created by a party
other than a Loan Party;
(g) financing
statements with respect to a lessor’s rights in and to personal property leased
to such Person in the ordinary course of such Person’s business other than
through a Capital Lease;
(h)
solely with respect to Real Property, such other Liens, defects and
encumbrances as may be approved by the Administrative Agent in its sole
discretion;
(i) Liens
securing judgments which do not constitute an Event of Default; and
(j) Liens
in favor of a banking institution arising as a matter of law or otherwise
encumbering deposits (including the right of set off) and which are within the
general parameters customary in the banking industry;
provided
that the
term “Customary Permitted Liens” shall not include any Lien securing
Indebtedness.
“
Default
”
means any event or condition which constitutes an Event of Default or which upon
notice, lapse of any grace period or both would, unless cured or waived
hereunder, become an Event of Default.
“
Defaulting
Lender
” means any Lender, as determined by the Administrative Agent, that
has (a) failed to fund any portion of its Loans or participations in Letters of
Credit required to be funded by it hereunder within two (2) Business Days
of the date required to be funded by it hereunder, (b) has notified the
Administrative Agent, any Issuing Bank, the Swingline Lender, any Lender and/or
the Borrower in writing that it does not intend to comply with any of its
funding obligations under this Agreement or has made a public statement to the
effect that it does not intend to comply with its funding obligations under this
Agreement, (c) has otherwise failed to pay over to the Administrative Agent or
any other Lender any other amount required to be paid by it hereunder within
three (3) Business Days of the date when due, unless the subject of a good faith
dispute, or (d) (i) becomes or is insolvent or has a parent company that
has become or is insolvent, or (ii) becomes the subject of a bankruptcy or
insolvency proceeding, or has had a receiver, conservator, trustee or custodian
appointed for it, or has taken any action or furtherance of, or indicating its
consent to, approval of or acquiescence in any such proceeding or appointment or
has a parent company that has become the subject of a bankruptcy or insolvency
proceeding, or has had a receiver, conservator, trustee or custodian appointed
for it, or has taken any action in furtherance of, or indicating its consent to,
approval of or acquiescence in any such proceeding or appointment.
“
Deposit
Account
” has the meaning given to such term in the UCC.
“
Depreciation
Amount
”
means, as of any date of determination, an amount equal to the product of (a)
1.5742% of the orderly liquidation value of the Eligible Trucks of the Borrowing
Base Contributors per the most recent Appraisal
multiplied by
(b) the number
of months since the most recent Appraisal;
adjusted
upwards for
depreciation attributable to any Eligible Trucks of the Borrowing Base
Contributors acquired since the date of the most recent Appraisal (calculated
based on 1.5742% per month of the cost of such acquired Eligible Trucks) and
adjusted downwards for any depreciation attributable to Eligible Trucks of the
Borrowing Base Contributors disposed of since the date of the most recent
Appraisal (calculated based on 1.5742% per month of the orderly liquidation
value of such disposed Eligible Trucks).
“
DIP
Credit Agreement
” means that certain Revolving Credit, Term Loan and
Guarantee Agreement dated as of May 3, 2010 by and among the Borrower, the other
guarantors party thereto, the lenders party thereto and the Administrative
Agent.
“
Disclosed
Matters
” means the actions, suits and proceedings and the environmental
matters disclosed in
Schedule
3.06
.
“
Document
”
has the meaning assigned to such term in the Security Agreement.
“
dollars
”
or “
$
”
refers to lawful money of the United States of America.
“
EBITDA
” means, with respect to
any Person for any period, (a) Net Income of such Person for such period
plus
(b) the sum of, in each
case to the extent included in the calculation of such Net Income but without
duplication, (i) any provision for federal, state and local income and franchise
taxes, (ii) Interest Expense, (iii) loss or charges from extraordinary items,
including losses from the sale or
other disposition of assets or any subsidiaries
,
(iv) depreciation, depletion
and amortization expenses, (v) all other non-cash charges, non-cash impairment
charges and non-cash charges, expenses and losses for such period,
provided
that each of the
foregoing is a non-recurring charge, expense or loss, (vi) the amount of any
non-cash (x) compensation deduction as the result of any grant of stock or
stock equivalents to employees, officers, directors or consultants and
(y) incentive compensation charges, (vii) unusual or non-recurring charges,
fees and expenses which are acceptable to the Administrative Agent in its sole
discretion, (viii) all one time compensation charges, including without
limitation, stay bonuses paid to existing management and severance costs, in an
aggregate amount not to exceed $1,000,000 and to the extent incurred and paid
prior to December 31, 2010, (ix) fees, expenses and costs incurred in
connection with the Transactions, the Reorganization Plan and other cash
restructuring charges in an aggregate amount not to exceed $11,000,000 and to
the extent paid subsequent to the Effective Date and prior to September 30,
2011, of which cash restructuring charges incurred and paid after the Effective
Date will not exceed $1,800,000, (x) any gains or losses associated with the
disposition of the Excluded Jointed Venture, including the Excluded JV Equity
and Excluded JV Assets, and (xi) to the extent not already included in
Consolidated Net Income, cash proceeds from business interruption insurance
minus
(c) the sum of,
in each case to the extent included in the calculation of such Net Income but
without duplication, (i) any credit for any federal, state and local income and
franchise tax, (ii) gains from extraordinary items for such period and (iii) any
other non-cash gains or other items which have been added in determining Net
Income, including any reversal of a change referred to in
clause (b)(vi)
above by
reason of a decrease in the value of any Stock or Stock
Equivalent. In no event shall the calculation of “EBITDA” include any
gain or loss from the early extinguishment or repurchase of
Indebtedness.
“
Effective
Date
” means the date on which the conditions specified in
Section 4.01
are
satisfied (or waived in accordance with
Section
9.02
).
“
Eligible
Accounts
” means, at any time, the Accounts of the Borrowing Base
Contributors which the Administrative Agent determines in its Permitted
Discretion are eligible as the basis for the extension of Revolving Loans,
Swingline Loans and the issuance of Letters of Credit
hereunder. Without limiting the Administrative Agent’s discretion
provided herein, Eligible Accounts shall not include any
Account:
(a) in
which the Administrative Agent does not have a fully perfected first priority
Lien or is subject to any Lien other than Customary Permitted Liens so long as
such Customary Permitted Liens (other than Customary Permitted Liens of the type
described in
clause
(a)
of the definition thereof) do not have priority over the Lien in
favor of the Administrative Agent; or
(b) which
is (i) more than 90 days past due according to the original terms of sale or
(ii) 120 days or more past the original invoice date thereof; or
(c) any
representation or warranty contained in this Agreement or any other Loan
Document with respect to such specific Account is not true and correct;
or
(d) with
respect to which the Account Debtor has disputed liability or made any claim
with respect to any other Account due from such Account Debtor to such Borrowing
Base Contributor but only to the extent of such dispute or claim;
or
(e) with
respect to which the Account Debtor has (i) filed a petition for bankruptcy or
any other relief under the Bankruptcy Code or any other law relating to
bankruptcy, insolvency, reorganization or relief of debtors, (ii) made a general
assignment for the benefit of creditors, (iii) had filed against it any petition
or other application for relief under the Bankruptcy Code or any such other law,
(iv) has failed, suspended business operations, become insolvent, called a
meeting of its creditors generally for the purpose of obtaining any financial
concession or accommodation or (v) had or suffered a receiver or a trustee to be
appointed for all or a significant portion of its assets or affairs, in each
case, unless such Accounts arose on a post-petition basis and (1) the Account
Debtor on such Account is a debtor-in-possession in a Chapter 11 case under the
Bankruptcy Code and has available debtor-in-possession financing from sources
and under terms reasonably acceptable to the Administrative Agent and (2) the
Administrative Agent, acting in its sole discretion, determines that such
Account shall be an Eligible Account;
provided, however
,
that the aggregate amount of all otherwise Eligible Accounts excluded under this
clause
(e)
shall not,
at any time, exceed 5% of the Eligible Accounts of the Borrowing Base
Contributors; or
(f) the
Account Debtor on such Account or any of its Affiliates is also a supplier to or
creditor of the Borrower or any of its Subsidiaries, but only to the extent of
the amount owing by the Borrower or any of its Subsidiaries to such supplier or
creditor, unless such supplier or creditor has executed a no-offset letter
reasonably satisfactory to the Administrative Agent, in its sole discretion, in
which case the full amount of such account shall be eligible pursuant to this
clause
(f)
;
or
(g) which
is owed by an Account Debtor which (i) does not maintain its chief executive
office in the U.S. or Canada or (ii) is not organized under applicable law of
the U.S., any state of the U.S., Canada or any province of Canada unless, in
either case, the sale is on letter of credit or acceptance terms acceptable to
the Administrative Agent in its Permitted Discretion, and (1) such letter of
credit names the Administrative Agent as beneficiary for the benefit of the
Secured Parties or (2) the issuer of such letter of credit has consented to the
assignment of the proceeds thereof to the Administrative Agent;
or
(h) which
(i) does not arise from the sale of goods or performance of services in the
ordinary course of business, (ii) is not evidenced by an invoice or other
documentation satisfactory to the Administrative Agent which has been sent to
the Account Debtor, (iii) represents a sale on a bill-and-hold, guaranteed
sale, sale-and-return, sale on approval, consignment, cash-on-delivery or any
other repurchase or return basis, or (iv) relates to payments of interest;
or
(i) which
is subject to any deduction, offset, counterclaim, return privilege or other
conditions other than volume sales discounts given in the ordinary course of
such Borrowing Base Contributor’s business;
provided,
however
,
that such Account shall
be ineligible pursuant to this
clause
(i)
only to the
extent of such deduction, offset, counterclaim, return privilege or other
condition; or
(j) with
respect to which the Account Debtor is located in any State of the United States
requiring the holder of such Account, as a precondition to commencing or
maintaining any action in the courts of such State, either to (i) receive a
certificate of authorization to do business in such State or be in good standing
in such State or (ii) file a Notice of Business Activities Report with the
appropriate office or agency of such State, in each case unless the holder of
such Account has received such a certificate of authority to do business, is in
good standing or, as the case may be, has duly filed such a notice in such
State; or
(k) with
respect to which the Account Debtor is a Governmental Authority, unless such
Borrowing Base Contributor has assigned its rights to payment of such Account to
the Administrative Agent pursuant to the Assignment of Claims Act of 1940, as
amended, in the case of a federal Governmental Authority, and pursuant to
applicable law, if any, in the case of any other Governmental Authority, and
such assignment has been accepted and acknowledged by the appropriate government
officers; or
(l) which
represents late charges or finance charges;
provided
that with
respect to any Account for which late charges or finance charges constitute only
a portion of such Account, such Account shall be ineligible pursuant to this
clause
(l)
only to the extent of
such late charges or finance charges; or
(m) which
represents a progress billing consisting of an invoice for goods sold or used or
services rendered pursuant to a contract under which the Account Debtor’s
obligation to pay that invoice is subject to such Borrowing Base Contributor’s
completion of further performance under such contract; or
(n) which
was previously the subject of a charge-back, debit memo or other transaction
pursuant to which the liability of the Account Debtor thereunder was at one time
extinguished or settled but has subsequently been reinstated and re-aged;
or
(o) with
respect to which 50% or more of the outstanding Accounts of the Account Debtor
have become, or have been determined by the Administrative Agent, in accordance
with the provisions hereof, to be, ineligible pursuant to
clause
(b)
above;
or
(p) which
is denominated in a currency other than Dollars; or
(q) which
is a bonded Account or is evidenced by any promissory note, chattel paper or
instrument; or
(r) with
respect to which such Borrowing Base Contributor, in order to be entitled to
collect such Account, is required to perform any additional service for, or
perform or incur any additional obligation to, the Person to whom or to which it
was made; or
(s) the
total Accounts of such Account Debtor to such Borrowing Base Contributor
represent more than 15% of the Eligible Accounts of all Borrowing Base
Contributors at such time, but only to the extent of such excess;
or
(t)
which is owed by any Affiliate, employee, officer, director, agent or
stockholder of any Loan Party; or
(u) which
the Administrative Agent determines may not be paid by reason of the Account
Debtor’s inability to pay or which the Administrative Agent otherwise determines
in its Permitted Discretion is unacceptable for any reason whatsoever;
or
(v) which,
for any Account Debtor, exceeds a credit limit determined by the Administrative
Agent in its Permitted Discretion, to the extent of such excess; or
(w) with
respect to which any check or other instrument of payment has been returned
uncollected for any reason; or
(x) for
which the goods giving rise to such Account have not been shipped to the Account
Debtor or for which the services giving rise to such Account have not been
performed by the Borrower or if such Account was invoiced more than once;
or
(y)
which does not comply in all material respects
with the requirements of all applicable laws and regulations, whether Federal,
state or local, including without limitation the Federal Consumer Credit
Protection Act, the Federal Truth in Lending Act and Regulation Z of the Board;
or
(z)
which relates to the sale of Aggregates at
the minehead or other site of extraction unless an appropriate UCC-1 financing
statement or Mortgage in favor of the Administrative Agent complying with
Section 9-502 of the UCC as to as-extracted collateral shall have been
properly filed in the real property records.
In the
event that an Account which was previously an Eligible Account ceases to be an
Eligible Account hereunder, the Borrower shall notify the Administrative Agent
thereof on and at the time of submission to the Administrative Agent of the next
Borrowing Base Certificate. In determining the amount of an Eligible
Account, the face amount of an Account may, in the Administrative Agent’s
Permitted Discretion, be reduced by, without duplication of any other Reserve,
eligibility criteria or the terms of the definition of Borrowing Base, to the
extent not reflected in such face amount, (i) the amount of all accrued and
actual discounts, claims, credits or credits pending, promotional program
allowances, price adjustments, finance charges or other allowances (including
any amount that the Borrower may be obligated to rebate to an Account Debtor
pursuant to the terms of any agreement or understanding (written or oral)) and
(ii) the aggregate amount of all cash received in respect of such Account but
not yet applied by the Borrower to reduce the amount of such
Account.
“
Eligible
Aggregates Inve
ntory
”
means that portion of the Eligible Inventory which consists exclusively of
Aggregates.
“
Eligible
Inventory
” means, at any time, the Inventory of each of the Borrowing
Base Contributors (other than any Inventory that has been consigned by any such
Borrowing Base Contributor) including raw materials and finished goods which the
Administrative Agent determines in its Permitted Discretion is eligible as the
basis for the extension of Revolving Loans, Swingline Loans and the issuance of
Letters of Credit hereunder. Without limiting the Administrative
Agent’s discretion provided herein, Eligible Inventory shall only include
Inventory (a) that is owned solely by such Borrowing Base Contributor or
(without duplication) jointly with other Borrowing Base Contributors, (b) with
respect to which the Administrative Agent has a valid, perfected and enforceable
first-priority Lien, subject only to Customary Permitted Liens so long as such
Customary Permitted Liens (other than Customary Permitted Liens of the type
described in
clause
(a)
or
(b)
of the definition
thereof) do not have priority over the Lien in favor of the Administrative
Agent, (c) with respect to which no covenant, representation or warranty
contained in any Loan Document has been breached, (d) that is not, in the
Administrative Agent’s Permitted Discretion, slow moving, obsolete,
unmerchantable, defective, unfit for sale or not salable at prices approximating
at least the cost of such Inventory in the ordinary course of business, and (e)
with respect to which (in respect of any Inventory labeled with a brand name or
trademark and sold by such Borrowing Base Contributor pursuant to a trademark
owned by such Borrowing Base Contributor or a license granted to such Borrowing
Base Contributor) the Administrative Agent would have rights under such
trademark or license pursuant to the Security Agreement or other agreement
reasonably satisfactory to the Administrative Agent to sell such Inventory in
connection with a liquidation thereof. No Inventory of any Borrowing
Base Contributor shall be Eligible Inventory if such Inventory consists of or
constitutes (i) goods returned or rejected by customers other than goods that
are undamaged or are resalable in the normal course of business, (ii) goods to
be returned to suppliers, (iii) goods in transit (it being understood, for the
avoidance of doubt, that this
clause
(iii)
shall not
exclude from Eligible Inventory any goods that are in transit from a Borrowing
Base Contributor to a customer of such Borrowing Base Contributor or another
Borrowing Base Contributor), (iv) “
fuel
” or “
gasoline
” for operational use
by such Borrowing Base Contributor, (v) goods which constitute forms or casting
patterns used in the production of pre-cast concrete Inventory, (vi) goods which
constitute personal computers (and equipment and supplies related thereto),
(vii) spare parts used in maintenance of the Trucks, (viii) goods located,
stored, used or held at the premises of a third party (excluding goods at
customer locations so long as the aggregate amount thereof does not exceed
$500,000 at any time) unless (1)(A) the Administrative Agent shall have received
a Collateral Access Agreement or (B) in the case of Inventory located at a
leased premises, a Reserve of three months’ rent shall have been established
with respect thereto and (2) an appropriate UCC-1 financing statement shall have
been properly filed or (ix) Aggregates located at the site of extraction unless
an appropriate UCC-1 financing statement or Mortgage in favor of the
Administrative Agent complying with Section 9-502 of the UCC as to
as-extracted collateral shall have been properly filed in the real property
records. In the event that Inventory which was previously Eligible
Inventory ceases to be Eligible Inventory hereunder, the Borrower shall notify
the Administrative Agent thereof on and at the time of submission to the
Administrative Agent of the next Borrowing Base Certificate.
“
Eligible
Trucks
” means the Trucks of each of the Borrowing Base Contributors (a)
that are owned solely by such Borrowing Base Contributor, (b) with respect to
which the Administrative Agent has a valid, perfected and enforceable
first-priority Lien, subject only to Customary Permitted Liens, (c) with respect
to which no covenant, representation or warranty contained in any Loan Document
has been breached, (d) that are not, in the Administrative Agent’s Permitted
Discretion, obsolete, unmerchantable, defective or otherwise unusable and are in
good working order, condition and repair (ordinary wear and tear excepted), (e)
are evidenced by a certificate of title in the name of a Borrowing Base
Contributor and in the possession of the Administrative Agent or the Servicer,
(f) are properly registered in the name of a Borrowing Base Contributor in one
of the states of the United States and all registration fees then due for such
Truck have been paid, (g) the Administrative Agent’s Lien is noted on the
certificate of title therefor, (h) are currently licensed for commercial use in
the United States and are in compliance with all applicable motor vehicle laws,
(i) are insured by the Borrowing Base Contributors pursuant to the terms of this
Agreement and (j) that the Administrative Agent deems to be Eligible Trucks in
its Permitted Discretion. Trucks which would otherwise be eligible
pursuant to the foregoing criteria but which were not owned by a Borrowing Base
Contributor on the date of the most recent Appraisal delivered to the
Administrative Agent shall only become “
Eligible Trucks
” on
the last day of any fiscal month during which (or after) such Truck is (or was)
acquired by such Borrowing Base Contributor.
“
Environmental
Laws
” means all laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way to the
protection of the environment, preservation or reclamation of natural resources,
the management, release or threatened release of any Hazardous Material or to
public or worker health and safety regarding exposure to Hazardous
Materials.
“
Environmental
Liability
” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or
indemnities), of the Borrower or any Subsidiary resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other binding consensual arrangement pursuant to which liability is assumed with
respect to any of the foregoing.
“
Equity
Interests
” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
equity interest;
provided
,
however
, that (i) no
portion of the Senior Notes shall be deemed Equity Interests until and only to
the extent such portion of any of the Senior Notes is converted into common
stock of the Borrower and (ii) any other instruments evidencing Indebtedness
convertible into or exchangeable for common stock of the Borrower will be deemed
Indebtedness, and not Equity Interests, until the exchange or conversion
thereof.
“
Equity
Issuance
” means the issuance or sale of any Equity Interests by the
Borrower or any Subsidiary of the Borrower of Equity Interests of the Borrower
or any Subsidiary of the Borrower, as applicable, to any Person other than the
Borrower or any Subsidiary of the Borrower.
“
ERISA
”
means the Employee Retirement Income Security Act of 1974, as amended from time
to time.
“
ERISA
Affiliate
” means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a
single employer under Section 414 of the Code.
“
ERISA
Event
” means (a) any “reportable event”, as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Plan; (d) the incurrence by the Borrower or
any of its ERISA Affiliates of any liability under Title IV of ERISA with
respect to the termination of any Plan; (e) the receipt by the Borrower or any
ERISA Affiliate from the PBGC or a plan administrator of any written notice
relating to an intention to terminate any Plan or Plans or to appoint a trustee
to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal
from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any
ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Borrower or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
“
Eurodollar
”,
when used in reference to any Loan or Borrowing, refers to whether such Loan, or
the Loans comprising such Borrowing, are bearing interest at a rate determined
by reference to the Adjusted LIBO Rate.
“
Event of
Default
” has the meaning assigned to such term in
Article
VII
.
“
Excluded
Collateral
” means (a) the Stock of the Excluded Joint Venture (the “
Excluded
JV Equity
”), (b) the assets owned by the Excluded Joint Venture (the
“
Excluded
JV Assets
”), (c) any Real Property (other than Material Real Property)
and leasehold interests in the Real Property except solely as may be necessary
to perfect and enforce the Administrative Agent’s Lien in any as-extracted
collateral and (d) property and assets excluded pursuant to the terms of the
Security Agreement.
“
Excluded
Issuances
”
shall
mean an issuance and sale of Equity Interests of Borrower (a) to directors,
officers, or employees of Borrower or its Subsidiaries, (b) to finance capital
expenditures or any Permitted Acquisitions or other Investments pursuant to
Section 6.04(t)
or (c) pursuant to the terms of convertible Indebtedness.
“
Excluded
Joint Venture
” means Superior Materials Holdings LLC and its direct and
indirect subsidiaries.
“
Excluded
Taxes
” means, with respect to the Administrative Agent, any Lender, the
Issuing Bank or any other recipient of any payment to be made by or on account
of any obligation of the Borrower hereunder, (a) income or franchise taxes
imposed on (or measured by) its net income by the United States of America, or
by the jurisdiction under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which
its applicable lending office is located, (b) any branch profits taxes imposed
by the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located, (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under
Section 2.19(b)
), any
withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party to this Agreement (or designates a new
lending office) or is attributable to such Foreign Lender’s failure to comply
with
Section
2.17(f)
, except to the extent that such Foreign Lender (or its assignor,
if any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from the Borrower with respect to
such withholding tax pursuant to
Section 2.17(a)
and
(d) any U.S. Federal withholding Taxes imposed by FATCA.
“
Existing
Letters of Credit
” means those letters of credit described on
Schedule 2.06
hereto.
“
FATCA
”
means Sections 1471 through 1474 of the Code and any regulations or
official interpretations thereof.
“
FCC
R
Test
” means, for any trailing twelve month period ending
September 30, 2011 or the last day of any calendar month thereafter, a
Fixed Charge Coverage Ratio that is equal to or greater than 1.0 to 1.0, as
evidenced by the Borrower’s financial statements delivered to the Administrative
Agent for the fiscal quarter ending September 30, 2011 or for any calendar
month thereafter.
“
Federal
Funds Effective Rate
” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
“
Financial
Officer
” means the chief executive officer, chief financial officer,
principal accounting officer, treasurer, assistant treasurer or controller of
the Borrower.
“
Fixed
Charges
”
means,
with reference to any period, without duplication, cash Interest Expense,
plus
prepayments (other than prepayments of the Revolving Loans which do not result
in a permanent reduction in the Commitments and Indebtedness permitted under
Section
6.01(e)
required in connection with any disposition or casualty of
assets financed and securing such Indebtedness, which prepayments of such
Permitted Indebtedness shall be in an amount not to exceed the Net Proceeds
received as a result of such disposition or casualty event) and scheduled
principal payments on Indebtedness made during such period,
plus
expense for taxes paid in cash,
plus
dividends or distributions paid in cash to a Person other than such Person and
its Subsidiaries,
plus
Capital Lease Obligation payments,
plus
cash contributions to any Plan to the extent not reflected in Net Income, all
calculated for the Borrower and its Subsidiaries on a consolidated basis;
provided,
that Fixed
Charges shall exclude the financed portion of all third-party financed capital
expenditures.
“
Fixed
Charge Coverage Ratio
”
means, for any period, the ratio of (a) EBITDA
minus
the unfinanced portion of Net Capital Expenditures to (b) Fixed Charges, all
calculated for the Borrower and its Subsidiaries on a consolidated basis in
accordance with GAAP.
“
Foreign
Lender
” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For
purposes of this definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
“
Foreign
Payee
” means any Payee that is organized under the laws of a jurisdiction
other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single
jurisdiction.
“
Foreign
Subsidiary
” means a Subsidiary that is a “controlled foreign corporation”
under Section 957 of the Code.
“
Funding
Account
” has the meaning assigned to such term in
Section
4.01(h)
.
“
GAAP
”
means generally accepted accounting principles in the United States of
America.
“
Governmental
Authority
” means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
“
Guarantee
”
of or by any Person (the “
guarantor
”)
means any obligation, contingent or otherwise, of the guarantor guaranteeing or
having the economic effect of guaranteeing any Indebtedness or other obligation
of any other Person (the “
primary
obligor
”) in any manner, whether directly or indirectly, and including
any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or to advance or supply funds for the purchase
of) any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such
Indebtedness or other obligation of the payment thereof, (c) to maintain working
capital, equity capital or any other financial statement condition or liquidity
of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation;
provided
, that the
term Guarantee shall not include endorsements for collection or deposit in
the ordinary course of business. The amount of any Guarantee of any
guaranteeing Person shall be deemed to be the lower of (A) an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Guarantee is made and (B) the maximum amount for which such guaranteeing
Person may be liable pursuant to the terms of the instrument embodying such
Guarantee, unless such primary obligation and the maximum amount for which such
guaranteeing Person may be liable are not stated or determinable, in which case
the amount of such Guarantee shall be such guaranteeing Person’s maximum
reasonably anticipated liability (assuming such Person is required to perform)
in respect thereof as determined by such Person in good
faith.
“
Guaranteed
Obligations
” has the meaning assigned to such term in
Section
10.01
.
“
Hazardous
Materials
” means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
“
Indebtedness
”
of any Person means, without duplication, (a) all obligations of such Person for
borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business and accrued
expenses or amounts owed by such Person to employees or officers of such Person
in the ordinary course of business as compensation for services rendered), (f)
all Indebtedness of others secured by any Lien on property owned or acquired by
such Person, whether or not the Indebtedness secured thereby has been assumed,
(g) all Guarantees by such Person of Indebtedness of others as described in
clauses (a) through (f) and (h) through (l) hereof, (h) all Capital Lease
Obligations of such Person, (i) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters of
guaranty, (j) all obligations, contingent or otherwise, of such Person in
respect of bankers’ acceptances, (k) earn-out obligations to the extent
such obligations are liquidated in amount and (l) any other Off-Balance Sheet
Liability. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefor as a result
of such Person’s ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such Person is
not liable therefor. Notwithstanding anything to the contrary
contained here, “Indebtedness” shall not include the amount of Indebtedness
which is non-recourse to the obligor thereunder or to such Person or for which
recourse is limited to an identified asset shall be equal to the lesser of (i)
the amount of such obligation and (ii) the fair market value of such
asset.
“
Indemnified
Taxes
” means Taxes other than Excluded Taxes.
“
Initial
Availability
Block
Period
”
means the period commencing on the Effective Date and continuing to but
excluding the date of delivery of financial statements for the fiscal quarter
ended September 30, 2011.
“
Intercreditor
Agreement
” means that certain Intercreditor Agreement dated as of the
date hereof by and among the Administrative Agent, the Notes Agent and the Loan
Parties.
“
Interest
Election Request
” means a request by the Borrower to convert or continue
a Revolving Borrowing in accordance with
Section
2.07
.
“
Interest
Expense
” means, with reference to any period, total interest expense
(including that attributable to Capital Lease Obligations) of the Borrower and
its Subsidiaries for such period with respect to all outstanding Indebtedness of
the Borrower and its Subsidiaries (including all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers’
acceptance financing and net costs under Swap Agreements in respect of interest
rates to the extent such net costs are allocable to such period as interest
expense in accordance with GAAP), calculated on a consolidated basis for the
Borrower and its Subsidiaries for such period in accordance with
GAAP.
“
Interest
Payment Date
” means with respect to any CBFR Loan (other than a Swingline
Loan) or Eurodollar Loan, the first Business Day of each calendar month and the
Maturity Date.
“
Interest
Period
” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Borrower may elect;
provided
, that (a) if
any Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, in the case
of a Eurodollar Borrowing only, such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (b) any Interest Period pertaining to a
Eurodollar Borrowing that commences on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof,
the date of a Borrowing initially shall be the date on which such Borrowing is
made and, in the case of a Revolving Borrowing, thereafter shall be the
effective date of the most recent conversion or continuation of such
Borrowing.
“
Inventory
”
has the meaning assigned to such term in the Security Agreement.
“
Investment
”
has the meaning assigned to such term in
Section
6.04
.
“
Issuing
Bank
” means Chase, in its capacity as the issuer of Letters of Credit
hereunder, and its successors in such capacity as provided in
Section
2.06(i)
. The Issuing Bank may, in its discretion, arrange for
one or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in
which case the term “Issuing Bank” shall include any such Affiliate with respect
to Letters of Credit issued by such Affiliate.
“
Joinder
Agreement
” has the meaning assigned to such term in
Section
5.11
.
“
Land
”
of any Person means all of those plots, pieces or parcels of land now owned,
leased or hereafter acquired or leased or purported to be owned, leased or
hereafter acquired or leased (including, in respect of the Loan Parties, as
reflected in the most recent financial statements of the Borrower) by such
Person, including, without limitation, any quarries.
“
LC
Collateral Account
” has the meaning assigned to such term in
Section
2.06(j)
.
“
LC
Disbursement
” means a payment made by the Issuing Bank pursuant to a
Letter of Credit.
“
LC
Exposure
” means, at any time, the sum of Commercial LC Exposure and
Standby LC Exposure. The LC Exposure of any Revolving Lender at any
time shall be its Applicable Percentage of the total LC Exposure at such
time.
“
Lead
Arrangers
” means J.P. Morgan Securities Inc. and Wells Fargo Capital
Finance, LLC.
“
Lenders
”
means the Persons listed on the
Commitment Schedule
and any other Person that shall have become a party hereto pursuant to an
Assignment and Assumption, other than any such Person that ceases to be a party
hereto pursuant to an Assignment and Assumption. Unless the context
otherwise requires, the term “Lenders” includes the Swingline
Lender.
“
Letter of
Credit
” means any letter of credit issued pursuant to this
Agreement.
“
LIBO
Rate
” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Reuters Screen LIBOR01 Page (or on any successor
or substitute page of such Service, or any successor to or substitute for such
Service, providing rate quotations comparable to those currently provided on
such page of such Service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period. In the event that such rate is not available at such
time for any reason, then the “LIBO Rate” with respect to such Eurodollar
Borrowing for such Interest Period shall be the rate at which dollar deposits of
$5,000,000 and for a maturity comparable to such Interest Period are offered by
the principal London office of the Administrative Agent in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest
Period.
“
Lien
”
means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge,
hypothecation, encumbrance, charge or security interest in, on or of such asset,
(b) the interest of a vendor or a lessor under any conditional sale agreement,
capital lease or title retention agreement (or any financing lease having
substantially the same economic effect as any of the foregoing) relating to such
asset and (c) in the case of securities, any purchase option, call or similar
right of a third party with respect to such securities.
“
Loan
Documents
” means this Agreement, any promissory notes issued pursuant to
the Agreement, any Letter of Credit applications, the Collateral Documents, the
Loan Guaranty, the Service Agreement, the Intercreditor Agreement and all other
agreements, instruments, documents and certificates identified in
Section 4.01
executed
and delivered to, or in favor of, the Administrative Agent or any Lenders and
including all other pledges, powers of attorney, consents, assignments,
contracts, notices, letter of credit agreements and all other written matter
whether heretofore, now or hereafter executed by or on behalf of any Loan Party,
or any employee of any Loan Party, and delivered to the Administrative Agent or
any Lender in connection with the Agreement or the transactions contemplated
thereby. Any reference in the Agreement or any other Loan Document to
a Loan Document shall include all appendices, exhibits or schedules thereto, and
all amendments, restatements, supplements or other modifications thereto, and
shall refer to the Agreement or such Loan Document as the same may be in effect
at any and all times such reference becomes operative. In no event
shall any document, instrument or agreement (including any Swap Agreement)
governing any Banking Services, Banking Services Obligations or Swap Obligations
constitute a Loan Document.
“
Loan
Guarantor
” means each Loan Party (other than the Borrower).
“
Loan
Guaranty
” means
Article X
of this
Agreement.
“
Loan
Parties
” means the Borrower, the Borrower’s Subsidiaries and any other
Person who becomes a party to this Agreement pursuant to a Joinder Agreement and
their successors and assigns.
“
Loans
”
means the loans and advances made by the Lenders pursuant to this Agreement,
including Swingline Loans, Overadvances and Protective Advances.
“
Material
Adverse Effect
” means a material adverse effect on (a) the business,
assets, operations, performance or condition, financial or otherwise, of the
Borrower and its Subsidiaries taken as a whole, (b) the ability of any Loan
Party to perform any of its obligations under the Loan Documents to which it is
a party, (c) the Collateral (other than solely by reason of any reduction in the
market value thereof), or the Administrative Agent’s Liens (on behalf of itself
and the Lenders) on the Collateral or the priority of such Liens, or (d) the
rights of or benefits available to the Administrative Agent, the Issuing Bank or
the Lenders thereunder.
“
Material
Agreements
” has the meaning assigned to such term in
Section
3.12
.
“
Material
Indebtedness
” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or
more of the Borrower and its Subsidiaries in an aggregate principal amount
exceeding $2,500,000. For purposes of determining Material
Indebtedness, the “obligations” of the Borrower or any Subsidiary in respect of
any Swap Agreement at any time shall be, after taking into account the effect of
any netting agreements relating to such Swap Agreement, (a) for any date on or
after the date such Swap Agreement has been closed out and the termination
value determined in accordance therewith, such termination value, and (b) for
any date prior to the date referenced in
clause
(a)
, the amount
determined as the mark-to-market value for such Swap Agreement, as determined
based upon the maximum aggregate amount that the Borrower or such Subsidiary
would be required to pay if such Swap Agreement was terminated based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Agreement.
“
Material
Real Property
” means each parcel of Real Property with a net book value
equal to or greater than $700,000.
“
Maturity
Date
” means August 31, 2014 or any earlier date on which the Commitments
are reduced to zero or otherwise terminated pursuant to the terms
hereof.
“
Maximum
Liability
” has the meaning assigned to such term in
Section
10.10
.
“
Moody’s
”
means Moody’s Investors Service, Inc.
“
Mortgages
”
means any mortgage, deed of trust or other agreement which conveys or evidences
a Lien in favor of the Administrative Agent, for the benefit of the
Administrative Agent and the Lenders, on Real Property of a Loan Party,
including any amendment, modification or supplement thereto.
“
Multiemployer
Plan
” means a multiemployer plan as defined in Section 4001(a)(3) of
ERISA.
“
Net
Capital Expenditures
” means, for any period an amount equal to (a)
Capital Expenditures of the Borrower and its Subsidiaries on a consolidated
basis
minus
(b)
the net cash proceeds (as reported in the Borrower’s cash flow statement) and/or
trade-in allowance received by the Borrower and its Subsidiaries on a
consolidated basis that are attributed solely to that portion of any asset sale
involving property, plant or equipment and are not required to be applied to the
prepayment of the Senior Notes or deposited, other than on a temporary basis, in
the Asset Sales Proceeds Account (as defined in the Senior Notes
Agreement).
“
Net
Income
” means, for any period, the consolidated net income (or loss) of
the Borrower and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP;
provided
that there
shall be excluded (a) the income (or deficit) of any Person accrued prior to the
date it becomes a Subsidiary or is merged into or consolidated with the Borrower
or any of its Subsidiaries, (b) the income (or deficit) of any Person (other
than a Subsidiary) in which the Borrower or any of its Subsidiaries has an
ownership interest, except to the extent that any such income is actually
received by the Borrower or such Subsidiary in the form of dividends or similar
distributions and (c) the undistributed earnings of any Subsidiary to the extent
that the declaration or payment of dividends or similar distributions by such
Subsidiary is not at the time permitted by the terms of any contractual
obligation (other than under any Loan Document) or Requirement of Law applicable
to such Subsidiary.
“
Net
Orderly Liquidation Value Inventory Rate
” shall mean the orderly
liquidation value (net of estimated costs and expenses incurred in connection
with liquidation) of the Borrowing Base Contributors’ Eligible Inventory as a
percentage of the value of such Eligible Inventory, which percentage shall be
determined by the most recent Appraisal of such Inventory received by the
Administrative Agent.
“
Net
Orderly Liquidation Value Of Eligible Trucks
” means, as of any date of
determination, the orderly liquidation value of the Eligible Trucks of the
Borrowing Base Contributors, net of all estimated costs of liquidation thereof,
which have been appraised pursuant to an Appraisal and are then owned by the
Borrowing Base Contributors as determined by the most recent Appraisal of such
Trucks received by the Administrative Agent.
“
Net
Proceeds
” means, with respect to any event, (a) the cash proceeds
received in respect of such event including (i) any cash received in respect of
any non-cash proceeds (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or purchase
price adjustment receivable or otherwise, but excluding any interest payments),
but only as and when received, (ii) in the case of a casualty, cash insurance
proceeds and (iii) in the case of a condemnation or similar event, cash
condemnation awards and similar payments, in each case net of (b) the sum of (i)
all reasonable fees and out-of-pocket costs or expenses paid to third parties
(other than Affiliates) in connection with such event (including, without
limitation, attorneys’ fees, accountants’ fees, investment banking fees, survey
costs, title insurance premiums, and related search and recording charges,
transfer taxes, deed or mortgage recording taxes, other customary expenses and
brokerage, consultant and other customary fees actually incurred in connection
therewith), (ii) in the case of a sale, transfer or other disposition of an
asset (including pursuant to a sale and leaseback transaction or a casualty or a
condemnation or similar proceeding), the amount of all payments required to be
made as a result of such event to repay Indebtedness (other than Loans) secured
by such asset or otherwise subject to mandatory prepayment as a result of such
event, (iii) the amount of all taxes paid (or reasonably estimated to be
payable) and the amount of any reserves or escrows established to fund
contingent liabilities (including indemnification obligations and purchase price
adjustments) reasonably estimated to be payable and (iv) any amount required to
be deposited in the Senior Notes Account pursuant to the terms of the Senior
Notes Agreement, in each case during the year that such event occurred or the
next succeeding year and that are directly attributable to such event (as
determined reasonably and in good faith by a Financial Officer).
“
Non-Consenting
Lender
”
has the
meaning assigned to such term in
Section
9.02(d)
.
“
Non-Paying
Guarantor
” has the meaning assigned to such term in
Section
10.11
.
“
Non-Recourse
Indebtedness
” means Indebtedness:
(a) as
to which neither the Borrower nor any other Loan Party (i) provides credit
support of any kind (including any undertaking, agreement or instrument that
would constitute Indebtedness), (ii) is directly or indirectly liable as a
primary obligor, guarantor or otherwise, or (iii) constitutes the
lender;
(b) no
default with respect to which would permit, upon notice, lapse of time or both,
any holder of any other Indebtedness of the Borrower or any other Loan Party to
declare a default on such other Indebtedness or cause the payment of the
Indebtedness to be accelerated or payable prior to its stated maturity;
and
(c) as
to which the Administrative Agent has determined in its sole discretion that the
holder or holders of such Indebtedness will not have any recourse to the stock
or assets of the Borrower or any other Loan Party except for Collateral that
does not constitute Accounts or Inventory.
“
Notes
Agent
” means U.S. Bank National Association in its capacity as noteholder
collateral agent for the holders of the Senior Notes and its successors and
permitted assigns in such capacity.
“
Notes
Priority
Collateral
” has the meaning assigned to such term in the Intercreditor
Agreement.
“
Obligated
Party
” has the meaning assigned to such term in
Section
10.02
.
“
Obligations
”
means all unpaid principal of and accrued and unpaid interest on the Loans, all
LC Exposure, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations of the Loan Parties to the Lenders or to any
Lender, the Administrative Agent, the Issuing Bank or any indemnified
party arising under the Loan Documents.
“
Off-Balance
Sheet Liability
”
of a Person means (a) any repurchase obligation or liability of such
Person with respect to accounts or notes receivable sold by such Person, (b) any
indebtedness, liability or obligation under any so-called “synthetic lease”
transaction entered into by such Person, or (c) any indebtedness, liability or
obligation arising with respect to any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the balance sheets of such Person (other than operating
leases).
“
Other
Taxes
” means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement.
“
Overadvance
”
has the meaning assigned to
such term in
Section
2.05
.
“
Participant
”
has the meaning set forth in
Section
9.04
.
“
Paying
Guarantor
” has the meaning assigned to such term in
Section
10.11
.
“
PBGC
”
means the Pension Benefit Guaranty Corporation referred to and defined in ERISA
and any successor entity performing similar functions.
“
Permitted
Acquisition
” means any Acquisition by the Borrower or any Loan Party in a
transaction that satisfies each of the following requirements:
(a) such
Acquisition is not a hostile or contested Acquisition;
(b) the
business acquired in connection with such Acquisition is not engaged, directly
or indirectly, in any line of business other than the businesses in which the
Borrower or any Loan Party is engaged on the Effective Date and any business
activities that are similar, related, incidental, complementary or corollary
thereto or reasonable extension thereof;
(c) both
immediately before and immediately after giving effect to such Acquisition and
the Loans (if any) requested to be made in connection therewith, each of the
representations and warranties in the Loan Documents is true and correct in all
material respects (except (i) any such representation or warranty which relates
to a specified prior date, (ii) to the extent the Administrative Agent and the
Lenders have been notified in writing by the Borrower that any representation or
warranty is not correct and the Required Lenders have explicitly waived in
writing compliance with such representation or warranty and (iii) that such
materiality qualifier shall not be applicable to representations and warranties
that are already qualified or modified by materiality in the text
thereof);
(d) as
soon as available, but in any event sufficiently prior to such Acquisition to
allow the Administrative Agent adequate time to review the information provided
to the Lenders under
clause
(ii)
below, for
Acquisitions with a purchase price greater than $1,000,000, the Borrower shall
provide the Administrative Agent (i) notice of such Acquisition and (ii) a copy
of all business and financial information reasonably requested by the
Administrative Agent including pro forma financial statements, statements of
cash flow, and Availability projections;
(e) prior
to inclusion of the Accounts, Inventory and Trucks acquired in connection with
such Acquisition in the determination of the Borrowing Base, the Administrative
Agent shall have conducted an Appraisal of such Inventory and, if reasonably
requested by the Administrative Agent, of such Trucks and an audit and field
examination of such Accounts to its satisfaction, any applicable Reserves have
been established, and all appropriate lien filings and collateral documentation
have been duly completed, executed and delivered to the Administrative Agent, in
each case, to the extent required by, and in accordance with, the Loan
Documents;
(f) if
such Acquisition is an Acquisition of the Equity Interests of a Person, such
Acquisition (i) is structured so that the acquired Person shall become a
wholly-owned subsidiary of a Loan Party pursuant to the terms of this Agreement,
and (ii) will not result in any violation of Regulation U;
(g) Borrower
or any Loan Guarantor shall not, as a result of or in connection with any such
Acquisition, assume or incur any direct or contingent liabilities (whether
relating to environmental, tax, litigation, or other matters) that could
reasonably be expected to have a Material Adverse Effect;
(h) in
connection with an Acquisition of the Equity Interests in any Person, all Liens
on property of such Person shall be terminated unless permitted pursuant to the
Loan Documents, or the Administrative Agent in its Permitted Discretion consents
otherwise, and in connection with an Acquisition of the assets of any Person,
all Liens on such assets shall be terminated unless permitted pursuant to the
Loan Documents;
(i) for
any Acquisition consummated on or after October 1, 2011, the Fixed Charge
Coverage Ratio (after giving effect to such Acquisition) shall be greater than
or equal to 1.0 to 1.0 for the most recent trailing twelve month period
(calculated on a Pro Forma Basis) (including synergies and other costs savings
which are demonstrated and verifiable to the satisfaction of the Administrative
Agent)) and assuming that for purposes of calculating such Fixed Charge Coverage
Ratio for such period, such Acquisition and any Indebtedness and related
interest expense incurred in connection therewith occurred on the first day of
such applicable period;
(j) the
Borrower shall certify (and provide the Administrative Agent with projected
calculations in form and substance reasonably satisfactory to the Administrative
Agent), on its behalf and on behalf of the Loan Parties, to the Administrative
Agent and the Lenders that, immediately after giving effect to the completion of
such Acquisition, Availability will not be less than $15,000,000 if there is an
Availability Block in effect, or $25,000,000 if there is no Availability Block
in effect, such Availability in each case to be determined (assuming all past
due accounts payable of the Loan Parties have been paid in full in
cash);
(k) the
gross purchase price for all Acquisitions permitted hereby shall not exceed
$5,000,000 per year or $15,000,000 in the aggregate (excluding any portion of a
purchase price paid with (i) the cash proceeds received from an Equity Issuance
made after the Effective Date, (ii) Equity Interests of the Borrower or (iii)
Non-Recourse Indebtedness in an amount not to exceed $10,000,000, provided that
the purchase price paid pursuant to the foregoing
clauses (i),
(ii)
and
(iii)
shall not
exceed $50,000,000 in the aggregate and may not consist of proceeds from any
convertible debt); and
(l) no
Default or Event of Default exists or would result therefrom.
“
Permitted
Discretion
” means a determination made in good faith and in the exercise
of reasonable (from the perspective of a secured asset-based lender) business
judgment.
“
Permitted
Investments
”
means:
(a) direct
obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America (or by any agency
thereof to the extent such obligations are backed by the full faith and credit
of the United States of America), in each case maturing within one year from the
date of acquisition thereof;
(b) investments
in commercial paper maturing within 270 days from the date of acquisition
thereof and having, at such date of acquisition, the highest credit rating
obtainable from S&P or from Moody’s;
(c) investments
in certificates of deposit, banker’s acceptances and time deposits maturing
within 180 days from the date of acquisition thereof issued or guaranteed by or
placed with, and money market deposit accounts issued or offered by, any
domestic office of any commercial bank organized under the laws of the United
States of America or any State thereof which has a combined capital and surplus
and undivided profits of not less than $500,000,000;
(d) fully
collateralized repurchase agreements with a term of not more than 30 days for
securities described in clause (a) above and entered into with a financial
institution satisfying the criteria described in clause (c) above;
and
(e) money
market funds that (i) comply with the criteria set forth in Securities and
Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are
rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at
least $5,000,000,000.
“
Person
”
means any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, Governmental Authority or other
entity.
“
Plan
”
means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the
Code or Section 302 of ERISA, and in respect of which the Borrower or any
ERISA Affiliate is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.
“
Prepayment
Event
” means:
(a) any
sale, transfer or other disposition (including pursuant to a sale and leaseback
transaction) of any property or asset of any Loan Party, other than dispositions
described in
Section
6.05(a)
,
(b)
,
(c)
,
(d)
,
(e)
, (except as
provided in
clause
(b) below)
(f)
,
(h)
,
(j)
,
(k)
or (m);
or
(b) any
casualty or other insured damage to, or any taking under power of eminent domain
or by condemnation or similar proceeding of, any property or asset of any Loan
Party, with a fair market value immediately prior to such event equal to or
greater than $500,000; or
(c) the
issuance by the Borrower of any Equity Interests, or the receipt by the Borrower
of any capital contribution, other than any Excluded Issuances; or
(d) the
incurrence by any Loan Party of any Indebtedness, other than Indebtedness
permitted under
Section
6.01
.
“
Prime
Rate
” means the rate of interest per annum publicly announced from time
to time by Chase as its prime rate at its offices at 270 Park Avenue in New
York City; each change in the Prime Rate shall be effective from and including
the date such change is publicly announced as being effective.
“
Pro Forma
Basis
” means, whenever pro forma effect is to be given to any Permitted
Acquisition, all components of such calculations shall be adjusted to include or
exclude, as the case may be, without duplication, such components of such
calculations attributable to any business or assets that have been acquired by
the Borrower or any of its Subsidiaries (including through Permitted
Acquisitions) after the first day of the applicable period of determination and
prior to the end of such period and made on a basis that is consistent with
Article 11 of Regulation S-X under the Securities Act and shall include, for the
avoidance of doubt, synergies, operating improvements, operating expense
reductions and other cost savings to the extent allowable, calculated in
accordance with Article 11 of Regulation S-X under the Securities Act and is in
a manner reasonably acceptable to the Administrative Agent.
“
Projections
”
has the meaning assigned to such term in
Section
5.01(f)
.
“
Protective
Advance
” has the meaning assigned to such term in
Section
2.04
.
“
Real
Property
” of any Person means the fee owned Land of such Person, together
with the right, title and interest of such Person, if any, in and to the
streets, the Land lying in the bed of any streets, roads or avenues, opened or
proposed, in front of, the air space and development rights pertaining to the
Land and the right to use such air space and development rights, all rights of
way, privileges, liberties, tenements, hereditaments and appurtenances belonging
or in any way appertaining thereto, all fixtures, all easements now or hereafter
benefiting the Land and all royalties and rights appertaining to the use and
enjoyment of the Land, including all alley, vault, drainage, mineral, water, oil
and gas rights, together with all of the buildings and other improvements now or
hereafter erected on the Land and any fixtures appurtenant thereto.
“
Register
”
has the meaning set forth in
Section
9.04
.
“
Related
Parties
” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.
“
Reorganization
Plan
” means that certain Joint Plan of Reorganization of U.S. Concrete,
Inc., et al., Pursuant to Chapter 11 of the Bankruptcy Code dated
July 27, 2010 (as amended, supplemented or modified from time to
time).
“
Report
”
means reports prepared by the Administrative Agent or another Person showing the
results of appraisals, field examinations or audits pertaining to the assets of
the Borrowing Base Contributors from information furnished by or on behalf of
the Borrowing Base Contributors, after the Administrative Agent has exercised
its rights of inspection pursuant to this Agreement, which Reports may be
distributed to the Lenders by the Administrative Agent.
“
Required
Lenders
” means, at any time, Lenders (other than Defaulting Lenders)
having Credit Exposure and unused Commitments representing more than 50% of the
sum of the total Credit Exposure and unused Commitments at such time
;
provided
that, as
long as there are less than three (3) unaffiliated Lenders, Required Lenders
shall mean all of the Lenders.
“
Requirement
of Law
” means, as to any Person, the Certificate of Incorporation and
By-Laws or other organizational or governing documents of such Person, and any
law, treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
“
Reserves
”
means any and all reserves which the Administrative Agent deems necessary, in
its Permitted Discretion, to maintain (including, without limitation, reserves
for accrued and unpaid interest on the Secured Obligations, Banking Services
Reserves, volatility reserves, reserves for rent at locations leased by any Loan
Party and for consignee’s, warehousemen’s and bailee’s charges, reserves for
dilution of Accounts, reserves for Inventory shrinkage, reserves for customs
charges and shipping charges related to any Inventory in transit, reserves for
vehicle licenses, registration fees and other permits, reserves for Swap
Obligations, reserves for contingent liabilities of any Loan Party, reserves for
uninsured losses of any Loan Party, reserves for uninsured, underinsured,
un-indemnified or under-indemnified liabilities or potential liabilities with
respect to any litigation, reserves for accrued and unpaid professional fees
incurred in connection with the Reorganization Plan and reserves for taxes,
fees, assessments, and other governmental charges) with respect to the
Collateral or any Loan Party.
“
Responsible
Officer
” means the chief executive officer, president, vice president,
chief financial officer, treasurer or assistant treasurer or other similar
officer of a Loan Party with responsibility for the administration of the
obligations of such entity in respect of this Agreement.
“
Restricted
Payment
” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the
Borrower or any Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such Equity Interests in the Borrower.
“
Revolving
Commitment
” means, with respect to each Lender, the commitment, if any,
of such Lender to make Revolving Loans and to acquire participations in Letters
of Credit, Protective Advances, Overadvances and Swingline Loans hereunder,
expressed as an amount representing the maximum possible aggregate amount of
such Lender’s Revolving Exposure hereunder, as such commitment may be reduced or
increased from time to time pursuant to (a)
Section 2.09
and (b)
assignments by or to such Lender pursuant to
Section
9.04
. The initial amount of each Lender’s Revolving Commitment
is set forth on the
Commitment Schedule
,
or in the Assignment and Assumption pursuant to which such Lender shall have
assumed its Revolving Commitment, as applicable. The initial
aggregate amount of the Lenders’ Revolving Commitments is
$75,000,000.
“
Revolving
Exposure
” means, with respect to any Lender at any time, the sum of (a)
the outstanding principal amount of such Lender’s Revolving Loans and its LC
Exposure and (b) an amount equal to such Lender’s Applicable Percentage of the
aggregate principal amount of Swingline Loans, Protective Advances and
Overadvances outstanding at such time.
“
Revolving
Lender
” means, as of any date of determination, a Lender with a Revolving
Commitment or, if the Revolving Commitments have terminated or expired, a Lender
with Revolving Exposure.
“
Revolving
Loan
” means a Loan made pursuant to
Section
2.01(a)
.
“
S&P
”
means Standard & Poor’s Ratings Services, a division of The McGraw Hill
Companies, Inc.
“
Secured
Parties
” means the Lenders, the Issuing Bank, the Administrative Agent
and any other holder of any Secured Obligation.
“
Secured
Obligations
” means all Obligations, together with all (a) Banking
Services Obligations and (b) Swap Obligations owing to one or more Lenders or
their respective Affiliates (which, in the case of an Affiliate of a Lender, are
or were incurred during the period in which such Lender is a Lender);
provided
that at or
prior to the time that any transaction relating to such Swap Obligation is
executed, the Lender party thereto (other than Chase) shall have delivered
written notice to the Administrative Agent that such a transaction has been
entered into and that it constitutes a Secured Obligation entitled to the
benefits of the Collateral Documents.
“
Security
Agreement
” means that certain Pledge and Security Agreement, dated as of
the date hereof, between the Loan Parties and the Administrative Agent, for the
benefit of the Administrative Agent and the Lenders, and any other pledge or
security agreement entered into, after the date of this Agreement by any other
Loan Party (as required by this Agreement or any other Loan Document), or any
other Person, as the same may be amended, restated or otherwise modified from
time to time.
“
Senior
Notes
” means the $55,000,000 in principal amount of senior secured
convertible notes issued on or about the Effective Date in a private placement
pursuant to Section 4(2) and Regulation D of the Exchange
Act.
“
Senior
Notes Account
” means the “Asset Sale Proceeds Account” as defined in the
Senior Notes Agreement.
“
Senior
Notes Agreement
” means that certain Indenture by and among the Notes
Agent, the Trustee, the Loan Parties and the purchasers of the Senior
Notes.
“
Senior
Notes Documents
” means the Senior Notes Agreement and the “Note
Documents” under and as defined in the Senior Notes Agreement.
“
Service
Agreement
” means that certain Service Agreement dated as of the Effective
Date between the Administrative Agent and the Servicer relating to the
certificates of title for those Trucks included in the Borrowing Base
Collateral.
“
Servicer
”
means On The Go Transportation Services, Inc.
“
Settlement
”
has the meaning assigned to
such term in
Section
2.05(d)
.
“
Settlement
Date
”
has the
meaning assigned to such term in
Section
2.05(d)
.
“
Standby
LC Exposure
” means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding standby Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements relating to standby Letters of Credit
that have not yet been reimbursed by or on behalf of the Borrower at such
time. The Standby LC Exposure of any Revolving Lender at any time
shall be its Applicable Percentage of the total Standby LC Exposure at such
time.
“
Statutory
Reserve Rate
” means a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one
minus
the aggregate of the maximum reserve percentages (including any marginal,
special, emergency or supplemental reserves) expressed as a decimal established
by the Board to which the Administrative Agent is subject with respect to the
Adjusted LIBO Rate, for eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of the Board). Such
reserve percentages shall include those imposed pursuant to such Regulation
D. Eurodollar Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
“
Subordinated
Indebtedness
” of a Person means any Indebtedness of such Person the
payment of which is subordinated to payment of the Secured Obligations to the
written satisfaction of the Administrative Agent.
“
subsidiary
”
means, with respect to any Person (the “
parent
”)
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent’s consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or, in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (b) that is,
as of such date, otherwise Controlled, by the parent or one or more subsidiaries
of the parent or by the parent and one or more subsidiaries of the
parent.
“
Subsidiary
”
means any direct or indirect subsidiary of the Borrower or a Loan Party, as
applicable; provided that the Excluded Joint Venture shall not be a “Subsidiary”
with respect to any Person.
“
Supermajority
Revolving Lenders
”
means, at any time, Lenders, other than Defaulting Lenders, having
Revolving Exposure and unused Revolving Commitments representing more than 75%
of the sum of the total Revolving Exposure and unused Revolving Commitments at
such time.
“
Swap
Agreement
” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement involving, or settled
by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions;
provided
that no
phantom stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees or consultants of
the Borrower or the Subsidiaries shall be a Swap Agreement.
“
Swap
Obligations
” of a Person means any and all obligations of such Person,
whether absolute or contingent and howsoever and whensoever created, arising,
evidenced or acquired (including all renewals, extensions and modifications
thereof and substitutions therefor), under (a) any and all Swap Agreements, and
(b) any and all cancellations, buy backs, reversals, terminations or assignments
of any Swap Agreement transaction.
“
Swingline
Exposure
” means, at any time, the sum of the aggregate undrawn amount of
all outstanding Swingline Loans at such time. The Swingline Exposure
of any Revolving Lender at any time shall be its Applicable Percentage of the
total Swingline Exposure at such time.
“
Swingline
Lender
” means JPMorgan Chase Bank, N.A., in its capacity as lender of
Swingline Loans hereunder and any successor thereto.
“
Swingline
Loan
” has the meaning assigned to such term in
Section
2.05(a)
.
“
Taxes
”
means any and all present or future taxes, levies, imposts, duties, deductions,
charges or withholdings imposed by any Governmental Authority.
“
Transactions
”
means the execution, delivery and performance by the Borrower of this Agreement,
the borrowing of Loans and other credit extensions, the use of the proceeds
thereof and the issuance of Letters of Credit hereunder.
“
Trucks
”
means, with respect to each Borrowing Base Contributor, the ready-mix concrete
trucks and the mixing drums affixed thereto owned by such Borrowing Base
Contributor.
“
Trustee
”
means U.S. Bank National
Association in its capacity as trustee for the holders of the Senior Notes and
its successors and permitted assigns in such capacity.
“
Type
”,
when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined
by reference to the Adjusted LIBO Rate or the CB Floating Rate.
“
UCC
”
means the Uniform Commercial Code as in effect from time to time in the State of
New York or any other state the laws of which are required to be applied in
connection with the issue of perfection of security interests.
“
Unfunded
Pension Liability
” means, with respect to the Borrower or any of its
ERISA Affiliates at any time, the sum of (a) the amount, if any, by which the
present value of all accrued benefits under each Plan exceeds the fair market
value of all assets of such Plan allocable to such benefits in accordance with
Title IV of ERISA, as determined as of the most recent valuation date for such
Plan using the actuarial assumptions pursuant to Section 412 of the Code or
Section 302 of ERISA in effect under such Plan, (b) the aggregate amount of
withdrawal liability that could be assessed under Section 4063 with respect
to each Plan subject to such section, separately calculated for each such Plan
as of its most recent valuation date and (c) for a period of five years
following a transaction reasonably likely to be covered by Section 4069 of
ERISA, the liabilities (whether or not accrued) that could be avoided by the
Borrower, any of its Subsidiaries or any ERISA Affiliate as a result of
such transaction.
“
Unliquidated
Obligations
” means, at any time, any Secured Obligations (or portion
thereof) that are contingent in nature or unliquidated at such time, including
any Secured Obligation that is: (a) an obligation to reimburse a bank
for drawings not yet made under a letter of credit issued by it; (b) any other
obligation (including any guarantee) that is contingent in nature at such time;
or (c) an obligation to provide collateral to secure any of the foregoing types
of obligations.
“
Withdrawal
Liability
” means, with respect to the Borrower or any of its Subsidiaries
or any ERISA Affiliate of the Borrower or any of its Subsidiaries at any time,
the liability to a Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan, the terms “complete” or “partial”
withdrawal of which are defined in Part I of Subtitle E of Title IV of
ERISA.
“
Withholding
Agent
” means the Borrower, any Loan Party or the Administrative
Agent.
Section
1.02
Classification of Loans and
Borrowings
. For purposes of this Agreement, Loans may be
classified and referred to by Class (
e.g.
, a “Revolving
Loan”) or by Type (
e.g.
, a “Eurodollar
Loan”) or by Class and Type (
e.g.
, a “Eurodollar
Revolving Loan”). Borrowings also may be classified and referred to
by Class (
e.g.
,
a “Revolving Borrowing”) or by Type (
e.g.
, a “Eurodollar
Borrowing”) or by Class and Type (
e.g.
, a “Eurodollar
Revolving Borrowing”).
Section
1.03
Terms
Generally
. The definitions of terms herein shall apply equally
to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and
“including” shall be deemed to be followed by the phrase “without
limitation”. The word “will” shall be construed to have the same
meaning and effect as the word “shall”. Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, amended and restated,
supplemented or otherwise modified, renewed or extended (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person’s successors and permitted assigns and, in the case of any Governmental
Authority, any other Governmental Authority that shall have succeeded to any or
all of the functions thereof, (c) the words “herein”, “hereof” and “hereunder”,
and words of similar import, shall be construed to refer to this Agreement in
its entirety and not to any particular provision hereof, (d) all references
herein to Articles, Sections, Exhibits and Schedules shall be construed to refer
to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (e)
the words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights, (f) all
references to “knowledge” of any Loan Party means the actual knowledge of any
Responsible Officer of such Loan Party and (g) references to any law shall
include all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting such law (including by succession of
comparable successor laws).
Section
1.04
Accounting Terms;
GAAP
. Except as otherwise expressly provided herein, all terms
of an accounting or financial nature shall be construed in accordance with GAAP,
as in effect from time to time;
provided
that, if the
Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice
shall have been withdrawn or such provision amended in accordance
herewith.
Section
1.05
Times of
Day.
Unless
otherwise specified, all references herein to times of day shall be references
to Central time (daylight or standard, as applicable).
Section
1.06
Timing of Payment of
Performance
.
When the
payment of any obligation or the performance of any covenant, duty or obligation
is stated to be due or performance required on a day which is not a Business
Day, the date of such payment (other than as described in the definition of
Interest Period) or performance shall extend to the immediately succeeding
Business Day.
Section
1.07
Certifications
.
All
certifications to be made hereunder by an officer or representative of a Loan
Party shall be made by such person in his or her capacity solely as an officer
or a representative of such Loan Party, on such Loan Party’s behalf and not in
such Person’s individual capacity.
ARTICLE
II
The
Credits
Section
2.01
Commitments
. Subject
to the terms and conditions set forth herein, each Lender agrees to make (a)
Revolving Loans to the Borrower from time to time during the Availability Period
in an aggregate principal amount that will not result in (i) such Lender’s
Revolving Exposure exceeding such Lender’s Revolving Commitment or (ii) the
total Revolving Exposures exceeding (x) the lesser of the total Revolving
Commitments or the Borrowing Base,
minus
(y) the Availability Block, subject to the Administrative Agent’s authority, in
its sole discretion, to make Protective Advances and Overadvances pursuant to
the terms of
Section
2.04
and
Section
2.05
. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow
Revolving Loans without premium or penalty.
Section
2.02
Loans and
Borrowings
. (a) Each Loan (other than a Swingline Loan) shall
be made as part of a Borrowing consisting of Loans of the same Class and Type
made by the Lenders ratably in accordance with their respective Commitments of
the applicable Class. Any Protective Advance, any
Overadvance and any
Swingline Loan shall be made in accordance with the procedures set forth in
Section 2.04
and
Section
2.05
.
(b) Subject
to
Section
2.14
, each Revolving Borrowing shall be comprised entirely of CBFR Loans
or Eurodollar Loans as the Borrower may request in accordance herewith,
provided
that all
Borrowings made on the Effective Date must be made as CBFR Borrowings but may be
converted into Eurodollar Borrowings in accordance with
Section 2.08
. Each
Swingline Loan shall be a CBFR Loan. Each Lender at its option may
make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate
of such Lender to make such Loan;
provided
that any
exercise of such option shall not affect the obligation of the Borrower to repay
such Loan in accordance with the terms of this Agreement and shall be subject to
Section
2.19
.
(c)
At the commencement of each Interest Period for any
Eurodollar Revolving Borrowing, such Borrowing shall be in an aggregate amount
that is an integral multiple of $500,000 and not less than
$1,000,000. CBFR Revolving Borrowings may be in any
amount. Borrowings of more than one Type and Class may be outstanding
at the same time;
provided
that there
shall not at any time be more than a total of six Eurodollar Borrowings
outstanding.
(d) Notwithstanding
any other provision of this Agreement, the Borrower shall not be entitled to
request, or to elect to convert or continue, any Borrowing if the Interest
Period requested with respect thereto would end after the Maturity
Date.
Section
2.03
Requests for Revolving
Borrowings
. To request a Revolving Borrowing, the Borrower
shall notify the Administrative Agent of such request either in writing
(delivered by hand, facsimile or electronic transmission) in a form approved by
the Administrative Agent and signed by the Borrower or by telephone (a) in the
case of a Eurodollar Borrowing, not later than 11:00 a.m. three Business Days
before the date of the proposed Borrowing or (b) in the case of a CBFR Borrowing
(other than a Swingline Loan for which the deadline will be 1:00 p.m. rather
than noon), not later than noon on the date of the proposed Borrowing;
provided
that any
such notice of a CBFR Revolving Borrowing to finance the reimbursement of an LC
Disbursement as contemplated by
Section 2.06(e)
may
be given not later than 11:00 a.m. on the date of the proposed
Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or facsimile to the
Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such telephonic
and written Borrowing Request shall specify the following information in
compliance with
Section
2.01
:
(i) the
aggregate amount of the requested Borrowing and a breakdown of the separate
wires comprising such Borrowing;
(ii) the
date of such Borrowing, which shall be a Business Day;
(iii) whether
such Borrowing is to be a CBFR Borrowing or a Eurodollar Borrowing;
and
(iv) in
the case of a Eurodollar Borrowing, the initial Interest Period to be applicable
thereto, which shall be a period contemplated by the definition of the term
“
Interest
Period
.”
If no
election as to the Type of Revolving Borrowing is specified, then the requested
Revolving Borrowing shall be a
CBFR
Borrowing. If no Interest Period is specified with respect to any
requested Eurodollar Revolving Borrowing, then the Borrower shall be deemed to
have selected an Interest Period of one month’s duration. Promptly
following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender’s Loan to be made as part of the requested
Borrowing.
Section
2.04
Protective
Advances
. (a) Subject to the limitations set forth below, the
Administrative Agent is authorized by the Borrower and the Lenders, from time to
time in the Administrative Agent’s sole discretion (but shall have absolutely no
obligation), to make Loans to the Borrower, on behalf of all Lenders, which the
Administrative Agent, in its Permitted Discretion, deems necessary or desirable
(i) to preserve or protect the Collateral, or any portion thereof, (ii) to
enhance the likelihood of, or maximize the amount of, repayment of the Loans and
other Obligations, or (iii) to pay any other amount chargeable to or required to
be paid by the Borrower pursuant to the terms of this Agreement to the extent
then due, including payments of reimbursable expenses (including costs, fees,
and expenses as described in
Section 9.03
) and
other sums payable under the Loan Documents (any of such Loans are herein
referred to as “
Protective
Advances
”);
provided
that, the
aggregate principal amount of Protective Advances and Overadvances outstanding
at any time shall not at any time exceed $7,500,000;
provided further
that, the aggregate principal amount of outstanding Protective Advances
plus
the aggregate Revolving Exposure shall not exceed the aggregate Revolving
Commitments. Protective Advances may be made even if the conditions
precedent set forth in
Section 4.02
have not
been satisfied. The Protective Advances shall be secured by the Liens
in favor of the Administrative Agent in and to the Collateral pursuant to the
Loan Documents and shall constitute Secured Obligations
hereunder. All Protective Advances shall be CBFR
Borrowings. The Administrative Agent’s authorization to make
Protective Advances may be revoked at any time by the Required
Lenders. Any such revocation must be in writing and shall become
effective prospectively upon the Administrative Agent’s and Borrower’s receipt
thereof. At any time that there is sufficient Availability and the
conditions precedent set forth in
Section 4.02
have
been satisfied, the Administrative Agent may request the Revolving Lenders to
make a Revolving Loan to repay a Protective Advance. At any other
time the Administrative Agent may require the Lenders to fund their risk
participations described in
Section
2.04(b)
.
(b) Upon
the making of a Protective Advance by the Administrative Agent
(whether before or after
the occurrence of a Default), each Lender shall be deemed, without further
action by any party hereto, to have unconditionally and irrevocably purchased
from the Administrative Agent without recourse or warranty, an undivided
interest and participation in such Protective Advance in proportion to its
Applicable Percentage. From and after the date, if any, on which any
Lender is required to fund its participation in any Protective Advance purchased
hereunder, the Administrative Agent shall promptly distribute to such Lender,
such Lender’s Applicable Percentage of all payments of principal and interest
and all proceeds of Collateral received by the Administrative Agent in respect
of such Protective Advance.
Section
2.05
Swingline Loans and
Overadvances
. (a)
The Administrative Agent, the Swingline Lender and the Revolving Lenders agree
that in order to facilitate the administration of this Agreement and the other
Loan Documents, promptly after the Borrower requests a CBFR Borrowing, the
Swingline Lender may elect to have the terms of this
Section 2.05(a)
apply
to such Borrowing Request by advancing, on behalf of the Revolving Lenders and
in the amount requested, same day funds to the Borrower on the applicable
Borrowing date to the Funding Account (each such Loan made solely by the
Swingline Lender pursuant to this
Section 2.05(a)
is
referred to in this Agreement as a “
Swingline Loan
”),
with settlement among them as to the Swingline Loans to take place on a periodic
basis as set forth in
Section
2.05(d)
. Each Swingline Loan shall be subject to all the terms
and conditions applicable to other CBFR Loans funded by the Revolving Lenders,
except that all payments thereon shall be payable to the Swingline Lender solely
for its own account. In addition, the Borrower hereby authorizes the
Swingline Lender to, and the Swingline Lender shall, subject to the terms and
conditions set forth herein (but without any further written notice required),
not later than 4:30 p.m. on each Business Day, make available to the Borrower by
means of a credit to the Funding Account, the proceeds of a Swingline Loan to
the extent necessary to pay items to be drawn on any Controlled Disbursement
Account that day (as determined based on notice from the Administrative
Agent). The aggregate amount of Swingline Loans outstanding at any
time shall not exceed $7,500,000. The Swingline Lender shall not make
any Swingline Loan if the requested Swingline Loan exceeds Availability (before
giving effect to such Swingline Loan). All Swingline Loans shall be
CBFR Borrowings.
(b) Any
provision of this Agreement to the contrary notwithstanding, at the request of
the Borrower, the Administrative Agent may in its sole discretion (but with
absolutely no obligation), make Revolving Loans to the Borrower, on behalf of
the Revolving Lenders, in amounts that exceed Availability (any such excess
Revolving Loans are herein referred to collectively as “
Overadvances
”);
provided
that,
no Overadvance shall result in a Default due to Borrower’s request for such
Overadvance or failure to repay unless then due in accordance with this
Section 2.05
for
so long as such Overadvance remains outstanding in accordance with the terms of
this paragraph, but solely with respect to the amount of such
Overadvance. In addition, Overadvances may be made even if the
condition precedent set forth in
Section 4.02(c)
has
not been satisfied. All Overadvances shall constitute CBFR
Borrowings. The authority of the Administrative Agent to make
Overadvances is limited to the extent that the aggregate principal amount
of Protective Advances and Overadvances outstanding at any time shall not at any
time exceed $7,500,000;
provided
that, each
Overadvance shall mature and be due on the earlier of the Maturity Date, demand
by the Administrative Agent and thirty days after such Overadvance is made, and
no Overadvance shall cause any Revolving Lender’s Revolving Exposure to exceed
its Revolving Commitment;
further
provided
,
that the Required
Lenders may at any time revoke the Administrative Agent’s authorization to make
Overadvances. Any such revocation must be in writing and shall become
effective prospectively upon the Administrative Agent’s receipt
thereof.
(c) Upon
the making of a Swingline Loan or an Overadvance by the Administrative
Agent (whether before or after the occurrence of a Default and regardless
of whether a Settlement has been requested with respect to such Swingline Loan
or Overadvance), each Revolving Lender shall be deemed, without further action
by any party hereto, to have unconditionally and irrevocably purchased from the
Swingline Lender or the Administrative Agent, as the case may be, without
recourse or warranty, an undivided interest and participation in such Swingline
Loan or Overadvance in proportion to its Applicable Percentage of the Revolving
Commitment. The Swingline Lender or the Administrative Agent may, at
any time, require the Revolving Lenders to fund their participations. From and
after the date, if any, on which any Revolving Lender is required to fund its
participation in any Swingline Loan or Overadvance purchased hereunder, the
Administrative Agent shall promptly distribute to such Lender, such Lender’s
Applicable Percentage of all payments of principal and interest and all proceeds
of Collateral received by the Administrative Agent in respect of such
Loan.
(d) The
Administrative Agent, on behalf of the Swingline Lender, shall request
settlement (a “
Settlement
”) with the
Revolving Lenders on at least a weekly basis or on any date that the
Administrative Agent elects, by notifying the Revolving Lenders of such
requested Settlement by facsimile, telephone, or e-mail no later than 12:00 p.m.
on the date of such requested Settlement (the “
Settlement
Date
”). Each Revolving Lender (other than the Swingline
Lender, in the case of the Swingline Loans) shall transfer the amount of such
Revolving Lender’s Applicable Percentage of the outstanding principal amount of
the applicable Loan with respect to which Settlement is requested to the
Administrative Agent, to such account of the Administrative Agent as the
Administrative Agent may designate, not later than 2:00 p.m. on such Settlement
Date. Settlements may occur during the existence of a Default and
whether or not the applicable conditions precedent set forth in
Section 4.02
have
then been satisfied. Such amounts transferred to the Administrative
Agent shall be applied against the amounts of the Swingline Lender’s Swingline
Loans and, together with Swingline Lender’s Applicable Percentage of such
Swingline Loan, shall constitute Revolving Loans of such Revolving Lenders,
respectively. If any such amount is not transferred to the
Administrative Agent by any Revolving Lender on such Settlement Date, the
Swingline Lender shall be entitled to recover such amount on demand from such
Lender together with interest thereon as specified in
Section
2.07
.
Section
2.06
Letters of
Credit
.
(a)
General
. Subject
to the terms and conditions set forth herein, the Borrower may request the
issuance of Letters of Credit for its own account or for the benefit of the
other Loan Parties, in a form reasonably acceptable to the Administrative Agent
and the Issuing Bank, at any time and from time to time during the Availability
Period. In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any form of letter
of credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, the Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control. All
Existing Letters of Credit shall be deemed to have been issued pursuant to this
Section 2.06
,
and from and after the Effective Date shall be subject to and governed by the
terms and conditions hereof.
(b)
Notice of Issuance,
Amendment, Renewal, Extension; Certain Conditions
. To request
the issuance of a Letter of Credit (or the amendment, renewal or extension of an
outstanding Letter of Credit), the Borrower shall hand deliver or facsimile (or
transmit by electronic communication, if arrangements for doing so have been
approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent
(prior to 11:00 am at least three Business Days prior to the requested date
of issuance, amendment, renewal or extension (or such shorter time period
approved by the Issuing Bank in its reasonable discretion)) a notice requesting
the issuance of a Letter of Credit, or identifying the Letter of Credit to be
amended, renewed or extended, and specifying the date of issuance, amendment,
renewal or extension (which shall be a Business Day), the date on which such
Letter of Credit is to expire (which shall comply with paragraph (c) of this
Section), the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare,
amend, renew or extend such Letter of Credit. If requested by the
Issuing Bank, the Borrower also shall submit a letter of credit application on
the Issuing Bank’s standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or
extended only if (and upon issuance, amendment, renewal or extension of each
Letter of Credit the Borrower shall be deemed to represent and warrant that),
after giving effect to such issuance, amendment, renewal or extension (i) the LC
Exposure shall not exceed $30,000,000, and (ii) the total Revolving Exposures
shall not exceed (A) the lesser of the total Revolving Commitments and the
Borrowing Base,
minus
(B) the
Availability Block.
(c)
Expiration
Date
. Except for an Auto-Extension Letter of Credit, each
Letter of Credit shall expire at or prior to the close of business on the
earlier of (i) the date one year after the date of the issuance of such Letter
of Credit (or, in the case of any renewal or extension thereof, one year after
such renewal or extension) and (ii) the date that is five Business Days prior to
the Maturity Date.
(d)
Participations
. By
the issuance of a Letter of Credit (or an amendment to a Letter of Credit
increasing the amount thereof) and without any further action on the part of the
Issuing Bank or the Revolving Lenders, the Issuing Bank hereby grants to each
Revolving Lender, and each Revolving Lender hereby acquires from the Issuing
Bank, a participation in such Letter of Credit equal to such Lender’s Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each
Revolving Lender hereby absolutely and unconditionally agrees to pay to the
Administrative Agent, for the account of the Issuing Bank, such Lender’s
Applicable Percentage of each LC Disbursement made by the Issuing Bank and not
reimbursed by the Borrower on the date due as provided in paragraph (e) of this
Section, or of any reimbursement payment required to be refunded to the Borrower
for any reason. Each Revolving Lender acknowledges and agrees that
its obligation to acquire participations pursuant to this paragraph in respect
of Letters of Credit is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including any amendment, renewal or extension of
any Letter of Credit or the occurrence and continuance of a Default or reduction
or termination of the Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever.
(e)
Reimbursement
. If
the Issuing Bank shall make any LC Disbursement in respect of a Letter of
Credit, the Borrower shall reimburse such LC Disbursement by paying to the
Administrative Agent an amount equal to such LC Disbursement not later than 2:00
p.m. on the date that such LC Disbursement is made, if the Borrower shall have
received notice of such LC Disbursement prior to 11:00 a.m. on such date, or, if
such notice has not been received by the Borrower prior to such time on such
date, then not later than 2:00 p.m. on (i) the Business Day that the Borrower
receives such notice, if such notice is received prior to 11:00 a.m. on the day
of receipt, or (ii) the Business Day immediately following the day that the
Borrower receives such notice, if such notice is not received prior to such time
on the day of receipt;
provided
that, the
Borrower may, subject to the conditions to borrowing set forth herein, request
in accordance with
Section 2.03
that
such payment be financed with a CBFR Revolving Borrowing or Swingline Loan in an
equivalent amount and, to the extent so financed, the Borrower’s obligation to
make such payment shall be discharged and replaced by the resulting CBFR
Revolving Borrowing or Swingline Loan. If the Borrower fails to make
such payment when due, the Administrative Agent shall notify each Revolving
Lender of the applicable LC Disbursement, the payment then due from the Borrower
in respect thereof and such Lender’s Applicable Percentage
thereof. Promptly following receipt of such notice, each Revolving
Lender shall pay to the Administrative Agent its Applicable Percentage of the
payment then due from the Borrower, in the same manner as provided in
Section 2.07
with
respect to Loans made by such Lender (and
Section 2.07
shall
apply,
mutatis
mutandis
, to the
payment obligations of the Revolving Lenders), and the Administrative Agent
shall promptly pay to the Issuing Bank the amounts so received by it from the
Revolving Lenders. Promptly following receipt by the Administrative
Agent of any payment from the Borrower pursuant to this paragraph, the
Administrative Agent shall distribute such payment to the Issuing Bank or, to
the extent that Revolving Lenders have made payments pursuant to this paragraph
to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as
their interests may appear. Any payment made by a Revolving Lender
pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement
(other than the funding of CBFR Revolving Loans or a Swingline Loan as
contemplated above) shall not constitute a Loan and shall not relieve the
Borrower of its obligation to reimburse such LC
Disbursement.
(f)
Obligations
Absolute
. The
Borrower’s obligation to reimburse LC Disbursements as provided in paragraph
(e)
of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of
(i)
any lack of validity or enforceability
of any Letter of Credit or this Agreement, or any term or provision therein,
(ii)
any draft or other document presented
under a Letter of Credit proving to be forged, fraudulent or invalid in any
respect or any statement therein being untrue or inaccurate in any respect,
(iii)
payment by the Issuing Bank under a
Letter of Credit against presentation of a draft or other document that does not
comply with the terms of such Letter of Credit, or
(iv)
any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower’s obligations
hereunder
(other than
payment or performance)
. Neither the Administrative
Agent, the Revolving Lenders nor the Issuing Bank, nor any of their Related
Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank;
provided
that the foregoing shall not be
construed to excuse the Issuing Bank from liability to the Borrower to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by the Issuing Bank’s
failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. The
parties hereto expressly agree that, in the absence of gross negligence or
willful misconduct on the part of the Issuing Bank (as finally determined by a
court of competent jurisdiction), the Issuing Bank shall be deemed to have
exercised care in each such determination. In furtherance of the
foregoing and without limiting the generality thereof, the parties agree that,
with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(g)
Disbursement
Procedures
. The
Issuing Bank shall, promptly following its receipt thereof, examine all
documents purporting to represent a demand for payment under a Letter of
Credit. The Issuing Bank shall promptly notify the Administrative
Agent and the Borrower by telephone (confirmed by facsimile) of such demand for
payment and whether the Issuing Bank has made or will make an LC Disbursement
thereunder;
provided
that any failure to give or delay in
giving such notice shall not relieve the Borrower of its obligation to reimburse
the Issuing Bank and the Revolving Lenders with respect to any such LC
Disbursement
in accordance
with the terms herein
.
(h)
Interim
Interest
. If the
Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall
reimburse such LC Disbursement in full on the date such LC Disbursement is made,
the unpaid amount thereof shall bear interest, for each day from and including
the date such LC Disbursement is made to but excluding the date that the
Borrower reimburses such LC Disbursement, at the rate per annum then applicable
to CBFR Revolving Loans;
provided
that, if the Borrower fails to
reimburse such LC Disbursement when due pursuant to paragraph
(e)
of this Section, then
Section
2.13(d)
shall
apply. Interest accrued pursuant to this paragraph shall be for the
account of the Issuing Bank, except that interest accrued on and after the date
of payment by any Revolving Lender pursuant to paragraph
(e)
of this Section to reimburse the
Issuing Bank shall be for the account of such Lender to the extent of such
payment.
(i)
Replacement
of the Issuing Bank
. The Issuing Bank may be
replaced at any time by written agreement among the Borrower, the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Revolving Lenders of any such replacement
of the Issuing Bank. At the time any such replacement shall become
effective, the Borrower shall pay all unpaid fees accrued for the account of the
replaced Issuing Bank pursuant to
Section
2.12(b)
. From
and after the effective date of any such replacement,
(i)
the successor Issuing Bank shall have
all the rights and obligations of the Issuing Bank under this Agreement with
respect to Letters of Credit to be issued thereafter and
(ii)
references herein to the term
“
Issuing
Bank
” shall be deemed to
refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After
the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall
remain a party hereto and shall continue to have all the rights and obligations
of an Issuing Bank under this Agreement with respect to Letters of Credit issued
by it prior to such replacement
to the extent such Letters of Credit
remain outstanding
, but
shall not be required to issue additional Letters of Credit.
(j)
Cash
Collateralization
. If any
Event of
Default shall occur and be continuing,
on the Business Day that the Borrower receives
written
notice from the Administrative Agent or
the Required Lenders (or, if the maturity of the Loans has been
accelerated, Revolving Lenders with LC Expo
sure representing greater than
50% of the total LC
Exposure) demanding the deposit of cash collateral pursuant to this paragraph,
the Borrower shall deposit in an account with the Administrative Agent, in the
name of the Administrative Agent and for the benefit of the Revolving Lenders
(the “
LC
Collateral Account
”), an
amount in cash equal to 105% of the LC Exposure as of such date
plus
accrued and unpaid interest thereon;
provided
that the obligation to deposit such
cash collateral shall become effective immediately, and such deposit shall
become immediately due and payable, without demand or other notice of any kind,
upon the occurrence of any Event of Default with respect to the Borrower
described in clause
(h)
or
(i)
of
Article
VII
. Such
deposit shall be held by the Administrative Agent as collateral for the payment
and performance of the Secured Obligations. The Administrative Agent
shall have exclusive dominion and control, including the exclusive right of
withdrawal, over such account and the Borrower hereby grants the Administrative
Agent a security interest in the LC Collateral Account. Other than
any interest earned on the investment of such deposits, which investments shall
be made at the option and sole discretion of the Administrative Agent and at the
Borrower’s risk and expense, such deposits shall not bear
interest. Interest or profits, if any, on such investments shall
accumulate in such account
for the benefit of the Borrower
. Moneys in such account
shall be applied by the Administrative Agent to reimburse the Issuing Bank for
LC Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrower for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated (but subject to the consent of Revolving Lenders with LC
Exposure representing greater than 50% of the total LC Exposure), be applied to
satisfy other Secured Obligations
in accordance with
Section
2.18
. If the
Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence
and continuance
of a
n Event of
Default, such amount (to the extent not
applied as aforesaid) shall be returned to the Borrower within three Business
Days after all such
Events
of Default
have been cured
or waived.
(k)
Auto-Extension
Letters of Credit
. If the Borrower so requests
in respect of a standby Letter of Credit, the Issuing Bank shall agree to issue
a standby Letter of Credit that has provisions that automatically extend the
expiry date of such standby Letter of Credit for successive periods of up to
twelve months (each, an “
Auto-Extension
Letter of Credit
”);
provided
that any such Auto-Extension Letter of
Credit must permit the Issuing Bank to prevent any such extension at least once
in each twelve month period (commencing with the date of issuance of such Letter
of Credit) by giving prior notice to the beneficiary thereof not later than a
day (the “
Non-Extension
Notice Date
”) in each such
twelve-month period to be agreed upon at the time such Auto-Extension Letter of
Credit is issued. Unless otherwise directed by the Issuing Bank, the
Borrower shall not be required to make a specific request to the relevant
Issuing Bank for any such extension. Once an Auto-Extension Letter of
Credit has been issued, the Lenders shall be deemed to have authorized (but may
not require) the Issuing Bank to permit the extension of such Auto-Extension
Letter of Credit at any time to an expiry date that is not later than the
earlier of twelve months after issuance or five (5) Business Days prior to the
Maturity Date;
provided
that the Issuing Bank (A) shall not be
required to permit any such extension if the Issuing Bank has determined that it
would have no obligation at such time to issue such Auto-Extension Letter of
Credit in its extended form under the terms hereof, and (B) shall not permit any
such extension if it has received notice (which may be by telephone or in
writing) on or before the day that is five (5) Business Days before the
Non-Extension Notice Date from the Administrative Agent, the Required Lenders or
the Borrower that one or more of the applicable conditions specified in
Section
4.01
is not then satisfied
or waived.
Section
2.07
Funding of
Borrowings
.
(a)
Each Lender shall make each Loan to be
made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by
1:00 p.m.
to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders
in an amount equal to such Lender’s Applicable Percentage
;
provided
that, Swingline Loans shall be made as
provided in
Section
2.05
.
Subject to
clause
(b)
of this Section
, t
he Administrative Agent will make such
Loans available to the Borrower by promptly crediting the amounts so received,
in like funds, to the Funding Account;
provided
that CBFR Revolving Loans made to
finance the reimbursement of
(i)
an LC Disbursement as provided in
Section
2.06(e)
shall be remitted
by the Administrative Agent to the Issuing Bank and
(ii)
a Protective Advance or an Overadvance
shall be retained by the Administrative Agent.
(b)
Unless the Administrative Agent shall
have received notice from a Lender prior to the proposed date of any Borrowing
that such Lender will not make available to the Administrative Agent such
Lender’s share of such Borrowing, the Administrative Agent may assume that such
Lender has made such share available on such d
ate in accordance with
clause
(a)
of this Section and may, in reliance
upon such assumption, make available to the Borrower a corresponding
amount. In such event, if a Lender has not in fact made its share of
the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i)
in the case of such Lender, the greater
of the Federal Funds Effective Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation or
(ii)
in the case of the Borrower, the
interest rate applicable to CBFR Loans. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender’s Loan included in such Borrowing.
Section
2.08
Interest
Elections
.
(a)
Each Revolving Borrowing initially
shall be of the Type specified in the applicable Borrowing Request and, in the
case of a Eurodollar Revolving Borrowing, shall have an initial Interest Period
as specified in such Borrowing Request. Thereafter, the Borrower may
elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Revolving Borrowing, may elect
Interest Periods therefor, all as provided in this Section. The
Borrower may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably
among the Lenders holding the Loans comprising such Borrowing, and the Loans
comprising each such portion shall be considered a separate
Borrowing. This Section shall not apply to
Swingline Loans,
Overadvances or Protective Advances,
which may not be converted or continued.
(b)
To make an election pursuant to this
Section, the Borrower shall notify the Administrative Agent of such election by
telephone by the time that a Borrowing Request would be required under
Section
2.03
if the Borrower were
requesting a Revolving Borrowing of the Type resulting from such election to be
made on the effective date of such election. Each such telephonic
Interest Election Request shall be irrevocable and shall be confirmed promptly
by
hand delivery,
facsimile
or electronic transmission
to the Administrative Agent of a
written Interest Election Request in a form approved by the Administrative Agent
and signed by the Borrower.
(c)
Each telephonic and written Interest
Election Request shall specify the following information in compliance with
Section
2.02
:
(i)
the Borrowing to which such Interest
Election Request applies and, if different options are being elected with
respect to different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be specified pursuant
to clauses
(iii)
and
(iv)
below shall be specified for each
resulting Borrowing);
(ii)
the effective date of the election made
pursuant to such Interest Election Request, which shall be a Business
Day;
(iii)
whether the resulting Borrowing is to be
a CBFR Borrowing or a Eurodollar Borrowing; and
(iv)
if the resulting Borrowing is a
Eurodollar Borrowing, the Interest Period to be applicable thereto after giving
effect to such election, which shall be a period contemplated by the definition
of the term “
Interest
Period
”.
If any
such Interest Election Request requests a Eurodollar Borrowing but does not
specify an Interest Period, then the Borrower shall be deemed to have selected
an Interest Period of one month’s duration.
(d)
Promptly following receipt of an
Interest Election Request, the Administrative Agent shall advise each Lender of
the details thereof and of such Lender’s portion of each resulting
Borrowing.
(e)
If the Borrower fails to deliver a
timely Interest Election Request with respect to a Eurodollar Revolving
Borrowing prior to the end of the Interest Period applicable thereto, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest
Period such Borrowing shall be converted to a CBFR
Borrowing. Notwithstanding any contrary provision hereof, if
a
Default has occurred and is continuing
and the Administrative Agent, at the request of the Required Lenders, so
notifies the Borrower, then, so long as a Default is continuing
(i)
no outstanding Revolving Borrowing may
be converted to or continued as a Eurodollar Borrowing and
(ii)
unless repaid, each Eurodollar
Revolving Borrowing shall be converted to a CBFR Borrowing at the end of the
Interest Period applicable thereto.
Section
2.09
Termination
and Reduction of Commitments
.
(a)
Unless previously terminated, the
Commitments shall terminate on the Maturity Date.
(b)
The Borrower may at any time terminate
the Commitments upon
(i)
the payment in full of all outstanding
Loans, together with accrued and unpaid interest thereon and on any Letters of
Credit,
(ii)
the cancellation and return of all
outstanding Letters of Credit (or alternatively, with respect to each such
Letter of Credit, the furnishing to the Administrative Agent of a cash deposit
(or at the discretion of the Administrative Agent a back up standby letter of
credit satisfactory to the Administrative Agent) equal to 105% of the LC
Exposure as of such date),
(iii)
the payment in full of the accrued and
unpaid fees, and
(iv)
the payment in full of all reimbursable
expenses and other Obligations
then due and owing
together with accrued and unpaid
interest thereon
, if
any
.
(c)
Subject to
Section
2.16
, t
he Borrower may from time to time reduce
the Revolving Commitments;
provided
that
(i)
each reduction of the Revolving
Commitments shall be in an amount th
at is an integral multiple of
$
1,000,000 and not less
than
$1,000,000
and
(ii)
the Borrower shall not reduce the
Revolving Commitments if, after giving effect to any concurrent prepayment of
the Revolving Loans in accordance with
Section
2.10
, the sum of the
Revolving Exposures would exceed
(A)
the lesser of the total Revolving
Commitments and the Borrowing Base,
minus
(B)
the Availability
Block
.
(d)
The Borrower shall notify the
Administrative Agent of any election to terminate or reduce the Commitments
under paragraph
(b)
or
(c)
of this Section at least three Business
Days prior to the effective date of such termination or reduction, specifying
such election and the effective date thereof. Promptly following
receipt of any notice, the Administrative Agent shall advise the Lenders of the
contents thereof. Each notice delivered by the Borrower pursuant to
this Section shall be irrevocable;
provided
that a notice of termination of the
Commitments delivered by the Borrower may state that such notice is conditioned
upon the effectiveness of other credit facilities
or other events
, in which case such notice may be
revoked by the Borrower (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Commitments shall be permanent. Each
reduction of the Commitments shall be made ratably among the Lenders in
accordance with their respective Commitments.
Section
2.10
Repayment of
Loans; Evidence of Debt
.
(a)
The Borrower hereby unconditionally
promises to pay
(i)
to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Revolving Loan
on the Maturity Date,
(ii)
to the Administrative Agent the then
unpaid amount of each Protective Advance on the earlier of the Maturity Date and
demand by the Administrative Agent, and
(iii)
to the Administrative Agent the then
unpaid principal amount of each Overadvance on the earlier of the Maturity Date,
demand by the Administrative Agent and the 30
th
day after such Overadvance is
made.
(b)
O
n each Business Day, the Administrative
Agent shall apply all funds credited to the Collection Account on such Business
Day or the immediately preceding Business Day (at the discretion of the
Administrative Agent, whether or not immediately available),
first
to prepay any Protective Advances and
Overadvances that may be outstanding, pro rata,
second
to prepay the Revolving Loans and
third
to
cash collateralize outstanding LC
Exposure
, in each case
without a permanent commitment reduction
.
(c)
Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of
the Borrower to such Lender resulting from each Loan made by such Lender,
including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder.
(d)
The Administrative Agent shall maintain
accounts in which it shall record
(i)
the amount of each Loan made hereunder,
the Class and Type thereof and the Interest Period applicable thereto,
(ii)
the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and
(iii)
the amount of any sum received by the
Administrative Agent hereunder for the account of the Lenders and each Lender’s
share thereof.
(e)
The entries made in the accounts
maintained pursuant to paragraph
(c)
or
(d)
of this Section shall be
prima
facie
evidence of the existence and amounts
of the obligations recorded therein;
provided
that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement.
(f)
Any Lender may request that Loans made
by it be evidenced by a promissory note. In such event, the Borrower
shall
promptly
prepare, execute and deliver to such
Lender a promissory note payable to the order of such Lender (or, if requested
by such Lender, to such Lender and its registered assigns) and in a form
approved by the Administrative Agent
and Borrower
. Thereafter, the Loans
evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to
Section
9.04
) be represented by one
or more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).
Section
2.11
Prepayment
of Loans
.
(a)
The Borrower shall have the right at
any time and from time to time to prepay any Borrowing in whole or in
part
without premium or
penalty
, subject to prior
notice in accordance with paragraph
(d)
of this Section.
(b)
I
n the event and on such occasion that
the total Revolving Exposure exceeds (x) the lesser of
(i)
the aggregate Revolving Commitments or
(ii)
the Borrowing Base,
e
xcept for Overadvances permitted under
Section
2.05
,
minus
(y) the Availability
Block
, the Borrower shall prepay the
Revolving Loans
, LC
Exposure
and/or
Swingline Loans
in an aggregate amount equal to such
excess.
In the
event and on each occasion that any Net Proceeds are received by or on behalf of
any Loan Party in respect of any Prepayment Event, the Borrower shall,
immediately after such Net Proceeds are received by any Loan Party and subject
to the terms, conditions and provisions of the Intercreditor Agreement, prepay
the Obligations as set forth in
Section 2.11(c)
below
in an aggregate amount equal to 100% of such Net Proceeds without a
corresponding commitment reduction,
provided
that, in the
case of any event described in clause (a) or (b) of the definition of the term
“
Prepayment
Event
”, any Net Proceeds attributable to Notes Priority Collateral shall
be applied in accordance with the Senior Notes Documents or, if the Senior Notes
(or any replacement or refinancing thereof) are no longer outstanding, any Net
Proceeds attributable to Real Property, equipment or any tangible assets
(excluding Inventory) shall be applied by the Administrative Agent to reduce the
outstanding principal balance of the Revolving Loans (without a permanent
reduction of the Revolving Commitment) and upon such application, the
Administrative Agent may, in the case of any event described in
clause (b)
of the
definition of the term “
Prepayment
Event
”, establish a Reserve against the Borrowing Base in an
amount not greater than the amount of such proceeds so applied to cover the
costs of repair, restoration or replacement.
(c)
All such amounts pursuant to
Section
2.11(c)
shall be applied,
first
to prepay any Protective Advances and
Overadvances that may be outstanding, pro rata, and
second
to prepay the Revolving Loans without a
corresponding reduction in the Revolving Commitment and to cash collateralize
outstanding LC Exposure.
Subject to the terms, conditions and
provisions of the Intercreditor Agreement, i
f the precise amount of insurance or
condemnation proceeds allocable to Inventory as compared to
e
quipment,
f
ixtures and
R
eal
P
roperty is not otherwise determined, the
allocation and application of those proceeds shall be determined by the
Administrative Agent, in its Permitted Discretion.
(d)
The Borrower shall notify the
Administrative Agent
(and,
in the case of prepayment of a Swingline Loan, the Swingline Lender)
by telephone (confirmed by facsimile)
or electronic transmission
of any prepayment hereunder
(i)
in the case of
a voluntary
prepayment of a Eurodollar Revolving
Bo
rrowing, not later than
11:00 a.m. three Business Days before the date of prepayment, or
(ii)
in the case of a voluntary prepayment
of an CBFR Revolving Borrowing, not later than 11:00 a.m.
one Business Day before the date of
prepayment. Each such notice shall be irrevocable and shall specify
the prepayment date and the principal amount of each Borrowing or portion
thereof to be prepaid;
provided
that, if a notice of prepayment is
given in connection with a conditional notice of termination of the Commitments
as contemplated by
Section
2.09
, then such notice of
prepayment may be revoked if such notice of termination is revoked in accordance
with
Section
2.09
. Promptly
following receipt of any such notice relating to a Revolving Borrowing, the
Administrative Agent shall advise the Lenders of the contents
thereof. Each
voluntary
partial prepayment of any Revolving
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Revolving Borrowing of the same Type as provided in
Section
2.02
. Each
prepayment of a Revolving Borrowing shall be applied ratably to the Revolving
Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by
Section
2.13
.
Section
2.12
Fees
.
(a)
The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at the Applicable Unused Commitment Fee Rate on the average daily
amount of the Available Revolving Commitment of such Lender during the period
from and including the Effective Date to but excluding the date on which the
Lenders’ Revolving Commitments terminate. Accrued commitment fees
shall be payable
monthly
in arrears on the first
Business Day of each calendar month and on the date on which the Revolving
Commitments terminate, commencing on the first such date to occur after the date
hereof. All commitment fees shall be computed on the basis of a year
of 360 days and shall be payable for the actual number of days
elapsed.
(b)
The Borrower agrees to pay
(i)
to the Administrative Agent for the
account of each Revolving Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Margin used to determine the interest rate applicable to Eurodollar Revolving
Loans on the average daily amount of such Lender’s LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the period
from and including the Effective Date to but excluding the later of the date on
which such Lender’s Revolving Commitment terminates and the date on which such
Revolving Lender ceases to have any LC Exposure, and
(ii)
to the Issuing Bank a fronting fee,
which shall accrue at the rate of 0.20% per annum on the average daily amount of
the LC Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to but
excluding the later of the date of termination of the Revolving Commitments and
the date on which there ceases to be any LC Exposure, as well as the Issuing
Bank’s standard fees with respect to the issuance, amendment, renewal or
extension of any Letter of Credit or processing of drawings
thereunder. Participation fees and fronting fees accrued through and
including the last day of each calendar month shall be payable
monthly in arrears
on the first Business Day of each
calendar month following such last day, commencing on the first such date to
occur after the Effective Date;
provided
that all such fees shall be payable on
the date on which the Revolving Commitments terminate and any such fees accruing
after the date on which the Commitments terminate shall be payable on
demand. Any other fees payable to the Issuing Bank pursuant to this
paragraph shall be payable within 10 days after demand. All
participation fees and fronting fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days
elapsed.
(c)
The Borrower agrees to pay to the
Administrative Agent, for its own account, fees payable in the amounts and at
the times separately agreed upon between the Borrower and the Administrative
Agent.
(d)
The Borrower agrees to pay to the Lead
Arrangers, for their respective accounts, fees payable in the amounts and at
such times separately agreed upon between the Borrower and the Lead
Arrangers.
(e)
All fees payable hereunder shall be paid
on the dates due, in immediately available funds, to the Administrative Agent
(or to the Issuing Bank, in the case of fees payable to it) for distribution, in
the case of commitment fees and participation fees, to the
Lenders. Fees paid shall not be refundable under any
circumstances.
Section
2.13
Interest
.
(a)
The Loans comprising each CBFR
Borrowing
(including each
Swingline Loan)
shall bear
interest at the CB Floating Rate
plus
the Applicable
Margin.
(b)
The Loans comprising each Eurodollar
Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period
in effect for such Borrowing
plus
the Applicable
Margin.
(c)
Each Protective Advance and each
Overadvance shall bear interest at the CB Floating Rate
plus
the Applicable Margin for Revolving
Loans
plus
2%.
(d)
Notwithstanding the foregoing, during
the occurrence and continuance of an Event of Defau
lt,
the Required Lenders may, at their
option, by
notice to the Borrower (which notice may
be revoked at the option of the Required Lenders notwithstanding any provision
of
Section
9.02
requiring the consent
of “each Lender affected thereby” for reductions in interest rates), declare
effective upon such notice
that
(i)
all Loans shall bear interest at 2%
plus
the rate otherwise applicable to such
Loans as provided in the preceding paragraphs of this Section or
(ii)
in the case of any other amount
outstanding hereunder, such amount shall accrue at 2%
plus
the rate applicable to such fee or
other obligation as provided hereunder.
(e)
Accrued interest on each Loan shall be
payable in arrears on each Interest Payment Date for such Loan and upon
termination of the Commitments;
provided
that
(i)
interest accrued pursuant to paragraph
(d)
of this Section shall be payable on
demand,
(ii)
in the event of any repayment or
prepayment of any Loan (other than a prepayment of a CBFR Revolving Loan prior
to the end of the Availability Period), accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment
and
(iii)
in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.
(f)
All interest hereunder shall be computed
on the basis of a year of 360 days, except that interest computed by reference
to the CB Floating Rate shall be computed on the basis of a year of 365 days (or
366 days in a leap year), and in each case shall be payable for the actual
number of days elapsed. The applicable CB Floating Rate, Adjusted
LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
Section
2.14
Alternate
Rate of Interest
. After the Effective
Date,
if
prior to the commencement of any
Interest Period for a Eurodollar Borrowing:
(a)
the Administrative Agent
reasonably
determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable,
for such Interest Period; or
(b)
the Administrative Agent is advised by
the Required Lenders that the Adjusted LIBO Rate or the LIBO Rate, as
applicable, for such Interest Period will not adequately and fairly reflect the
cost to such Lenders (or Lender) of making or maintaining their Loans (or its
Loan) included in such Borrowing for such Interest Period;
then the
Administrative Agent shall give notice thereof to the Borrower and the Lenders
by telephone, facsimile or electronic transmission as promptly as practicable
thereafter and, until the Administrative Agent notifies the Borrower and the
Lenders that the circumstances giving rise to such notice no longer exist, (i)
any Interest Election Request that requests the conversion of any Revolving
Borrowing to, or continuation of any Revolving Borrowing as, a Eurodollar
Borrowing shall be ineffective, and (ii) if any Borrowing Request requests a
Eurodollar Revolving Borrowing, such Borrowing shall be made as a
CBFR
Borrowing.
Section
2.15
Increased
Costs
.
(a)
If any Change in Law
shall:
(i)
impose, modify or deem applicable any
reserve, special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank;
or
(ii)
impose on any Lender or the Issuing Bank
or the London interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or participation
therein;
and the
result of any of the foregoing shall be to increase the cost to such Lender of
making or maintaining any Eurodollar Loan (or of maintaining its obligation to
make any such Loan) or to increase the cost to such Lender or the Issuing Bank
of participating in, issuing or maintaining any Letter of Credit or to reduce
the amount of any sum received or receivable by such Lender or the Issuing Bank
hereunder (whether of principal, interest or otherwise), then the Borrower will
pay to such Lender or the Issuing Bank, as the case may be, such additional
amount or amounts as will compensate such Lender or the Issuing Bank, as the
case may be, for such additional costs incurred or reduction
suffered.
(b)
If any Lender or the Issuing Bank
determines that any Change in Law regarding capital requirements has or would
have the effect of reducing the rate of return on such Lender’s or the Issuing
Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding
company, if any, as a consequence of this Agreement or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the Issuing Bank, to a level below that which such Lender or
the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could
have achieved but for such Change in Law (taking into consideration such
Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the
Issuing Bank’s holding company with respect to capital adequacy), then from time
to time the Borrower will pay to such Lender or the Issuing Bank, as the case
may be, such additional amount or amounts as will compensate such Lender or the
Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such
reduction suffered.
(c)
A certificate of a Lender or the Issuing
Bank setting forth
in
reasonable detail
the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph
(a)
or
(b)
of this Section shall be delivered to
the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender or the Issuing Bank, as the case may be, the
amount shown as due on any such certificate within 10 days after receipt
thereof.
(d)
Failure or delay on the part of any
Lender or the Issuing Bank to demand compensation pursuant to this Section shall
not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand
such compensation;
provided
that the Borrower shall not be required
to compensate a Lender or the Issuing Bank pursuant to this Section for any
increased costs or r
eductions incurred more than
180
days prior to the date
that such Lender or the Issuing Bank, as the case may be, notifies the Borrower
of the Change in Law giving rise to such increased costs or reductions and of
such Lender’s or the Issuing Bank’s intention to claim compensation therefor;
provided
further
that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the
180
-day period referred to above shall be
extended to include the period of retroactive effect
thereof.
Section
2.16
Break
Funding Payments
. In the event of
(a)
the payment of any principal of any
Eurodollar Loan other than on the last day of an Interest Period applicable
thereto (including as a result of an Event of Default),
(b)
the conversion of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto,
(c)
the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under
Section
2.09(d)
and is revoked in
accordance therewith), or
(d)
the assignment of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto as a result
of a request by the Borrower pursuant to
Section
2.19
, then, in any such
event, the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such
loss, cost or expense to any Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of
(i)
the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over
(ii)
the amount of interest which would
accrue on such principal amount for such period at the interest rate which such
Lender would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market. A certificate of any Lender setting forth
in reasonable detail,
any amount or amounts that such Lender
is entitled to receive pursuant to this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower
shall pay such Lender the amount shown as due on any such certificate within 10
days after receipt thereof.
Section
2.17
Taxes
.
(a)
Any and all payments by or on account
of any obligation of the Borrower hereunder shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes;
provided
that if the Borrower shall be required
to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i)
the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent, Lender or Issuing Bank (
each a “
Payee
”
) receives an amount equal to the sum it
would have received had no such deductions been made,
(ii)
the Borrower shall make such deductions
and
(iii)
the Borrower shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.
(b)
In addition, the Borrower shall pay any
Other Taxes to the relevant Governmental Authority in accordance with applicable
law.
(c)
The Borrower shall indemnify
any Payee
, within
15 Business D
ays after written demand
therefor (including documentation
reasonably supporting such request)
, for the full amount of any Indemnified
Taxes or Other Taxes paid by
such Payee
, as the case may be, on or with respect
to any payment by or on account of any obligation of the Borrower hereunder
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the
relevant
Governmental Authority;
provided
,
however
, that the Borrower
shall not be required to compensate
any Payee
,
for any Indemnified Taxes or
Other Taxes incurred more
than one hundred eighty (180) days
prior to the date that
such Payee notifies Borrower
of such Indemnified Taxes or Other
Taxes and of such
Payee’s
intention
to claim compensation
therefor
;
provided
,
further
, that, if the circumstances giving rise
to such Indemnified Taxes or Other Taxes is retroactive, then the
one hundred eighty (180) day
period referred to above shall be
extended to include the period of retroactive effect thereof
.
A certificate as to the
amount of such payment or liability delivered to the Borrower by a
Payee
shall be conclusive absent manifest
error.
(d)
Each Lender and the Issuing Bank shall
indemnify the Borrower and the Administrative Agent, within 10 days after
written demand therefor, against any and all Taxes and any and all related
losses, claims, liabilities, penalties, interest and reasonable expenses
(including the fees, charges and disbursements of any counsel for the Borrower
or the Administrative Agent) incurred by or asserted against the Borrower or the
Administrative Agent by any Governmental Authority as a result of the failure by
such Lender or the Issuing Bank, as the case may be, to deliver, or as a result
of the inaccuracy, inadequacy or deficiency of, any documentation required to be
delivered to the Borrower or the Administrative Agent pursuant to
Section
2.17(f)
. Each
Lender and the Issuing Bank hereby authorizes the Administrative Agent to set
off and apply any and all amounts at any time owing to such Lender or the
Issuing Bank, as the case may be, under this Agreement or any other Loan
Document, against any amount due to the Administrative Agent under
this
Section
2.17(d)
.
(e)
Within 30 days
after any payment of Indemnified Taxes
or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(f)
A
ny
Payee
that is a "United States person" within
the meaning of section
7701(a)(30) of the Code shall deliver to
the Administrative
Agent and
the
Borrower
IRS Form W-9 or such other documentation
or information prescribed by Applicable Law or reasonably requested by
Administrative Agent or
Borrower
to determine
whether such
Payee
is subject to backup withholding or
information reporting requirements.
Any Foreign
Payee
that is entitled to an
exemption from United States withholding
tax, or that is subject to such tax at a reduced rate under an applicable tax
treaty, shall provide the Administrative Agent and the Borrower with two
properly completed and duly executed originals of each of the following, as
applicable: (i) Form W-8IMY (together with any applicable underlying IRS forms,
documentation or certificates) or successor form, (ii) Form W-8ECI (claiming
exemption from U.S. withholding tax because the income is effectively connected
with a U.S. trade or business) or any successor form, (iii) Form W-8BEN
(claiming exemption from, or a reduction of, U.S. withholding tax under an
income tax treaty) or any successor form, (iv) in the case of a Foreign Payee
claiming exemption under Sections 871(h) or 881(c) of the Code, a Form
W-8BEN (claiming exemption from U.S. withholding tax under the portfolio
interest exemption) or any successor form or (v) any other applicable form,
certificate or document prescribed by the IRS or any applicable law certifying
as to such Foreign Payee’s entitlement to such exemption from United States
withholding tax or reduced rate with respect to all payments to be made to such
Foreign Payee under the Loan Documents. Unless the Borrower and the
Administrative Agent have received forms or other documents satisfactory to them
indicating that payments under any Loan Document to or for a Foreign Payee are
not subject to United States withholding tax or are subject to such tax at a
rate reduced by an applicable tax treaty, the Loan Parties and the
Administrative Agent shall withhold amounts required to be withheld by
applicable Requirements of Law from such payments at the applicable statutory
rate. In addition, if a payment made to a Payee under any Loan
Document would be subject to U.S. federal withholding Tax imposed by FATCA if
such Payee fails to comply with the applicable reporting requirements of FATCA
(including those contained in Section 1471(b) or 1472(b) of the Code, as
applicable), such Lender shall deliver to the Withholding Agent (A) a
certification signed by the chief financial officer, principal accounting
officer, treasurer or controller and (B) other documentation reasonably
requested by its Withholding Agent sufficient for the Withholding Agent to
comply with its obligations under FATCA and to determine that such Payee has
complied with such applicable reporting requirements.
(g)
If a Payee
determines, in its sole discretion,
that it has received a refund of any Taxes or Other Taxes as to which it has
been indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this
Section
2.17
, it shall pay over
such refund to the Borrower (but only to the extent of indemnity payments made,
or additional amounts paid, by the Borrower under this
Section
2.17
with respect to the
Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of
such Payee
and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund); provided, that the Borrower, upon the request of
the Payee
, agrees to repay the amount paid over
to the Borrower (
plus
any penalties, interest or other
charges imposed by the relevant Governmental Authority) to
such Payee
in the event
the Payee
is required to repay such refund to such
Governmental Authority. This Section shall not be construed to require the
Administrative Agent or any Lender to make available its tax returns (or any
other information relating to its taxes which it deems confidential) to the
Borrower or any other Person.
Section
2.18
Payments
Generally; Allocation of Proceeds; Sharing of Set-offs
.
(a)
The Borrower shall make each payment
required to be made by it hereunder (whether of principal, interest, fees or
reimbursement of LC Disbursements, or of amounts payable under
Section
2.15
,
Section
2.16
or
Section
2.17
, or
otherwise) prior to 2:00 p.m.
on the date when due, in
immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such
payments shall be made to the Administrative Agent at its offices at 10 South
Dearborn Street, 22nd Floor, Chicago, Illinois
(or such other location identified by
the Administrative Agent to the Borrower in writing)
, except payments to be made directly to
the Issuing Bank
or
Swingline Lender
as
expressly provided herein and except that payments pursuant to
Section
2.15
,
Section
2.16
,
Section
2.17
and
Section
9.03
shall be made directly
to the Persons entitled thereto. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. If
any payment hereunder shall be due on a day that is not a Business Day, the date
for payment shall be extended to the next succeeding Business Day, and, in the
case of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments hereunder shall be made in
dollars.
(b)
Any proceeds of Collateral received by
the Administrative Agent
(i)
not constituting either
(A)
a specific payment of principal,
interest, fees or other sum payable under the Loan Documents (which shall be
applied as specified by the Borrower),
(B)
a mandatory prepayment (which shall be
applied in accordance with
Section
2.11
) or
(C)
amounts to be applied from the
Collection Account (which shall be applied in accordance with
Section
2.10(b)
) or
(ii)
after an Event of Default has occurred
and is continuing and the Administrative Agent so elects or the Required Lenders
so direct, such funds shall be applied ratably
first
, to pay any fees, indemnities, or
expense reimbursements including amounts then due to the Administrative Agent
and the Issuing Bank from the Borrower
pursuant to the Loan
Documents
(other than in
connection with Banking Services or Swap Obligations)
pursuant to the Loan
Documents
,
second
, to pay any fees or expense
reimbursements then due to the Lenders from the Borrower (other than in
connection with Banking Services or Swap Obligations),
third
, to pay interest due in respect of the
Overadvances and Protective Advances,
fourth
, to pay the principal of the
Overadvances and Protective Advances,
fifth
, to pay interest then due and payable
on the Loans (other than the Overadvances and Protective Advances) ratably,
sixth
, to prepay principal on the Loans
(other than the Overadvances and Protective Advances) and unreimbursed LC
Disbursements ratably,
seventh
, to pay an amount to the Administrative
Agent equal to one hundred five percent (105%) of the aggregate undrawn face
amount of all outstanding Letters of Credit and the aggregate amount of any
unpaid LC Disbursements, to be held as cash collateral for such Obligations,
eighth
, to payment of any amounts owing with
respect to Banking Services and Swap Obligations,
ninth
, to the payment of any other Secured
Obligation due to the Administrative Agent or any Lender by the
Borrower
and
tenth
, the balance, if any, after all of the
Secured Obligations have been paid in full, to the Borrower or as otherwise
required by law
.
Notwithstanding anything to the contrary
contained in this Agreement, unless so directed by the Borrower, or unless a
Default is in existence, neither the Administrative Agent nor any Lender shall
apply any payment which it receives to any Eurodollar Loan of a
Class
, except
(A)
on the expiration date of the Interest
Period applicable to any such Eurodollar Loan or
(B)
in the event, and only to the extent,
that there are no outstanding
CBFR
Loans of the same Class and, in any
such event, the Borrower shall pay the break funding payment required in
accordance with
Section
2.16
. The
Administrative Agent and the Lenders shall have the continuing and exclusive
right to apply and reverse and reapply any and all such proceeds and payments to
any portion of the Secured Obligations.
(c)
At the election of the Administrative
Agent, all payments of principal, interest, LC Disbursements, fees, premiums,
reimbursable expenses (including, without limitation, all reimbursement for fees
and expenses pursuant to
Section
9.03
), and other sums
then due and
payable under the Loan Documents, may be
paid from the proceeds of Borrowings made hereunder whether made following a
request by the Borrower pursuant to
Section
2.03
or a deemed request as
provided in this Section or may be deducted from
the Collection Account
. The Borrower hereby
irrevocably authorizes
(i)
the Administrative Agent to make a
Borrowing for the purpose of paying each payment of principal, inter
est and fees as it becomes due and
payable h
ereunder or any
other amount due
and
payable
under the Loan
Documents and agrees that all such amounts charged shall constitute Loans
(including
Swingline Loans
and
Overadvances, but such
a Borrowing may only constitute a Protective Advance if it is to reimburse
costs, fees and expenses as described in
Section
9.03
) and that all such
Borrowings shall be deemed to have been requested pursuant to
Section
2.03
,
Section
2.04
or
Section
2.05
, as applicable and
(ii)
the Administrative Agent to charge
the Collection
Account
of the Borrower
maintained with the Administrative Agent for each payment of principal, interest
and fees as it becomes due hereunder or any other amount due under the Loan
Documents.
(d)
If any Lender shall, by exercising any
right of set-off or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Loans or participations in LC
Disbursements resulting in such Lender receiving payment of a greater proportion
of the aggregate amount of its Loans and participations in LC Disbursements and
accrued interest thereon than the proportion received by any other Lender, then
the Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Loans and participations in LC Disbursements of
other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Loans and
participations in LC Disbursements;
provided
that
(i)
if any such participations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and
(ii)
the provisions of this paragraph shall
not be construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans or participations in LC Disbursements to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The
Borrower consents to the foregoing and agrees, to the extent it may effectively
do so under applicable law, that any Lender acquiring a participation pursuant
to the foregoing arrangements may exercise against the Borrower rights of
set-off and counterclaim with respect to such participation as fully as if such
Lender were a direct creditor of the Borrower in the amount of such
participation
, in each case
in accordance with the terms of this Agreement
.
(e)
Unless the Administrative Agent shall
have received notice from the Borrower prior to the date on which any payment is
due to the Administrative Agent for the account of the Lenders or the Issuing
Bank hereunder that the Borrower will not make such payment, the Administrative
Agent may assume that the Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders or the Issuing Bank, as the case may be, the amount due. In
such event, if the Borrower has not in fact made such payment, then each of the
Lenders or the Issuing Bank, as the case may be, severally agrees to repay to
the Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.
(f)
If any Lender shall fail to make
any payment required to be made by it pursuant to
Section
2.05
,
2.06(d)
or
(e)
,
2.07(b)
,
2.18(e)
or
9.03(c)
, then the Administrative Agent may, in
its discretion (notwithstanding any contrary provision hereof),
(i)
apply any amounts thereafter received
by the Administrative Agent for the account of such Lender to satisfy such
Lender’s obligations under such Sections until all such unsatisfied obligations
are fully paid and/or
(ii)
deposit
any such amounts in a segregated account
as cash collateral for, and apply any such amounts to, any future funding
obligations of such Lender under such Sections; application of amounts pursuant
to
(i)
and
(ii)
above shall be made in such order a may
be determined by the Administrative Agent in its discretion.
Section
2.19
Mitigation
Obligations; Replacement of Lenders
.
(a)
If any Lender requests compensation
under
Section
2.15
, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to
Section
2.17
, then
such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment
(i)
would eliminate or reduce amounts
payable pursuant to
Section
2.15
or
2.17
, as the case may be, in the future and
(ii)
would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or
assignment
promptly
following written demand (including documentation supporting such
demand)
.
(b)
If any Lender requests compensation
under
Section
2.15
, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to
Section
2.17
, or if any Lender
becomes a Defaulting Lender, then the Borrower may, at its sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in
Section
9.04
), all its interests,
rights and obligations under this Agreement to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment);
provided
that
(i)
the Borrower shall have received the
prior written consent of the Administrative Agent (and if a Revolving Commitment
is being assigned, the Issuing Bank)
to the extent required by
Section
9.04
, which consent shall
not unreasonably be withheld,
conditioned or delayed, (ii)
such Lender shall have received payment
of an amount equal to the outstanding principal of its Loans and participations
in LC Disbursements
and
Swingline Loans
, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and
(iii)
in the case of any such assignment
resulting from a claim for compensation under
Section
2.15
or payments required
to be made pursuant to
Section
2.17
, such assignment will
result in a reduction in such compensation or payments. A Lender
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to
apply.
Section
2.20
Defaulting
Lenders
. Notwithstanding any
provision of this Agreement to the contrary, if any Lender becomes a Defaulting
Lender, then the following provisions shall apply for so long as such Lender is
a Defaulting Lender:
(a)
fees shall cease to accrue on the
unfunded portion of the Revolving Commitment of such Defaulting Lender pursuant
to
Section
2.12(a)
;
(b)
the Commitment and Revolving Credit
Exposure of such Defaulting Lender shall not be included in determining whether
all Lenders or the Required Lenders have taken or may take any action hereunder
(including any consent to any amendment or waiver pursuant to
Section
9.02
), provided that any
waiver, amendment or modification requiring the consent of all Lenders or each
affected Lender which affects such Defaulting Lender differently than other
affected Lenders shall require the consent of such Defaulting
Lender;
(c)
if any
Swingline Exposure or
LC Exposure exists at the time a Lender
becomes a Defaulting Lender then:
(i)
all or any part of such
Swingline Exposure and
LC Exposure shall be reallocated among
the non-Defaulting Lenders in accordance with their respective Applicable
Percentages but only to the extent (x) the sum of all non-Defaulting Lenders’
Revolving Credit Exposures plus such Defaulting Lender’s
Swingline Exposure and
LC Exposure does not exceed the total of
all non-Defaulting Lenders’ Revolving Commitments and (y) the conditions set
forth in
Section
4.02
are satisfied at such
time; and
(ii)
if the reallocation described in clause
(i)
above cannot, or can only partially, be
effected, the Borrower shall within one Business Day following
written
notice by the Administrative Agent,
(x) first, prepay such
Swingline Exposure
and (y)
cash collateralize such Defaulting
Lender’s LC Exposure (after giving effect to any partial reallocation pursuant
to clause
(i)
above) in accordance with the
procedures set forth in
Section
2.06(j)
for so long as such
LC Exposure is outstanding;
(iii)
if the Borrower cash collateralizes any
portion of such Defaulting Lender’s LC Exposure pursuant to
Section
2.20(c)
, the Borrower shall
not be required to pay any fees to such Defaulting Lender pursuant to
Section
2.12(b)
with respect to
such Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s
LC Exposure is cash collateralized;
(iv)
if the LC Exposure of the non-Defaulting
Lenders is reallocated pursuant to
Section
2.20(c)
, then the fees
payable to the Lenders pursuant to
Section
2.12(a)
and
Section
2.12(b)
shall be adjusted
in accordance with such non-Defaulting Lenders’ Applicable Percentages;
or
(v)
if any Defaulting Lender’s LC Exposure
is neither cash collateralized nor reallocated pursuant to
Section
2.20(c)
, then, without
prejudice to any rights or remedies of the Issuing Bank or any Lender hereunder,
all facility fees that otherwise would have been payable to such Defaulting
Lender (solely with respect to the portion of such Defaulting Lender’s
Commitment that was utilized by such LC Exposure) and letter of credit fees
payable under
Section
2.12(b)
with respect to
such Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank until
such LC Exposure is cash collateralized and/or reallocated;
(d)
the Issuing Bank shall not be required
to issue, amend or increase any Letter of Credit, unless it is satisfied that
the related exposure will be 100% covered by the Commitments of the
non-Defaulting Lenders and/or cash collateral will be provided by the Borrower
in accordance with
Section
2.20(c)
, and participating
interests in any such newly issued or increased Letter of Credit
or newly made Swingline Loan
shall be allocated among
non-Defaulting Lenders in a manner consistent with
Section
2.20(c)(i)
(and Defaulting
Lenders shall not participate therein); and
(e)
in the event and on the date that each
of the Administrative
Agent, the Borrower,
the
Issuing Bank
and the
Swingline Lender
each
agrees that a Defaulting Lender has adequately remedied all matters that caused
such Lender to be a Defaulting Lender, then the
Swingline Exposure and
LC Exposure of the other Lenders shall
be readjusted to reflect the inclusion of such Lender’s Revolving Commitment and
on such date such Lender shall purchase at par such of the Loans
(other than Swingline Loans)
of the other Lenders
as the Administrative Agent shall
determine may be necessary in order for such Lender to hold such Loans in
accordance with its Applicable Percentage.
Section
2.21
Returned
Payments
. If
after receipt of any payment which is applied to the payment of all or any part
of the Obligations, the Administrative Agent or any Lender is for any reason
compelled to surrender such payment or proceeds to any Person because such
payment or application of proceeds is invalidated, declared fraudulent, set
aside, determined to be void or voidable as a preference, impermissible setoff,
or a diversion of trust funds, or for any other reason, then the Obligations or
part thereof intended to be satisfied shall be revived and continued and this
Agreement shall continue in full force as if such payment or proceeds had not
been received by the Administrative Agent or such Lender. The
provisions of this
Section
2.21
shall be and remain
effective notwithstanding any contrary action which may have been taken by the
Administrative Agent or any Lender in reliance upon such payment or application
of proceeds. The provisions of this
Section
2.21
shall survive the
termination of this Agreement.
ARTICLE
III
Representations and
Warranties
Each Loan
Party represents and warrants to the Lenders that:
Section
3.01
Organization;
Powers
. Each of
the Loan Parties and its Subsidiaries is duly organized, validly existing and in
good standing
(to the
extent applicable)
under
the laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
Section
3.02
Authorization;
Enforceability
. The Transactions are within
each Loan Party’s organizational powers and have been duly authorized by all
necessary organizational actions and, if required, actions by equity
holders. The Loan Documents to which each Loan Party is a party have
been duly executed and delivered by such Loan Party and constitute a legal,
valid and binding obligation of such Loan Party, enforceable in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.
Section
3.03
Governmental
Approvals; No Conflicts
. The Transactions
(a)
do not require any consent or approval
of, registration or filing with, or any other action by, any Governmental
Authority, except such as have been obtained or made and a
re in full force and effect and
except for filings
necessary to perfect Liens created
pursuant to the Loan Documents and
release existing Liens securing the DIP Credit Agreement,
(b)
will not violate any Requirement of Law
applicable to any Loan Party or any of its Subsidiaries,
(c)
will not violate or result in a default
under any
material
indenture, agreement or
other instrument binding upon any Loan Party or any of its Subsidiaries or its
assets, and
(d)
will not result in the creation or
imposition of any Lien on any asset of any Loan Party or any of its
Subsidiaries, except Liens created pursuant to the Loan Documents
and the Senior Notes
Documents
.
Section
3.04
Financial
Condition; No Material Adverse Change
.
(a)
The Borrower has heretofore furnished
to the Lenders its consolidated balance sheet and statements of income,
stockholders equity and cash flows
(i)
as of and for the fiscal year ended
December
3
1, 2009, reported on by
PricewaterhouseCoopers LLP
, independent public accountants, and
(ii)
as of and for the fiscal quarter and
the portion of the fiscal year ended June 30, 2010
, certified by one of its Financial
O
fficer
s
. Such financial statements
present fairly, in all material respects, the financial position and results of
operations and cash flows of the Borrower and its consolidated Subsidiaries as
of such dates and for such periods in accordance with GAAP, subject to year-end
audit adjustments and the absence of footnotes in the case of the statements
referred to in clause
(ii)
above.
(b)
No event, change or condition has
occurred that has had, or could reasonably be expected to have, a Material
Adverse Effect, since June 30, 2010.
Section
3.05
Properties
.
(a)
As of the
Effective Date
,
Schedule
3.05
sets forth the address of each parcel
of
R
eal
P
roperty that is owned or leased by each
Loan Party.
As
of the Effective Date, e
ach
of
the Loan Parties’
material
leases and
subleases is valid and enforceable in accordance with its terms
(subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law)
and is in full force and effect, and no
default by any party to any such lease or sublease exists
, except for any default which could not
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect
. Each of the Loan Parties
and its Subsidiaries has good and indefeasible title to, or valid leasehold
interests in,
or rights
to,
all its
material
real and personal property, free of all
Liens other than those permitted by
Section
6.02
.
(b)
Each
of the Loan Parties
and its Subsidiaries owns, or
is
licensed to use, all
trademarks, tradenames, copyrights, patents
and other intellectual
property
necessary to its
business as currently conducted, a correct and co
mplete list of all trademark
registrations and applications, patents and patent applications, and copyright
applications and registrations owned by a Loan Party or any of its Subsidiaries,
as of the date of this Agreement
, is set forth on
Schedule
3.05
, and the use thereof by the Loan
Parties and
their
respective
Subsidiaries
does not infringe in any material respect upon the rights of any other Person,
and the Loan Parties’ rights thereto are not
subject to any licensing agreement or
similar arrangement.
Section
3.06
Litigation
and Environmental Matters
.
(a)
There are no actions, suits or
proceedings by or before any arbitrator or Governmental Authority pending
against or, to the knowledge of any Loan Party, threatened
against or affecting
the Loan Parties or any of their
Subsidiaries
(i)
as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect (other than the Disclosed Matters) or
(ii)
that involve this Agreement or the
Transactions.
(b)
Except for the Disclosed
Matters
, (i)
no Loan Party nor any of its
Subsidiaries has received notice of any claim with respect to any Environmental
Liability or knows of any basis for any Environmental Liability that,
individually
or in the
aggregate, could
reasonably
be expected to result in a Material Adverse Effect,
and (ii)
no Loan Party nor any of its
Subsidiaries
(A)
has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law or
(B)
has become subject to any Environmental
Liability
, in each case,
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect
.
(c)
Since the date of this Agreement, there
has been no change in the status of the Disclosed Matters that, individually or
in the aggregate, has resulted in, or materially increased the likelihood of, a
Material Adverse Effect.
Section
3.07
Compliance
with Laws and Agreements
. Each
of the
Loan Part
ies
and
their respective
Subsidiaries is in compliance with all
Requirements of Law applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
Section
3.08
Investment
Company Status
. No Loan Party nor any of
its Subsidiaries is
required to be registered as
an “investment company” as
defined in, or subject to regulation under, the Investment Company Act of
1940.
Section
3.09
Taxes
.
Except as set forth on
Schedule
3.09
, e
ach
of the Loan Parties
and
their respective
Subsidiaries has timely filed or caused
to be filed all Tax returns and reports requ
ired to have been filed and
paid or caused to be paid all Taxes
required to have been paid by it, except
(a)
Taxes that are being contested in good
faith by appropriate proceedings and for which such Loan Party or such
Subsidiary, as applicable, has set aside on its books adequate
reserves
or (b) Taxes in
respect of which the aggregate liability does not exceed $1,500,000
.
Except as set forth on
Schedule
3.09
, as of the Effective Date,
n
o tax liens have been
filed and no claims are being asserted with respect to any such
taxes
that have not been
discharged by the Reorganization Plan.
Section
3.10
ERISA.
Except as set forth on
Schedule
3.10
:
(a)
No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect.
(b)
Neither Borrower nor any of the
Borrower’s Subsidiaries or ERISA Affiliates has an Unfunded Pension Liability,
except as could not reasonably be expected to have a Material Adverse
Effect.
(c)
Neither Borrower nor any of the
Borrower’s Subsidiaries or ERISA Affiliates has been assessed Withdrawal
Liability except as could not reasonably be expected to have a Material Adverse
Effect.
(d)
All Plans have been operated and
administered in compliance with the Code, ERISA, and all applicable regulations
promulgated thereunder, except as could not reasonably be expected to have a
Material Adverse Effect. There has been no prohibited transaction or
violation of fiduciary responsibilities with respect to any Plan except as could
not reasonably be expected to have a Material Adverse
Effect.
Section
3.11
Disclosure
. The Borrower has disclosed
to the Lenders all agreements, instruments and corporate or other restrictions
to which it or any Subsidiary is subject, and all other matters known to it,
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect.
None
of the reports,
historical
financial statements, certificates or
other information furnished by or on behalf of any Loan Party to the
Administr
ative Agent or any
Lender pursuant to
this
Agreement or any other Loan Document
(other than projections, budgets,
estimates, forward looking information and general market data),
as modified or supplemented by other
information so furnished
when taken as a whole,
contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
provided
that, with respect to projected
financial information, the Borrower represents only that such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time delivered and, if such projected financial information was delivered prior
to the Effective Date, as of the Effective Date
(it being understood that projections
are inherently uncertain and actual results may be materially different, and no
assurance can be given that the projected results will be realized and such
projections should not be viewed as a guarantee of performance)
.
Section
3.12
Material
Agreements
. All
material agreements and contracts
(other than any agreement or instrument
evidencing or governing Indebtedness)
to which any Loan Party is a party or is
bound as of the date of this Agreement
and with which the failure to comply is
reasonably likely to result in a Material Adverse Effect
(the “
Material
Agreements
”)
are listed on
Schedule
3.12
.
No Loan Party is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any
M
aterial
A
greement to which it is a
party.
Section
3.13
Solvency
.
(a)
Immediately after the consummation of
the Transactions to occur on the Effective Date,
(i)
the fair value
(measured on a going concern value) of
the assets of the Borrower and its Subsidiaries, on a consolidated
basis
, at a
fair valuation, will exceed
the
debts and liabilities,
subordinated, contingent or otherwise
of the Borrower and its Subsidiaries,
on a consolidated basis
;
(ii)
the present fair saleable value
of
the property of the
Borrower and its Subsidiaries, on a consolidated basis,
will be greater than the amount that
will be required to pay the probable liability of its debts and other
liabilities, subordinated, contingent or otherwise
of the Borrower and its Subsidiaries,
on a consolidated basis
, as
such debts and other liabilities become absolute and matured;
(iii)
the Borrower and its Subsidiaries, on a
consolidated basis,
will be able to pay their
debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and
(iv)
the Borrower and its Subsidiaries, on a
consolidated basis,
will
not have unreasonably small capital with which to con
duct the business in which they
are
engaged as such
business is now conducted and is proposed to be conducted after the Effective
Date.
The amount
of contingent liabilities at any time shall be computed as the amount that, in
the light of all the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an actual or matured
liability.
(b)
No Loan Party intends to, or will permit
any of its Subsidiaries to, and no Loan Party believes that it or any of its
Subsidiaries will, incur debts beyond its ability to pay such debts as they
mature, taking into account the timing of and amounts of cash to be received by
it or any such Subsidiary and the timing of the amounts of cash to be payable on
or in respect of its Indebtedness or the Indebtedness of any such
Subsidiary.
Section
3.14
Insurance
.
Schedule
3.14
sets forth a description of all
insurance maintained by or on behalf of the Loan Parties and the Subsidiaries as
of the Effective Date. As of the Effective Date, all premiums in
respect of such insurance have been paid
to the extent due
. The Borrower believes that
the insurance maintained by or on behalf of the Borrower and the Subsidiaries is
adequate.
Section
3.15
Capitalization
and Subsidiaries
.
Schedule
3.15
sets forth
as of the Effective Date
(a)
a correct and complete list of the name
and relationship to the Borrower of each and all of the Borrower’s Subsidiaries,
(b)
a true and complete listing of each
class of each of the Borrower’s authorized Equity
Interests, of which all
issued shares are validly issued,
outstanding,
fully paid and
non-assessable
, and
(c)
the type of entity of the
Borrower and each of its Subsidiaries. All of the issued
and outstanding Equity Interests owned by any Loan Party has been (to the extent
such concepts are relevant with respect to such ownership interests) duly
authorized and issued and is fully paid and non-assessable.
Section
3.16
Security
Interest in Collateral
. The provisions of this
Agreement and the other Loan Documents create legal and valid Liens on all the
Collateral in favor of the Administrative Agent, for the benefit of the
Administrative Agent and the Lenders, and
when (i) financing statements and other
filings, including, without limitation any short form intellectual property
security agreements, fixture filings and other real estate filings, in
appropriate form are filed in the appropriate offices in the case of Liens
perfected by filing (provided, however, that additional filings may be necessary
to perfect the Administrative Agent’s Lien on any intellectual property acquired
after the date hereof), (ii) the Administrative Agent takes possession, control
or assignment of the Collateral with respect to which a security interest may be
perfected only by possession, control or assignment (which possession, control
or assignment shall be given to the Administrative Agent to the extent
possession or control by the Administrative Agent is required by each Collateral
Document) or (iii) the Administrative Agent’s Lien on any Collateral represented
by a certificate of title is noted (which notation shall be required to the
extent set forth in the Collateral Documents) in the case of Liens perfected by
notation,
such Liens
constitute perfected and continuing Liens on the Collateral, securing the
Secured Obligations, enforceable against the applicable Loan Party and all third
parties
(subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at
law)
, and having priority
over all other Liens on the Collateral
to the extent provided in the
Intercreditor Agreement
except in the case of
(a)
Customary Permitted Liens
, Liens set forth on
Schedule
6.02
and Liens permitted by
Section
6.02(d)
or
(e)
, to the extent any such Liens would
have priority over the Liens in favor of the Administrative Agent pursuant to
any applicable law or agreement
,
(b)
Liens perfected only by
possession
, control or
notation
to the extent the
Administrative Agent has not obtained or does not maintain possession of such
Collateral
and
(c)
Liens in favor of the Notes Agent in
Notes Priority Collateral
.
Notwithstanding the
foregoing, nothing in the Loan Documents shall require any Loan Party to make
any filings or take any actions to record or perfect the Administrative Agent’s
Lien in any intellectual property outside of the United
States.
Section
3.17
Employment
Matters
.
Except as set forth in
Schedule
3.17
, a
s of the Effective Date, there are no
strikes, lockouts or slowdowns against any Loan Party or any Subsidiary pending
or, to the knowledge of the Borrower, threatened. The hours worked by
and payments made to employees of the Loan Parties and the Subsidiaries have not
been in violation of the Fair Labor Standards Act or any other applicable
Federal, state, local or foreign law dealing with such
matters.
Except
as set forth in
Schedule
3.17
, a
ll payments due from any Loan Party or
any Subsidiary, or for which any claim may be made against any Loan Party or any
Subsidiary, on account of wages and employee health and welfare insurance and
other benefits, have been paid or accrued as a liability on the books of the
Loan Party or such Subsidiary.
Section
3.18
Common
Enterprise
. The
successful operation and condition of each of the Loan Parties is dependent on
the continued successful performance of the functions of the group of the Loan
Parties as a whole and the successful operation of each of the Loan Parties is
dependent on the successful performance and operation of each other Loan
Party. Each Loan Party expects to derive benefit (and its board of
directors or other governing body has determined that it may reasonably be
expected to derive benefit), directly and indirectly, from
(a)
successful operations of each of the
other Loan Parties and
(b)
the credit extended by the Lenders to
the Borrower hereunder, both in their separate capacities and as members of the
group of companies. Each Loan Party has determined that execution,
delivery, and performance of this Agreement and any other Loan Documents to be
executed by such Loan Party is within its purpose, will be of direct and
indirect benefit to such Loan Party, and is in its best
interest.
Section
3.19
Margin
Regulations
. The
Borrower is not engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U of the
Federal Reserve Board), and no proceeds of any Loan will be used to purchase or
carry any such margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock in contravention of Regulation T, U
or X of the Federal Reserve Board.
ARTICLE
IV
Conditions
Section
4.01
Effective
Date
. The
obligations of the Lenders to make Loans and of the Issuing Bank to issue
Letters of Credit hereunder shall not become effective until the date on which
each of the following conditions is satisfied (or waived in accordance with
Section
9.02
):
(a)
Credit
Agreement and Loan Documents
. The Administrative Agent
(or its counsel) shall have received
(i)
from each party hereto either
(A)
a counterpart of this Agreement signed
on behalf of such party or
(B)
written evidence satisfactory to the
Administrative Agent (which may include facsimile transmission of a signed
signature page of this Agreement) that such party has signed a counterpart of
this Agreement and
(ii)
duly executed copies of the Loan
Documents and such other certificates, documents, instruments and agreements as
the Administrative Agent shall reasonably request in connection with the
transactions contemplated by this Agreement and the other Loan Documents,
including
the initial
Borrowing Request,
any
promissory notes requested by a Lender pursuant to
Section
2.10
payable to the order
of e
ach such requesting
Lender and one or more
written opinion
s
of the Loan Parties’ counsel, addressed
to the Administrative Agent, the Issuing Bank and the Lenders
in form and substance (including local
counsel opinions with regard to perfection of the Administrative Agent’s Lien in
as-extracted collateral) reasonably satisfactory to the Administrative
Agent.
(b)
Financial
Statements and Projections
. The Lenders shall have
received
(i)
audited consolidated financial
statements of the Borrower for the 2009, 2008 and 2007 fiscal years,
(ii)
unaudited interim consolidated
financial statements of Borrower for
the
fiscal
month and
quarter ended
June 30, 2010, (iii) unaudited
consolidated statement of operations of Borrower for the fiscal month ended July
31, 2010
and
(iv)
satisfactory (x) quarterly projections
through December 31, 2011 and (y) annual projections through December 31,
2014
.
(c)
Closing
Certificates; Certified Certificate of Incorporation; Good Standing
Certificates
. The Administrative Agent
shall have received
(i)
a certificate
on behalf
of each Loan Party, dated the Effective
Date and executed by its Secretary or Assistant Secretary, which shall
(A)
certify the resolutions of its Board of
Directors, members or other body authorizing the execution, delivery and
performance of the Loan Documents to which it is a party,
(B)
identify by name and title and bear the
signatures of the Financial Officers and any other officers of such Loan Party
authorized to sign the Loan Documents to which it is a party, and
(C)
contain appropriate attachments,
including the certificate or articles of incorporation or organization of each
Loan Party certified by the relevant authority of the jurisdiction of
organization of such Loan Party and a true and correct copy of its by-laws or
operating, management or partnership agreement, and
(ii)
a long form good standing certificate
for each Loan Party from its jurisdiction of organization
and each jurisdiction where the conduct
of such Loan Party’s business activities or the ownership of its properties
necessitates qualification, in each case as of a recent date
.
(d)
No Default
Certificate
. The
Administrative Agent
shall
have received a certificate, signed by the chief financial officer
or chief executive officer
of the Borrower
on behalf of each
Loan Party
, on t
he initial Borrowing date
(i)
stating that no Default has occurred
and is continuing,
(ii)
stating that the representations and
warranties contained in
Article
III
are true and correct as
of such date, and
(iii)
certifying any other factual matters as
may be reasonably requested by the Administrative Agent.
(e)
Fees
. The Lenders and the
Administrative Agent shall
have received all fees then due and payable
, and all
reasonable out-of-pocket
expenses for which invoices have been
presented (including the reasonable fees and
reasonable out-of-pocket
expenses of legal counsel), on or before
the Effective Date. All such amounts will be paid with proceeds of
the Senior Notes or
proceeds of
Loans made on
the Effective Date and will be reflected in the funding instructions given by
the Borrower to the Administrative Agent on or before the Effective
Date.
(f)
Lien
Searches
. The
Administrative Agent shall have received the results of a recent lien search in
each of th
e jurisdictions
where
the Loan Parties
are
organized or Material
Real Property is
located,
a
nd such search shall
reveal no L
iens on any of
the assets of the Loan Parties except for
(i) L
iens permitted by
Section
6.02
or
(ii) Liens
discharged on or prior to the Effective
Date pursuant to a pay-off letter or other documentation satisfactory to the
Administrative Agent.
(g)
Pay-Off
Letter
. The
Administrative Agent shall have received
a reasonably
satisfactory pay-off lette
r
for all loans under the DIP Credit
Agreement to be repaid from the proceeds of the initial Borrowing
and the Senior Notes
, confirming that all Liens upon any of
the property of the Loan Parties constituting Collateral will be terminated or
released concurrently with such payment.
(h)
Funding
Account
. The Administrative Agent shall have received a notice
setting forth the deposit account of the Borrower (the “
Funding
Account
”) to which the Lender is authorized by the Borrower to transfer
the proceeds of any Borrowings requested or authorized pursuant to this
Agreement.
(i)
[
Reserved.]
(j)
Collateral Access and
Control Agreements
. The Administrative Agent shall have
received each (i) Collateral Access Agreement required to be provided pursuant
to Section 4.13 of the Security Agreement and, to the extent not obtained,
the Administrative Agent shall impose a rent or charges Reserve for each
applicable location in accordance with the definition of Eligible Inventory; and
(ii) Deposit Account Control Agreement required to be provided pursuant to
Section 4.14 of the Security Agreement.
(k) [Reserved.]
(l)
Borrowing Base
Certificate
. The Lead Arrangers shall have received a
Borrowing Base Certificate which calculates the Borrowing Base as of a date
specified by the Administrative Agent prior to the Effective Date with customary
supporting documentation.
(m)
Closing
Availability
. After giving effect to all Borrowings to be made
on the Effective Date and the issuance of any Letters of Credit on the Effective
Date and payment of all fees and expenses due hereunder, and with all of the
Loan Parties’ indebtedness, liabilities, and obligations current, the Borrower’s
Availability shall not be less than $23,500,000.
(n)
Pledged Stock; Stock Powers;
Pledged Notes
. The Administrative Agent shall have confirmed
that the Notes Agent has received the certificates representing the shares of
Capital Stock pledged pursuant to the Security Agreement, together with an
undated stock power for each such certificate executed in blank by a duly
authorized officer of the pledgor thereof, and the Administrative Agent shall
have received each promissory note (if any) pledged to the Administrative Agent
pursuant to the Security Agreement endorsed (without recourse) in blank (or
accompanied by an executed transfer form in blank) by the pledgor
thereof.
(o)
Filings, Registrations and
Recordings
. Each document (including any Uniform Commercial
Code financing statement) required by the Collateral Documents or under law or
reasonably requested by the Administrative Agent to be filed, registered or
recorded in order to create in favor of the Administrative Agent, for the
benefit of the Lenders, a perfected Lien on the Collateral described therein,
prior and superior in right to any other Person (other than with respect to
Liens expressly permitted by
Section 6.02
), shall
be in proper form for filing, registration or recordation.
(p) [Reserved.]
(q)
Insurance
. The
Administrative Agent shall have received evidence of insurance coverage in form,
scope, and substance reasonably satisfactory to the Administrative Agent and
otherwise in compliance with the terms of Section 5.09 and
Section 4.12 of the Security Agreement.
(r)
Letter of Credit
Application
. The Administrative Agent shall have received a
properly completed letter of credit application (whether standalone or pursuant
to a master agreement, as applicable) if the issuance of a Letter of Credit
(other than the Existing Letters of Credit) will be required on the Effective
Date. The Borrower shall have executed the Issuing Bank’s master
agreement for the issuance of commercial Letters of Credit.
(s)
Tax
Withholding
. The Administrative Agent shall have received a
properly completed and signed IRS Form W-8 or W-9, as applicable, for each Loan
Party.
(t)
Third Party Consents and
Approvals
. The Administrative Agent shall have received fully
executed copies of all consents and approvals, if any, required to be obtained
from any Governmental Authority or other Person (which in the case of
non-Governmental Authorities is limited to material consents and approvals) in
connection with the Transactions (including member and shareholder approvals, if
any), each of which shall have been obtained on satisfactory terms and shall be
in full force and effect.
(u)
Reorganization Plan
.
The Reorganization Plan shall be in form and substance reasonably acceptable to
the Administrative Agent in all material respects and shall have been confirmed
by a final order entered by the Bankruptcy Court (the “
Confirmation Order
”)
in form and substance reasonably acceptable to the Administrative Agent in all
material respects, which has not been stayed by the Bankruptcy Court or by any
court having jurisdiction to issue such stay. The Confirmation Order
shall have been entered upon proper notice to all parties to be bound by the
Reorganization Plan, all as may be required by the Bankruptcy Code, the Federal
Rules of Bankruptcy Procedure, order of the Bankruptcy Court, and any applicable
local bankruptcy rules. Moreover, (i) the time to appeal the
Confirmation Order or to seek review, rehearing or certiorari with respect to
the Confirmation Order must have expired, (ii) unless otherwise waived by the
Administrative Agent, no appeal or petition for review, rehearing or certiorari
with respect to the Confirmation Order may be pending and (iii) the Confirmation
Order must otherwise be in full force and effect. The effective date
of the Reorganization Plan shall have occurred or shall occur substantially
concurrently with the Effective Date.
(v)
Notes
. (i)
Each Loan Party shall have executed and delivered definitive financing
documentation with respect to the Senior Notes (including the Intercreditor
Agreement), on terms reasonably satisfactory to the Administrative Agent and
Lead Arrangers; and
(ii) the
conditions to the effectiveness of the documentation governing the Senior Notes
shall have been satisfied or waived on terms reasonably satisfactory to the
Administrative Agent, and concurrently the Borrower shall have received at least
$55,000,000 in gross cash proceeds from the issuance of the Senior
Notes.
(w)
Pro Forma Balance
Sheets
. The Administrative Agent and the Lenders shall have
received a pro forma consolidated balance sheet of the Borrower as at the date
of the most recent balance sheet delivered pursuant to
clause
(b)
above prepared to give
effect to the consummation of the funding of the initial Loans and the issuance
of the Senior Notes as if such funding and issuance had occurred on such date or
on the first day of such period, as applicable, and consistent in all material
respects with information previously provided by the Borrower.
(x)
Appraisals
. The
Administrative Agent shall have received asset appraisals of the Inventory and
Trucks, which appraisals shall be in form and substance satisfactory to the
Administrative Agent.
(y)
Field
Examinations
. The Administrative Agent shall have received
updated field examinations and audits requested by it in connection with the
Transactions, with respect to the Borrowing Base Collateral and such other
information or materials as the Administrative Agent shall include within the
scope of such field examination and audit, all of which shall be in form and
substance satisfactory to the Administrative Agent.
(z)
Corporate
Structure
. The Lead Arrangers shall be reasonably satisfied in
their sole judgment with the corporate (or other organizational) structure,
capital structure, other material debt instruments, material Accounts and
governing documents of the Loan Parties.
(aa)
Patriot
Act
. The Administrative Agent shall have received at least
three days prior to the Effective Date, all documentation and other information
required by bank regulatory authorities under applicable “know-your-customer”
and anti-money laundering rules and regulations, including the Patriot
Act.
(bb)
Other
Documents
. The Administrative Agent shall have received such
other documents as the Administrative Agent, the Issuing Bank, any Lender or
their respective counsel may have reasonably requested.
The
Administrative Agent shall notify the Borrower and the Lenders of the Effective
Date, and such notice shall be conclusive and
binding. Notwithstanding the foregoing, the obligations of the
Lenders to make Loans and of the Issuing Bank to issue Letters of Credit
hereunder shall not become effective unless each of the foregoing conditions is
satisfied (or waived pursuant to
Section 9.02
) at or
prior to 2:00 p.m. on September 27, 2010 (and, in the event such conditions are
not so satisfied or waived, the Commitments shall terminate at such
time).
Section
4.02
Each Credit
Event
. The obligation of each Lender to make a Loan on the
occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or
extend any Letter of Credit, is subject to the satisfaction of the following
conditions:
(a) The
representations and warranties of the Borrower set forth in this Agreement shall
be true and correct in all material respects on and as of the date of such
Borrowing or the date of issuance, amendment, renewal or extension of such
Letter of Credit, as applicable, except to the extent such representations and
warranties expressly relate to an earlier date, in which case such
representations and warranties shall have been true and correct in all material
respects as of such earlier date, except that such materiality qualifier shall
not be applicable to representations and warranties that are already qualified
or modified by materiality in the text thereof.
(b) At
the time of and immediately after giving effect to such Borrowing or the
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing.
(c) After
giving effect to any Borrowing or the issuance of any Letter of Credit,
Availability is not less than zero.
Each
Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (a), (b)
and (c) of this Section.
Notwithstanding
the failure to satisfy the conditions precedent set forth in paragraphs (a) or
(b) of this Section, unless otherwise directed by the Required Lenders, the
Administrative Agent may, but shall have no obligation to, continue to make
Loans and an Issuing Bank may, but shall have no obligation to, issue or cause
to be issued any Letter of Credit for the ratable account and risk of Lenders
from time to time if the Administrative Agent believes that making such Loans or
issuing or causing to be issued any such Letter of Credit is in the best
interests of the Lenders.
Section
4.03
Determinations Under
Sections 4.01 and 4.02
. For purposes of determining
compliance with the conditions specified in
Sections 4.01
and
4.02
that
are necessary for the Effective Date to have occurred, each applicable Lender
shall be deemed to have consented to, approved or accepted or to be satisfied
with each document or other matter required thereunder to be consented to or
approved by or acceptable or satisfactory to such Lender unless an officer of
the Administrative Agent responsible for the transactions contemplated by the
Loan Documents shall have received notice from such Lender prior to the
Effective Date specifying its objection thereto, and such Lender shall not have
made available to the Administrative Agent such Lender’s ratable portion of the
initial Borrowing.
Section
4.04
Post
-Closing
Conditions
. Within 75 days following the Effective Date (or
such later date as agreed by the Administrative Agent) and substantially
contemporaneously with the delivery of any mortgages under the Senior Notes
Documents, the Administrative Agent shall have received, with respect to each
parcel of Material Real Property which is subject to a first priority mortgage
in favor of the Notes Agent, each of the following, in form and substance
reasonably satisfactory to the Administrative Agent:
(a) a
second priority Lien Mortgage on such property;
(b) evidence
that a counterpart of the Mortgage has been delivered to the title company for
recording in the place necessary, in the Administrative Agent’s judgment, to
create a valid and enforceable second priority Lien in favor of the
Administrative Agent for the benefit of itself and the Lenders;
(c) ALTA
or other mortgagee’s title policy;
(d) an
opinion of counsel in the state in which such parcel of Material Real Property
is located in form and substance and from counsel reasonably satisfactory to the
Administrative Agent;
(e) if
any such parcel of Material Real Property is determined by the Administrative
Agent to be in a flood zone, a flood notification form signed by the Borrower
and evidence that flood insurance is in place for the building and contents, all
in form and substance reasonably satisfactory to the Administrative Agent;
and
(f) an
ALTA survey prepared and certified to the Administrative Agent by a surveyor
reasonably acceptable to the Administrative Agent for each Material Real
Property.
Notwithstanding
any provision of this Agreement, any failure to satisfy the conditions set forth
in this
Section
4.04
shall constitute an immediate Event of Default without further
notice to the Loan Parties.
ARTICLE
V
Affirmative
Covenants
Until the
Commitments have expired or been terminated and the principal of and interest on
each Loan and all fees payable hereunder shall have been paid in full and all
Letters of Credit, Banking Services Obligations and Swap Obligations shall have
expired, terminated, been cash collateralized or backstopped to the
Administrative Agent’s satisfaction and all LC Disbursements shall have been
reimbursed, each Loan Party executing this Agreement covenants and agrees,
jointly and severally with all of the Loan Parties, with the Lenders
that:
Section
5.01
Financial Statements;
Borrowing Base and Other Information
. The Borrower will
furnish to the Administrative Agent and each Lender:
(a) within
90 days after the end of each fiscal year of the Borrower, its audited
consolidated
balance
sheet and related statements of operations, stockholders’ equity and cash flows
as of the end of and for such year, setting forth in each case in comparative
form the figures for the previous fiscal year, all reported on by a “Big Four”
independent public accounting firm or other independent public accountants
reasonably acceptable to the Administrative Agent (without a “going concern” or
like qualification or exception and without any qualification or exception as to
the scope of such audit (other than with respect to the 2010 audit solely with
respect to bankruptcy matters)) to the effect that such consolidated financial
statements present fairly in all material respects the financial condition and
results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, accompanied by
any management letter, if available, prepared by said accountants;
(b) within
45 days after the end of each of the first three fiscal quarters of the
Borrower, its unaudited consolidated balance sheet and related statements of
operations, stockholders’ equity and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting forth in
each case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the previous
fiscal year and the Projections, all certified by one of its Financial Officers
as presenting fairly in all material respects the financial condition and
results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes, together with a
narrative discussion and analysis of the financial condition and results of
operations of the Borrower and its Subsidiaries for the applicable fiscal
quarter;
(c) within
30 days after the end of each fiscal month of the Borrower, its unaudited
consolidated balance sheet and related statements of operations as of the end of
and for such fiscal month and the then elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for the corresponding
month and year-to-date periods of the previous fiscal year, all certified by one
of its Financial Officers as presenting fairly in all material respects the
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes, together with updates to the most recently delivered
narrative discussion and analysis described in
clause
(b)(ii)
;
(d) concurrently
with any delivery of financial statements under
clause
(a)
or
(b)
or
(c)
above, a
certificate of a Financial Officer of the Borrower in substantially the form of
Exhibit
D
(i) certifying, in the case of the financial statements delivered
under
clause
(b)
or
(c)
, as presenting
fairly in all material respects the financial condition and results of
operations of the Borrower and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes, (ii) certifying as to whether a
Default has occurred and is continuing and, if a Default has occurred and is
continuing, specifying the details thereof and any action taken or proposed to
be taken with respect thereto, (iii) setting forth reasonably detailed
calculations with respect to
Sections
6.12
and
6.13
(commencing
September 30, 2011 irrespective of whether the FCCR Commencement Date has
occurred), in the case of the financial statements delivered under
clauses
(a)
and
(b)
for
Section 6.12
and the
financial statements delivered under
clauses
(a)
or
(b)
and
(c)
for
Section 6.13
and (iv)
stating whether any change in GAAP or in the application thereof has occurred
since the date of the audited financial statements referred to in
Section 3.04
and, if
any such change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate;
(e) concurrently
with any delivery of financial statements under
clause
(a)
above, if
reasonably available, a certificate of the accounting firm that reported on such
financial statements stating whether they obtained knowledge during the course
of their examination of such financial statements of any Default (which
certificate may be limited to the extent required by accounting rules or
guidelines);
(f) concurrently
with any delivery of
financial statements
under
clauses
(a)
or
(b)
above, (i) a
certificate of a Responsible Officer of the Borrower certifying that the
corporate chart attached thereto (or the last corporate chart delivered pursuant
to this
clause
(f)
) is true,
correct, complete and current in all material respects as of the date of such
financial statements and (ii) a certificate of a Responsible Officer of the
Borrower in form and substance reasonably satisfactory to the Administrative
Agent that all certificates, statements, updates and other documents (including
updated schedules) required to be delivered pursuant to the Pledge and Security
Agreement by any Loan Party in the preceding fiscal quarter have been delivered
thereunder (or such delivery requirement was otherwise duly waived or
extended). The reporting requirements set forth in this
clause
(f)
are in
addition to, and are not intended to and shall not replace or otherwise modify,
any obligation of any Loan Party under any Loan Document (including other notice
or reporting requirements);
(g) within 30 days
after the end of each fiscal year of the Borrower, a copy of the plan and
forecast (including a projected consolidated balance sheet, income statement and
funds flow statement) of the Borrower and its Subsidiaries for each quarter of
the upcoming fiscal year (the “
Projections
”)
in form reasonably satisfactory to the Administrative Agent;
(h) within
15 days of the end of each calendar month or as may be requested by the
Administrative Agent if an Event of Default has occurred and is continuing, as
of the period then ended, a Borrowing Base Certificate and supporting
information in connection therewith, together with any additional reports with
respect to the Borrowing Base as the Administrative Agent may reasonably
request;
provided
that
a Borrowing
Base Certificate shall be delivered weekly within 3 Business Days after the end
of each calendar week if Availability is less than $12,500,000 at any
time;
(i) within
15 days of the end of each calendar month, as of the period then ended, all
delivered electronically in a text formatted file acceptable to the
Administrative Agent:
(i) a
detailed aging of the Borrowing Base Contributors’ Accounts, by customer, aged
by invoice date or due date, as available, and reconciled to the
Borrowing Base Certificate delivered as of such date prepared in a manner
reasonably acceptable to the Administrative Agent;
(ii) a
schedule detailing the Borrowing Base Contributors’ Inventory, in form
reasonably satisfactory to the Administrative Agent, (A) by location, by class
(raw material, work-in-process and finished goods), by product type, which
Inventory shall be valued at the lower of cost (determined on a first-in,
first-out basis) or market and adjusted for Reserves as the Administrative Agent
has previously indicated to the Borrower are deemed by the Administrative Agent
to be appropriate, and (B) reconciled to the Borrowing Base Certificate
delivered as of such date;
(iii) a
worksheet of calculations prepared by the Borrower to determine Eligible
Accounts and Eligible Inventory, such worksheets detailing the Accounts and
Inventory excluded from Eligible Accounts and Eligible Inventory and the
reason for such exclusion;
(iv) a
reconciliation of the Borrowing Base Contributors’ Accounts and Inventory
between the amounts shown in the Borrowing Base Contributors’ general ledgers
and financial statements and the reports delivered pursuant to clauses (i) and
(ii) above; and
(v) a
reconciliation of the loan balance per the Borrower’s general ledger to the loan
balance under this Agreement;
(j) within
20 days of the end of each calendar month and during the continuance of an Event
of Default, at such other times as may be requested by the Administrative Agent,
with respect to the Eligible Trucks of the Borrowing Base Contributors, a
certificate setting forth, as of the month then ended, all delivered
electronically in a text formatted file acceptable to the Administrative
Agent:
(i) a
summary report of the Trucks of the Borrowing Base Contributors (differentiating
with respect to Eligible Trucks and all other Trucks), indicating, if available,
changes in value and depreciation amounts;
(ii) a
list of Trucks of the Borrowing Base Contributors purchased or otherwise
acquired during such period, setting forth the following information to the
extent available: the date of acquisition, the manufacturer, the year
made, the model, the vehicle identification number, the owner, State in which it
is titled, the Certificate of Title identification number and the license plate
number, together with a copy of the invoice, purchase order, registration or
other document setting forth the vehicle identification number of such
vehicle;
(iii) a
summary report of Eligible Trucks of the Borrowing Base Contributors sold or
contracted for sale during such period;
(iv) a
report reconciling the records of the Borrowing Base Contributors against the
most recent report of the Administrative Agent with respect to the Eligible
Trucks; and
(v) any
other information relating to the Trucks as the Administrative Agent may
reasonably request;
(k) within
15 days of the end of each calendar month, as of the month then ended, a
schedule of the Borrower’s accounts payable, delivered electronically in a text
formatted file reasonably acceptable to the Administrative Agent, which will
include, commencing with the month ending October 31, 2010, an aging of
such accounts payable;
(l) at
such times as may be requested by the Administrative Agent, a list of all
customer addresses, delivered electronically in a text formatted file acceptable
to the Administrative Agent;
(m) promptly
upon the Administrative Agent’s request:
(i) copies
of invoices in connection with the invoices issued by the Borrowing Base
Contributors in connection with any Accounts, credit memos, shipping and
delivery documents, and other information related thereto;
(ii) copies
of purchase orders, invoices, and shipping and delivery documents in connection
with any Inventory or Trucks purchased by any Borrowing Base Contributor;
and
(iii) a
schedule detailing the balance of all intercompany accounts of the Loan
Parties;
(n) promptly
upon request by the Administrative Agent, on a monthly basis, the Borrowing Base
Contributors’ sales journal, cash receipts journal (identifying trade and
non-trade cash receipts) and debit memo/credit memo journal;
(o) promptly
upon request of the Administrative Agent, copies of all tax returns filed by any
Loan Party with the U.S. Internal Revenue Service;
(p) [Reserved.]
(q) promptly
after the same become publicly available, copies of all periodic and other
reports, proxy statements and other materials filed by the Borrower or any
Subsidiary with the Securities and Exchange Commission, or any Governmental
Authority succeeding to any or all of the functions of said Commission, or with
any national securities exchange, or distributed by the Borrower to its
shareholders generally, as the case may be; and
(r) promptly
following any request therefor, such other information regarding the operations,
business affairs and financial condition of the Borrower or any Subsidiary, or
compliance with the terms of this Agreement, as the Administrative Agent or any
Lender may reasonably request.
Notwithstanding
the foregoing, the obligations in paragraphs (a) and (b) of this
Section 5.01
shall be
satisfied with respect to financial information of Borrower and its Subsidiaries
by furnishing (A) the applicable financial statements of Borrower or (B)
Borrower's Form 10-K or 10-Q, as applicable, filed with the
SEC. Documents required to be delivered pursuant to
Section 5.01(a)
,
(b)
and
(p)
may be delivered
electronically and if so delivered, shall be deemed to have been delivered on
the date (i) on which the Borrower posts such documents via EDGAR, or provides a
link thereto on its website on the Internet at www.us-concrete.com/; or (ii) on
which such documents are posted on the Borrower’s behalf on
IntraLinks/IntraAgency or another relevant website, if any, to which each Lender
and the Administrative Agent have access (whether a commercial, third-party
website or whether sponsored by the Administrative Agent).
Section
5.02
Notices of Material
Events
. The Borrower will furnish to the Administrative Agent
and each Lender prompt written notice upon a Loan Party obtaining knowledge of
the following:
(a) the
occurrence of any Default;
(b) receipt
of any notice of any governmental investigation or any litigation or proceeding
commenced or threatened against any Loan Party that (i) seeks damages in excess
of $1,000,000 (excluding any amount covered by third party insurance as to which
the insurer has not declined coverage), (ii) seeks injunctive relief that
affects or impairs the use of any Collateral, (iii) is asserted or instituted
against any Plan, its fiduciaries or its assets involving a claim in excess of
$500,000, (iv) alleges criminal misconduct by any Loan Party, (v) alleges the
violation of any law regarding, or seeks remedies in connection with, any
Environmental Laws and which could reasonably be expected to result in
expenditures by any Loan Party in excess of $500,000, (vi) contests any tax,
fee, assessment, or other governmental charge in excess of $500,000, or (vii)
involves any product recall;
(c) any
Lien (other than any Lien permitted by
Section 6.02
excluding paragraphs (e), (g), (h), (j) and (k) thereof) or material claim made
or asserted against any of the Collateral;
(d) any
judgment rendered against any Loan Party in excess of $1,000,000;
(e) any
and all default notices received under or with respect to any leased location or
public warehouse where Borrowing Base Collateral is located (which shall be
delivered within two Business Days after receipt thereof);
(f) all
material amendments to Material Agreements, together with a copy of each such
amendment;
(g) the
fact that a Loan Party has entered into a Swap Agreement or an amendment to a
Swap Agreement, together with copies of all agreements evidencing such Swap
Agreement or amendments thereto (which shall be delivered within two Business
Days);
(h) the
occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in liability
of the Borrower and its Subsidiaries in an aggregate amount exceeding
$1,000,000; and
(i) any
other development that results in, or could reasonably be expected to result in,
a Material Adverse Effect.
Each
notice delivered under this Section shall be accompanied by a statement of a
Financial Officer or other Responsible Officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
Section
5.03
Existence; Conduct of
Business
. Each Loan Party will, and will cause each Subsidiary
to, (a) do or cause to be done all things necessary to preserve, renew and keep
in full force and effect (i) its legal existence and (ii) the rights,
qualifications, licenses, permits, franchises, governmental authorizations,
intellectual property rights, licenses and permits in its reasonable business
judgment necessary to the conduct of its business, and maintain all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted;
provided
that the
foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under
Section 6.03
or
dispositions, sales, transfers or leases permitted by
Section 6.05
and
(b) except as permitted by
Section 6.03
, carry
on and conduct its business in substantially the same manner and in
substantially the same fields of enterprise as it is presently
conducted.
Section
5.04
Payment of
Obligations
. Each Loan Party will, and will cause
each Subsidiary to, pay or discharge all Material Indebtedness and
all other material liabilities and obligations, including Taxes, before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) such
Loan Party or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
Section
5.05
Maintenance of
Properties
. Each Loan Party will, and will cause each
Subsidiary to, keep and maintain all property material to the conduct of its
business in good working order and condition, ordinary wear and tear and
casualty and condemnation excepted.
Section
5.06
Books and Records;
Inspection Rights
. Each Loan Party will, and will cause each
Subsidiary to, (a) keep proper books of record and account in which full, true
and correct entries are made of all dealings and transactions in relation to its
business and activities and (b) permit any representatives designated by the
Administrative Agent or any Lender (including employees of the Administrative
Agent, any Lender or any consultants, accountants, lawyers and appraisers
retained by the Administrative Agent), upon reasonable prior notice during
normal business hours, to visit and inspect its properties, to examine and make
extracts from its books and records and to discuss its affairs, finances and
condition with its officers and independent accountants (and a Responsible
Officer of the Borrower shall be entitled to, but not required to, participate
in such discussions with the independent accountants so long as the
participation of such Responsible Officer does not result in an unreasonable
delay in such discussions), all at such reasonable times and as often as
reasonably requested.
The
Loan Parties acknowledge that the Administrative Agent, after exercising its
rights of inspection, may prepare and distribute to the Lenders certain Reports
pertaining to the Loan Parties’ assets for internal use by the Administrative
Agent and the Lenders, which shall in each case be subject to the terms and
conditions of
Section
9.12
.
Section
5.07
Compliance with
Laws
. Each Loan Party will, and will cause each Subsidiary to,
comply with all Requirements of Law applicable to it or its property, except
where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
Section
5.08
Use of
Proceeds
. The proceeds of the Loans and the Letters of Credit
are being used by the Borrower (and, to the extent distributed to them by the
Borrower, each other Loan Party) solely (a) for operating expenses, working
capital and other general corporate purposes of the Borrower, the other Loan
Parties and their respective subsidiaries, (b) to pay transaction costs, fees
and expenses incurred in connection with this Agreement, the Reorganization Plan
and the transactions contemplated thereunder and hereby and to fund payments
required to be made under and in accordance with the Reorganization Plan and (c)
on the Effective Date to repay in full the obligations outstanding under the DIP
Credit Agreement. No part of the proceeds of any Loan and no Letter
of Credit will be used, whether directly or indirectly, for any purpose that
entails a violation of any of the Regulations of the Board, including
Regulations T, U and X.
Section
5.09
Insurance
. Each
Loan Party will, and will cause each Subsidiary to, maintain with financially
sound and reputable carriers having a financial strength rating of at least A by
A.M. Best Company (a) insurance in such amounts (with no greater risk retention)
and against such risks (including loss or damage by fire and loss in transit;
theft, burglary, pilferage, larceny, embezzlement, and other criminal
activities; business interruption; and general liability) and such other
hazards, as is customarily maintained by companies of established repute engaged
in the same or similar businesses operating in the same or similar locations and
(b) all insurance required pursuant to the Collateral Documents. The
Borrower will furnish to the Lenders, promptly upon request of the
Administrative Agent, information in reasonable detail as to the insurance so
maintained.
Section
5.10
Casualty and
Condemnation
. The Borrower (a) will furnish to the
Administrative Agent and the Lenders prompt written notice of any casualty,
loss, destruction or other insured damage to the Collateral or the
commencement of any action or proceeding for the taking of any portion of the
Collateral or interest therein under power of eminent domain or by condemnation
or similar proceeding, in each case in the amount of $500,000 or more and (b)
will ensure that the Net Proceeds of any such event (whether in the form of
insurance proceeds, condemnation awards or otherwise) are collected and applied
in accordance with the applicable provisions of this Agreement and the
Collateral Documents.
Section
5.11
Appraisals
. At
any time that the Administrative Agent orders an Appraisal of the Inventory or
Trucks of the Borrower and its Subsidiaries, the Borrower and its Subsidiaries
will cooperate with and assist in the preparation of such Appraisal, which shall
include, without limitation, information required by applicable law and
regulations;
provided
,
however
, that if no
Event of Default has occurred and is continuing, one such Appraisal per calendar
year for Inventory and Trucks, respectively, shall be at the sole expense of the
Loan Parties, and if any Event of Default exists, then each Appraisal commenced
during the existence of such Event of Default shall be at the expense of the
Loan Parties.
Section
5.12
Depository
Banks
. The Borrower and each Subsidiary will utilize the
Administrative Agent as its principal depository bank, including for the
maintenance of operating, administrative, cash management, collection activity,
and other deposit accounts for the conduct of its business.
Section
5.13
Additional Collateral;
Further Assurances
. (a) Subject to applicable law and the
Intercreditor Agreement, the Borrower and each other Loan Party shall cause each
of its Subsidiaries (other than Foreign Subsidiaries) formed or acquired after
the date of this Agreement in accordance with the terms of this Agreement to
become a Loan Party by executing the Joinder Agreement set forth as
Exhibit E
hereto (the
“
Joinder
Agreement
”) within 10 days of formation or acquisition as applicable (or
such later date as agreed to by the Administrative Agent in its reasonable
judgment). Upon execution and delivery thereof, each such Person (i)
shall automatically become a Loan Guarantor hereunder and thereupon shall have
all of the rights, benefits, duties, and obligations in such capacity under the
Loan Documents and (ii) subject to the terms, conditions and provisions of
the Intercreditor Agreement will grant Liens to the Administrative Agent, for
the benefit of the Administrative Agent and the Lenders, in any property of such
Loan Party which constitutes Collateral, including any Material Real
Property located in the U.S. owned by any Loan Party in each case within 10 days
for Collateral other than Material Real Property or 75 days in the case of
Material Real Property (or such later date as agreed to by the Administrative
Agent in its reasonable judgment) or as otherwise set forth in any Collateral
Document.
(b) The
Borrower and each other Loan Party will cause (i) 100% of the issued and
outstanding Equity Interests of each of its Subsidiaries (other than Foreign
Subsidiaries and the Excluded Joint Venture) and (ii) 66% of the issued and
outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg.
Section 1.956-2(c)(2)) and 100% of the issued and outstanding Equity Interests
not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2) in
each Foreign Subsidiary directly owned by the Borrower or any domestic
Subsidiary to be subject at all times to a second priority, perfected Lien
(subject to Liens permitted by
Section 6.02
) in
favor of the Administrative Agent pursuant to the terms and conditions of the
Loan Documents (including the Intercreditor Agreement).
(c) Without
limiting the foregoing, but subject to the terms, conditions and provisions of
the Loan Documents, each Loan Party will, and will cause each Subsidiary (other
than Foreign Subsidiaries) to, execute and deliver, or cause to be executed and
delivered, to the Administrative Agent such documents, agreements and
instruments, and will take or cause to be taken such further actions (including
the filing and recording of financing statements, fixture filings, mortgages,
deeds of trust and other documents and such other actions or deliveries of the
type required by
Section 4.01
, as
applicable), which may be required by law or which the Administrative Agent may,
from time to time, reasonably request to carry out the terms and conditions of
this Agreement and the other Loan Documents and to ensure perfection and
priority of the Liens created or intended to be created by the Collateral
Documents, all at the expense of the Loan Parties.
(d) Subject
to the terms, conditions and provisions of the Intercreditor Agreement, if any
material assets (including any Material Real Property or improvements thereto or
any interest therein) are acquired by the Borrower or any Loan Guarantor after
the Effective Date (other than assets constituting Collateral under the Security
Agreement that become subject to the Lien in favor of the Security Agreement
upon acquisition thereof) constituting Collateral, the Borrower will promptly
notify the Administrative Agent and the Lenders thereof, and, if requested by
the Administrative Agent or the Required Lenders, within 10 days for Collateral
other than Material Real Property or 75 days in the case of Material Real
Property (or such later date as agreed to by the Administrative Agent in its
reasonable discretion or as otherwise set forth in any Collateral Document, the
Borrower will cause such assets to be subjected to a Lien securing the Secured
Obligations and will take, and cause the Loan Guarantor to take, such actions as
shall be necessary or reasonably requested by the Administrative Agent to grant
and perfect such Liens, including actions described in paragraph (c) of this
Section, all at the reasonable expense of the Loan Parties in each case in
accordance with the terms, conditions and provisions of the Loan
Documents.
Section
5.14
Field
Examinations
. At any time that the Administrative Agent
reasonably requests, the Borrower will permit the Administrative Agent to
conduct field examinations with respect to all components of the Borrowing Base
Collateral and such other matters regarding the Loan Parties or the Collateral
as the Administrative Agent shall reasonably require; provided, however, the
Borrower shall only be required to reimburse the Administrative Agent for the
cost of three field examinations in any fiscal year, unless an Event of
Default exists, at which time each field examination commenced during the
existence of an Event of Default or shall be at the expense of the
Borrower.
ARTICLE
VI
Negative
Covenants
Until the
Commitments have expired or terminated and the principal of and interest on each
Loan and all fees, expenses and other amounts payable under any Loan Document
have been paid in full and all Letters of Credit, Banking Services Obligations
and Swap Obligations have expired, terminated, been cash collateralized or
backstopped to the Administrative Agent’s satisfaction and all LC Disbursements
shall have been reimbursed, the Loan Parties covenant and agree, jointly and
severally, with the Lenders that:
Section
6.01
Indebtedness
. No
Loan Party will, nor will it permit any Subsidiary to, create, incur or suffer
to exist any Indebtedness, except:
(a) the
Secured Obligations;
(b) Indebtedness
existing on the date hereof and set forth in
Schedule
6.01
, including the
Senior Notes, and extensions and renewals of any such Indebtedness in
accordance with clause (f) hereof (but not any refinancing or replacement
thereof);
(c) Indebtedness
of the Borrower to any Subsidiary or the Excluded Joint Venture and of any
Subsidiary to the Borrower, any other Subsidiary or the Excluded Joint Venture,
provided
that
(i) Indebtedness of any Subsidiary that is not a Loan Party to the Borrower or
any Subsidiary that is a Loan Party shall be subject to
Section 6.04
and (ii)
Indebtedness of the Borrower to any Subsidiary and Indebtedness of any
Subsidiary that is a Loan Party to any Subsidiary that is not a Loan Party shall
be subordinated to the Secured Obligations on terms reasonably satisfactory to
the Administrative Agent;
(d) Guarantees
by the Borrower of Indebtedness of any Subsidiary or the Excluded Joint Venture
and by any Subsidiary of Indebtedness of the Borrower, any other Subsidiary or
the Excluded Joint Venture,
provided
that (i) the
Indebtedness of a Subsidiary so Guaranteed is permitted by this
Section 6.01
, (ii)
Guarantees by the Borrower or any Subsidiary that is a Loan Party of
Indebtedness of any Subsidiary that is not a Loan Party shall be subject to
Section 6.04
and (iii) Guarantees permitted under this clause (d) shall be subordinated to
the Secured Obligations of the applicable Subsidiary on the same terms as the
Indebtedness so Guaranteed is subordinated to the Secured
Obligations;
(e) Indebtedness
of the Borrower or any Subsidiary incurred to finance the acquisition,
construction or improvement of any fixed or capital assets (whether or not
constituting purchase money Indebtedness), including Trucks, Capital Lease
Obligations and any Indebtedness assumed in connection with the acquisition of
any such assets or secured by a Lien on any such assets prior to or in
connection with the acquisition thereof, and extensions, renewals and
replacements of any such Indebtedness so long as any such renewal, extension,
replacement or refunding is in an aggregate principal amount not greater than
the principal amount (plus accrued interest and any premium, fees or expenses
incurred in connection therewith);
provided
that (i)
such Indebtedness is incurred prior to or within 90 days after such acquisition
or the completion of such construction or improvement and (ii) the aggregate
principal amount of Indebtedness permitted by this
clause
(e)
at any time
outstanding shall not exceed the greater of $20,000,000 and 12.5% of
Consolidated Net Tangible Assets;
(f) Indebtedness
which represents an extension, refinancing, replacement or renewal of any of the
Indebtedness described in
clauses
(b)
and
(k)
hereof; provided
that, (i) the principal amount of such Indebtedness is not increased other than
by an amount equal to accrued interest, fees, expenses and premiums incurred in
connection therewith and the interest rate does not exceed the current market
rate for that type of Indebtedness, (ii) any Liens securing such
Indebtedness are not extended to any additional property of any Loan Party,
(iii) no Loan Party that is not originally obligated with respect to repayment
of such Indebtedness is required to become obligated with respect thereto, (iv)
such extension, refinancing, replacement or renewal does not result in a
shortening of the average weighted maturity of the Indebtedness so extended,
refinanced or renewed, (v) the terms of any such extension, refinancing,
replacement or renewal are not less favorable to the obligor thereunder than the
original terms of such Indebtedness taken as a whole in light of current market
conditions and (vi) if the Indebtedness that is refinanced, renewed, or extended
was subordinated in right of payment to the Secured Obligations, then the terms
and conditions of the refinancing, renewal, replacement or extension
Indebtedness must include subordination terms and conditions that are at least
as favorable to the Administrative Agent and the Lenders as those that were
applicable to the refinanced, renewed, or extended Indebtedness;
(g) Indebtedness
owed to any person providing workers’ compensation, health, disability or other
employee benefits or property, casualty or liability insurance, pursuant to
reimbursement or indemnification obligations to such person, in each case
incurred in the ordinary course of business;
(h) Indebtedness
of the Borrower or any Subsidiary in respect of performance bonds, completion
guarantees, bid bonds, appeal bonds, surety bonds and similar obligations, in
each case provided in the ordinary course of business;
(i) Indebtedness
incurred in the ordinary course of business in connection with the financing of
insurance premiums;
(j) Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently drawn against insufficient funds in
the ordinary course of business.
(k) Indebtedness
(including the deferred purchase price for a Permitted Acquisition) of any
Person that becomes a Subsidiary after the date hereof;
provided
that (i)
such Indebtedness exists at the time such Person becomes a Subsidiary and is not
created in contemplation of or in connection with such Person becoming a
Subsidiary or such Indebtedness is incurred to finance such Permitted
Acquisition and (ii) the aggregate principal amount of Indebtedness permitted by
this
clause
(k)
shall not exceed $10,000,000 at any time outstanding;
(l) Indebtedness
under Swap Agreements entered into from time to time by any Loan Party or
Subsidiary in accordance with
Section
6.07
;
(m) Indebtedness
consisting of deferred purchase price or notes issued to officers, directors and
employees to purchase or redeem Equity Interests of a Loan Party in an amount
not to exceed $1,500,000 at any time;
(n) Indebtedness
in respect of netting services, overdraft protections and other cash management
arrangements, in each case in the ordinary course of business;
(o) Guarantees
by any Loan Party of Indebtedness or other obligations arising in the ordinary
course of business of any other Loan Party;
(p) Indebtedness
constituting the obligation to make purchase price adjustments and indemnities
in connection with Permitted Acquisitions and dispositions permitted
hereunder;
(q) Subordinated
Indebtedness; and
(r) other
Indebtedness in an aggregate principal amount not exceeding $2,000,000 at any
time outstanding.
Section
6.02
Liens
. No
Loan Party will, nor will it permit any Subsidiary to, create, incur, assume or
permit to exist any Lien on any property or asset now owned or hereafter
acquired by it, or assign or sell any income or revenues (including accounts
receivable) or rights in respect of any thereof, except:
(a) Liens
created pursuant to any Loan Document and Liens in favor of the Notes Agent
securing the obligations under the Senior Notes Agreement (in each case, the
priority of which shall be as provided in the Intercreditor
Agreement);
(b) Customary
Permitted Liens;
(c) any
Lien on any property or asset of the Borrower or any Subsidiary existing on the
date hereof and set forth in
Schedule
6.02
;
provided
that (i)
such Lien shall not apply to any other property or asset of the Borrower or
Subsidiary (other than proceeds and accessions thereof) unless otherwise
permitted hereby and (ii) such Lien shall secure only those obligations which it
secures on the date hereof and extensions, renewals and replacements thereof
that do not increase the outstanding principal amount thereof (other than by an
amount equal to accrued interest, fees, expenses and premiums incurred in
connection thereof);
(d) Liens
on fixed or capital assets (including Trucks) acquired, constructed or improved
by the Borrower or any Subsidiary;
provided
that (i)
such security interests secure Indebtedness permitted by clause (e) of
Section 6.01
, (ii)
such security interests and the Indebtedness secured thereby are incurred prior
to or within 90 days after such acquisition or the completion of such
construction or improvement, (iii) the Indebtedness secured thereby does not
exceed 100% of the cost of acquiring, constructing or improving such fixed or
capital assets and (iv) such security interests shall not apply to any other
property or assets of the Borrower or Subsidiary (other than proceeds and
accessions thereof) unless otherwise permitted thereof;
(e) any
Lien on any property or asset (other than Accounts and Inventory) that is
acquired by the Borrower or any Subsidiary or existing on any property or asset
(other than Accounts and Inventory) of any Person that becomes a Loan Party
after the date hereof and that secures Indebtedness permitted by
Section 6.01(k)
;
provided
that
(i) such Lien shall not apply to any other property or assets of the Loan Party
(other than proceeds and accessions thereof) unless otherwise permitted thereof
and (ii) such Lien shall secure only those obligations which it secures on the
date of such acquisition or the date such Person becomes a Loan Party, as the
case may be and extensions, renewals, refinancings and replacements thereof that
do not increase the outstanding principal amount thereof (other than by any
amount equal to accrued interest, fees, expenses and premiums incurred in
connection herewith);
(f) Liens
of a collecting bank arising in the ordinary course of business under Section
4-208 of the Uniform Commercial Code in effect in the relevant jurisdiction
covering only the items being collected upon;
(g) Liens
arising out of sale and leaseback transactions permitted by
Section
6.06
;
(h) Liens
granted by a Subsidiary that is not a Loan Party in favor of the Borrower or
another Loan Party in respect of Indebtedness owed by such
Subsidiary;
(i) Liens
securing Indebtedness permitted under
Section 6.01(i)
,
provided
that
(i) such Liens are limited to securing only the unpaid premiums under the
applicable insurance policy and (ii) such Liens only encumbered the proceeds of
the applicable insurance policy;
(j) Liens
securing obligations in an aggregate amount not to exceed $1,000,000 at any
time;
(k) Liens
resulting from the deposit of funds or evidences of Indebtedness in trust for
the purpose of defeasing or discharging Indebtedness of the Borrower or any
Subsidiary so long as such defeasance or discharge is otherwise permitted under
this Agreement;
(l) non-exclusive
licenses or sublicenses of intellectual property granted by any Loan Party in
the ordinary course of business;
(m) Liens
attaching solely to cash earnest money deposits in connection with any letter of
intent or purchase agreement in connection with a Permitted
Acquisition;
(n) Liens
arising by operation of law under Article 2 of the UCC in favor of reclaiming
seller of goods or buyer of goods;
(o) Security
given to a public or private utility or any Governmental Authority as required
in the ordinary course of business; and
(p) Liens
in the nature of the right of setoff in favor of counterparties to contractual
agreements with the Loan Parities in the ordinary course of
business.
Notwithstanding
the foregoing, none of the Liens permitted pursuant to this
Section 6.02
may at
any time attach to any Loan Party’s (i) Accounts, other than those permitted
under
clauses (a) and
(i)
of the definition of Customary Permitted Lien and clause (a) above
and (ii) Inventory, other than those permitted under
clauses (a), (b) and
(i)
of the definition of Customary Permitted Lien and clause (a)
above.
Section
6.03
Fundamental
Changes
. (a) No Loan Party will, nor will it permit any
Subsidiary to, merge into or consolidate with any other Person, or permit any
other Person to merge into or consolidate with it, or liquidate or dissolve,
except (x) in connection with any Permitted Acquisition or (y) that, if at the
time thereof and immediately after giving effect thereto no Event of Default
shall have occurred and be continuing (i) any Subsidiary of the Borrower may
merge into or consolidate with the Borrower in a transaction in which the
Borrower is the surviving corporation, (ii) any Loan Party (other than the
Borrower) may merge into or consolidate with any Loan Party in a transaction in
which the surviving entity is a Loan Party, (iii) any Subsidiary may
liquidate or dissolve if its assets are transferred, distributed or otherwise
distributed as a dividend to a Loan Party and (iv) any Subsidiary that is not a
Loan Party may liquidate or dissolve if the Borrower determines in good faith
that such liquidation or dissolution is in the best interests of the Borrower
and is not materially disadvantageous to the Lenders;
provided
that any
such merger involving a Person that is not a wholly owned Subsidiary immediately
prior to such merger shall not be permitted unless also permitted by
Section
6.04
.
(b) No
Loan Party will, nor will it permit any of its Subsidiaries to, engage in any
business other than businesses of the type conducted by the Borrower and its
Subsidiaries on the date of execution of this Agreement and businesses
reasonably related, incidental, ancillary, corollary, complementary thereto or a
reasonable extension thereof.
Section
6.04
Investments, Loans,
Advances, Guarantees and Acquisitions
. No Loan Party will, nor
will it permit any Subsidiary to, purchase, hold or acquire (including pursuant
to any merger with any Person that was not a Loan Party and a wholly owned
Subsidiary prior to such merger) any capital stock, evidences of indebtedness or
other securities (including any option, warrant or other right to acquire any of
the foregoing) of, make or permit to exist any loans or advances to, Guarantee
any obligations of, or make or permit to exist any investment or any other
interest in, any other Person, or purchase or otherwise acquire (in one
transaction or a series of transactions) any assets of any other Person
constituting a business unit (whether through purchase of assets, merger or
otherwise) (each an “
Investment
”),
except:
(a) Permitted
Investments, subject to control agreements in favor of the Administrative Agent
for the benefit of the Lenders or otherwise subject to a perfected security
interest in favor of the Administrative Agent for the benefit of the Lenders to
the extent required by the Collateral Documents;
(b) Investments
in existence on the date of this Agreement and described in
Schedule
6.04
and any
extensions, replacements or renewals thereof which do not result in an increase
in the amount thereof;
(c) Investments
by the Borrower and the Subsidiaries in Equity Interests in their respective
Subsidiaries,
provided
that (i) any such Equity Interests held by a Loan Party shall be pledged
pursuant to the Security Agreement (subject to the limitations applicable to
common stock of a Foreign Subsidiary referred to in
Section 5.13
) and
(ii) the aggregate amount of investments by Loan Parties in Subsidiaries that
are not Loan Parties (together with outstanding intercompany loans permitted
under clause (ii) to the proviso to
Section 6.04(d)
and
outstanding Guarantees permitted under the proviso to
Section 6.04(e)
)
shall not exceed $2,500,000 at any time outstanding (in each case
determined without regard to any write-downs or write-offs);
(d) Investments
made by the Borrower to any Subsidiary and made by any Subsidiary to the
Borrower or any other Subsidiary,
provided
that (i) any
such loans and advances made by a Loan Party shall be evidenced by a promissory
note pledged pursuant to the Security Agreement and (ii) the amount of such
loans and advances made by Loan Parties to Subsidiaries that are not Loan
Parties (together with outstanding investments permitted under clause (ii) to
the proviso to
Section
6.04(c)
and outstanding Guarantees permitted under the proviso to
Section 6.04(e)
)
shall not exceed $2,500,000 at any time outstanding (in each case determined
without regard to any write-downs or write-offs);
(e) Guarantees
constituting Indebtedness permitted by
Section 6.01
,
provided
that the
aggregate principal amount of Indebtedness of Subsidiaries that are not Loan
Parties that is Guaranteed by any Loan Party shall (together with outstanding
investments permitted under clause (ii) to the proviso to
Section 6.04(c)
and
outstanding intercompany loans permitted under clause (ii) to the proviso to
Section
6.04(d)
) shall not exceed $2,500,000 at any time outstanding (in each
case determined without regard to any write-downs or write-offs);
(f) loans
or advances made by a Loan Party to its employees, officers and directors on an
arms-length basis (i) in the ordinary course of business consistent with past
practices for travel and entertainment expenses, relocation costs and similar
purposes up to a maximum of $500,000 in the aggregate at any one time
outstanding and (ii) to purchase Equity Interests of a Loan Party up to a
maximum of $2,500,000 in the aggregate at any one time outstanding, provided
that any such loans or advances described in this
clause (ii)
are
cashless;
(g) subject
to Sections 4.2(a) and 4.4 of the Security Agreement, notes payable, or stock or
other securities issued by Account Debtors to a Loan Party pursuant to
negotiated agreements with respect to settlement of such Account Debtor’s
Accounts in the ordinary course of business, consistent with past
practices;
(h) Investments
in the form of Swap Agreements permitted by
Section
6.07
;
(i) Investments
of any Person existing at the time such Person becomes a Subsidiary of the
Borrower or consolidates or merges with the Borrower or any of the Subsidiaries
(including in connection with a permitted acquisition) so long as such
investments were not made in contemplation of such Person becoming a Subsidiary
or of such merger;
(j) Investments
received in connection with the dispositions of assets permitted by
Section
6.05
;
(k) investments
constituting deposits described in clause (c) of the definition of the term
“
Customary Permitted
Liens
;”
(l) Permitted
Acquisitions;
(m) deposits,
prepayments and other credits to suppliers made in the ordinary course of
business consistent with the past practices of Borrower and its
Subsidiaries;
(n) Investments
in respect of Capital Expenditures permitted under
Section
6.12
;
(o) sales,
transfers, leases or dispositions to the extent permitted by
Section 6.05
,
Section 6.09
and
other Loan Documents;
(p) Loan
Parties may establish wholly owned Subsidiaries to the extent they comply with
Section
5.13
;
(q) earnest
money required in connection with and to the extent permitted by Permitted
Acquisitions;
(r) Investments
by any Loan Party or a Subsidiary in the Excluded Joint Venture after the
Effective Date in an aggregate amount not to exceed $7,000,000;
(s) (i)
the acquisition and holding of accounts receivables owing to the
Borrower or any Subsidiary if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary terms, and
(ii) the endorsement of negotiable instruments for collection in the ordinary
course of business; and
(t) other
Investments not exceeding in the aggregate $1,500,000 at any time
outstanding.
Section
6.05
Asset
Sales
. No Loan Party will, nor will it permit any Subsidiary
to, sell, transfer, lease or otherwise dispose of any asset, including any
Equity Interest owned by it, nor will the Borrower permit any Subsidiary to
issue any additional Equity Interest in such Subsidiary (other than to the
Borrower or another Subsidiary in compliance with
Section 6.04
),
except:
(a) sales,
transfers and dispositions of (i) inventory, cash and cash equivalents in the
ordinary course of business, (ii) used, obsolete, worn out or surplus equipment
or property in the ordinary course of business, (iii) Real Property that is
no longer necessary in or useful to the business of the Borrower or any of its
Subsidiaries in the ordinary course of business, (iv) non-core assets acquired
in a Permitted Acquisition and (v) disposition of the assets of or Excluded JV
Equity in the Excluded Joint Venture;
(b) sales,
transfers and dispositions to the Borrower or any Subsidiary,
provided
that any
such sales, transfers or dispositions involving a Subsidiary that is not a Loan
Party shall be made in compliance with
Section
6.09
;
(c) sales,
transfers and dispositions of accounts receivable in connection with the
compromise, settlement or collection thereof;
(d) sales,
transfers and dispositions of Permitted Investments and other Investments
permitted by clauses (i) and (k) of
Section
6.04
;
(e) sale
and leaseback transactions permitted by
Section
6.06
;
(f) dispositions
resulting from any casualty or other insured damage to, or any taking under
power of eminent domain or by condemnation or similar proceeding of, any
property or asset of the Borrower or any Subsidiary;
(g) sales,
transfers and other dispositions of assets (other than Equity Interests in a
Subsidiary unless all Equity Interests in such Subsidiary are sold) that are not
permitted by any other paragraph of this Section,
provided
that the
aggregate fair market value of all assets sold, transferred or otherwise
disposed of in reliance upon this paragraph (g) shall not exceed $5,000,000
during any fiscal year of the Borrower;
(h) a
true lease or sublease of Real Property that (i) does not constitute
Indebtedness and (ii) does not constitute a Sale and Leaseback
Transaction;
(i) the
sale or disposition of personal property (other than Accounts, Eligible Trucks
and Inventory) of the Borrower and its Subsidiaries to the Excluded Joint
Venture consummated in connection with managing the Excluded Joint Venture in
the ordinary course of business and consistent with past practices, in an
aggregate amount not to exceed $1,500,000; and
(j) the
lease (as lessee or lessor), sublease, non-exclusive license (as licensee or
licensor) or sublicense of real or personal property and the termination of such
lease or license, in each case, in the ordinary course of business and in
accordance with the applicable Collateral Documents;
(k) sales,
transfers, lease or dispositions in accordance with Section
6.03;
(l) sales,
transfers or dispositions described on
Schedule 6.05
;
and
(m) expiration
or abandonment of intellectual property in the ordinary course of
business.
provided
that all
sales, transfers, leases and other dispositions permitted hereby (other than
those permitted by paragraphs
(a)(v)
,
(b)
,
(f)
,
(h)
,
(j)
,
(j)
,
(k)
and
(m)
above) shall be
made for fair value and for at least 75% cash consideration of such fair
value.
Section
6.06
Sale and Leaseback
Transactions
. No Loan Party will, nor will it permit any
Subsidiary to, enter into any arrangement, directly or indirectly, whereby it
shall sell or transfer any property, real or personal, used or useful in its
business, whether now owned or hereafter acquired, and thereafter rent or lease
such property or other property that it intends to use for substantially the
same purpose or purposes as the property sold or transferred, except for (a) any
such sale of any fixed or capital assets by the Borrower or any Subsidiary that
is made for cash consideration in an amount not less than the fair value of such
fixed or capital asset and is consummated within 90 days after the Borrower or
such Subsidiary acquires or completes the construction of such fixed or capital
asset, or (b) any such sale to a Loan Party.
Section
6.07
Swap
Agreements
. No Loan Party will, nor will it permit
any Subsidiary to, enter into any Swap Agreement, except (a) Swap
Agreements entered into to hedge or mitigate risks to which the Borrower or any
Subsidiary has actual exposure (other than those in respect of Equity Interests
of the Borrower or any of its Subsidiaries), and (b) Swap Agreements entered
into in order to effectively cap, collar or exchange interest rates (from fixed
to floating rates, from one floating rate to another floating rate or otherwise)
with respect to any interest-bearing liability or investment of the Borrower or
any Subsidiary.
Section
6.08
Restricted Payments; Certain
Payments of Indebtedness
. (a) No Loan Party will, nor will it
permit any Subsidiary to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, or incur any obligation (contingent or
otherwise) to do so, except as follows:
(i) the
Borrower may declare and pay Restricted Payments with respect to its common
stock payable solely in additional shares of its common stock, and, with respect
to its preferred stock, payable solely in additional shares of such preferred
stock, in shares of its common stock or an increase in liquidation
value;
(ii) Subsidiaries
may declare and make Restricted Payments ratably with respect to their Equity
Interests;
(iii) Restricted
Payments in respect of fractional shares;
(iv) the
Borrower may make Restricted Payments, not exceeding $3,500,000 during any
fiscal year, pursuant to and in accordance with stock option plans or
other benefit plans for management or employees of the Borrower and its
Subsidiaries; and
(v) the
Borrower or a Subsidiary may make payments in cash or issue notes to former
employees, officers or directors of such Person in connection with the
redemption or repurchase of Equity Interests in the Borrower or a Subsidiary
from such former employees, officers or directors upon termination of employment
with a Loan Party or their death or disability in an aggregate amount not to
exceed $1,500,000 and provided that any such notes are subordinated to the
Obligations in form and substance reasonably acceptable to the Administrative
Agent.
(b) No
Loan Party will, nor will it permit any Subsidiary to, make or agree to pay or
make, directly or indirectly, any voluntary payment or other distribution
(whether in cash, securities or other property) of or in respect of principal of
or interest on any Indebtedness, or any payment or other distribution (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any Indebtedness, except:
(i) payment
of Indebtedness created under the Loan Documents;
(ii) payment
of regularly scheduled interest and principal payments as and when due in
respect of any Indebtedness, other than payments in respect of the Subordinated
Indebtedness prohibited by the subordination provisions thereof;
(iii) refinancings
of Indebtedness to the extent permitted by
Section
6.01
;
(iv) payments
of intercompany Indebtedness between Loan Parties;
(v) so
long as no Default or Event of Default has occurred and is continuing, payment
of Indebtedness with either (x) the Net Proceeds from the issuance of common
stock or other Equity Interests of the Borrower or (y) the issuance of common
stock or other Equity Interests of the Borrower;
(vi) payment
of secured Indebtedness that becomes due as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness; and
(vii) so
long as no Default or Event of Default has occurred and is continuing, the
voluntary prepayment, redemption or repurchase of (A) up to $2,500,000 of the
Senior Notes during the term of this Agreement if the Borrower is in pro forma
compliance with the Fixed Charge Coverage Ratio and has Availability of not less
than $10,000,000 if there is an Availability Block in effect or has Availability
of not less than $20,000,000 if there is no Availability Block in effect, in
each case after giving effect thereto, and (B) up to $2,500,000 of other
Indebtedness during the term of this Agreement if the Borrower is in pro forma
compliance with the Fixed Charge Coverage Ratio and has Availability of not less
than $10,000,000 if there is an Availability Block in effect or has Availability
of not less than $20,000,000 if there is no Availability Block in effect, in
each case after giving effect thereto.
Section
6.09
Transactions with
Affiliates
. No Loan Party will, nor will it permit any
Subsidiary to, sell, lease or otherwise transfer any property or assets to, or
purchase, lease or otherwise acquire any property or assets from, or otherwise
engage in any other transactions with, any of its Affiliates, except (a)
transactions that (i) are in the ordinary course of business and (ii) are at
prices and on terms and conditions not less favorable to the Borrower or such
Subsidiary than could be obtained on an arm’s-length basis from unrelated third
parties, (b) transactions between or among (i) the Borrower and any Subsidiary
that is a Loan Party or (ii) Subsidiaries that are not Loan Parties,
(c) any Investment, Indebtedness or Restricted Payment permitted by the
Agreement, (d) loans and advances to employees permitted under
Section 6.04
, (e) the
payment of reasonable fees to directors of the Borrower or any Subsidiary who
are not employees of the Borrower or any Subsidiary, and compensation and
employee benefit arrangements paid to, and indemnities provided for the benefit
of, directors, officers or employees of the Borrower or its Subsidiaries in the
ordinary course of business, (f) any issuances of securities or other payments,
awards or grants in cash, securities or otherwise pursuant to, or the funding
of, employment agreements, stock options and stock ownership plans or other
compensation plans approved by the Borrower’s board of directors and (g)
transactions described on
Schedule
6.09
.
Section
6.10
Restrictive
Agreements
. No Loan Party will, nor will it permit any
Subsidiary to, directly or indirectly, enter into, incur or permit to exist any
consensual agreement or other arrangement that prohibits, restricts or imposes
any condition upon (a) the ability of such Loan Party or any of its Subsidiaries
to create, incur or permit to exist any Lien upon any of its property or assets,
or (b) the ability of any Subsidiary to pay dividends or other distributions
with respect to any shares of its capital stock or to make or repay loans or
advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of
the Borrower or any other Subsidiary;
provided
that (i) the
foregoing shall not apply to restrictions and conditions imposed by law or by
any Loan Document or the Senior Notes Documents, (ii) the foregoing shall not
apply to restrictions and conditions existing on the date hereof identified on
Schedule
6.10
(but shall apply
to any extension or renewal of, or any amendment or modification materially
expanding the scope of, any such restriction or condition), (iii) the foregoing
shall not apply to customary restrictions and conditions contained in agreements
relating to the sale of a Subsidiary pending such sale, provided such
restrictions and conditions apply only to the Subsidiary that is to be sold and
such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not
apply to restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness, (v) clause (a)
of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment, subletting, licensing or encumbering
thereof, (vi) restrictions which are not more restrictive than those contained
in this Agreement contained in any documents governing any Indebtedness incurred
after the Effective Date in accordance with the provisions of this Agreement,
(vii) any agreement in effect at the time such Subsidiary becomes a Subsidiary
of the Borrower, so long as such agreement was not entered into in contemplation
of such Person becoming a Subsidiary of the Borrower, (viii) customary
provisions in joint venture agreements and other similar agreements applicable
to joint ventures permitted hereunder and applicable solely to such joint
venture entered into in the ordinary course of business and (ix) any agreement
evidencing any permitted modification, replacement, renewal, extension or
refinancing of such agreements identified in clauses (i) - (viii) so long as
such modification, replacement, renewal, extension or refinancing is not (taken
as a whole) materially less favorable to the Lenders.
Section
6.11
Amendment of Material
Documents
. No Loan Party will, nor will it permit any
Subsidiary to, amend, modify or waive any of its rights under (a) agreement
relating to any Subordinated Indebtedness, (b) its certificate of incorporation,
by-laws, operating, management or partnership agreement or other organizational
documents or (c)
the
Senior Notes, to the extent any such amendment, modification or waiver would
be adverse to the Lenders; provided, that any refinancing permitted by
Section 6.01
shall not be deemed to be adverse for purposes of this
Section
6.11
.
Section
6.12
Capital
Expenditures
. (a) The Borrower will not, nor will it
permit any Subsidiary to, incur or make any Capital Expenditures in an amount
exceeding (i) $15,000,000 in the aggregate from the Effective Date through and
including December 31, 2010 and (ii) 7.0% of consolidated annual revenue of
Borrower and its Subsidiaries for the trailing twelve month period ending on the
last day of each fiscal quarter thereafter (commencing with the fiscal quarter
ended March 31, 2011); provided that the amount of any Capital Expenditures
permitted to be made in respect of the trailing twelve month period ending on
March 31, 2011 shall be increased by a maximum of $7,500,000 of the unused
amount of Capital Expenditures that were permitted to be made during the fiscal
year ended December 31, 2010.
Section
6.13
Fixed Charge Coverage
Ratio
. Beginning with the fiscal month in which the
Availability Block is eliminated and with respect to any fiscal month thereafter
in which Availability was at any time less than $15,000,000 (any such month, the
“
FCCR
Commencement Date
”),
the Borrower shall maintain a Fixed Charge Coverage Ratio for the trailing
twelve month period of at least 1.0:1.0, determined (i) as of the last day of
the fiscal month preceding the FCCR Commencement Date and (ii) as of the last
day of each fiscal month occurring thereafter for the trailing twelve month
period ending on each such date, until Availability is equal to or greater than
$15,000,000 for a period of thirty (30) consecutive days.
Section
6.14
End of Fiscal Year and
Fiscal Quarters
. Unless otherwise agreed by the Administrative
Agent, the Loan Parties shall cause each of their fiscal years and the fiscal
years of each of their Subsidiaries to end on December 31st of the
applicable year and shall cause each of their fiscal quarters and the fiscal
quarters of their Subsidiaries to end on March 31st, June 30th, September 30th
and December 31st of the applicable year.
ARTICLE
VII
Events of
Default
If any of
the following events (“
Events of
Default
”) shall occur:
(a) the
Borrower shall fail to pay any principal or interest of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;
(b) the
Borrower shall fail to pay any fee or any other amount (other than an amount
referred to in clause (a) of this Article) payable under this Agreement, when
and as the same shall become due and payable, and such failure shall continue
unremedied for a period of three Business Days;
(c) any
representation or warranty made or deemed made by or on behalf of any Loan Party
or any Subsidiary in or in connection with this Agreement or any Loan Document
or any amendment or modification thereof or waiver thereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with this Agreement or any Loan Document or any amendment or
modification thereof or waiver thereunder, shall prove to have been materially
incorrect when made or deemed made, except that such materiality qualifier shall
not be applicable to representations and warranties that are already qualified
or modified by materiality in the text thereof;
(d) any
Loan Party shall fail to observe or perform any covenant, condition or agreement
contained in
Section
4.04
,
Section
5.02(a)
,
Section 5.03
(with
respect to a Loan Party’s existence) or
Section 5.08
or in
Article
VI
;
(e) any
Loan Party shall fail to observe or perform any covenant, condition or agreement
contained in this Agreement or any other Loan Document (other than those which
constitute a default under another Section of this Article), and such failure
shall continue unremedied for a period of (i) 5 days after the earlier of
knowledge of a Loan Party of such breach or notice thereof from the
Administrative Agent (which notice will be given at the request of any Lender)
if such breach relates to terms or provisions of
Section 5.01
,
Section 5.02
(other
than
Section
5.02(a)
),
Section 5.03
through
Section 5.07
,
Section
5.08
,
Section
5.09
,
Section 5.10
,
Section 5.12
or
Section
5.13(a)
of this Agreement or (ii) 15 Business Days after
the earlier of knowledge of a Loan Party of such breach or notice thereof from
the Administrative Agent (which notice will be given at the request of any
Lender) if such breach relates to terms or provisions of any other Section of
this Agreement or any other Loan Document;
(f) any
Loan Party or any Subsidiary shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable;
(g) any
event or condition occurs that results in any Material Indebtedness becoming due
prior to its scheduled maturity or that enables or permits (with or without the
giving of notice, the lapse of time or both) the holder or holders of any
Material Indebtedness or any trustee or agent on its or their behalf to cause
any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity
(after giving effect to any grace period, amendment or waiver);
provided
that this
clause (g) shall not apply to secured Indebtedness that becomes due as a result
of the voluntary sale or transfer of the property or assets securing such
Indebtedness or any Indebtedness which converts to Equity Interests as a result
of any event or condition;
(h) an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (i) liquidation, reorganization or other relief in respect of a
Loan Party or any Subsidiary of any Loan Party or its debts, or of a substantial
part of its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for any Loan Party or any Subsidiary of any Loan Party or for a substantial part
of its assets, and, in any such case, such proceeding or petition shall continue
undismissed for 60 consecutive days or an order or decree approving or ordering
any of the foregoing shall be entered;
(i) any
Loan Party or any Subsidiary of any Loan Party shall (i) voluntarily commence
any proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for such Loan Party or Subsidiary of any Loan Party or for a
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;
(j) any
Loan Party or any Subsidiary of any Loan Party shall become unable, admit in
writing its inability or fail generally to pay its debts as they become
due;
(k) one
or more final judgments for the payment of money in an aggregate amount in
excess of $2,500,000 (in excess of insurance provided by reputable providers for
which coverage has not been disclaimed) shall be rendered against any Loan
Party, any Subsidiary of any Loan Party or any combination thereof and the same
shall remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally taken
by a judgment creditor to attach or levy upon any assets of any Loan Party or
any Subsidiary of any Loan Party to enforce any such judgment or any Loan Party
or any Subsidiary of any Loan Party shall fail within 30 days to discharge one
or more non-monetary judgments or orders which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, which
judgments or orders, in any such case, are not stayed on appeal or otherwise
being appropriately contested in good faith by proper proceedings diligently
pursued;
(l)
an ERISA Event shall have occurred that, when taken together with all other
ERISA Events that have occurred, results in liability of the Borrower and its
Subsidiaries exceeding $5,000,000;
(m) a
Change in Control shall occur;
(n) the
occurrence of any “Event of Default” under and as defined in the Senior Notes
Agreement;
(o) the
Loan Guaranty shall fail to remain in full force or effect or any action shall
be taken by a Loan Party to discontinue or to assert the invalidity or
unenforceability of the Loan Guaranty, or any Loan Guarantor shall fail to
comply with any of the terms or provisions of the Loan Guaranty to which it is a
party, or any Loan Guarantor shall deny that it has any further liability under
the Loan Guaranty to which it is a party, or shall give notice to such
effect;
(p) any
Collateral Document shall for any reason fail to create a valid and perfected
first priority Lien in any Collateral purported to be covered thereby (other
than (i) in respect of Collateral with a value not to exceed $250,000 or (ii) as
a result of the action or inaction of the Administrative Agent), except as
permitted by the terms of any Collateral Document, or any Collateral Document
shall fail to remain in full force or effect or any action shall be taken by a
Loan Party to discontinue or to assert the invalidity or unenforceability of any
Collateral Document
;
or
(q) any
material provision of any Loan Document for any reason ceases to be valid,
binding and enforceable in accordance with its terms (other than as a result of
the action or inaction of the Administrative Agent or Lenders) (or any Loan
Party shall challenge the enforceability of any Loan Document or shall assert in
writing, or engage in any action or inaction based on any such assertion, that
any provision of any of the Loan Documents has ceased to be or otherwise is not
valid, binding and enforceable in accordance with its terms);
then, and
in every such event (other than an event with respect to the Borrower described
in clause (h) or (i) of this Article), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to the Borrower, take either or both of
the following actions, at the same or different times: (i) terminate
the Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower; and
in case of any event with respect to the Borrower described in clause (h) or (i)
of this Article, the Commitments shall automatically terminate and the principal
of the Loans then outstanding, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower to the
extent permitted by applicable law. Upon the occurrence and the
continuance of an Event of Default, the Administrative Agent may, and at the
request of the Required Lenders shall, exercise any rights and remedies provided
to the Administrative Agent under the Loan Documents or at law or equity,
including all remedies provided under the UCC.
ARTICLE
VIII
The Administrative
Agent
Each of
the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative
Agent as its agent and authorizes the Administrative Agent to take such actions
on its behalf, including execution of the other Loan Documents, and to exercise
such powers as are delegated to the Administrative Agent by the terms of the
Loan Documents, together with such actions and powers as are reasonably
incidental thereto.
The bank
serving as the Administrative Agent hereunder shall have the same rights and
powers in its capacity as a Lender as any other Lender and may exercise the same
as though it were not the Administrative Agent, and such bank and its Affiliates
may accept deposits from, lend money to and generally engage in any kind of
business with the Loan Parties or any Subsidiary of a Loan Party or other
Affiliate thereof as if it were not the Administrative Agent
hereunder.
The
Administrative Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Loan Documents
that the Administrative Agent is required to exercise in writing as directed by
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in
Section 9.02
), and
(c) except as expressly set forth in the Loan Documents, the Administrative
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to any Loan Party or any of its
Subsidiaries that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in
Section
9.02
) or in the absence of its own gross negligence or willful
misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (d)
any statement, warranty or representation made in or in connection with any Loan
Document, (e) the contents of any certificate, report or other document
delivered hereunder or in connection with any Loan Document, (f) the performance
or observance of any of the covenants, agreements or other terms or conditions
set forth in any Loan Document, (g) the validity, enforceability, effectiveness
or genuineness of any Loan Document or any other agreement, instrument or
document, (h) the creation, perfection or priority of Liens on the Collateral or
the existence of the Collateral, or (i) the satisfaction of any condition set
forth in
Article
IV
or elsewhere in any Loan Document, other than to confirm receipt of
items expressly required to be delivered to the Administrative
Agent.
The
Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it in good faith to
be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may
consult with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
The
Administrative Agent may perform any and all its duties and exercise its rights
and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent
may perform any and all its duties and exercise its rights and powers through
their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative
Agent.
Subject
to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time by
giving at least 10 days prior notice to the Lenders, the Issuing Bank and the
Borrower. Upon any such resignation, the Required Lenders shall have
the right, absent an Event of Default, in consultation with the Borrower, to
appoint a successor. If no successor shall have been so appointed by
the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of and in consultation with the
Lenders and the Issuing Bank, appoint a successor Administrative Agent which
shall be a commercial bank or an Affiliate of any such commercial bank which is,
absent an Event of Default, reasonably acceptable to the
Borrower. Upon the acceptance of its appointment as Administrative
Agent hereunder by a successor, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the Administrative Agent’s resignation hereunder,
the provisions of this Article,
Section 2.17(d)
and
Section 9.03
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while it was acting as
Administrative Agent.
Each
Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges
that it will, independently and without reliance upon the Administrative Agent
or any other Lender and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any other Loan Document or
related agreement or any document furnished hereunder or
thereunder.
Each
Lender hereby agrees that (i) it has requested a copy of each Report prepared by
or on behalf of the Administrative Agent; (ii) the Administrative Agent (A)
makes no representation or warranty, express or implied, as to the completeness
or accuracy of any Report or any of the information contained therein or any
inaccuracy or omission contained in or relating to a Report and (B) shall not be
liable for any information contained in any Report; (iii) the Reports are not
comprehensive audits or examinations, and that any Person performing any field
examination will inspect only specific information regarding the Loan Parties
and will rely significantly upon the Loan Parties’ books and records, as well as
on representations of the Loan Parties’ personnel and that the Administrative
Agent undertakes no obligation to update, correct or supplement the Reports;
(iv) it will keep all Reports confidential and strictly for its internal use,
not share the Report with any Loan Party or any other Person except as otherwise
permitted pursuant to this Agreement; and (v) without limiting the generality of
any other indemnification provision contained in this Agreement, it will pay and
protect, and indemnify, defend, and hold the Administrative Agent and any such
other Person preparing a Report harmless from and against, the claims, actions,
proceedings, damages, costs, expenses, and other amounts (including reasonable
attorney fees) incurred by as the direct or indirect result of any third parties
who might obtain all or part of any Report through the indemnifying
Lender.
With
respect to the incurrence or issuance by the Loan Parties of any Indebtedness
that is permitted to be secured by Liens pursuant to
Section 6.02(a)
, each
of the Lenders hereby authorizes and directs the Administrative Agent to enter
into the Collateral Documents and the Intercreditor Agreement on behalf of such
Lender and agrees that the Administrative Agent in its various capacities
thereunder may take such actions on its behalf as is contemplated by the terms
of the Collateral Documents and the Intercreditor Agreement. Each
Lender hereunder (a) agrees that it will be bound by and will take no actions
contrary to the provisions of the Collateral Documents and the Intercreditor
Agreement, (b) authorizes and instructs the Administrative Agent to enter into
the Collateral Documents and the Intercreditor Agreement as agent and on behalf
of such Lender, (c) agrees that the Administrative Agent may take such actions
on behalf of such Lender as is contemplated by the terms of the Collateral
Documents and the Intercreditor Agreement, (d) consents to the subordination of
Liens provided for in the Intercreditor Agreement and (e) agrees this Agreement
and the other Loan Documents are subject to the terms, conditions and provisions
of the Intercreditor Agreement.
The
Lenders (or Affiliates thereof) identified in this Agreement, or hereafter
appointed by the Administrative Agent, as a “Documentation Agent”, “Sole
Bookrunner” or other similar titles, shall not have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders herein.
ARTICLE
IX
Miscellaneous
Section
9.01
Notices
. (a)
Except in the case of notices and other communications expressly permitted to be
given by telephone (and subject to paragraph (b) below), all notices, demands
and other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by facsimile or electronic transmission, as
follows:
(i) if
to any Loan Party, to the Borrower at:
U.S.
Concrete, Inc.
2925
Briarpark, Suite 1050
Houston,
Texas 77042
Attention: General
Counsel
Telecopy
no: (713) 499-6201
E-Mail
Address:
clindeman@us-concrete.com
(ii)
if to the Administrative
Agent, the Issuing Bank or the Swingline Lender:
JPMorgan
Chase Bank, N.A.
2200 Ross
Avenue, 9th Floor
Dallas,
Texas 75220
Attention:
Mario Quintanilla
Telephone
No. (214) 965-2371
Facsimile:
(214) 965-4731
(iii)
with a copy
to:
JPMorgan
Chase Bank, N.A.
10 South
Dearborn, 22nd Floor
Chicago,
Illinois, 60603-2003
Attention:
Elena Ruiz
Telephone
No. (312) 732-7572
Facsimile:
(312) 732-7603
All such
notices and other communications (A) sent by hand or overnight courier service,
or mailed by certified or registered mail, shall be deemed to have been given
when received or (B) sent by facsimile shall be deemed to have been given when
sent,
provided
that if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next Business Day
for the recipient.
(b) Notices
and other communications to the Lenders hereunder may be delivered or furnished
by electronic communications (including e-mail and internet or intranet
websites) pursuant to procedures approved by the Administrative Agent;
provided
that the
foregoing shall not apply to notices pursuant to
Article II
or to
compliance and no Event of Default certificates delivered pursuant to
Section 5.01(d)
unless otherwise agreed by the Administrative Agent and the applicable
Lender. The Administrative Agent or the Borrower (on behalf of the
Loan Parties) may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it;
provided
that
approval of such procedures may be limited to particular notices or
communications. All such notices and other communications (i) sent to an e-mail
address shall be deemed received upon the sender’s receipt of an acknowledgement
from the intended recipient (such as by the “return receipt requested” function,
as available, return e-mail or other written acknowledgement),
provided
that if not
given during the normal business hours of the recipient, such notice or
communication shall be deemed to have been given at the opening of business on
the next Business Day for the recipient, and (ii) posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in the foregoing clause
(b)(i) of notification that such notice or communication is available and
identifying the website address therefor.
(c) Any
party hereto may change its address or facsimile number for notices and other
communications hereunder by notice to the other parties hereto.
Section
9.02
Waivers;
Amendments
. (a) No failure or delay by the Administrative
Agent, the Issuing Bank or any Lender in exercising any right or power hereunder
or under any other Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power to the
extent permitted by applicable law. The rights and remedies of the
Administrative Agent, the Issuing Bank and the Lenders hereunder and under any
other Loan Document are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision
of any Loan Document or consent to any departure by any Loan Party therefrom
shall in any event be effective unless the same shall be permitted by paragraph
(b) of this Section, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. Without
limiting the generality of the foregoing, the making of a Loan or issuance of a
Letter of Credit shall not be construed as a waiver of any Default, regardless
of whether the Administrative Agent, any Lender or the Issuing Bank may have had
notice or knowledge of such Default at the time.
(b) Neither
this Agreement nor any other Loan Document nor any provision hereof or thereof
may be waived, amended or modified except (i) in the case of this Agreement,
pursuant to an agreement or agreements in writing entered into by the Borrower
and the Required Lenders or, (ii) in the case of any other Loan Document (other
than the Intercreditor Agreement which shall be amended and modified in
accordance with the provisions set forth therein), pursuant to an agreement or
agreements in writing entered into by the Administrative Agent and the Loan
Party or Loan Parties that are parties thereto, with the consent of the Required
Lenders;
provided
that no such
agreement shall (A) increase the Commitment of any Lender without the written
consent of such Lender (provided that the Administrative Agent may make
Protective Advances as set forth in
Section 2.04
or
Overadvances set forth in
Section 2.05
), (B)
reduce or forgive the principal amount of any Loan or LC Disbursement or reduce
the rate of interest thereon, or reduce or forgive any interest or fees payable
hereunder, without the written consent of each Lender directly affected thereby
(provided that the waiver of default interest or any Default or Event of Default
shall not constitute a reduction or forgiveness of any interest or fee), (C)
postpone any scheduled date of payment of the principal amount of any Loan or LC
Disbursement, or any scheduled date for the payment of any interest, fees or
other Obligations payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender directly affected thereby
(other than mandatory prepayments), (D) change
Section
2.18(b)
or alter the manner in which payments are shared, without
the written consent of each Lender, (E) increase the advance rates set forth in
the definition of Borrowing Base or add new categories of eligible assets or
modify that portion of Section 2.01 which limits the amount that can be borrowed
in each case in a manner that would increase availability, without the written
consent of the Supermajority Revolving Lenders, (F) change any of the provisions
of this Section or the definition of “
Required Lenders
” or
reduce the number or percentage of Lenders (or Lenders of any Class) specified
in any provision of any Loan Document required to waive, amend or modify any
rights thereunder or make any determination or grant any consent thereunder,
without the written consent of each Lender, (G) change
Section 2.20
, without
the consent of each Lender (other than any Defaulting Lender), (H) release any
Loan Guarantor from its obligation under its Loan Guaranty (except as otherwise
permitted herein or in the other Loan Documents), without the written consent of
each Lender, or (I) subordinate the Secured Obligations owed to any Lender
or any Liens securing such Secured Obligations except as otherwise provided
herein, without the consent of each Lender, (J) change
Section 9.04
to allow
a Loan Party or any Affiliate thereof to become a permitted assignee without the
consent of each Lender, or (K) except as provided in
clauses
(c)
and
(d)
of this Section
or in any Collateral Document, release all or substantially all of the
Collateral, without the written consent of each Lender;
provided
further that
no such agreement shall amend, modify or otherwise adversely affect the rights
or duties of the Administrative Agent, the Issuing Bank or the Swingline Lender
hereunder without the prior written consent of the Administrative Agent, the
Swingline Lender or the Issuing Bank, as the case may be (it being understood
that any change to
Section 2.20
shall
require the consent of the Administrative Agent, the Swingline Lender and the
Issuing Bank). The Administrative Agent may also amend the
Commitment Schedule
to reflect assignments entered into pursuant to
Section 9.04
.
(c) The
Lenders hereby irrevocably authorize the Administrative Agent, at its option and
in its sole discretion, to release any Liens granted to the Administrative Agent
by the Loan Parties on any Collateral (i) upon the termination of the all
Commitments, payment and satisfaction in full in cash of all Secured Obligations
(other than Unliquidated Obligations), and the cash collateralization
of all Unliquidated Obligations in a manner satisfactory to each affected
Lender, (ii) constituting property being sold or disposed of if the Loan Party
disposing of such property certifies to the Administrative Agent that the sale
or disposition is made in compliance with the terms of this Agreement (and the
Administrative Agent may rely conclusively on any such certificate, without
further inquiry), and to the extent that the property being sold or disposed of
constitutes 100% of the Equity Interest of a Subsidiary, the Administrative
Agent is authorized to release any Loan Guaranty provided by such Subsidiary,
(iii) constituting property leased to a Loan Party under a lease which has
expired or been terminated in a transaction permitted under this Agreement, or
(iv) as required to effect any sale or other disposition of such Collateral in
connection with any exercise of remedies of the Administrative Agent and the
Lenders pursuant to
Article
VII
. Except as provided in the preceding sentence, the
Administrative Agent will not release any Liens on Borrowing Base Collateral
without the prior written authorization of the Required Lenders;
provided
that, the
Administrative Agent may in its discretion, release its Liens on Collateral
valued in the aggregate not in excess of $5,000,000 during any calendar year
without the prior written authorization of the Required Lenders to the extent
the Loan Parties are permitted to dispose of such Collateral pursuant to the
terms of the Loan Documents. Any such release shall not in any manner
discharge, affect, or impair the Obligations or any Liens (other than those
expressly being released) upon (or obligations of the Loan Parties in respect
of) all interests retained by the Loan Parties, including the proceeds of any
sale, all of which shall continue to constitute part of the
Collateral.
(d) If,
in connection with any proposed amendment, waiver or
consent requiring the consent of “each Lender” or “each Lender
affected thereby,” the consent of the Required Lenders or the Supermajority
Revolving Lenders is obtained, but the consent of other necessary Lenders is not
obtained (any such Lender whose consent is necessary but not obtained being
referred to herein as a “
Non-Consenting
Lender
”), then the Borrower may elect to replace a Non-Consenting
Lender as a Lender party to this Agreement, provided that, concurrently with
such replacement, (1) another bank or other entity which is reasonably
satisfactory to the Borrower and the Administrative Agent shall agree (and the
Administrative Agent agrees any other Lender, an Affiliate of a Lender and
Approved Fund is acceptable), as of such date, to purchase for cash the Loans
and other Obligations due to the Non-Consenting Lender pursuant to an Assignment
and Assumption and to become a Lender for all purposes under this Agreement and
to assume all obligations of the Non-Consenting Lender to be terminated as of
such date and to comply with the requirements of
clause (b)
of
Section 9.04
, and (2)
the Borrower shall pay to such Non-Consenting Lender in same day funds on the
day of such replacement (a) all interest, fees and other amounts then accrued
but unpaid to such Non-Consenting Lender by the Borrower hereunder to and
including the date of termination, including without limitation payments due to
such Non-Consenting Lender under
Section 2.15
and
Section 2.17
,
and (b) an amount, if any, equal to the payment which would have been due to
such Lender on the day of such replacement under
Section 2.16
had the
Loans of such Non-Consenting Lender been prepaid on such date rather than sold
to the replacement Lender.
Section
9.03
Expenses; Indemnity; Damage
Waiver
. (a) The Borrower shall pay (i) all reasonable and
documented out-of-pocket expenses incurred by the Administrative Agent, the Lead
Arrangers and their Affiliates (including the reasonable fees, charges and
disbursements of one counsel for the Administrative Agent and the Lead
Arrangers, collectively, exclusive of any local counsel) in connection with the
syndication and distribution (including, without limitation, via the internet or
through a service such as Intralinks) of the credit facilities provided for
herein, the preparation and administration of the Loan Documents or any
amendments, modifications or waivers of the provisions of the Loan Documents
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable and documented out-of-pocket expenses incurred
by the Issuing Bank in connection with the issuance, amendment, renewal or
extension of any Letter of Credit or any demand for payment thereunder and (iii)
all out-of-pocket expenses incurred by the Administrative Agent, the Lead
Arrangers, the Issuing Bank or any Lender, including the fees, charges and
disbursements of any counsel for the Administrative Agent, the Lead Arrangers,
the Issuing Bank or any Lender, in connection with the enforcement, collection
or protection of its rights in connection with the Loan Documents, including its
rights under this Section, or in connection with the Loans made or Letters of
Credit issued hereunder, including all such out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit. Expenses being reimbursed by the Borrower under this
Section include, without limiting the generality of the foregoing, reasonable
out-of-pocket costs and expenses incurred in connection with:
(A) Subject
to
Section
5.11
, Appraisals, insurance reviews and the Service
Agreement;
(B) Subject
to
Section
5.14
, field examinations and the preparation of Reports based on the fees
charged by a third party retained by the Administrative Agent or the internally
allocated fees for each Person employed by the Administrative Agent with respect
to each field examination;
(C) background
checks regarding senior management and/or key investors, as deemed necessary or
appropriate in the reasonable discretion of the Administrative
Agent;
(D) taxes,
fees and other charges for (1) lien and title searches and title
insurance, (2) recording the Mortgages, filing financing statements and
continuations, and (3) noting the Administrative Agent’s Liens on Trucks
and other actions to perfect, protect, and continue the Administrative Agent’s
Liens;
(E) sums
paid or incurred to take any action required of any Loan Party under the Loan
Documents that such Loan Party fails to pay or take; and
(F) forwarding
loan proceeds, collecting checks and other items of payment, and establishing
and maintaining the accounts and lock boxes, and costs and expenses of
preserving and protecting the Collateral.
All of
the foregoing costs and expenses may be charged to the Borrower as Revolving
Loans or to the Collection Account, all as described in
Section
2.18(c)
.
(b) The
Borrower shall indemnify the Administrative Agent, the Lead Arrangers, the
Issuing Bank and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an “
Indemnitee
”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, penalties, incremental taxes, liabilities and related reasonable
out-of-pocket expenses, including the reasonable documented fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of the Loan Documents or any agreement or instrument
contemplated thereby, the performance by the parties hereto of their respective
obligations thereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use
of the proceeds therefrom (including any refusal by the Issuing Bank to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such Letter
of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, (iv) the failure of the Borrower to deliver
to the Administrative Agent the required receipts or other required documentary
evidence with respect to a payment made by the Borrower for Taxes pursuant
to
Section 2.17
, or (v) any
actual or prospective claim, litigation, investigation or proceeding relating to
any of the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto;
provided
that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, penalties, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or such Indemnitee’s Related Parties or (y) arise from any
dispute solely among Indemnitees. WITHOUT LIMITATION OF THE FOREGOING BUT
SUBJECT TO ANY LIMITATION CONTAINED THEREIN, IT IS THE INTENTION OF THE BORROWER
AND THE BORROWER AGREES THAT THE FOREGOING INDEMNITIES SHALL APPLY TO EACH
INDEMNITEE WITH RESPECT TO LOSSES, CLAIMS, DAMAGES, PENALTIES, LIABILITIES AND
RELATED EXPENSES (INCLUDING, WITHOUT LIMITATION, ALL EXPENSES OF LITIGATION OR
PREPARATION THEREFOR), WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF
THE NEGLIGENCE OF SUCH (AND/OR ANY OTHER) INDEMNITEE.
(c) To
the extent that the Borrower fails to pay any amount required to be paid by it
to the Administrative Agent promptly following written demand, any Lead
Arranger, the Issuing Bank or the Swingline Lender under paragraph (a) or (b) of
this Section, each Lender severally agrees to pay to the Administrative Agent,
such Lead Arranger, the Issuing Bank or the Swingline Lender, as the case may
be, such Lender’s Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount;
provided
that the
unreimbursed expense or indemnified loss, claim, damage, penalty, liability or
related expense, as the case may be, was incurred by or asserted against the
Administrative Agent, such Lead Arranger, the Issuing Bank or the Swingline
Lender in its capacity as such.
(d) To
the extent permitted by applicable law, no Loan Party shall assert, and each
hereby waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Transactions,
any Loan or Letter of Credit or the use of the proceeds thereof.
(e) All
amounts due under this Section shall be payable promptly after written demand
therefor.
Section
9.04
Successors and
Assigns
. (a) The provisions of this Agreement and the
Intercreditor Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Bank that issues any Letter of Credit),
except that (i) the Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each Lender
(and any attempted assignment or transfer by the Borrower without such consent
shall be null and void) and (ii) no Lender may assign or otherwise transfer its
rights or obligations hereunder except in accordance with this
Section. Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), Participants (to the extent
provided in paragraph (c) of this Section) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent,
the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
(b) (i)
Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may
assign to one or more assignees all or a portion of its rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
at the time owing to it) with the prior written consent (such consent not to be
unreasonably withheld, conditioned or delayed) of:
(A) the
Borrower,
provided
that no
consent of the Borrower shall be required for an assignment to a Lender, an
Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred
and is continuing, any other assignee;
(B) the
Administrative Agent
,
and
(C) the
Issuing Bank
.
(ii) Assignments
shall be subject to the following additional conditions:
(A) except
in the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender’s Commitment
or Loans of any Class, the amount of the Commitment or Loans of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent,
provided
that no such
consent of the Borrower shall be required if an Event of Default has occurred
and is continuing;
(B) each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender’s rights and obligations under this Agreement;
(C) the
parties to each assignment shall execute and deliver to the Administrative Agent
an Assignment and Assumption, together with a processing and recordation fee of
$3,500;
(D) no
Loan Party or any Affiliate thereof shall become an assignee; and
(E) the
assignee, if it shall not be a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire in which the assignee designates one or more
Credit Contacts to whom all syndicate-level information (which may contain
material non-public information about the Borrower, the Loan Parties and their
Related Parties or their respective securities) will be made available and who
may receive such information in accordance with the assignee’s compliance
procedures and applicable laws, including Federal and state securities
laws.
For the
purposes of this
Section 9.04(b)
, the
term “
Approved
Fund
” has the following meaning:
“
Approved
Fund
” means any Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions of
credit in the ordinary course of its business and that is administered or
managed by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an
Affiliate of an entity that administers or manages a Lender.
(iii) Subject
to acceptance and recording thereof pursuant to paragraph (b)(iv) of this
Section, from and after the effective date specified in each Assignment and
Assumption the assignee thereunder shall be a party hereto and, to the extent of
the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of
Section 2.15
,
Section 2.16
,
Section 2.17
and
Section 9.03
to
the extent such benefits relate to the time period prior to the effective date
specified in such Assignment and Assumption). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this
Section 9.04
shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.
(iv) The
Administrative Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitment of, and principal amount of the Loans and LC
Disbursements owing to, each Lender pursuant to the terms hereof from time to
time (the “
Register
”). The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent, the Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the
Borrower, the Issuing Bank and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.
(v) Upon
its receipt of a duly completed Assignment and Assumption executed by an
assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption
and record the information contained therein in the Register;
provided
that if
either the assigning Lender or the assignee shall have failed to make any
payment required to be made by it pursuant to
Section 2.05
,
Section 2.06(d)
or
Section
2.06(e)
,
Section 2.07(b)
,
Section
2.18(d)
,
Section 2.18(e)
or
Section
9.03(c)
, the Administrative Agent shall have no obligation to accept such
Assignment and Assumption and record the information therein in the Register
unless and until such payment shall have been made in full, together with all
accrued interest thereon. No assignment shall be effective for
purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.
(c) (i)
Any Lender may, without the consent of the Borrower, the Administrative Agent,
the Issuing Bank or the Swingline Lender, sell participations to one or more
banks or other entities (a “
Participant
”)
in all or a portion of such Lender’s rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided
that (A)
such Lender’s obligations under this Agreement shall remain unchanged, (B) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (C) the Borrower, the Administrative Agent,
the Issuing Bank and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement;
provided
that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to
Section 9.02(b)
that
affects such Participant. Subject to paragraph (c)(ii) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of
Section
2.15
,
Section
2.16
and
Section 2.17
to the
same extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section. To the extent permitted by
law, each Participant also shall be entitled to the benefits of
Section 9.08
as
though it were a Lender, provided such Participant agrees to be subject to
Section 2.18(c)
as
though it were a Lender.
(ii) A
Participant shall not be entitled to receive any greater payment under
Section 2.15
or
Section 2.17
than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower’s prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of
Section 2.17
unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with
Section 2.17(f)
as
though it were a Lender and in all events shall not receive any amounts other
than the applicable Lender would have been entitled to receive.
(d) Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement to secure obligations of such Lender,
including without limitation any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest;
provided
that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.
Section
9.05
Survival
. All
covenants, agreements, representations and warranties made by the Loan Parties
in the Loan Documents and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of the Loan Documents and the making of any
Loans and issuance of any Letters of Credit, regardless of any investigation
made by any such other party or on its behalf and notwithstanding that the
Administrative Agent, the Issuing Bank or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated. The provisions of
Section 2.15
,
Section 2.16
,
Section 2.17
and
Section 9.03
and
Article
VIII
shall survive and remain in full force and effect regardless of the
repayment of the Loans, the expiration or termination of the Letters of Credit
and the Commitments or the termination of this Agreement or any provision
hereof.
Section
9.06
Counterparts; Integration;
Effectiveness
. This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Agreement, the other Loan Documents and any
separate letter agreements with respect to fees payable to the Administrative
Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof. Except as
provided in
Section
4.01
, this Agreement shall become effective when it shall have been
executed and delivered by the Administrative Agent and when the Administrative
Agent shall have received counterparts hereof which, when taken together, bear
the signatures of each of the other parties hereto, and thereafter shall be
binding upon and inure to the benefit of the parties hereto and their respective
permitted successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by facsimile or other electronic
communication (including via email or PDF) shall be effective as delivery of a
manually executed counterpart of this Agreement. THIS WRITTEN AGREEMENT
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
Section
9.07
Severability
. Any
provision of any Loan Document held to be invalid, illegal or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions thereof; and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.
Section
9.08
Right of
Setoff
. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) other than any escrow, employee benefit, tax, trust, payroll, petty
cash accounts or any Senior Notes Account, at any time held and other
obligations at any time owing by such Lender or Affiliate to or for the credit
or the account of the Borrower or such Loan Guarantor against any of and all the
Secured Obligations held by such Lender irrespective of whether or not such
Lender shall have made any demand under the Loan Documents and although such
obligations may be unmatured. The applicable Lender shall notify the
Borrower and the Administrative Agent of such set-off or application,
provided
that any
failure to give or any delay in giving such notice to the Borrower shall not
affect the validity of any such set-off or application under this
Section. The rights of each Lender under this Section are in addition
to other rights and remedies (including other rights of setoff) which such
Lender may have.
(a) NOTWITHSTANDING
THE FOREGOING, AT ANY TIME THAT ANY OF THE SECURED OBLIGATIONS SHALL BE SECURED
BY REAL PROPERTY LOCATED IN CALIFORNIA, NO LENDER SHALL EXERCISE A RIGHT OF
SETOFF, LENDER’S LIEN OR COUNTERCLAIM OR TAKE ANY COURT OR ADMINISTRATIVE ACTION
OR INSTITUTE ANY PROCEEDING TO ENFORCE ANY PROVISION OF THIS AGREEMENT OR ANY
LOAN DOCUMENT UNLESS IT IS TAKEN WITH THE CONSENT OF THE LENDERS REQUIRED BY
SECTION 9.02 OF THIS AGREEMENT, IF SUCH SETOFF OR ACTION OR PROCEEDING WOULD OR
MIGHT (PURSUANT TO SECTIONS 580a, 580b, 580d AND 726 OF THE CALIFORNIA CODE OF
CIVIL PROCEDURE OR SECTION 2924 OF THE CALIFORNIA CIVIL CODE, IF APPLICABLE, OR
OTHERWISE) AFFECT OR IMPAIR THE VALIDITY, PRIORITY, OR ENFORCEABILITY OF THE
LIENS GRANTED TO AGENT PURSUANT TO THE COLLATERAL DOCUMENTS OR THE
ENFORCEABILITY OF THE SECURED OBLIGATIONS HEREUNDER, AND ANY ATTEMPTED EXERCISE
BY ANY LENDER OR ANY SUCH RIGHT WITHOUT OBTAINING SUCH CONSENT OF THE PARTIES AS
REQUIRED ABOVE, SHALL BE NULL AND VOID. THIS PARAGRAPH SHALL BE
SOLELY FOR THE BENEFIT OF EACH OF THE LENDERS.
Section
9.09
Governing Law; Jurisdiction;
Consent to Service of Process
. (a) The Loan Documents (other
than those containing a contrary express choice of law provision) shall be
governed by and construed in accordance with the laws of the State of New York,
but giving effect to federal laws applicable to national banks.
(b) Each
Loan Party hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any U.S. Federal or New York State
court sitting in New York, New York in any action or proceeding arising out of
or relating to any Loan Documents, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, in
such Federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document
shall affect any right that the Administrative Agent, the Issuing Bank or any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement or any other Loan Document against any Loan Party or its properties in
the courts of any jurisdiction.
(c) Each
party hereto hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or any other Loan Document in any court
referred to in paragraph (b) of this Section. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(d) Each
party to this Agreement irrevocably consents to service of process in the manner
provided for notices in
Section
9.01
. Nothing in this Agreement or any other Loan Document
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.
Section
9.10
WAIVER OF JURY
TRIAL
. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
Section
9.11
Headings
. Article
and Section headings and the Table of Contents used herein are for convenience
of reference only, are not part of this Agreement and shall not affect the
construction of, or be taken into consideration in interpreting, this
Agreement.
Section
9.12
Confidentiality
. Each
of the Administrative Agent, the Issuing Bank and the Lenders individually
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates’
directors, officers, employees and agents, including accountants, auditors,
consultants, legal counsel and other advisors that are expected to be involved
in the evaluation of such information in connection with the transactions
contemplated by this Agreement (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
Requirement of Law or required by any subpoena or similar legal process, (d) to
any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or in connection with any pledge or assignment of a
security interest in all or any portion of its rights under this Agreement as
permitted under
Section
9.04(d)
or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Loan Parties and
their obligations, (g) with the consent of the Borrower
,
or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent, the Issuing
Bank or any Lender on a non-confidential basis from a source other than the
Borrower not in violation of confidentiality obligations owed to any Loan Party
hereunder. For the purposes of this Section, “
Information
”
means all material, non-public information received from the Borrower relating
to the Borrower or its business, other than any such information that is
available to the Administrative Agent, the Issuing Bank or any Lender on a
non-confidential basis prior to disclosure by the Borrower. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
EACH
LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN
SECTION
9.12
FURNISHED TO IT
PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION
CONCERNING THE BORROWER AND ITS AFFILIATES AND THEIR RELATED PARTIES
OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE
PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL
HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES
AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.
ALL
INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE
BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF
ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY
CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER, THE LOAN PARTIES AND
THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES. ACCORDINGLY,
EACH LENDER REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS
IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE
INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH
ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE
SECURITIES LAWS.
Section
9.13
Several Obligations;
Nonreliance; Violation of Law
. The respective obligations of
the Lenders hereunder are several and not joint and the failure of any Lender to
make any Loan or perform any of its obligations hereunder shall not relieve any
other Lender from any of its obligations hereunder. Each Lender hereby
represents that it is not relying on or looking to any margin stock for the
repayment of the Borrowings provided for herein. Anything contained
in this Agreement to the contrary notwithstanding, neither the Issuing Bank nor
any Lender shall be obligated to extend credit to the Borrower in violation of
any Requirement of Law.
Section
9.14
USA PATRIOT
Act
. Each Lender that is subject to the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “
Act
”)
hereby notifies the Borrower that pursuant to the requirements of the Act, it is
required to obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and other
information that will allow such Lender to identify the Borrower in accordance
with the Act.
Section
9.15
Disclosure
. Each
Loan Party and each Lender hereby acknowledges and agrees that the
Administrative Agent and/or its Affiliates from time to time may hold
investments in, make other loans to or have other relationships with any of the
Loan Parties and their respective Affiliates.
Section
9.16
Appointment for
Perfection
. Each Lender hereby appoints each other Lender as
its agent for the purpose of perfecting Liens, for the benefit of the
Administrative Agent and the Lenders, in assets which, in accordance with
Article 9 of the UCC or any other applicable law can be perfected only by
possession. Should any Lender (other than the Administrative Agent)
obtain possession of any such Collateral, such Lender shall notify the
Administrative Agent thereof, and, promptly upon the Administrative Agent’s
request therefor shall deliver such Collateral to the Administrative Agent or
otherwise deal with such Collateral in accordance with the Administrative
Agent’s instructions.
Section
9.17
Interest Rate
Limitation
. Notwithstanding anything herein to the contrary,
if at any time the interest rate applicable to any Loan, together with all fees,
charges and other amounts which are treated as interest on such Loan under
applicable law (collectively the “
Charges
”), shall
exceed the maximum lawful rate (the “
Maximum Rate
”) which
may be contracted for, charged, taken, received or reserved by the Lender
holding such Loan in accordance with applicable law, the rate of interest
payable in respect of such Loan hereunder, together with all Charges payable in
respect thereof, shall be limited to the Maximum Rate and, to the extent lawful,
the interest and Charges that would have been payable in respect of such Loan
but were not payable as a result of the operation of this Section shall be
cumulated and the interest and Charges payable to such Lender in respect of
other Loans or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received
by such Lender.
Section
9.18
Intercreditor
Agreement
. Notwithstanding anything herein to the contrary,
any Liens and security interests granted to the Administrative Agent pursuant to
any Loan Document and the exercise of any right or remedy by Administrative
Agent under any Loan Document are subject to the provisions of the Intercreditor
Agreement. If there is a conflict between the terms of the Intercreditor
Agreement and this Agreement, the terms of the Intercreditor Agreement will
control.
ARTICLE
X
Loan
Guaranty
Section
10.01
Guaranty
. Each
Loan Guarantor (other than those that have delivered a separate Guaranty) hereby
agrees that it is jointly and severally liable for, and absolutely and
unconditionally guarantees to the Lenders the prompt payment when due, whether
at stated maturity, upon acceleration or otherwise, and at all times thereafter,
of the Secured Obligations and to the extent the Borrower would be required to
do so pursuant to
Section 9.03(a)(iii)
,
all costs and expenses paid or incurred by the Administrative Agent, the Issuing
Bank and the Lenders in endeavoring to collect all or any part of the Secured
Obligations from, or in prosecuting any action against, the Borrower, any Loan
Guarantor or any other guarantor of all or any part of the Secured Obligations
(such costs and expenses, together with the Secured Obligations, collectively
the “
Guaranteed
Obligations
”). Each Loan Guarantor further agrees that the
Guaranteed Obligations may be extended or renewed in whole or in part without
notice to or further assent from it, and that it remains bound upon its
guarantee notwithstanding any such extension or renewal. All terms of this Loan
Guaranty apply to and may be enforced by or on behalf of any domestic or foreign
branch or Affiliate of any Lender that extended any portion of the Guaranteed
Obligations.
Section
10.02
Guaranty of
Payment
. This Loan Guaranty is a guaranty of payment and not
of collection. Each Loan Guarantor waives any right to require the
Administrative Agent, the Issuing Bank or any Lender to sue the Borrower, any
Loan Guarantor, any other guarantor, or any other person obligated for all or
any part of the Guaranteed Obligations (each, an “
Obligated
Party
”), or otherwise to enforce its payment against any collateral
securing all or any part of the Guaranteed Obligations.
Section
10.03
No Discharge or Diminishment
of Loan Guaranty
. (a) Except as otherwise provided for herein,
the obligations of each Loan Guarantor hereunder are unconditional and absolute
and not subject to any reduction, limitation, impairment or termination for any
reason (other than the indefeasible payment in full in cash of the Guaranteed
Obligations), including: (i) any claim of waiver, release, extension,
renewal, settlement, surrender, alteration, or compromise of any of the
Guaranteed Obligations, by operation of law or otherwise; (ii) any change in the
corporate existence, structure or ownership of the Borrower or any other
guarantor of or other person liable for any of the Guaranteed Obligations; (iii)
any insolvency, bankruptcy, reorganization or other similar proceeding affecting
any Obligated Party, or their assets or any resulting release or discharge of
any obligation of any Obligated Party; or (iv) the existence of any claim,
setoff or other rights which any Loan Guarantor may have at any time against any
Obligated Party, the Administrative Agent, the Issuing Bank, any Lender, or any
other person, whether in connection herewith or in any unrelated
transactions.
(b) The
obligations of each Loan Guarantor hereunder are not subject to any defense or
setoff, counterclaim, recoupment, or termination whatsoever by reason of the
invalidity, illegality, or unenforceability of any of the Guaranteed Obligations
or otherwise, or any provision of applicable law or regulation purporting to
prohibit payment by any Obligated Party, of the Guaranteed Obligations or any
part thereof.
(c) Further,
the obligations of any Loan Guarantor hereunder are not discharged or impaired
or otherwise affected by: (i) the failure of the Administrative
Agent, the Issuing Bank or any Lender to assert any claim or demand or to
enforce any remedy with respect to all or any part of the Guaranteed
Obligations; (ii) any waiver or modification of or supplement to any provision
of any agreement relating to the Guaranteed Obligations; (iii) any release,
non-perfection, or invalidity of any indirect or direct security for the
obligations of the Borrower for all or any part of the Guaranteed Obligations or
any obligations of any other guarantor of or other person liable for any of the
Guaranteed Obligations; (iv) any action or failure to act by the Administrative
Agent, the Issuing Bank or any Lender with respect to any collateral securing
any part of the Guaranteed Obligations; or (v) any default, failure or delay,
willful or otherwise, in the payment or performance of any of the Guaranteed
Obligations, or any other circumstance, act, omission or delay that might in any
manner or to any extent vary the risk of such Loan Guarantor or that would
otherwise operate as a discharge of any Loan Guarantor as a matter of law or
equity (other than the indefeasible payment in full in cash of the Guaranteed
Obligations).
Section
10.04
Defenses
Waived
. To the fullest extent permitted by applicable law,
each Loan Guarantor hereby waives any defense based on or arising out of any
defense of the Borrower or any Loan Guarantor or the unenforceability of all or
any part of the Guaranteed Obligations from any cause, or the cessation from any
cause of the liability of the Borrower or any Loan Guarantor, other than the
indefeasible payment in full in cash of the Guaranteed Obligations. Without
limiting the generality of the foregoing, each Loan Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and, to the fullest extent
permitted by law, any notice not provided for herein, as well as any requirement
that at any time any action be taken by any person against any Obligated Party,
or any other person. Each Loan Guarantor confirms that it is not a
surety under any state law and shall not raise any such law as a defense to its
obligations hereunder. The Administrative Agent may, at its election,
foreclose on any Collateral held by it by one or more judicial or nonjudicial
sales, accept an assignment of any such Collateral in lieu of foreclosure or
otherwise act or fail to act with respect to any collateral securing all or a
part of the Guaranteed Obligations, compromise or adjust any part of the
Guaranteed Obligations, make any other accommodation with any Obligated Party or
exercise any other right or remedy available to it against any Obligated Party,
without affecting or impairing in any way the liability of such Loan Guarantor
under this Loan Guaranty except to the extent the Guaranteed Obligations have
been fully and indefeasibly paid in cash. To the fullest extent
permitted by applicable law, each Loan Guarantor waives any defense arising out
of any such election even though that election may operate, pursuant to
applicable law, to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of any Loan Guarantor against any Obligated
Party or any security.
Section
10.05
Rights of
Subrogation
. No Loan Guarantor will assert any right, claim or
cause of action, including, without limitation, a claim of subrogation,
contribution or indemnification that it has against any Obligated Party, or any
collateral, until the Loan Parties and the Loan Guarantors have fully performed
all their obligations to the Administrative Agent, the Issuing Bank and the
Lenders.
Section
10.06
Reinstatement; Stay of
Acceleration
. If at any time any payment of any portion of the
Guaranteed Obligations is rescinded or must otherwise be restored or returned
upon the insolvency, bankruptcy, or reorganization of the Borrower or otherwise,
each Loan Guarantor’s obligations under this Loan Guaranty with respect to that
payment shall be reinstated at such time as though the payment had not been made
and whether or not the Administrative Agent, the Issuing Bank and the Lenders
are in possession of this Loan Guaranty. If acceleration of the time for payment
of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy
or reorganization of the Borrower, all such amounts otherwise subject to
acceleration under the terms of any agreement relating to the Guaranteed
Obligations shall nonetheless be payable by the Loan Guarantors forthwith on
demand by the Lender.
Section
10.07
Information
. Each
Loan Guarantor assumes all responsibility for being and keeping itself informed
of the Borrower’s financial condition and assets, and of all other circumstances
bearing upon the risk of nonpayment of the Guaranteed Obligations and the
nature, scope and extent of the risks that each Loan Guarantor assumes and
incurs under this Loan Guaranty, and agrees that neither the Administrative
Agent, the Issuing Bank nor any Lender shall have any duty to advise any Loan
Guarantor of information known to it regarding those circumstances or
risks.
Section
10.08
Termination
. The
Lenders may continue to make loans or extend credit to the Borrower based on
this Loan Guaranty until five days after it receives written notice of
termination from any Loan Guarantor. Notwithstanding receipt of any
such notice, each Loan Guarantor will continue to be liable to the Lenders for
any Guaranteed Obligations created, assumed or committed to prior to the fifth
day after receipt of the notice, and all subsequent renewals, extensions,
modifications and amendments with respect to, or substitutions for, all or any
part of that Guaranteed Obligations.
Section
10.09
Taxes
. All
payments of the Guaranteed Obligations will be made by each Loan Guarantor free
and clear of and without deduction for any Indemnified Taxes or Other Taxes;
provided
that
if any Loan Guarantor shall be required to deduct any Indemnified Taxes or Other
Taxes from such payments, then (a) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (b) such Loan
Guarantor shall make such deductions and (c) such Loan Guarantor shall pay the
full amount deducted to the relevant Governmental Authority in accordance with
applicable law.
Section
10.10
Maximum
Liability
. The provisions of this Loan Guaranty are severable,
and in any action or proceeding involving any state corporate law, or any state,
federal or foreign bankruptcy, insolvency, reorganization or other law affecting
the rights of creditors generally, if the obligations of any Loan Guarantor
under this Loan Guaranty would otherwise be held or determined to be avoidable,
invalid or unenforceable on account of the amount of such Loan Guarantor’s
liability under this Loan Guaranty, then, notwithstanding any other provision of
this Loan Guaranty to the contrary, the amount of such liability shall, without
any further action by the Loan Guarantors or the Lenders, be automatically
limited and reduced to the highest amount that is valid and enforceable as
determined in such action or proceeding (such highest amount determined
hereunder being the relevant Loan Guarantor’s “
Maximum
Liability
”). This Section with respect to the Maximum
Liability of each Loan Guarantor is intended solely to preserve the rights of
the Lenders to the maximum extent not subject to avoidance under applicable law,
and no Loan Guarantor nor any other person or entity shall have any right or
claim under this Section with respect to such Maximum Liability, except to the
extent necessary so that the obligations of any Loan Guarantor hereunder shall
not be rendered voidable under applicable law. Each Loan Guarantor agrees that
the Guaranteed Obligations may at any time and from time to time exceed the
Maximum Liability of each Loan Guarantor without impairing this Loan Guaranty or
affecting the rights and remedies of the Lenders hereunder,
provided
that,
nothing in this sentence shall be construed to increase any Loan Guarantor’s
obligations hereunder beyond its Maximum Liability.
Section
10.11
Contribution
. In
the event any Loan Guarantor (a “
Paying
Guarantor
”) shall make any payment or payments under this Loan Guaranty
or shall suffer any loss as a result of any realization upon any collateral
granted by it to secure its obligations under this Loan Guaranty, each other
Loan Guarantor (each a “
Non-Paying
Guarantor
”) shall contribute to such Paying Guarantor an amount equal to
such Non-Paying Guarantor’s “Applicable Percentage” of such payment or payments
made, or losses suffered, by such Paying Guarantor. For purposes of
this
Article X
,
each Non-Paying Guarantor’s “
Applicable
Percentage
” with respect to any such payment or loss by a Paying
Guarantor shall be determined as of the date on which such payment or loss was
made by reference to the ratio of (a) such Non-Paying Guarantor’s Maximum
Liability as of such date (without giving effect to any right to receive, or
obligation to make, any contribution hereunder) or, if such Non-Paying
Guarantor’s Maximum Liability has not been determined, the aggregate amount of
all monies received by such Non-Paying Guarantor from the Borrower after the
date hereof (whether by loan, capital infusion or by other means) to (b) the
aggregate Maximum Liability of all Loan Guarantors hereunder (including such
Paying Guarantor) as of such date (without giving effect to any right to
receive, or obligation to make, any contribution hereunder), or to the extent
that a Maximum Liability has not been determined for any Loan Guarantor, the
aggregate amount of all monies received by such Loan Guarantors from the
Borrower after the date hereof (whether by loan, capital infusion or by other
means). Nothing in this provision shall affect any Loan Guarantor’s
several liability for the entire amount of the Guaranteed Obligations (up to
such Loan Guarantor’s Maximum Liability). Each of the Loan Guarantors
covenants and agrees that its right to receive any contribution under this Loan
Guaranty from a Non-Paying Guarantor shall be subordinate and junior in right of
payment to the payment in full in cash of the Guaranteed
Obligations. This provision is for the benefit of both the
Administrative Agent, the Issuing Bank, the Lenders and the Loan Guarantors and
may be enforced by any one, or more, or all of them in accordance with the terms
hereof.
Section
10.12
Liability
Cumulative
. The liability of each Loan Party as a Loan
Guarantor under this
Article X
is in
addition to and shall be cumulative with all liabilities of each Loan Party to
the Administrative Agent, the Issuing Bank and the Lenders under this Agreement
and the other Loan Documents to which such Loan Party is a party or in respect
of any obligations or liabilities of the other Loan Parties, without any
limitation as to amount, unless the instrument or agreement evidencing or
creating such other liability specifically provides to the
contrary.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
U.S. CONCRETE, INC.,
as
Borrower
|
|
|
By:
|
/s/ Michael W. Harlan
|
Name:
|
Michael
W. Harlan
|
Title:
|
Chief
Executive Officer and President
|
|
|
OTHER
LOAN PARTIES:
|
|
ALBERTA
INVESTMENTS, INC.
|
|
|
By:
|
/s/ Michael W. Harlan
|
Name:
|
Michael
W. Harlan
|
Title:
|
President
|
|
|
ALLIANCE
HAULERS, INC.
|
|
|
By:
|
/s/ Michael W. Harlan
|
Name:
|
Michael
W. Harlan
|
Title:
|
President
|
|
|
AMERICAN
CONCRETE PRODUCTS, INC.
|
|
|
By:
|
/s/ Curt M. Lindeman
|
Name:
|
Curt
M. Lindeman
|
Title:
|
Vice
President and Secretary
|
|
|
ATLAS
REDI-MIX, LLC
|
|
|
By:
|
/s/ Michael W. Harlan
|
Name:
|
Michael
W. Harlan
|
Title:
|
President
|
[Signature
Page to Credit Agreement]
ATLAS-TUCK
CONCRETE, INC.
|
|
|
By:
|
/s/ Michael W. Harlan
|
Name:
|
Michael
W. Harlan
|
Title:
|
President
|
|
|
BWB,
INC. OF MICHIGAN
|
|
|
By:
|
/s/ Curt M. Lindeman
|
Name:
|
Curt
M. Lindeman
|
Title:
|
Vice
President and Secretary
|
|
|
BEALL
CONCRETE ENTERPRISES, LLC
|
|
|
By:
|
/s/ Michael W. Harlan
|
Name:
|
Michael
W. Harlan
|
Title:
|
President
|
|
|
BEALL
INDUSTRIES, INC.
|
|
|
By:
|
/s/ Michael W. Harlan
|
Name:
|
Michael
W. Harlan
|
Title:
|
President
|
|
|
BEALL
INVESTMENT CORPORATION, INC.
|
|
|
By:
|
/s/ Michael W. Harlan
|
Name:
|
Michael
W. Harlan
|
Title:
|
President
|
[Signature
Page to Credit Agreement]
BEALL
MANAGEMENT, INC.
|
|
By:
|
/s/ Michael W. Harlan
|
Name: Michael
W. Harlan
|
Title: President
|
|
BRECKENRIDGE
READY MIX, INC.
|
|
By:
|
/s/ Curt M. Lindeman
|
Name: Curt
M. Lindeman
|
Title: Vice
President and Secretary
|
|
BUILDERS’
REDI-MIX LLC
|
|
By:
|
/s/ Curt M. Lindeman
|
Name: Curt
M. Lindeman
|
Title: Vice
President and Secretary
|
|
CENTRAL
CONCRETE SUPPLY CO., INC.
|
|
By:
|
/s/ Curt M. Lindeman
|
Name: Curt
M. Lindeman
|
Title: Vice
President and Secretary
|
|
CENTRAL
PRECAST CONCRETE, INC.
|
|
By:
|
/s/ Curt M. Lindeman
|
Name: Curt
M. Lindeman
|
Title: Vice
President and Secretary
|
[Signature
Page to Credit Agreement]
CONCRETE
ACQUISITION III, LLC
|
|
By:
|
/s/ Curt M. Lindeman
|
Name: Curt
M. Lindeman
|
Title: President
|
|
CONCRETE
ACQUISITION IV, LLC
|
|
By:
|
/s/ Curt M. Lindeman
|
Name: Curt
M. Lindeman
|
Title: President
|
|
CONCRETE
ACQUISITION V, LLC
|
|
By:
|
/s/ Curt M. Lindeman
|
Name: Curt
M. Lindeman
|
Title: President
|
|
CONCRETE
ACQUISITION VI, LLC
|
|
By:
|
/s/ Curt M. Lindeman
|
Name: Curt
M. Lindeman
|
Title: President
|
|
CONCRETE
XXXIII ACQUISITION, INC.
|
|
By:
|
/s/ Curt M. Lindeman
|
Name: Curt
M. Lindeman
|
Title: President
|
[Signature
Page to Credit Agreement]
CONCRETE
XXXIV ACQUISITION, INC.
|
|
By:
|
/s/ Curt M. Lindeman
|
Name: Curt
M. Lindeman
|
Title: President
|
|
CONCRETE
XXXV ACQUISITION, INC.
|
|
By:
|
/s/ Curt M. Lindeman
|
Name: Curt
M. Lindeman
|
Title: President
|
|
CONCRETE
XXXVI ACQUISITION, INC.
|
|
By:
|
/s/ Curt M. Lindeman
|
Name:
Curt M. Lindeman
|
Title:
President
|
|
EASTERN
CONCRETE MATERIALS, INC.
|
|
By:
|
/s/ Michael W. Harlan
|
Name:
Michael W. Harlan
|
Title:
President and Secretary
|
|
HAMBURG
QUARRY LIMITED LIABILITY COMPANY
|
|
By:
|
/s/ Michael W. Harlan
|
Name: Michael
W. Harlan
|
Title: President
|
[Signature
Page to Credit Agreement]
INGRAM
CONCRETE, LLC
|
|
By:
|
/s/ Curt M. Lindeman
|
Name:
Curt M. Lindeman
|
Title:
Vice President and Secretary
|
|
KURTZ
GRAVEL COMPANY
|
|
By:
|
/s/ Michael W. Harlan
|
Name:
Michael W. Harlan
|
Title:
Vice President and Secretary
|
|
LOCAL
CONCRETE SUPPLY & EQUIPMENT, LLC
|
|
By:
|
/s/ Curt M. Lindeman
|
Name: Curt
M. Lindeman
|
Title: President
and Secretary
|
|
MASTER
MIX, LLC
|
|
By:
|
/s/ Curt M. Lindeman
|
Name:
Curt M. Lindeman
|
Title:
President and Secretary
|
|
MASTER
MIX CONCRETE, LLC
|
|
By:
|
/s/ Curt M. Lindeman
|
Name: Curt
M. Lindeman
|
Title: President
and Secretary
|
[Signature
Page to Credit Agreement]
MG,
LLC
|
|
By:
|
/s/ Curt M. Lindeman
|
Name: Curt
M. Lindeman
|
Title: Vice
President and Secretary
|
|
NYC
CONCRETE MATERIALS, LLC
|
|
By:
|
/s/ Curt M. Lindeman
|
Name:
Curt M. Lindeman
|
Title:
President and Secretary
|
|
PEBBLE
LANE ASSOCIATES, LLC
|
|
By:
|
/s/ Curt M. Lindeman
|
Name:
Curt M. Lindeman
|
Title: President
and Secretary
|
|
REDI-MIX
CONCRETE, L.P.
|
|
By:
|
/s/ Michael W. Harlan
|
Name: Michael
W. Harlan
|
Title: President
|
|
REDI-MIX
GP, LLC
|
|
By:
|
/s/ Michael W. Harlan
|
Name:
Michael W. Harlan
|
Title:
President
|
[Signature
Page to Credit Agreement]
REDI-MIX,
LLC
|
|
By:
|
/s/ Michael W. Harlan
|
Name: Michael
W. Harlan
|
Title: President
|
|
RIVERSIDE
MATERIALS, LLC
|
|
By:
|
/s/ Wallace H. Johnson
|
Name: Wallace
H. Johnson
|
Title: President
and Secretary
|
|
SAN
DIEGO PRECAST CONCRETE, INC.
|
|
By:
|
/s/ Curt M. Lindeman
|
Name: Curt
M. Lindeman
|
Title:
Vice President and Secretary
|
|
SIERRA
PRECAST, INC.
|
|
By:
|
/s/ Curt M. Lindeman
|
Name: Curt
M. Lindeman
|
Title: Vice
President and Secretary
|
|
SMITH
PRE-CAST, INC.
|
|
By:
|
/s/ Curt M. Lindeman
|
Name:
Curt M. Lindeman
|
Title:
Vice President and Secretary
|
[Signature
Page to Credit Agreement]
SUPERIOR
CONCRETE MATERIALS, INC.
|
|
By:
|
/s/ Curt M. Lindeman
|
Name: Curt
M. Lindeman
|
Title: Vice
President and Secretary
|
|
SUPERIOR
HOLDINGS, INC.
|
|
By:
|
/s/ Michael W. Harlan
|
Name: Michael
W. Harlan
|
Title: Vice
President and Secretary
|
|
TITAN
CONCRETE INDUSTRIES, INC.
|
|
By:
|
/s/ Michael W. Harlan
|
Name:
Michael W. Harlan
|
Title:
Vice President and Secretary
|
|
USC
ATLANTIC, INC.
|
|
By:
|
/s/ Michael W. Harlan
|
Name:
Michael W. Harlan
|
Title:
Vice President and Secretary
|
|
USC
MANAGEMENT CO., LLC
|
|
By:
|
/s/ Curt M. Lindeman
|
Name: Curt
M. Lindeman
|
Title: Vice
President and Secretary
|
|
USC
MICHIGAN, INC.
|
|
By:
|
/s/ Michael W. Harlan
|
Name:
Michael W. Harlan
|
Title:
Vice President and Secretary
|
[Signature
Page to Credit Agreement]
USC
PAYROLL, INC.
|
|
By:
|
/s/ Curt M. Lindeman
|
Name: Curt
M. Lindeman
|
Title: Vice
President and Secretary
|
|
USC
TECHNOLOGIES, INC.
|
|
By:
|
/s/ Curt M. Lindeman
|
Name:
Curt M. Lindeman
|
Title:
Vice President and Secretary
|
|
U.S.
CONCRETE ON-SITE, INC.
|
|
By:
|
/s/ Curt M. Lindeman
|
Name:
Curt M. Lindeman
|
Title:
Vice President and Secretary
|
[Signature
Page to Credit Agreement]
AGENTS
AND LENDERS:
|
|
JPMORGAN CHASE BANK,
N.A.
, as Administrative Agent, Issuing Bank, Swingline Lender and a
Lender
|
|
|
By:
|
/s/
Mario Quintanilla
|
Name:
|
Mario
Quintanilla
|
Title:
|
Vice
President
|
[Signature
Page to Credit Agreement]
WELLS FARGO CAPITAL FINANCE,
LLC
, as Documentation Agent, Lead Arranger and a
Lender
|
|
|
By:
|
/s/
Kathy Plisko
|
Name:
|
Kathy
Plisko
|
Title:
|
Managing
Director
|
[Signature
Page to Credit Agreement]
Exhibit
10.2
PLEDGE
AND SECURITY AGREEMENT
THIS
PLEDGE AND SECURITY AGREEMENT (as it may be amended, restated, supplemented or
modified from time to time, the “
Security
Agreement
”) is entered into as of August 31, 2010 by and among U.S.
CONCRETE, INC., a Delaware corporation (the “
Company
”
and a “
Grantor
”),
the domestic Subsidiaries of the Company identified on the signature pages
hereto as Grantors (each a “
Grantor
”,
and collectively with the Company, the “
Grantors
”),
and JPMORGAN CHASE BANK, N.A., in its capacity as administrative agent (the
“
Administrative
Agent
”)
for the lenders party to the Credit Agreement referred to below.
PRELIMINARY
STATEMENT
The
Grantors, the Administrative Agent and the Lenders are entering into a Credit
Agreement dated as of August 31, 2010 (as it may be amended, restated,
supplemented or modified from time to time, the “
Credit
Agreement
”). Each Grantor is entering into this Security
Agreement in order to induce the Lenders to enter into and extend credit to the
Company under the Credit Agreement and to secure the Secured Obligations that
the Grantors have agreed to guarantee pursuant to Article X of the Credit
Agreement.
ACCORDINGLY,
the Grantors and the Administrative Agent, on behalf of the Secured Parties,
hereby agree as follows:
ARTICLE
I
DEFINITIONS
1.1
Terms Defined in Credit
Agreement
. All capitalized terms used herein and not otherwise
defined shall have the meanings assigned to such terms in the Credit
Agreement.
1.2
Terms Defined in
UCC
. Terms defined in the UCC which are not otherwise defined
in this Security Agreement are used herein as defined in the UCC.
1.3
Definitions of Certain Terms
Used Herein
. As used in this Security Agreement, in addition
to the terms defined in the Preliminary Statement, the following terms shall
have the following meanings:
“
Accounts
”
shall have the meaning set forth in Article 9 of the UCC.
“
Article
”
means a numbered article of this Security Agreement, unless another document is
specifically referenced.
“
As-Extracted
Collateral
” shall have the meaning set forth in Article 9 of the
UCC.
“
Chattel
Paper
” shall have the meaning set forth in Article 9 of the
UCC.
“
Closing
Date
” means the date of the Credit Agreement.
“
Collateral
”
shall have the meaning set forth in
Article
II
.
“
Collateral
Access Agreement
” means any landlord waiver or other agreement, in form
and substance reasonably satisfactory to the Administrative Agent, between the
Administrative Agent and any third party (including any bailee, consignee,
customs broker, or other similar Person) in possession of any Collateral or any
landlord of any Loan Party for any real property where any Collateral is
located, as such landlord waiver or other agreement may be amended, restated,
supplemented or otherwise modified from time to time.
“
Collateral
Deposit Account
” shall have the meaning set forth in
Section
7.1(a)
.
“
Collateral
Report
” means any certificate (including any Borrowing Base Certificate),
report or other document delivered by any Grantor to the Administrative Agent or
any Lender with respect to the Collateral pursuant to any Loan
Document.
“
Collection
Account
” shall have the meaning set forth in
Section
7.1(b)
.
“
Commercial
Tort Claims
” means the commercial tort claims (as that term is defined in
Article 9 of the UCC), including, without limitation, those commercial tort
claims set forth on
Exhibit
J
.
“
Commodity
Account Control Agreement
” means an agreement, in form and substance
reasonably satisfactory to the Administrative Agent, among any Loan Party, a
commodity intermediary holding such Loan Party's assets, including funds and
commodity contracts, and the Administrative Agent with respect to collection and
control of all deposits, commodity contracts and other balances held in a
commodity account maintained by any Loan Party with such commodity
intermediary.
“
Commodity
Accounts
” shall have the meaning set forth in Article 9 of the
UCC.
“
Control
”
shall have the meaning set forth in Article 8 or, if applicable, in Section
9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.
“
Control
Account
” means a Securities Account or Commodity Account that is the
subject of an effective Securities Account Control Agreement or Commodity
Account Control Agreement and that is maintained by any Loan Party with a
securities or commodity intermediary. “Control Account” includes all
Financial Assets held in a Securities Account or a Commodity Account and all
certificates and instruments, if any, representing or evidencing the Financial
Assets contained therein.
“
Copyrights
”
means, with respect to any Person, all of such Person’s right, title, and
interest in and to the following: (a) all copyrights, rights and
interests in copyrights, works protectable by copyright, copyright
registrations, and copyright applications; (b) all renewals of any of the
foregoing; (c) the right to sue for past, present, and future infringements of
any of the foregoing; and (d) all rights corresponding to any of the foregoing
throughout the world.
“
Default
”
means any event or condition which constitutes an Event of Default or which upon
notice, lapse of grace period or both would, unless cured or waived, become an
Event of Default.
“
Deposit
Account Control Agreement
” means an agreement, in form and substance
reasonably satisfactory to the Administrative Agent, among any Loan Party, a
banking institution holding such Loan Party’s funds, and the Administrative
Agent with respect to collection and control of all deposits and balances held
in a deposit account maintained by any Loan Party with such banking
institution.
“
Deposit
Accounts
” shall have the meaning set forth in Article 9 of the
UCC.
“
Documents
”
shall have the meaning set forth in Article 9 of the UCC.
“
Equipment
”
shall have the meaning set forth in Article 9 of the UCC.
“
Event of
Default
” has the meaning assigned to such term in the Credit
Agreement.
“
Excluded
Deposit Accounts
” means (i) the Permitted Utility Deposit Account, (ii)
payroll, withholding tax and other accounts for which the funds on deposit
therein pertain to Liens permitted under clause (c) of the definition of
“Customary Permitted Liens” in the Credit Agreement (provided that neither the
Company nor any such Subsidiary may maintain funds in any such account in excess
of amounts which are actually accrued (or in the case of fiduciary accounts,
otherwise required to be maintained therein) to its employees or the relevant
Governmental Authority or other beneficiary of such account) and (iii) other
deposit accounts (the “
Other Excluded Deposit
Accounts
”) so long as the following conditions are satisfied: (1) all
deposits into and balances maintained in the Other Excluded Deposit Accounts
shall be in the ordinary course of business and (2) to the extent the aggregate
balances in all Other Excluded Deposit Accounts at any time exceed $300,000 for
a period of longer than 3 Business Days the Company shall, or shall cause the
relevant Subsidiary to, either (A) cause such amounts in excess of $300,000 to,
within 3 Business Days, be transferred to a Deposit Account subject to a Deposit
Account Control Agreement or (B) cause one or more Other Excluded Deposit
Accounts to become subject to a Deposit Account Control Agreement so that, after
giving effect to the actions in clauses (A) and/or (B) the aggregate balance on
deposit in all Other Excluded Deposit Accounts shall not at any time exceed
$300,000 for a period longer than 3 Business Days.
“
Excluded
Property
” means, collectively, (i) Stock of the Excluded Joint Venture,
(ii) any property to the extent that such grant of a security interest is
prohibited by any Requirement of Law of a Governmental Authority, requires a
consent not obtained of any Governmental Authority pursuant to such Requirement
of Law or is prohibited by, or constitutes a breach or default under or results
in the termination of or gives rise to a right on the part of the parties
thereto other than the Company and its Subsidiaries to terminate (or materially
modify) or requires any consent not obtained under, any contract, license,
agreement, instrument or other document evidencing or giving rise to such
property or, in the case of any Investment Property, pledged stock or pledged
note or any applicable shareholder or similar agreement, except to the extent
that such Requirement of Law or the term in such contract, license, agreement,
instrument or other document or shareholder or similar agreement providing for
such prohibition, breach, default or right of termination or modification or
requiring such consent is ineffective under the UCC or other applicable law;
(iii) Equipment owned by any Grantor that is subject to a purchase money Lien or
a Capital Lease permitted pursuant to the terms of the Credit Agreement, but
only for so long as the contract or other agreement in which such Lien is
granted (or in the documentation providing for such Capital Lease) prohibits or
requires the consent of any Person other than the Borrower and its Affiliates as
a condition to the creation of any other Lien on such Equipment and only to the
extent such prohibition or requirement is not rendered unenforceable or
otherwise deemed ineffective by the UCC or any other Requirement of Law, (iv)
any Trademark application filed on an "intent-to-use" basis, prior to the filing
and acceptance of a “Statement of Use” pursuant to Section 1(d) of the Lanham
Act or an “Amendment to Allege Use” pursuant to Section 1(c) of the Lanham Act
with respect thereto,
provided
that any such
Trademark application shall automatically be included in the Collateral upon the
filing of acceptable evidence of use of such Trademark, (v) any Equity
Interests of any Foreign Subsidiary in excess of 66% of the outstanding voting
Equity Interests of such Foreign Subsidiary, (vi) any assets other than Rolling
Stock Collateral the perfection of which would require notion of a lien on a
certificate of title, (vii) any Real Property owned or leased by a Grantor
(other than that constituting As-Extracted Collateral) and (viii) any Equity
Interests which would require separate financial statements for a Subsidiary of
the Company to be filed with the United States Securities and Exchange
Commission (or any successor federal agency) pursuant to Rule 3-16 of
Regulation S-X (or any successor law or regulation), as in effect from time
to time;
provided
,
however
, “Excluded
Property” shall (a) not include any proceeds, substitutions or replacements of
Excluded Property (unless such proceeds, substitutions or replacements would
constitute Excluded Property) and (b) with respect to the exclusions set forth
in clause (ii) above, not be construed to limit, impair or otherwise affect the
Administrative Agent’s continuing security interests in any Grantor’s rights to
or interests of any Grantor in (x) monies due or to become due under any such
contract, license, agreement, instrument or other document (to the extent not
prohibited by such contract, license, agreement, instrument or other document
and applicable law), or (y) any proceeds from the sale, license, lease or other
disposition of any such contract, license, agreement, instrument or other
document.
“
Exhibit
”
refers to a specific exhibit to this Security Agreement, unless another document
is specifically referenced.
“
Financial
Asset
” has the meaning given to such term in the UCC.
“
Fixtures
”
shall have the meaning set forth in Article 9 of the UCC.
“
General
Intangibles
” shall have the meaning set forth in Article 9 of the
UCC.
“
Goods
”
shall have the meaning set forth in Article 9 of the UCC.
“
Instruments
”
shall have the meaning set forth in Article 9 of the UCC.
“
Intellectual
Property
” means, collectively, all rights, priorities and privileges of
any Grantor relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including Copyrights,
Licenses, Patents, Trademarks, trade secrets and Internet domain names, and all
rights to sue at law or in equity for any infringement or other impairment
thereof, including the right to receive all proceeds and damages
therefrom.
“
Intercompany
Note
” means any promissory note evidencing loans made by any Grantor to
any of its Subsidiaries or another Grantor.
“
Intercreditor
Agreement
” means that certain Intercreditor Agreement by and among the
Administrative Agent, the Notes Agent and the Grantors dated as of August 31,
2010 (as amended, restated, supplemented or modified from time to
time).
“
Inventory
”
shall have the meaning set forth in Article 9 of the UCC.
“
Investment
Property
” shall have the meaning set forth in Article 9 of the UCC and
shall include all Equity Interests in Subsidiaries regardless of whether such
Equity Interests are classified as “Investment Property” in Article 9 of the
UCC.
“
Lenders
”
means the lenders party to the Credit Agreement and their successors and
permitted assigns.
“
Letter-of-Credit
Rights
” shall have the meaning set forth in Article 9 of the
UCC.
“
Licenses
”
means, with respect to any Person, all of such Person’s right, title, and
interest in and to (a) any and all licensing agreements or similar arrangements
in and to its Patents, Copyrights, or Trademarks, and (b) all rights to sue for
past, present, and future breaches thereof.
“
Lock
Boxes
” shall have the meaning set forth in
Section
7.1(a)
.
“
Lock Box
Agreements
” shall have the meaning set forth in
Section
7.1(a)
.
“
Patents
”
means, with respect to any Person, all of such Person’s right, title, and
interest in and to: (a) any and all patents and patent applications;
(b) all inventions and improvements described and claimed therein; (c) all
reissues, divisions, continuations, extensions, and continuations-in-part
thereof; (d) all rights to sue for past, present, and future infringements
thereof; and (e) all rights corresponding to any of the foregoing throughout the
world.
“
Permitted
Utility Deposit Account
” means any Deposit Accounts held by the Company
or any of its Subsidiaries that is funded in connection with a deposit provided
to any utility company as a result of the bankruptcy proceedings, provided that
the aggregate balance on deposit in all Permitted Utility Deposit Accounts shall
not at any time exceed $500,000.
“
Pledged
Collateral
” means all Instruments, Securities and other Investment
Property of the Grantors, whether or not physically delivered to the
Administrative Agent pursuant to this Security Agreement.
“
Receivables
”
means the Accounts, Chattel Paper, Documents, Instruments and any other rights
or claims to receive money which are General Intangibles or which are otherwise
included as Collateral.
“
Required
Secured Parties
” means (a) prior to an acceleration of the Obligations
under the Credit Agreement, the Required Lenders, (b) after an acceleration of
the Obligations under the Credit Agreement but prior to the date upon which the
Credit Agreement has terminated by its terms and all of the obligations
thereunder have been paid in full, Lenders holding in the aggregate at least a
majority of the total of the Aggregate Credit Exposure, and (c) after the Credit
Agreement has terminated by its terms and all of the Obligations thereunder have
been paid in full (whether or not the Obligations under the Credit Agreement
were ever accelerated), Lenders holding in the aggregate at least a majority of
the aggregate net early termination payments and all other amounts then due and
unpaid from any Grantor to the Lenders or their Affiliates under Swap
Agreements, as determined by the Administrative Agent in its reasonable
discretion.
“
Rolling
Stock Collateral
” means all Trucks owned by the Grantors other than any
Trucks subject to a Lien permitted by Section 6.02(d) of the Credit
Agreement.
“
Section
”
means a numbered section of this Security Agreement, unless another document is
specifically referenced.
“
Securities
Account Control Agreement
” means an agreement, in form and substance
reasonably satisfactory to the Administrative Agent, among any Loan Party, a
securities intermediary holding such Loan Party's assets, including funds and
securities, and the Administrative Agent with respect to collection and control
of all deposits, securities and other balances held in a securities account
maintained by any Loan Party with such securities intermediary.
“
Securities
Accounts
” shall have the meaning set forth in Article 8 of the
UCC.
“
Security
”
shall have the meaning set forth in Article 8 of the UCC.
“
Stock
Rights
” means all dividends, instruments or other distributions and any
other right or property which the Grantors shall receive or shall become
entitled to receive for any reason whatsoever with respect to, in substitution
for or in exchange for any Equity Interest constituting Collateral, any right to
receive an Equity Interest and any right to receive earnings, in which the
Grantors now have or hereafter acquire any right, issued by an issuer of such
Equity Interest.
“
Supporting
Obligations
” shall have the meaning set forth in Article 9 of the
UCC.
“
Trademarks
”
means, with respect to any Person, all of such Person’s right, title, and
interest in and to the following: (a) all trademarks (including
service marks), trade names, trade dress, and trade styles and the registrations
and applications for registration thereof and the goodwill of the business
symbolized by the foregoing; (b) all renewals of the foregoing; (c) all rights
to sue for past, present, and future infringements of the foregoing, including
the right to settle suits involving claims and demands for royalties owing; and
(d) all rights corresponding to any of the foregoing throughout the
world.
“
UCC
”
means the Uniform Commercial Code, as in effect from time to time, of the State
of New York
or
of any other state the laws of which are required as a result thereof to be
applied in connection with the attachment, perfection or priority of, or
remedies with respect to, Administrative Agent’s or any Lender’s Lien on any
Collateral.
The
foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms.
1.4
Terms
Generally
. The definitions of terms herein shall apply equally
to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include,” “includes” and
“including” shall be deemed to be followed by the phrase “without
limitation.” The word “will” shall be construed to have the same
meaning and effect as the word “shall.” Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, amended and restated,
supplemented or otherwise modified, renewed, extended, replaced or refinanced,
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed to
include such Person’s permitted successors and assigns and, in the case of any
Governmental Authority, any other Governmental Authority that shall have
succeeded to any or all of the functions thereof, (c) the words “herein,”
“hereof” and “hereunder,” and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision
hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules
shall be construed to refer to Articles and Sections of, and Exhibits and
Schedules to, this Agreement and (e) the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights, (f) all references to “knowledge” of any Loan
Party means the actual knowledge of a Responsible Officer, (g) references to any
law shall include all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting such Law (including by
succession of comparable successor laws).
1.5
Times of
Day.
Unless otherwise specified, all references herein to
times of day shall be references to Central time (daylight or standard, as
applicable).
1.6
Timing of Payment of
Performance
. When the payment of any obligation or the
performance of any covenant, duty or obligation is stated to be due or
performance required on a day which is not a Business Day, the date of such
payment or performance shall extend to the immediately succeeding Business
Day.
1.7
Certifications
. All
certifications to be made hereunder by an officer or representative of a Loan
Party shall be made by such person in his or her capacity solely as an officer
or a representative of such Loan Party, on such Loan Party’s behalf and not in
such Person’s individual capacity.
ARTICLE
II
GRANT OF SECURITY
INTEREST
Each
Grantor hereby pledges, collaterally assigns and grants to the Administrative
Agent, on behalf of and for the ratable benefit of the Secured Parties, a
security interest in all of its right, title and interest in, to and under all
personal property, whether now owned by or owing to, or hereafter acquired by or
arising in favor of such Grantor (including under any trade name or derivations
thereof), and whether owned or consigned by or to, or leased from or to, such
Grantor, and regardless of where located (all of which will be collectively
referred to as the “
Collateral
”),
including:
(a) all
Accounts;
(b) all
Chattel Paper;
(c) all
Documents;
(d) all
Equipment (including all Trucks);
(e) all
Fixtures;
(f) all
General Intangibles;
(g) all
Goods;
(h) all
Instruments;
(i) all
Intellectual Property;
(j) all
Inventory (including As-Extracted Collateral);
(k) all
Investment Property;
(l) all
cash or cash equivalents;
(m) all
letters of credit, Letter-of-Credit Rights and Supporting
Obligations;
(n) all
Deposit Accounts with any bank or other financial institution;
(o) all
Commodity Accounts;
(p) all
Securities Accounts;
(q) all
Commercial Tort Claims;
(r) all
As-Extracted Collateral;
(s) and
all accessions to, substitutions for and replacements, proceeds (including Stock
Rights), insurance proceeds and products of the foregoing, together with all
books and records, customer lists, credit files, computer files, programs,
printouts and other computer materials and records related thereto and any
General Intangibles at any time evidencing or relating to any of the
foregoing;
to secure
the prompt and complete payment and performance of the Secured Obligations;
provided, however,
that
“
Collateral
”
(and each defined term used in the definition of Collateral) shall not include
any Excluded Property; and
provided
,
further
, that if and when any
property shall cease to be Excluded Property, such property shall be deemed at
all times from and after such date to constitute Collateral.
ARTICLE
III
REPRESENTATIONS AND
WARRANTIES
Each
Grantor represents and warrants to the Administrative Agent and the Secured
Parties that:
3.1
Title, Perfection and
Priority
. Such Grantor has good and valid rights in or the
power to transfer the Collateral and title to the Collateral with respect to
which it has purported to grant a security interest hereunder, free and clear of
all Liens except for Liens permitted under
Section
4.1(e)
, and has full
organizational power and authority to grant to the Administrative Agent the
security interest in such Collateral pursuant hereto. When financing
statements have been filed in the appropriate offices against such Grantor in
the locations listed on
Exhibit H
and this
Security Agreement (or other short form security agreement) has been filed in
the United States Patent and Trademark Office and the United States Copyright
Office, as applicable, and the payment of all filing and recordation fees
associated therewith, the Administrative Agent will, except as set forth in and
subject to the terms, conditions and provisions of the Intercreditor Agreement,
have a fully perfected first priority security interest in that Collateral of
the Grantor in which a security interest may be perfected by filing, subject
only to Liens permitted under
Section
4.1(e)
; provided,
however, that additional filings may be necessary to perfect the Administrative
Agent’s security interest in any Intellectual Property acquired after the date
hereof. Notwithstanding the foregoing, nothing in this Security
Agreement shall require any Grantor to make any filings or take any actions to
record or perfect the Administrative Agent’s security interest in any
Intellectual Property outside the United States.
3.2
Type and Jurisdiction of
Organization, Organizational and Identification Numbers
. The
type of entity of such Grantor, its state of organization, the organizational
number issued to it by its state of organization and its federal employer
identification number as of the Effective Date are set forth on
Exhibit
A
.
3.3
Principal
Location
. Such Grantor’s mailing address and the location of
its place of business (if it has only one) or its chief executive office (if it
has more than one place of business), as of the Effective Date is disclosed in
Exhibit
A
.
3.4
Collateral
Locations
. All of such Grantor’s locations where tangible
Collateral is located as of the Effective Date are listed on
Exhibit A
other than
(a) Inventory and Equipment in transit, (b) Equipment out for repair or
refurbishment, (c) Inventory and Equipment maintained at a customer
location, and (d) Inventory and Equipment in the possession of employees or
Subsidiaries in the ordinary course of business). As of the Effective
Date, all of said locations are owned by such Grantor except for locations (i)
which are leased by the Grantor as lessee or sublessee and designated in
Annex A
of
Exhibit A
and (ii) at
which Inventory is held in a public warehouse or is otherwise held by a bailee
or on consignment as designated in
Annex A
of
Exhibit
A
.
3.5
Deposit Accounts, Commodity
Accounts and Securities Accounts
. All of such Grantor's
Deposit Accounts, Commodity Accounts and Securities Accounts as of the Effective
Date are listed on
Exhibit B
.
3.6
Exact
Names
. Such Grantor’s name in which it has executed this
Security Agreement is the exact name as it appears in such Grantor’s
organizational documents, as amended, as filed with such Grantor’s jurisdiction
of organization. Except as set forth on
Exhibit A
, as of the
Effective Date, such Grantor has not, during the past five years, been known by
or used any other legal name, or currently is not known by or does not use any
other corporate or fictitious name.
3.7
Letter-of-Credit Rights and
Chattel Paper
.
Exhibit C
lists all
Letter-of-Credit Rights and Chattel Paper valued individually in excess of
$100,000 of such Grantor as of the Effective Date. All action by such
Grantor necessary to protect and perfect the Administrative Agent’s Lien on each
item listed on
Exhibit
C
(including the delivery of all originals and the placement of a legend
on all Chattel Paper as required hereunder) has been duly taken to the extent
requested by the Administrative Agent. Upon taking of all such
actions, the Administrative Agent will have a fully perfected first priority
security interest in the Collateral listed on
Exhibit C
, subject
only to Liens permitted under
Section
4.1(e)
.
3.8
Accounts and Chattel
Paper
.
(a) The
names of the obligors, amounts owing, due dates and other information with
respect to its Accounts and Chattel Paper are and will be correctly stated in
all material respects in all records of such Grantor relating thereto and in all
invoices and Collateral Reports with respect thereto furnished to the
Administrative Agent by such Grantor from time to time. As of the
time when each Account or each item of Chattel Paper arises, such Grantor shall
be deemed to have represented and warranted that such Account or Chattel Paper,
as the case may be, and all records relating thereto, are genuine and in all
material respects what they purport to be. For the avoidance of
doubt, subsequent Collateral Reports may qualify records, invoices and other
information previously furnished to the Administrative Agent.
(b) With
respect to its Accounts, except as specifically disclosed on the most recent
Collateral Report, (i) all Accounts are Eligible Accounts; (ii) all Accounts
represent bona fide sales of Inventory or rendering of services to Account
Debtors in the ordinary course of such Grantor’s business and are not evidenced
by a judgment, Instrument or Chattel Paper; (iii) to such Grantor’s knowledge,
there are no setoffs, claims or disputes existing or asserted against such
Grantor with respect thereto and such Grantor has not made any agreement with
any Account Debtor for any extension of time for the payment thereof, any
compromise or settlement for less than the full amount thereof, any release of
any Account Debtor from liability therefor, or any deduction therefrom except a
discount or allowance allowed by such Grantor in the ordinary course of its
business for prompt payment and disclosed to the Administrative Agent; (iv) to
such Grantor’s knowledge, there are no facts, events or occurrences which in any
way impair the validity or enforceability thereof or could reasonably be
expected to reduce the amount payable thereunder as shown on such Grantor’s
books and records and any invoices, statements and Collateral Reports with
respect thereto; (v) such Grantor has not received any written notice of
bankruptcy proceedings or actions which are threatened or pending against any
Account Debtor; and (vi) such Grantor has no knowledge that any Account Debtor
is unable generally to pay its debts as they become due.
(c) In
addition, with respect to all of its Accounts, (i) except as specifically
disclosed on the most recent Collateral Report, the amounts shown on all
invoices, statements and Collateral Reports with respect thereto are actually
and absolutely owing to such Grantor as indicated thereon and are not in any way
contingent; (ii) no payments have been or shall be made thereon except payments
immediately delivered to a Lock Box or a Collateral Deposit Account as required
pursuant to
Section
7.1
; and
(iii) to such Grantor’s knowledge, all Account Debtors have the capacity to
contract.
3.9
Inventory
. With
respect to any of its Inventory scheduled or listed on the most recent
Collateral Report, (a) such Inventory (other than Inventory (i) in transit, (ii)
maintained at a customer location and (iii) in the possession of employees or
Subsidiaries in the ordinary course of business) is located at one of such
Grantor’s locations set forth on
Exhibit A
, (b) no
Inventory (other than Inventory (i) in transit, (ii) maintained at a customer
location and (iii) in the possession of employees or Subsidiaries in the
ordinary course of business) is now, or shall at any time or times hereafter be
stored at any other location except as permitted by
Section
4.1(g)
, (c) such
Grantor has good and merchantable title to such Inventory and such Inventory is
not subject to any Lien or security interest or document whatsoever except for
the Lien granted to the Administrative Agent, for the benefit of the
Administrative Agent and the Secured Parties, and except for Liens permitted by
Section
4.1(e)
, (d) such
Inventory is Eligible Inventory of good and merchantable quality, free from any
defects, (e) such Inventory is not subject to any licensing, patent, royalty,
trademark, trade name or copyright agreements with any third parties which would
require any consent of any third party upon sale or disposition of that
Inventory or the payment of any monies to such third parties pursuant to such
agreements upon such sale or other disposition, (f) such Inventory has been
produced in accordance with the Federal Fair Labor Standards Act of 1938, as
amended, and all rules, regulations and orders thereunder and (g) the completion
of manufacture, sale or other disposition of such Inventory by the
Administrative Agent following an Event of Default shall not require the consent
of any Person (other than consents applicable to Administrative Agent generally
and not as a result of this Agreement, landlord consents to the extent not
otherwise obtained and any consents applicable under the Intercreditor
Agreement) and shall not constitute a breach or default under any contract or
agreement to which such Grantor is a party or to which such property is
subject.
3.10
Intellectual Property
As of the Effective Date, such Grantor does not own any Patents, patent
applications, trademark applications or registrations or copyright registrations
except as set forth in
Exhibit
D
. This Security Agreement is effective to create a valid and
continuing Lien and, upon filing of appropriate financing statements in the
offices listed on
Exhibit H
and this
Security Agreement (or other short form security agreement) with the United
States Copyright Office and the United States Patent and Trademark Office, and
the payment of all filing and recordation fees associated therewith, fully
perfected and, subject only to the prior Lien of the Notes Agent and the Liens
permitted by
Section
4.1(e)
,
second priority security interests in favor of the Administrative Agent on such
Grantor’s Patents, Trademarks and Copyrights; provided that additional filings
may be necessary to perfect the Administrative Agent’s security interest in any
Intellectual Property acquired after the date hereof; except as set forth in the
terms, conditions and provisions of the Intercreditor Agreement, such perfected
security interests are enforceable (subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law) as such as against any and all
creditors of and purchasers from such Grantor; and (subject to the
qualifications set forth in
Section 3.1
and this
Section 3.10
)
all action necessary to protect and perfect the Administrative Agent’s Lien on
such Grantor’s Patents, Trademarks or Copyrights shall have been duly
taken. Notwithstanding the foregoing, nothing in this Security
Agreement shall require any Grantor to make any filings or take any actions to
record or perfect the Administrative Agent’s security interest in any
Intellectual Property outside the United States.
3.11
Filing
Requirements
. As of the Effective Date, all Rolling Stock
Collateral is described on
Part I
of
Exhibit
E
. As of the Effective Date, none of the Collateral owned by
it is of a type for which security interests or liens may be perfected by filing
under any federal statute except for Patents, Trademarks and Copyrights held by
such Grantor and described in
Exhibit
D
. The legal description, county and street address of each
property on which any Inventory constituting As-Extracted Collateral as of the
Effective Date are located is set forth in
Exhibit F
together
with the name and address of the record owner of each such
property.
3.12
No Financing Statements,
Security Agreements
. No financing statement or security
agreement describing all or any portion of the Collateral which has not lapsed
or been terminated naming such Grantor as debtor has been filed or is of record
in any jurisdiction except (a) for financing statements or security agreements
naming the Administrative Agent on behalf of the Secured Parties as the secured
party, (b) as to which a duly authorized termination statement relating to such
financing statement or other instrument has been delivered to the Administrative
Agent on the Effective Date and (c) as permitted by
Section
4.1(e)
.
3.13
Pledged
Collateral
.
(a)
Exhibit G
sets forth
a complete and accurate list of all Pledged Collateral which constitute Equity
Interests owned by such Grantor or which represent Indebtedness owed to such
Grantor. Such Grantor is the direct, sole beneficial owner and sole
holder of record of the Pledged Collateral listed on
Exhibit G
as being
owned by it, free and clear of any Liens, except for Liens permitted by
Section
4.1(e)
. Such
Grantor further represents and warrants that (i) all Pledged Collateral owned by
it constituting an Equity Interest has been (to the extent such concepts are
relevant with respect to such Pledged Collateral) duly authorized, validly
issued, are fully paid and non-assessable, (ii) with respect to any certificates
delivered to the Administrative Agent or the Notes Agent representing an Equity
Interest, either such certificates are Securities as defined in Article 8 of the
UCC as a result of actions by the issuer or otherwise, or, if such certificates
are not Securities, such Grantor has so informed the Administrative Agent or the
Notes Agent (as applicable) so that it may take steps to perfect its security
interest therein as a General Intangible, (iii) all such Pledged Collateral held
by a securities intermediary is covered by a control agreement among such
Grantor, the securities intermediary and the Administrative Agent pursuant to
which the Administrative Agent has Control (subject to the terms, conditions and
provisions of the Intercreditor Agreement) and (iv) to such Grantor’s knowledge
and except as otherwise disclosed to the Administrative Agent, all Pledged
Collateral which represents Indebtedness owed to such Grantor has been duly
authorized, authenticated or issued and delivered by the issuer of such
Indebtedness, is the legal, valid and binding obligation of such issuer and such
issuer (subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law) is not in default thereunder; provided that, with regard to
clause (iii) above, the Company may maintain a Securities Account with
Merrill Lynch which is not a Control Account for the sole purpose of depositing
therein deferred compensation payments on behalf of its employees and officer’s
in accordance with the Company’s existing incentive plan for which accounts are
maintained at Merrill Lynch (or any of its Affiliates) (the “
Merrill
Lynch Account
”); provided further that the aggregate amount from time to
time on deposit therein shall not exceed and amount equal to (x) $500,000 minus
all distributions or withdrawals made from the Merrill Lynch Account on or after
the Effective Date plus (y) the amount, if any, earned on the amounts on deposit
in the Merrill Lynch Account.
(b) Except
as set forth on
Exhibit G
as of the
Effective Date, (i) none of the Pledged Collateral owned by it has been issued
or transferred in violation in any material respect of the securities
registration, securities disclosure or similar laws of any jurisdiction to which
such issuance or transfer may be subject, (ii) there are existing no options,
warrants, calls or commitments of any character whatsoever relating to such
Pledged Collateral and (iii) no consent, approval, authorization, or other
action by, and no giving of notice, filing with, any governmental authority or
any other Person is required for the pledge by such Grantor of such Pledged
Collateral pursuant to this Security Agreement or for the execution, delivery
and performance of this Security Agreement by such Grantor, or for the exercise
by the Administrative Agent of the voting or other rights provided for in this
Security Agreement or for the remedies in respect of the Pledged Collateral
pursuant to this Security Agreement, except as may be required in connection
with such disposition by laws affecting the offering and sale of securities
generally, those that have been obtained or made and are in full force and
effect and except as set forth in the terms, conditions and provisions of the
Intercreditor Agreement.
(c) Except
as set forth in
Exhibit G
, as of the
Effective Date, such Grantor owns 100% of the issued and outstanding Equity
Interests which constitute Pledged Collateral owned by it and none of the
Pledged Collateral which represents Indebtedness owed to such Grantor (other
than any Intercompany Note) is subordinated in right of payment to other
Indebtedness or subject to the terms of an indenture.
ARTICLE
IV
COVENANTS
From the
date of this Security Agreement, and thereafter until this Security Agreement is
terminated in accordance with
Section 8.14
, each
Grantor agrees that:
4.1
General
.
(a)
Collateral
Records
. Such Grantor will maintain complete and accurate
books and records with respect to the Collateral owned by it.
(b)
Authorization to File
Financing Statements; Ratification
. Such Grantor hereby
authorizes the Administrative Agent to file, and if requested will promptly
deliver to the Administrative Agent, all financing statements and other
documents and take such other actions as may from time to time be requested by
the Administrative Agent in order to maintain a perfected (subject to the
qualifications in
Section
3.1
) and, except as
set forth in the terms, conditions and provisions of the Intercreditor
Agreement, first priority security interest in and, if applicable, Control of,
the Collateral owned by such Grantor, subject to Liens permitted under
Section
4.1(e)
. Any
financing statement filed by the Administrative Agent may be filed in any filing
office in any UCC jurisdiction and may (i) indicate such Grantor’s Collateral
(A) as “all assets” of the Grantor or words of similar effect, regardless of
whether any particular asset comprised in the Collateral falls within the scope
of Article 9 of the UCC or such jurisdiction, or (B) by any other description
which reasonably describes the Collateral, and (ii) contain any other
information required by part 5 of Article 9 of the UCC for the sufficiency or
filing office acceptance of any financing statement or amendment, including (A)
whether such Grantor is an organization, the type of organization and any
organization identification number issued to such Grantor, and (B) in the case
of a financing statement filed as a fixture filing or indicating such Grantor’s
Collateral as As-Extracted Collateral or timber to be cut, a sufficient
description of real property to which the Collateral relates. Such
Grantor also agrees to furnish any such information to the Administrative Agent
promptly upon its reasonable request therefor. Such Grantor also
ratifies its authorization for the Administrative Agent to have filed in any UCC
jurisdiction any initial financing statements or amendments thereto if filed
prior to the date hereof.
(c)
Further
Assurances
. Such Grantor will, promptly following the
Administrative Agent’s reasonable request, furnish to the Administrative Agent,
as often as the Administrative Agent requests, statements and schedules further
identifying and describing the Collateral owned by it and such other reports and
information in connection with its Collateral as the Administrative Agent may
reasonably request, all in such detail as the Administrative Agent may
specify. Such Grantor also agrees to take any and all actions
necessary to defend title to the Collateral against all persons and to defend
the security interest of the Administrative Agent in its Collateral and the
priority thereof against any Lien not expressly permitted
hereunder.
(d)
Disposition of
Collateral
. Such Grantor will not sell, lease or otherwise
dispose of the Collateral owned by it except for dispositions specifically
permitted pursuant to Section 6.05 of the Credit Agreement (or consented to in
writing pursuant to Section 9.02 of the Credit Agreement).
(e)
Liens
. Such
Grantor will not create, incur, or suffer to exist any Lien on the Collateral
owned by it except (i) the security interest created by this Security Agreement,
and(ii) except as otherwise provided herein, other Liens permitted pursuant to
Section 6.02 of the Credit Agreement.
(f)
Other Financing
Statements
. Such Grantor will not authorize the filing of any
financing statement naming it as debtor covering all or any portion of the
Collateral owned by it, except as permitted by
Section
4.1(e)
. Such
Grantor acknowledges that it is not authorized to file any financing statement
or amendment or termination statement with respect to any financing statement
without the prior written consent of the Administrative Agent, subject to such
Grantor’s rights under Section 9-509(d)(2) of the UCC.
(g)
Locations
. Such
Grantor will not maintain any Collateral (other than (i) Inventory and Equipment
in transit, (ii) Equipment out for repair or refurbishment, (iii) Inventory
and Equipment maintained at a customer location, and (iv) Inventory and
Equipment in the possession of employees or Subsidiaries in the ordinary course
of business) owned by it at any location other than those locations listed on
Exhibit A
or
otherwise disclosed to the Administrative Agent in accordance with
Section 4.15
.
4.2
Receivables
.
(a)
Certain Agreements on
Receivables
. Such Grantor will not make or agree to make any
discount, credit, rebate or other reduction in the original amount owing on a
Receivable or accept in satisfaction of a Receivable less than the original
amount thereof, except that, prior to the occurrence and continuance of an Event
of Default, such Grantor may or agree to reduce the amount of Accounts arising
from the sale of Inventory in accordance with its present policies and in the
ordinary course of business.
(b)
Collection of
Receivables
. Except as otherwise provided in this Security
Agreement, such Grantor will do all things commercially reasonable to collect
and enforce, at such Grantor’s sole expense, all amounts due or hereafter due to
such Grantor under the Receivables owned by it.
(c)
Delivery of
Invoice
s. Such Grantor will deliver to the Administrative
Agent immediately upon its request duplicate invoices with respect to each
Account owned by it bearing such language of assignment as the Administrative
Agent shall specify.
(d)
Disclosure of Counterclaims
on Accounts
. If (i) any discount, credit or agreement to make
a rebate or to otherwise reduce the amount owing on any Account owned by such
Grantor exists or (ii) if, to the knowledge of such Grantor, any dispute,
setoff, claim, counterclaim or defense exists or has been asserted or threatened
with respect to any such Account, such Grantor will disclose such fact to the
Administrative Agent in the next Collateral Report. Such Grantor
shall send the Administrative Agent a copy of each credit memorandum in excess
of $100,000 promptly after issuance and knowledge of a Responsible Officer or
principal accounting officer thereof, and such Grantor shall promptly report
each credit memo and each of the facts required to be disclosed to the
Administrative Agent in accordance with this
Section
4.2(d)
on the
Borrowing Base Certificates submitted by it.
(e)
Electronic Chattel
Paper
. Within three Business Days of obtaining such electronic
chattel paper, such Grantor shall take all steps necessary to grant the
Administrative Agent Control of all electronic chattel paper valued individually
in excess of $100,000 in accordance with the UCC and all “transferable records”
as defined in each of the Uniform Electronic Transactions Act and the Electronic
Signatures in Global and National Commerce Act.
4.3
Inventory and
Equipment
.
(a) Such
Grantor will do all things commercially reasonable to maintain, preserve,
protect and keep its Inventory and the Equipment necessary in the conduct of its
business in good repair and working and saleable condition, except for damaged
or defective goods arising in the ordinary course of such Grantor’s business and
except for ordinary wear and tear and casualty and condemnation in respect of
the Equipment, except where failure to do so could not reasonably be expected to
have a Material Adverse Effect.
(b) Such
Grantor shall not permit any Equipment to become a fixture with respect to Real
Property or to become an accession with respect to other personal property with
respect to which real or personal property the Administrative Agent does not
have a Lien.
(c)
Titled
Vehicles
. Within 60 days following the acquisition of any
Rolling Stock Collateral, such Grantor will give the Administrative Agent and
the Servicer notice of its acquisition of any Rolling Stock Collateral covered
by a Certificate of Title and deliver to the Administrative Agent or the
Servicer the original of any such Certificate of Title and provide and/or file
all other documents or instruments necessary to have the Lien of the
Administrative Agent noted on any such Certificate of Title or with the
appropriate state office.
4.4
Delivery of Instruments,
Securities, Chattel Paper and Documents
. Except as required to
be delivered to the Notes Agent pursuant to the terms, conditions and provisions
of the Intercreditor Agreement with respect to Securities, such Grantor will (a)
deliver to the Administrative Agent immediately upon execution of this Security
Agreement the originals of all Chattel Paper, Securities and Instruments
individually in excess of $100,000 constituting Collateral owned by it (if any
then exist), (b) hold in trust for the Administrative Agent upon receipt and
within three Business Days thereafter deliver to the Administrative Agent any
such Chattel Paper, Securities and Instruments individually in excess of
$100,000 constituting Collateral, (c) within three Business Days of the
Administrative Agent’s request, deliver to the Administrative Agent (and
thereafter hold in trust for the Administrative Agent upon receipt and
immediately deliver to the Administrative Agent) any Document evidencing or
constituting Collateral and (d) upon the Administrative Agent’s request, deliver
to the Administrative Agent a duly executed amendment to this Security
Agreement, in substantially the form of
Exhibit I
hereto (the
“
Amendment
”),
pursuant to which such Grantor will pledge such additional
Collateral. Such Grantor hereby authorizes the Administrative Agent
to attach each Amendment to this Security Agreement and agrees that all
additional Collateral owned by it set forth in such Amendments shall be
considered to be part of the Collateral.
4.5
Uncertificated Pledged
Collateral
. Subject to the terms, conditions and provisions of
the Intercreditor Agreement, such Grantor will permit the Administrative Agent
from time to time to cause the appropriate issuers (and, if held with a
securities intermediary, such securities intermediary) of uncertificated
securities or other types of Pledged Collateral owned by it not represented by
certificates to mark their books and records with the numbers and face amounts
of all such uncertificated securities or other types of Pledged Collateral not
represented by certificates and all rollovers and replacements therefor to
reflect the Lien of the Administrative Agent granted pursuant to this Security
Agreement. With respect to any Pledged Collateral owned by it, upon the
Administrative Agent’s request, such Grantor will take any actions necessary to
cause (a) the issuers of uncertificated securities which are Pledged Collateral
and (b) any securities intermediary which is the holder of any such Pledged
Collateral (other than the Merrill Lynch Account), to cause the Administrative
Agent to have and retain Control over such Pledged Collateral (subject to the
terms, conditions and provisions of the Intercreditor
Agreement). Without limiting the foregoing, such Grantor will, with
respect to any such Pledged Collateral held with a securities intermediary
(other than the Merrill Lynch Account), cause such securities intermediary to
enter into a Securities Control Agreement with the Administrative Agent, in form
and substance reasonably satisfactory to the Administrative Agent, giving the
Administrative Agent Control (subject to the terms, conditions and provisions of
the Intercreditor Agreement).
4.6
Pledged
Collateral
.
(a)
Changes in Capital Structure
of Issuers
. Except to the extent permitted by the terms of the
Credit Agreement, such Grantor will not (i) permit or allow any Subsidiary, the
Equity Interests of which constitute Pledged Collateral owned by it, to
dissolve, merge, liquidate, retire any of its Equity Interests or other
Instruments or Securities evidencing ownership, reduce its capital, sell or
encumber all or substantially all of its assets (except for Liens permitted
pursuant to
Section
4.1(e)
and sales of assets permitted pursuant to
Section 4.1(d)
), or
(ii) vote any such Pledged Collateral in favor of any of the
foregoing.
(b)
Registration of Pledged
Collateral
. Subject to the terms, conditions and provisions of
the Intercreditor Agreement, upon the occurrence and during the continuance
of an Event of Default, such Grantor will permit any registerable
Pledged Collateral owned by it to be registered in the name of the
Administrative Agent or its nominee at any time at the option of the Required
Secured Parties.
(c)
Exercise of Rights in
Pledged Collateral
.
(i) Without
in any way limiting the foregoing and subject to clause (ii) below, such Grantor
shall have the right to exercise all voting rights or other rights relating to
the Pledged Collateral owned by it for all purposes not in violation of this
Security Agreement, the Credit Agreement, the Intercreditor Agreement or any
other Loan Document;
provided
however
,
that
no
vote or other right shall be exercised or action taken for the purpose of
impairing the enforcement rights of the Administrative Agent in respect of such
Pledged Collateral except as may be incidental to actions otherwise permitted
under such documents.
(ii) Such
Grantor will permit the Administrative Agent or its nominee at any time after
the occurrence and during the continuance of an Event of Default, and with prior
notice, to exercise all voting rights or other rights relating to the Pledged
Collateral owned by it, including, without limitation, exchange, subscription or
any other rights, privileges, or options pertaining to any Equity Interest or
Investment Property constituting such Pledged Collateral as if it were the
absolute owner thereof.
(iii) Such
Grantor shall be entitled to collect and receive for its own use all dividends,
distributions and interest paid in respect of the Pledged Collateral owned by it
to the extent not in violation of the Credit Agreement
other than
, upon the
occurrence and during the continuance of an Event of Default, any of the
following distributions and payments (collectively referred to as the “
Excluded
Payments
”): (A) dividends and interest paid or payable other
than in cash in respect of such Pledged Collateral, and instruments and other
property received, receivable or otherwise distributed in respect of, or in
exchange for, any Pledged Collateral; (B) dividends and other distributions paid
or payable in cash in respect of such Pledged Collateral in connection with a
partial or total liquidation or dissolution or in connection with a reduction of
capital, capital surplus or paid-in capital of an issuer; and (C) cash paid,
payable or otherwise distributed, in respect of principal of, or in redemption
of, or in exchange for, such Pledged Collateral;
provided however, that
until
actually paid, all rights to such distributions shall remain subject to the Lien
created by this Security Agreement; and
(iv) All
Excluded Payments in respect of any of the Pledged Collateral owned by such
Grantor, whenever paid or made, shall, subject to the terms, conditions and
provisions of the Intercreditor Agreement, upon the occurrence and during the
continuance of an Event of Default, be delivered to the Administrative Agent to
hold as Pledged Collateral and shall, if received by such Grantor, be received
in trust for the benefit of the Administrative Agent, be segregated from the
other property or funds of such Grantor, and, subject to the terms, conditions
and provisions of the Intercreditor Agreement, be forthwith delivered to the
Administrative Agent as Pledged Collateral in the same form as so received (with
any necessary endorsement).
(v) After
the Administrative Agent acknowledges that all Events of Default have been cured
or waived in accordance with the provisions of the Credit Agreement, and so long
as the Obligations shall not have been accelerated, each Grantor shall have the
right to exercise the voting and other consensual rights and powers that it
would have otherwise been entitled to pursuant to this
Section 4.6
, and
receive dividends and other distributions it would have been authorized to
receive pursuant to this
Section
4.6
. After the Administrative Agent acknowledges that all
Events of Default have been cured or waived in accordance with the provisions of
the Credit Agreement, any dividend or distribution paid to the Administrative
Agent shall upon the request of the Grantors (except to the extent theretofore
applied to the Secured Obligations) promptly be returned to the
Grantors.
4.7
Intellectual
Property
.
(a) Subject
to the terms set forth in the Intercreditor Agreement, such Grantor will use its
commercially reasonable efforts to secure all consents and approvals necessary
or appropriate for the assignment to or benefit of the Administrative Agent of
any License held by such Grantor and to enforce the security interests granted
hereunder.
(b) Such
Grantor shall notify the Administrative Agent immediately if it knows that any
application or registration for any material Patent, Trademark or Copyright (now
or hereafter existing) owned by such Grantor may become abandoned (except for
Patents, Trademarks or Copyrights expiring at the end of their statutory terms),
or of any adverse determination in any proceeding (other than office actions
issued in the ordinary course of prosecution of any patent application or
application to register any other Intellectual Property) against such Grantor
regarding such Grantor’s ownership of any material Patent, Trademark or
Copyright, its right to register the same, or to keep and maintain the
same, in each case, to the extent the same could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
(c) If
such Grantor, either directly or through any agent, employee, licensee or
designee, file an application for the registration of any Patent, Trademark or
Copyright with the United States Patent and Trademark Office or the United
States Copyright Office, such Grantor shall give the Administrative Agent
written notice thereof concurrently with the delivery of a Compliance
Certificate under the Credit Agreement, and, upon request of the Administrative
Agent, such Grantor shall execute and deliver any and all security agreements as
the Administrative Agent may request to evidence the Administrative Agent’s
security interest on such Patent, Trademark or Copyright.
(d) Except
as determined by such Grantor in its reasonable business judgment (exercised in
good faith), such Grantor shall take all actions that are necessary or requested
by the Administrative Agent to pursue each application (and to obtain the
relevant registration) and to maintain the validity and enforceability of each
registration of its material Patents, Trademarks and Copyrights (now or
hereafter existing) owned by such Grantor.
(e) Such
Grantor shall, unless it shall reasonably determine that such Patent, Trademark
or Copyright is not material to the conduct of its business or operations, take
all actions deemed appropriate under the circumstances in the exercise of its
reasonable business judgment (exercised in good faith) to protect such Patent,
Trademark or Copyright owned by such Grantor, including if appropriate under the
circumstances bringing suit and recovering all damages therefor. In
the event that such Grantor institutes suit because any of its Patents,
Trademarks or Copyrights constituting Collateral is infringed upon, or
misappropriated or diluted by a third party, such Grantor shall comply with
Section
4.8
.
4.8
Commercial Tort
Claims
. Such Grantor shall promptly, and in any event within
three Business Days after a Responsible Officer of such Grantor has actual
knowledge of such commercial tort claim, notify the Administrative Agent of any
commercial tort claim (as defined in the UCC) individually in excess of $100,000
acquired by it and, unless the Administrative Agent otherwise consents, such
Grantor shall enter into an amendment to this Security Agreement, substantially
in the form of
Exhibit
I
hereto, granting to Administrative Agent a first priority security
interest (subject to Liens permitted by
Section
4.1(e)
) in such
commercial tort claim.
4.9
Letter-of-Credit
Rights
. If such Grantor is or becomes the beneficiary of a
letter of credit, having a face or stated amount individually in excess of
$100,000, it shall promptly, and in any event within three Business Days after
becoming a beneficiary, notify the Administrative Agent thereof and use
commercially reasonable efforts to cause the issuer and/or confirmation bank to
(a) consent to the assignment of any Letter-of-Credit Rights to the
Administrative Agent and (b) agree to direct all payments thereunder to a
Deposit Account at the Administrative Agent or subject to a Deposit Account
Control Agreement for application to the Secured Obligations, in accordance with
Section 2.18 of the Credit Agreement, all in form and substance reasonably
satisfactory to the Administrative Agent.
4.10
Federal, State or Municipal
Claims
. Such Grantor will promptly notify the Administrative
Agent upon obtaining knowledge of any Collateral with a value in excess of
$100,000 which constitutes a claim against the United States government or any
state or local government or any instrumentality or agency thereof, the
assignment of which claim is restricted by federal, state or municipal
law.
4.11
No
Interference
. Such Grantor agrees that it will not interfere
with any right, power and remedy of the Administrative Agent provided for in
this Security Agreement or now or hereafter existing at law or in equity or by
statute or otherwise, or the exercise or beginning of the exercise by the
Administrative Agent of any one or more of such rights, powers or
remedies.
4.12
Insurance
. (a)
In the event any Collateral is located in any area that has been designated by
the Federal Emergency Management Agency as a “Special Flood Hazard Area”, such
Grantor shall purchase and maintain flood insurance on such Collateral
(including any personal property which is located on any real property leased by
such Loan Party within a “
Special
Flood Hazard Area
”). The amount of flood insurance required by
this Section shall be the amount maintained by the Grantors on the Effective
Date or such other amount as the Administrative Agent may reasonably
request.
(b) All
insurance policies required hereunder and under Section 5.09 of the Credit
Agreement shall name the Administrative Agent (for the benefit of the
Administrative Agent and the Lenders) as an additional insured or as loss payee,
as applicable, and shall contain loss payable clauses or mortgagee clauses,
through endorsements in form and substance satisfactory to the Administrative
Agent, which provide that: (i) subject to the terms, conditions and
provisions of the Intercreditor Agreement, all proceeds thereunder with respect
to any Collateral shall be payable to the Administrative Agent; (ii) no such
insurance shall be affected by any act or neglect of the insured or owner of the
property described in such policy; and (iii) such policy and loss payable or
mortgagee clauses may be canceled, amended, or terminated only upon at least
thirty days prior written notice (ten days in the case of non-payment of
premium) given to the Administrative Agent.
(c) All
premiums on any such insurance shall be paid when due by such Grantor, and
copies of the policies delivered to the Administrative Agent. If such
Grantor fails to obtain any insurance as required by this Section, the
Administrative Agent may obtain such insurance at the Borrower’s
expense. By purchasing such insurance, the Administrative Agent shall
not be deemed to have waived any Default arising from the Grantor’s failure to
maintain such insurance or pay any premiums therefor.
4.13
Collateral Access
Agreements
. Such Grantor shall use commercially reasonable
efforts for a period not to exceed 90 days to obtain a Collateral Access
Agreement, from the lessor of each leased property, mortgagee of owned property
or bailee or consignee with respect to any warehouse, processor or converter
facility or other location (other than any worksite or customer location) where
Collateral is stored or located, which agreement or letter shall provide access
rights, contain a waiver or subordination of all Liens or claims that the
landlord, mortgagee, bailee or consignee may assert against the Collateral at
that location, and shall otherwise be reasonably satisfactory in form and
substance to the Administrative Agent. With respect to such locations
or warehouse space leased as of the Closing Date and thereafter, if the
Administrative Agent has not received a Collateral Access Agreement as of the
Effective Date (or, if later, as of the date such location is acquired or
leased), Borrower’s Eligible Inventory at that location shall be subject to
Reserves established by the Administrative Agent in accordance with the terms of
the Credit Agreement. After the Closing Date, no real property or
warehouse space shall be leased by such Grantor and no Inventory shall be
shipped to a processor or converter under arrangements established after the
Closing Date, unless and until a satisfactory Collateral Access Agreement shall
first have been obtained with respect to such location and if it has not been
obtained, Borrower’s Eligible Inventory at that location shall be subject to the
establishment of Reserves in accordance with the terms of the Credit
Agreement. Such Grantor shall timely and fully pay and perform its
obligations under all leases and other agreements (subject to any grace periods
therein) with respect to each leased location or third party warehouse where any
Collateral with a value exceeding $250,000 is or may be located.
4.14
Control
Agreements
. Such Grantor will provide to the Administrative
Agent upon the Administrative Agent’s request, (a) a Commodity Account Control
Agreement duly executed on behalf of each commodities intermediary holding a
Commodity Account of such Grantor as set forth in the Security Agreement, (b) a
Securities Account Control Agreement duly executed on behalf of each securities
intermediary holding a Securities Account (other than the Merrill Lynch Account)
of such Grantor as set forth in the Security Agreement and (c) a Deposit Account
Control Agreement duly executed on behalf of each financial institution holding
a Deposit Account (other than an Excluded Deposit Account) of such Grantor;
provided that
, the
Administrative Agent may, in its Permitted Discretion, defer delivery of any
such control agreement, establish a Reserve in accordance with the terms of the
Credit Agreement with respect to any Deposit Account, Commodity Account or
Securities Account for which the Administrative Agent has not received such a
control agreement, and require such Grantor to open and maintain a new Deposit
Account, Commodity Account or Securities Account with a financial institution
subject to a control agreement.
4.15
Change of Name or Location;
Change of Fiscal Year
. Such Grantor shall not change its chief
executive office, principal place of business, mailing address, corporate
offices or warehouses or locations at which Collateral is held or stored, or the
location of its records concerning the Collateral as set forth in the Security
Agreement unless the Administrative Agent shall have received at least 15 days
prior written notice of such change;
provided, that any new
location shall be in the continental U.S. Such grantor shall not (a)
change its name as it appears in official filings in the state of its
incorporation or organization, (b) change the type of entity that it is, (c)
change its organization identification number, if any, issued by its state of
incorporation or other organization, or (d) change its state of incorporation or
organization, in each case, unless the Administrative Agent shall have received
at least 15 days prior written notice of such change.
4.16
New
Subsidiaries
. Pursuant to Section 5.13 of the Credit
Agreement, any new direct or indirect domestic Subsidiary (whether by
acquisition, creation or designation) of a Loan Party is required to enter into
this Security Agreement by executing and delivering in favor of the
Administrative Agent an instrument in the form of
Annex
I
. Upon the execution and delivery of
Annex I
by such new
domestic Subsidiary, such domestic Subsidiary shall become a Grantor hereunder
with the same force and effect as if originally named as a Grantor
herein. The execution and delivery of any instrument adding an
additional Grantor as a party to this Agreement shall not require the consent of
any other Grantor under this Agreement. The rights and obligations of
each Grantor hereunder shall remain in full force and effect notwithstanding the
addition of any new Grantor hereunder.
ARTICLE
V
EVENTS OF DEFAULT AND
REMEDIES
5.1
Remedies
.
(a) Upon
the occurrence and during the continuance of an Event of Default, the
Administrative Agent may, subject to the terms, conditions and provisions of the
Credit Agreement and the Intercreditor Agreement, exercise any or all of the
following rights and remedies:
(i) those
rights and remedies provided in this Security Agreement, the Credit Agreement,
the Intercreditor Agreement or any other Loan Document;
provided that,
this
Section
5.1(a)
shall not be
understood to limit any rights or remedies available to the Administrative Agent
and the Secured Parties prior to an Event of Default;
(ii) those
rights and remedies available to a secured party under the UCC (whether or not
the UCC applies to the affected Collateral) or under any other applicable law
(including, without limitation, any law governing the exercise of a bank’s right
of setoff or bankers’ lien) when a debtor is in default under a security
agreement;
(iii) give
notice of sole control or any other instruction under any Deposit Account
Control Agreement or and other control agreement with any securities
intermediary and take any action therein with respect to such
Collateral;
(iv) without
notice (except as specifically provided in
Section
8.1
or elsewhere
herein), demand or advertisement of any kind to any Grantor or any other Person,
peaceably enter the premises of any Grantor where any Collateral is located
(through self-help and without judicial process) to collect, receive, assemble,
process, appropriate, sell, lease, assign, grant an option or options to
purchase or otherwise dispose of, deliver, or realize upon, the Collateral or
any part thereof in one or more parcels at public or private sale or sales
(which sales may be adjourned or continued from time to time with or without
notice and may take place at any Grantor’s premises or elsewhere), for cash, on
credit or for future delivery without assumption of any credit risk, and upon
such other terms as the Administrative Agent may deem commercially reasonable;
and
(v) immediately
after written notice to the applicable Grantor, transfer and register in its
name or in the name of its nominee the whole or any part of the Pledged
Collateral, to exchange certificates or instruments representing or evidencing
Pledged Collateral for certificates or instruments of smaller or larger
denominations, to exercise the voting and all other rights as a holder with
respect thereto, to collect and receive all cash dividends, interest, principal
and other distributions made thereon and to otherwise act with respect to the
Pledged Collateral as though the Administrative Agent was the outright owner
thereof.
(b) The
Administrative Agent, on behalf of the Secured Parties, may comply with any
applicable state or federal law requirements in connection with a disposition of
the Collateral and compliance will not be considered to adversely affect the
commercial reasonableness of any sale of the Collateral.
(c) The
Administrative Agent shall have the right upon any such public sale or sales
and, to the extent permitted by law, upon any such private sale or sales, to
purchase for the benefit of the Administrative Agent and the Secured Parties,
the whole or any part of the Collateral so sold, free of any right of equity
redemption, which equity redemption the Grantor hereby expressly
releases.
(d) Until
the Administrative Agent is able to effect a sale, lease, or other disposition
of Collateral, the Administrative Agent shall have the right to hold or use
Collateral, or any part thereof, to the extent that it deems appropriate for the
purpose of preserving Collateral or its value or for any other purpose deemed
appropriate by the Administrative Agent. The Administrative Agent
may, if it so elects, seek the appointment of a receiver or keeper to take
possession of Collateral and to enforce any of the Administrative Agent’s
remedies (for the benefit of the Administrative Agent and the Secured Parties),
with respect to such appointment without prior notice or hearing as to such
appointment.
(e) If,
after the Credit Agreement has terminated by its terms and all of the
Obligations have been paid in full, there remain Swap Obligations outstanding,
the Required Secured Parties may exercise the remedies provided in this
Section
5.1
upon the
occurrence of any event which would allow or require the termination or
acceleration of any Swap Obligations pursuant to the terms of the Swap
Agreement.
(f) Notwithstanding
the foregoing, except as required by applicable law, neither the Administrative
Agent nor the Secured Parties shall be required to (i) make any demand upon, or
pursue or exhaust any of their rights or remedies against, any Grantor, any
other obligor, guarantor, pledgor or any other Person with respect to the
payment of the Secured Obligations or to pursue or exhaust any of their rights
or remedies with respect to any Collateral therefor or any direct or indirect
guarantee thereof, (ii) marshal the Collateral or any guarantee of the Secured
Obligations or to resort to the Collateral or any such guarantee in any
particular order, or (iii) effect a public sale of any
Collateral.
(g) Each
Grantor recognizes that the Administrative Agent may be unable to effect a
public sale of any or all the Pledged Collateral and may be compelled to resort
to one or more private sales thereof in accordance with clause (a)
above. Each Grantor also acknowledges that any private sale may
result in prices and other terms less favorable to the seller than if such sale
were a public sale and, notwithstanding such circumstances, agrees that any such
private sale shall not be deemed to have been made in a commercially
unreasonable manner solely by virtue of such sale being private. The
Administrative Agent shall be under no obligation to delay a sale of any of the
Pledged Collateral for the period of time necessary to permit any Grantor or the
issuer of the Pledged Collateral to register such securities for public sale
under the Securities Act of 1933, as amended, or under applicable state
securities laws, even if the applicable Grantor and the issuer would agree to do
so.
5.2
Grantor’s Obligations Upon
Default
. Upon the request of the Administrative Agent after
the occurrence and during the continuance of an Event of Default, subject to the
terms, conditions and provisions of the Intercreditor Agreement, each Grantor
will:
(a) assemble
and make available to the Administrative Agent the tangible Collateral and all
books and records relating thereto at any place or places specified by the
Administrative Agent, whether at a Grantor’s premises or elsewhere;
(b) permit
the Administrative Agent, by the Administrative Agent’s representatives and
agents, to enter, occupy and use any premises where all or any part of the
Collateral, or the books and records relating thereto, or both, are located, to
take possession of all or any part of the Collateral or the books and records
relating thereto, or both, to remove all or any part of the Collateral or the
books and records relating thereto, or both, and to conduct sales of the
Collateral, without any obligation to pay the Grantor for such use and
occupancy;
(c) furnish
to the Administrative Agent, or cause an issuer of Pledged Collateral to furnish
to the Administrative Agent, any information regarding the Pledged Collateral in
such detail as the Administrative Agent may specify; and
(d)
at its own expense, cause the independent certified public
accountants then engaged by each Grantor to prepare and deliver to the
Administrative Agent and each Lender, at any time, and from time to time,
promptly upon the Administrative Agent’s request, the following reports with
respect to the applicable Grantor: (i) a reconciliation of all
Accounts; (ii) an aging of all Accounts; (iii) trial balances; and (iv) a test
verification of such Accounts.
5.3
Grant of Intellectual
Property License
. For the purpose of enabling the
Administrative Agent to exercise the rights and remedies under this
Article V
at and
during the continuance of such time as the Administrative Agent shall be
lawfully entitled to exercise such rights and remedies in accordance with the
Intercreditor Agreement, each Grantor hereby (a) grants to the Administrative
Agent, for the benefit of the Administrative Agent and the Secured Parties, an
irrevocable, nonexclusive license (exercisable without payment of royalty or
other compensation to any Grantor) to use, license or sublicense any
Intellectual Property rights now owned or hereafter acquired by such Grantor,
and wherever the same may be located, and including in such license access to
all media in which any of the licensed items may be recorded or stored and to
all computer software and programs used for the compilation or printout thereof
and (b) irrevocably agrees that the Administrative Agent may sell any of such
Grantor’s Inventory directly to any person, including without limitation persons
who have previously purchased the Grantor’s Inventory from such Grantor and in
connection with any such sale or other enforcement of the Administrative Agent’s
rights under this Security Agreement, may sell Inventory which bears any
Trademark owned by or licensed to such Grantor and any Inventory that is covered
by any Copyright owned by or licensed to such Grantor and the Administrative
Agent may finish any work in process and affix any Trademark owned by or
licensed to such Grantor and sell such Inventory as provided
herein.
5.4
Waivers
. Each
Grantor hereby waives any and all rights that it may otherwise have (whether any
such right is contractual or exists pursuant to the articles of incorporation or
bylaws of any relevant entity or under applicable law) that would interfere with
this Agreement or the exercise by the Administrative Agent of any rights or
remedies granted to it pursuant to this Agreement. Without limiting
the generality of the foregoing, (a) U.S. Concrete, Inc. and Beall Industries,
Inc. hereby waive any transfer restriction on the stock of Beall Industries,
Inc., including, without limitation, any right of first refusal or right of
first offer set forth in Section 6.10 of the Bylaws of Beall Industries, Inc.,
(b) U.S. Concrete, Inc. and Central Precast Concrete, Inc. hereby waive any
transfer restriction on the stock of Central Precast Concrete, Inc., including,
without limitation, any right of first refusal or right of first offer set forth
in Section 4 of the Articles of Incorporation of Central Precast Concrete, Inc.,
and (c) U.S. Concrete, Inc. and Superior Holdings, Inc. hereby waive any
transfer restriction on the stock of Superior Holdings, Inc., including, without
limitation, any right of first refusal or right of first offer set forth in
Article V of the Articles of Incorporation of Superior Holdings,
Inc.
ARTICLE
VI
ACCOUNT VERIFICATION;
ATTORNEY IN FACT; PROXY
6.1
Account
Verification
. The Administrative Agent may at any time, in the
Administrative Agent’s own name, in the name of a nominee of the Administrative
Agent, or in the name of any Grantor communicate (by mail, telephone, facsimile
or otherwise) with the Account Debtors of any such Grantor, parties to contracts
with any such Grantor and obligors in respect of Instruments of any such Grantor
to verify with such Persons, to the Administrative Agent’s reasonable
satisfaction, the existence, amount, terms of, and any other matter relating to,
Accounts, Instruments, Chattel Paper, payment intangibles and/or other
Receivables.
6.2
Authorization for Secured
Party to Take Certain Action
.
(a) Each
Grantor irrevocably authorizes the Administrative Agent at any time and from
time to time in the sole discretion of the Administrative Agent and appoints the
Administrative Agent as its attorney in fact, subject to
clause
(b)
of this
Section
6.2
(i) to
execute on behalf of such Grantor as debtor and to file financing statements
necessary or desirable in the Administrative Agent’s sole discretion to perfect
(subject to the qualifications with respect to Intellectual Property set forth
in
Section
3.1
) and
to maintain the perfection and priority of the Administrative Agent’s security
interest in the Collateral, (ii) to endorse and collect any cash proceeds of the
Collateral, (iii) to file a carbon, photographic or other reproduction of this
Security Agreement or any financing statement with respect to the Collateral as
a financing statement and to file any other financing statement or amendment of
a financing statement (which does not add new collateral or add a debtor) in
such offices as the Administrative Agent in its sole discretion deems necessary
or desirable to perfect (subject to the qualifications with respect to
Intellectual Property set forth in
Section
3.1
) and to maintain
the perfection and priority of the Administrative Agent’s security interest in
the Collateral, (iv) to contact and enter into one or more agreements with the
issuers of uncertificated securities which are Pledged Collateral or with
securities intermediaries holding Pledged Collateral as may be necessary or
advisable to give the Administrative Agent Control over such Pledged Collateral,
subject to the terms set forth in the Intercreditor Agreement, (v) to apply the
proceeds of any Collateral received by the Administrative Agent to the Secured
Obligations as provided in
Section
7.3
, (vi) upon five
days’ prior notice, to discharge past due taxes, assessments, charges, fees or
Liens on the Collateral (except for such Liens as are specifically permitted
hereunder), (vii) to contact Account Debtors for any reason, (viii) to demand
payment or enforce payment of the Receivables in the name of the Administrative
Agent or such Grantor and to endorse any and all checks, drafts, and other
instruments for the payment of money relating to the Receivables, (ix) to sign
such Grantor’s name on any invoice or bill of lading relating to the
Receivables, drafts against any Account Debtor of the Grantor, assignments and
verifications of Receivables, (x) to exercise all of such Grantor’s rights and
remedies with respect to the collection of the Receivables and any other
Collateral, (xi) to settle, adjust, compromise, extend or renew the Receivables,
(xii) to settle, adjust or compromise any legal proceedings brought to collect
Receivables, (xiii) to prepare, file and sign such Grantor’s name on a proof of
claim in bankruptcy or similar document against any Account Debtor of such
Grantor, (xiv) to prepare, file and sign such Grantor’s name on any notice of
Lien, assignment or satisfaction of Lien or similar document in connection with
the Receivables, (xv) to change the address for delivery of mail addressed to
such Grantor to such address as the Administrative Agent may designate and to
receive, open and dispose of all mail addressed to such Grantor, and (xvi) to do
all other acts and things necessary to carry out this Security Agreement; and
such Grantor agrees to reimburse the Administrative Agent promptly following
written demand for any reasonable and documented out-of-pocket expense or
payment incurred by the Administrative Agent in connection with any of the
foregoing;
provided
that,
this authorization shall not relieve such Grantor of any of its
obligations under this Security Agreement or under the Credit
Agreement.
(b) All
acts of said attorney or designee are hereby ratified and
approved. The powers conferred on the Administrative Agent, for the
benefit of the Administrative Agent and the Secured Parties, under this
Section
6.2
are solely to
protect the Administrative Agent’s interests in the Collateral and shall not
impose any duty upon the Administrative Agent or any Lender to exercise any such
powers. The Administrative Agent agrees that, except for the powers
granted in
Sections
6.2(a)(i)
,
(a)(ii)
,
(a)(iii)
,
(a)(iv)
,
(a)(v)
,
(a)(vi)
and
(a)(xvi)
, it shall
not exercise any power or authority granted to it under the power of attorney
unless an Event of Default has occurred and is continuing.
6.3
Proxy
. SUBJECT
TO THE TERMS, CONDITIONS AND PROVISIONS OF THE INTERCREDITOR AGREEMENT, EACH
GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE ADMINISTRATIVE AGENT AS
ITS PROXY AND ATTORNEY-IN-FACT (AS SET FORTH IN
SECTION
6.2
ABOVE) WITH
RESPECT TO ITS PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE SUCH PLEDGED
COLLATERAL, WITH FULL POWER OF SUBSTITUTION TO DO SO. IN ADDITION TO
THE RIGHT TO VOTE ANY SUCH PLEDGED COLLATERAL, THE APPOINTMENT OF THE
ADMINISTRATIVE AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO
EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF
SUCH PLEDGED COLLATERAL WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING
WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND
VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE,
AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF
ANY SUCH PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY
PERSON (INCLUDING THE ISSUER OF SUCH PLEDGED COLLATERAL OR ANY OFFICER OR AGENT
THEREOF), UPON THE OCCURRENCE AND DURING THE CONTINUANCE OF AN EVENT OF
DEFAULT.
6.4
Nature of Appointment;
Limitation of Duty
. THE APPOINTMENT OF THE ADMINISTRATIVE
AGENT AS PROXY AND ATTORNEY-IN-FACT IN THIS
ARTICLE
VI
IS COUPLED WITH
AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS SECURITY
AGREEMENT IS TERMINATED IN ACCORDANCE WITH
SECTION
8.14
. NOTWITHSTANDING
ANYTHING CONTAINED HEREIN, NEITHER THE ADMINISTRATIVE AGENT, NOR ANY LENDER, NOR
ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR
REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED
HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY
FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN RESPECT OF DAMAGES
ATTRIBUTABLE TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT (OR THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY OF THEIR RESPECTIVE AFFILIATES,
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES) AS FINALLY DETERMINED
BY A COURT OF COMPETENT JURISDICTION; PROVIDED THAT, IN NO EVENT SHALL THEY BE
LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL
DAMAGES.
ARTICLE
VII
COLLECTION AND APPLICATION
OF COLLATERAL PROCEEDS; DEPOSIT ACCOUNTS
7.1
Collection of
Receivables
. Subject to the terms, conditions and provisions
of the Intercreditor Agreement:
(a) On
or before the Effective Date, each Grantor shall (i) execute and deliver to the
Administrative Agent Deposit Account Control Agreements for each Deposit Account
(other than Excluded Deposit Accounts) maintained by such Grantor into which all
cash, checks or other similar payments relating to or constituting payments made
in respect of Receivables will be deposited (a “
Collateral
Deposit Account
”), which Collateral Deposit Accounts (as of the Effective
Date) are identified as such on
Exhibit B
, and (ii)
establish lock box service (the “
Lock
Boxes
”) with the bank(s) set forth in
Exhibit B
, which lock
boxes shall be subject to irrevocable lockbox agreements in the form provided by
or otherwise acceptable to the Administrative Agent and shall be accompanied by
an acknowledgment by the bank where the Lock Box is located of (1) to the extent
requested by the Administrative Agent, the Lien of the Administrative Agent
granted hereunder and (2) irrevocable instructions to wire all amounts collected
therein to the Collection Account (a “
Lock Box
Agreement
”). After the Closing Date, each Grantor will comply
with the terms of
Section
7.2
.
(b) Each
Grantor shall direct all of its Account Debtors to forward payments directly to
Lock Boxes subject to Lock Box Agreements. Subject to the terms,
conditions and provisions of the Intercreditor Agreement, the Administrative
Agent shall have sole access to the Lock Boxes at all times and each Grantor
shall take all actions necessary to grant the Administrative Agent such sole
access. At no time shall any Grantor remove any item from a Lock Box
or from a Collateral Deposit Account without the Administrative Agent’s prior
written consent. If any Grantor should refuse or neglect to promptly
notify any Account Debtor to forward payments directly to a Lock Box subject to
a Lock Box Agreement after written notice from the Administrative Agent, the
Administrative Agent shall, notwithstanding the language set forth in
Section
6.2(b)
be entitled to
make such notification directly to such Account Debtor. If
notwithstanding the foregoing instructions, any Grantor receives any proceeds of
any Receivables, such Grantor shall receive such payments as the Administrative
Agent’s trustee, and shall immediately deposit all cash, checks or other similar
payments related to or constituting payments made in respect of Receivables
received by it to a Collateral Deposit Account. All funds deposited
into any Lock Box subject to a Lock Box Agreement or a Collateral Deposit
Account will be swept on a daily basis into a collection account maintained by
the Company with the Administrative Agent (the “
Collection
Account
”). The Administrative Agent shall hold and apply funds
received into the Collection Account as provided by the terms of
Section
7.3
.
(c) Notwithstanding
anything to the contrary contained herein, in no event shall the Grantors be
required to deposits any amounts received in respect of the Notes Priority
Collateral in any Collateral Deposit Account or Collection Account or otherwise
direct such amounts or proceeds to a Lockbox if delivered to a collateral
account pledged to the Notes Agent.
7.2
Covenant Regarding New
Deposit Accounts; Lock Boxes
. Before opening or replacing any
Collateral Deposit Account, other Deposit Account, or establishing a new Lock
Box (other than Excluded Deposit Accounts), each Grantor shall cause each bank
or financial institution in which it seeks to open (i) a Deposit Account, to
enter into a Deposit Account Control Agreement with the Administrative Agent in
order to give the Administrative Agent Control of such Deposit Account, or (ii)
a Lock Box, to enter into a Lock Box Agreement with the Administrative Agent in
order to give the Administrative Agent Control of the Lock Box. In
the case of Deposit Accounts or Lock Boxes maintained with Lenders and their
Affiliates, the terms of such letter shall be subject to the provisions of the
Credit Agreement regarding setoffs.
7.3
Application of Proceeds;
Deficiency
. All amounts deposited in the Collection Account
shall be deemed received by the Administrative Agent in accordance with Section
2.18 of the Credit Agreement and shall, after having been credited to the
Collection Account, be applied (and allocated) by Administrative Agent in
accordance with Section 2.10(b) of the Credit Agreement. Subject to
the terms, conditions and provisions of the Intercreditor Agreement, the
Administrative Agent shall require all other cash proceeds of the Collateral,
which are not required to be applied to the Obligations pursuant to Section 2.11
of the Credit Agreement, to be deposited in a special non-interest bearing cash
collateral account with the Administrative Agent and held there as security for
the Secured Obligations. No Grantor shall have any control whatsoever
over said cash collateral account. Any such proceeds of the
Collateral shall be applied in the order set forth in Section 2.18 of the Credit
Agreement unless a court of competent jurisdiction shall otherwise
direct. Subject to the terms, conditions and provisions of the
Intercreditor Agreement, the balance, if any, after all of the Secured
Obligations have been satisfied, shall be deposited by the Administrative Agent
into the Company’s general operating account with the Administrative
Agent. The Grantors shall remain liable for any deficiency if the
proceeds of any sale or disposition of the Collateral are insufficient to pay
all Secured Obligations, including any attorneys’ fees and other expenses
incurred by Administrative Agent or any Lender to collect such
deficiency.
ARTICLE
VIII
GENERAL
PROVISIONS
8.1
Waivers
. To
the extent permitted by applicable law, each Grantor hereby waives notice of the
time and place of any public sale or the time after which any private sale or
other disposition of all or any part of the Collateral may be
made. To the extent such notice may not be waived under applicable
law, any notice made shall be deemed reasonable if sent to the Grantors,
addressed as set forth in
Article IX
, at least
ten days prior to (a) the date of any such public sale or (b) the time after
which any such private sale or other disposition may be made. To the
maximum extent permitted by applicable law, each Grantor waives all claims,
damages, and demands against the Administrative Agent or any Lender arising out
of the repossession, retention or sale of the Collateral, except to the extent
such arise out of the gross negligence or willful misconduct of the
Administrative Agent or such Lender (or any of their respective affiliates,
officers, directors, employees, agents or representatives) as finally determined
by a court of competent jurisdiction. To the extent it may lawfully
do so, each Grantor absolutely and irrevocably waives and relinquishes the
benefit and advantage of, and covenants not to assert against the Administrative
Agent or any Lender, any valuation, stay, appraisal, extension, moratorium,
redemption or similar laws and any and all rights or defenses it may have as a
surety now or hereafter existing which, but for this provision, might be
applicable to the sale of any Collateral made under the judgment, order or
decree of any court, or privately under the power of sale conferred by this
Security Agreement, or otherwise. Except as otherwise specifically
provided herein, each Grantor hereby waives presentment, demand, protest or any
notice (to the maximum extent permitted by applicable law) of any kind in
connection with this Security Agreement or any Collateral.
8.2
Limitation on Administrative
Agent’s and Secured Parties’ Duty with Respect to the
Collateral
. The Administrative Agent shall have no obligation
to clean-up or otherwise prepare the Collateral for sale. The
Administrative Agent and each Secured Party shall use reasonable care with
respect to the Collateral in its possession or under its
control. Neither the Administrative Agent nor any Secured Party shall
have any other duty as to any Collateral in its possession or control or in the
possession or control of any agent or nominee of the Administrative Agent or
such Secured Party other than to account for money received, or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. To the extent that applicable law imposes
duties on the Administrative Agent to exercise remedies in a commercially
reasonable manner, each Grantor acknowledges and agrees that it is commercially
reasonable for the Administrative Agent (a) to fail to incur expenses deemed
significant by the Administrative Agent to prepare Collateral for disposition or
otherwise to transform raw material or work in process into finished goods or
other finished products for disposition, (b) to fail to obtain third party
consents for access to Collateral to be disposed of, or to obtain or, if not
required by other law, to fail to obtain governmental or third party consents
for the collection or disposition of Collateral to be collected or disposed of,
(c) to fail to exercise collection remedies against Account Debtors or other
Persons obligated on Collateral or to remove Liens on or any adverse claims
against Collateral, (d) to exercise collection remedies against Account Debtors
and other Persons obligated on Collateral directly or through the use of
collection agencies and other collection specialists, (e) to advertise
dispositions of Collateral through publications or media of general circulation,
whether or not the Collateral is of a specialized nature, (f) to contact other
Persons, whether or not in the same business as such Grantor, for expressions of
interest in acquiring all or any portion of such Collateral, (g) to hire one or
more professional auctioneers to assist in the disposition of Collateral,
whether or not the Collateral is of a specialized nature, (h) to dispose of
Collateral by utilizing internet sites that provide for the auction of assets of
the types included in the Collateral or that have the reasonable capacity of
doing so, or that match buyers and sellers of assets, (i) to dispose of assets
in wholesale rather than retail markets, (j) to disclaim disposition warranties,
such as title, possession or quiet enjoyment, (k) to purchase insurance or
credit enhancements to insure the Administrative Agent against risks of loss,
collection or disposition of Collateral or to provide to the Administrative
Agent a guaranteed return from the collection or disposition of Collateral, or
(l) to the extent deemed appropriate by the Administrative Agent, to obtain the
services of other brokers, investment bankers, consultants and other
professionals to assist the Administrative Agent in the collection or
disposition of any of the Collateral. Each Grantor acknowledges that
the purpose of this
Section
8.2
is to provide
non-exhaustive indications of what actions or omissions by the Administrative
Agent would be commercially reasonable in the Administrative Agent’s exercise of
remedies against the Collateral and that other actions or omissions by the
Administrative Agent shall not be deemed commercially unreasonable solely on
account of not being indicated in this
Section
8.2
. Without
limitation upon the foregoing, nothing contained in this
Section
8.2
shall be
construed to grant any rights to any Grantor or to impose any duties on the
Administrative Agent that would not have been granted or imposed by this
Security Agreement or by applicable law in the absence of this
Section
8.2
.
8.3
Compromises and Collection
of Collateral
. The Grantors and the Administrative Agent
recognize that setoffs, counterclaims, defenses and other claims may be asserted
by obligors with respect to certain of the Receivables, that certain of the
Receivables may be or become uncollectible in whole or in part and that the
expense and probability of success in litigating a disputed Receivable may
exceed the amount that reasonably may be expected to be recovered with respect
to a Receivable. In view of the foregoing, each Grantor agrees that
the Administrative Agent may at any time and from time to time, if an Event of
Default has occurred and is continuing, compromise with the obligor on any
Receivable, accept in full payment of any Receivable such amount as the
Administrative Agent in its sole discretion shall determine or abandon any
Receivable, and any such action by the Administrative Agent shall be
commercially reasonable so long as the Administrative Agent acts in good faith
based on information known to it at the time it takes any such
action.
8.4
Secured Party Performance of
Debtor Obligations
. Subject to the terms, conditions and
provisions of the Intercreditor Agreement, without having any obligation to do
so, upon prior notice to the extent required under this Agreement, the
Administrative Agent may perform or pay any obligation which any Grantor has
agreed to perform or pay in this Security Agreement and the Grantors shall
reimburse the Administrative Agent for any amounts paid by the Administrative
Agent pursuant to this
Section
8.4
. The
Grantors’ obligation to reimburse the Administrative Agent pursuant to the
preceding sentence shall be a Secured Obligation payable on demand.
8.5
Specific Performance of
Certain Covenants
. Each Grantor acknowledges and agrees that a
breach of any of the covenants contained in
Section
4.1(d)
,
Section
4.1(e)
,
Section
4.4
,
Section
4.5
,
Section
4.6
,
Section
4.7
,
Section
4.8
,
Section
4.9
,
Section
4.10
,
Section
4.12
,
Section
4.13
,
Section
4.14
,
Section
4.15
,
Section 4.16
,
Section
5.2
, or
Section
8.7 or in
Article VII
will cause irreparable injury to the Administrative Agent and the Secured
Parties, that the Administrative Agent and the Secured Parties have no adequate
remedy at law in respect of such breaches and therefore agrees, without limiting
the right of the Administrative Agent or the Secured Parties to seek and obtain
specific performance of other obligations of the Grantors contained in this
Security Agreement, that the covenants of the Grantors contained in the Sections
referred to in this
Section
8.5
shall be
specifically enforceable against the Grantors.
8.6
Dispositions Not
Authorized
. No Grantor is authorized to sell or otherwise
dispose of the Collateral except as set forth in
Section
4.1(d)
and
notwithstanding any course of dealing between any Grantor and the Administrative
Agent or other conduct of the Administrative Agent, no authorization to sell or
otherwise dispose of the Collateral (except as set forth in
Section
4.1(d)
) shall be
binding upon the Administrative Agent or the Lenders unless such authorization
is in accordance with Section 9.02 of the Credit Agreement.
8.7
No Waiver; Amendments;
Cumulative Remedies
. No delay or omission of the
Administrative Agent or any Lender to exercise any right or remedy granted under
this Security Agreement shall impair such right or remedy or be construed to be
a waiver of any Default or an acquiescence therein, and any single or partial
exercise of any such right or remedy shall not preclude any other or further
exercise thereof or the exercise of any other right or remedy. No
waiver, amendment or other variation of the terms, conditions or provisions of
this Security Agreement whatsoever shall be valid unless in writing signed by
the Administrative Agent with the concurrence or at the direction of the Lenders
required under Section 9.02 of the Credit Agreement and then only to the extent
in such writing specifically set forth. All rights and remedies
contained in this Security Agreement or by law afforded shall be cumulative and
all shall be available to the Administrative Agent and the Secured Parties until
the Secured Obligations have been paid in full.
8.8
Limitation by Law;
Severability of Provisions
. All rights, remedies and powers
provided in this Security Agreement may be exercised only to the extent that the
exercise thereof does not violate any applicable provision of law, and all the
provisions of this Security Agreement are intended to be subject to all
applicable mandatory provisions of law that may be controlling and to be limited
to the extent necessary so that they shall not render this Security Agreement
invalid, unenforceable or not entitled to be recorded or registered, in whole or
in part. Any provision in this Security Agreement that is held to be
inoperative, unenforceable, or invalid in any jurisdiction shall, as to that
jurisdiction, be inoperative, unenforceable, or invalid without affecting the
remaining provisions in that jurisdiction or the operation, enforceability, or
validity of that provision in any other jurisdiction, and to this end the
provisions of this Security Agreement are declared to be severable.
8.9
Reinstatement
. This
Security Agreement shall remain in full force and effect and continue to be
effective should any petition be filed by or against any Grantor for liquidation
or reorganization, should any Grantor become insolvent or make an assignment for
the benefit of any creditor or creditors or should a receiver or trustee be
appointed for all or any significant part of any Grantor’s assets, and shall
continue to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Secured Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Secured Obligations, whether as a
“voidable preference,” “fraudulent conveyance,” or otherwise, all as though such
payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Secured Obligations shall be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned.
8.10
Benefit of
Agreement
. The terms and provisions of this Security Agreement
shall be binding upon and inure to the benefit of the Grantors, the
Administrative Agent and the Secured Parties and their respective successors and
permitted assigns (including all persons who become bound as a debtor to this
Security Agreement), except that no Grantor shall have the right to assign its
rights or delegate its obligations under this Security Agreement or any interest
herein, without the prior written consent of the Administrative
Agent. No sales of participations, assignments, transfers, or other
dispositions of any agreement governing the Secured Obligations or any portion
thereof or interest therein shall in any manner impair the Lien granted to the
Administrative Agent, for the benefit of the Administrative Agent and the
Secured Parties, hereunder.
8.11
Survival of
Representations
. All representations and warranties of the
Grantors contained in this Security Agreement shall survive the execution and
delivery of this Security Agreement.
8.12
Taxes and
Expenses
. Any taxes (including income taxes) payable or ruled
payable by Federal or State authority in respect of this Security Agreement
shall be paid by the Grantors, together with interest and penalties, if
any. The Grantors shall reimburse the Administrative Agent for any
and all reasonable and out-of-pocket expenses (including reasonable and
out-of-pocket attorneys’, auditors’ and accountants’ fees) paid or incurred by
the Administrative Agent in connection with the preparation, execution,
delivery, administration, collection and enforcement of this Security Agreement
and in the audit, analysis, administration, collection, preservation or sale of
the Collateral (including the expenses and charges associated with any periodic
or special audit of the Collateral). Any and all costs and expenses
incurred by the Grantors in the performance of actions required pursuant to the
terms hereof shall be borne solely by the Grantors.
8.13
Headings
. The
title of and section headings in this Security Agreement are for convenience of
reference only, and shall not govern the interpretation of any of the terms and
provisions of this Security Agreement.
8.14
Termination and
Release
. Subject to the terms, conditions and provisions of
the Intercreditor Agreement:
(a) This
Security Agreement shall continue in effect (notwithstanding the fact that from
time to time there may be no Secured Obligations outstanding) until (i) the
Credit Agreement has terminated pursuant to its express terms and (ii) all of
the Secured Obligations (other than Unliquidated Obligations) have been paid in
full (or with respect to any outstanding Letters of Credit, a cash deposit or,
at the discretion of the Administrative Agent, a back up standby letter of
credit satisfactory to the Administrative Agent has been delivered to the
Administrative Agent as required by the Credit Agreement) and all Commitments
have been terminated, whereupon the security interest created hereunder shall
automatically terminate and be released.
(b) Any
Subsidiary shall automatically be released from its obligations hereunder and
the security interest in the Collateral of such Subsidiary shall be
automatically released upon the consummation of any transaction permitted by the
Credit Agreement (or consented to in writing pursuant to Section 9.02 of the
Credit Agreement) as a result of which such Subsidiary ceases to be a Subsidiary
of the Company.
(c) Upon
(i) any sale, transfer or other disposition by any Grantor of Collateral that is
permitted under the Credit Agreement (other than to another Grantor), (ii) upon
the effectiveness of any written consent to the release of security interest
granted hereby in any Collateral pursuant to Section 9.02 of the Credit
Agreement or (iii) any release of Liens pursuant to Section 4.2 of the
Intercreditor Agreement, the security interest of the Administrative Agent in
such Collateral and any other security interests granted hereby in such
Collateral shall be automatically released.
(d) Upon
the termination or release of any security interest created hereunder or release
of Collateral, the Administrative Agent will, upon request by and at the expense
of any Grantor, execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence the termination of the security
interest created hereunder or the release of such Collateral, as the case may
be.
8.15
Entire
Agreement
. This Security Agreement embodies the entire
agreement and understanding between the Grantors and the Administrative Agent
relating to the Collateral and supersedes all prior agreements and
understandings between the Grantors and the Administrative Agent relating to the
Collateral.
8.16
CHOICE OF
LAW
. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS)
OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO
NATIONAL BANKS.
8.17
CONSENT TO
JURISDICTION
. EACH GRANTOR HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR NEW YORK STATE COURT SITTING
IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT AND EACH GRANTOR HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT. EACH PARTY HERETO
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT
IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY GRANTOR IN
THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY
GRANTOR AGAINST THE ADMINISTRATIVE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE
AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY
ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS SECURITY AGREEMENT OR ANY
OTHER LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK, NEW
YORK.
8.18
WAIVER OF JURY
TRIAL
. EACH GRANTOR, THE ADMINISTRATIVE AGENT AND EACH LENDER
HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT
OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
8.19
Indemnity
. Each
Grantor hereby agrees to indemnify the Administrative Agent and the Secured
Parties, and their respective successors, assigns, agents and employees (each,
an “
Indemnitee
”), from
and against any and all liabilities, damages, penalties, suits, costs, and
expenses of any kind and nature (including, without limitation, all expenses of
litigation or preparation therefor whether or not the Administrative Agent or
any Secured Party is a party thereto) imposed on, incurred by or asserted
against the Administrative Agent or the Secured Parties, or their respective
successors, assigns, agents and employees, in any way relating to or arising out
of this Security Agreement, or the manufacture, purchase, acceptance, rejection,
ownership, delivery, lease, possession, use, operation, condition, sale, return
or other disposition of any Collateral (including, without limitation, latent
and other defects, whether or not discoverable by the Administrative Agent or
the Secured Parties or any Grantor, and any claim for Patent, Trademark or
Copyright infringement);
provided
that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, penalties, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or such Indemnitee’s Related Parties or (y) arise from any
dispute solely among Indemnitees. WITHOUT LIMITATION OF THE FOREGOING
BUT SUBJECT TO ANY LIMITATION CONTAINED THEREIN, IT IS THE INTENTION OF EACH
GRANTOR AND EACH GRANTOR AGREES THAT THE FOREGOING INDEMNITIES SHALL APPLY TO
EACH INDEMNITEE WITH RESPECT TO LOSSES, CLAIMS, DAMAGES, PENALTIES, LIABILITIES
AND RELATED EXPENSES (INCLUDING, WITHOUT LIMITATION, ALL EXPENSES OF LITIGATION
OR PREPARATION THEREFOR), WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT
OF THE NEGLIGENCE OF SUCH (AND/OR ANY OTHER) INDEMNITEE.
8.20
Counterparts
. This
Security Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Security Agreement by signing any such
counterpart. Delivery of an executed counterpart of a signature page
of this Agreement by facsimile or other electronic communication (including via
email or PDF) shall be effective as delivery of a manually executed counterpart
of this Agreement.
8.21
Intercreditor
Agreement
. Notwithstanding anything to the contrary contained
in this Security Agreement, the Liens, security interests and rights granted
pursuant to this Security Agreement shall be subject to the terms, provisions
and conditions of (and the exercise of any right or remedy by the Administrative
Agent hereunder or thereunder shall be subject to the terms and conditions of),
the Intercreditor Agreement. In the event of any conflict between
this Security Agreement and the Intercreditor Agreement, the Intercreditor
Agreement shall control, and no right, power, or remedy granted to the
Administrative Agent hereunder shall be exercised by the Administrative Agent,
and no direction shall be given by the Administrative Agent in contravention of,
the Intercreditor Agreement. With respect to any
requirements herein for any Grantor to deliver originals
of Certificated Securities, Instruments or similar documents
constituting Collateral, such requirements shall be deemed satisfied to the
extent the requirements to deliver the same to the Notes Agent in
accordance with the Intercreditor Agreement and the Senior Notes Documents are
in effect and are satisfied by such Grantor. To the extent that
any covenants, representations or warranties set forth in this Agreement are
untrue or incorrect solely as a result of the delivery to, or grant of
possession or control to, the Noteholder Collateral Agent in accordance with
this
Section
8.21
, such representation or warranty shall not be deemed to be untrue or
incorrect for purposes of this Agreement.
8.22
Perfect
ion
in Certain
Collateral
. Notwithstanding anything herein to the contrary,
the Administrative Agent agrees with the Grantors that, if and for so long as,
in the reasonable judgment of the Required Lenders (confirmed in writing by
notice to the Company), the cost of perfecting the Administrative Agent’s Lien
in any item of Collateral shall be excessive in view of the benefits to be
obtained by the Secured Parties from such perfection, the Grantors shall be
excused from the requirement that the Administrative Agent’s Lien in such item
of Collateral be perfected until such time as the Required Lenders shall confirm
in writing to the Company that, in their reasonable judgment, such situation no
longer exists. Nothing contained herein shall be construed to permit
any item of the Collateral to be included as Eligible Accounts, Eligible
Inventory or Eligible Trucks if the Administrative Agent’s Lien therein is not
properly perfected as would otherwise be required, nor shall anything contained
herein be construed to limit the creation or attachment of the Administrative
Agent’s Lien in any item of Collateral. The Required Lenders may, but
shall not be obligated to, grant extensions of time for the perfection of
security interests in particular items of Collateral (including extensions
beyond the Closing Date for the perfection of security interests in any item of
Collateral existing on such date) where the Required Lenders reasonably
determine, in consultation with the Company, that perfection of the
Administrative Agent’s Lien in such item of Collateral cannot be accomplished
without undue efforts or expense within the time or times provided therefor or
otherwise required by this Security Agreement or the other Loan
Documents.
8.23
Notes Priority
Collateral
. Notwithstanding anything to the contrary contained
in this Security Agreement, if any deadline with respect to Notes Priority
Collateral to provide any information, any agreements with third parties or a
perfected security interest to the Notes Agent under that certain Pledge and
Security Agreement dated as of the date hereof among the Grantors and the Notes
Agent is extended or waived thereunder, then any such corresponding deadline
under this Security Agreement (if any) shall also be automatically extended or
waived, as applicable, hereunder.
ARTICLE
IX
NOTICES
9.1
Sending
Notices
. Any notice required or permitted to be given under
this Security Agreement shall be sent by United States mail, telecopier,
personal delivery or nationally established overnight courier service, and shall
be deemed received (a) when received, if sent by hand or overnight courier
service, or mailed by certified or registered mail notices or (b) when sent, if
sent by telecopier (except that, if not given during normal business hours for
the recipient, shall be deemed to have been given at the opening of business on
the next Business Day for the recipient), in each case addressed to the Grantors
at the notice address set forth on
Exhibit A
, and to the
Administrative Agent and the Lenders at the addresses set forth in accordance
with Section 9.01 of the Credit Agreement.
9.2
Change in
Address for Notices
. Each of the Grantors, the Administrative
Agent and the Lenders may change the address for service of notice upon it by a
notice in writing to the other parties.
ARTICLE
X
THE ADMINISTRATIVE
AGENT
JPMorgan
Chase Bank, N.A. has been appointed Administrative Agent for the Lenders
hereunder pursuant to Article VIII of the Credit Agreement. It is
expressly understood and agreed by the parties to this Security Agreement that
any authority conferred upon the Administrative Agent hereunder is subject to
the terms of the delegation of authority made by the Lenders to the
Administrative Agent pursuant to the Credit Agreement, and that the
Administrative Agent has agreed to act (and any successor Administrative Agent
shall act) as such hereunder only on the express conditions contained in such
Article VIII. Any successor Administrative Agent appointed pursuant
to Article VIII of the Credit Agreement shall be entitled to all the rights,
interests and benefits of the Administrative Agent hereunder.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the Grantors and the Administrative Agent have executed this
Security Agreement as of the date first above written.
|
GRANTORS:
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|
|
|
U.S. CONCRETE, INC.
, a
Delaware corporation
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|
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|
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By:
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/s/ Michael W. Harlan
|
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Name:
|
Michael
W. Harlan
|
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Title:
|
Chief
Executive Officer and President
|
|
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ALBERTA
INVESTMENTS, INC.
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By:
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/s/ Michael W. Harlan
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Name:
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Michael
W. Harlan
|
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Title:
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President
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ALLIANCE
HAULERS, INC.
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|
|
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By:
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/s/ Michael W. Harlan
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Name:
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Michael
W. Harlan
|
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Title:
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President
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AMERICAN
CONCRETE PRODUCTS, INC.
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By:
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/s/ Curt M. Lindeman
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Name:
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Curt
M. Lindeman
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Title:
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Vice
President and Secretary
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ATLAS
REDI-MIX, LLC
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By:
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/s/ Michael W. Harlan
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Name:
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Michael
W. Harlan
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Title:
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President
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[Signature
Page to Pledge and Security Agreement]
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ATLAS-TUCK
CONCRETE, INC.
|
|
|
|
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By:
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/s/ Michael W. Harlan
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Name:
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Michael
W. Harlan
|
|
Title:
|
President
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|
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BWB,
INC. OF MICHIGAN
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By:
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/s/ Curt M. Lindeman
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Name:
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Curt
M. Lindeman
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Title:
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Vice
President and Secretary
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|
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|
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BEALL
CONCRETE ENTERPRISES, LLC
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By:
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/s/ Michael W. Harlan
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Name:
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Michael
W. Harlan
|
|
Title:
|
President
|
|
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BEALL
INVESTMENT CORPORATION, INC.
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|
|
|
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By:
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/s/ Michael W. Harlan
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|
Name:
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Michael
W. Harlan
|
|
Title:
|
President
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BEALL
INDUSTRIES, INC.
|
|
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|
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By:
|
/s/ Michael W. Harlan
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Name:
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Michael
W. Harlan
|
|
Title:
|
President
|
[Signature
Page to Pledge and Security Agreement]
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BEALL
MANAGEMENT, INC.
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|
|
|
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By:
|
/s/ Michael W. Harlan
|
|
Name:
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Michael
W. Harlan
|
|
Title:
|
President
|
|
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|
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BRECKENRIDGE
READY MIX, INC.
|
|
|
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By:
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/s/ Curt M. Lindeman
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Name:
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Curt
M. Lindeman
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Title:
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Vice
President and Secretary
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BUILDERS’
REDI-MIX LLC
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By:
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/s/ Curt M. Lindeman
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Name:
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Curt
M. Lindeman
|
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Title:
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Vice
President and Secretary
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|
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CENTRAL
CONCRETE SUPPLY CO., INC.
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By:
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/s/ Curt M. Lindeman
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Name:
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Curt
M. Lindeman
|
|
Title:
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Vice
President and Secretary
|
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CENTRAL
PRECAST CONCRETE, INC.
|
|
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By:
|
/s/ Curt M. Lindeman
|
|
Name:
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Curt
M. Lindeman
|
|
Title:
|
Vice
President and Secretary
|
[Signature
Page to Pledge and Security Agreement]
|
CONCRETE
ACQUISITION III, LLC
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
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Curt
M. Lindeman
|
|
Title:
|
President
|
|
|
|
|
CONCRETE
ACQUISITION IV, LLC
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt
M. Lindeman
|
|
Title:
|
President
|
|
|
|
|
CONCRETE
ACQUISITION V, LLC
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt
M. Lindeman
|
|
Title:
|
President
|
|
|
|
|
CONCRETE
ACQUISITION VI, LLC
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt
M. Lindeman
|
|
Title:
|
President
|
|
|
|
|
CONCRETE
XXXIII ACQUISITION, INC.
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt
M. Lindeman
|
|
Title:
|
President
|
[Signature
Page to Pledge and Security Agreement]
|
CONCRETE
XXXIV ACQUISITION, INC.
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt
M. Lindeman
|
|
Title:
|
President
|
|
|
|
|
CONCRETE
XXXV ACQUISITION, INC.
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt
M. Lindeman
|
|
Title:
|
President
|
|
|
|
|
CONCRETE
XXXVI ACQUISITION, INC.
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt
M. Lindeman
|
|
Title:
|
President
|
|
|
|
|
EASTERN
CONCRETE MATERIALS, INC.
|
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael
W. Harlan
|
|
Title:
|
President
and Secretary
|
|
|
|
|
HAMBURG
QUARRY LIMITED LIABILITY COMPANY
|
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael
W. Harlan
|
|
Title:
|
President
|
[Signature
Page to Pledge and Security Agreement]
|
INGRAM
CONCRETE, LLC
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt
M. Lindeman
|
|
Title:
|
Vice
President and Secretary
|
|
|
|
|
KURTZ
GRAVEL COMPANY
|
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael
W. Harlan
|
|
Title:
|
Vice
President and Secretary
|
|
|
|
|
LOCAL
CONCRETE SUPPLY &
EQUIPMENT,
LLC
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt
M. Lindeman
|
|
Title:
|
President
and Secretary
|
|
|
|
|
MASTER
MIX, LLC
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt
M. Lindeman
|
|
Title:
|
President
and Secretary
|
|
|
|
|
MASTER
MIX CONCRETE, LLC
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt
M. Lindeman
|
|
Title:
|
President
and Secretary
|
[Signature
Page to Pledge and Security Agreement]
|
MG,
LLC
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt
M. Lindeman
|
|
Title:
|
Vice
President and Secretary
|
|
|
|
|
NYC
CONCRETE MATERIALS, LLC
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt
M. Lindeman
|
|
Title:
|
President
and Secretary
|
|
|
|
|
PEBBLE
LANE ASSOCIATES, LLC
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt
M. Lindeman
|
|
Title:
|
President
and Secretary
|
|
|
|
|
REDI-MIX
CONCRETE, L.P.
|
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael
W. Harlan
|
|
Title:
|
President
|
|
|
|
|
REDI-MIX
GP, LLC
|
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael
W. Harlan
|
|
Title:
|
President
|
[Signature
Page to Pledge and Security Agreement]
|
REDI-MIX,
LLC
|
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael
W. Harlan
|
|
Title:
|
President
|
|
|
|
|
RIVERSIDE
MATERIALS, LLC
|
|
|
|
By:
|
/s/ Wallace H. Johnson
|
|
Name:
|
Wallace
H. Johnson
|
|
Title:
|
President
and Secretary
|
|
|
|
|
SAN
DIEGO PRECAST CONCRETE, INC.
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt
M. Lindeman
|
|
Title:
|
Vice
President and Secretary
|
|
|
|
|
SIERRA
PRECAST, INC.
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt
M. Lindeman
|
|
Title:
|
Vice
President and Secretary
|
|
|
|
|
SMITH
PRE-CAST, INC.
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt
M. Lindeman
|
|
Title:
|
Vice
President and Secretary
|
[Signature
Page to Pledge and Security Agreement]
|
SUPERIOR
CONCRETE MATERIALS, INC.
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt
M. Lindeman
|
|
Title:
|
Vice
President and Secretary
|
|
|
|
|
SUPERIOR
HOLDINGS, INC.
|
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael
W. Harlan
|
|
Title:
|
Vice
President and Secretary
|
|
|
|
|
TITAN
CONCRETE INDUSTRIES, INC.
|
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael
W. Harlan
|
|
Title:
|
Vice
President and Secretary
|
|
|
|
|
USC
ATLANTIC, INC.
|
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael
W. Harlan
|
|
Title:
|
Vice
President and Secretary
|
|
|
|
|
USC
MANAGEMENT CO., LLC
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt
M. Lindeman
|
|
Title:
|
Vice
President and Secretary
|
[Signature
Page to Pledge and Security Agreement]
|
USC
MICHIGAN, INC.
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael
W. Harlan
|
|
Title:
|
Vice
President and Secretary
|
|
|
|
|
USC
PAYROLL, INC.
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt
M. Lindeman
|
|
Title:
|
Vice
President and Secretary
|
|
|
|
|
USC
TECHNOLOGIES, INC.
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt
M. Lindeman
|
|
Title:
|
Vice
President and Secretary
|
|
|
|
|
U.S.
CONCRETE ON-SITE, INC.
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt
M. Lindeman
|
|
Title:
|
Vice
President and Secretary
|
[Signature
Page to Pledge and Security Agreement]
|
JPMORGAN
CHASE BANK, N.A., as
Administrative
Agent
|
|
|
|
By:
|
/s/
Mario Quintanilla
|
|
Name:
|
Mario
Quintanilla
|
|
Title:
|
Vice
President
|
[Signature
Page to Pledge and Security Agreement]
INTERCREDITOR
AGREEMENT
Intercreditor
Agreement (this “
Agreement
”), dated as
of August 31, 2010, among JPMORGAN CHASE BANK, N.A., as Administrative Agent (in
such capacity, with its successors and assigns, and as more specifically defined
below, the “
ABL
Representative
”) for the ABL Secured Parties (as defined below), U.S.
BANK NATIONAL ASSOCIATION, as Trustee and as Noteholder Collateral Agent (in
such capacities, with its successors and assigns, and as more specifically
defined below, the “
Notes
Representative
”) for the Notes Secured Parties (as defined below), and
each of the Loan Parties (as defined below) party hereto.
WHEREAS,
U.S. Concrete, Inc., a Delaware corporation (“
Borrower
”), the other
Loan Parties named therein, the ABL Representative and certain financial
institutions are parties to the Credit Agreement dated as of the date hereof
(the “
Existing ABL
Agreement
”), pursuant to which such financial institutions have agreed to
make loans and extend other financial accommodations to Borrower from time to
time;
WHEREAS,
Borrower and the Notes Representative are parties to the Indenture dated as of
the date hereof (the “
Existing Indenture
”),
pursuant to Borrower issued its 9.5% Convertible Secured Notes due 2015 (the
“
Notes
”) to
certain financial institutions and other entities, and such Notes are guaranteed
by the Loan Parties (other than the Borrower);
WHEREAS,
Borrower and each other Loan Party that is party to any ABL Guarantee has
granted to the ABL Representative security interests in the ABL Collateral as
security for payment and performance of the ABL Obligations;
WHEREAS,
Borrower and each other Loan Party that is party to any Notes Guarantee has
granted to the Notes Representative security interests in the Notes Collateral
as security for payment and performance of the Notes Obligations;
WHEREAS,
the ABL Obligations are to be secured by first priority liens on the ABL
Priority Collateral and second priority liens on the Notes Priority Collateral;
and
WHEREAS,
the Notes Obligations are to be secured by first priority liens on the Notes
Priority Collateral and second priority liens on the ABL Priority
Collateral.
NOW
THEREFORE, in consideration of the foregoing and the mutual covenants herein
contained and other good and valuable consideration, the existence and
sufficiency of which is expressly recognized by all of the parties hereto, the
parties agree as follows:
SECTION
1.
Definitions; Rules of
Construction
.
1.1
UCC
Definitions
. Terms defined in the Uniform Commercial Code are
used herein as so defined, including, without limitation, the
following: Accounts, As-Extracted Collateral, Chattel Paper,
Commercial Tort Claims, Commodity Account, Deposit Accounts, Documents,
Equipment, General Intangibles, Goods, Instruments, Inventory, Investment
Property, Letter of Credit, Letter of Credit Rights, Records, Securities Account
and Supporting Obligations.
1.2
Defined
Terms
. The following terms, as used herein, have the following
meanings:
“
ABL Agreement
” means
the collective reference to (a) the Existing ABL Agreement, (b) any Additional
ABL Agreement and (c) any other credit agreement, loan agreement, note
agreement, promissory note, indenture or other agreement or instrument
evidencing or governing the terms of any indebtedness or other financial
accommodation that has been incurred to extend, replace, refinance or refund in
whole or in part the indebtedness and other obligations outstanding under the
Existing ABL Agreement (regardless of whether such replacement, refunding or
refinancing is a “working capital” facility, asset-based facility or otherwise),
any Additional ABL Agreement or any other agreement or instrument referred to in
this clause (c) unless such agreement or instrument expressly provides that it
is not intended to be and is not an ABL Agreement hereunder (a
“
Replacement ABL
Agreement
”). Any reference to the ABL Agreement hereunder
shall be deemed a reference to any ABL Agreement then extant.
“
ABL Cap Amount
” has
the meaning assigned to such term in the definition of “ABL
Obligations”.
“
ABL
Collateral
” means all
assets, whether now owned or hereafter acquired by any Loan Party, in which a
Lien is granted or purported to be granted at any time to any ABL Secured Party
as security for any ABL Obligation.
“
ABL
Creditors
” means,
collectively, the “Lenders” and the other “Secured Parties”, each as defined in
the ABL Agreement.
“
ABL DIP Financing
”
has the meaning set forth in
Section
5.2(a)
.
“
ABL Documents
” means
the ABL Agreement, each ABL Security Document, each ABL Guarantee and each other
“Loan Document” as defined in the ABL Agreement.
“
ABL Excess Amount
”
shall have the meaning assigned to such term in the definition of “ABL
Obligations”.
“
ABL Guarantee
” means
any guarantee by any Loan Party of any or all of the ABL
Obligations.
“
ABL Lien
”
means any Lien created
by the ABL Security Documents.
“
ABL Obligations
”
means (a) all principal of and interest (including without limitation any
Post-Petition Interest) and premium (if any) on all loans made pursuant to the
ABL Agreement or any ABL DIP Financing by the ABL Creditors, (b) all
reimbursement obligations (if any) and interest thereon (including without
limitation any Post-Petition Interest) with respect to any letter of credit or
similar instruments issued pursuant to the ABL Agreement, (c) all Swap
Obligations, (d) all Banking Services Obligations and (e) all guarantee
obligations, indemnities (other than Unasserted Contingent Obligations), fees,
expenses and other amounts payable from time to time pursuant to the ABL
Documents, in each case whether or not allowed or allowable in an Insolvency
Proceeding. To the extent any payment with respect to any ABL
Obligation (whether by or on behalf of any Loan Party, as Proceeds of
Collateral, enforcement of any right of setoff or otherwise) is declared to be a
fraudulent conveyance or a preference in any respect, set aside or required to
be paid to a debtor in possession, any Notes Secured Party, receiver or similar
Person, then the obligation or part thereof originally intended to be satisfied
shall, for the purposes of this Agreement and the rights and obligations of the
ABL Secured Parties and the Notes Secured Parties with respect to such amounts,
be deemed to be reinstated and outstanding as if such payment had not
occurred. Notwithstanding the foregoing or any other provision of
this Agreement, if the sum of the ABL Obligations consisting of, without
duplication, (i) the principal amount of loans under the ABL Agreement and the
other ABL Documents, or under any ABL DIP Financing, and (ii) the aggregate face
amount of all outstanding letters of credit issued or deemed issued under, or
otherwise secured under, the ABL Agreement and the other ABL Documents, or under
any ABL DIP Financing (all such ABL Obligations described in clauses (i)
and (ii) above being collectively referred to herein as the “
Capped
ABL
Obligations
”),
exceeds the sum of $80,000,000
minus
the amount of any
permanent commitment reductions under the ABL Agreement as a result of the
prepayment of such obligations with the net proceeds from any asset dispositions
(for the avoidance of doubt, other than as a result of any replacement,
refunding or refinancing of an ABL Obligation) (the “
ABL Cap Amount
”),
then the portion of the Capped ABL Obligations exceeding the ABL Cap Amount
(such portion being referred to herein as the “
ABL Excess Amount
”),
and all interest, premiums, reimbursement obligations and other amounts in
respect of such ABL Excess Amount, shall be secured by the ABL Security
Documents but shall not constitute “ABL Obligations” for all purposes of this
Agreement.
“
ABL Obligations Payment
Date
” means the first date on which (a) the ABL Obligations (other than
those that constitute Unasserted Contingent Obligations) have been indefeasibly
paid in cash in full (or cash collateralized or defeased in accordance with the
terms of the ABL Documents), (b) all commitments to extend credit under the ABL
Documents have been terminated, (c) there are no outstanding letters of credit
or similar instruments issued under, or Swap Obligations or Banking Services
Obligations secured by, the ABL Documents (other than such as have been cash
collateralized or defeased in accordance with the terms of the ABL Documents),
and (d) so long as the Notes Obligations Payment Date shall not have occurred,
the ABL Representative has delivered a written notice to the Notes
Representative stating that the events described in clauses (a), (b) and (c)
have occurred to the satisfaction of the ABL Secured
Parties. Notwithstanding the foregoing, if at any time within 90 days
after the ABL Obligations Payment Date has occurred, the Borrower enters into
any refinancing or replacement of any ABL Agreement which refinancing or
replacement is permitted hereby and under the Notes Documents, then such ABL
Obligations Payment Date shall automatically be deemed not to have occurred for
all purposes of this Agreement, and the obligations under such ABL Agreement and
the related ABL Documents shall automatically be treated as ABL Obligations for
all purposes of this Agreement, including for purposes of the Lien priorities
and rights in respect of Collateral set forth herein, and the collateral agent
under such ABL Documents shall be the ABL Representative for all purposes of
this Agreement. Upon receipt of a notice within such time period
stating that the Borrower has entered into such new ABL Agreement (which notice
shall include the identity of the new collateral agent, such collateral agent,
the “
New
ABL
Agent
”), the Notes
Representative shall promptly enter into such documents and agreements
(including amendments or supplements to this Agreement) at the Loan Parties’
expense as such New ABL Agent may reasonably request in order to provide to the
New ABL Agent the rights contemplated hereby, in each case consistent in all
material respects with the terms of this Agreement.
“
ABL Priority
Collateral
” means all Collateral consisting of the
following:
(a) all
Accounts;
(b) all
Inventory (including As-Extracted Collateral);
(c) all
Trucks;
(d) all
Instruments;
(e) all
Documents;
(f) all
Chattel Paper;
(g) all
Deposit Accounts (other than the Asset Sale Proceeds Account) with any bank or
other financial institution (including all cash, cash equivalents, financial
assets, negotiable instruments and other evidence of payment, and other funds on
deposit therein or credited thereto);
(h) all
Securities Accounts (other than the Asset Sale Proceeds Account) with any
securities intermediary (including any and all Investment Property and all funds
or other property held therein or credited thereto);
(i) all
Commodity Accounts with any commodities intermediary (including any and all
commodity contracts and all funds and other property held therein or credited
thereto);
(j) all
Letter of Credit Rights;
(k) all
General Intangibles (other than Intellectual Property and Capital Stock in
Subsidiaries of Borrower);
(l) all
As-Extracted Collateral;
(m) all
accessions to, substitutions for and replacements of the foregoing, together
with all books and records, customer lists, credit files, computer files,
programs, printouts and other computer materials and records related thereto;
and
(n) to
the extent not otherwise included, all Proceeds (including without limitation,
all insurance proceeds), Supporting Obligations and products of any and all of
the foregoing and all collateral security and guarantees given by any Person
with respect to any of the foregoing;
provided,
however, that, (i) any Collateral, regardless of type, received in exchange for
ABL Priority Collateral pursuant to an Enforcement Action in accordance with the
terms of the ABL Agreement and this Agreement shall be treated as ABL Priority
Collateral under this Agreement, the Notes Security Documents and the ABL
Security Documents; (ii) any Collateral of the type that constitutes ABL
Priority Collateral, if received in exchange for Notes Priority Collateral
pursuant to an Enforcement Action in accordance with the terms of the Indenture
and this Agreement, shall be treated as Notes Priority Collateral under this
Agreement, the Notes Security Documents and the ABL Security Documents; and
(iii) ABL Priority Collateral shall exclude all Notes Priority Collateral
(other than Notes Priority Collateral which is treated as ABL Priority
Collateral as set forth in the proviso (i) above), it being understood and
agreed that the ABL Secured Parties remain entitled to the benefit of their
second priority Lien in any such Collateral.
“
ABL Representative
”
has the meaning set forth in the introductory paragraph hereof. In
the case of any Replacement ABL Agreement, the ABL Representative shall be the
Person identified as administrative agent or other representative in such
Agreement.
“
ABL Secured Parties
”
means the ABL Representative, the ABL Creditors and any other holders of the ABL
Obligations.
“
ABL Security
Documents
” means the “Collateral Documents” as defined in the ABL
Agreement, and any other documents that are designated under the ABL Agreement
as “ABL Security Documents” for purposes of this Agreement.
“
Access Period
” means,
with respect to any Real Property or Equipment constituting Notes Priority
Collateral, the period, following the commencement of any Enforcement Action,
which begins on the earlier of (a) the day on which the ABL Representative
provides the Notes Representative with the written notice of its election to
request access to such Real Property or Equipment constituting Notes Priority
Collateral pursuant to
Section
3.4(c)
and (b)
the day on which the ABL Representative receives written notice from the Notes
Representative that the Notes Representative (or its agent) has obtained
possession or control of such Real Property or Equipment constituting Notes
Priority Collateral or has, through the exercise of remedies or otherwise, sold
or otherwise transferred such Real Property or Equipment constituting Notes
Priority Collateral to any third party purchaser or transferee, and ends on the
earliest of (i) the day which is 120
days after such date
(the “
Initial Access
Date
”) plus such number of days, if any, after the Initial Access Date
that it is stayed or otherwise prohibited from exercising remedies with respect
to associated ABL Priority Collateral, (ii) the date on which all or
substantially all of the ABL Priority Collateral associated with such Real
Property or Equipment constituting Notes Priority Collateral is sold, collected
or liquidated, (iii) the ABL Obligations Payment Date and (iv) the date on which
the default which resulted in such Enforcement Action has been cured to the
satisfaction of the ABL Representative or waived in writing.
“
Additional ABL
Agreement
” means any agreement approved for designation as such by the
ABL Representative, the Notes Representative and the Borrower.
“
Additional Indenture
”
means any agreement approved for designation as such by the ABL Representative,
the Notes Representative and the Borrower.
“
Asset Sale Proceeds
Account
” means one or more Deposit Accounts or Securities Accounts
together with the cash, cash equivalents, financial assets, negotiable
instruments and other evidence of payment, and other funds on deposit therein or
credited thereto, to the extent consisting solely of Notes Priority
Collateral.
“
Banking Services
”
means each and any of the following bank services provided to any Loan Party by
any ABL Secured Party (or any of its affiliates): (a) credit cards
for commercial customers (including, without limitation, “commercial credit
cards” and purchasing cards), (b) stored value cards and (c) treasury management
services (including, without limitation, controlled disbursement, automated
clearinghouse transactions, return items, overdrafts and interstate depository
network services).
“
Banking Services
Obligations
” means,
with respect to any Loan Party, any and all obligations of such Loan Party owed
to any ABL Secured Party (or any of its affiliates), whether absolute or
contingent and howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and substitutions
therefor) in connection with Banking Services.
“
Bankruptcy Code
”
means the United States Bankruptcy Code (11 U.S.C. §101
et seq.
), as amended
from time to time.
“
Borrower
” has the
meaning set forth in the first WHEREAS clause above.
“
Business Day
” means
any day that is not a Saturday, Sunday or other day on which commercial banks in
New York City are authorized or required by law to remain closed.
“
Capital Stock
” means
(a) in the case of a corporation, corporate stock, (b) in the case of an
association, any and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock, (c) in the case of a
partnership or limited liability company, partnership or membership interests
(whether general or limited and however designated, whether voting or
non-voting), and (d) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of property of, the issuing Person.
“
Capped ABL
Obligations
” has the meaning assigned to such term in the definition of
“ABL Obligations”.
“
Collateral
” means,
collectively, all ABL Collateral and all Notes Collateral.
“
Common Collateral
”
means all Collateral that constitutes both ABL Collateral and Notes
Collateral.
“
Comparable
S
ecurity Document
”
means, in relation to any Senior Collateral subject to any Senior Security
Document, that Junior Security Document that creates a security interest in the
same Senior Collateral, granted by the same Loan Party, as
applicable.
“
Copyright Licenses
”
means any and all agreements granting any right in, to or under Copyrights
(whether a Loan Party is licensee or licensor thereunder).
“
Copyrights
” means all
right, title, and interest in and to the following: (a) all
copyrights, rights and interests in copyrights, works protectable by copyright,
copyright registrations, and copyright applications; (b) all renewals of any of
the foregoing; (c) the right to sue for past, present, and future infringements
of any of the foregoing; and (d) all rights corresponding to any of the
foregoing throughout the world.
“
Enforcement Action
”
means, with respect to the ABL Obligations or the Notes Obligations, the
exercise of any rights and remedies against, or to realize upon, to any Common
Collateral securing such obligations or the commencement or prosecution of
enforcement of any of the rights and remedies under, as applicable, the ABL
Documents or the Notes Documents, or applicable law, including without
limitation the exercise of any rights of set-off or recoupment, and the exercise
of any rights or remedies of a secured creditor under the Uniform Commercial
Code of any applicable jurisdiction or under the Bankruptcy Code.
“
Existing ABL
Agreement
” has the meaning set forth in the first WHEREAS clause of this
Agreement.
“
Existing Indenture
”
has the meaning set forth in the second WHEREAS clause of this
Agreement.
“
Indenture
” means the
collective reference to (a) the Existing Indenture, (b) any Additional Indenture
and (c) any other credit agreement, loan agreement, note agreement, promissory
note, indenture or other agreement or instrument evidencing or governing the
terms of any indebtedness or other financial accommodation that has been
incurred to extend, replace, refinance or refund in whole or in part the
indebtedness and other obligations outstanding under the Existing Indenture, any
Additional Indenture or any other agreement or instrument referred to in this
clause (c) unless such agreement or instrument expressly provides that it is not
intended to be and is not a Indenture hereunder (a “
Replacement
Indenture
”). Any
reference to the Indenture hereunder shall be deemed a reference to any
Indenture then extant.
“
Insolvency
Proceeding
” means any proceeding in respect of bankruptcy, insolvency,
winding up, receivership, dissolution or assignment for the benefit of
creditors, in each of the foregoing events whether under the Bankruptcy Code or
any similar federal, state or foreign bankruptcy, insolvency, reorganization,
receivership or similar law.
“
Intellectual
Property
” means, collectively, all rights, priorities and privileges
relating to intellectual property, whether arising under United States,
multinational or foreign laws or otherwise, including Copyrights, Copyright
Licenses, Patents, Patent Licenses, Trademarks, Trademark Licenses, trade
secrets and Internet domain names, and all rights to sue at law or in equity for
any infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.
“
Ju
nior Collateral
”
shall mean with respect to any Junior Secured Party, any Collateral on which it
has a Junior Lien.
“
Junior Documents
”
shall mean, collectively, with respect to any Junior Obligations, any provision
pertaining to such Junior Obligation in any Loan Document or any other document,
instrument or certificate evidencing or delivered in connection with such Junior
Obligation.
“
Junior
Liens
” shall mean (a) with respect to any ABL Priority Collateral,
all Liens securing the Notes Obligations, and (b) with respect to any Notes
Priority Collateral, all Liens securing the ABL Obligations.
“
Junior Obligations
”
shall mean (a) with respect to any ABL Priority Collateral, all Notes
Obligations and (b) with respect to any Notes Priority Collateral, all ABL
Obligations.
“
Junior
Representative
” shall mean (a) with respect to any ABL Obligations or any
ABL Priority Collateral, the Notes Representative and (b) with respect to any
Notes Obligations or any Notes Priority Collateral, the ABL
Representative.
“
Junior Secured
Parties
” shall mean (a) with respect to the ABL Priority Collateral, all
Notes Secured Parties and (b) with respect to the Notes Priority Collateral, all
ABL Secured Parties.
“
Juni
or
Security
Documents
” shall mean with respect to any Junior Secured Party, the
Security Documents that secure the Junior Obligations.
“
Lien
” means, with
respect to any asset, (a) any mortgage, deed of trust, deed to secure debt,
lien, pledge, hypothecation, assignment, assignation, debenture, encumbrance,
charge or security interest in, on or of such asset, (b) the interest of a
vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same
economic effect as any of the foregoing) relating to such asset and (c) in the
case of securities, any purchase option, call or similar right of a third party
with respect to such securities.
“
Lien Priority
” means
with respect to any Lien of the ABL Representative or Notes Representative in
the Common Collateral, the order of priority of such Lien specified in
Section
2.1
.
“
Loan Documents
” shall
mean, collectively, the ABL Documents and the Notes Documents.
“
Loan Party
” means
Borrower and each direct or indirect affiliate or shareholder (or equivalent) of
Borrower or any of its affiliates that is now or hereafter becomes a party to
any ABL Document. All references in this Agreement to any Loan Party
shall include such Loan Party as a debtor-in-possession and any receiver or
trustee for such Loan Party in any Insolvency Proceeding.
“
Material Real
Property
” means, with respect to a Loan Party, each parcel of fee owned
Real Property (or any interest in owned Real Property) with a net book value
equal to or greater than $700,000.
“
Notes Collateral
”
means all assets, whether now owned or hereafter acquired by any Loan Party, in
which a Lien is granted or purported to be granted to any Notes Secured Party as
security for any Notes Obligation.
“
Notes Creditors
”
means the “Holders” and the other “Noteholder Secured Parties”, each as defined
in the Indenture.
“
Notes DIP Financing
”
has the meaning set forth in
Section
5.2(b)
.
“
Notes Documents
”
means each Note, each Indenture, each Notes Security Document, each Notes
Guarantee and each other “Note Document” as defined in the
Indenture.
“
Notes Guarantee
”
means any guarantee by any Loan Party of any or all of the Notes
Obligations.
“
Notes Lien
”
means any Lien created
by the Notes Security Documents.
“
Notes Obligations
”
means (a) all principal of and interest (including without limitation any
Post-Petition Interest) and premium (if any) on all indebtedness under the Notes
and the Indenture or any Notes DIP Financing by the Notes Creditors, and
(b) all guarantee obligations, indemnities, fees, expenses and other amounts
payable from time to time pursuant to the Notes Documents, in each case whether
or not allowed or allowable in an Insolvency Proceeding. To the
extent any payment with respect to any Notes Obligation (whether by or on behalf
of any Loan Party, as Proceeds of security, enforcement of any right of setoff
or otherwise) is declared to be a fraudulent conveyance or a preference in any
respect, set aside or required to be paid to a debtor in possession, any ABL
Secured Party, receiver or similar Person, then the obligation or part thereof
originally intended to be satisfied shall, for the purposes of this Agreement
and the rights and obligations of the ABL Secured Parties and the Notes Secured
Parties, be deemed to be reinstated and outstanding as if such payment had not
occurred.
“
Notes
Obligations
Payment Date
” means the first date on which (a) the Notes Obligations
(other than those that constitute Unasserted Contingent Obligations) have been
indefeasibly paid in cash in full, (b) all commitments to extend credit under
the Notes Documents have been terminated, and (c) so long as the ABL Obligations
Payment Date shall not have occurred, the Notes Representative has delivered a
written notice to the ABL Representative stating that the events described in
clauses (a) and (b) have occurred to the satisfaction of the Notes Secured
Parties. Notwithstanding the foregoing, if at any time within 90 days
after the Notes Obligations Payment Date has occurred, the Borrower enters into
any refinancing or replacement of any Indenture which refinancing or replacement
is permitted hereby and under the ABL Documents, then such Notes Obligations
Payment Date shall automatically be deemed not to have occurred for all purposes
of this Agreement, and the obligations under such Indenture and the related
Notes Documents shall automatically be treated as Notes Obligations for all
purposes of this Agreement, including for purposes of the Lien priorities and
rights in respect of Collateral set forth herein, and the collateral agent under
such Notes Documents shall be the Notes Representative for all purposes of this
Agreement. Upon receipt of a notice within such time period stating
that the Borrower has entered into a new Indenture (which notice shall include
the identity of the new collateral agent, such collateral agent, the “
New Notes Agent
”),
the ABL Representative shall promptly enter into such documents and agreements
(including amendments or supplements to this Agreement) at the Loan Parties’
expense as such New Notes Agent may reasonably request in order to provide to
the New Notes Agent the rights contemplated hereby, in each case consistent in
all material respects with the terms of this Agreement.
“
Notes Priority
Collateral
” means all Collateral consisting of the following: (a) all
Equipment (other than Trucks), (b) all Capital Stock in any Subsidiary of
Borrower, (c) all Intellectual Property, (d) all Material Real Property, (e) the
Asset Sale Proceeds Account, (f) all other Notes Collateral that is not ABL
Priority Collateral, (g) all accessions to, substitutions for and replacements
of the foregoing, together with all books and records, computer files, programs,
printouts and other computer materials and records related thereto (other than
to the extent constituting ABL Priority Collateral), and (h) to the extent not
otherwise included, all Proceeds (including without limitation, all insurance
proceeds), Supporting Obligations and products of any and all of the foregoing
and all collateral security and guarantees given by any Person with respect to
any of the foregoing; provided, however, that (i) any Collateral, regardless of
type, received in exchange for Notes Priority Collateral pursuant to an
Enforcement Action in accordance with the terms of the Indenture and this
Agreement shall be treated as Notes Priority Collateral under this Agreement,
the Notes Security Documents and the ABL Security Documents; (ii) any Collateral
of the type that constitutes Notes Priority Collateral, if received in exchange
for ABL Priority Collateral pursuant to an Enforcement Action in accordance with
the terms of the ABL Agreement and this Agreement, shall be treated as ABL
Priority Collateral under this Agreement, the Notes Security Documents and the
ABL Security Documents; and (iii) Notes Priority Collateral shall exclude all
ABL Priority Collateral (other than ABL Priority Collateral which is treated as
Notes Priority Collateral as set forth in the proviso (i) above), it being
understood and agreed that the Notes Secured Parties remain entitled to the
benefit of their second priority Lien in any such Collateral.
“
Notes Representative
”
has the meaning set forth in the introductory paragraph hereof. In
the case of any Replacement Indenture, the Notes Representative shall be the
Person identified as trustee or other representative in such
Agreement.
“
Notes Secured
Parties
” means the Notes Representative, the Notes Creditors and any
other holders of the Notes Obligations.
“
Notes Security
Documents
” means the “Security Documents” as defined in the Indenture and
any documents that are designated under the Indenture as “Notes Security
Documents” for purposes of this Agreement.
“
Patent License
” means
all agreements granting any right in, to, or under Patents (whether any Loan
Party is licensee or licensor thereunder).
“
Patents
” means all
right, title, and interest in and to: (a) any and all patents and
patent applications; (b) all inventions and improvements described and claimed
therein; (c) all reissues, divisions, continuations, extensions, and
continuations-in-part thereof; (d) all rights to sue for past, present, and
future infringements thereof; and (e) all rights corresponding to any of the
foregoing throughout the world.
“
Person
” means any
person, individual, sole proprietorship, partnership, joint venture,
corporation, limited liability company, unincorporated organization,
association, institution, entity, party, including any government and any
political subdivision, agency or instrumentality thereof.
“
Post-Petition
Interest
” means any interest or entitlement to fees or expenses or other
charges that accrues after the commencement of any Insolvency Proceeding (or
would accrue but for the commencement of an Insolvency Proceeding), whether or
not allowed or allowable in any such Insolvency Proceeding.
“
Priority Collateral
”
means the ABL Priority Collateral or the Notes Priority Collateral, as
applicable.
“
Proceeds
” means (a)
all “proceeds,” as defined in Article 9 of the Uniform Commercial Code, with
respect to the Common Collateral, and (b) whatever is recoverable or recovered
when any Common Collateral is sold, exchanged, collected, or disposed of,
whether voluntarily or involuntarily.
“
Real Property
” means
any right, title or interest in and to real property, including any fee
interest, leasehold interest, easement, or license and any other right to use or
occupy real property, including any right arising by contract.
“
Replacement ABL
Agreement
” has the meaning set forth in the definition of “ABL
Agreement.”
“
Replacement
Indenture
” has the
meaning set forth in the definition of “Indenture.”
“
Secured
Obligations
” shall
mean the ABL Obligations and the Notes Obligations.
“
Secured Parties
”
means the ABL Secured Parties and the Notes Secured Parties.
“
Security
Documents
” means,
collectively, the ABL Security Documents and the Notes Security
Documents.
“
Senior Collateral
”
shall mean with respect to any Senior Secured Party, any Collateral on which it
has a Senior Lien.
“
Senior Documents
”
shall mean, collectively, with respect to any Senior Obligation, any provision
pertaining to such Senior Obligation in any Loan Document or any other document,
instrument or certificate evidencing or delivered in connection with such Senior
Obligation.
“
Senior Liens
” shall
mean (a) with respect to the ABL Priority Collateral, all Liens securing the ABL
Obligations and (b) with respect to the Notes Priority Collateral, all
Liens securing the Notes Obligations.
“
Senior
Obligations
” shall
mean (a) with respect to any ABL Priority Collateral, all ABL Obligations and
(b) with respect to any Notes Priority Collateral, all Notes
Obligations.
“
Senior
Obligations Paym
ent Date
” shall mean
(a) with respect to ABL Obligations, the ABL Obligations Payment Date and (b)
with respect to any Notes Obligations, the Notes Obligations Payment
Date.
“
Senior
Representative
” shall
mean (a) with respect to any ABL Priority Collateral, the ABL Representative and
(b) with respect to any Notes Priority Collateral, the Notes
Representative.
“
Senior Secured
Parties
” shall mean (a) with respect to the ABL Priority Collateral, all
ABL Secured Parties and (b) with respect to the Notes Priority Collateral, all
Notes Secured Parties.
“
Senior
Security
Documents
” shall mean with respect to any Senior Secured Party, the
Security Documents that secure the Senior Obligations owing to such Senior
Secured Party.
“
Subsidiary
” means,
with respect to any Person (the “parent”) at any date, any corporation, limited
liability company, partnership, association or other entity the accounts of
which would be consolidated with those of the parent in the parent’s
consolidated financial statements if such financial statements were prepared in
accordance with GAAP as of such date, as well as any other corporation, limited
liability company, partnership, association or other entity (a) of which
securities or other ownership interests representing more than 50% of the equity
or more than 50% of the ordinary voting power or, in the case of a partnership,
more than 50% of the general partnership interests are, as of such date, owned,
controlled or held, or (b) that is, as of such date, otherwise controlled, by
the parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent; provided, that Superior Materials Holdings LLC
and its direct and indirect subsidiaries shall not be a Subsidiary of any Loan
Party.
“
Swap
Obligations
” means,
with respect to any Loan Party, any and all obligations of such Loan Party,
whether absolute or contingent and howsoever and whensoever created, arising,
evidenced or acquired (including all renewals, extensions and modifications
thereof and substitutions therefor), owed to any ABL Creditor (or any of its
affiliates) under (a) any and all agreements with respect to any swap, forward,
future or derivative transaction or option or similar agreement involving, or
settled by reference to, one or more rates, currencies, commodities, equity or
debt instruments or securities, or economic, financial or pricing indices or
measures of economic, financial or pricing risk or value or any similar
transaction or any combination of these transactions, and (b) any and all
cancellations, buy backs, reversals, terminations or assignments of the any of
the foregoing.
“
Trademark Licenses
”
means any and all agreements granting any right in or to Trademarks (whether a
Loan Party is licensee or licensor thereunder).
“
Trademarks
” means all
right, title, and interest in and to the following: (a) all
trademarks (including service marks), trade names, trade dress, and trade styles
and the registrations and applications for registration thereof and the goodwill
of the business symbolized by the foregoing; (b) all renewals of the foregoing;
(c) all rights to sue for past, present, and future infringements of the
foregoing, including the right to settle suits involving claims and demands for
royalties owing; and (d) all rights corresponding to any of the foregoing
throughout the world.
“
Trucks
” means all
ready-mix concrete trucks and the mixing drums affixed thereto owned by any Loan
Party.
“
Unasserted Contingent
Obligations
” shall mean, at any time, ABL Obligations or Notes
Obligations, as applicable, for taxes, costs, indemnifications, reimbursements,
damages and other liabilities (excluding (a) the principal of, and interest and
premium (if any) on, and fees and expenses relating to, any ABL Obligation or
Notes Obligation, as applicable, and (b) with respect to ABL Obligations
contingent reimbursement obligations in respect of amounts that may be drawn
under outstanding letters of credit) in respect of which no assertion of
liability (whether oral or written) and no claim or demand for payment (whether
oral or written) has been made (and, in the case of ABL Obligations or Notes
Obligations, as applicable, for indemnification, no notice for indemnification
has been issued by the indemnitee) at such time.
“
Uniform Commercial
Code
” shall mean the Uniform Commercial Code as in effect from time to
time in the applicable jurisdiction.
1.3
Rules of
Construction
. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”. The
word “will” shall be construed to have the same meaning and effect as the word
“shall”. Unless the context requires otherwise (a) any definition of
or reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, amended and restated, restated, supplemented, modified,
refinanced, replaced, renewed or otherwise extended (subject to any restrictions
on such amendments, amendments and restatements, restatements, supplements,
modifications, refinancings, replacements, renewals and extensions set forth
herein), (b) any reference herein to any Person shall be construed to include
such Person’s successors and permitted assigns, (c) the words “herein”, “hereof”
and “hereunder”, and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof, (d)
all references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words “asset” and “property” shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION
2.
Lien Priority.
2.1
Lien
Subordination
. Notwithstanding the date, manner or order of
grant, attachment or perfection of any Junior Lien in respect of any Collateral
or of any Senior Lien in respect of any Collateral and notwithstanding any
provision of the UCC, any applicable law, any Security Document, any alleged or
actual defect or deficiency in any of the foregoing or any other circumstance
whatsoever, the Junior Representative, on behalf of each Junior Secured Party,
in respect of such Collateral hereby agrees that:
(a) any
Senior Lien in respect of such Collateral, regardless of how acquired, whether
by grant, statute, operation of law, subrogation or otherwise, shall be and
shall remain senior in all respects and prior to any Junior Lien in respect of
such Collateral (whether or not such Senior Lien is subordinated to any Lien
securing any other obligation); and
(b) any
Junior Lien in respect of such Collateral, regardless of how acquired, whether
by grant, statute, operation of law, subrogation or otherwise, shall be junior
and subordinate in all respects to any Senior Lien in respect of such
Collateral;
provided,
that notwithstanding anything to the contrary contained in this Agreement, any
ABL Liens on any ABL Priority Collateral, insofar as such ABL Liens secure any
ABL Excess Amount, shall be junior and subordinate in all respects to all Notes
Liens on any ABL Priority Collateral.
2.2
Prohibition on Contesting
Liens
. In respect of any Collateral, the Junior
Representative, on behalf of each Junior Secured Party, in respect of such
Collateral agrees that it shall not, and hereby waives any right
to:
(a) contest,
or support any other Person in contesting, in any proceeding (including any
Insolvency Proceeding), the priority, perfection, validity or enforceability of
any Senior Lien on such Collateral; or
(b) demand,
request, plead or otherwise assert or claim the benefit of any marshalling,
appraisal, valuation or similar right which it may have in respect of such
Collateral or the Senior Liens on such Collateral, except to the extent that
such rights are expressly granted in this Agreement.
2.3
Nature of
Obligations
. The Notes Representative on behalf of itself and
the other Notes Secured Parties acknowledges that a portion of the ABL
Obligations represents debt that is revolving in nature and that the amount
thereof that may be outstanding at any time or from time to time may be
increased or reduced and subsequently reborrowed, and that the terms of the ABL
Obligations may be modified, extended or amended from time to time, and that the
aggregate amount of the ABL Obligations may be increased, extended, renewed,
replaced or refinanced, in each event, without notice to or consent by the Notes
Secured Parties and without affecting the provisions hereof. The ABL
Representative on behalf of itself and the other ABL Secured Parties
acknowledges that Notes Obligations may be extended, renewed, replaced or
refinanced without notice to or consent by the ABL Secured Parties and without
affecting the provisions hereof. The Lien Priorities provided in
Section 2.1
shall not be altered or otherwise affected by any such amendment, modification,
supplement, extension, repayment, reborrowing, increase, replacement, renewal,
restatement or refinancing of either the ABL Obligations or the Notes
Obligations, or any portion thereof.
2.4
No New
Liens
. (a) Until the ABL Obligations Payment Date, no Notes
Secured Party shall acquire or hold any Lien on any assets of any Loan Party
securing any Notes Obligation which assets are not also subject to the Lien of
the ABL Representative under the ABL Documents, subject to the Lien Priority set
forth herein. If any Notes Secured Party shall (nonetheless and in
breach hereof) acquire or hold any Lien on any assets of any Loan Party securing
any Notes Obligation which assets are not also subject to the Lien of the ABL
Representative under the ABL Documents, subject to the Lien Priority set forth
herein, then the Notes Representative (or the relevant Notes Secured Party)
shall, without the need for any further consent of any other Notes Secured Party
and notwithstanding anything to the contrary in any other Notes Document be
deemed to also hold and have held such lien for the benefit of the ABL
Representative as security for the ABL Obligations (subject to the Lien Priority
and other terms hereof) and shall promptly notify the ABL Representative in
writing of the existence of such Lien.
(b) Until
the Notes Obligations Payment Date, no ABL Secured Party shall acquire or hold
any Lien on any assets of any Loan Party securing any ABL Obligation which
assets are not also subject to the Lien of the Notes Representative under the
Notes Documents, subject to the Lien Priority set forth herein. If
any ABL Secured Party shall (nonetheless and in breach hereof) acquire or hold
any Lien on any assets of any Loan Party securing any ABL Obligation which
assets are not also subject to the Lien of the Notes Representative under the
Notes Documents, subject to the Lien Priority set forth herein, then the ABL
Representative (or the relevant ABL Secured Party) shall, without the need for
any further consent of any other ABL Secured Party and notwithstanding anything
to the contrary in any other ABL Document be deemed to also hold and have held
such lien for the benefit of the Notes Representative as security for the Notes
Obligations (subject to the Lien Priority and other terms hereof) and shall
promptly notify the Notes Representative in writing of the existence of such
Lien.
2.5
Separate Grants of Security
and Separate Classification
. Each Secured Party acknowledges
and agrees that (a) the grants of Liens pursuant to the ABL Security Documents
and the Notes Security Documents constitute two separate and distinct grants of
Liens and (b) because of, among other things, their differing rights in the
Common Collateral, the Notes Obligations are fundamentally different from the
ABL Obligations and should be separately classified in any plan of
reorganization proposed or adopted in an Insolvency Proceeding. To
further effectuate the intent of the parties as provided in the immediately
preceding sentence, if it is held that the claims of the ABL Secured Parties and
the Notes Secured Parties in respect of the Common Collateral constitute claims
in the same class (rather than separate classes of senior and junior secured
claims), then the ABL Secured Parties and the Notes Secured Parties hereby
acknowledge and agree that all distributions shall be made as if there were
separate classes of ABL Obligation claims and Notes Obligation claims against
the Loan Parties (with the effect being that, to the extent that the aggregate
value of the ABL Priority Collateral or Notes Priority Collateral is sufficient
(for this purpose ignoring all claims held by the other Secured Parties), the
ABL Secured Parties or the Notes Secured Parties, respectively, shall be
entitled to receive, in addition to amounts distributed to them in respect of
principal, pre-petition interest and other claims, all amounts owing in respect
of Post-Petition Interest that is available from each pool of Priority
Collateral for each of the ABL Secured Parties and the Notes Secured Parties,
respectively, before any distribution is made in respect of the claims held by
the other Secured Parties, with the other Secured Parties hereby acknowledging
and agreeing to turn over to the respective other Secured Parties amounts
otherwise received or receivable by them to the extent necessary to effectuate
the intent of this sentence, even if such turnover has the effect of reducing
the aggregate recoveries.
2.6
Agreements Regarding Actions
to Perfect Liens
. (a) The ABL Representative agrees on behalf
of itself and the other ABL Secured Parties that all mortgages, deeds of trust,
deeds and similar instruments (collectively, “
mortgages
”) now or
thereafter filed against Real Property in favor of or for the benefit of the ABL
Representative shall contain the following notation (or such other notation
reasonably acceptable to the Notes Representative): “The lien created
by this mortgage on the real property described herein is junior and subordinate
to the lien on such real property created by any mortgage, deed of trust or
similar instrument now or hereafter granted to [INSERT NAME OF THEN APPLICABLE
NOTES REPRESENTATIVE], as Notes Representative, in accordance with the
provisions of the Intercreditor Agreement dated as of August 31 2010, as
amended, restated, amended and restated, modified, supplemented, renewed or
replaced from time to time.”
(b) Each
of the ABL Representative and the Notes Representative hereby acknowledges that,
to the extent that it holds, or a third party holds on its behalf, physical
possession of or “control” (as defined in the Uniform Commercial Code) over, or
is otherwise noted as a lienholder on any certificate of title constituting,
Common Collateral pursuant to the ABL Security Documents or the Notes Security
Documents, as applicable, the ABL Representative and the Notes Representative,
as applicable, each agree to hold or control such Common Collateral as bailee
and as non-fiduciary agent for the Notes Representative or the ABL
Representative, as applicable (such bailment and agency being intended, among
other things, to satisfy the requirements of Sections 9-313(c), 9-104, 9-105,
9-106, and 9-107 of the UCC and applicable certificate of title laws), solely
for the purpose of perfecting the security interest (including any
second-priority security interest) granted under the Notes Documents or the ABL
Documents, as applicable, subject to the terms and conditions of this
Section 2.6
(either
the ABL Representative or the Notes Representative in such capacity, the “
Control
Representative
”). Nothing in this
Section 2.6
shall be construed to impose any duty on the ABL Representative or the Notes
Representative (or any third party acting on either such Person’s behalf) or
create any fiduciary relationship with respect to such Common Collateral or
provide the Notes Representative, any other Notes Secured Party, the ABL
Representative or any other ABL Secured Party, as applicable, with any rights
with respect to such Common Collateral beyond those specified in this Agreement,
the ABL Security Documents and the Notes Security Documents, as applicable,
provided
that
subsequent to the occurrence of the ABL Obligations Payment Date (so long as the
Notes Obligations Payment Date shall not have occurred), the ABL Representative
shall (i) deliver to the Notes Representative, at the Loan Parties’ sole cost
and expense, the Common Collateral in its possession or control together with
any necessary endorsements to the extent required by the Notes Documents or (ii)
direct and deliver such Common Collateral as a court of competent jurisdiction
otherwise directs;
provided
,
further
, that
subsequent to the occurrence of the Notes Obligations Payment Date (so long as
the ABL Obligations Payment Date shall not have occurred), the Notes
Representative shall (A) deliver to the ABL Representative, at the Loan Parties’
sole cost and expense, the Common Collateral in its possession or control
together with any necessary endorsements to the extent required by the ABL
Documents or (B) direct and deliver such Common Collateral as a court of
competent jurisdiction otherwise directs. The provisions of this
Agreement are intended solely to govern the respective Lien priorities as
between the ABL Secured Parties and the Notes Secured Parties and shall not
impose on the ABL Secured Parties or the Notes Secured Parties any obligations
in respect of the disposition of any Common Collateral (or any proceeds thereof)
that would conflict with prior perfected Liens or any claims thereon in favor of
any other Person that is not a Secured Party.
(c) The
ABL Representative hereby agrees that after the ABL Obligations Payment Date and
upon the written request of the Notes Representative, to the extent that the
applicable control agreement is in full force and effect and has not been
terminated, the ABL Representative shall continue to act as the Control
Representative for the Notes Representative (solely for the purpose of
perfecting the security interest granted under the Notes Documents and at the
expense of Loan Parties) with respect to the deposit account or securities
account that is the subject of such control agreement, until the earlier to
occur of (i) 30 days after the ABL Obligations Payment Date and (ii) the date
when a control agreement is executed in favor of the Notes Representative with
respect to such deposit account or securities account. The Notes
Representative hereby agrees that after the Notes Obligations Payment Date and
upon the written request of the ABL Representative, to the extent that the
applicable control agreement is in full force and effect and has not been
terminated, the Notes Representative shall continue to act as the Control
Representative for the ABL Representative (solely for the purpose of
perfecting the security interest granted under the ABL Documents and at the
expense of Loan Parties) with respect to the deposit account or securities
account that is the subject of such control agreement, until the earlier to
occur of (1) 30 days after the Notes Obligations Payment Date and (2) the date
when a control agreement is executed in favor of the ABL Representative with
respect to such deposit account or securities account.
(d) Until
the Notes Obligations Payment Date, the ABL Representative agrees that to the
extent it is in possession of any Common Collateral constituting Notes Priority
Collateral, promptly upon the request of the Notes Representative at any time
prior to the Notes Obligations Payment Date, the ABL Representative shall
deliver to the Notes Representative any such Notes Priority Collateral held by
it, and shall use commercially reasonable efforts to cause each ABL Creditor
known to it to be holding such Notes Priority Collateral to deliver the same to
the Notes Representative, together with any necessary endorsements without
warranty or representation of any kind (or otherwise allow the Notes
Representative to obtain control of such Notes Priority
Collateral).
(e) Until
the ABL Obligations Payment Date, the Notes Representative agrees that to the
extent it is in possession of any Common Collateral constituting ABL
Priority Collateral, promptly upon the request of the ABL Representative at any
time prior to the ABL Obligations Payment Date, the Notes Representative shall
deliver to the ABL Representative any such ABL Priority Collateral held by it,
and shall use commercially reasonable efforts to cause each Notes Creditor known
to it to be holding such ABL Priority Collateral to deliver the same to the ABL
Representative, together with any necessary endorsements without warranty or
representation of any kind (or otherwise allow the ABL Representative to obtain
control of such ABL Priority Collateral).
(f) The
ABL Representative shall have no obligation whatsoever to the Notes
Representative or any Notes Creditor to ensure that the Common Collateral is
genuine or owned by any Loan Party or to preserve rights or benefits of any
person except as expressly set forth in this
Section
2.6
. The duties or responsibilities of the ABL Representative
under this
Section
2.6
shall be limited solely to holding or controlling the Common
Collateral as bailee and non-fiduciary agent in accordance with this
Section 2.6
and
delivering the Common Collateral upon the ABL Obligations Payment Date as
provided in this
Section 2.6
. The
Notes Representative shall have no obligation whatsoever to the ABL
Representative or any ABL Creditor to ensure that the Common Collateral is
genuine or owned by any Loan Party or to preserve rights or benefits of any
person except as expressly set forth in this
Section
2.6
. The duties or responsibilities of the Notes
Representative under this
Section 2.6
shall be
limited solely to holding or controlling the Common Collateral as bailee and
non-fiduciary agent in accordance with this
Section 2.6
and
delivering the Common Collateral upon the Notes Obligations Payment Date as
provided in this
Section 2.6
.
SECTION
3.
Enforcement Rights
.
3.1
Exclusive
Enforcement
. Until the Senior Obligations Payment Date has
occurred, whether or not an Insolvency Proceeding has been commenced by or
against any Loan Party, the Senior Secured Parties shall have the exclusive
right to take and continue any Enforcement Action (including the right to credit
bid their debt) with respect to the Senior Collateral, without any consultation
with or consent of any Junior Secured Party, but subject to the proviso set
forth in
Section
5.1
. Upon the occurrence and during the continuance of a
default or an event of default under the Senior Documents, the Senior
Representative and the other Senior Secured Parties may take and continue any
Enforcement Action with respect to the Senior Obligations and the Senior
Collateral in such order and manner as they may determine in their sole
discretion in accordance with the terms and conditions of the Senior
Documents. Notwithstanding the foregoing, any Junior Representative
may, subject to
Section 3.2
, take all
such actions as it shall deem necessary to (i) perfect or continue the
perfection of its Junior Liens or (ii) to create, preserve or protect (but not
enforce) the Junior Liens on any Collateral.
3.2
Standstill and
Waivers
. Each Junior Representative, on behalf of itself and
the other Junior Secured Parties, agrees that, until the Senior Obligations
Payment Date has occurred, whether or not an Insolvency Proceeding has been
commenced by or against any Loan Party, but subject to the proviso set forth in
Section
5.1
:
(a) they
will not take or cause to be taken any action, the purpose or effect of which is
to make any Lien on any Senior Collateral that secures any Junior Obligation
pari passu with or senior to, or to give any Junior Secured Party any preference
or priority relative to, the Liens on the Senior Collateral securing the Senior
Obligations;
(b) they
will not, directly or indirectly, contest, oppose, object to, interfere with,
hinder or delay, in any manner, whether by judicial proceedings (including
without limitation the filing of an Insolvency Proceeding) or otherwise, any
foreclosure, sale, lease, exchange, transfer or other disposition of the Senior
Collateral by any Senior Secured Party or any other Enforcement Action taken (or
any forbearance from taking any Enforcement Action) in respect of the Senior
Collateral by or on behalf of any Senior Secured Party;
(c) they
have no right to (x) direct either the Senior Representative or any other Senior
Secured Party to exercise any right, remedy or power with respect to the Senior
Collateral or pursuant to the Senior Security Documents in respect of the Senior
Collateral or (y) consent or object to the exercise by the Senior Representative
or any other Senior Secured Party of any right, remedy or power with respect to
the Senior Collateral or pursuant to the Senior Security Documents with respect
to the Senior Collateral or to the timing or manner in which any such right is
exercised or not exercised (or, to the extent they may have any such right
described in this clause (c), whether as a junior lien creditor in respect of
the Senior Collateral or otherwise, they hereby irrevocably waive such
right);
(d) they
will not institute any suit or other proceeding or assert in any suit,
Insolvency Proceeding or other proceeding any claim against any Senior Secured
Party seeking damages from or other relief by way of specific performance,
instructions or otherwise, with respect to, and no Senior Secured Party shall be
liable for, any action taken or omitted to be taken by any Senior Secured Party
with respect to the Senior Collateral or pursuant to the Senior Documents in
respect of the Senior Collateral;
(e) they
will not commence judicial or nonjudicial foreclosure proceedings with respect
to, seek to have a trustee, receiver, liquidator or similar official appointed
for or over, attempt any action to take possession of any Senior Collateral,
exercise any right, remedy or power with respect to, or otherwise take any
action to enforce their interest in or realize upon, the Senior Collateral;
and
(f) they
will not seek, and hereby waive any right, to have the Senior Collateral or any
part thereof marshaled upon any foreclosure or other disposition of the Senior
Collateral.
3.3
Judgment
Creditors
. In the event that any Notes Secured Party becomes a
judgment lien creditor in respect of Common Collateral as a result of its
enforcement of its rights as an unsecured creditor, such judgment lien shall be
subject to the terms of this Agreement for all purposes (including in relation
to the ABL Liens and the ABL Obligations) to the same extent as all other Liens
securing the Notes Obligations are subject to the terms of this
Agreement. In the event that any ABL Secured Party becomes a judgment
lien creditor in respect of Common Collateral as a result of its enforcement of
its rights as an unsecured creditor, such judgment lien shall be subject to the
terms of this Agreement for all purposes (including in relation to the Notes
Liens and the Notes Obligations) to the same extent as all other Liens securing
the ABL Obligations are subject to the terms of this Agreement.
3.4
Cooperation; Sharing of
Information and Access
. (a) The Notes Representative, on
behalf of itself and the other Notes Secured Parties, agrees that each of them
shall take such actions as the ABL Representative shall request in connection
with the exercise by the ABL Secured Parties of their rights set forth herein in
respect of the ABL Priority Collateral. The ABL Representative, on
behalf of itself and the other ABL Secured Parties, agrees that each of them
shall take such actions as the Notes Representative shall request in connection
with the exercise by the Notes Secured Parties of their rights set forth herein
in respect of the Notes Priority Collateral.
(b) In
the event that the ABL Representative shall, in the exercise of its rights under
the ABL Security Documents or otherwise, receive possession or control of any
books and Records of any Loan Party which contain information identifying or
pertaining to the Notes Priority Collateral, the ABL Representative shall
promptly notify the Notes Representative of such fact and, upon request from the
Notes Representative and as promptly as practicable thereafter, either make
available to the Notes Representative such books and Records for inspection and
duplication or provide to the Notes Representative copies thereof. In
the event that the Notes Representative shall, in the exercise of its rights
under the Notes Security Documents or otherwise, receive possession or control
of any books and Records of any Loan Party which contain information identifying
or pertaining to any of the ABL Priority Collateral, the Notes Representative
shall promptly notify the ABL Representative of such fact and, upon request from
the ABL Representative and as promptly as practicable thereafter, either make
available to the ABL Representative such books and Records for inspection and
duplication or provide the ABL Representative copies thereof. The
Notes Representative hereby irrevocably grants the ABL Representative an
non-exclusive worldwide license or right to use, to the maximum extent permitted
by applicable law and to the extent of the Notes Representative’s interest
therein, exercisable without payment of royalty or other compensation, to use
any of the Intellectual Property incorporated in or relating to the ABL Priority
Collateral and now or hereafter owned by, licensed to, or otherwise used by the
Loan Parties in order for ABL Representative and the other ABL Secured Parties
to purchase, use, market, repossess, possess, store, assemble, manufacture,
process, sell, transfer, distribute or otherwise dispose of any asset included
in the ABL Priority Collateral in connection with the liquidation, disposition
or realization upon the ABL Priority Collateral in accordance with the terms and
conditions of the ABL Security Documents and the other ABL
Documents. Nothing contained in this
Section 3.4
shall
restrict the rights of the Notes Representative from selling, assigning or
otherwise transferring any of the Loan Parties’ Intellectual Property; provided,
that the Notes Representative agrees that any sale, transfer or other
disposition of any of the Loan Parties’ Intellectual Property (whether by
foreclosure or otherwise) will be subject to the ABL Representative’s rights as
set forth in this
Section
3.4
. The ABL Representative acknowledges that with respect to
the Intellectual Property subject to the foregoing license, the Notes
Representative or third party purchaser, as owner of such Intellectual Property,
shall have such rights of quality control (“quality” being the relevant Loan
Party’s standards in effect immediately prior to ABL Representative’s use of the
relevant Intellectual Property) and inspection to the extent reasonably
necessary pursuant to applicable law to maintain the validity and enforceability
of such Intellectual Property, provided, that if the Notes Representative elects
to exercise such quality control and/or inspection rights it may retain
professionals to do so at the expense of the Loan Parties.
(c) If
the Notes Representative, or any agent or representative of the Notes
Representative, or any receiver, shall, after the commencement of any
Enforcement Action, obtain possession or physical control of any of the Notes
Priority Collateral (or sells or otherwise transfers any of the Notes Priority
Collateral to a third party purchaser or transferee without first obtaining
possession or physical control), the Notes Representative shall promptly notify
the ABL Representative in writing of that fact, and the ABL Representative
shall, within ten Business Days thereafter, notify the Notes Representative in
writing as to whether the ABL Representative desires to exercise access rights
under this Agreement. In addition, if the ABL Representative, or any
agent or representative of the ABL Representative, or any receiver, shall obtain
possession or physical control of any of the Notes Priority Collateral in
connection with an Enforcement Action, then the ABL Representative shall
promptly notify the Notes Representative that the ABL Representative is
exercising its access rights under this Agreement and its rights under
Section 3.4
under
either circumstance. Upon delivery of such notice by the ABL
Representative to the Notes Representative, the parties shall confer in good
faith to coordinate with respect to the ABL Representative’s exercise of such
access rights, with such access rights to apply to any Real Property or
Equipment constituting Notes Priority Collateral access to which is reasonably
necessary to enable the ABL Representative during normal business hours to
convert ABL Priority Collateral consisting of raw materials and work-in-process
into saleable finished goods and/or to transport such ABL Priority Collateral to
a point where such conversion can occur, to otherwise prepare ABL Priority
Collateral for sale and/or to arrange or effect the sale of ABL Priority
Collateral, all in accordance with the manner in which such matters are
completed in the ordinary course of business. Consistent with the
definition of “
Access
Period
,” access rights will apply to differing parcels of Real Property
or items of Equipment constituting Notes Priority Collateral at differing times,
in which case, a differing Access Period will apply to each such parcel of Real
Property and each such item of Equipment. During any pertinent Access
Period, the ABL Representative and its agents, representatives and designees
shall have a non-exclusive right to have access to, and a rent-free right to
use, the relevant Real Property or Equipment constituting Notes Priority
Collateral for the purposes described above. The ABL Representative
shall take proper and reasonable care of any Notes Priority Collateral that is
used by the ABL Representative during the Access Period and shall repair at its
expense (without waiving any rights of reimbursement from the Loan Parties) and
replace any damage (ordinary wear-and-tear excepted) caused by any act or
omission of the ABL Representative or its agents, representatives or designees
and leave such Notes Priority Collateral in a condition substantially similar
(ordinary wear and tear excepted) to the condition of such Notes Priority
Collateral immediately prior to the date of commencement of the use thereof by
the ABL Representative. The ABL Representative shall comply with all
applicable laws in connection with its use or occupancy or possession of the ABL
Priority Collateral. The ABL Representative shall indemnify and hold
harmless the Notes Representative and the Notes Creditors for any injury or
damage to Persons or property (ordinary wear-and-tear excepted) caused by the
acts or omissions of Persons under its control;
provided
,
however
, that the ABL
Representative and the ABL Creditors will not be liable for any diminution in
the value of Notes Priority Collateral caused by the absence of the ABL Priority
Collateral therefrom. The ABL Representative, for itself and on
behalf of the ABL Secured Parties, hereby acknowledges that, during the period
any Notes Priority Collateral shall be under control or possession of the Notes
Representative or the other Notes Creditors, the Notes Representatives and other
Notes Creditors shall not be obligated to take any action to protect or to
procure insurance with respect to any ABL Priority Collateral that may be
located on or in the Notes Priority Collateral, it being understood that the
Notes Representative and other Notes Creditors shall have no responsibility for
loss or damage to the ABL Priority Collateral (other than as a result of the
gross negligence or willful misconduct of the Notes Representative and/or the
other Notes Creditors or their agents) and that risk of loss or damage to the
ABL Priority Collateral shall remain with ABL Representative and the ABL Secured
Parties. The ABL Representative and the Notes Representative shall
cooperate and use reasonable efforts to ensure that their activities during the
Access Period as described above do not interfere materially with the activities
of the other as described above, including the right of Notes Representative to
show the Notes Priority Collateral to prospective purchasers and to ready the
Notes Priority Collateral for sale. Consistent with the definition of
the term “
Access
Period
,” if any order or injunction is issued or stay is granted or is
otherwise effective by operation of law that prohibits the ABL Representative
from exercising any of its rights hereunder, then the Access Period granted to
the ABL Representative under this
Section 3.4
shall be
stayed during the period of such prohibition and shall continue thereafter for
the number of days remaining as required under this
Section
3.4
. If any Notes Priority Collateral is sold or otherwise
transferred to a third party purchaser or transferee, the Notes Representative
shall expressly condition such sale or other transfer on such purchaser’s or
transferee’s agreement to grant the ABL Representative the access rights
otherwise applicable pursuant to this Agreement.
3.5
No Additional Rights For the
Loan Parties Hereunder
. Except as provided in
Section 3.6
hereof,
if any ABL Secured Party or Notes Secured Party shall enforce its rights or
remedies in violation of the terms of this Agreement, no Loan Party shall be
entitled to use such violation as a defense to any action by any ABL Secured
Party or Notes Secured Party, nor to assert such violation as a counterclaim or
basis for set off or recoupment against any ABL Secured Party or Notes Secured
Party.
3.6
Actions Upon
Breach
. (a) If any ABL Secured Party or Notes Secured Party,
contrary to this Agreement, commences or participates in any action or
proceeding against any Loan Party or the Common Collateral, such Loan Party,
with the prior written consent of the ABL Representative or the Notes
Representative, as applicable, may interpose as a defense or dilatory plea the
making of this Agreement, and any ABL Secured Party or Notes Secured Party, as
applicable, may intervene and interpose such defense or plea in its or their
name or in the name of such Loan Party.
(b) Should
any ABL Secured Party or Notes Secured Party, contrary to this Agreement, in any
way take, attempt to or threaten to take any action with respect to the Common
Collateral (including, without limitation, any attempt to realize upon or
enforce any remedy with respect to this Agreement), or fail to take any action
required by this Agreement, any ABL Secured Party or Notes Secured Party (in its
own name or in the name of the relevant Loan Party), as applicable, or the
relevant Loan Party, may obtain relief against such ABL Secured Party or Notes
Secured Party, as applicable, by injunction, specific performance and/or other
appropriate equitable relief, it being understood and agreed by each of the ABL
Representative on behalf of each ABL Secured Party and the Notes Representative
on behalf of each Notes Secured Party that (i) the ABL Secured Parties’ or Notes
Secured Parties’, as applicable, damages from its actions may at that time be
difficult to ascertain and may be irreparable, and (ii) each Notes Secured Party
or ABL Secured Party, as applicable, waives any defense that the Loan Parties
and/or the Notes Secured Parties and/or ABL Secured Parties, as applicable,
cannot demonstrate damage and/or be made whole by the awarding of
damages.
SECTION
4.
Application of
Proceeds
of Senior Collateral; Dispositions
and Releases of Lien; Notices and Insurance.
4.1
Application of
Proceeds
.
(a)
Application of Proceeds of
Senior Collateral
. Subject to clause (d) below, whether or not
any Insolvency Proceeding has been commenced by or against any Loan Party and
whether or not any default or event of default under the Senior Documents has
occurred, the Senior Representative and Junior Representative hereby agree that
all Senior Collateral, and all Proceeds thereof, received by either of them in
connection with the collection, sale or disposition of Senior Collateral
constituting an Enforcement Action shall be applied,
first
, to the payment
of costs and expenses (including reasonable attorneys fees and expenses and
court costs) of the Senior Secured Parties in connection with such Enforcement
Action,
second
, to the
payment of the Senior Obligations in accordance with the Senior Documents until
the Senior Obligations Payment Date,
third
, to the payment
of the Junior Obligations in accordance with the Junior Documents until the
Junior Obligations Payment Date,
fourth
, in respect of
ABL Collateral or Proceeds thereof, to the payment of any ABL Excess Amount,
and
fifth
, the balance,
if any, to the Loan Parties or to whosoever may be lawfully entitled to receive
the same or as a court of competent jurisdiction may direct.
(b)
Limited Obligation or
Liability
. In exercising remedies, whether as a secured
creditor or otherwise, the Senior Representative shall have no obligation or
liability to the Junior Representative or to any Junior Secured Party, regarding
the adequacy of any Proceeds or for any action or omission, save and except
solely for an action or omission that breaches the express obligations
undertaken by each party under the terms of this Agreement.
(c)
Segregation of Collateral;
Turnover
. Until the occurrence of the Senior Obligations
Payment Date, whether or not an Insolvency Proceeding has been commenced by or
against any Loan Party, any Senior Collateral that may be received by any Junior
Secured Party in violation of this Agreement shall be segregated and held in
trust and promptly paid over to the Senior Representative, for the benefit of
the Senior Secured Parties, in the same form as received with any necessary
endorsements, or as a court of competent jurisdiction may otherwise direct and
each Junior Secured Party hereby authorizes the Senior Representative to make
any such endorsements as agent for the Junior Representative (which
authorization, being coupled with an interest, is irrevocable).
(d)
Mixed Collateral
Proceeds
. Notwithstanding anything to the contrary contained
above or in the definition of the ABL Priority Collateral or Notes Priority
Collateral, in the event that proceeds of Common Collateral are received from
(or are otherwise attributable to the value of) a sale or other disposition of
Common Collateral that involves a combination of ABL Priority Collateral and
Notes Priority Collateral, the portion of such proceeds that shall be allocated
as proceeds of ABL Priority Collateral for purposes of this Agreement shall be
an amount equal to the net book value of such ABL Priority Collateral (except in
the case of Accounts which amount shall be equal to the face amount of such
Accounts). In addition, notwithstanding anything to the contrary
contained above or in the definition of the ABL Priority Collateral or Term Loan
Priority Collateral, to the extent proceeds of Collateral are proceeds received
from (or are otherwise attributable to the value of) the sale or disposition of
all or substantially all of the Capital Stock of any Subsidiary of Borrower
which is a Loan Party or all or substantially all of the assets of any such
Subsidiary, such proceeds shall constitute (1) first, in an amount equal to the
face amount of the Accounts and the net book value of all other ABL Priority
Collateral owned by such Subsidiary at the time of such sale, ABL Priority
Collateral and (2) second, to the extent in excess of the amounts described in
preceding clause (1), Term Loan Priority Collateral.
4.2
Releases of
Liens
. Upon any release, sale or disposition of Senior
Collateral permitted pursuant to the terms of the Senior Documents that results
in the release of the Senior Lien on any Senior Collateral (including without
limitation any sale or other disposition pursuant to any Enforcement Action)
(other than release of the Senior Lien due to the occurrence of the Senior
Obligations Payment Date), the Junior Lien on such Senior Collateral (excluding
any portion of the proceeds of such Senior Collateral remaining after the Senior
Obligations Payment Date occurs) shall be automatically and unconditionally
released with no further consent or action of any Person. The Junior
Representative shall, at the Loan Parties’ expense, promptly execute and deliver
such release documents and instruments and shall take such further actions as
the Senior Representative shall request to evidence any release of the Junior
Lien described in this
Section
4.2
. The Junior Representative hereby appoints the Senior
Representative and any officer or duly authorized person of the Senior
Representative, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power of attorney in the place and stead
of the Junior Representative and in the name of the Junior Representative or in
the Senior Representative’s own name, from time to time, in the Senior
Representative’s sole discretion, for the purposes of carrying out the terms of
this
Section
4.2
, to take any and all appropriate action and to execute and deliver
any and all documents and instruments as may be necessary or desirable to
accomplish the purposes of this
Section 4.2
,
including, without limitation, any financing statements, endorsements,
assignments, releases or other documents or instruments of transfer (which
appointment, being coupled with an interest, is irrevocable). Until
the Senior Obligations Payment Date occurs, to the extent that the Senior
Secured Parties have released any Lien on Senior Collateral and any such Lien is
later reinstated, then the Junior Secured Parties shall be granted a Junior Lien
on any such Senior Collateral.
4.3
Certain Real Property
Notices; Insurance
.
(a) The
Notes Representative shall give the ABL Representative at least 30 days notice
prior to commencing any Enforcement Action against any Real Property owned by
any Loan Party at which ABL Priority Collateral is stored or otherwise located
or to dispossess any Loan Party from such Real Property (it being understood
that failure to give such notice shall not affect the effectiveness or validity
of such Enforcement Action).
(b) Proceeds
of Common Collateral include insurance proceeds and therefore the Lien Priority
shall govern the ultimate disposition of casualty insurance
proceeds. The ABL Representative shall be named as additional insured
or loss payee, as applicable, with respect to all insurance policies relating to
ABL Priority Collateral and the Notes Representative shall be named as
additional insured or loss payee, as applicable, with respect to all insurance
policies relating to Notes Priority Collateral. The ABL
Representative shall have the sole and exclusive right, as against the Notes
Representative, to adjust settlement of insurance claims in the event of any
covered loss, theft or destruction of ABL Priority Collateral. The
Notes Representative shall have the sole and exclusive right, as against the ABL
Representative, to adjust settlement of insurance claims in the event of any
covered loss, theft or destruction of Notes Priority Collateral. If,
and to the extent of, any loss under an insurance policy that covers both ABL
Priority Collateral and Notes Priority Collateral, the ABL Representative and
the Notes Representative shall work jointly in good faith to adjust or settle
under the applicable insurance policy. Each of the Notes
Representative and ABL Representative shall cooperate (if necessary) in a
reasonable manner in effecting the payment of insurance proceeds in accordance
with
Section
4.1
.
SECTION
5.
Insolvency
Proceedings.
5.1
Filing of
Motions
. Until the Senior Obligations Payment Date has
occurred, the Junior Representative agrees on behalf of itself and the other
Junior Secured Parties that no Junior Secured Party shall, in or in connection
with any Insolvency Proceeding, file any pleadings or motions, take any position
at any hearing or proceeding of any nature, or otherwise take any action
whatsoever, in each case in respect of any of the Senior Collateral, including,
without limitation, with respect to the determination of any Liens or claims
held by the Senior Representative (including the validity and enforceability
thereof) or any other Senior Secured Party in respect of any Senior Collateral
or the value of any claims of such parties under Section 506(a) of the
Bankruptcy Code or otherwise;
provided
that the
Junior Representative may (a) file a proof of claim in an Insolvency Proceeding,
and (b) file any necessary responsive or defensive pleadings in opposition of
any motion or other pleadings made by any Person objecting to or otherwise
seeking the disallowance of any Person objecting to or otherwise seeking the
disallowance of the claims of the Junior Secured Parties on the Senior
Collateral, subject to the limitations contained in this Agreement and only if
consistent with the terms and the limitations on the Junior Representative
imposed hereby.
5.2
Financing
Matters
.
(a) If any Loan
Party becomes subject to any Insolvency Proceeding in the United States at any
time prior to the ABL Obligations Payment Date, and if the ABL Representative or
the other ABL Secured Parties desire to consent (or not object) to the use of
ABL Priority Collateral constituting cash collateral under the Bankruptcy Code
or to provide financing to any Loan Party under the Bankruptcy Code or to
consent (or not object) to the provision of such financing to any Loan Party by
any third party secured by all or a portion of the ABL Priority Collateral (any
such financing, “
ABL
DIP Financing
”),
then the Notes Representative agrees, on behalf of itself and the other Notes
Secured Parties, that each Notes Secured Party (i) will be deemed to have
consented to, will raise no objection to, nor support any other Person objecting
to, the use of such cash collateral or to such ABL DIP Financing on the grounds
of a failure to provide “adequate protection” for the Notes Representative’s
Lien on the Notes Collateral to secure the Notes Obligations or on any other
grounds (and will not request any adequate protection solely as a result of such
ABL DIP Financing) and (ii) will subordinate (and will be deemed hereunder to
have subordinated) the Notes Liens on any ABL Priority Collateral (A) to such
ABL DIP Financing on the same terms as the ABL Liens are subordinated thereto
(and such subordination will not alter in any manner the terms of this
Agreement), (B) to any adequate protection provided to the ABL Secured Parties
and (C) to any “carve-out” for professional fees and customary fees and expenses
agreed to by the ABL Representative or the other ABL Secured Parties and
approved by the bankruptcy court, so long as (w) such ABL DIP Financing will not
result in the Capped ABL Obligations exceeding the ABL Cap Amount, (x) the
Notes Representative retains its Lien on the Notes Collateral to secure the
Notes Obligations (in each case, including Proceeds thereof arising after the
commencement of the case under the Bankruptcy Code) and, as to the Notes
Priority Collateral only, such Lien has the same priority as existed prior to
the commencement of the case under the Bankruptcy Code and any Lien securing
such ABL DIP Financing is junior and subordinate to the Lien of the Notes
Representative on the Notes Priority Collateral, (y) all Liens on ABL Priority
Collateral securing any such ABL DIP Financing shall be senior to or on a parity
with the Liens of the ABL Representative and the other ABL Secured Parties
securing the ABL Obligations on ABL Priority Collateral and (z) if the ABL
Representative receives a replacement or adequate protection Lien on
post-petition assets of the debtor to secure the ABL Obligations, and such
replacement or adequate protection Lien is on any of the Notes Priority
Collateral, (1) such replacement or adequate protection Lien on such
post-petition assets which are part of the Notes Priority Collateral (the “
Notes
Post-Petition
Assets
”) is junior and subordinate to the Lien in favor of the Notes
Representative on the Notes Priority Collateral and (2) the Notes Representative
also receives a replacement or adequate protection Lien on such Notes
Post-Petition Assets of the debtor to secure the Notes
Obligations. In no event will any of the ABL Secured Parties seek to
obtain a priming Lien on any of the Notes Priority Collateral and nothing
contained herein shall be deemed to be a consent by Notes Secured Parties to any
adequate protection payments using Notes Priority Collateral.
(b) If
any Loan Party becomes subject to any Insolvency Proceeding in the United States
at any time prior to the Notes Obligations Payment Date, and if the Notes
Representative or the other Notes Secured Parties desire to consent (or not
object) or to provide financing to any Loan Party under the Bankruptcy Code or
to consent (or not object) to the provision of such financing to any Loan Party
by any third party secured by all or a portion of the Notes Priority Collateral
(any such financing, “
Notes DIP
Financing
”), then the ABL Representative agrees, on behalf of itself and
the other ABL Secured Parties, that each ABL Secured Party (i) will be deemed to
have consented to, will raise no objection to, nor support any other Person
objecting to such Notes DIP Financing on the grounds of a failure to provide
“adequate protection” for the ABL Representative’s Lien on the ABL Collateral to
secure the ABL Obligations or on any other grounds (and will not request any
adequate protection solely as a result of such Notes DIP Financing) and (ii)
will subordinate (and will be deemed hereunder to have subordinated) the ABL
Liens on any Notes Priority Collateral (A) to such Notes DIP Financing on the
same terms as the Notes Liens are subordinated thereto (and such subordination
will not alter in any manner the terms of this Agreement), (B) to any adequate
protection provided to the Notes Secured Parties and (C) to any “carve-out” for
professional fees and customary fees and expenses agreed to by the Notes
Representative or the other Notes Secured Parties and approved by the bankruptcy
court, so long as (x) the ABL Representative retains its Lien on the ABL
Collateral to secure the ABL Obligations (in each case, including Proceeds
thereof arising after the commencement of the case under the Bankruptcy Code)
and, as to the ABL Priority Collateral only, such Lien has the same priority as
existed prior to the commencement of the case under the Bankruptcy Code and any
Lien securing such Notes DIP Financing is junior and subordinate to the Lien of
the ABL Representative on the ABL Priority Collateral, (y) all Liens on Notes
Priority Collateral securing any such Notes DIP Financing shall be senior to or
on a parity with the Liens of the Notes Representative and the other Notes
Secured Parties securing the Notes Obligations on Notes Priority Collateral and
(z) if the Notes Representative receives a replacement or adequate protection
Lien on post-petition assets of the debtor to secure the Notes Obligations, and
such replacement or adequate protection Lien is on any of the ABL Priority
Collateral, (1) such replacement or adequate protection Lien on such
post-petition assets which are part of the ABL Priority Collateral (the “
ABL Post-Petition
Assets
”) is junior and subordinate to the Lien in favor of the ABL
Representative on the ABL Priority Collateral and (2) the ABL Representative
also receives a replacement or adequate protection Lien on such ABL
Post-Petition Assets of the debtor to secure the ABL Obligations. In
no event will any of the Notes Secured Parties seek to obtain a priming Lien on
any of the ABL Priority Collateral, and nothing contained herein shall be deemed
to be a consent by the ABL Secured Parties to any adequate protection payments
using ABL Priority Collateral.
(c) All
Liens granted to the Notes Representative or the ABL Representative in any
Insolvency Proceeding, whether as adequate protection or otherwise, are intended
to be and shall be deemed to be subject to the Lien Priority and the other terms
and conditions of this Agreement.
5.3
Relief From the Automatic
Stay
. Until the ABL Obligations Payment Date, the Notes
Representative agrees, on behalf of itself and the other Notes Secured Parties,
that none of them will seek (or support any other Person in seeking) relief from
the automatic stay or from any other stay in any Insolvency Proceeding or take
any action in derogation thereof, in each case in respect of any ABL Priority
Collateral, without the prior written consent of the ABL
Representative. Until the Notes Obligations Payment Date, the ABL
Representative agrees, on behalf of itself and the other ABL Secured Parties,
that none of them will seek relief from the automatic stay or from any other
stay in any Insolvency Proceeding or take any action in derogation thereof, in
each case in respect of any Notes Priority Collateral, without the prior written
consent of the Notes Representative. In addition, neither the Notes
Representative nor the ABL Representative shall seek any relief from the
automatic stay with respect to any Common Collateral without providing 30 days’
prior written notice to the other, unless otherwise agreed by both the ABL
Representative and the Notes Representative.
5.4
No
Contest
. The Junior Representative, on behalf of itself and
the Junior Secured Parties, agrees that, prior to the Senior Obligations Payment
Date, none of them shall contest (or support any other Person contesting) (a)
any request by the Senior Representative or any Senior Secured Party for
adequate protection of its interest in the Senior Collateral (unless in
contravention of
Section 5.2(a)
or
(b)
, as applicable),
or (b) any objection by the Senior Representative or any Senior Secured Party to
any motion, relief, action, or proceeding based on a claim by the Senior
Representative or any Senior Secured Party that its interests in the Senior
Collateral (unless in contravention of
Section 5.2(a)
or
(b)
, as applicable)
are not adequately protected (or any other similar request under any law
applicable to an Insolvency Proceeding), so long as any Liens granted to the
Senior Representative as adequate protection of its interests are subject to
this Agreement.
5.5
Avoidance
Issues.
If any Senior Secured Party is required in any
Insolvency Proceeding or otherwise to disgorge, turn over or otherwise pay to
the estate of any Loan Party, because such amount was avoided or ordered to be
paid or disgorged for any reason, including without limitation because it was
found to be a fraudulent or preferential transfer, any amount (a “
Recovery
”), whether
received as proceeds of security, enforcement of any right of set-off or
otherwise, then the Senior Obligations shall be reinstated to the extent of such
Recovery and deemed to be outstanding as if such payment had not occurred and
the Senior Obligations Payment Date shall be deemed not to have occurred and to
the extent that the ABL Cap Amount was decreased in connection with any such
payment of ABL Obligations, the ABL Cap Amount shall be increased to such
extent. If this Agreement shall have been terminated prior to such
Recovery, this Agreement shall be reinstated in full force and effect, and such
prior termination shall not diminish, release, discharge, impair or otherwise
affect the obligations of the parties hereto. The Junior Secured
Parties agree that none of them shall be entitled to benefit from any avoidance
action affecting or otherwise relating to any distribution or allocation made in
accordance with this Agreement, whether by preference or otherwise, it being
understood and agreed that the benefit of such avoidance action otherwise
allocable to them shall instead be allocated and turned over for application in
accordance with the priorities set forth in this Agreement.
5.6
Asset Dispositions in an
Insolvency Proceeding
. Neither the Junior Representative nor
any other Junior Secured Party shall, in an Insolvency Proceeding or otherwise,
oppose any sale or disposition of any Senior Collateral that is supported by the
Senior Secured Parties, and the Junior Representative and each other Junior
Secured Party will be deemed to have consented under Section 363 of the
Bankruptcy Code (and otherwise) to any sale of any Senior Collateral supported
by the Senior Secured Parties and to have released their Liens on such assets;
provided that this
Section 5.6
shall not
apply to any case of a sale or disposition of Real Property constituting Notes
Priority Collateral unless the ABL Representative has received at least 60 days
prior notice of the consummation of any such sale.
5.7
Other
Matters
. To the extent that the Senior Representative or any
Senior Secured Party has or acquires rights under Section 363 or Section 364 of
the Bankruptcy Code with respect to any of the Junior Collateral, the Senior
Representative agrees, on behalf of itself and the other Senior Secured Parties,
not to assert any of such rights without the prior written consent of the Junior
Representative;
provided
that if
requested by the Junior Representative, the Senior Representative shall timely
exercise such rights in the manner requested by the Junior Representative,
including any rights to payments in respect of such rights.
5.8
Effectiveness in Insolvency
Proceedings
. This Agreement, which the parties hereto
expressly acknowledge is a “subordination agreement” under section 510(a) of the
Bankruptcy Code, shall be effective before, during and after the commencement of
an Insolvency Proceeding.
SECTION
6.
Notes Documents and ABL
Documents.
(a) Each
Loan Party and the Notes Representative, on behalf of itself and the Notes
Secured Parties, agrees that it shall not at any time execute or deliver any
amendment or other modification to any of the Notes Documents inconsistent with
or in violation of this Agreement.
(b) Each
Loan Party and the ABL Representative, on behalf of itself and the ABL Secured
Parties, agrees that it shall not at any time execute or deliver any amendment
or other modification to any of the ABL Documents inconsistent with or in
violation of this Agreement.
(c) In
the event the Senior Representative enters into any amendment, waiver or consent
in respect of any of the Senior Security Documents for the purpose of adding to,
or deleting from, or waiving or consenting to any departures from any provisions
of, any Senior Security Document (including any release of any Lien in favor of
such Senior Secured Party) or changing in any manner the rights of any parties
thereunder, in each case solely with respect to any Senior Collateral, then such
amendment, waiver or consent shall apply automatically to any comparable
provision of the Comparable Security Document without the consent of or action
by any Junior Secured Party (with all such amendments, waivers and modifications
subject to the terms hereof);
provided
that, (i) no
such amendment, waiver or consent shall have the effect of removing assets
subject to the Lien of any Junior Security Document, except to the extent that a
release of such Lien is permitted by
Section 4.2
, (ii) no
such amendment, waiver or consent with respect to any provision applicable to
the Junior Representative under the Junior Documents shall be made without the
prior written consent of the Junior Representative, and (iii) notice of such
amendment, waiver or consent shall be given to the Junior Representative no
later than 30 days after its effectiveness,
provided
that the
failure to give such notice shall not affect the effectiveness and validity
thereof.
SECTION
7.
Purchase
Options.
7.1
Notice of
Exercise
. (a) Upon the occurrence and during the continuance
of an “Event of Default” under the ABL Documents, if such Event of Default
remains uncured or unwaived for at least thirty (30) consecutive days and the
requisite ABL Creditors have not agreed to forbear from the exercise of
remedies, all or a portion of the Notes Creditors, acting as a single group,
shall have the option at any time upon five (5) Business Days’ prior written
notice to the ABL Representative to purchase all (but not less than all) of the
ABL Obligations from the ABL Secured Parties. Such notice from such
Notes Creditors to the ABL Representative shall be irrevocable.
(b) Upon
the occurrence and during the continuance of an “Event of Default” under the
Notes Documents, if such Event of Default remains uncured or unwaived for at
least thirty (30) consecutive days and the requisite Notes Creditors have not
agreed to forbear from the exercise of remedies, all or a portion of the ABL
Creditors, acting as a single group, shall have the option at any time upon five
(5) Business Days’ prior written notice to the Notes Representative to purchase
all (but not less than all) of the Notes Obligations from the Notes Secured
Parties. Such notice from such ABL Creditors to the Notes
Representative shall be irrevocable.
7.2
Purchase and
Sale
. (a) On the date specified by the relevant Notes
Creditors in the notice contemplated by
Section 7.1(a)
above
(which shall not be less than five (5) Business Days, nor more than twenty (20)
calendar days, after the receipt by the ABL Representative of the notice of the
relevant Notes Creditor’s election to exercise such option), the ABL Lenders
shall sell to the relevant Notes Creditors, and the relevant Notes Creditors
shall purchase from the ABL Creditors, the ABL Obligations,
provided
that, the
ABL Representative and the other ABL Secured Parties shall retain all rights to
be indemnified or held harmless by the Loan Parties in accordance with the terms
of the ABL Documents but shall not retain any rights to the security
therefor.
(b) On
the date specified by the relevant ABL Creditors in the notice contemplated by
Section 7.1(b)
above (which shall not be less than five (5) Business Days, nor more than twenty
(20) calendar days, after the receipt by the Notes Representative of the notice
of the relevant ABL Creditor’s election to exercise such option), the Notes
Creditors shall sell to the relevant ABL Creditors, and the relevant ABL
Creditors shall purchase from the Notes Creditors, the Notes Obligations,
provided
that, the
Notes Representative and the other Notes Secured Parties shall retain all rights
to be indemnified or held harmless by the Loan Parties in accordance with the
terms of the Notes Documents but shall not retain any rights to the security
therefor.
7.3
Payment of Purchase
Price
. Upon the date of such purchase and sale, the relevant
Notes Creditors or the relevant ABL Creditors, as applicable, shall (a) pay to
the ABL Representative for the benefit of the ABL Creditors (with respect to a
purchase of the ABL Obligations) or to the Notes Representative for the benefit
of the Notes Creditors (with respect to a purchase of the Notes Obligations) as
the purchase price therefor the full amount of all the ABL Obligations or Notes
Obligations, as applicable, then outstanding and unpaid (including principal,
interest, fees and expenses, including reasonable attorneys’ fees and legal
expenses but specifically excluding any prepayment premium, make-whole,
termination or similar fees), (b) with respect to a purchase of the ABL
Obligations, furnish cash collateral to the ABL Representative in a manner and
in such amounts as the ABL Representative determines is reasonably necessary to
secure the ABL Representative, the ABL Secured Parties, letter of credit issuing
banks and applicable affiliates in connection with any issued and outstanding
letters of credit, Swap Obligations and Banking Service Obligations secured by
the ABL Documents, (c) with respect to a purchase of the ABL Obligations, agree
to reimburse the ABL Representative, the ABL Secured Parties and letter of
credit issuing banks for any loss, cost, damage or expense (including reasonable
attorneys’ fees and legal expenses) in connection with any commissions, fees,
costs or expenses related to any issued and outstanding letters of credit as
described above and any checks or other payments provisionally credited to the
ABL Obligations, and/or as to which the ABL Representative has not yet received
final payment, (d) agree to reimburse the ABL Secured Parties or the Notes
Secured Parties, as applicable, and with respect to a purchase of the ABL
Obligations letter of credit issuing banks, in respect of indemnification
obligations of the Loan Parties under the ABL Documents or the Notes Documents,
as applicable, as to matters or circumstances known to the ABL Representative or
the Notes Representative, as applicable, at the time of the purchase and sale
which would reasonably be expected to result in any loss, cost, damage or
expense (including reasonable attorneys’ fees and legal expenses) to the ABL
Secured Parties, the Notes Secured Parties or letter of credit issuing banks, as
applicable, and (e) agree to indemnify and hold harmless the ABL Secured Parties
or the Notes Secured Parties, as applicable, and with respect to a purchase of
the ABL Obligations letter of credit issuing banks, from and against any loss,
liability, claim, damage or expense (including reasonable fees and expenses of
legal counsel) arising out of any claim asserted by a third party in respect of
the ABL Obligations or the Notes Obligations, as applicable, as a direct result
of any acts by any Notes Secured Party or any ABL Secured Party, as applicable,
occurring after the date of such purchase. Such purchase price and
cash collateral shall be remitted by wire transfer in federal funds to such bank
account in New York, New York as the ABL Representative or the Notes
Representative, as applicable, may designate in writing for such
purpose.
7.4
Limitation on
Representations and Warranties
. Such purchase shall be
expressly made without representation or warranty of any kind by any selling
party (or the ABL Representative or the Notes Representative) and without
recourse of any kind, except that the selling party shall represent and
warrant: (a) the amount of the ABL Obligations or Notes Obligations,
as applicable, being purchased from it, (b) that such ABL Secured Party or Notes
Secured Party, as applicable, owns the ABL Obligations or Notes Obligations, as
applicable, free and clear of any Liens or encumbrances and (c) that such ABL
Secured Party or Notes Secured Party, as applicable, has the right to assign
such ABL Obligations or Notes Obligations, as applicable, and the assignment is
duly authorized.
SECTION
8.
Reliance; Waivers;
etc.
8.1
Reliance
. The
ABL Documents are deemed to have been executed and delivered, and all extensions
of credit thereunder are deemed to have been made or incurred, in reliance upon
this Agreement. The Notes Representative, on behalf of it itself and
the other Notes Secured Parties, expressly waives all notice of the acceptance
of and reliance on this Agreement by the ABL Representative and the other ABL
Secured Parties. The Notes Documents are deemed to have been executed
and delivered and all extensions of credit thereunder are deemed to have been
made or incurred, in reliance upon this Agreement. The ABL
Representative, on behalf of itself and the other ABL Secured Parties, expressly
waives all notices of the acceptance of and reliance on this Agreement by the
Notes Representative and the other Notes Secured Parties.
8.2
No Warranties or
Liability
. The Notes Representative and the ABL Representative
acknowledge and agree that neither has made any representation or warranty with
respect to the execution, validity, legality, completeness, collectibility or
enforceability of any other ABL Document or any Notes
Document. Except as otherwise provided in this Agreement, the Notes
Representative and the ABL Representative will be entitled to manage and
supervise the respective extensions of credit to any Loan Party in accordance
with law and their usual practices, modified from time to time as they deem
appropriate.
8.3
No
Waivers
. No right or benefit of any party hereunder shall at
any time in any way be prejudiced or impaired by any act or failure to act on
the part of such party or any other party hereto or by any noncompliance by any
Loan Party with the terms and conditions of any of the ABL Documents or the
Notes Documents.
SECTION
9.
Obligations
Unconditional.
For so long as this Agreement is in full force and
effect, all rights, interests, agreements and obligations hereunder of the
Senior Representative and the Senior Secured Parties in respect of any
Collateral and the Junior Representative and the Junior Secured Parties in
respect of such Collateral shall remain in full force and effect regardless
of:
(a) any
lack of validity or enforceability of any Senior Document or any Junior Document
and regardless of whether the Liens of the Senior Representative and Senior
Secured Parties are not perfected or are voidable for any reason;
(b) any
change in the time, manner or place of payment of, or in any other terms of, all
or any of the Senior Obligations or Junior Obligations, or any amendment or
waiver or other modification, including any increase in the amount thereof,
whether by course of conduct or otherwise, of the terms of any Senior Document
or any Junior Document;
(c) any
exchange, release or lack of perfection of any Lien on any Collateral or any
other asset, or any amendment, waiver or other modification, whether in writing
or by course of conduct or otherwise, of all or any of the Senior Obligations or
Junior Obligations or any guarantee thereof;
(d) the
commencement of any Insolvency Proceeding in respect of any Loan Party;
or
(e) any
other circumstances which otherwise might constitute a defense available to, or
a discharge of, any Loan Party in respect of any Secured Obligation or of any
Junior Secured Party in respect of this Agreement.
SECTION
10.
Miscellaneous.
10.1
Rights of
Subrogation
. The Notes Representative, for and on behalf of
itself and the Notes Secured Parties, agrees that no payment to the ABL
Representative or any ABL Secured Party pursuant to the provisions of this
Agreement shall entitle the Notes Representative or any Notes Secured Party to
exercise any rights of subrogation in respect thereof until the ABL Obligations
Payment Date. Following the ABL Obligations Payment Date, the ABL
Representative agrees to execute such documents, agreements, and instruments as
the Notes Representative or any Notes Secured Party may reasonably request to
evidence the transfer by subrogation to any such Person of an interest in the
ABL Obligations resulting from payments to the ABL Representative by such
Person, so long as all costs and expenses (including all reasonable legal fees
and disbursements) incurred in connection therewith by the ABL Representative
are paid by such Person upon request for payment thereof. The ABL
Representative, for and on behalf of itself and the ABL Secured Parties, agrees
that no payment to the Notes Representative or any Notes Secured Party pursuant
to the provisions of this Agreement shall entitle the ABL Representative or any
ABL Secured Party to exercise any rights of subrogation in respect thereof until
the Notes Obligations Payment Date. Following the Notes Obligations
Payment Date, the Notes Representative agrees to execute such documents,
agreements, and instruments as the ABL Representative or any ABL Secured Party
may reasonably request to evidence the transfer by subrogation to any such
Person of an interest in the Notes Obligations resulting from payments to the
Notes Representative by such Person, so long as all costs and expenses
(including all reasonable legal fees and disbursements) incurred in connection
therewith by the Notes Representative are paid by such Person upon request for
payment thereof.
10.2
Further
Assurances
. Each of the Notes Representative and the ABL
Representative will, at the Loan Parties’ expense and at any time and from time
to time, promptly execute and deliver all further instruments and documents, and
take all further action, that may be necessary or desirable, or that the other
party may reasonably request, in order to protect any right or interest granted
or purported to be granted hereby or to enable the ABL Representative or the
Notes Representative to exercise and enforce its rights and remedies hereunder;
provided
,
however
, that no
party shall be required to pay over any payment or distribution, execute any
instruments or documents, or take any other action referred to in this
Section 10.2
, to the
extent that such action would contravene any law, order or other legal
requirement or any of the terms or provisions of this Agreement, and in the
event of a controversy or dispute, such party may interplead any payment or
distribution in any court of competent jurisdiction, without further
responsibility in respect of such payment or distribution under this
Section
10.2
.
10.3
Conflicts
. In
the event of any conflict between the provisions of this Agreement and the
provisions of any ABL Document or any Notes Document, the provisions of this
Agreement shall govern to the extent of such conflict.
10.4
Continuing Nature of
Provisions.
Subject to
Section 5.5
, this
Agreement shall continue to be effective, and shall not be revocable by any
party hereto, until the earlier of (a) the ABL Obligations Payment Date and (b)
the Notes Obligations Payment Date. This is a continuing agreement
and the ABL Secured Parties and the Notes Secured Parties may continue, at any
time and without notice to the other parties hereto, to extend credit and other
financial accommodations, lend monies and provide indebtedness to, or for the
benefit of, any Loan Party on the faith hereof.
10.5
Amendments;
Waivers
. (a) No amendment or modification of any of the
provisions of this Agreement shall be effective unless the same shall be in
writing and signed by the ABL Representative and the Notes
Representative. Each Loan Party agrees that this Agreement may be
amended or modified by the ABL Representative and the Notes Representative
without notice to, or the consent of, any Loan Party, provided no Loan Party
shall be bound by any such amendment or modification that directly and adversely
affects the rights or duties of such Loan Party in any material
respect.
(b) It
is understood that the ABL Representative and the Notes Representative, without
the consent of any other ABL Secured Party or Notes Secured Party, may in their
discretion determine that a supplemental agreement (which may take the form of
an amendment and restatement of this Agreement) is necessary or appropriate to
facilitate having additional indebtedness or other obligations (“
Additional Debt
”) of
any of the Loan Parties become ABL Obligations or Notes Obligations, as the case
may be, under this Agreement, which supplemental agreement shall specify whether
such Additional Debt constitutes ABL Obligations or Notes Obligations,
provided
, that such
Additional Debt is permitted to be incurred by the ABL Agreement and Indenture
then extant, and is permitted by said Agreements to be subject to the provisions
of this Agreement as ABL Obligations or Notes Obligations, as
applicable.
10.6
Information Concerning
Financial Condition of the Loan Parties
. The Notes
Representative and the ABL Representative hereby agree that no party shall have
any duty to advise any other party of information known to it regarding the
financial condition of the Loan Parties or any other circumstances bearing upon
the risk of nonpayment of the ABL Obligations or the Note Obligations (except as
otherwise provided in the ABL Documents and Notes Documents). In the
event the Notes Representative or the ABL Representative, in its sole
discretion, undertakes at any time or from time to time to provide any
information to any other party to this Agreement, it shall be under no
obligation (a) to provide any such information to such other party or any other
party on any subsequent occasion, (b) to undertake any investigation not a part
of its regular business routine, or (c) to disclose any other
information.
10.7
Governing
Law
. This Agreement shall be construed in accordance with and
governed by the law of the State of New York, except as otherwise required by
mandatory provisions of law and except to the extent that remedies provided by
the laws of any jurisdiction other than the State of New York are governed by
the laws of such jurisdiction.
10.8
Submission to Jurisdiction;
JURY TRIAL WAIVER
. (a) Each ABL Secured Party, each Notes
Secured Party and each Loan Party hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of any judgment,
and each such party hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined
in such New York State or, to the extent permitted by law, in such Federal
court. Each such party agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement shall affect any right that the any
ABL Secured Party or Notes Secured Party may otherwise have to bring any action
or proceeding against any Loan Party or its properties in the courts of any
jurisdiction.
(b) Each
ABL Secured Party, each Notes Secured Party and each Loan Party hereby
irrevocably and unconditionally waives, to the fullest extent it may legally and
effectively do so (i) any objection it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or relating to this
Agreement in any court referred to in paragraph (a) of this Section and (ii) the
defense of an inconvenient forum to the maintenance of such action or
proceeding.
(c) Each
party to this Agreement irrevocably consents to service of process in the manner
provided for notices in
Section
10.9
. Nothing in this Agreement will affect the right of any
party to this Agreement to serve process in any other manner permitted by
law.
(d) EACH
PARTY HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH
PARTY HERETO REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
10.9
Notices.
Unless
otherwise specifically provided herein, any notice or other communication herein
required or permitted to be given shall be in writing and may be personally
served, telecopied, or sent by overnight express courier service or United
States mail and shall be deemed to have been given when delivered in person or
by courier service, upon receipt of a telecopy or five days after deposit in the
United States mail (certified, with postage prepaid and properly
addressed). For the purposes hereof, the addresses of the parties
hereto (until notice of a change thereof is delivered as provided in this
Section 10.9
) shall
be as set forth below each party’s name on the signature pages hereof, or, as to
each party, at such other address as may be designated by such party in a
written notice to all of the other parties.
10.10
Successors and
Assigns
.
This Agreement
shall be binding upon and inure to the benefit of each of the parties hereto and
each of the ABL Secured Parties and Notes Secured Parties and their respective
successors and assigns, and nothing herein is intended, or shall be construed to
give, any other Person any right, remedy or claim under, to or in respect of
this Agreement or any Collateral.
10.11
Headings
. Section
headings used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
10.12
Severability
.
Any provision of
this Agreement held to be invalid, illegal or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.
10.13
Other
Remedies
. For avoidance of doubt, it is understood that
nothing in this Agreement shall prevent any ABL Secured Party or any Notes
Secured Party from exercising any available remedy to accelerate the maturity of
any indebtedness or other obligations owing under the ABL Documents or the Notes
Documents, as applicable, or to demand payment under any guarantee in respect
thereof.
10.14
Counterparts; Integration;
Effectiveness
. This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. Delivery of an executed counterpart of a signature
page of this Agreement by telecopy or electronic transmission shall be effective
as delivery of a manually executed counterpart of this
Agreement. This Agreement shall become effective when it shall have
been executed by each party hereto.
10.15
Additional Loan
Parties
. Borrower shall cause each Person that becomes a Loan
Party after the date hereof to become a party to this Agreement by execution and
delivery by such Person of a Joinder Agreement in the form of
Annex 1
hereto.
10.16
Force
Majeure
. Other than with respect to obligations that can be
performed by the payment of money, whenever a period of time is herein
prescribed for action to be taken by either the ABL Representative or the
Notes Representative, such Person shall not be liable or responsible for, and
there shall be excluded from the computation of any such period of time, any
delays due to strikes, riots, acts of God, shortages of labor or materials, war
and terrorist acts or activities.
10.17
No Consequential
Damages
. Neither the ABL Representative nor the Notes
Representative shall be liable for any indirect, special or consequential
damages (including but not limited to lost profits) whatsoever, even if it has
been informed of the likelihood thereof and regardless of the form of
action.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first written above.
|
JPMORGAN
CHASE BANK, N.A., as ABL
Representative
for and on behalf of the ABL Secured
Parties
|
|
|
|
|
By:
|
/s/
Mario Quintanilla
|
|
Name:
|
Mario
Quintanilla
|
|
Title:
|
Vice
President
|
|
|
|
|
Address
for Notices:
|
|
|
|
|
JPMorgan
Chase Bank, N.A.
|
|
2200
Ross Avenue, 9
th
Floor
|
|
MC:
TX1-2921
|
|
Attention:
|
Mario
Quintanilla
|
|
Telecopy No.:
|
(214)
965-4731
|
|
|
|
|
U.S.
BANK NATIONAL ASSOCIATION, as Notes
Representative
for and on behalf of the Notes Secured
Parties
|
|
|
|
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By:
|
/s/
Wally Jones
|
|
Name:
|
Wally
Jones
|
|
Title:
|
Vice
President
|
|
|
|
|
Address
for Notices:
|
|
|
|
|
150
Fourth Avenue North, 2
nd
Floor
|
|
Nashville,
TN 37219
|
|
|
|
Attention:
|
Corporate
Trust Services - U.S. Concrete
|
|
Telecopy No.:
|
(615)
251-0737
|
[Signature
Page to Intercreditor Agreement]
|
U.S.
CONCRETE, INC.
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael W. Harlan
|
|
Title:
|
Chief Executive Officer and
President
|
|
|
|
|
Address
for Notices for U.S. Concrete, Inc. and all of the
following
entities:
|
|
|
|
2925
Briarpark, Suite 1050
|
|
Houston,
Texas 77042
|
|
Attention: General
Counsel
|
|
Telecopy
No: (713) 499-6201
|
|
|
|
|
ALBERTA
INVESTMENTS, INC.
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael W. Harlan
|
|
Title:
|
President
|
|
|
|
|
ALLIANCE
HAULERS, INC.
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael W. Harlan
|
|
Title:
|
President
|
|
|
|
|
AMERICAN
CONCRETE PRODUCTS, INC.
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
Vice President and
Secretary
|
|
|
|
|
ATLAS
REDI-MIX, LLC
|
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael W. Harlan
|
|
Title:
|
President
|
[Signature
Page to Intercreditor Agreement]
|
ATLAS-TUCK
CONCRETE, INC.
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael W. Harlan
|
|
Title:
|
President
|
|
|
|
|
BWB,
INC. OF MICHIGAN
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
Vice President and
Secretary
|
|
|
|
|
BEALL
CONCRETE ENTERPRISES, LLC
|
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael W. Harlan
|
|
Title:
|
President
|
|
|
|
|
BEALL
INVESTMENT CORPORATION, INC.
|
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael W. Harlan
|
|
Title:
|
President
|
|
|
|
|
BEALL
INDUSTRIES, INC.
|
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael W. Harlan
|
|
Title:
|
President
|
|
|
|
|
BEALL
MANAGEMENT, INC.
|
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael W. Harlan
|
|
Title:
|
President
|
[Signature
Page to Intercreditor Agreement]
|
BRECKENRIDGE
READY MIX, INC.
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
Vice President and
Secretary
|
|
|
|
|
BUILDERS’
REDI-MIX LLC
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
Vice President and
Secretary
|
|
|
|
|
CENTRAL
CONCRETE SUPPLY CO., INC.
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
Vice President and
Secretary
|
|
|
|
|
CENTRAL
PRECAST CONCRETE, INC.
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
Vice President and
Secretary
|
|
|
|
|
CONCRETE
ACQUISITION III, LLC
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
President
|
[Signature
Page to Intercreditor Agreement]
|
CONCRETE
ACQUISITION IV, LLC
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
President
|
|
|
|
|
CONCRETE
ACQUISITION V, LLC
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
President
|
|
|
|
|
CONCRETE
ACQUISITION VI, LLC
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
President
|
|
|
|
|
CONCRETE
XXXIII ACQUISITION, INC.
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
President
|
|
|
|
|
CONCRETE
XXXIV ACQUISITION, INC.
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
President
|
|
|
|
|
CONCRETE
XXXV ACQUISITION, INC.
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
President
|
[Signature
Page to Intercreditor Agreement]
|
CONCRETE
XXXVI ACQUISITION, INC.
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
President
|
|
|
|
|
EASTERN
CONCRETE MATERIALS, INC.
|
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael W. Harlan
|
|
Title:
|
President and Secretary
|
|
|
|
|
HAMBURG
QUARRY LIMITED LIABILITY COMPANY
|
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael W. Harlan
|
|
Title:
|
President
|
|
|
|
|
INGRAM
CONCRETE, LLC
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
Vice President and
Secretary
|
|
|
|
|
KURTZ
GRAVEL COMPANY
|
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael W. Harlan
|
|
Title:
|
Vice President and
Secretary
|
[Signature
Page to Intercreditor Agreement]
|
LOCAL
CONCRETE SUPPLY & EQUIPMENT, LLC
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
President and Secretary
|
|
|
|
|
MASTER
MIX, LLC
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
President and Secretary
|
|
|
|
|
MASTER
MIX CONCRETE, LLC
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
President and Secretary
|
|
|
|
|
MG,
LLC
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
Vice President and
Secretary
|
|
|
|
|
NYC
CONCRETE MATERIALS, LLC
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
President and Secretary
|
|
|
|
|
PEBBLE
LANE ASSOCIATES, LLC
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
President and
Secretary
|
[Signature
Page to Intercreditor Agreement]
|
REDI-MIX
CONCRETE, L.P.
|
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael W. Harlan
|
|
Title:
|
President
|
|
|
|
|
REDI-MIX
GP, LLC
|
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael W. Harlan
|
|
Title:
|
President
|
|
|
|
|
REDI-MIX,
LLC
|
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael W. Harlan
|
|
Title:
|
President
|
|
|
|
|
RIVERSIDE
MATERIALS, LLC
|
|
|
|
|
By:
|
/s/ Wallace H. Johnson
|
|
Name:
|
Wallace H. Johnson
|
|
Title:
|
President and Secretary
|
|
|
|
|
SAN
DIEGO PRECAST CONCRETE, INC.
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
Vice President and
Secretary
|
[Signature
Page to Intercreditor Agreement]
|
SIERRA
PRECAST, INC.
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
Vice President and
Secretary
|
|
|
|
|
SMITH
PRE-CAST, INC.
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
Vice President and
Secretary
|
|
|
|
|
SUPERIOR
CONCRETE MATERIALS, INC.
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
Vice President and
Secretary
|
|
|
|
|
SUPERIOR
HOLDINGS, INC.
|
|
|
|
|
By:
|
/s/
Michael W. Harlan
|
|
Name:
|
Michael
W. Harlan
|
|
Title:
|
Vice President and
Secretary
|
|
|
|
|
TITAN
CONCRETE INDUSTRIES, INC.
|
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael W. Harlan
|
|
Title:
|
Vice President and
Secretary
|
|
|
|
|
USC
ATLANTIC, INC.
|
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael W. Harlan
|
|
Title:
|
Vice President and
Secretary
|
|
|
|
|
USC
MANAGEMENT CO., LLC
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
Vice President and
Secretary
|
[Signature
Page to Intercreditor Agreement]
|
USC
MICHIGAN, INC.
|
|
|
|
|
By:
|
/s/ Michael W. Harlan
|
|
Name:
|
Michael W. Harlan
|
|
Title:
|
Vice President and
Secretary
|
|
|
|
|
USC
PAYROLL, INC.
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
Vice President and
Secretary
|
|
|
|
|
USC
TECHNOLOGIES, INC.
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
Vice President and
Secretary
|
|
|
|
|
U.S.
CONCRETE ON-SITE, INC.
|
|
|
|
|
By:
|
/s/ Curt M. Lindeman
|
|
Name:
|
Curt M. Lindeman
|
|
Title:
|
Vice President and
Secretary
|
[Signature
Page to Intercreditor Agreement]
ANNEX
1
JOINDER
AGREEMENT
THIS
JOINDER AGREEMENT (this “
Agreement
”), dated as
of _______________ __, 20__, is executed by ______________________________, a
____________________ (the “
New Subsidiary
”) in
favor of JPMORGAN CHASE BANK, N.A. (“
ABL Representative
”)
and U.S. BANK NATIONAL ASSOCIATION (“
Notes
Representative
”), in their capacities as ABL Representative and Notes
Representative, respectively, under that certain Intercreditor Agreement (the
“
Intercreditor
Agreement
”), dated as of August __, 2010 among the ABL Representative,
the Notes Representative, U.S Concrete, Inc. and each of the other Loan Parties
party thereto. All capitalized terms used herein and not otherwise
defined shall have the meanings set forth in the Intercreditor
Agreement.
The New
Subsidiary, for the benefit of the ABL Representative and the Notes
Representative, hereby agrees as follows:
1. The
New Subsidiary hereby acknowledges the Intercreditor Agreement and acknowledges,
agrees and confirms that, by its execution of this Agreement, the New Subsidiary
will be deemed to be a Loan Party under the Intercreditor Agreement and shall
have all of the obligations of a Loan Party thereunder as if it had executed the
Intercreditor Agreement. The New Subsidiary hereby ratifies, as of
the date hereof, and agrees to be bound by, all of the terms, provisions and
conditions contained in the Intercreditor Agreement.
2. The
address of the New Subsidiary for purposes of 10.09 of the Intercreditor
Agreement is as follows:
3. THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE NEW SUBSIDIARY HEREUNDER SHALL
BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
IN
WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly
executed by its authorized officer, as of the day and year first above
written.
|
[NEW
SUBSIDIARY]
|
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
Exhibit
10.4
U.S.
CONCRETE, INC.
MANAGEMENT
EQUITY INCENTIVE PLAN
1.
Establishment of the
Plan.
U.S. Concrete, Inc., a Delaware corporation (the
“Company”), hereby establishes this U.S. Concrete, Inc. Management Equity
Incentive Plan (the “Plan”), effective as of August 31, 2010.
2.
Definitions.
The
following terms used in the Plan have the following respective
meanings:
“Authorized
Officer” means the CEO (or any other senior officer of the Company to whom the
CEO delegates, by written notice to the Committee of that delegation, authority
to execute any Award Agreement).
“Award”
means a Director Award or an Employee Award.
“Award
Agreement” means any written
Director Award Agreement
or Employee Award Agreement.
“Board”
means the Board of Directors of the Company.
“Cash
Award” means an award denominated in cash.
“Cause”
means unless otherwise determined by the Committee in the applicable Award
Agreement, with respect to termination of a Participant’s employment, the
following: (a) in the case where there is an employment agreement or
similar agreement in effect between the Company or a Subsidiary of the Company
and the Participant at the time of grant of an Award that defines “cause” (or
words of like import), “cause” as defined under such agreement, or (b) in the
absence of any such agreement, (i) the Participant’s conviction of a felony
crime or crime involving moral turpitude (or the Participant’s entering of a
plea of nolo contendere to any charge against the Participant of a felony crime
or crime involving moral turpitude) of any kind, (ii) the Participant’s
violation of a Company policy that provides for termination of employment in the
event of such a violation, (iii) the Participant’s continuing failure (except by
reason of the Participant’s incapacity attributable to physical or mental
illness or injury) to substantially perform the duties and responsibilities
assigned to the Participant (provided those duties and responsibilities are
commensurate and consistent with the capacity in which the Participant is
employed with the Company or a Subsidiary of the Company) for a period of twenty
(20) days after the Company has delivered to the Participant a written demand
for substantial performance which specifically identifies the basis for the
Company’s determination that the Participant has not substantially performed his
or her duties and responsibilities, or (iv) the Participant’s engagement in any
act of gross negligence, fraud or other conduct that is materially injurious to
the Company, monetarily or otherwise. With respect to termination of
a Participant’s directorship, “cause” means an act or failure to act that
constitutes cause for removal of a director under applicable Delaware
law.
“CEO”
means the chief executive officer of the Company at that time.
“Code”
means the Internal Revenue Code of 1986, as amended from time to
time.
“Committee”
means the Compensation Committee of the Board (or any other committee of the
Board which the Board designates by a written resolution to administer the Plan)
or, if none is appointed, the entire Board.
“Common
Stock” means the Common Stock, $0.001 par value per share, of the
Company.
“Company”
means U.S. Concrete, Inc., a Delaware corporation.
“Director”
means an individual serving as a member of the Board.
“Director
Award” means the grant under the Plan of any Nonqualified Option, SAR, Stock
Award, Cash Award or Performance Award, whether granted singly or in combination
or tandem with any other Award, to a Participant who is a Nonemployee Director
on such terms and subject to such conditions and limitations as the Committee
may establish pursuant to the Plan and Director Award Agreement.
“Director
Award Agreement” means a written agreement between the Company and a Participant
who is a Nonemployee Director which sets forth the terms, conditions and
limitations applicable to a Director Award granted to that Nonemployee
Director.
“Dividend
Equivalent” means a right that entitles the Participant to receive, with respect
to each share of Restricted Stock or RSU that is subject to an underlying Award,
an amount equal to all cash and stock dividends that are payable to stockholders
of record on one share of Common Stock during the Restriction
Period.
“Employee”
means any person or entity that is employed by or providing services to the
Company or any of its Subsidiaries.
“Employee
Award” means the grant under the Plan of any Option, SAR, Stock Award, Cash
Award or Performance Award, whether granted singly or in combination or tandem
with any other Award, to a Participant who is an Employee on such terms and
subject to such conditions and limitations as the Committee may establish
pursuant to the Plan and Employee Award Agreement.
“Employee
Award Agreement” means a written agreement between the Company and a Participant
who is an Employee which sets forth the terms, conditions and limitations
applicable to an Employee Award granted to that Employee.
“Fair
Market Value” of a share of Common Stock means, as of a particular date, (i) if
shares of Common Stock are listed on a national securities exchange, the closing
sales price on such date or, if such price is unavailable, the average of the
closing bid and asked prices per share of Common Stock on such date (or in
either event, if there was no trading in the Common Stock on such date, on the
next preceding date on which such trading was reported) as provided by the
consolidated transaction reporting system for the principal national securities
exchange on which shares of Common Stock are listed on such date; (ii) if shares
of Common Stock are not so listed, the last sales price on such date or, if such
price is unavailable, the average of the closing bid and asked prices per share
of Common Stock on such date (or, if there was no trading in the Common Stock on
such date, on the next preceding date on which such trading was reported) as
reported by the National Quotation Bureau Incorporated; or (iii) if shares
of Common Stock are not publicly traded on such date, as determined by the Board
in its good faith discretion taking into account the requirements of Code
Section 409A.
“Incentive
Option” means an Option intended to comply with Code Section 422.
“Incentive
Restricted Stock Unit” (“Incentive RSU”) means a unit evidencing the right to
receive 0.35020 of a share of Common Stock that is subject to forfeiture
provisions or other restrictions on transfer.
“Nonemployee
Director” has the meaning specified in Paragraph 4(b).
“Nonqualified
Option” means an Option that is not an Incentive Option.
“Option”
means a right to purchase a specified number of shares of Common Stock at a
specified exercise price.
“Participant”
means a Nonemployee Director or Employee to whom an Award has been made under
the Plan.
“Performance
Award” means an award to a Participant who is an Employee or Director, the
earning of which is subject to the attainment of one or more Performance
Goals.
“Performance
Goal” means a standard the Committee establishes to determine in whole or in
part whether a Performance Award will be earned.
“Restricted
Stock” means one share of Common Stock that is subject to forfeiture provisions
or other restrictions on transfer until the expiration of the Restriction Period
set forth in the applicable Award Agreement.
“Restricted
Stock Unit” (“RSU”) means a unit evidencing the right to receive one share of
Common Stock or equivalent cash value (as determined by the Committee in its
sole discretion) that is subject to forfeiture provisions or other restrictions
on transfer.
“Restriction
Period” means a period of time beginning as of the effective date of an Award of
Restricted Stock or RSUs and ending as of the date on which the Common Stock
subject to that Award is no longer restricted as to its transfer or no longer
subject to forfeiture provisions.
“Stock
Appreciation Right” (“SAR”) means a right to receive, upon exercise, a payment,
in cash or Common Stock (as determined by the Committee in its sole discretion),
equal to the excess of the Fair Market Value or other specified valuation of a
specified number of shares of Common Stock on the date the right is exercised
over the Fair Market Value of such shares of Common Stock on the date the right
is granted, in each case as set forth in the Award Agreement.
“Stock
Award” means an Award in the form of Common Stock or units denominated in Common
Stock, including, without limitation, Awards of Restricted Stock, RSUs and
Incentive RSUs.
“Subsidiary”
means: (i) in the case of a corporation, any corporation of which the
Company directly or indirectly owns shares representing more than 50% of the
combined voting power of the shares of all classes or series of capital stock of
that corporation which have the right to vote generally on matters submitted to
a vote of the stockholders of that corporation; and (ii) in the case of a
partnership or other business entity not organized as a corporation, any such
business entity of which the Company directly or indirectly owns more than 50%
of the voting, capital or profits interests (whether in the form of partnership
interests, membership interests or otherwise).
3.
Objectives.
The
Company has designed the Plan to (i) attract and retain key Employees and
qualified Nonemployee Directors, (ii) encourage the sense of proprietorship of
those persons in the Company, and (iii) stimulate the active interest of those
persons in the development and financial success of the Company by making
Awards.
4.
Eligibility.
(a) Employees. Employees
assigned or to be assigned positions of responsibility and whose performance, in
the judgment of the Committee, can have a significant effect on the success of
the Company are eligible for Employee Awards. The Committee may grant
an Employee Award to any individual who has agreed in writing to become an
Employee within six months after the date of that agreement, provided that the
effectiveness of that Award is subject to the condition that the individual
actually becomes an Employee within that time period.
(b) Directors. Directors
who are not employees of the Company or any of its Subsidiaries (“Nonemployee
Directors”) are eligible for Director Awards.
5.
Common Stock Available for
Awards.
(a) Subject
to the provisions of Paragraph 14, there will be available for Awards granted
wholly or partly in Common Stock (including Options or SARs that may be
exercised for or settled in Common Stock) an aggregate of 2,243,933 shares of
Common Stock. No more than 2,243,933 shares of Common Stock will be
used under the Plan for Awards of Incentive Options. Shares of Common
Stock which are the subject of Awards that are forfeited or terminated, expire
unexercised, are settled in cash in lieu of Common Stock or in a manner such
that all or some of the shares covered thereby are not issued to a Participant
or are exchanged for consideration that does not involve Common Stock will again
immediately become available for Awards. In addition, any shares of
Common Stock exchanged by a Participant or withheld from a Participant as full
or partial payment to the Company of the exercise price or tax withholding upon
exercise or payment of an Award under the Plan will again immediately become
available for Awards. The number of shares of Common Stock reserved
for issuance under the Plan shall be reduced only to the extent that shares of
Common Stock are actually issued in connection with the exercise or settlement
of an Award; provided, however, that the number of shares reserved for issuance
shall be reduced by the total number of Options or SARs
exercised. Shares of Common Stock delivered under the Plan in
settlement of an Award issued or made (a) upon the assumption, substitution,
conversion or replacement of outstanding awards under a plan or arrangement of
an acquired entity or (b) as a post-transaction grant under such a plan or
arrangement of an acquired entity shall not reduce or be counted against the
maximum number of shares of Common Stock available for delivery under the Plan,
to the extent that the exemption for transactions in connection with mergers and
acquisitions from the stockholder approval requirements of the applicable
securities exchange for equity compensation plans applies. The
Committee may from time to time adopt and observe such rules and procedures
concerning the counting of shares of Common Stock against the Plan maximum as it
may deem appropriate, including rules more restrictive than those set forth
above to the extent necessary to satisfy the requirements of any national
securities exchange on which the Common Stock is listed or any applicable
regulatory requirement. The Board and the appropriate officers of the
Company are authorized to take from time to time whatever actions are necessary,
and to file any required documents with governmental authorities, stock
exchanges and transaction reporting systems to ensure that shares of Common
Stock are available for issuance pursuant to the Plan.
(b) By
no later than the fifth anniversary of the Company’s emergence from Chapter 11
bankruptcy proceedings, all shares of Common Stock reserved for issuance
hereunder shall be subject to an outstanding Award or shall have been delivered
pursuant to the settlement of an Award. Within thirty (30) days
following the Company’s emergence from Chapter 11 bankruptcy proceedings,
thirty-five percent (35%) of the shares of Common Stock available for delivery
pursuant to Awards shall be allocated to Employee Awards. No more
than five percent (5%) of the shares of Common Stock available for delivery
pursuant to Awards shall be allocated to Director Awards. Each
Participant who receives an Award in the form of RSUs shall also concurrently
receive an equal number of Incentive RSUs.
6.
Administration.
(a) The
Committee will administer the Plan. Subject to the provisions hereof
and applicable laws, the Committee will have full and exclusive power and
authority to administer the Plan and to take all actions that the Plan
specifically contemplates or that are necessary or appropriate in connection
with the administration and operation hereof, including, without limitation, the
authority and discretion to (i) designate Participants; (ii) determine the type
or types of Awards to be granted to a Participant; (iii) determine the number of
shares of Common Stock to be covered by, or with respect to which payments,
rights or other matters are to be calculated in connection with Awards; (iv)
determine the terms and conditions of any Award, including, without limitation,
and as applicable, the exercise price, vesting schedules, conditions relating to
exercise and termination of the right to exercise; (v) determine whether, to
what extent, and under what circumstances Awards may be settled or exercised in
cash, shares of Common Stock, other securities, other Awards or other property,
or canceled, forfeited or suspended and the method or methods by which Awards
may be settled, exercised, canceled, forfeited or suspended; (vi) determine
whether, to what extent, and under what circumstances the delivery of cash,
shares of Common Stock, other securities, other Awards, other property and other
amounts payable with respect to an Award shall be deferred, either automatically
or at the election of the holder thereof or the Committee; (vii) review any
decisions or actions made or taken by any Committee in connection with any Award
or the operation, administration or interpretation of the Plan; and (viii)
otherwise amend an Award in whole or in part from time-to-time as the Committee
determines, in its sole and absolute discretion, to be necessary or appropriate
to conform such Award to, or required to satisfy, any legal requirement
(including without limitation the provisions of Section 409A of the Code), which
amendment may be made retroactively or prospectively.
(b) The
Committee also will have full and exclusive power to interpret the Plan and to
adopt and amend from time to time such rules, regulations and guidelines for the
administration of the Plan as the Committee may deem necessary or proper, and to
adopt, amend, suspend or waive such rules, forms, instruments and guidelines,
and appoint such agents, as it deems necessary, desirable or appropriate for the
proper administration of the Plan,
all of which powers will
be exercised in the best interests of the Company and in keeping with the
objectives of the Plan. The Committee may, in its discretion, provide
for the extension of the exercisability of any Award, accelerate the vesting or
exercisability of any Award, eliminate or make less restrictive any restrictions
any Award contains, waive any restriction or other provision of the Plan or any
Award or otherwise amend or modify any Award in any manner that is either (i)
not adverse to the Participant to whom that Award was granted or
(ii) consented to in writing by that Participant. The Committee
may interpret, construe, administer, resolve any ambiguity, correct any defect
or supply any omission or reconcile any inconsistency in the Plan, any Award
Agreement or any instrument or agreement relating to the Plan in the manner and
to the extent the Committee deems necessary or desirable to further the purposes
of the Plan. All designations, determinations, interpretations and
other actions or decisions of the Committee will lie within its sole and
absolute discretion and will be final, conclusive and binding on all parties
concerned, including, without limitation, the Company, any Subsidiary, any
shareholder, any Participant and their estate and any holder or beneficiary of
any Award.
(c) No
Committee member or Company officer to whom the Committee delegates authority
(pursuant to Paragraph 7) will be liable for any action that person takes or
omits to take in connection with the performance of any duties under the Plan,
except for his or her own willful misconduct or as any applicable statute
expressly provides.
(d) No
Option or SAR may be repriced, replaced, regranted through cancellation or
modified without stockholder approval (except pursuant to Paragraph 14), if the
effect would be to reduce the exercise price for the shares underlying such
Award.
7.
Delegation of
Authority.
The Committee may delegate to the CEO and to other
senior officers of the Company its duties under the Plan on such terms and
subject to such conditions or limitations as the Committee may
establish.
8.
Awards.
(a) Employee
Awards. The Committee will determine the type or types of Employee
Awards to be made and will designate from time to time the Employees who are to
receive Employee Awards. An Employee Award Agreement will (i)
evidence each Employee Award, (ii) contain such terms, conditions and
limitations as the Committee determines in its sole discretion, and (iii) be
signed by the Participant to whom that Employee Award is made and an Authorized
Officer. Employee Awards may consist of those this Paragraph 8(a)
lists and may be granted singly or in combination or in tandem with other
Employee Awards. Employee Awards also may be made in combination or
in tandem with, in replacement of or as alternatives to grants or rights under
the Plan or any other plan of the Company or any of its Subsidiaries, including
the plan of any acquired entity; provided that, except as contemplated in
Paragraph 14 hereof, no Option or SAR may be issued in exchange for the
cancellation of an Option or SAR with a higher exercise price nor may the
exercise price of any Option or SAR be reduced, except in accordance with
Paragraphs 6(d) and 14. An Employee Award may provide for the grant
or issuance of additional, replacement or alternative Employee Awards on the
occurrence of specified events, including the exercise of the original Employee
Award granted to a Participant. All or part of an Employee Award may
be subject to such conditions as the Committee may establish, which may include,
but are not limited to, continuous employment or service with the Company and
its Subsidiaries, achievement of specific business objectives, increases or
maintenance of levels in specified indices, attainment or maintenance of
specified growth rates and other comparable measurements of
performance. If a Participant holding an Employee Award ceases to be
an Employee, any unexercised, deferred, unexercisable, unvested or unpaid
portion of that Employee Award will be treated as the applicable Employee Award
Agreement sets forth.
The types
of Employee Awards that may be made under the Plan are as follows:
(i)
Option.
An
Employee Award may be in the form of an Incentive Option or a Nonqualified
Option. The Committee may designate an Option as an “incentive stock
option” for purposes of Code Section 422, and any Stock Option that is not so
designated shall be a Nonqualified Option. The price at which any
share of Common Stock may be purchased on the exercise of any Option will be not
less than the Fair Market Value of a share of the Common Stock on the date of
grant of that Option. No Option may be exercised after the expiration
of 10 years from the date such Option is granted. Notwithstanding any
other provision of the Plan to the contrary, no Option may include provisions
that “reload” the Option upon exercise (i.e. automatically grant additional
options upon the exercise of the original grant). Subject to the
foregoing limitations, the Committee will determine the other terms, conditions
and limitations applicable to each Option, including its term and the date or
dates on which it becomes exercisable, and all applicable terms and conditions
will be provided for in an Employee Award Agreement, which may make reference to
the provisions of any applicable employment or similar agreement.
(ii)
SAR.
An Employee
Award may be in the form of an SAR. The strike price for a SAR shall
not be less than the Fair Market Value of a share of Common Stock on the date on
which the SAR is granted. The term of a SAR shall not exceed 10 years
from the date of grant. Subject to the foregoing limitations, the
terms, conditions and limitations applicable to any SAR awarded pursuant to the
Plan, including its term and the date or dates on which it becomes exercisable,
shall be determined by the Committee and provided for in an Employee Award
Agreement, which may make reference to the provisions of any applicable
employment or similar agreement.
(iii)
Stock Award.
An
Employee Award may be in the form of a Stock Award. The terms,
conditions and limitations of the Stock Award shall be determined by the
Committee in its sole discretion and provided for in an Employee Award
Agreement, which may make reference to the provisions of any applicable
employment or similar agreement. The Committee may provide for the
accelerated vesting of a Stock Award at any time, including, without limitation,
following a change of control or other specified event involving the Company,
upon a termination of the applicable Employee’s employment by reason of death,
disability or retirement, or upon termination of such Employee’s employment by
the Company without Cause or by such Employee for good reason or good
cause.
(iv)
Cash Award.
An
Employee Award may be in the form of a Cash Award, the terms, conditions and
limitations applicable to which the Committee will determine and will be
provided for in an Employee Award Agreement, which may make reference to the
provisions of any applicable employment or similar agreement.
(v)
Performance
Awards.
Without limiting the type or number of Awards that may
be made under the other provisions of the Plan, an Award may be in the form of a
Performance Award. The terms, conditions and limitations applicable
to any Performance Awards granted to Participants pursuant to the Plan shall be
determined by the Committee in its sole discretion and provided for in an
Employee Award Agreement, which may make reference to the provisions of any
applicable employment or similar agreement. The Committee may provide
for the accelerated vesting of a Performance Award at any time, including,
without limitation, following a change of control or other specified event
involving the Company, upon a termination of the applicable Employee’s
employment by reason of death, disability or retirement, or upon termination of
such Employee’s employment by the Company without Cause or by such Employee for
good reason or good cause. The Committee shall set Performance Goals
in its discretion which, depending on the extent to which they are met, will
determine the value and/or amount of Performance Awards that will be paid out to
the Participant and/or the portion of an Award that may be
exercised.
(A)
Nonqualified Performance
Awards
. Performance Awards granted to Employees or Nonemployee
Directors that are not intended to qualify as qualified performance-based
compensation under Code Section 162(m) shall be based on achievement of such
Performance Goals and be subject to such terms, conditions and restrictions as
the Committee or its delegate shall determine and shall be provided for in an
Award Agreement, which may make reference to the provisions of any applicable
employment or similar agreement.
(B)
Qualified Performance
Awards
. Performance Awards granted to Employees under the Plan
that are intended to qualify as qualified performance-based compensation under
Code Section 162(m) shall be paid, vested or otherwise deliverable solely on
account of the attainment of one or more pre-established, objective Performance
Goals established by the Committee in accordance with Code Section 162(m) prior
to the earlier to occur of (x) 90 days after the commencement of the period
of service to which the Performance Goal relates and (y) the lapse of 25%
of the period of service (as scheduled in good faith at the time the goal is
established), and in any event while the outcome is substantially
uncertain. A Performance Goal is objective if a third party having
knowledge of the relevant facts could determine whether the goal is
met. Such a Performance Goal may be based on one or more business
criteria that apply to the Employee, one or more business units, divisions or
sectors of the Company, or the Company as a whole, and if so desired by the
Committee, by comparison with a peer group of companies. A
Performance Goal may apply to the individual, one or more lines or classes of
products or services of the Company, one or more business divisions, groups or
units of the Company, or the Company as a whole, and may include, among other
criteria, one or more of the following: net revenue or gross revenue,
revenue growth, net income (before or after taxes), stock price, market share,
earnings per share, return on equity, return on assets, decrease in costs,
operating income, gross income, cash flow, gross profits, gross margins,
operating margin, working capital, earnings before interest and taxes, earnings
before interest, tax, depreciation and amortization, return on capital, total
stockholder return, or economic value added. Unless otherwise stated,
such a Performance Goal need not be based upon an increase or positive result
under a particular business criterion and could include, for example,
maintaining the status quo or limiting economic losses (measured, in each case,
by reference to specific business criteria). T
he Committee may, in its sole discretion, also exclude,
or adjust to reflect, the impact of a
n
event or occurrence that the Committee determines should be appropriately
excluded or adjusted, including
restructurings, discontinued operations, extraordinary
items or events, and other unusual or non-recurring charges
,
event
s
either not directly related to the operations of the
Company or not within the reasonable control of the Company’s management
,
or
a change in tax law or accounting standards
required by generally accepted accounting principles
. In
interpreting Plan provisions applicable to qualified Performance Awards, it is
the intent of the Plan to conform with the standards of Code Section 162(m) and
Treasury Regulation §1.162-27(e)(2)(i), as to grants to those Participants whose
compensation is, or is likely to be, subject to Code Section 162(m), and the
Committee in establishing such goals and interpreting the Plan shall be guided
by such provisions. Prior to the payment of any compensation based on
the achievement of Performance Goals for qualified Performance Awards, the
Committee must certify in writing that applicable Performance Goals and any of
the material terms thereof were, in fact, satisfied. Subject to the
foregoing provisions, the Committee will determine the terms, conditions and
limitations applicable to Performance Awards, which shall be provided for in an
Award Agreement, which may make reference to the provisions of any applicable
employment or similar agreement.
(b) The
following limitations will apply to each Employee Award that is intended to
qualify as qualified performance-based compensation under Code Section 162(m) to
the extent required by Code Section 162(m):
(i) no
Participant may be granted, during any one-year period, Employee Awards
consisting of Options or SARs that are exercisable for more than 500,000 shares
of Common Stock;
(ii) no
Participant may be granted, during any one-year period, Stock Awards that are
intended to be Qualified Performance Awards covering or relating to more than
500,000 shares of Common Stock (this limitation and the limitation in clause (i)
above being the “Stock-based Awards Limitations”); and
(iii) no
Participant may be granted Employee Awards that are intended to be Qualified
Performance Awards consisting of cash or that are in any other form the Plan
permits (other than Employee Awards consisting of Options or SARs, or otherwise
consisting of Common Stock or units denominated in Common Stock) in respect of
any one-year period having a value determined on the date of grant in excess of
$2,000,000.
(c) Director
Awards. The Committee may grant a Nonemployee Director one or more
Awards and establish the terms thereof consistent with the foregoing provisions
of this Paragraph 8 for granting awards to Employees and subject to the
applicable terms, conditions and limitations set forth in the Plan and the
applicable Award Agreement.
9.
Payment of
Awards.
(a) General. Payment
of Awards may be made in the form of cash or shares of Common Stock, or a
combination thereof, and may include such restrictions as the Committee may
determine, including, in the case of shares of Common Stock, restrictions on
transfer and forfeiture provisions. If payment of an Award is made in
the form of shares of Restricted Stock, the applicable Award Agreement relating
to those shares will
specify whether they
are to be issued at the beginning or end of the applicable Restriction
Period. If shares of Restricted Stock are to be issued at the
beginning of their Restriction Period, the certificates evidencing those shares
(to the extent that those shares are so evidenced) will contain appropriate
legends and restrictions that describe the terms and conditions of the
restrictions applicable thereto. If shares of Restricted Stock are to
be issued at the end of the applicable Restricted Period, the right to receive
those shares will be evidenced by book-entry registration or in such other
manner as the Committee may determine.
(b) Deferral. Subject
to the requirements of Code Section 409A, with the approval of the Committee,
amounts payable in respect of Awards may be deferred and paid either in the form
of installments or as a lump-sum payment. The Committee may
permit
selected
Participants to elect to defer payments of some or all types of Awards in
accordance with procedures the Committee establishes taking into account the
requirements of Code Section 409A. Any deferred payment of an Award,
whether elected by the Participant or specified by the applicable Award
Agreement or by the Committee, may be forfeited if and to the extent that the
applicable Award Agreement so provides.
(c) Dividends
and Interest. Rights to dividends or Dividend Equivalents may be
extended to and made part of any Award consisting of shares of Common Stock or
units denominated in shares of Common Stock, subject to such terms, conditions
and restrictions as the Committee may establish. The Committee also
may establish rules and procedures for the crediting of interest on deferred
cash payments and Dividend Equivalents for Awards consisting of Common Stock or
units denominated in Common Stock.
10.
Option
Exercise.
The price at which shares of Common Stock may be
purchased under an Option will be paid in full at the time of exercise in cash
or, if the Participant so elects, the Participant may purchase those shares by
such means as approved by the Committee which may include tendering shares of
Common Stock valued at their Fair Market Value per share on the date of
exercise, the withholding of shares issuable upon exercise of such Option,
through a broker-assisted “cashless exercise” procedure, or any combination
thereof. The Committee will determine acceptable methods for
Participants to tender Common Stock to exercise an Option. The
Committee may provide for procedures to permit the exercise or purchase of any
Award by use of the proceeds to be received from the sale of Common Stock
issuable pursuant to such an Award.
11.
Taxes.
The Company
will have the right to deduct applicable taxes from any Employee Award payment
and withhold, at the time of delivery or vesting of cash or shares of Common
Stock under the Plan, or at the time applicable law otherwise requires, an
appropriate amount of cash or number of shares of Common Stock or a combination
thereof for payment of taxes required by law or to take such other action as may
be necessary in the opinion of the Company to satisfy all obligations for
withholding of those taxes. The Committee may permit withholding to
be satisfied by the transfer to the Company of shares of Common Stock
theretofore owned by the holder of the Employee Award with respect to which
withholding is required, provided that the use of shares of Common Stock to
satisfy any such withholding obligation shall not exceed the minimum statutorily
required withholding obligation. If shares of Common Stock are used
to satisfy tax withholding, those shares will be valued at their Fair Market
Value per share when the tax withholding is required to be
made. Notwithstanding the foregoing, the Participant shall not be
permitted to surrender shares in payment of any portion of the tax withholding
amount if such action would cause the Company or any Subsidiary to recognize an
additional compensation expense with respect to the applicable Award for
financial reporting purposes, unless the Committee consents
thereto.
12.
Amendment, Modification, Suspension
or Termination.
The Board may amend, modify, suspend or
terminate the Plan for the purpose of meeting or addressing any changes in legal
requirements or for any other purpose applicable law permits, except that (a) no
amendment or alteration that would adversely affect the rights of any
Participant under any Award previously granted to that Participant will be made
without the written consent of that Participant and (b) no amendment or
alteration that would constitute a material revision to the Plan requiring
stockholder approval under applicable legal requirements or the applicable
requirements of any securities exchange on which the Common Stock is
listed will be made without stockholder approval. The Plan shall
terminate on the tenth anniversary of the date of its adoption by the Board,
unless sooner terminated by the Board pursuant to the preceding
sentence. Termination of the Plan shall not affect any of the rights
of any Participant under any Award outstanding on the termination date of the
Plan, and such rights shall continue to be subject to the terms of the
applicable Award Agreement and the Plan, notwithstanding the termination of the
Plan. Subject to Paragraph 14 below, no amendment, alteration or
modification to an Option or SAR that has the effect of a repricing thereof or
the cancellation and regrant of same which has the effect of reducing the
exercise or strike price is allowable, except upon stockholder approval as
contemplated under Paragraph 6(d). Further, the Committee may not
establish or maintain any program under which outstanding Options or SARs are
surrendered or canceled in exchange for Options or SARs with a lower exercise
price or greater economic value without stockholder approval.
13.
Assignability.
Unless
the Committee otherwise determines and provides in the applicable Award
Agreement, no Award or any other benefit under the Plan will be assignable or
otherwise transferable except by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code or Title
I of the Employee Retirement Income Security Act of 1974, as amended, or the
rules thereunder. The Committee may prescribe and include in any
Award Agreement other restrictions on transfer. Any attempted
assignment of an Award or any other benefit under the Plan in violation of this
Paragraph 13 will be null and void.
14.
Adjustments.
(a) The
existence of outstanding Awards will not affect in any manner the right or power
of the Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the capital stock of the
Company or its business or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or other stock (whether or not that issue
is prior to, on a parity with or junior to the Common Stock) or the dissolution
or liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding of any kind,
whether or not of a character similar to that of the acts or proceedings
enumerated above.
(b) In
the event of any extraordinary distribution (whether in the form of cash, Common
Stock, securities or other property), stock dividend, extraordinary cash
dividend, recapitalization, reclassification stock split, reverse stock split,
reorganization, merger, consolidation, spin-off, combination, repurchase, Common
Stock exchange or other similar transaction or event, then (i) the number of
shares of Common Stock reserved under the Plan, (ii) the number of shares of
Common Stock covered by outstanding Awards in the form of Common Stock or units
denominated in Common Stock, (iii) the exercise or other price in respect of
such Awards, (iv) the Stock-based Award Limitations described in Paragraph 8(b)
hereof, and (v) the appropriate Fair Market Value and other price determinations
for such Awards shall each be appropriately and equitably adjusted by the Board
to reflect such transaction. In the event of any unusual or
nonrecurring events (including, without limitation, the events described in the
preceding sentence) affecting the Company or its financial statements or those
of any Subsidiary or of changes in applicable laws, regulations or accounting
principles, the Board shall make appropriate adjustments to (i) the number of
shares of Common Stock reserved under the Plan, (ii) the number of shares
of Common Stock covered by Awards in the form of Common Stock or units
denominated in Common Stock, (iii) the exercise or other price in respect
of such Awards, (iv) the appropriate Fair Market Value and other price
determinations for such Awards, and (v) the Stock-based Award Limitations
described in Paragraph 8(b) hereof, to give effect to such event or transaction;
provided that such adjustments shall only be such as are determined by the Board
in its sole discretion to be necessary to maintain the proportionate interest of
the holders of the Awards and preserve the value of such Awards without
increasing or decreasing their then current value.
(c) In
the event of a corporate merger, consolidation, acquisition of property or
stock, separation, reorganization or liquidation, the Board may (but is not
obligated to) make such adjustments to Awards or other provisions for the
disposition of Awards as it deems equitable, and shall be authorized, in its
discretion, (i) to provide for the substitution of a new Award or other
arrangement (which, if applicable, may be exercisable for such property or stock
as the Board determines) for an Award or the assumption of the Award, regardless
of whether in a transaction to which Code Section 424(a) applies,
(ii) to provide, prior to the transaction, for the acceleration of the
vesting and exercisability of, or lapse of restrictions with respect to, the
Award and, if the transaction is a cash merger, provide for the termination of
any portion of the Award that remains unexercised at the time of such
transaction or (iii) to cancel any such Awards and to deliver to the
Participants cash in an amount that the Board shall determine in its sole
discretion is equal to the fair market value of such Awards on the date of such
event, which in the case of Options or SARs shall be the excess (if any) of the
Fair Market Value of Common Stock on such date over the exercise price or grant
price of such Award (for the avoidance of doubt, if there is no such excess, the
Option or SAR shall be canceled for no consideration).
(d) Except
as expressly provided in the Plan or an Award Agreement, no Participant shall
have any rights by reason of any subdivision or consolidation of shares of stock
of any class, the payment of any dividend, any increase or decrease in the
number of shares of stock of any class or any dissolution, liquidation, merger
or consolidation of the Company or any other corporation. Except as
expressly provided in the Plan, no issuance by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number of shares or amount of other property subject to any Award.
(e) No
provision of this Paragraph 14 shall be given effect to the extent that such
provision would cause any tax to become due under Code Section
409A.
15.
Restrictions.
(a) No
Common Stock or other form of payment will be issued with respect to any Award
unless the Company is satisfied, on the basis of advice of its counsel, that the
issuance will comply with applicable federal and state securities laws,
including the Securities Act of 1933, as amended. Certificates
evidencing shares of Common Stock delivered under the Plan (to the extent that
the shares are so evidenced) may be subject to such stop-transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission,
any securities exchange or transaction reporting system on which the Common
Stock is then listed or to which it is admitted for quotation and any applicable
federal or state securities law. The Committee may cause a legend or
legends to be placed upon those certificates (if any) to make appropriate
reference to those restrictions.
(b) The
exercise of any Option granted hereunder shall only be effective at such time as
counsel to the Company shall have determined that the issuance and delivery of
shares of Common Stock pursuant to such exercise is in compliance with all
applicable laws, regulations of governmental authority and the requirements of
any securities exchange on which shares of Common Stock are
traded. The Company may, in its discretion, defer the effectiveness
of an exercise of an Option hereunder or the issuance or transfer of shares of
Common Stock pursuant to any Award pending or to ensure compliance under federal
or state securities laws or the rules or regulations of any exchange on which
the shares are then listed for trading. The Company shall inform the
Participant in writing of its decision to defer the effectiveness of the
exercise of an Option or the issuance or transfer of shares of Common Stock
pursuant to any Award. During the period that the effectiveness of
the exercise of an Option has been deferred, the Participant may, by written
notice, withdraw such exercise and obtain the refund of any amount paid with
respect thereto.
16.
Unfunded
Plan.
Insofar as the Plan provides for Awards of cash, Common
Stock or rights thereto, it will be unfunded. Although the Company
may establish bookkeeping accounts with respect to Participants who are entitled
to cash, Common Stock or rights thereto under the Plan, it will use any such
accounts merely as a bookkeeping convenience. The Company will not be
required to segregate any assets that may at any time be represented by cash,
Common Stock or rights thereto, nor will the Plan be construed as providing for
that segregation, nor shall the Company, the Board or the Committee be deemed to
be a trustee of any cash, Common Stock or rights thereto to be granted under the
Plan. Any liability or obligation of the Company to any Participant
with respect to an Award of cash, Common Stock or rights thereto under the Plan
will be based solely on any contractual obligations that the Plan and any Award
Agreement create, and no such liability or obligation of the Company will be
deemed to be secured by any pledge or other encumbrance on any property of the
Company. Neither the Company nor the Board nor the Committee will be
required to give any security or bond for the performance of any obligation that
the Plan creates.
17.
Code Section
409A.
The Plan is intended not to be governed by or to comply
with the applicable requirements of Code Section 409A and shall be limited,
construed and interpreted in accordance with such intent. To the
extent that any Award is subject to Code Section 409A, it shall be paid in a
manner that will comply with Code Section 409A, including proposed, temporary or
final regulations or any other guidance issued by the Secretary of the Treasury
and the Internal Revenue Service with respect
thereto. Notwithstanding any provision of the Plan to the contrary,
in the event that the Committee determines that any shares of Common Stock
issued or amounts payable hereunder will be taxable to a Participant under Code
Section 409A and related Department of Treasury guidance, prior to delivery to
such Participant of such shares of Common Stock or payment to such Participant
of such amount, the Company may (a) adopt such amendments to the Plan and
Awards and appropriate policies and procedures, including amendments and
policies with retroactive effect, that the Committee determines necessary or
appropriate to preserve the intended tax treatment of the benefits provided by
the Plan and Awards hereunder and/or (b) take such other actions as the
Committee determines necessary or appropriate to avoid or limit the imposition
of an additional tax under Code Section 409A.
The Company shall have
no liability to a Participant, or any other party, if an Award that is intended
to be exempt from, or compliant with, Code Section 409A is not so exempt or
compliant or for any action taken by the Committee or the Company and, in the
event that any amount or benefit under the Plan becomes subject to penalties
under Code Section 409A, responsibility for payment of such penalties shall rest
solely with the affected Participants and not with the
Company. Notwithstanding any contrary provision in the Plan or Award
Agreement, any payment of “nonqualified deferred compensation” (within the
meaning of Code Section 409A) that is otherwise required to be made under the
Plan to a “specified employee” (as defined under Section 409A of the Code) as a
result of such Employee’s “separation from service” (within the meaning of Code
Section 409A) (other than a payment that is not subject to Code Section 409A)
shall be delayed for the first six (6) months following such “separation from
service” (or, if earlier, the date of death of the “specified employee”) and
shall instead be paid (in a manner set forth in the Award Agreement) upon
expiration of such delay period.
18.
Governing Law.
The
Plan and all determinations made and actions taken pursuant hereto, to the
extent not otherwise governed by mandatory provisions of the Code or the
securities laws of the United States, will be governed by and construed in
accordance with the laws of the State of Delaware.
19.
No Retention Rights; No Right to
Incentive Award
.
Nothing in the Plan, any
Award Agreement or in any Award granted under the Plan shall confer upon a
Participant any right to continue in service or employment for any period of
specific duration or interfere with or otherwise restrict in any way the rights
of the Company or any Subsidiary or of the Participant, which rights are hereby
expressly reserved by each, to terminate his or her service or employment at any
time and for any reason, with or without Cause. No person shall have any
claim or right to receive an Award hereunder. The Committee’s granting of an
Award to a Participant at any time shall neither require the Committee to grant
an Award to such Participant or any other Participant or other person at any
time nor preclude the Committee from making subsequent grants to such
Participant or any other Participant or other person.
20.
Settlement of Awards; Fractional
Shares
.
Each
Award Agreement shall set forth the form in which the Award shall be
settled. The Committee shall determine whether fractional shares of
Common Stock shall be issued under the Plan, whether cash, Awards, other
securities or other property shall be issued or paid in lieu of fractional
shares of Common Stock or whether such fractional shares of Common Stock or any
rights thereto shall be rounded, forfeited or otherwise eliminated.
21.
Relationship
to Other
Benefits
. No payment under the Plan shall be taken into
account in determining any benefits under any pension, retirement, profit
sharing, group insurance or other benefit plan of the Company or any Subsidiary
except as otherwise specifically provided in such other plan.
22.
Severability
. If
any provision of the Plan or any Award agreement is or becomes or is deemed to
be invalid, illegal or unenforceable in any jurisdiction or as to any person or
Award, or would disqualify the Plan or any Award under any law deemed applicable
by the Committee, such provision shall be construed or deemed amended to conform
to the applicable laws, or if it cannot be construed or deemed amended without,
in the determination of the Committee, materially altering the intent of the
Plan or the Award, such provision shall be stricken as to such jurisdiction,
person or Award, and the remainder of the Plan and any such Award shall remain
in full force and effect.
23.
Titles and
Headings
. The titles and headings of the sections in the Plan
are for convenience of reference only, and, in the event of any conflict, the
text of the Plan, rather than such titles or headings, shall
control.
Exhibit
10.5
U.S.
CONCRETE, INC.
NON-QUALIFIED
STOCK OPTION AWARD AGREEMENT
This
Award Agreement (this “Agreement”) is made as of __________, 20__ by and between
U.S. Concrete, Inc., a Delaware corporation (the “Company”), and __________ (the
“Optionee”). For value received, pursuant to the U.S. Concrete, Inc.
Management Equity Incentive Plan (the “
Plan
”), the Company
hereby grants to the Optionee a nonqualified stock option (the “Option”) to
purchase from the Company up to ____________ shares of Common Stock at a price
per share equal to $_______ (the “Exercise Price”), subject to the following
terms and conditions. Unless otherwise defined in this Agreement,
capitalized terms used in this Agreement shall have the meanings assigned to
them in the Plan.
1.
Grant
Date
The
Option is granted as of __________, 20__ (the “Grant Date”).
2.
Vesting and
Exercise
Subject
to the terms and conditions of this Agreement and the Plan, the Option will
become vested and exercisable as to one-twelfth (1/12) of the shares subject
hereto on each of the first twelve quarterly anniversaries of the Grant Date,
subject to the Optionee’s continued service or employment with the Company or
its Subsidiaries on each applicable vesting date. There shall be no
proportionate or partial vesting in the periods prior to each vesting date and
all vesting shall occur only on the appropriate vesting date, subject to the
Optionee’s continued service or employment with the Company or its Subsidiaries
on each applicable vesting date. If an installment of the vesting
would result in a fractional share, that installment will be rounded to the next
higher or lower share by rounding-down for fractions less than one-half and
rounding-up for fractions equal to or greater than one-half, except for the
final installment, which will be for the balance of the underlying
shares.
(b) Notwithstanding
the foregoing and subject to any additional benefits that may be provided under
any applicable executive severance agreement by and between the Optionee and the
Company in effect on the date hereof (any such agreement, as may be amended from
time to time, is referred to herein as the “
Executive Severance
Agreement
”), upon a termination of the Optionee’s service or employment
by the Company or its Subsidiaries without Cause, any portion of the Option that
would have become vested and exercisable during the six (6)-month period
following such termination shall become immediately vested and exercisable as of
the date of such termination.
(c) Unless
earlier terminated in accordance with the terms and provisions of the Plan
and/or this Agreement, the Option will expire on the date that is ten (10) years
following the Grant Date (the “Expiration Date”) and must be exercised, to the
extent vested and exercisable, on or before the Expiration Date.
3.
Restrictions on
Exercise
The
Option may not be exercised unless the Company is satisfied, on the basis of
advice of its counsel, that the exercise will comply with the Securities Act of
1933, as amended, and all other applicable federal and state securities laws, as
they are in effect on the date of exercise.
4.
Termination
Unless
the Executive Severance Agreement otherwise sets forth, subject to the terms of
the Plan, the Option, to the extent vested at the time of the Optionee’s
termination of service or employment with the Company and its Subsidiaries,
shall remain exercisable as follows:
(a)
General
. Except
as otherwise provided in Sections 4(b) and 4(c) hereof, in the event of
termination of the Optionee’s service or employment with the Company and its
Subsidiaries for any reason, the vested portion of the Option shall remain
exercisable until the earlier of (i) ninety (90) days following the date of such
termination, and (ii) the Expiration Date.
(b)
Termination Without
Cause
. In the event of termination of the Optionee’s service
or employment by the Company or its Subsidiaries without Cause, the vested
portion of the Option shall remain exercisable until the earlier of (i) one (1)
year following the date of such termination, and (ii) the Expiration
Date.
(c)
Termination for
Cause
. In the event of termination of the Optionee’s service
or employment by the Company or its Subsidiaries for Cause or in the event of
the Optionee’s voluntary resignation after an event that would be grounds for a
termination by the Company or its Subsidiaries for Cause, the entire Option
(whether or not vested) shall terminate and expire upon such
termination.
(d)
Treatment of Unvested Option
upon Termination
. Any portion of the Option that is not vested
as of the date of termination of the Optionee’s service or employment by the
Company or its Subsidiaries for any reason (after taking into account any
applicable accelerated vesting provision) shall terminate and expire as of the
date of such termination.
5.
Manner of
Exercise
(a) The
Optionee may exercise the Option by delivering to the Company a written notice
(an “Exercise Notice”) in such form as the Committee approves, which sets forth
the Optionee’s election to exercise the Option, the number of shares that the
Optionee is purchasing and such other representations and agreements as to the
Optionee’s investment intent and access to information as the Company may
require to comply with applicable securities laws.
(b) The
Optionee must deliver with any Exercise Notice the full payment of the total
Exercise Price respecting the shares of Common Stock that the Optionee is
purchasing pursuant to that Exercise Notice in cash or, if the Plan so permits
and the Optionee so elects, shares of Common Stock, a combination of cash and
shares of Common Stock, or such other manner as is permitted under Paragraph 10
of the Plan; provided, that: (i) shares of Common Stock tendered in
payment of the Exercise Price will be valued at Fair Market Value on the date
the Exercise Notice is delivered; and (ii) the Committee will determine the
method for tendering shares of Common Stock in payment of the Exercise
Price.
(c) The
Company will not issue any shares of Common Stock on the exercise of the Option
unless the Optionee has satisfied any and all applicable federal, state or local
withholding obligations of the Company, and the Company will have the right to
withhold (and the Optionee will have the right to require the Company to
withhold) at the time of that issuance and out of the number of shares of Common
Stock which otherwise would be issued such number of the shares being purchased
(valued at their Fair Market Value on the date of withholding) as it deems
necessary to satisfy all applicable withholding obligations. The
Optionee may transfer to the Company shares of Common Stock theretofore owned by
the Optionee to satisfy the Company’s applicable withholding obligations on the
exercise of the Option. If shares of Common Stock are used for this
purpose, those shares will be valued at their Fair Market Value per share as of
the date when the withholding is required to be made.
6.
Compliance With
Laws and Regulations and Tax Matters
The
issuance and transfer of the shares of Common Stock subject to the Option will
be subject to compliance by the Company and the Optionee with all applicable
requirements of federal and state laws and with all applicable requirements of
any stock exchange on which the Common Stock may be listed at the time of that
issuance or transfer.
(b) The
Option is treated as a “nonqualified option” for federal income tax
purposes. The Optionee acknowledges that the tax consequences
associated with the Option are complex and that the Company has urged the
Optionee to review with the Optionee’s own tax advisors the federal, state and
local tax consequences of the Option. The Optionee is relying solely
on such advisors and not on any statements or representations of the Company or
any of its Subsidiaries or any of their respective agents. The
Company does not guarantee any particular tax effect, and the Optionee shall be
solely responsible and liable for the satisfaction of all taxes, penalties and
interest that may be imposed on or for the account of the Optionee in connection
with the Option (including any taxes, penalties and interest under Code
Section 409A), and neither the Company nor any of its Subsidiaries shall
have any obligation to indemnify or otherwise hold the Optionee (or any
authorized transferee or beneficiary) harmless from any or all of such taxes,
penalties or interest.
7.
Non-Solicitation
and Non-Disclosure
In
consideration for the grant of the Option, the Optionee agrees that the Optionee
will not, during Optionee’s employment or service with the Company or its
Subsidiaries, and for one year thereafter, directly or indirectly, for any
reason, for the Optionee’s own account or on behalf of or together with any
other person, entity or organization (a) call on or otherwise solicit any
natural person who is employed by, or providing services to, the Company or its
Subsidiaries in any capacity with the purpose or intent of attracting that
person from the employ of the Company or its Subsidiaries, or (b) divert or
attempt to divert from the Company or any of its Subsidiaries any customer,
client or business relating to the provision of ready-mixed concrete and related
services. As further consideration for the grant of the Option, the
Optionee agrees that the Optionee will not at any time, either while employed
by, or providing services to, the Company or any of its Subsidiaries, or at any
time thereafter, make any independent use of, or disclose to any other person
(except as authorized in advance in writing by the Company) any confidential,
nonpublic and/or proprietary information of the Company and its Subsidiaries,
including, without limitation, information derived from reports, work in
progress, codes, marketing and sales programs, customer lists, records of
customer service requirements, cost summaries, pricing formulae, methods of
doing business, ideas, materials or information prepared or performed for, by or
on behalf of the Company or its Subsidiaries. This Section 7 shall
survive termination of the Option.
8.
Effect of the
Plan
The
Option constitutes an Award in the form of a Nonqualified Option under, and this
Agreement will be deemed for all purposes to constitute an Award Agreement
entered into pursuant to, the Plan, which hereby is incorporated in this
Agreement by this reference, including the provisions thereof relating to the
adjustment of the Exercise Price and other terms of the Option. In
the event of any conflict between the terms and conditions of this Agreement and
the terms and conditions of the Plan, the terms and conditions of the Plan shall
control.
9.
Nontransferability
of Option
The
Option may not be transferred in any manner other than by will or by the laws of
descent and distribution or pursuant to a domestic relations order as defined in
the Code or Title I of the Employee Retirement Income Security Act of 1974, as
amended, or the rules thereunder. Any attempt to sell, exchange,
transfer, assign, pledge, encumber or otherwise dispose of or hypothecate in any
way the Option, or the levy of any execution, attachment or similar legal
process upon the Option, contrary to the terms and provisions of this Agreement
and/or the Plan shall be null and void and without legal force or
effect. The terms of the Option will be binding on the respective
executors, administrators, successors and assigns of the parties
hereto.
10.
No Rights as
Stockholder; No Right to Continued Service
The
Optionee shall have no rights as a stockholder with respect to any shares of
Common Stock covered by the Option unless and until the Optionee has become the
holder of record of such shares. Except as otherwise provided by the
Plan, the Optionee agrees and understands that nothing contained in this
Agreement provides, or is intended to provide, the Optionee with any protection
against potential future dilution of the Optionee’s interest in the Company for
any reason. Nothing in this Agreement shall interfere with or limit
in any way the right of the Company or its Subsidiaries to terminate the
Optionee’s service or employment at any time, for any reason and with or without
Cause.
11.
Entire Agreement;
Amendment
This
Agreement, together with the Plan, contains the entire agreement between the
parties hereto with respect to the subject matter contained herein, and
supersedes all prior agreements or prior understandings, whether written or
oral, between the parties relating to such subject matter. The
Committee shall have the right, in its sole discretion, to modify or amend this
Agreement from time to time in accordance with and as provided in the Plan, and
the Company shall give written notice to the Optionee of any such modification
or amendment of this Agreement as soon as practicable after the adoption
thereof; provided, however, that if such modification or amendment would
adversely affect the rights of the Optionee, the Agreement may only be so
modified or amended by a writing signed by both the Company and the
Optionee.
12.
Governing
Law.
This Agreement shall be construed,
interpreted and enforced in accordance with the laws of the State of Delaware
without regard to any applicable conflicts of laws provisions that would result
in the application of the laws of any other jurisdiction.
13.
Severability.
The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, and each other provision of this
Agreement shall be severable and enforceable to the extent permitted by
applicable law.
[Remainder
of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date first written above.
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U.S.
CONCRETE, INC.
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Title:
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Acceptance
The
Optionee hereby acknowledges receipt of a copy of the Plan, represents that the
Optionee has read and understands the terms and provisions of the Plan and this
Agreement, and accepts the Option, as of the date first written above, subject
to all of the terms and provisions of the Plan and this Agreement.
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Optionee
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Print
Name:
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Social
Security No.:
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Exhibit
10.6
U.S.
CONCRETE, INC.
RESTRICTED
STOCK UNIT AWARD AGREEMENT
This Award Agreement (this “Agreement”)
is made as of _______________, 20__, by and between U.S. Concrete, Inc., a
Delaware corporation (the “Company”), and __________ (“Grantee”). For
value received, the Company hereby grants to Grantee, pursuant to the provisions
of the U.S. Concrete, Inc. Management Equity Incentive Plan (the “Plan”), a
restricted stock unit award for ________ units (the “RSUs”) and an incentive
restricted stock unit award for ________ units (the “Incentive RSUs”)
(collectively, this “Award”), effective as of _____________, 20__ (the “Grant
Date”), subject to the terms and conditions set forth herein and in the
Plan. Unless otherwise defined in this Agreement, capitalized terms
used in this Agreement shall have the meanings assigned to them in the
Plan.
TERMS AND
CONDITIONS OF AWARD
1. EFFECT
OF THE PLAN. The Award granted to Grantee is subject to all the
provisions of the Plan and of this Agreement, together with all rules and
determinations from time to time issued by the Committee and by the Board
pursuant to the Plan. The Company hereby reserves the right to amend,
modify, restate, supplement or terminate the Plan without the consent of
Grantee, so long as such amendment, modification, restatement or supplement
shall not materially reduce the rights and benefits available to Grantee
hereunder, and this Award shall be subject, without further action by the
Company or Grantee, to such amendment, modification, restatement or
supplement. In the event of any conflict between the terms and
conditions of this Agreement and the terms and conditions of the Plan, the terms
and conditions of the Plan shall control.
2. GRANT. This
Agreement shall evidence the grant of the RSUs and Incentive RSUs to Grantee,
and Grantee acknowledges that Grantee will not receive shares of Common Stock in
respect of the RSUs or Incentive RSUs unless and until the RSUs and Incentive
RSUs vest as provided in this Award and all tax withholding obligations
applicable to the “Vested RSUs” (as defined below) and “Vested Incentive RSUs”
(as defined below) have been satisfied. This Award constitutes a
Stock Award under, and this Agreement will be deemed for all purposes to
constitute an Award Agreement entered into pursuant to, the Plan, which hereby
is incorporated in this Agreement by this reference. Grantee agrees
that the Award shall be subject to all of the terms and conditions set forth in
this Agreement and the Plan, including, but not limited to, the forfeiture
conditions set forth in Section 3.2 hereof, the restrictions on transfer set
forth in Section 3.5 hereof and the satisfaction of any applicable tax
withholding obligation as set forth in Section 5 hereof.
3. RSUs
AND INCENTIVE RSUs.
3.1 VESTING. Subject
to the terms and conditions of this Agreement and the Plan, the RSUs will become
vested as to one-twelfth (1/12) of the shares subject hereto on each of the
first twelve quarterly anniversaries of the Grant Date (each, a “Vesting Date”),
subject to Grantee’s continued service or employment with the Company or its
Subsidiaries on each applicable Vesting Date. There shall be no
proportionate or partial vesting in the periods prior to each Vesting Date and
all vesting shall occur only on the appropriate Vesting Date, subject to
Grantee’s continued service or employment with the Company or its Subsidiaries
on each applicable Vesting Date. RSUs that have vested pursuant to
this Award are referred to herein as “Vested RSUs,” and RSUs that have not yet
vested pursuant to this Award are referred to herein as “Unvested
RSUs.” Notwithstanding the foregoing and subject to any additional
benefits that may be provided under any applicable executive severance agreement
by and between Grantee and the Company in effect on the date hereof (any such
agreement, as may be amended from time to time, is referred to herein as the
“
Executive Severance
Agreement
”), upon a termination of Grantee’s service or employment by the
Company or its Subsidiaries without Cause, any portion of the RSUs that would
have become vested during the six (6)-month period following such termination
shall become immediately vested as of the date of such termination.
If an
installment of the vesting would result in a fractional Vested RSU, that
installment will be rounded to the next higher or lower RSU by rounding-down for
fractions less than one-half and rounding-up for fractions equal to or greater
than one-half, except for the final installment, which will be for the balance
of the RSUs.
3.2 FORFEITURE. Except
as provided otherwise in the Executive Severance Agreement, and subject to
Section 3.1 hereof and to the Committee’s discretion to otherwise accelerate
vesting hereunder in accordance with the Plan, all Unvested RSUs shall be
immediately forfeited and cancelled upon termination of Grantee’s service or
employment with the Company and its Subsidiaries for any reason.
3.3 DELIVERY
OF SHARES.
i
General
. Subject
to the provisions of Section 3.3(ii) hereof, within thirty (30) days following
the vesting of the RSUs, Grantee shall receive the number of shares of Common
Stock that correspond to the number of RSUs that have become vested on the
applicable Vesting Date.
ii
Deferrals
. If
permitted by the Company, Grantee may elect, subject to the terms and conditions
of the Plan and any other applicable written plan or procedure adopted by the
Company from time to time for purposes of such election, to defer the
distribution of all or any portion of the shares of Common Stock that would
otherwise be distributed to Grantee hereunder (the “Deferred Shares”),
consistent with the requirements of Code Section 409A. Upon the
vesting of RSUs that have been so deferred, the applicable number of Deferred
Shares shall be credited to a bookkeeping account established on Grantee’s
behalf (the “Account”). Subject to Section 4 hereof, the number of
shares of Common Stock equal to the number of Deferred Shares credited to
Grantee’s Account shall be distributed to Grantee in accordance with the terms
and conditions of the Plan and the other applicable written plans or procedures
of the Company, consistent with the requirements of Code Section
409A.
3.4 INCENTIVE
RSUs. With respect to each RSU awarded to Grantee under this
Agreement, Grantee will receive one Incentive RSU which shall entitle Grantee to
receive a payment equal to 0.35020 of a share of Common Stock to be delivered
within thirty (30) days following the later of the date on which (i) the related
RSU vests, or (ii) the Performance Goal is achieved. Each Incentive
RSU will vest on the same schedule as the related RSU and shall be immediately
forfeited and cancelled if such RSU is forfeited and cancelled for any
reason. Incentive RSUs that have vested pursuant to this Award are
referred to herein as “Vested Incentive RSUs,” and RSUs that have not yet vested
pursuant to this Award are referred to herein as “Unvested Incentive
RSUs.” For purposes of the foregoing, the “Performance Goal” shall be
deemed to have been achieved on the earlier of (a) the conversion on a
cumulative basis of 95% of the 9.5% Convertible Secured Notes due 2015 of the
Company issued pursuant to the Indenture dated August 31, 2010 between the
Company, U.S. Bank National Association, as Trustee and Noteholder Collateral
Agent, and the Guarantors named therein (the “
Indenture
”) or (b)
the date the Company delivers a Conversion Event Notice in accordance with the
terms of the Indenture. If the Performance Goal is not achieved prior to the
Maturity Date (as defined in the Indenture), each Incentive RSU will expire
without any payment being made with respect thereto.
3.5 NON-TRANSFERABILITY. This
Award may not be transferred, assigned, pledged or otherwise encumbered by
Grantee in any manner whatsoever, except that this Award may be transferred by
will or by the laws of descent and distribution or pursuant to a domestic
relations order as defined in the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended, or the rules
thereunder. References to Grantee, to the extent relevant in
the context, shall include references to authorized
transferees. Except as otherwise determined by the Committee, Grantee
shall not sell, transfer, assign, pledge or otherwise encumber or dispose of, by
operation of law or otherwise, any portion of this Award. Any
transfer by Grantee in violation of the provisions hereof shall be void and of
no force or effect, and shall result in the immediate forfeiture of all Unvested
RSUs and Unvested Incentive RSUs.
4. DIVIDENDS;
RIGHTS AS STOCKHOLDER. Cash dividends on shares of Common Stock
issuable hereunder shall be credited to a dividend book entry account on behalf
of Grantee with respect to each RSU granted to Grantee, provided that such cash
dividends shall not be deemed to be reinvested in shares of Common Stock and
shall be held uninvested and without interest and paid in cash at the same time
that the shares of Common Stock underlying the RSUs are delivered to Grantee in
accordance with the provisions hereof. Stock dividends on shares of
Common Stock shall be credited to a dividend book entry account on behalf of
Grantee with respect to each RSU granted to Grantee, provided that such stock
dividends shall be paid in shares of Common Stock at the same time that the
shares of Common Stock underlying the RSUs are delivered to Grantee in
accordance with the provisions hereof. To the extent that any
Unvested RSUs are forfeited and cancelled for any reason, all cash dividends and
stock dividends credited with respect thereto shall also be forfeited and
cancelled at such time. Except as otherwise provided herein, Grantee
shall have no rights as a stockholder with respect to any shares of Common Stock
covered by any RSU unless and until Grantee has become the holder of record of
such shares, and except as otherwise provided by the Plan, Grantee agrees and
understands that nothing contained in this Agreement provides, or is intended to
provide, Grantee with any protection against potential future dilution of
Grantee’s interest in the Company for any reason.
5. TAX
MATTERS.
5.1 The
Company shall have the power and the right to deduct or withhold, or require
Grantee to remit to the Company, an amount sufficient to satisfy any applicable
federal, state, local and foreign taxes of any kind (including, but not limited
to, Grantee’s FICA and SDI obligations) which the Company, in its sole
discretion, deems necessary to be withheld or remitted to comply with the Code
and/or any other applicable law, rule or regulation with respect to the RSUs and
Incentive RSUs and, if Grantee fails to do so, the Company may otherwise refuse
to issue or transfer any shares of Common Stock otherwise required to be issued
pursuant to this Agreement. Any statutorily required withholding
obligation with regard to Grantee may be satisfied by reducing the amount of
cash or shares of Common Stock otherwise deliverable to Grantee
hereunder.
5.2 Grantee
acknowledges that the tax consequences associated with this Award are complex
and that the Company has urged Grantee to review with Grantee’s own tax advisors
the federal, state and local tax consequences of this Award. Grantee
is relying solely on such advisors and not on any statements or representations
of the Company or any of its Subsidiaries or any of their respective
agents. The Company does not guarantee any particular tax effect, and
Grantee shall be solely responsible and liable for the satisfaction of all
taxes, penalties and interest that may be imposed on or for the account of
Grantee in connection with this Award (including any taxes, penalties and
interest under Code Section 409A), and neither the Company nor any of its
Subsidiaries shall have any obligation to indemnify or otherwise hold Grantee
(or any authorized transferee or beneficiary) harmless from any or all of such
taxes, penalties or interest.
6. GOVERNING
LAW. This Award shall be construed, interpreted and enforced in
accordance with the laws of the State of Delaware without regard to any
applicable conflicts of laws provisions that would result in the application of
the laws of any other jurisdiction.
7. NO
RIGHT TO CONTINUED SERVICE. This Award shall not be construed as
giving Grantee any right to continued service or employment with the Company or
its Subsidiaries. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with Grantee, free from
any liability or claim under this Award or the Plan, except as expressly
provided in this Award.
8. NATURE
OF PAYMENTS. The Award hereunder shall constitute a special incentive
payment to Grantee and shall not be taken into account in computing the amount
of salary or compensation of Grantee for the purpose of determining any
retirement, death or other benefits under (a) any retirement, bonus, life
insurance or other employee benefit plan of the Company or (b) any agreement
between the Company and Grantee, except as such plan or agreement shall
otherwise expressly provide.
9. COMPLIANCE
WITH LAWS AND REGULATIONS. The issuance and transfer of the shares of
Common Stock hereunder will be subject to compliance by the Company and Grantee
with all applicable requirements of federal and state laws and with all
applicable requirements of any stock exchange on which the Common Stock may be
listed at the time of that issuance or transfer.
10. NON-SOLICITATION
AND NON-DISCLOSURE. In consideration for the grant of the Award,
Grantee agrees that Grantee will not, during Grantee’s employment or service
with the Company or any of its Subsidiaries, and for one year thereafter,
directly or indirectly, for any reason, for Grantee’s own account or on behalf
of or together with any other person, entity or organization (a) call on or
otherwise solicit any natural person who is employed by, or providing services
to, the Company or any Subsidiary of the Company in any capacity with the
purpose or intent of attracting that person from the employ of the Company or
its Subsidiaries, or (b) divert or attempt to divert from the Company or any of
its Subsidiaries any customer, client or business relating to the provision of
ready-mixed concrete, precast concrete or related concrete products or
services. As further consideration for the grant of the Award,
Grantee agrees that Grantee will not at any time, either while employed by, or
providing services to, the Company or its Subsidiaries, or at any time
thereafter, make any independent use of, or disclose to any other person (except
as authorized in advance in writing by the Company) any confidential, nonpublic
and/or proprietary information of the Company and its Subsidiaries, including,
without limitation, information derived from reports, work in progress, codes,
marketing and sales programs, customer lists, records of customer service
requirements, cost summaries, pricing formulae, methods of doing business,
ideas, materials or information prepared or performed for, by or on behalf of
the Company or its Subsidiaries. This Section 10 shall survive
termination of this Award.
11. BINDING
EFFECT. This Agreement shall be binding upon and inure to the benefit
of the Company and Grantee and their respective heirs, executors,
administrators, legal representatives, successors and assigns, subject to the
restrictions on transfer set forth in Section 3.4 of this Award.
12. SEVERABILITY. The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
and each other provision of this Agreement shall be severable and enforceable to
the extent permitted by applicable law.
13. AMENDMENT;
WAIVER; MISCELLANEOUS. The Committee shall have the right, in its
sole discretion, to modify or amend this Agreement from time to time in
accordance with and as provided in the Plan, and the Company shall give written
notice to Grantee of any such modification or amendment of this Agreement as
soon as practicable after the adoption thereof; provided, however, that if such
modification or amendment would adversely affect the rights of Grantee, the
Agreement may only be so modified or amended by a writing signed by both the
Company and Grantee. Any provision for the benefit of the Company
contained in this Agreement may be waived, either generally or in any particular
instance, by the Board or by the Committee. A waiver on one occasion
shall not be deemed to be a waiver of the same or any other breach on a future
occasion.
14. ENTIRE
AGREEMENT. This Agreement and the Plan embody the entire agreement of
the parties hereto with respect to the RSUs, Incentive RSUs and all other
matters contained herein.
[Remainder
of Page Intentionally Left Blank]
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first written above.
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U.S.
CONCRETE, INC.
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By:
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Name:
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Title:
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Acceptance
Grantee
hereby acknowledges receipt of a copy of the Plan, represents that Grantee has
read and understands the terms and provisions of the Plan and this Agreement,
and accepts the Award, as of the date first written above, subject to all of the
terms and provisions of the Plan and this Agreement.
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Grantee
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Print
Name:
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Social
Security No.:
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Exhibit
10.7
FORM
OF INDEMNIFICATION AGREEMENT
THIS
INDEMNIFICATION AGREEMENT (this “Agreement”) is made as of ______ __, 2010 by
and between U.S. Concrete, Inc., a Delaware corporation (the “Company”), and
___________ (“Indemnitee”).
PRELIMINARY
STATEMENT
Highly
competent persons have become more reluctant to serve corporations as directors
or in other capacities unless they are provided with adequate protection through
insurance or adequate indemnification against inordinate risks of claims and
actions against them arising out of their service to and activities on behalf of
corporations.
The Board
of Directors of the Company (the “Board”) has determined that, in order to
attract and retain qualified individuals, the Company will maintain on an
ongoing basis, at its sole expense, liability insurance to protect persons
serving the Company and its subsidiaries from certain
liabilities. Although the furnishing of that insurance has been a
customary and widespread practice among United States-based corporations and
other business enterprises, the Board believes that, given current market
conditions and trends, that insurance may be available to it in the future only
at higher premiums and with more exclusions. At the same time,
directors, officers and other persons in service to corporations or business
enterprises increasingly are being subjected to expensive and time-consuming
litigation relating to, among other matters, matters that traditionally would
have been brought only against the corporation or business enterprise
itself. The uncertainties relating to liability insurance and to
indemnification have increased the difficulty of attracting and retaining those
persons, and the Board has determined that (i) this increased difficulty is
detrimental to the best interests of the Company’s stockholders and that the
Company should act to assure those persons that there will be
increased certainty of such protection in the future and (ii) it is reasonable,
prudent and necessary for the Company contractually to obligate itself to
indemnify those persons to the fullest extent applicable law permits so that
they will serve or continue to serve the Company free from undue concern that
they will not be so indemnified.
The Third
Amended and Restated Bylaws (“Bylaws”) of the Company require indemnification of
the officers and directors of the Company. Indemnitee may also be
entitled to indemnification pursuant to the Delaware General Corporation Law
(“DGCL”). The Bylaws and the DGCL expressly provide that the
indemnification provisions set forth therein are not exclusive, and thereby
contemplate that contracts may be entered into between the Company and members
of the board of directors, officers and other persons with respect to
indemnification.
This
Agreement is a supplement to and in furtherance of the Bylaws of the Company and
any resolutions adopted pursuant thereto, and shall not be deemed a substitute
therefor, nor to diminish or abrogate any rights of Indemnitee
thereunder.
The
Indemnitee may not be willing to serve as an officer or director without
adequate protection, and the Company desires Indemnitee to serve in such
capacity. Indemnitee is willing to serve, continue to serve and to
take on additional service for or on behalf of the Company on the condition that
he be so indemnified.
NOW,
THEREFORE, in consideration of the premises and the covenants herein, the
parties to this Agreement agree as follows:
Section
1.
Services by
Indemnitee.
Indemnitee agrees to serve as a director
[and/or officer]
of the
Company and, as mutually agreed by Indemnitee and the Company, as a director,
officer, trustee, general partner, managing member, employee, agent or fiduciary
of other corporations, limited liability companies, partnerships, joint
ventures, trusts or other enterprises (including, without limitation, employee
benefit plans) (each, an “Enterprise”). Indemnitee may at any time
and for any reason resign from any such position (subject to any other
contractual obligation or any obligation applicable law imposes), in which event
the Company will have no obligation under this Agreement to continue Indemnitee
in that position. This Agreement is not and is not to be construed as
an employment contract between the Company (or any of its subsidiaries) and
Indemnitee. Indemnitee specifically acknowledges that Indemnitee’s
employment with the Company (or any of its subsidiaries), if any, is at will,
and the Indemnitee may be discharged at any time for any reason, with or without
cause, except as may be otherwise provided in any written employment contract
between Indemnitee and the Company (or any of its subsidiaries), other
applicable formal severance policies duly adopted by the Board or, with respect
to service as a director of the Company, by the Company’s Amended and Restated
Certificate of Incorporation, Bylaws and the DGCL. The
foregoing notwithstanding, subject to Section 12, this Agreement will continue
in force after Indemnitee has ceased to serve as an officer or director of the
Company and no longer serves at the request of the Company as a director,
officer, employee, agent or fiduciary of any other Enterprise.
Section
2.
Indemnification—General.
The
Company will indemnify, and advance Expenses (as hereinafter defined) to,
Indemnitee (i) as this Agreement permits and (ii) (subject to the provisions
hereof) to the fullest extent applicable law in effect on the date hereof and as
amended from time to time permits. The rights the preceding sentence
provide to Indemnitee will include, but will not be limited to, the rights the
other Sections hereof set forth.
Section
3.
Proceedings Other Than by or in the
Right of the Company.
Indemnitee will be entitled to the
rights of indemnification this Section 3 provides if, by reason of his Corporate
Status, he is, or is threatened to be made, a party to or a participant in any
threatened, pending or completed Proceeding (as hereinafter defined), other than
a Proceeding by or in the right of the Company. Pursuant to this
Section 3, the Company will indemnify Indemnitee against, and will hold
Indemnitee harmless from and in respect of, all Expenses, judgments, penalties,
fines (including excise taxes) and amounts paid in settlement (including all
interest, assessments and other charges paid or payable in connection with or in
respect of those Expenses, judgments, fines, penalties or amounts paid in
settlement) actually and reasonably incurred by him or on his behalf in
connection with that Proceeding or any claim, issue or matter therein, if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company and, with respect to any criminal
Proceeding, had no reasonable cause to believe his conduct was
unlawful.
Section
4.
Proceedings by or in the Right of
the Company.
Indemnitee will be entitled to the rights of
indemnification this Section 4 provides if, by reason of his Corporate Status,
he is, or is threatened to be made, a party to or a participant (as a witness or
otherwise) in any threatened, pending or completed Proceeding brought by or in
the right of the Company to procure a judgment in its favor. Pursuant
to this Section 4, the Company will indemnify Indemnitee against, and will hold
Indemnitee harmless from and in respect of, all Expenses actually and reasonably
incurred by him or on his behalf in connection with that Proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Company; provided, however, that no indemnification
against those Expenses will be made in respect of any claim, issue or matter in
that Proceeding as to which Indemnitee has been adjudged to be liable to the
Company unless and to the extent that the Court of Chancery, or the court in
which that Proceeding has been brought or is pending, determines that despite
the adjudication of liability but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnification.
Section
5.
Indemnification for Expenses of a
Party Who Is Wholly or
Partly
Successful.
Notwithstanding
any other provision hereof, to the extent that Indemnitee is, by reason of his
Corporate Status, a party to (or a participant in) and is successful, on the
merits or otherwise, in defense of any Proceeding, the Company will indemnify
him against all Expenses actually and reasonably incurred by him or on his
behalf in connection therewith. If Indemnitee is not wholly successful in
defense of any Proceeding but is successful, on the merits or otherwise, as to
one or more but less than all claims, issues or matters in that Proceeding, the
Company will indemnify Indemnitee against all Expenses actually and reasonably
incurred by him or on his behalf in connection with each successfully resolved
claim, issue or matter. For purposes of this Section 5 and without limitation,
the termination of any claim, issue or matter in any Proceeding by dismissal,
with or without prejudice, will be deemed to be a successful result as to that
claim, issue or matter.
Section
6.
Indemnification for Expenses as a
Witness.
Notwithstanding any other provision hereof, to the extent that
Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding to
which Indemnitee is not a party, the Company will indemnify him against all
Expenses actually and reasonably incurred by him or on his behalf in connection
therewith.
Section
7.
Advancement of Expenses.
The
Company will advance all reasonable Expenses incurred by or on behalf of
Indemnitee in connection with any Proceeding within 10 business days after the
Company receives a statement or statements from Indemnitee requesting such
advance or advances from time to time, whether prior to or after final
disposition of that Proceeding. Each such statement must reasonably
evidence the Expenses incurred by or on behalf of Indemnitee and include or be
preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay
any Expenses advanced if it ultimately is determined that Indemnitee is not
entitled to be indemnified by the Company against those Expenses. The
Company will accept any such undertaking and advance such Expenses without
reference to the financial ability of Indemnitee to make repayment, and without
regard to Indemnitee’s ultimate entitlement to indemnification under other
provisions of this Agreement.
Section
8.
Procedure for Determination of
Entitlement to Indemnification
. (a) Within thirty
(30) days after the actual receipt by Indemnitee of notice that he or she is a
party to or a participant (as a witness or otherwise) in any Proceeding,
Indemnitee shall submit to the Company a written notice identifying the
Proceeding. The omission by the Indemnitee to notify the Company will
not relieve the Company from any liability which it may have to Indemnitee (i)
otherwise than under this Agreement, and (ii) under this Agreement only to the
extent the Company can establish that such omission to notify resulted in actual
prejudice to the Company.
(b) Indemnitee
shall thereafter deliver to the Company a written application to indemnify
Indemnitee in accordance with this Agreement. Such application(s) may
be delivered from time to time and at such time(s) as Indemnitee deems
appropriate in his or her sole discretion. Following such a written
application for indemnification by Indemnitee, the Indemnitee's entitlement to
indemnification shall be determined according to Section 8(c) of this
Agreement.
(c) On
written request by Indemnitee for indemnification pursuant to Section 8(b), a
determination, if applicable law requires, with respect to Indemnitee’s
entitlement thereto will be made in the specific case: (i) by a majority vote of
the Disinterested Directors, even though less than a quorum of the Board, or
(ii) if so requested by the Indemnitee in his or her sole discretion by an
Independent Counsel in a written opinion to the Board, a copy of which will be
delivered to Indemnitee. If it is so determined that Indemnitee is
entitled to indemnification hereunder, the Company will: (i) within
10 business days after that determination pay to Indemnitee all amounts
theretofore incurred by or on behalf of Indemnitee in respect of which
Indemnitee is entitled to that indemnification by reason of that determination;
and (ii) thereafter on written request by Indemnitee, pay to Indemnitee within
10 business days after that request such additional amounts theretofore incurred
by or on behalf of Indemnitee in respect of which Indemnitee is entitled to that
indemnification by reason of that determination. Indemnitee will
cooperate with the person, persons or entity making the determination with
respect to Indemnitee’s entitlement to indemnification under this Agreement,
including providing to such person, persons or entity on reasonable advance
request any documentation or information which is (i) not privileged or
otherwise protected from disclosure, (ii) reasonably available to Indemnitee and
(iii) reasonably necessary to that determination. The Company will
bear all costs and expenses (including attorneys’ fees and disbursements)
Indemnitee incurs in so cooperating (irrespective of the determination as to
Indemnitee’s entitlement to indemnification) and hereby indemnifies and agrees
to hold Indemnitee harmless therefrom.
(d)
If an Independent Counsel is to make the determination of entitlement to
indemnification pursuant to Section 8(c), the Independent Counsel will be
selected as this Section 8(d) provides. If a Change of Control has
not occurred, the Board will select the Independent Counsel, and the Company
will give written notice to Indemnitee advising him of the identity of the
Independent Counsel so selected. If a Change of Control has occurred,
Indemnitee will select the Independent Counsel (unless Indemnitee requests that
the Board make the selection, in which event the preceding sentence will apply),
and Indemnitee will give written notice to the Company advising it of the
identity of the Independent Counsel so selected. In either event,
Indemnitee or the Company, as the case may be, may, within 10 business days
after the written notice of selection has been given, deliver to the Company or
to Indemnitee, as the case may be, a written objection to the selection;
provided, however, that any such objection may be asserted only on the ground
that the Independent Counsel so selected is not an “Independent Counsel” as
Section 21 defines that term, and the objection must set forth with
particularity the factual basis for that assertion. Absent a proper
and timely objection, the person so selected shall act as Independent
Counsel. If any such written objection is so made and substantiated,
the Independent Counsel so selected may not serve as Independent Counsel unless
and until that objection is withdrawn or a court of competent jurisdiction has
determined that objection is without merit. If (i) an Independent
Counsel is to make the determination of entitlement to indemnification pursuant
to Section 8(c) and (ii) within 20 days after submission by Indemnitee of a
written request for indemnification pursuant to Section 8(a), no Independent
Counsel has been selected and not objected to, either the Company or Indemnitee
may petition the Court of Chancery or other court of competent jurisdiction for
resolution of any objection that has been made by the Company or Indemnitee to
the other’s selection of Independent Counsel and/or for the appointment as
Independent Counsel of a person selected by the petitioned court or by such
other person as the petitioned court designates, and the person with respect to
whom all objections are so resolved or the person so appointed will act as the
Independent Counsel under Section 8(c). The Company will pay any and
all reasonable and documented fees and expenses the Independent Counsel incurs
in connection with acting pursuant to Section 8(c), and the Company will pay all
reasonable and documented fees and expenses incident to the procedures this
Section 8(d) sets forth, regardless of the manner in which the Independent
Counsel is selected or appointed. If (i) the Independent Counsel
selected or appointed pursuant to this Section 8(d) does not make any
determination respecting Indemnitee’s entitlement to indemnification hereunder
within 45 days after the Company receives a written request therefor and (ii)
any judicial proceeding or arbitration pursuant to Section 10(a) is then
commenced, that Independent Counsel will be discharged and relieved of any
further responsibility in such capacity (subject to the applicable standards of
professional conduct then prevailing).
Section
9.
Presumptions and Effect of Certain
Proceedings.
(a) In making a determination with
respect to entitlement to indemnification hereunder, the person, persons or
entity making that determination must presume that Indemnitee is entitled to
indemnification hereunder if Indemnitee has submitted a request for
indemnification in accordance with Section 8(a), and the Company will have the
burden of proof to overcome that presumption in connection with the making by
any person, persons or entity of any determination contrary to that
presumption. Neither the failure of the Company (including by its
directors or independent legal counsel) to have made a determination prior to
the commencement of any action pursuant to this Agreement that indemnification
is proper in the circumstances because Indemnitee has met the applicable
standard of conduct, nor an actual determination by the Company (including by
its directors or independent legal counsel) that Indemnitee has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that Indemnitee has not met the applicable standard of
conduct.
(b) The
termination of any Proceeding or of any claim, issue or matter therein, by
judgment, order, settlement or conviction, or on a plea of nolo contendere or
its equivalent, will not (except as this Agreement otherwise expressly provides)
of itself adversely affect the right of Indemnitee to indemnification hereunder
or create a presumption that Indemnitee did not act in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful.
(c) Any
action Indemnitee takes or omits to take in connection with any employee benefit
plan will, if taken or omitted in good faith by Indemnitee and in a manner
Indemnitee reasonably believed to be in the interest of the participants in or
beneficiaries of that plan, be deemed to have been taken or omitted in a manner
“not opposed to the best interests of the Company” for all purposes
hereof.
(d)
Reliance as Safe
Harbor
. For purposes of any determination of good faith,
Indemnitee shall be deemed to have acted in good faith if Indemnitee's action is
based on the records or books of account of the Enterprise, including financial
statements, or on information supplied to Indemnitee by the officers of the
Enterprise in the course of their duties, or on the advice of legal counsel for
the Enterprise or on information or records given or reports made to the
Enterprise by an independent certified public accountant or by an appraiser or
other expert selected by the Enterprise. The provisions of
this Section 9(d) shall not be deemed to be exclusive or to limit in any way the
other circumstances in which the Indemnitee may be deemed or found to have met
the applicable standard of conduct set forth in this Agreement.
(e)
Actions of
Others
. The knowledge and/or actions, or failure to act, of
any other director, trustee, partner, managing member, fiduciary, officer, agent
or employee of the Enterprise shall not be imputed to Indemnitee for purposes of
determining the right to indemnification under this Agreement.
Section
10.
Remedies of
Indemnitee
. (a) In the event that (i) a
determination is made pursuant to Section 8 that Indemnitee is not entitled to
indemnification hereunder, (ii) advancement of Expenses is not timely made
pursuant to Section 7, (iii) no determination as to Indemnitee’s entitlement to
indemnification shall have been made pursuant to Section 8(c) of this Agreement
hereunder, or that determination shall not have been made within 45 days after
receipt by the Company of the request for that indemnification, (iv) payment of
indemnification is not made pursuant to Section 5 or 6 within 10 business days
after receipt by the Company of a written request therefor or (v) payment of
indemnification pursuant to Section 8(c) is not made timely, Indemnitee will be
entitled to an adjudication from the Court of Chancery of his entitlement to
that indemnification or advancement of Expenses. Alternatively,
Indemnitee, at his option, may seek an award in arbitration to be conducted by a
single arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Indemnitee must commence any such proceeding
seeking an adjudication or an award in arbitration within 180 days following the
date on which Indemnitee first has the right to commence that proceeding
pursuant to this Section 10(a); provided, however, that this sentence will not
apply in respect of a proceeding brought by Indemnitee to enforce his rights
under Section 5.
(b) If
a determination has been made pursuant to Section 8(c) that Indemnitee is not
entitled to indemnification hereunder, any judicial proceeding or arbitration
commenced pursuant to this Section 10 will be conducted in all respects as a de
novo trial, or arbitration, on the merits and Indemnitee will not be prejudiced
by reason of that adverse determination. In any judicial proceeding
or arbitration commenced pursuant to this Section 10, the Company will have the
burden of proving that Indemnitee is not entitled to indemnification or
advancement of Expenses, as the case may be and the Company may not refer to or
introduce into evidence any determination pursuant to Section 8(c) of this
Agreement adverse to Indemnitee for any purpose. If Indemnitee
commences a judicial proceeding or arbitration pursuant to this Section 10,
Indemnitee shall not be required to reimburse the Company for any advances
pursuant to Section 7 until a final determination is made with respect to
Indemnitee's entitlement to indemnification (as to which all rights of appeal
have been exhausted or lapsed).
(c) If
a determination has been made pursuant to Section 8(c) that Indemnitee is
entitled to indemnification hereunder, the Company will be bound by that
determination in any judicial proceeding or arbitration commenced pursuant to
this Section 10, absent (i) a misstatement by Indemnitee of a material fact, or
an omission by Indemnitee of a material fact necessary to make Indemnitee’s
statements not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under applicable
law.
(d) If
Indemnitee, pursuant to this Section 10, seeks a judicial adjudication of or an
award in arbitration to enforce his rights under, or to recover damages for
breach of, this Agreement, Indemnitee will be entitled to recover from the
Company, and will be indemnified by the Company against, any and all expenses
(of the types described in the definition of Expenses in Section 21) actually
and reasonably incurred by him in that judicial adjudication or arbitration, but
only if he prevails therein. If it is determined in that judicial
adjudication or arbitration that Indemnitee is entitled to receive part of, but
not all, the indemnification or advancement of expenses sought, the Expenses
incurred by Indemnitee in connection with that judicial adjudication or
arbitration will be appropriately prorated between those in respect of which
this Section 10(d) entitles Indemnitee to indemnification and those Indemnitee
must bear.
(e) The
Company shall be precluded from asserting in any judicial proceeding or
arbitration commenced pursuant to this Section 10 that the procedures and
presumptions of this Agreement are not valid, binding and enforceable and shall
stipulate in any such court or before any such arbitrator that the Company is
bound by all the provisions of this Agreement.
(f) The
Company shall indemnify Indemnitee to the fullest extent permitted by law
against all Expenses and, if requested by Indemnitee, shall (within ten (10)
business days after the Company's receipt of such written request) advance such
Expenses to Indemnitee, which are incurred by Indemnitee in connection with any
judicial proceeding or arbitration brought by Indemnitee for (i) indemnification
or advances of Expenses by the Company under this Agreement or any other
agreement or provision of the Company's Amended and Restated Certificate of
Incorporation or Bylaws now or hereafter in effect or (ii) recovery or advances
under any insurance policy maintained by the Company or any of its subsidiaries
for the benefit of Indemnitee, regardless of whether Indemnitee ultimately is
determined to be entitled to such indemnification, advance or insurance
recovery, as the case may be.
Section
11.
Non-exclusivity; Survival of Rights;
Insurance; Subrogation.
(a) The rights to
indemnification and advancement of Expenses this Agreement provides are not and
will not be deemed exclusive of any other rights to which Indemnitee may at any
time be entitled under applicable law, the Company’s Amended and Restated
Certificate of Incorporation, the Company’s Bylaws, any agreement, a vote of
stockholders or a resolution of directors, or otherwise. No
amendment, alteration or termination of this Agreement or any provision hereof
will limit or restrict any right of Indemnitee hereunder in respect of any
action Indemnitee has taken or omitted in his Corporate Status prior to that
amendment, alteration or termination. To the extent that a change in
Delaware law (whether by statute or judicial decision) permits greater
indemnification by agreement than would be afforded currently under this
Agreement, it is the intent and agreement of the parties hereto that Indemnitee
will enjoy by this Agreement the greater benefits that change
affords. No right or remedy herein conferred is intended to be
exclusive of any other right or remedy, and every other right and remedy shall
be cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other right or
remedy.
(b) The
Company will maintain in effect during the entire period for which the Company
is obligated to indemnify Indemnitee under this Agreement (subject to
appropriate cost considerations), an insurance policy or policies providing
liability insurance for directors, officers and employees of the Company or of
any other Enterprise that any such person serves at the request of the
Company. Indemnitee will be covered by any such policy or policies in
accordance with its or their terms to the maximum extent of the coverage
available for any such person under such policy or policies. If, at
the time the Company receives notice from any source of a Proceeding as to which
Indemnitee is a party or a participant (as a witness or otherwise), the Company
has director and officer liability insurance in effect, the Company shall give
prompt notice of such Proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of the Indemnitee, all amounts payable as a result of such Proceeding
in accordance with the terms of such policies.
(c) The
Company will not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable (or for which advancement is provided hereunder)
hereunder if and to the extent that Indemnitee has otherwise actually received
that payment or obtained the entire benefit therefrom under any insurance
policy, contract, agreement or otherwise.
(d) If
the Company makes any payment hereunder, it will be subrogated to the extent of
that payment to all the rights of recovery of Indemnitee, who will execute all
papers required and take all action necessary to secure those rights, including
execution of such documents as are necessary to enable the Company to bring suit
to enforce those rights.
(e) The
Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee
with respect to Indemnitee’s service at the request of the Company as a
director, officer, employee, agent or fiduciary of any other Enterprise will be
reduced by any amount Indemnitee has actually received as indemnification or
advancement of Expenses from that other Enterprise.
Section
12.
Duration of
Agreement
. This Agreement will continue until and terminate on
the later of: (i) 10 years after the date that Indemnitee has ceased
to serve as a director or officer of the Company or as a director, officer,
trustee, partner, managing partner, employee, agent or fiduciary of any other
Enterprise that Indemnitee served on behalf of the Company at the request of the
Company; or (ii) one year after the final termination of any Proceeding
(including any rights of appeal thereto) then pending in respect of which
Indemnitee is granted rights of indemnification or advancement of Expenses
hereunder and of any proceeding commenced by Indemnitee pursuant to Section 10
relating thereto including any rights of appeal of any Section 10
Proceeding. This Agreement will be binding on the Company and its
successors and assigns and will inure to the benefit of Indemnitee and his
spouse (if Indemnitee resides in Texas or another community property state),
heirs, executors and administrators.
Section
13.
Severability.
If
any provision or provisions of this Agreement is or are invalid, illegal or
unenforceable for any reason whatsoever: (i) the validity, legality
and enforceability of the remaining provisions hereof (including, without
limitation, each portion of any Section containing any such invalid, illegal or
unenforceable provision which is not itself invalid, illegal or unenforceable)
will not in any way be affected or impaired thereby; (ii) such provision or
provisions will be deemed reformed to the extent necessary to conform to
applicable law and to give the maximum effect to the intent of the parties
hereto; and (iii) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any Section containing
any such invalid, illegal or unenforceable provision which is not itself
invalid, illegal or unenforceable) will be construed so as to give effect to the
intent manifested thereby.
Section
14.
Exception to Right of
Indemnification or Advancement of Expenses.
Notwithstanding
any provision in this Agreement, the Company shall not be obligated under this
Agreement to make any indemnity in connection with any claim made against
Indemnitee:
(a) for
which payment has actually been received by or on behalf of Indemnitee under any
insurance policy or other indemnity provision, except with respect to any excess
beyond the amount actually received under any insurance policy or other
indemnity provision; or
(b) for
an accounting of profits made from the purchase and sale (or sale and purchase)
by Indemnitee of securities of the Company within the meaning of Section 16(b)
of the Exchange Act or similar provisions of state statutory law or common
law;
(c) except
as otherwise provided in Sections 10(d) - (f) hereof, in connection with any
Proceeding (or any part of any Proceeding) initiated by Indemnitee, including
any Proceeding (or any part of any Proceeding) initiated by Indemnitee against
the Company or its directors, officers, employees or other indemnitees, unless
(i) the Board authorized the Proceeding (or any part of any Proceeding) prior to
its initiation or (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable
law;
(d) for
reimbursement to the Company of any bonus or other incentive-based or
equity-based compensation or of any profits realized by Indemnitee from the sale
of securities of the Company, in each case as required under the Exchange Act;
or
(e) in
connection with proceedings or claims involving the enforcement of non-compete
and/or non-disclosure agreements or the non-compete and/or non-disclosure
provisions of employment, severance, consulting or similar agreements the
Indemnitee may be a party to with the Company, or any subsidiary of the
Company.
Section
15.
Enforcement and Binding
Effect.
(a) The
Company expressly confirms and agrees that it has entered into this Agreement
and assumed the obligations imposed on it hereby in order to induce Indemnitee
to serve as a director or officer of the Company, and the Company acknowledges
that Indemnitee is relying upon this Agreement in serving as a director or
officer of the Company.
(b) This
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, oral, written and implied, between the parties hereto with
respect to the subject matter hereof.
Section
16.
Settlement.
Notwithstanding
any other provision of this Agreement, the Company shall have no obligation to
indemnify Indemnitee under the Agreement for amounts paid in settlement of any
action, suit or proceeding without the Company’s written consent, which shall
not be unreasonably withheld.
Section
17.
Joint Liability.
(a) The
Company shall not, without Indemnitee’s prior written consent, enter into any
settlement of any Proceeding in which the Company is or is alleged to be jointly
liable with Indemnitee (or would be if joined in such Proceeding) unless such
settlement provides for a full and final release of all claims asserted against
Indemnitee.
(b) The
Company hereby agrees to fully indemnify, hold harmless and exonerate Indemnitee
from any claims for contribution which may be brought by officers, directors or
employees of the Company (other than Indemnitee) who may be jointly liable with
Indemnitee.
Section
18.
Identical
Counterparts.
This Agreement may be executed in one or more
counterparts, each of which will for all purposes be deemed to be an original
but all of which together will constitute one and the same
agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this
Agreement.
Section
19.
Headings.
The
headings of the Sections hereof are inserted for convenience only and do not and
will not be deemed to constitute part of this Agreement or to affect the
construction thereof.
Section
20.
Security.
To the
extent requested by Indemnitee and approved by the Board, the Company may at any
time and from time to time provide security to Indemnitee for the Company’s
obligations hereunder through an irrevocable bank line of credit, funded trust
or other collateral.
Section
21.
Definitions
. For
purposes of this Agreement:
“
Acquiring Person
” means any
Person who or which, together with all its Affiliates and Associates, is or are
the Beneficial Owner of 50% or more of the shares of Common Stock then
outstanding, but does not include any Exempt Person; provided, however, that a
Person will not be or become an Acquiring Person if that Person, together with
its Affiliates and Associates, becomes the Beneficial Owner of 50% or more of
the shares of Common Stock then outstanding solely as a result of a reduction in
the number of shares of Common Stock outstanding which results from the
Company’s direct or indirect repurchase of Common Stock, unless and until such
time as that Person or any Affiliate or Associate of that Person purchases or
otherwise becomes the Beneficial Owner of additional shares of Common Stock
constituting 1% or more of the then outstanding shares of Common Stock or any
other Person (or Persons) who is (or collectively are) the Beneficial Owner of
shares of Common Stock constituting 1% or more of the then outstanding shares of
Common Stock becomes an Affiliate or Associate of that Person, unless, in either
such case, that Person, together with all its Affiliates and Associates, is not
then the Beneficial Owner of 50% or more of the shares of Common Stock then
outstanding.
“
Affiliate
” has the meaning
Exchange Act Rule 12b-2 specifies.
“
Associate
” means, with
reference to any Person, (i) any corporation, firm, partnership, limited
liability company, association, unincorporated organization or other entity
(other than the Company or a subsidiary of the Company) of which that Person is
an officer or general partner (or officer or general partner of a general
partner) or is, directly or indirectly, the Beneficial Owner of 10% or more of
any class of its equity securities or interests, (ii) any trust or other estate
in which that Person has a substantial beneficial interest or for or of which
that Person serves as trustee or in a similar fiduciary capacity and (iii) any
relative or spouse of that Person, or any relative of that spouse, who has the
same home as that Person.
A
specified Person is deemed the “
Beneficial Owner
” of, and is
deemed to “beneficially own,” any securities:
(i) of
which that Person or any of that Person’s Affiliates or Associates, directly or
indirectly, is the “beneficial owner” (as determined pursuant to Exchange Act
Rule 13d-3) or otherwise has the right to vote or dispose of, including pursuant
to any agreement, arrangement or understanding (whether or not in writing);
provided, however, that a Person will not be deemed the “Beneficial Owner” of,
or to “beneficially own,” any security under this subparagraph (i) as a result
of an agreement, arrangement or understanding to vote that security if that
agreement, arrangement or understanding: (A) arises solely from a
revocable proxy or consent given in response to a public (that is, not including
a solicitation exempted by Exchange Act Rule 14a-2(b)(2)) proxy or consent
solicitation made pursuant to, and in accordance with, the applicable provisions
of the Exchange Act; and (B) is not then reportable by that Person on Exchange
Act Schedule 13D (or any comparable or successor report);
(ii) which
that Person or any of that Person’s Affiliates or Associates,
directly or indirectly, has the right or obligation to acquire (whether that
right or obligation is exercisable or effective immediately or only after the
passage of time or the occurrence of an event) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or on the exercise of
conversion rights, exchange rights, other rights, warrants or options, or
otherwise; provided, however, that a Person will not be deemed the “Beneficial
Owner” of, or to “beneficially own,” securities tendered pursuant to a tender or
exchange offer made by that Person or any of that Person’s Affiliates or
Associates until those tendered securities are accepted for purchase or
exchange; or
(iii) which
are beneficially owned, directly or indirectly, by (A) any other Person (or any
Affiliate or Associate thereof) with which the specified Person or any of the
specified Person’s Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy or consent as described in the
proviso to subparagraph (i) of this definition) or disposing of any voting
securities of the Company or (B) any group (as Exchange Act Rule 13d-5(b) uses
that term) of which that specified Person is a member;
provided,
however, that nothing in this definition will cause a Person engaged in business
as an underwriter of securities to be the “Beneficial Owner” of, or to
“beneficially own,” any securities that Person acquires through its
participation in good faith in a firm commitment underwriting (including,
without limitation, securities acquired pursuant to stabilizing transactions to
facilitate a public offering in accordance with Exchange Act Regulation M or to
cover overallotments created in connection with a public offering) until the
expiration of 40 days after the date of that acquisition. For
purposes of this definition, “voting” a security includes voting, granting a
proxy, acting by consent, making a request or demand relating to corporate
action (including, without limitation, calling a stockholder meeting) or
otherwise giving an authorization (within the meaning of Section 14(a) of the
Exchange Act) in respect of that security.
“
Change of Control
” means the
occurrence of any of the following events that occurs after
[the date of this
Agreement][September 1, 2010]
: (i) any Person becomes an
Acquiring Person; (ii) at any time the then Continuing Directors cease to
constitute a majority of the members of the Board; (iii) a merger of the Company
with or into, or a sale by the Company of its properties and assets
substantially as an entirety to, another Person occurs and, immediately after
that occurrence, any Person, other than an Exempt Person, together with all
Affiliates and Associates of that Person (other than Exempt Persons), will be
the Beneficial Owner of 50% or more of the total voting power of the then
outstanding Voting Shares of the Person surviving that transaction (in the case
or a merger or consolidation) or the Person acquiring those properties and
assets substantially as an entirety unless that Person, together with all its
Affiliates and Associates, was the Beneficial Owner of 50% or more of the shares
of Common Stock outstanding prior to that transaction; (iv) the approval by the
stockholders of the Company of a complete liquidation of the Company or an
agreement or series of agreements for the sale or disposition by the Company of
all or substantially all of the Company's assets; or
(v)
occurs any other event of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any
similar item on any similar schedule or form) promulgated under the Exchange Act
(as defined below), whether or not the Company is then subject to such reporting
requirement.
“
Common Stock
” means (i) the
common stock, par value $.001 per share, of the Company and (ii) any other class
of capital stock of the Company which is (A) except for less voting rights,
identical to the common stock clause (i) of this definition describes and (B)
convertible into that common stock on a share for share basis on the occurrence
of a Change of Control.
“
Continuing Director
” means at
any time any individual who then (i) is a member of the Board and was a member
of the Board as of
[the date of
this Agreement][September 1, 2010]
or whose nomination for his first
election, or that first election, to the Board following that date was
recommended or approved by a majority of the then Continuing Directors (acting
separately or as a part of any action taken by the Board or any committee
thereof) and (ii) is not an Acquiring Person, an Affiliate or Associate of an
Acquiring Person or a nominee or representative of an Acquiring Person or of any
such Affiliate or Associate.
“
Corporate Status
” describes
the status of a natural person who is or was a director, officer, trustee,
general partner, managing member, employee or agent of the Company or of any
other Enterprise, provided that person is or was serving in that capacity at the
request of the Company. For purposes of this Agreement, “serving at
the request of the Company” includes any service by Indemnitee which imposes
duties on, or involves services by, Indemnitee with respect to any employee
benefit plan or its participants or beneficiaries.
“
Court of Chancery
” means the
Court of Chancery of the State of Delaware.
“
Disinterested Director
” means
a director of the Company who is not and was not a party to the Proceeding in
respect of which indemnification is sought by Indemnitee hereunder.
“
Exchange Act
” means the
Securities Exchange Act of 1934, as amended.
“
Exempt Person
” means: (i)(A)
the Company, any subsidiary of the Company, any employee benefit plan of the
Company or of any subsidiary of the Company and (B) any Person organized,
appointed or established by the Company for or pursuant to the terms of any such
plan or for the purpose of funding any such plan or funding other employee
benefits for employees of the Company or any subsidiary of the Company; and (ii)
Indemnitee, any Affiliate or Associate of Indemnitee or any group (as Exchange
Act Rule 13d-5(b) uses that term) of which Indemnitee or any Affiliate or
Associate of Indemnitee is a member.
“
Expenses
” include all
attorneys’ fees, retainers, court costs, transcript costs, fees of experts,
witness fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees, all other disbursements or
expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, being or preparing
to be a witness in, or otherwise participating in, a Proceeding and all interest
or finance charges attributable to any thereof. Should any payments
by the Company under this Agreement be determined to be subject to any federal,
state or local income or excise tax, “Expenses” also will include such amounts
as are necessary to place Indemnitee in the same after-tax position (after
giving effect to all applicable taxes) he would have been in had no such tax
been determined to apply to those payments. Expenses also shall
include Expenses incurred in connection with any appeal resulting from any
Proceeding, including without limitation the premium, security for, and other
costs relating to any cost bond, supersedeas bond, or other appeal bond or its
equivalent. Expenses, however, shall not include amounts paid in
settlement by Indemnitee or the amount of judgments or fines against
Indemnitee.
“
Independent Counsel
” means a
law firm, or a member of a law firm, that or who is experienced in matters of
corporation law and neither presently is, nor in the past five years has been,
retained to represent: (i) the Company, its affiliates or Indemnitee
in any matter material to any such party; or (ii) any other party to the
Proceeding giving rise to a claim for indemnification
hereunder. Notwithstanding the foregoing, the term “Independent
Counsel” does not include at any time any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Company or Indemnitee in an action to
determine Indemnitee’s rights under this Agreement.
“
Person
” means any natural
person, sole proprietorship, corporation, partnership of any kind having a
separate legal status, limited liability company, business trust, unincorporated
organization or association, mutual company, joint stock company, joint venture,
estate, trust, union or employee organization or governmental
authority.
“
Proceeding
” includes any
threatened, pending or completed action, suit, arbitration, alternate dispute
resolution mechanism, investigation, inquiry, administrative hearing or any
other actual, threatened or completed proceeding, whether brought in the right
of the Company or otherwise and whether of a civil, criminal, administrative or
investigative nature, in which Indemnitee was, is or will be involved as a party
or otherwise by reason of the fact that Indemnitee is or was a director or
officer of the Company, by reason of any action taken by him or of any action on
his part while acting as director or officer of the Company, or by reason of the
fact that he is or was serving at the request of the Company as a director,
officer, trustee, general partner, managing member, fiduciary, employee or agent
of any other Enterprise, in each case whether or not serving in such capacity at
the time any liability or expense is incurred for which indemnification,
reimbursement, or advancement of expenses can be provided under this
Agreement.
“
Voting Shares
”
means: (i) in the case of any corporation, stock of that corporation
of the class or classes having general voting power under ordinary circumstances
to elect a majority of that corporation’s board of directors; and (ii) in the
case of any other entity, equity interests of the class or classes having
general voting power under ordinary circumstances equivalent to the Voting
Shares of a corporation.
Section
22.
Modification and
Waiver
. No supplement to or modification or amendment of this
Agreement will be binding unless executed in writing by both parties
hereto. No waiver of any of the provisions of this Agreement will be
deemed or will constitute a waiver of any other provisions hereof (whether or
not similar), nor will any such waiver constitute a continuing
waiver.
Section
23.
Notice by
Indemnitee
. Indemnitee agrees promptly to notify the Company
in writing on being served with any summons, citation, subpoena, complaint,
indictment, information or other document relating to any Proceeding or matter
which may be subject to indemnification or advancement of Expenses hereunder;
provided, however, a failure to give that notice will not deprive Indemnitee of
his rights to indemnification and advancement of Expenses hereunder unless the
Company is actually and materially prejudiced thereby.
Section
24.
Notices
. All
notices, requests, demands and other communications hereunder must be
in writing and will be deemed delivered and received (i) if personally delivered
or if delivered by telex, telegram, facsimile or courier service, when actually
received by the party to whom the notice or communication is sent or (ii) if
delivered by mail (whether actually received or not), at the close of business
on the third business day in the city in which the Company’s principal executive
office is located next following the day when placed in the mail, postage
prepaid, certified or registered, addressed to the appropriate party at the
address of that party set forth below (or at such other address as that party
may designate by written notice to the other party in accordance
herewith):
(a)
|
If
to Indemnitee, to:
|
___________________
|
|
|
___________________
|
|
|
___________________
|
|
|
|
|
with
a copy (which will not constitute notice for the purposes of this
Agreement) to such legal counsel, if any, as the Indemnitee may designate
in writing;
and
|
(b)
|
If
to the Company, to:
|
U.S.
Concrete, Inc.
|
|
|
2925
Briarpark, Suite 500
|
|
|
Houston,
Texas 77042
|
|
|
Attention:
President
|
Section
25.
Contribution
. To
the fullest extent applicable law permits, if the indemnification provided for
in this Agreement is held by a court of competent jurisdiction to be unavailable
to Indemnitee in whole or in part, the Company, in lieu of indemnifying
Indemnitee, will contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all the circumstances of that Proceeding in order to
reflect: (i) the relative benefits received by the Company and
Indemnitee as a result of the event(s) and/or transaction(s) giving rise to that
Proceeding; and/or (ii) the relative fault of the Company (and its directors,
officers, employees and agents) and Indemnitee in connection with such event(s)
and/or transaction(s); provided, that, without limiting the generality of the
foregoing, such contribution shall not be required where such holding by the
court is due to the failure of the Indemnitee to meet the standard of conduct
set forth in Sections 3 or 4 hereof or any limitation on indemnification set
forth in Sections 14 or 16 hereof.
Section
26.
Governing Law; Submission to
Jurisdiction.
This Agreement and the legal relations among the
parties will be governed by, and construed and enforced in accordance with, the
laws of the State of Delaware, without regard to its conflict of laws
rules. Except with respect to any arbitration Indemnitee commences
pursuant to Section 10(a), the Company and Indemnitee hereby irrevocably and
unconditionally (i) agree that any action or proceeding arising out of or in
connection with this Agreement will be brought only in the Court of Chancery and
not in any other state or federal court in the United States of America or any
court in any other country, (ii) consent to submit to the exclusive jurisdiction
of the Court of Chancery for purposes of any action or proceeding arising out of
or in connection with this Agreement, (iii) waive any objection to the laying of
venue of any such action or proceeding in the Court of Chancery and (iv) waive,
and agree not to plead or to make, any claim that any such action or proceeding
brought in the Court of Chancery has been brought in an improper or otherwise
inconvenient forum.
Section
27.
Miscellaneous
. Use
of one gender herein includes usage of each other gender where
appropriate. This Agreement uses the words “herein,” “hereof” and
words of similar import to refer to this Agreement as a whole and not to any
provision of this Agreement, and the word “Section” refers to a Section of this
Agreement, unless otherwise specified.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and
year first above written.
ATTEST:
|
|
U.S.
CONCRETE, INC.
|
|
|
|
By:
|
|
|
By:
|
|
|
NEWS
RELEASE
Contact:
Curt Lindeman,
General Counsel
U.S. Concrete, Inc.
713-499-6222
|
FOR
IMMEDIATE RELEASE
U.S.
CONCRETE COMPLETES REORGANIZATION
|
·
Emerges
from Chapter 11
·
Secures
$75 million bank credit facility
·
Issues
$55 million in convertible notes
|
|
HOUSTON,
TX – August 31, 2010 – U.S. Concrete, Inc. today announced that it has met the
requirements of its Plan of Reorganization and emerged from chapter 11
proceedings just four months after commencing the reorganization of its balance
sheet.
“We are
very pleased to have concluded this comprehensive financial restructuring that
significantly reduced the total debt on our balance sheet and left the Company
in very solid financial condition,” said Michael W. Harlan, President and Chief
Executive Officer of U.S. Concrete. “We look forward to putting this process
permanently behind us and renewing our focus on managing the business and
serving our customers.”
Concurrent
with its emergence, the Company converted approximately $272.6 million of
principal amount of 8.375% Senior Subordinated Notes due 2014 into equity of the
reorganized company. Warrants to purchase up to 15% of equity of the
reorganized company will be issued to holders of the old common stock in the
upcoming weeks. Shares of the reorganized company will trade over the
counter. The Company also announced it entered into a $75 million
revolving secured credit facility with a group of banks led by JPMorgan Chase
and issued $55 million of 9.5% convertible secured notes due 2015.
“The new
credit facility provides us with adequate liquidity to fund our working capital
needs and capital expenditure program as we move forward,” stated Mr. Harlan.
“Our improved capital structure and financial condition should provide
reassurance to our customers, suppliers and employees about the stability of the
Company and our commitment to our operating strategy.”
Information
about the restructuring is available at the Company’s website,
www.us-concrete.com or via the Company’s restructuring line at (888)
369-8931.
About
U.S. Concrete
U.S.
Concrete services the construction industry in several major markets in the
United States through its two business segments: ready-mixed concrete and
concrete-related products; and precast concrete. The Company has 125 fixed
and 11 portable ready-mixed concrete plants, seven precast concrete plants and
seven producing aggregates facilities. During 2009 (including acquired volumes),
these plant facilities produced approximately 4.5 million cubic yards of
ready-mixed concrete and 3.0 million tons of aggregates. For more
information on U.S. Concrete, visit
www.us-concrete.com
.
CAUTIONARY STATEMENT
REGARDING FORWARD-LOOKING STATEMENTS
This
press release contains various forward-looking statements and information that
are based on management's beliefs, as well as assumptions made by and
information currently available to management. These forward-looking statements
speak only as of the date of this press release. The Company disclaims any
obligation to update these statements and cautions you not to rely unduly on
them. Forward-looking information includes, but is not limited to: the effect of
the conclusion of the Company’s financial restructuring; the availability and
access, in general, of funds to meet interest payment obligations under our debt
and to fund our operations and necessary capital expenditures; our ability to
comply with all covenants in our indenture and credit facilities; the adequacy
of the Company’s liquidity to fund working capital needs and capital expenditure
program; the condition of our capital structure and financial condition; and
commitment to our operating strategy. Although U.S. Concrete believes that the
expectations reflected in such forward-looking statements are reasonable, it can
give no assurance that those expectations will prove to have been correct. Such
statements are subject to certain risks, uncertainties and assumptions,
including, among other matters: general and regional economic conditions; the
level of activity in the construction industry, the ability of U.S. Concrete to
complete acquisitions and to effectively integrate the operations of acquired
companies; development of adequate management infrastructure; departure of key
personnel; access to labor; union disruption; competitive factors; government
regulations; exposure to environmental and other liabilities; the cyclical and
seasonal nature of U.S. Concrete's business; adverse weather conditions; the
availability and pricing of raw materials; and general risks related to the
industry and markets in which U.S. Concrete operates. Should one or more of
these risks materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those expected. These risks, as well as
others, are discussed in greater detail in U.S. Concrete's filings with the
Securities and Exchange Commission; including U.S. Concrete's Annual Report on
Form 10-K for the year ended December 31, 2009 and its Form 10-Q for the six
months ended June 30, 2010.
#####