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EXHIBIT 10.28
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PURCHASE AGREEMENT
among
TERREMARK WORLDWIDE, INC., as Issuer,
The Guarantors named herein,
The Agent named herein
and
The Purchasers named herein
Dated as of December 31,2004
Relating to:
$30,000,000 Aggregate Principal Amount of
Senior Secured Notes due 2009
3,060,444 Shares of Common Stock, $.001 Par Value
Warrants for 15,000,000 (Subject to Adjustment)
Shares of Common Stock, $.001 Par Value
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TABLE OF CONTENTS
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SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01.
Definitions..............................................................................2
SECTION 1.02.
Computation of Time
Periods.............................................................27
SECTION 1.03.
Accounting
Terms........................................................................27
SECTION 2
AUTHORIZATION, ISSUANCE AND SALE OF SECURITIES
SECTION 2.01.
Authorization of
Issue..................................................................27
SECTION 2.02.
Sale....................................................................................27
SECTION 2.03.
Closing.................................................................................27
SECTION 3
CONDITIONS TO CLOSING
SECTION 3.01.
Representations and
Warranties..........................................................28
SECTION 3.02.
Performance; No Default Under Other
Agreements..........................................28
SECTION 3.03.
Compliance
Certificates.................................................................28
SECTION 3.04.
Opinions of
Counsel.....................................................................29
SECTION 3.05.
Changes in Corporate
Structure..........................................................29
SECTION 3.06.
No Adverse
Events.......................................................................29
SECTION 3.07.
Financial Information; Capital
Structure................................................29
SECTION 3.08.
Proceedings and
Documents...............................................................29
SECTION 3.09.
Purchase Permitted by Applicable Law,
etc...............................................30
SECTION 3.10.
Transaction Documents in Force and Effect;
Information..................................30
SECTION 3.11.
No Violation; No Legal Constraints; Consents, Authorizations
and
Filings,
etc.........................................................................30
SECTION 3.12.
Consummation of the
Transactions........................................................31
SECTION 3.13.
Fees....................................................................................31
SECTION 3.14.
Private
Placement
Numbers...............................................................31
SECTION 3.15.
Simultaneous
Purchase...................................................................31
SECTION 3.16.
Delivery of
Documents...................................................................31
SECTION 3.17.
Personal Property
Requirements..........................................................31
SECTION 3.18.
Insurance...............................................................................32
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SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE ISSUERS
SECTION 4.01.
Due Incorporation; Power and
Authority..................................................33
SECTION 4.02.
Capitalization..........................................................................33
SECTION 4.03.
Equity Interests and
Subsidiaries.......................................................34
SECTION 4.04.
Due Authorization, Execution and
Delivery...............................................34
SECTION 4.05.
Non-Contravention; Authorizations and
Approvals.........................................35
SECTION 4.06.
Company Financial Statements; Company
Reports...........................................36
SECTION 4.07.
Absence of Undisclosed Liabilities or
Events............................................37
SECTION 4.08.
No Actions or
Proceedings...............................................................37
SECTION 4.09.
Properties..............................................................................38
SECTION 4.10.
Intellectual
Property...................................................................39
SECTION 4.11.
Taxes...................................................................................39
SECTION 4.12.
Employee Benefit
Plans..................................................................41
SECTION 4.13.
Private Offering; No Integration or General
Solicitation................................42
SECTION 4.14.
Eligibility for Resale Under Rule
144A..................................................42
SECTION 4.15.
Status Under Certain
Statutes...........................................................42
SECTION 4.16.
Insurance...............................................................................42
SECTION 4.17.
Use of Proceeds; Margin
Regulations.....................................................43
SECTION 4.18.
Existing
Indebtedness; Future
Liens.....................................................43
SECTION 4.19.
Compliance with Laws; Permits; Environmental
Matters....................................43
SECTION 4.20.
Solvency................................................................................44
SECTION 4.21.
Affiliate
Transactions..................................................................44
SECTION 4.22.
Material
Contracts......................................................................44
SECTION 4.23.
No Changes to Applicable
Law............................................................45
SECTION 4.24.
Indebtedness............................................................................45
SECTION 4.25.
Fees....................................................................................45
SECTION 4.26.
Brokerage
Fees..........................................................................45
SECTION 4.27.
Documents and
Procedures................................................................45
SECTION 4.28.
Absence of Labor
Dispute................................................................45
SECTION 4.29.
No Unrelated
Liabilities................................................................45
SECTION 4.30.
Full
Disclosure.........................................................................45
SECTION 4.31.
Assets Control Regulations and Anti-Money
Laundering....................................46
SECTION 4.32.
Certain Other Representations and Warranties; Consummation of
Transactions.........................................................................46
SECTION 4.33.
Security
Documents......................................................................47
SECTION 4.34.
Real Property Holding
Corporation.......................................................47
SECTION 4.35.
Activities of Certain
Subsidiaries......................................................48
SECTION 5
REPRESENTATIONS OF THE PURCHASERS
SECTION 5.01.
Purchase for
Investment.................................................................48
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SECTION 6
COVENANTS TO PROVIDE INFORMATION
SECTION 6.01.
Future Reports to
Holders...............................................................49
SECTION 7
OTHER AFFIRMATIVE COVENANTS
SECTION 7.01.
Payment of Principal, Premium and
Interest..............................................54
SECTION 7.02.
Preservation of Corporate Existence and
Franchises......................................54
SECTION 7.03.
Maintenance of
Properties...............................................................55
SECTION 7.04.
Taxes...................................................................................55
SECTION 7.05.
Books, Records and
Access...............................................................55
SECTION 7.06.
Compliance with
Law.....................................................................56
SECTION 7.07.
Insurance...............................................................................56
SECTION 7.08.
Offer to Repurchase upon Change of
Control..............................................57
SECTION 7.09.
Offer to Purchase by Application of Excess
Proceeds.....................................59
SECTION 7.10.
Affirmative Covenants with Respect to
Leases............................................60
SECTION 7.11.
[RESERVED]..............................................................................60
SECTION 7.12.
Further
Assurances......................................................................60
SECTION 7.13.
Additional Collateral; Additional
Guarantors............................................60
SECTION 7.14.
Security Interests; Further
Assurances..................................................62
SECTION 7.15.
Information Regarding
Collateral........................................................62
SECTION 7.16.
Designations of Unrestricted
Subsidiaries...............................................63
SECTION 7.17.
Post-Closing Collateral
Matters.........................................................64
SECTION 7.18.
Casualty
Event..........................................................................67
SECTION 7.19.
NAP Madrid Post Closing
Matters.........................................................67
SECTION 7.20.
Receivables
Account.....................................................................67
SECTION 8
NEGATIVE COVENANTS
SECTION 8.01.
Stay, Extension and Usury
Laws..........................................................68
SECTION 8.02.
Restricted
Payments.....................................................................68
SECTION 8.03.
Dividend and Other Payment Restrictions Affecting
Subsidiaries..........................69
SECTION 8.04.
Incurrence of Indebtedness and Issuance of Preferred
Stock..............................70
SECTION 8.05.
Asset
Sales.............................................................................73
SECTION 8.06.
Transactions with
Affiliates............................................................74
SECTION 8.07.
Limitation on
Liens.....................................................................75
SECTION 8.08.
Limitation on Issuances and Sales of Capital Stock of
Subsidiaries......................78
SECTION 8.09.
Payments for
Consents...................................................................78
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SECTION 8.10.
Merger, Consolidation, or Sale of
Assets................................................78
SECTION 8.11.
Conduct of
Business.....................................................................79
SECTION 8.12.
Limitation on Tax
Consolidation.........................................................79
SECTION 8.13.
Public
Disclosures......................................................................79
SECTION 8.14.
Limitation on Repurchases and other Repayments of
Notes.................................80
SECTION 8.15.
Limitation on
Activities................................................................80
SECTION 8.16.
Limitation on Accounting
Changes........................................................80
SECTION 8.17.
Fiscal
Year.............................................................................80
SECTION 8.18.
Amendments or Waivers of Certain
Documents..............................................80
SECTION 8.19.
Amendments to Charter
Documents.........................................................80
SECTION 8.20.
No
Integration..........................................................................80
SECTION 9
THE NOTES
SECTION 9.01.
Form and
Execution......................................................................81
SECTION 9.02.
Terms of the
Notes......................................................................81
SECTION 9.03.
Denominations...........................................................................81
SECTION 9.04.
Form of Legend for the
Notes............................................................81
SECTION 9.05.
Payments and
Computations...............................................................82
SECTION 9.06.
Registration; Registration of Transfer and
Exchange.....................................82
SECTION 9.07.
Transfer
Restrictions...................................................................83
SECTION 9.08.
Mutilated, Destroyed, Lost and Stolen
Notes.............................................84
SECTION 9.09.
Persons Deemed
Owners...................................................................85
SECTION 9.10.
Cancellation............................................................................85
SECTION 9.11.
Home Office
Payment.....................................................................85
SECTION 10
EVENTS OF DEFAULT
SECTION 10.01.
Events of
Default.......................................................................86
SECTION 10.02.
Remedies................................................................................88
SECTION 10.03.
Waiver of Past
Defaults.................................................................89
SECTION 11
REDEMPTION
SECTION 11.01.
Right of
Redemption.....................................................................90
SECTION 11.02.
Partial
Redemptions.....................................................................90
SECTION 11.03.
Notice of
Redemption....................................................................90
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SECTION 11.04.
Notes Payable on Redemption
Date........................................................91
SECTION 11.05.
Notes Redeemed in
Part..................................................................91
SECTION 12
SUBSIDIARY GUARANTEES
SECTION 12.01.
Subsidiary
Guarantees...................................................................91
SECTION 12.02.
Execution and Delivery of Subsidiary
Guarantees.........................................92
SECTION 12.03.
Guarantors May Consolidate, Etc. on Certain
Terms.......................................93
SECTION 12.04.
Releases of Subsidiary
Guarantees.......................................................93
SECTION 12.05.
Limitation on Guarantor
Liability.......................................................94
SECTION 13
EXPENSES, INDEMNIFICATION AND CONTRIBUTION, AND TERMINATION
SECTION 13.01.
Expenses................................................................................94
SECTION 13.02.
Indemnification.........................................................................95
SECTION 13.03.
Contribution............................................................................96
SECTION 13.04.
Survival................................................................................97
SECTION 13.05.
Termination.............................................................................97
SECTION 14
AGENT
SECTION 14.01.
Appointment.............................................................................98
SECTION 14.02.
Nature of
Duties........................................................................98
SECTION 14.03.
Rights, Exculpation,
Etc................................................................98
SECTION 14.04.
Reliance................................................................................99
SECTION 14.05.
Indemnification.........................................................................99
SECTION 14.06.
FMP Agency Services, LLC
Individually..................................................100
SECTION 14.07.
Successor
Agent........................................................................100
SECTION 14.08.
Collateral
Matters.....................................................................100
SECTION 14.09.
Agency for
Perfection..................................................................101
SECTION 14.10.
Notice of
Default......................................................................102
SECTION 14.11.
Noteholder Actions Against
Collateral..................................................102
SECTION 14.12.
Setoff and Sharing of
Payments.........................................................102
SECTION 15
MISCELLANEOUS
SECTION 15.01.
Notices................................................................................103
SECTION 15.02.
Benefit of Agreement; Assignments and
Participations...................................103
SECTION 15.03.
No Waiver; Remedies
Cumulative.........................................................104
SECTION 15.04.
Amendments, Waivers and
Consents.......................................................104
SECTION 15.05.
Counterparts...........................................................................105
SECTION 15.06.
Reproduction...........................................................................105
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SECTION 15.07.
Headings...............................................................................105
SECTION 15.08.
Governing Law; Submission to Jurisdiction;
Venue.......................................105
SECTION 15.09.
Severability...........................................................................106
SECTION 15.10.
Entirety...............................................................................106
SECTION 15.11.
Survival of Representations and
Warranties.............................................107
SECTION 15.12.
Incorporation..........................................................................107
SECTION 15.13.
Certain Rights and Obligations Among
Noteholders.......................................107
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EXHIBITS
Exhibit A
- Form of
Note
Exhibit B
- Form of
Subsidiary Guarantee
Exhibit C
- Form of
Supplemental Agreement
Exhibit D
- Form of
Warrant Certificate
Exhibit E
- Form of
Registration Rights
Exhibit F
- Form of
Compliance Certificate
Exhibit G
- Form of
Intercompany Note
Exhibit H
- Form of
Landlord Access Agreement(1)
Exhibit I
- Form of
Management Rights Letter
Exhibit J
- Form of
Mortgage
Exhibit K-1
- Form of
Perfection Certificate
Exhibit K-2
- Form of
Perfection Certificate Supplement
Exhibit L
- Form of
Security Agreement
Exhibit M
- Form of
Confidentiality Agreement
Exhibit N
-
Subordination Provisions
Exhibit 3.03(a) -
Form of
Officers' Certificate
Exhibit 3.03(b) -
Form of
Secretary's Certificate
Exhibit 3.04(a)(i) - Form of Company
Counsel Opinion
Exhibit 3.04(a)(ii) - Form of Local Counsel
Opinion
SCHEDULES
Schedule A
-
Information Relating to Purchasers
Schedule B
- Assets
to be Transferred to NAP Madrid
Schedule 3.04
- Local
Counsel
Schedule 3.06
- Adverse
Events
Schedule 4.02 -
Capitalization
Schedule 4.03(a) -
Equity
Interests
Schedule 4.03(b) -
Consents
Schedule 4.05
-
Authorizations and Approvals
Schedule 4.06
-
Financial Statements
Schedule 4.07(a) -
Liabilities
Schedule 4.07(b) -
Changes in
Business
Schedule 4.08
- Legal
and Governmental Actions
Schedule 4.09(c) -
Special
Flood Hazards
Schedule 4.10(a) -
Intellectual Property-- Claims
Schedule 4.10(c) -
Intellectual Property-- Violations
Schedule 4.11
-
Taxes
---------
(1) If there is a leasehold mortgage,
use landlord lien waiver, access
agreement and
consent.
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Schedule 4.12
- Retiree
Health and Life Benefits
Schedule 4.18
-
Indebtedness
Schedule 4.19
-
Compliance with Laws; Permits; Environmental Matters
Schedule 4.21(a) -
Affiliate
Transactions
Schedule 4.22
- Material
Contracts
Schedule 4.25
- Transaction Fees
Schedule 4.26
-
Brokerage Fees
Schedule 4.27
-
Documents and Procedures
Schedule 4.28
- Labor
Disputes
Schedule 7.17(a) -
Mortgaged
Properties
Schedule 7.17(a)(3) - Fair Market Value of
Fixtures
Schedule 7.17(b) -
Locations-- Landlord Access Agreements/Bailee Letters
Schedule 8.07(c) -
Liens
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PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of December 31, 2004, by and
among TERREMARK WORLDWIDE, INC., a Delaware
corporation (the "COMPANY"), the
guarantors listed on the signature pages
hereto (each a "GUARANTOR" and,
collectively, the "GUARANTORS," and
together with the Company, the "ISSUERS"),
Agent (defined below) and each of the
purchasers listed on SCHEDULE A hereto
(each a "PURCHASER" and, collectively, the
"PURCHASERS").
RECITALS
WHEREAS the Company and LA Ref II Telecom Miami, LLC, LA Ref
III Telecom Miami, LLC, LA Parallel II
Telecom Miami, LLC, LA Parallel III
Telecom Miami, LLC, LA Capital II Telecom
Miami, LLC LA Equity III Telecom
Miami, LLC, Barrow Street Tecota, LP and
MHLP, LLC (formerly known as Calor
Development, Ltd) (collectively, "SELLER")
have entered into an Acquisition
Agreement (the "ACQUISITION AGREEMENT")
pursuant to which the Company or a
Subsidiary (as hereinafter defined) shall
acquire (the "ACQUISITION") all of the
outstanding Capital Stock of Technology
Center of the Americas, LLC (the "SPV")
not currently owned by the Company or any
of its Subsidiaries for an aggregate
purchase price of $39,664,000 (subject to
adjustment as set forth therein);
WHEREAS, in connection with the Acquisition, the SPV will
enter into a financing agreement, dated as
of the date hereof (the "SPV
FINANCING AGREEMENT"), by and among the SPV
and Citigroup Global Markets Realty
Corp. ("CITIGROUP"), as administrative
agent for the lenders named therein, and
the lenders named therein, which will
provide for a mortgage loan to the Company
of $49.0 million;
WHEREAS, upon the terms and subject to the conditions set
forth in this Agreement, the Company has
agreed to sell to the Purchasers, and
the Purchasers, acting severally and not
jointly, have agreed to purchase from
the Company, an aggregate of (i) $30.0
million aggregate principal amount of the
Company's Senior Secured Notes due 2009 in
the form of EXHIBIT A hereto (the
"NOTES"), (ii) 3,060,444 shares (the
"SHARES") of the Company's Common Stock,
$.001 par value per share, and (iii) 15
million stock purchase warrants (the
"WARRANTS") evidencing rights to purchase
initially 15 million shares of the
Company's Common Stock, $.001 par value per
share (the "COMMON STOCK"), which
Warrants shall be in four different classes
in the forms of EXHIBIT D hereto;
WHEREAS the obligations of the Company under this Agreement
and the Notes will be guaranteed (the
"SUBSIDIARY GUARANTEES") by the
Guarantors, such Subsidiary Guarantees to
be in the form of EXHIBIT B hereto;
WHEREAS the Company desires to secure all of its obligations
under the Basic Documents (as hereinafter
defined) by granting to Agent, for the
benefit of Agent and the Noteholders, a
security interest in and lien upon
substantially all of its personal and real
property (including a pledge of all
of the Capital Stock (as hereinafter
defined) of its Subsidiaries (as
hereinafter defined)) other than the
Excluded Property (as defined in the
Security Agreement);
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WHEREAS each of the Guarantors (which excludes the SPV) is
willing to grant to Agent, for the benefit
of Agent and the Noteholders, a
security interest in and lien upon
substantially all of its personal and real
property to secure such guaranty other than
the Excluded Property (as defined in
the Security Agreement);
WHEREAS the holders of Shares and Warrants from time to time
will be entitled to the benefits of the
Registration Rights Agreement, dated the
date hereof (the "REGISTRATION RIGHTS
AGREEMENT"), by and among the Company and
the Purchasers in the form of EXHIBIT E
hereto;
WHEREAS the Issuers have duly authorized the creation and
issuance of the Notes, the Subsidiary
Guarantees, the Shares and the Warrants,
as applicable, and the execution and
delivery of this Agreement and the other
Transaction Documents; and
WHEREAS all things necessary to make this Agreement, the Notes
(when issued and delivered hereunder), the
Subsidiary Guarantees (when validly
endorsed on the Notes), the Warrants and
each other Basic Document valid and
binding obligations of each applicable
Issuer in accordance with their
respective terms have been done;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. DEFINITIONS. As used herein, the following terms
shall have the meanings specified herein
unless the context otherwise requires:
"ACCREDITED INVESTOR" means any Person that is an "accredited
investor" within the meaning of Rule 501(a)
under the Securities Act.
"ACQUIRED INDEBTEDNESS" means Indebtedness of a Person (i)
assumed in connection with an Asset
Acquisition from such Person or (ii)
existing at the time such Person becomes a
Subsidiary of any other Person (other
than any Indebtedness incurred in
connection with, or in contemplation of, such
Asset Acquisition or such Person becoming
such a Subsidiary). Acquired
Indebtedness shall be deemed to be incurred
on the date of the related
acquisition of assets from any Person or
the date the acquired Person becomes a
Subsidiary, as the case may be.
"ACQUISITION" has the meaning specified in the first recital
to this Agreement.
"ACQUISITION AGREEMENT" has the meaning specified in the first
recital to this Agreement.
"AFFILIATE" means with respect to any specified Person: (i)
any other Person directly or indirectly
controlling or controlled by or under
direct or indirect common control with such
specified Person; (ii) any other
Person that owns, directly or indirectly,
5% or more of such specified Person's
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Capital Stock or any officer or director of
any such specified Person or other
Person or, with respect to any natural
Person, any person having a relationship
with such Person by blood, marriage or
adoption no more remote than first
cousin; or (iii) any other Person 5% or
more of the Voting Stock of which is
beneficially owned or held directly or
indirectly by such specified Person. For
the purposes of this definition, "control"
when used with respect to any
specified Person means the power to direct
the management and policies of such
Person, directly or indirectly, whether
through ownership of voting securities,
by contract or otherwise; and the terms
"controlling" and "controlled" have
meanings correlative to the foregoing.
"AGENT" means FMP Agency Services, LLC in its capacity as
Agent for the Noteholders or its successor
appointed pursuant to Section 14.07.
"AGREEMENT" is defined in Section 15.04.
"APPLICABLE LAW" means all applicable laws, statutes,
treaties, rules, codes (including building
codes), ordinances, regulations,
certificates, orders and licenses of, and
interpretations by, any Governmental
Authority and judgments, decrees,
injunctions, writs, permits, orders or like
governmental action of any Governmental
Authority (including any Environmental
Law and any laws pertaining to health or
safety) applicable to the Company, any
of its Subsidiaries or any of their
property or operations.
"APPLICABLE PREMIUM" means, as of any date indicated below, a
premium to principal amount based on the
percentage of the principal amount of
Notes to be redeemed as follows:
PERIOD COMMENCING:
APPLICABLE PREMIUM:
-----------------
------------------
Closing Time
13.5%
December 31, 2005
13.5% (except as set forth
below)
December 31, 2006
7.5%
June 30, 2007
5.0%
December 31, 2007
2.25%
June 30, 2008
0.0%
Notwithstanding the foregoing, if a Change of Control Payment
Date occurs during the period commencing
December 31, 2005 and ending December
31, 2006 and if as a result of the
announcement of such Change of Control the
closing price of the Company's Common Stock
on the date of the consummation of
the Change of Control shall exceed $1.00
(after giving effect to any stock
splits, reverse stock splits, stock
dividends or similar events) then the
Applicable Premium for such period shall be
10.0%.
"APPLICABLE RATE" is defined in EXHIBIT A.
"ASSET ACQUISITION" means (i) an Investment by the Company or
any Subsidiary in any other Person pursuant
to which such Person will become a
Subsidiary or will be merged or
consolidated with or into the Company or any
Subsidiary or (ii) the acquisition by the
Company or any Subsidiary of the
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Company or any Subsidiary of the assets of
any Person which constitute
substantially all of the assets of any
Person which constitute substantially all
of the assets of such Person, or any
division or line of business of such
Person, or which is otherwise outside of
the ordinary course of business.
"ASSET SALE" means any sale, issuance, conveyance, transfer,
lease or other disposition (including,
without limitation, by way of merger,
consolidation or Sale and Lease-back
Transaction) (collectively, a "TRANSFER"),
directly or indirectly, in one or a series
of related transactions, of: (i) any
Capital Stock of any Subsidiary; (ii) all
or substantially all of the properties
and assets of any division or line of
business of the Company or its
Subsidiaries; or (iii) any other properties
or assets of the Company or any
Subsidiary other than in the ordinary
course of business. For the purposes of
this definition, the term "Asset Sale"
shall not include any transfer of
properties and assets (a) that is governed
by the provisions described under
Section 8.10; PROVIDED, HOWEVER, that any
transaction consummated in compliance
with Section 8.10 involving a transfer of
less than all of the properties or
assets of the Company shall be deemed to be
an Asset Sale with respect to the
properties or assets of the Company that
are not so transferred in such
transaction, (b) that is by the Company to
any Wholly Owned Subsidiary that is a
Guarantor, or by any Subsidiary to the
Company or any Wholly Owned Subsidiary
that is a Guarantor in accordance with the
terms of this Agreement, (c) that is
of obsolete equipment in the ordinary
course of business, (d) the Fair Market
Value of which in the aggregate does not
exceed $1,000,000 or (e) with respect
to the sale of 8,652,016 shares of the
Company's Capital Stock owned by NAP
Madrid, to the extent such proceeds are
used as set forth in Section 7.19.
"ASSET SALE OFFER" is defined in Section 7.09(a).
"ASSET SALE OFFER PAYMENT DATE" is defined in Section 7.09(b).
"AUDIT DATE" is defined in Section 4.06(b).
"AVERAGE LIFE TO STATED MATURITY" means, when applied to any
Indebtedness at any date, the number of
years obtained by dividing (a) the then
outstanding aggregate principal amount of
such Indebtedness into (b) the sum of
the total of the products obtained by
multiplying (i) the amount of each then
remaining installment, sinking fund, serial
maturity or other required payment
of principal, including payment at final
maturity, in respect thereof, by (ii)
the number of years (calculated to the
nearest one-twelfth) which will elapse
between such date and the making of such
payment.
"BAILEE LETTER" shall have the meaning assigned thereto in the
Security Agreement.
"BANKRUPTCY LAW" means Title 11 of the United States Code or
any similar federal, state or foreign
bankruptcy, insolvency, reorganization or
other law for the relief of debtors.
"BASIC DOCUMENTS"
means, collectively, this Agreement, the
Notes, the Guarantees, the Security
Documents, the Warrants, the Intercreditor
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Agreement, the Registration Rights
Agreement, the Management Rights Letter and
all certificates, instruments, financial
and other statements and other
documents made or delivered in connection
herewith and therewith.
"BOARD OF DIRECTORS" means the Board of Directors of the
Company or a Subsidiary of the Company, as
the case may be, or any authorized
committee of such Board of Directors.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL STOCK" means (i) with respect to any Person that is a
corporation, any and all shares, interests,
participations or other equivalents
(however designated and whether or not
voting) of corporate stock, including
each class of common stock and preferred
stock of such Person; (ii) with respect
to any Person that is not a corporation,
any and all partnership, membership or
other equity interests of such Person; and
(iii) any rights, warrants or options
exchangeable for or convertible into any of
the foregoing.
"CAPITALIZED LEASE OBLIGATION" means any obligation under a
lease of (or other agreement conveying the
right to use) any property (whether
real, personal or mixed) that is required
to be classified and accounted for as
a capital lease obligation under GAAP, and,
for the purpose of this Agreement,
the amount of such obligation at any date
shall be the capitalized amount
thereof at such date, determined in
accordance with GAAP consistently applied.
"CASH EQUIVALENTS" means, at any time, (i) any evidence of
Indebtedness with a maturity of not more
than one year 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); (ii)
certificates of deposit or
acceptances with a maturity of not more
than one year 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 $500,000,000; (iii)
commercial paper with a maturity of not
more than one year issued by a
corporation that is not an Affiliate of the
Company organized under the laws of
any state of the United States or the
District of Columbia and rated at least
A-1 by Standard & Poor's Corporation or
at least P-1 by Moody's Investors
Service, Inc.; and (iv) repurchase
obligations with a term of not more than
seven days for underlying securities of the
types described in clauses (i) and
(ii) above entered into with any financial
institution meeting the
qualifications specified in clause (ii)
above.
"CASUALTY EVENT" shall mean any loss of title or any loss of
or damage to or destruction of, or any
condemnation or other taking (including
by any Governmental Authority) of, any
property of the Company or any of its
Subsidiaries. "Casualty Event" shall
include but not be limited to any taking of
all or any part of any Real Property of any
person or any part thereof, in or by
condemnation or other eminent domain
proceedings pursuant to any Requirement of
Law, or by reason of the temporary
requisition of the use or occupancy of all or
any part of any Real Property of any person
or any part thereof by any
Governmental Authority, civil or military,
or any settlement in lieu thereof.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as
amended from time to time, 42 U.S.C.
ss. 9601 ET SEQ.
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<PAGE>
"CERCLIS" means the Comprehensive Environmental Response,
Compensation and Liability Information
System maintained by the U.S.
Environmental Protection Agency.
"CHANGE OF CONTROL" means the occurrence of any of the
following events (whether or not approved
by the Board of Directors of the
Company): (i) any "person" or "group" (as
such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), other than
Permitted Holders, is or becomes the
"beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of 33-1/3% or more
of the total voting or economic power
of the Voting Stock of the Company; (ii)
during any period of two consecutive
years, individuals who at the beginning of
such period constituted the Board of
Directors of the Company (together with any
new directors whose election to such
board or whose nomination for election by
the stockholders of the Company was
approved by a vote of 66-2/3% of the
directors then still in office who were
either directors at the beginning of such
period or whose election or nomination
for election was previously so approved)
cease for any reason to constitute a
majority of such Board of Directors then in
office; (iii) the Company
consolidates with or merges with or into
any Person or sells, assigns, conveys,
transfers, leases or otherwise disposes of
all or substantially all of its
assets to any Person, or any corporation
consolidates with or merges into or
with the Company, in any such event
pursuant to a transaction in which the
outstanding Voting Stock of the Company is
changed into or exchanged for cash,
securities or other property, other than
any such transaction where the
outstanding Voting Stock of the Company is
not changed or exchanged at all
(except to the extent necessary solely to
reflect a change in the jurisdiction
of incorporation of the Company or where
(A) no "person" or "group," other than
Permitted Holders, owns immediately after
such transaction, directly or
indirectly, 33-1/3% or more of the total
voting or economic power of the Voting
Stock of the surviving corporation and (B)
the holders of the Voting Stock of
the Company immediately prior to such
transaction own, directly or indirectly,
not less than a majority of the total
voting and economic power of the Voting
Stock of the surviving or transferee
corporation immediately after such
transaction); or (iv) any order, judgment
or decree shall be entered against the
Company decreeing the dissolution or split
up of the Company and such order
shall remain undischarged or unstayed for a
period in excess of sixty days.
"CHANGE OF CONTROL OFFER" is defined in Section 7.08(a).
"CHANGE OF CONTROL PAYMENT" is defined in Section 7.08(a).
"CHANGE OF CONTROL PAYMENT DATE" is defined in Section
7.08(b)(ii).
"CLOSING TIME" is defined in Section 2.03.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time, and the rules and
regulations promulgated thereunder from
time to time.
"COLLATERAL" shall mean, collectively, all of the Security
Agreement Collateral, the Mortgaged
Property and all other property of whatever
kind and nature subject or purported to be
subject from time to time to a Lien
under any Security Document.
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<PAGE>
"COMMISSION" means the Securities and Exchange Commission, as
from time to time constituted, created
under the Exchange Act or, if at any time
after the execution of this Agreement such
Commission is not existing and
performing the duties now assigned to it
under the Exchange Act, the body
performing such duties at such time.
"COMMON STOCK" has the meaning specified in the third recital
to this Agreement.
"COMPANY" shall have the meaning assigned to such term in the
preamble to this Agreement and its
successors and permitted assigns.
"COMPANY FINANCIAL STATEMENTS" is defined in Section 4.06(a).
"COMPANY PARTY" is defined in Section 4.04(e).
"COMPANY REPORTS" is defined in Section 4.06(b).
"COMPLIANCE CERTIFICATE" is defined in Section 6.01(f).
"CONSOLIDATED" or "CONSOLIDATED" (including the correlative
term "CONSOLIDATING") or on a "CONSOLIDATED
BASIS," when used with reference to
any financial term in this Agreement (but
not when used with respect to any Tax
Return or Tax liability), means the
aggregate for two or more Persons of the
amounts signified by such term for all such
Persons, with intercompany items
eliminated and, with respect to net income
or earnings, after eliminating the
portion of net income or earnings properly
attributable to minority interests,
if any, in the capital stock of any such
Person or attributable to shares of
preferred stock of any such Person not
owned by any other such Person, in
accordance with GAAP.
"CONSOLIDATED EBITDA" means, for any period, (i) the sum of,
without duplication, the amounts for such
period, taken as a single accounting
period, of (a) Consolidated Net Income, (b)
to the extent reducing Consolidated
Net Income, Consolidated Non-cash Charges,
(c) to the extent reducing
Consolidated Net Income, Consolidated
Interest Expense, and (d) to the extent
reducing Consolidated Net Income,
Consolidated Income Tax Expense less (ii)
other non-cash items increasing
Consolidated Net Income for such period.
"CONSOLIDATED INCOME TAX EXPENSE" means, for any period, the
provision for federal, state, local and
foreign income taxes payable by the
Company and the Subsidiaries for such
period as determined on a consolidated
basis in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, without
duplication, the sum of (a) the interest
expense of the Company and the
Subsidiaries for such period as determined
on a consolidated basis in accordance
with GAAP, including, without limitation,
(i) any amortization of debt discount
attributable to such period, (ii) the net
cost under or otherwise associated
with Hedging Obligations (in each case,
including any amortization of
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<PAGE>
discounts), (iii) the interest portion of
any deferred payment obligation, (iv)
all commissions, discounts and other fees
and charges owed with respect to
letters of credit and bankers' acceptance
financing and (v) all capitalized
interest and all accrued interest, and (b)
all but the principal component of
Capitalized Lease Obligations paid, accrued
and/or scheduled to be paid or
accrued by the Company and the Subsidiaries
during such period and as determined
on a consolidated basis. Consolidated
Interest Expense shall be calculated on a
Pro Forma Basis to give effect to any
Indebtedness incurred, assumed or
permanently repaid or extinguished during
the relevant Test Period in connection
with the Acquisition, any Asset
Acquisitions and Asset Sales as if such
incurrence, assumption, repayment or
extinguishing had been effected on the
first day of such period.
"CONSOLIDATED NET INCOME" means, for any period, the
consolidated net income (or loss) of the
Company and its Subsidiaries for such
period on a consolidated basis, adjusted,
to the extent included in calculating
such net income (or loss), by excluding,
without duplication, (i) all
extraordinary gains or losses (net of all
fees and expenses relating thereto),
(ii) the portion of net income (or loss) of
the Company and its Subsidiaries on
a consolidated basis allocable to minority
interests in unconsolidated Persons,
except to the extent that cash dividends or
distributions are actually received
by the Company or a Subsidiary, (iii)
income of the Company and the Subsidiaries
derived from or in respect of Investments
in Persons other than Subsidiaries,
except to the extent that cash dividends or
distributions are actually received
by the Company or a Subsidiary, (iv) net
income (or loss) of any Person combined
with the Company or any of the Subsidiaries
on a "pooling of interests" basis
attributable to any period prior to the
date of combination, (v) any gain or
loss realized upon the termination of any
employee pension benefit plan, (vi)
gains (but not losses), net of all fees and
expenses relating thereto, in
respect of any Asset Sales by the Company
or a Subsidiary, (vii) the net income
of any Subsidiary to the extent that the
declaration of dividends or similar
distributions by that Subsidiary of that
income is not at the time permitted,
directly or indirectly, by operation of the
terms of its charter or any
agreement, instrument, judgment, decree,
order, statute, rule or governmental
regulation applicable to that Subsidiary or
its stockholders, (viii) any
restoration to income of any contingency
reserve except to the extent provision
for such reserve was made out of income
accrued at any time following the
Closing Time, (ix) any gain, arising from
the acquisition of any securities, or
the extinguishment, under GAAP, of any
Indebtedness of the Company and (x) the
net gain resulting from any prepayment or
redemption premiums incurred with
respect to Indebtedness repaid with the
proceeds of the issuance of the Notes in
accordance with this Agreement.
"CONSOLIDATED NON-CASH CHARGES" means, for any period, the
aggregate depreciation, amortization and
other non-cash expenses of the Company
and the Subsidiaries reducing Consolidated
Net Income for such period (other
than any non-cash item requiring an accrual
or reserve for cash disbursements in
any future period), determined on a
consolidated basis.
"CONTESTED COLLATERAL LIEN CONDITIONS" shall mean, with
respect to any Permitted Lien of the type
described in clauses (a), (b), (e) and
(f) of Section 8.07, the following
conditions:
(a)
the Company shall cause any proceeding instituted
contesting such Lien to stay the sale or forfeiture of any portion
of
the Collateral on account of such Lien;
(b) at the option and at the request of the Agent or the
Required Holders, to the extent such Lien is in an amount in excess
of
$500,000, the appropriate Issuer shall maintain cash reserves in
an
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<PAGE>
amount sufficient to pay and discharge such Lien or obtain a bond
over
such Lien and, in either case, the Issuer's reasonable estimate of
all
interest and penalties related thereto; and
(c) such Lien shall in all respects be subject and subordinate
in priority to the Lien and security interest created and evidenced
by
the Security Documents, except if and to the extent that the
Requirement of Law creating, permitting or authorizing such
Lien
provides that such Lien is or must be superior to the Lien and
security
interest created and evidenced by the Security Documents.
"CONTRACT" is defined in Section 4.05.
"CONTROL AGREEMENT" shall have the meaning assigned to such
term in the Security Agreement.
"CONTROLLING PERSON" is defined in Section 13.02(a).
"CUSTODIAN" is defined in Section 10.01.
"DEFAULT" means any event, act or condition that is, or with
the giving of notice, lapse of time or both
would constitute an Event of
Default.
"DESIGNATION" has the meaning assigned to such term in Section
7.16.
"DESIGNATION AMOUNT" has the meaning assigned to such term in
Section 7.16.
"DISCLOSURE SCHEDULE" means all numbered Schedules to this
Agreement.
"DISINTERESTED DIRECTOR" means, with respect to any
transaction or series of related
transactions, a member of the Board of
Directors of the Company who does not have
any material direct or indirect
financial interest in or with respect to
such transaction or series of related
transactions.
"ENFORCEABILITY EXCEPTIONS" means, with respect to any
specified obligation, any limitations on
the enforceability of such obligation
due to bankruptcy, insolvency,
reorganization, moratorium, and other similar
laws of general applicability relating to
or affecting creditors' rights or
general equity principles (other than, in
any such case, any Federal or state
laws relating to fraudulent transfers).
"ENVIRONMENT" shall mean ambient air, surface water and
groundwater (including potable water,
navigable water and wetlands), the land
surface or subsurface strata, natural
resources, the workplace or as otherwise
defined in any Environmental Law.
"ENVIRONMENTAL ACTION" means (a) any action, suit, written
demand, written claim, written notice of
non-compliance or violation, written
notice of liability or potential liability,
investigation, proceeding, consent
order or consent agreement relating to any
Environmental Law, any Permit or
Hazardous Material, including, without
limitation, (i) by any Governmental
Authority for enforcement, cleanup,
removal, response, remedial or other actions
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<PAGE>
or damages and (ii) by any Governmental
Authority or third party for damages,
contribution, indemnification, cost
recovery, compensation or injunctive relief
and (b) any investigation, monitoring,
removal or remediation activities
undertaken by or on behalf of the Company
or any of its Subsidiaries, whether or
not such activities are carried out
voluntarily.
"ENVIRONMENTAL LAW" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation,
code, order, writ, judgment,
injunction, decree or judicial or written
agency interpretation, policy or
guidance that has the force and effect of
law relating to pollution or
protection of the environment, public
health and safety or natural resources,
including, without limitation, those
relating to the use, handling,
transportation, treatment, storage,
disposal, release or discharge of Hazardous
Materials, including, without limitation,
CERCLA; RCRA; the Federal Water
Pollution Control Act, 33 U.S.C.ss. 1251 ET
SEQ.; the Toxic Substances Control
Act, 15 U.S.C.ss. 2601 ET SEQ.; the Clean
Air Act, 42 U.S.C.ss. 7401 ET SEQ.;
the Safe Drinking Water Act, 42 U.S.C.ss.
3803 ET SEQ.; the Oil Pollution Act of
1990, 33 U.S.C.ss. 2701 ET SEQ.; the
Emergency Planning and the Community
Right-to-Know Act of 1986, 42 U.S.C.ss.
11001 ET SEQ.; the Hazardous Material
Transportation Act, 49 U.S.C.ss. 1801 ET
SEQ.; and the Occupational Safety and
Health Act, 29 U.S.C.ss. 651 ET SEQ.; and
any state and local or foreign
counterparts or equivalents, in each case
as amended from time to time.
"ERISA" is defined in Section 4.12(a).
"ERISA AFFILIATE" is defined in Section 4.12(b).
"EVENT OF DEFAULT" is defined in Section 10.01.
"EXCESS PROCEEDS" is defined in Section 8.05(b).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations
promulgated by the Commission thereunder.
"EXISTING CONVERTIBLE NOTES" means the convertible debt
securities of the Company which are
outstanding at the Closing Time.
"EXISTING LIEN" is defined in Section 8.07(c).
"FACILITY" means the 750,000 square foot telecommunications
building in which NAP of the Americas,
Inc., a Wholly Owned Subsidiary, is
housed as one of the tenants in Miami,
Florida.
"FAIR MARKET VALUE" means, with respect to any asset or
property, the price which could be
negotiated in an arm's-length transaction,
for cash, between an informed and willing
seller under no compulsion to sell and
an informed and willing buyer under no
compulsion to buy. Fair Market Value
shall be determined by the Board of
Directors of the Company or the applicable
Subsidiary of the Company acting in good
faith evidenced by a board resolution
thereof delivered to the Noteholders.
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<PAGE>
"FISCAL YEAR" means the Fiscal Year of the Company and its
Subsidiaries ending on March 31 of each
calendar year, except with respect to
NAP Madrid and Terremark Latin America
(Brasil) Ltda., for which "Fiscal Year"
means the Fiscal Year ending on December 31
of each calendar year unless and
until such Subsidiary adopts March 31 of
each calendar year as its Fiscal Year.
"FOREIGN SUBSIDIARY" means, with respect to any Person, any
Restricted Subsidiary of such Person that
is not organized or existing under the
laws of the United States, any state
thereof, the District of Columbia, or any
territory thereof.
"GAAP" means, at any date of determination, generally accepted
accounting principles in effect in the
United States which are applicable at the
date of determination and which are
consistently applied for all applicable
periods.
"GOVERNMENTAL AUTHORITY" means (a) the government of the
United States or any State or other
political subdivision thereof, (b) any
government or political subdivision of any
other jurisdiction in which the
Company or any Subsidiary conducts all or
any part of its business, or which
asserts jurisdiction over any properties of
the Company or any Subsidiary or (c)
any entity exercising executive,
legislative, judicial, regulatory or
administrative functions of or pertaining
to, any such government.
"GOVERNMENTAL REAL PROPERTY DISCLOSURE REQUIREMENTS" shall
mean any Requirement of Law of any
Governmental Authority requiring notification
of the buyer, lessee, mortgagee, assignee
or other transferee of any Real
Property, facility, establishment or
business, or notification, registration or
filing to or with any Governmental
Authority, in connection with the sale,
lease, mortgage, assignment or other
transfer (including any transfer of
control) of any Real Property, facility,
establishment or business, of the
actual or threatened presence or Release in
or into the Environment, or the use,
disposal or handling of Hazardous Material
on, at, under or near the Real
Property, facility, establishment or
business to be sold, leased, mortgaged,
assigned or transferred.
"GUARANTEE" means, as applied to any obligation, (i) a
guarantee (other than by endorsement of
negotiable instruments for collection in
the ordinary course of business), direct or
indirect, in any manner, of any part
or all of such obligation and (ii) an
agreement, direct or indirect, contingent
or otherwise, the practical effect of which
is to assure in any way the payment
or performance (or payment of damages in
the event of non-performance) of all or
any part of such obligation, including,
without limiting the foregoing, the
payment of amounts drawn down by letters of
credit. A guarantee shall include,
without limitation, any agreement to
maintain or preserve any other Person's
financial condition or to cause any other
Person to achieve certain levels of
operating results.
"GUARANTORS" means the Subsidiaries listed on the signature
pages hereto as guarantors to this
Agreement and any other Subsidiary which is a
guarantor of the Notes, including any
Person that executes or is required after
the Closing Time to execute a guarantee of
the Notes pursuant to the covenant
described under Section 7.13 until a
successor replaces such party pursuant to
the applicable provisions of this Agreement
and, thereafter, shall mean such
successor.
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<PAGE>
"HAZARDOUS MATERIALS" means (a) any petroleum or petroleum
products, radioactive materials, asbestos
in any form that is or is reasonably
expected to become friable, urea
formaldehyde foam insulation, dielectric fluid
containing levels of polychlorinated
biphenyls, and radon gas; (b) any
chemicals, materials or substances defined
as or included in the definition of
"hazardous substances," "hazardous waste,"
"hazardous materials," "extremely
hazardous substances," "restricted
hazardous waste," "toxic substances," "toxic
pollutants," "contaminants," or
"pollutants," or words of similar import, under
any applicable Environmental Law; and (c)
any other chemical, material or
substance, exposure to which is prohibited,
limited or regulated by any
governmental authority under Environmental
Laws.
"HEDGING
OBLIGATIONS" means, with respect to any Person, the
net payment obligations of such Person
under (a) Interest Rate Agreements and
(b) other agreements or arrangements
entered into in order to protect such
Person against fluctuations in commodity
prices, interest rates or currency
exchange rates.
"HOLDER" means any Noteholder, any Shareholder or any
Warrantholder.
"INCUR" is defined in Section 8.04(a).
"INCURRENCE RATIO" means, with respect to any Person, the
ratio of
(x) the sum of the aggregate outstanding amount of
Indebtedness and liquidation value of Preferred Stock of such
Person
and its Subsidiaries as of the date of calculation (the
"TRANSACTION
Date") on a Consolidated basis to
(y) such Person's Consolidated EBITDA for the two full fiscal
quarters (the "APPLICABLE PERIOD") ending on or prior to the date
of
determination for which financial statements are available
multiplied
by two (2).
For purposes of this definition, clauses (x) and (y) above
will be calculated after giving effect on a
Pro Forma Basis to
1. the incurrence or repayment of any Indebtedness or
Preferred Stock of such Person or any of its Subsidiaries (and
the
application of the proceeds thereof) giving rise to the need to
make
such calculation and any incurrence or repayment of other
Indebtedness
or Preferred Stock (and the application of the proceeds thereof),
other
than the incurrence or repayment of Indebtedness in the ordinary
course
of business for working capital purposes pursuant to working
capital
facilities, occurring during the Applicable Period or at any
time
subsequent to the last day of the Applicable Period and on or prior
to
the Transaction Date, as if such incurrence or repayment or
issuance or
redemption or other repayment, as the case may be (and the
application
of the proceeds thereof), occurred on the first day of the
Applicable
Period; and
2. any Asset Sales or Asset Acquisitions (including, without
limitation, any Asset Acquisition giving rise to the need to make
such
calculation as a result of such Person or one of its
Subsidiaries
(including any Person who becomes a Subsidiary as a result of the
Asset
Acquisition) incurring, assuming or otherwise being liable for
Acquired
Indebtedness and also including any Consolidated EBITDA (PROVIDED
that
such Consolidated EBITDA will be included only to the extent
that
Consolidated Net Income would be includable pursuant to the
definition
of "Consolidated Net Income") (including any PRO FORMA expense and
cost
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<PAGE>
reductions calculated on a basis consistent with Regulation S-X of
the
Exchange Act) attributable to the assets which are the subject of
the
Asset Acquisition or Asset Sale during the Applicable Period)
occurring
during the Applicable Period or at any time subsequent to the last
day
of the Applicable Period and on or prior to the Transaction Date,
as if
such Asset Sale or Asset Acquisition (including the incurrence,
assumption or liability for any such Acquired Indebtedness)
occurred on
the first day of the Applicable Period.
If such Person or any of its Subsidiaries
directly or indirectly guarantees
Indebtedness of a third Person, the
preceding sentence will give effect to the
incurrence of such guaranteed Indebtedness
as if such Person or any Subsidiary
or such Person had directly incurred or
otherwise assumed such guaranteed
Indebtedness.
"INDEBTEDNESS" means, with respect to any Person, without
duplication, (i) all indebtedness of such
Person for borrowed money or for the
deferred purchase price of property or
services, excluding any trade payables
and other accrued current liabilities
incurred or arising in the ordinary course
of business, but including, without
limitation, all obligations, contingent or
otherwise, of such Person in connection
with any letters of credit, bankers
acceptance or other similar credit
transaction and in connection with any
agreement to purchase, redeem, exchange,
convert or otherwise acquire for value
any Capital Stock of such Person, or any
warrants, rights or options to acquire
such Capital Stock, now or hereafter
outstanding, (ii) all obligations of such
Person evidenced by bonds, notes,
debentures or other similar instruments, (iii)
all indebtedness created or arising under
any conditional sale or other title
retention agreement with respect to
property acquired by such Person (even if
the rights and remedies of the seller or
lender under such agreement in the
event of default are limited to
repossession or sale of such property), but
excluding trade payables arising in the
ordinary course of business, (iv) all
Capitalized Lease Obligations of such
Person, (v) all Indebtedness referred to
in clauses (i) through (iv) above of other
Persons and all dividends of other
Persons, the payment of which is secured by
(or for which the holder of such
Indebtedness has an existing right,
contingent or otherwise, to be secured by)
any Lien upon or with respect to property
(including, without limitation,
accounts and contract rights) owned by such
Person, even though such Person has
not assumed or become liable for the
payment of such Indebtedness, (vi) all
guarantees of Indebtedness by such Person,
(vii) all Redeemable Capital Stock
issued by such Person (valued at the
greater of its voluntary or involuntary
maximum fixed repurchase price plus accrued
and unpaid dividends), (viii) all
Hedging obligations of such Person, and
(ix) any amendment, supplement,
modification, deferral, renewal, extension,
refunding or refinancing of any
liability of the types referred to in
clauses (i) through (viii) above. For
purposes hereof, the "maximum fixed
repurchase price" of any Redeemable Capital
Stock which does not have a fixed
repurchase price shall be calculated in
accordance with the terms of such
Redeemable Capital Stock as if such Redeemable
Capital Stock were purchased on any date on
which Indebtedness shall be required
to be determined pursuant to this
Agreement, and if such price is based upon, or
measured by, the Fair Market Value of such
Redeemable Capital Stock, such Fair
Market Value to be determined in good faith
by the Board of Directors of the
issuer of such Redeemable Capital
Stock.
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<PAGE>
"INDEPENDENT FINANCIAL ADVISOR" means an accounting, appraisal
or investment banking firm which is
nationally recognized within the United
States of America (i) which does not, and
whose directors, officers and
employees or Affiliates do not, have a
direct or indirect financial interest in
the Company or any of its Subsidiaries or
Affiliates and (ii) which, in the
judgment of the Board of Directors of the
Company, is otherwise independent and
qualified to perform the task for which it
is to be engaged.
"INSTITUTIONAL INVESTOR" means (a) any original Purchaser of a
Note and any transferee that is an
Affiliate of any original Purchaser, (b) any
holder of a Note holding more than 25% of
the aggregate principal amount of the
Notes then outstanding, and (c) any bank,
trust company, savings and loan
association or other financial institution,
any pension plan, any investment
company or investment fund, any insurance
company, any broker or dealer, or any
other similar financial institution or
entity, regardless of legal form
organized under the laws of the United
States or a State thereof, with capital
and surplus in excess of $50,000,000.
"INSURANCE POLICIES" means the insurance policies and
coverages required to be maintained by each
Issuer which is an owner of
Mortgaged Property with respect to the
applicable Mortgaged Property pursuant to
Section 7.07 and all renewals and
extensions thereof.
"INSURANCE REQUIREMENTS" means, collectively, all provisions
of the Insurance Policies, all requirements
of the issuer of any of the
Insurance Policies and all orders, rules,
regulations and any other requirements
of the National Board of Fire Underwriters
(or any other body exercising similar
functions) binding upon each Issuer which
is an owner of Mortgaged Property and
applicable to the Mortgaged Property or any
use or condition thereof.
"INTELLECTUAL PROPERTY" means (a) all inventions and
discoveries (whether patentable or
unpatentable and whether or not reduced to
practice), all improvements thereto, and
all patents, patent applications and
patent disclosures, together with all
reissuances, continuations,
continuations-in-part, revisions,
extensions and reexaminations thereof, (b) all
trademarks, service marks, trade dress,
logos, trade names and corporate names,
together with all translations,
adaptations, derivations and combinations
thereof and including all goodwill
associated therewith, (c) all copyrightable
works, all copyrights and all applications,
registrations and renewals in
connection therewith, (d) all broadcast
rights, (e) all mask works and all
applications, registrations and renewals in
connection therewith, (f) all
know-how, trade secrets and confidential
business information, whether
patentable or unpatentable and whether or
not reduced to practice (including
ideas, research and development, know-how,
formulas, compositions and
manufacturing and production process and
techniques, technical data, designs,
drawings, specifications, customer and
supplier lists, pricing and cost
information and business and marketing
plans and proposals), (g) all computer
software (including data and related
documentation), (h) all other proprietary
rights, (i) all copies and tangible
embodiments thereof (in whatever form or
medium) and (j) all licenses and agreements
in connection therewith.
"INTERCOMPANY NOTE" means a promissory note substantially in
the form of EXHIBIT G.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement
dated as of the date hereof by and between
Citigroup and Agent.
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"INTEREST PAYMENT DATE" is defined in EXHIBIT A.
"INTEREST RATE AGREEMENTS" means one or more of the following
agreements which shall be entered into by
one or more financial institutions:
obligations of any Person pursuant to any
arrangement with any other Person
whereby, directly or indirectly, such
Person is entitled to receive from time to
time periodic payments calculated by
applying either a floating or a fixed rate
of interest on a stated notional amount in
exchange for periodic payments made
by such Person calculated by applying a
fixed or a floating rate of interest on
the same notional amount or any other
arrangement involving payments by or to
such Person based upon fluctuations in
interest rates (including, without
limitation, interest rate swaps, caps,
floors, collars and similar agreements)
and/or other types of interest rate hedging
agreements from time to time.
"INVESTMENT" means, with respect to any Person, any direct or
indirect advance, loan or other extension
of credit (including by means of a
guarantee) or capital contribution to (by
means of any transfer of cash or other
property to others or any payment for
property or services for the account or
use of others or otherwise), or any
purchase or acquisition by such Person of
any Capital Stock, bonds, notes, debentures
or other securities or evidences of
Indebtedness issued by any other Person and
all other items that would be
classified as investments on a balance
sheet prepared in accordance with GAAP.
Investments shall exclude extensions of
trade credit on commercially reasonable
terms in accordance with normal trade
practices. In addition to the foregoing,
any Hedging Obligation or similar agreement
shall constitute an Investment. If
the Company or any Subsidiary of the
Company sells or otherwise disposes of any
Capital Stock of any direct or indirect
Subsidiary of the Company such that,
after giving effect to any such sale or
disposition, the Company no longer owns,
directly or indirectly, 100% of the
outstanding Capital Stock of such
Subsidiary, the Company shall be deemed to
have made an Investment on the date
of any such sale or disposition equal to
the Fair Market Value of the Capital
Stock of such Subsidiary not sold or
disposed of.
"ISSUERS" shall have the meaning assigned to such term in the
preamble of this Agreement and their
successors and assigns.
"LANDLORD ACCESS AGREEMENT" shall mean a Landlord Access
Agreement, substantially in the form of
EXHIBIT H, or such other form as may
reasonably be acceptable to the Agent and
the Required Holders.
"LEASES" shall mean any and all leases, subleases, tenancies,
options, concession agreements, rental
agreements, occupancy agreements,
franchise agreements, access agreements and
any other agreements (including all
amendments, extensions, replacements,
renewals, modifications and/or guarantees
thereof), whether or not of record and
whether now in existence or hereafter
entered into, affecting the use or
occupancy of all or any portion of any Real
Property.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which
banking institutions in The City of New
York or at a place of payment are
authorized by law, regulation or executive
order to remain closed. If any
payment date in respect of the Notes is a
Legal Holiday at a place of payment,
payment may be made at that place on the
next succeeding day that is not a Legal
Holiday, and no interest shall accrue for
the intervening period.
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<PAGE>
"LIEN" means any mortgage or deed of trust, charge, pledge,
lien (statutory or other), privilege,
security interest, hypothecation,
cessation and transfer, lease of real
property, assignment for security, claim,
deposit arrangement, or preference or
priority or other encumbrance upon or with
respect to any property of any kind
(including any conditional sale, capital
lease or other title retention agreement,
any leases in the nature thereof, and
any agreement to give any security
interest), whether real, personal or mixed,
movable or immovable, now owned or
hereafter acquired. A Person shall be deemed
to own subject to a Lien any property which
it has acquired or holds subject to
the interest of a vendor or lessor under
any conditional sale agreement, capital
lease or other title retention
agreement.
"MANAGEMENT RIGHTS LETTER" means the Management Rights Letter
dated as of the date hereof among Falcon
Mezzanine Partners, LP and the Company
substantially in the form of EXHIBIT I
hereto.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the business, management, operations,
affairs, condition (financial or
otherwise), assets, property, prospects or
results of operations of the Company
and its Subsidiaries taken as a whole, (b)
the ability of the Company or any
Subsidiary to perform any of its material
obligations under any of the
Transaction Documents, or (c) the validity
or enforceability of any Transaction
Document.
"MATERIAL CONTRACTS" means any agreements, contracts or
arrangements between the Company or its
Subsidiaries, on the one hand, and any
third parties, on the other, that are
material to the business, management,
operations, affairs, condition (financial
or otherwise), properties, assets,
prospects or results of operations of the
Company and its Subsidiaries, taken as
a whole.
"MATURITY," when used with respect to any Note, means the date
on which the principal of such Note becomes
due and payable as therein or herein
provided, whether at the Stated Maturity or
by declaration of acceleration, call
for redemption or otherwise (including in
connection with any offer to purchase
that this Agreement requires the Company to
make).
"MORTGAGE" shall mean an agreement, including, but not limited
to, a mortgage, deed of trust or any other
document, creating and evidencing a
Lien on a Mortgaged Property, which shall
be substantially in the form of
EXHIBIT J or other form reasonably
satisfactory to the Agent and the Required
Holders, in each case, with such schedules
and including such provisions as
shall be necessary to conform such document
to applicable local or foreign law
or as shall be customary under applicable
local or foreign law.
"MORTGAGED PROPERTY" shall mean (a) each Real Property
identified as a Mortgaged Property on
SCHEDULE 8(A) to the Perfection
Certificate dated the Closing Time to the
extent that such landlord consents to
such Mortgage and (b) each Real Property,
if any, which shall be subject to a
Mortgage delivered after the Closing Time
pursuant to Section 7.13(c) and
Section 7.17.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" within the
meaning of Section 3(37) of ERISA.
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<PAGE>
"NAP MADRID" means NAP de las Americas Madrid S.A.
"NET CASH PROCEEDS" means
(a) with respect to any Asset Sale by any Person, the proceeds
thereof (without duplication in respect of all Asset Sales) in the
form
of cash or Cash Equivalents including payments in respect of
deferred
payment obligations when received in the form of cash or Cash
Equivalents (except to the extent that such obligations are
financed or
sold with recourse to the Company or any Subsidiary) net of (i)
brokerage commissions and other reasonable fees and expenses
(including
fees and expenses of legal counsel and investment bankers) related
to
such Asset Sale, (ii) provisions for all taxes payable as a result
of
such Asset Sale, (iii) payments made to retire Indebtedness
where
payment of such Indebtedness is secured by the assets or properties
the
subject of such Asset Sale, (iv) amounts required to be paid to
any
Person (other than the Company or any Subsidiary) owning a
beneficial
interest in or having a Lien on the assets subject to the Asset
Sale
and (v) appropriate amounts to be provided by the Company or
any
Subsidiary, as the case may be, as a reserve, in accordance with
GAAP,
against any liabilities associated with such Asset Sale and
retained by
the Company or any Subsidiary, as the case may be, after such
Asset
Sale, including, without limitation, pension and other
postemployment
benefit liabilities, liabilities related to environmental matters
and
liabilities under any indemnification obligations associated with
such
Asset Sale (PROVIDED that the amount of any such reserves shall
be
deemed to constitute Net Cash Proceeds at the time such reserves
shall
have been released or are not otherwise required to be retained as
a
reserve); and
(b) with respect to any Casualty Event, the cash insurance
proceeds, condemnation awards and other compensation received
in
respect thereof, net of all reasonable costs, expenses and
taxes
incurred in connection with the collection of such proceeds, awards
or
other compensation in respect of such Casualty Event.
"NOTEHOLDER" means a Person in whose name a Note is registered
on the Security Register from time to
time.
"NOTES" has the meaning specified in the third recital to this
Agreement.
"NPL" means the National Priorities List under CERCLA.
"OBLIGATIONS" means (i) any principal, premium and interest
(including interest accruing during the
pendency of any bankruptcy, insolvency,
receivership or other similar proceeding,
regardless of whether allowed or
allowable in such proceeding) on the Notes,
when and as due, whether at
maturity, by acceleration, upon one or more
dates set for prepayment or
otherwise, (ii) all other monetary
obligations, including fees, costs, expenses
and indemnities, whether primary,
secondary, direct, contingent, fixed or
otherwise (including monetary obligations
incurred during the pendency of any
bankruptcy, insolvency, receivership or
other similar proceeding, regardless of
whether allowed or allowable in such
proceeding), of the Company and the other
Issuers under this Agreement and the other
Basic Documents pertaining to the
Notes, Subsidiary Guarantees or Security
Documents and other documents related
-17-
<PAGE>
thereto executed in connection therewith
and (iii) the due and punctual
performance of all covenants, agreements,
obligations and liabilities of the
Company and the other Issuers under or
pursuant to this Agreement and the other
Basic Documents pertaining to the Notes,
Subsidiary Guarantees or Security
Documents and other documents related
thereto executed in connection therewith.
"OFFER AMOUNT" is defined in Section 7.09(b)(ii).
"OFFERING EXCESS PROCEEDS ACCOUNT" is defined in Section 4.17.
"OFFICER" means, with respect to any Person, the President,
Chief Executive Officer or the Chief
Financial Officer of such Person.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate signed by two Officers of such
Person; PROVIDED, HOWEVER, that every
Officers' Certificate with respect to
compliance with a covenant or condition
provided for in this Agreement shall
include (i) a statement that the Officers
making or giving such Officers' Certificate
have read such condition and any
definitions or other provisions contained
in this Agreement relating thereto and
(ii) a statement at to whether, in the
opinion of the signers, such condition
has been complied with.
"OPERATING LEASE" means all leases other than Capitalized
Lease Obligations.
"OUTSTANDING," when used with respect to the Notes, means, as
of the date of determination, all Notes
theretofore executed and delivered under
this Agreement, EXCEPT:
(i) Notes theretofore cancelled by the Company or delivered to
the Company for cancellation;
(ii) Notes for whose payment or redemption money in the
necessary amount has been theretofore set aside by the Company with
a
third party in trust for the holders of such Notes; PROVIDED that
if
such Notes are to be redeemed, notice of such redemption has been
duly
given as provided in this Agreement; and
(iii) Notes which have been paid pursuant to Section 9.08 or in
exchange
for or in lieu of which other Notes have been executed and
delivered pursuant to this Agreement, other than any such Notes
in
respect of which there shall have been presented to the Company
proof
satisfactory to it that such Notes are held by a bona fide
purchaser in
whose hands such Notes are valid obligations of the Company;
PROVIDED, HOWEVER, that in determining
whether the Noteholders of the requisite
principal amount of the outstanding Notes
have given any request, demand,
authorization, direction, notice, consent
or waiver hereunder, Notes owned by
the Company or any other obligor upon the
Notes or any Affiliate of the Company
or of such other obligor shall be
disregarded and deemed not to be outstanding.
Notes so owned which have been pledged in
good faith may be regarded as
outstanding if the pledgee establishes to
the satisfaction of the Required
Holders the pledgee's right so to act with
respect to such Notes and that the
pledgee is not the Company or any other
obligor upon the Notes or any Affiliate
of the Company or of such other
obligor.
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<PAGE>
"PATRIOT ACT" means the Uniting and Strengthening America by
Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of
2001, P.L. 107-56, as amended.
"PAYMENT DEFAULT" is defined in Section 10.01(f).
"PENSION PLAN" is defined in Section 4.12(b).
"PERFECTION CERTIFICATE" shall mean a certificate in the form
of EXHIBIT K-1 or any other form approved
by the Agent and the Required Holders,
as the same shall be supplemented from time
to time by a Perfection Certificate
Supplement or otherwise.
"PERFECTION CERTIFICATE SUPPLEMENT" shall mean a certificate
supplement in the form of EXHIBIT K-2 or
any other form approved by the Agent
and the Required Holders.
"PERMITS" means all licenses, permits, certificates of need,
approvals and authorizations from all
Governmental Authorities required to
lawfully conduct a business as presently
conducted.
"PERMITTED COLLATERAL LIENS" means (i) Contested Liens (as
defined in the Security Agreement), (ii)
the Liens described in clauses (a),
(b), (c), (d), (e), (f), (g), (h), (i),
(j), (k), (l), (m), (n), (o), (p) and
(q) of Section 8.07 and (iii) in the case
of Mortgaged Property, "Permitted
Collateral Liens" shall mean the Liens
described in clauses (a), (b), (d), (e),
(g) and (l) of Section 8.07; PROVIDED,
HOWEVER, on the Closing Time or upon the
date of delivery of each additional
Mortgage under Section 7.13 or 7.14,
Permitted Collateral Liens shall mean only
those Liens set forth in SCHEDULE B
to the applicable Mortgage.
"PERMITTED HOLDER" means (i) Manuel D. Medina, (ii) Francis
Lee and (iii) any "controlled" (as such
term is defined in the definition of
Affiliate) Affiliate of Manuel D. Medina
and/or Francis Lee.
"PERMITTED INVESTMENTS" means (a) any Investment by the
Company or any Subsidiary of the Company in
the Company, a Wholly Owned
Subsidiary that is a Guarantor or, to the
extent no Default or Event of Default
shall have occurred and be continuing at
such time and after giving effect to
such Investment, Terremark Latin America
(Brasil) Ltda. or any future Wholly
Owned Subsidiary that is a Foreign
Subsidiary; (b) any Investment in cash and
Cash Equivalents; (c) subject to the
proviso in clause (a) above, any Investment
by the Company or any Subsidiary of the
Company in a Person, if as a result of
such Investment (i) such Person becomes a
Wholly Owned Subsidiary and a
Guarantor or (ii) such Person is merged,
consolidated or amalgamated with or
into, or transfers or conveys all or
substantially all of its assets to, or is
liquidated into, the Company or a Wholly
Owned Subsidiary that is a Guarantor;
(d) any Investment made as a result of the
receipt of non-cash consideration
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<PAGE>
from an Asset Sale that was made pursuant
to and in compliance with the
provisions of Section 8.05 hereof; (e)
other Investments in any Person (other
than a Wholly Owned Subsidiary that is a
Guarantor or, to the extent no Default
or Event of Default shall have occurred and
be continuing at such time and after
giving effect to such Investment, Terremark
Latin America (Brasil) Ltda. or any
future Wholly Owned Subsidiary that is a
Foreign Subsidiary) having an aggregate
Fair Market Value (measured on the date
each such Investment was made and
without giving effect to subsequent changes
in value), when taken together with
all other Investments made pursuant to this
clause (e) that are at the time
outstanding, not to exceed $10.0 million
excluding the Fair Market Value of any
Common Stock used as consideration for such
Investments; PROVIDED that to the
extent such Investments are made in a
non-Wholly Owned Subsidiary or
Unrestricted Subsidiary of the Company, the
Capital Stock of such non-Wholly
Owned Subsidiary or Unrestricted Subsidiary
owned directly or indirectly by the
Company shall become Collateral
contemporaneously with the Investment in
accordance with the requirements of Section
7.13(b) to the extent required by
Section 7.13(b); (f) investments in
securities of trade creditors or customers
received pursuant to any plan of
reorganization or similar arrangement upon the
bankruptcy or insolvency of such trade
creditors or customers; (g) Investments
represented by Hedging Obligations;
PROVIDED that such Hedging Obligations are
otherwise incurred in compliance with the
terms of this Agreement; (h)
Investments existing at the Closing Time
after giving effect to the Transaction;
and (i) the transfer by TerreNAP Data
Centers, Inc. of the assets listed on
Schedule B to NAP Madrid in exchange for
Preferred Stock of NAP Madrid in
accordance with Section 7.19.
"PERMITTED LIENS" is defined in Section 8.07.
"PERMITTED PAYMENT" is defined in Section 8.02(b).
"PERSON" means any individual, corporation, limited liability
company, partnership, joint venture,
association, joint-stock company, trust,
unincorporated organization or government
or any agency or political subdivision
thereof.
"PLAN" is defined in Section 4.12(a).
"PREDECESSOR NOTE" of any particular Note means every previous
Note evidencing all or a portion of the
same debt as that evidenced by such
particular Note.
"PREFERRED STOCK" means, with respect to any Person, Capital
Stock of any class or classes (however
designated) of such Person which is
preferred as to the payment of dividends or
distributions, or as to the
distribution of assets upon any voluntary
or involuntary liquidation or
dissolution of such Person, over Capital
Stock of any other class of such
Person.
"PRINCIPAL AMOUNT" means, when used with respect to any
particular Note, the principal amount of
such Note at its Stated Maturity.
"PRO FORMA BASIS" shall mean on a basis in accordance with
GAAP and Regulation S-X.
"PRO RATA SHARE" means with respect to all payments,
computations and other matters, the
percentage obtained by dividing (a) the
aggregate principal amount of the Notes
held by that Noteholder by (b) the
aggregate outstanding principal amount of
all Notes held by the Noteholders.
"PROPERTY" means any interest in any kind of property or
asset, whether real, personal or mixed, or
tangible or intangible.
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<PAGE>
"PROPERTY MATERIAL ADVERSE EFFECT" shall have the meaning
assigned thereto in the Mortgage.
"PUHCA" is defined in Section 4.15(a).
"PURCHASE MONEY OBLIGATION" means Indebtedness of a Person
incurred in the normal course of business
of such Person for the purpose of
financing all or any part of the purchase
price, or the cost of installation,
construction or improvement of any
property.
"PURCHASE PRICE" is defined in Section 2.02.
"PURCHASED SECURITY" means, individually, any of the Notes,
Subsidiary Guarantees, Shares or Warrants;
"PURCHASED SECURITIES" means,
collectively, the Notes, Subsidiary
Guarantees, Shares and Warrants.
"PURCHASER INDEMNIFIED PERSON" is defined in Section 13.02(a).
"PURCHASERS" is defined in the preamble to this Agreement.
"QUALIFIED CAPITAL STOCK" of any Person means any and all
Capital Stock of such Person other than
Redeemable Capital Stock.
"QUALIFIED INSTITUTIONAL BUYER" means any Person that is a
"qualified institutional buyer" within the
meaning of Rule 144A.
"REAL PROPERTY" shall mean, collectively, all right, title and
interest (including any leasehold, mineral
or other estate) in and to any and
all parcels of or interests in real
property owned, leased or operated by any
person, whether by lease, license or other
means, together with, in each case,
all easements, hereditaments and
appurtenances relating thereto, all
improvements and appurtenant fixtures and
equipment, all general intangibles and
contract rights and other property and
rights incidental to the ownership, lease
or operation thereof.
"REDEEMABLE CAPITAL STOCK" means any class or series of
Capital Stock to the extent that, either by
its terms, by the terms of any
security into which it is convertible or
exchangeable, or by contract or
otherwise, is or upon the happening of an
event or passage of time would be,
required to be redeemed prior to any Stated
Maturity of the principal of the
Notes or is redeemable at the option of the
holder thereof at any time prior to
such Stated Maturity, or is convertible
into or exchangeable for debt securities
at any time prior to such Stated
Maturity.
"REDEMPTION DATE," when used with respect to any Note to be
redeemed, means the date fixed for such
redemption by or pursuant to this
Agreement.
"REDEMPTION PRICE," when used with respect to any Note to be
redeemed, means the price at which it is to
be redeemed pursuant to this
Agreement.
"REDUCED RATE" is defined in EXHIBIT A.
"REFINANCING" is defined in Section 8.04(a)(ix).
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<PAGE>
"REGISTRATION RIGHTS AGREEMENT" has the meaning specified in
the seventh recital to this Agreement.
"REGULAR RECORD DATE" is defined in Section 9.05.
-------------------
"REGULATION S" means Regulation S under the Securities Act (or
any successor provision), as it may be
amended from time to time.
"RELEASE" shall mean any spilling, leaking, seepage, pumping,
pouring, emitting, emptying, discharging,
injecting, escaping, leaching,
dumping, disposing, depositing, dispersing,
emanating or migrating of any
Hazardous Material in, into or through the
Environment.
"REQUIRED HOLDERS" means Noteholders holding more than 50% of
the aggregate principal amount of
outstanding Notes.
"REQUIREMENTS OF LAW" shall mean, collectively, any and all
requirements of any Governmental Authority
including any and all laws,
judgments, orders, decrees, ordinances,
rules, regulations, statutes or case
law.
"RESTRICTED PAYMENTS" is defined in Section 8.02(a).
"REVOCATION" has the meaning assigned to such term in Section
7.16.
"RIGHT OF FIRST OFFER NOTICE" is defined in Section
8.04(c)(i).
"RULE 144" means Rule 144 under the Securities Act (or any
successor provision), as it may be amended
from time to time.
"RULE 144A" means Rule 144A under the Securities Act (or any
successor provision), as it may be amended
from time to time.
"SALE" is defined in Section 9.07(a).
"SALE AND LEASE-BACK TRANSACTION" means any arrangement with
any Person providing for the leasing by the
Company or any Restricted Subsidiary
of the Company of any real or tangible
personal property, which property has
been or is to be sold or transferred by the
Company or such Restricted
Subsidiary to such Person in contemplation
of such leasing.
"SECURED OBLIGATIONS" shall mean the Obligations.
"SECURED PARTIES" shall mean, collectively, the Agent and the
Noteholders.
"SECURITIES ACT" mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated
by the Commission thereunder.
"SECURITIES COLLATERAL" shall have the meaning assigned to
such term in the Security Agreement.
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<PAGE>
"SECURITY" means any of the Notes, the Warrants or the Warrant
Shares.
"SECURITY AGREEMENT" shall mean a Security Agreement
substantially in the form of EXHIBIT L
among the Issuers and Agent for the
benefit of the Secured Parties.
"SECURITY AGREEMENT COLLATERAL" shall mean all property
pledged or granted as collateral pursuant
to the Security Agreement delivered
(a) on the Closing Time or (b) thereafter
pursuant to Section 7.13.
"SECURITY DOCUMENTS" shall mean the Security Agreement, the
Mortgages and each other security document
or pledge agreement delivered in
accordance with applicable local or foreign
law to grant a valid, perfected
security interest in any property as
collateral for the Secured Obligations, and
all UCC or other financing statements or
instruments of perfection required by
this Agreement, the Security Agreement, any
Mortgage or any other such security
document or pledge agreement to be filed
with respect to the security interests
in property and fixtures created pursuant
to the Security Agreement or any
Mortgage and any other document or
instrument utilized to pledge or grant or
purport to pledge or grant a security
interest or lien on any property as
collateral for the Secured Obligations.
"SECURITY REGISTER" has the meaning given to such term in
Section 9.06(a).
"SELLER" has the meaning specified in the first recital to
this Agreement.
"SHARES" has the meaning specified in the third recital to
this Agreement.
"SHAREHOLDER" means a Person in whose name a Share is
registered.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary that would be a
"significant subsidiary" as defined in
Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act,
as such Regulation is in effect on
the date hereof.
"SOLVENT" means, with respect to any Person as of the date of
any determination, that on such date (a)
the fair value of such Person's assets
is greater than the amount of its
liabilities (including contingent and
unliquidated liabilities), (b) the present
fair saleable value of such Person's
assets is not less than the amount that
will be required to pay the probable
liability on such Person's debts as they
become absolute and matured, (c) such
Person is able to pay its debts and other
liabilities, contingent obligations
and other commitments as they mature in the
normal course of business, (d) such
Person does not intend to, and does not
believe that it will, incur debts or
liabilities beyond such Person's ability to
pay as such debts and liabilities
mature, and (e) such Person is not engaged
in a business or a transaction, and
is not about to engage in a business or a
transaction, for which such Person's
property would constitute unreasonably
small capital after giving due
consideration to current and anticipated
future capital requirements and current
and anticipated future business conduct and
the prevailing practice in the
industry in which such Person is engaged.
In computing the amount of contingent
liabilities at any time, such liabilities
shall be computed as the amount which,
in light of the facts and circumstances
existing at such time, represents the
amount that can reasonably be expected to
become an actual or matured liability.
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"SPV" has the meaning specified in the first recital to this
Agreement.
"SPV FINANCING AGREEMENT" means the SPV Financing Agreement as
defined in the second recital to this
Agreement, including any related notes,
guarantees, collateral documents,
instruments and agreements executed in
connection therewith, and in each case as
amended, modified, restated, renewed,
refunded, replaced or refinanced from time
to time.
"STANDARD RATE" is defined in EXHIBIT A.
"STATED MATURITY" means, with respect to any Note or any
installment of interest thereon, the dates
specified in such Note as the fixed
date on which the principal of such Note or
such installment of interest is due
and payable, and when used with respect to
any other Indebtedness, means the
date specified in the instrument governing
such Indebtedness as the fixed date
on which the principal of such Indebtedness
or any installment of interest is
due and payable.
"SUBORDINATED INDEBTEDNESS" means, with respect to the
Company, Indebtedness of the Company which
is expressly subordinated in right of
payment to the Notes or, with respect to
any Guarantor, Indebtedness of such
Guarantor which is expressly subordinated
in right of payment to the Subsidiary
Guarantee of such Guarantor and which is
subject to a subordination agreement
which contains subordination provisions
substantially similar to those set forth
in EXHIBIT N.
"SUBSIDIARY" means, with respect to any Person, (a) any
corporation of which the outstanding shares
of Voting Stock having at least a
majority of the votes entitled to be cast
in the election of directors shall at
the time be owned, directly or indirectly,
by such Person, or (b) any other
Person of which at least a majority of the
shares of Voting Stock are at the
time, directly or indirectly, owned by such
first named Person. For purposes of
this Agreement, an "Unrestricted
Subsidiary" of the Company shall be deemed not
to be a "Subsidiary" of the Company.
"SUBSIDIARY GUARANTEES" is defined in the fourth recital to
this Agreement.
"SURVEY" shall mean a survey of any Mortgaged Property (and
all improvements thereon) which is (a) (i)
prepared by a surveyor or engineer
licensed to perform surveys in the
jurisdiction where such Mortgaged Property is
located, (ii) dated (or redated) not
earlier than six months prior to the date
of delivery thereof unless there shall have
occurred within six months prior to
such date of delivery any exterior
construction on the site of such Mortgaged
Property or any easement, right of way or
other interest in the Mortgaged
Property has been granted or become
effective through operation of law or
otherwise with respect to such Mortgaged
Property which, in either case, can be
depicted on a survey, in which events, as
applicable, such survey shall be dated
(or redated) after the completion of such
construction or if such construction
shall not have been completed as of such
date of delivery, not earlier than 20
days prior to such date of delivery, or
after the grant or effectiveness of any
such easement, right of way or other
interest in the Mortgaged Property, (iii)
certified by the surveyor (in a manner
reasonably acceptable to the Agent) to
the Agent and the Title Company, (iv)
complying in all respects with the minimum
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detail requirements of the American Land
Title Association as such requirements
are in effect on the date of preparation of
such survey and (v) sufficient for
the Title Company to remove all standard
survey exceptions from the title
insurance policy (or commitment) relating
to such Mortgaged Property and issue
the endorsements of the type required by
Section 3.19(c) or (b) otherwise
acceptable to the Agent.
"TAX RETURNS" means all original, amended and estimated
reports, returns, information statements
and related documentation required to
be filed with respect to the Taxes of the
Company or its Subsidiaries including,
without limitation, consolidated federal
income tax returns of the Company and
its Subsidiaries.
"TAXES" means (i) all federal, state, local or foreign income,
gross receipts, windfall profits,
severance, property, production, sales, use,
license, excise, franchise, employment,
withholding, estimated or other taxes
imposed on the income, properties or
operations of the Company and its
Subsidiaries, together with any interest,
additions or penalties with respect
thereto and any interest in respect of such
additions or penalties and (ii) all
transferee, successor, joint and several
(including pursuant to Treasury
Regulation Section 1.1502-6 or any similar
provision of state, local or foreign
law), contractual or other liability for
any item described in clause (i) above.
"TITLE COMPANY" shall mean any title insurance company as
shall be retained by the Company and
reasonably acceptable to the Agent and the
Required Holders.
"TITLE POLICY" shall have the meaning assigned to such term in
Section 3.19(c).
"TOTAL LEVERAGE RATIO" means, with respect to any Person, the
ratio of
(x) the aggregate outstanding amount of Indebtedness (other
than the Existing Convertible Notes) less cash on hand of such
Person
and its Subsidiaries as of the date of calculation (the
"TRANSACTION
DATE") on a Consolidated basis to
(y) such Person's Consolidated EBITDA for the two full fiscal
quarters (the "APPLICABLE PERIOD") ending on or prior to the date
of
determination for which financial statements are available
multiplied
by two
(2).
For purposes of this definition, clauses (x) and (y) above
will be calculated after giving effect on a
Pro Forma Basis to
1. the incurrence or repayment of any Indebtedness of such
Person or any of its Subsidiaries (and the application of the
proceeds
thereof) giving rise to the need to make such calculation and
any
incurrence or repayment of other Indebtedness (and the application
of
the proceeds thereof), other than the incurrence or repayment
of
Indebtedness in the ordinary course of business for working
capital
purposes pursuant to working capital facilities, occurring during
the
Applicable Period or at any time subsequent to the last day of
the
Applicable Period and on or prior to the Transaction Date, as if
such
incurrence or repayment, as the case may be (and the application of
the
proceeds thereof), occurred on the first day of the Applicable
Period;
and
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2. any Asset Sales or Asset Acquisitions (including, without
limitation, any Asset Acquisition giving rise to the need to make
such
calculation as a result of such Person or one of its
Subsidiaries
(including any Person who becomes a Subsidiary as a result of the
Asset
Acquisition) incurring, assuming or otherwise being liable for
Acquired
Indebtedness and also including any Consolidated EBITDA (PROVIDED
that
such Consolidated EBITDA will be included only to the extent
that
Consolidated Net Income would be includable pursuant to the
definition
of "Consolidated Net Income") (including any PRO FORMA expense and
cost
reductions calculated on a basis consistent with Regulation S-X of
the
Exchange Act) attributable to the assets which are the subject of
the
Asset Acquisition or Asset Sale during the Applicable Period)
occurring
during the Applicable Period or at any time subsequent to the last
day
of the Applicable Period and on or prior to the Transaction Date,
as if
such Asset Sale or Asset Acquisition (including the incurrence,
assumption or liability for any such Acquired Indebtedness)
occurred on
the first day of the Applicable Period.
If such Person or any of its Subsidiaries
directly or indirectly guarantees
Indebtedness of a third Person, the
preceding sentence will give effect to the
incurrence of such guaranteed Indebtedness
as if such Person or any Subsidiary
or such Person had directly incurred or
otherwise assumed such guaranteed
Indebtedness.
"TRANSACTION DOCUMENTS" means collectively (a) the Basic
Documents, (b) the Acquisition Agreement
and (c) the SPV Financing Agreement and
all certificates, instruments, financial
and other statements and other
documents made or delivered in connection
therewith.
"TRANSACTIONS" means the transactions provided for in, or
contemplated by, the Transaction
Documents.
"UNITED STATES" shall have the meaning assigned to such term
in Regulation S.
"UNRESTRICTED SUBSIDIARY" means each Subsidiary of the Company
designated as such pursuant to and in
compliance with Section 7.16. Any such
designation may be revoked by a resolution
of the Board of Directors of the
Company delivered to the Noteholders,
subject to the provisions of such Section
7.16.
"VOTING STOCK" means any class or classes of Capital Stock
pursuant to which the holders thereof have
the general voting power under
ordinary circumstances to elect at least a
majority of the Board of Directors,
managers or trustees of any Person
(irrespective of whether or not, at the time,
stock of any other class or classes shall
have, or might have, voting power by
reason of the happening of any
contingency).
"WARRANT SHARES" means a share of the Common Stock of the
Company issuable upon exercise of a
Warrant.
"WARRANTHOLDER" means a Person in whose name a Warrant or
Warrant Share is registered.
"WARRANTS" has the meaning specified in the third recital to
this Agreement.
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<PAGE>
"WHOLLY OWNED SUBSIDIARY" means any Subsidiary of which 100%
of the outstanding Capital Stock is owned
by the Company and/or another Wholly
Owned Subsidiary. For purposes of this
definition, any directors' qualifying
shares shall be disregarded in determining
the ownership of a Subsidiary.
SECTION 1.02. COMPUTATION OF TIME PERIODS. For purposes of
computation of periods of time hereunder,
the word "from" means "from and
including" and the words "to" and "until"
each mean "to but excluding."
SECTION 1.03. ACCOUNTING TERMS. Accounting terms used but not
otherwise defined herein shall have the
meanings provided by, and be construed
in accordance with, GAAP.
SECTION 2
AUTHORIZATION, ISSUANCE AND SALE OF SECURITIES
SECTION 2.01. AUTHORIZATION OF ISSUE. The Company has
authorized the issue and sale of (i) $30.0
million aggregate principal amount of
the Notes, each Note to be in the form of
EXHIBIT A hereto, (ii) 3,060,444
Shares and (iii) 15 million Warrants to
purchase initially 15 million shares of
Common Stock, each Warrant to be in the
form of EXHIBIT D hereto. Each Guarantor
has authorized the issue of its Subsidiary
Guarantee of the Notes, each such
Subsidiary Guarantee to be in the form of
EXHIBIT B hereto.
SECTION 2.02. SALE. On the basis of the representations and
warranties herein contained and subject to
the terms and conditions herein set
forth, the Company agrees to sell to each
Purchaser, and each Purchaser, acting
severally and not jointly, agrees to
purchase from the Company, the aggregate
principal amount of Notes, the aggregate
number of Shares and the aggregate
number of Warrants, in each case, set forth
in SCHEDULE A opposite the name of
such Purchaser (i) at 100% of the principal
amount thereof in the case of the
Notes, (ii) at $0.6535 per Share in the
case of the Shares and (iii) at no
additional consideration in the case of the
Warrants (the "PURCHASE PRICE").
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<PAGE>
Unless otherwise required by Applicable
Law, the parties shall not take any
position inconsistent with the foregoing
allocation for any income tax purposes.
SECTION 2.03. CLOSING. The purchase and sale of the Purchased
Securities pursuant to this Agreement shall
occur at the offices of Cahill
Gordon & Reindel LLP, 80 Pine Street,
New York, New York 10005-1702, at 9:00
a.m., New York City time, on December 31,
2004, or such other time as shall be
agreed upon by the Purchasers and the
Company (such time and date of payment and
delivery being herein called the "CLOSING
Time"). At the Closing Time, the
Company will deliver to each Purchaser
certificates for the Purchased Securities
to be purchased by such Purchaser at the
Closing Time, in such denominations (in
the case of the Notes any integral multiple
of $1,000 principal amount) as such
Purchaser may request at least two Business
Days prior to the Closing Time,
dated the Closing Time and registered in
such Purchaser's name, against payment
by such Purchaser to the Company or to its
order by wire transfer of immediately
available funds in the amount of the
Purchase Price to be paid by such Purchaser
therefor to such bank account or accounts
as the Company may request in writing
at least two Business Days prior to the
Closing Time.
SECTION 3
CONDITIONS TO CLOSING
Each Purchaser's several obligation to purchase and pay for
the Purchased Securities to be purchased by
it at the Closing Time is subject to
the satisfaction or waiver by each
Purchaser prior to or at the Closing Time of
each of the conditions specified below in
this Section 3:
SECTION 3.01. REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties of the
Issuers in this Agreement and in each of
the other Transaction Documents shall be
true and correct in all material
respects (except that any representations
and warranties that are qualified as
to "materiality" or "Material Adverse
Effect" shall be true and correct) when
made and at and as of the Closing Time as
if made at and as of the Closing Time
(unless expressly stated to relate to a
specific earlier date, in which case
such representations and warranties shall
be true and correct in all material
respects (except that any representations
and warranties that are qualified as
to "materiality" or "Material Adverse
Effect" shall be true and correct) as of
such earlier date).
SECTION 3.02. PERFORMANCE; NO DEFAULT UNDER OTHER AGREEMENTS.
The Issuers and each of their respective
Subsidiaries, to the extent parties
hereto or thereto, shall have performed and
complied in all material respects
with all agreements and conditions
contained in this Agreement and each of the
other Transaction Documents required to be
performed or complied with by any of
them prior to or at the Closing Time and,
after giving effect to the issue and
sale of the Purchased Securities and the
other Transactions (and the application
of the proceeds thereof as contemplated by
Section 4.17 hereof and the other
Transaction Documents), no Default or Event
of Default shall have occurred and
be continuing and no default or event of
default shall have occurred and be
continuing under any of the other
Transaction Documents.
SECTION 3.03. COMPLIANCE CERTIFICATES.
(a) OFFICERS' CERTIFICATE. Each of the Issuers shall have
delivered to the Purchasers an Officers'
Certificate, dated the Closing Time, in
the form of EXHIBIT 3.03(A) hereto,
certifying that the conditions specified in
Sections 3.01, 3.02, 3.05, 3.06 and 3.07
have been fulfilled.
(b) SECRETARY'S CERTIFICATE. Each of the Issuers shall have
delivered to the Purchasers a certificate
in the form of EXHIBIT 3.03(B) hereto
certifying as to such Issuer's certificate
of incorporation, bylaws and
resolutions attached thereto, the
incumbency and signatures of certain officers
of such Issuer, and other corporate
proceedings of such Issuer relating to the
authorization, execution and delivery of
the Purchased Securities, as applicable
to such Issuer, this Agreement and the
other Transaction Documents to which such
Issuer is a party.
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<PAGE>
SECTION 3.04. OPINIONS OF COUNSEL. Such Purchaser shall have
received the favorable opinions in form and
substance satisfactory to it, dated
the Closing Time, from Greenberg Traurig
LLP, counsel for the Issuers,
substantially in the form set forth in
EXHIBIT 3.04(A)(I) and as to such other
matters as such Purchaser may reasonably
request.
SECTION 3.05. CHANGES IN CORPORATE STRUCTURE. None of the
Issuers nor any of their respective
Subsidiaries shall have changed their
respective jurisdiction of incorporation or
been a party to any merger or
consolidation or succeeded to all or any
substantial part of the liabilities of
any other Person at any time following the
Audit Date and there shall have
occurred no event which constitutes a
Change of Control of the Company and the
Company shall not have entered into any
agreement or understanding which, if
consummated, would constitute a Change of
Control of the Company.
SECTION 3.06. NO ADVERSE EVENTS. (i) None of the Issuers nor
any of their respective Subsidiaries shall
have sustained since the Audit Date
any loss or interference with its business
from fire, explosion, flood or other
calamity, whether or not covered by
insurance, or from any labor dispute or
court or governmental action, order or
decree, and (ii) except as set forth in
the Company Reports or in SCHEDULE 3.06,
since the Audit Date there shall not
have been any change in the capital stock
or long-term debt of any Issuer or any
of their Subsidiaries or any change, or any
development involving a prospective
change, in or affecting the business,
management, operations, affairs, condition
(financial or otherwise), assets, property,
prospects or results of operations
of the Company and its Subsidiaries, in the
case of clauses (i) and (ii) above,
which, individually or in the aggregate,
could reasonably be expected to result
in a Material Adverse Effect.
SECTION 3.07. FINANCIAL INFORMATION; CAPITAL STRUCTURE. Such
Purchaser shall have received (i) a PRO
FORMA consolidated balance sheet for the
Company and its Subsidiaries as of the
Closing Time after giving effect to the
Transactions, including the issuance of the
Purchased Securities and the use of
the proceeds thereof, which have been
certified by the Chief Financial Officer
of the Company and which are in form and
substance satisfactory to such
Purchaser and (ii) each of the consolidated
financial projections (including an
operating budget and a cash flow budget) of
the Company pursuant to Section
4.06, each of which is in form and
substance satisfactory to such Purchaser. The
PRO FORMA consolidated capital structure of
the Company, after giving effect to
the Transactions (including all adjustments
permitted by Regulation S-X under
the Securities Act), shall be consistent in
all material respects with the
projections provided to such Purchaser
prior to the Closing Time and the capital
structure contemplated herein, except as to
the value of the Warrants issued to
the Purchasers and the lenders under the
SPV Financing Agreement.
SECTION 3.08. PROCEEDINGS AND DOCUMENTS. All corporate and
other proceedings in connection with the
Transactions and the other transactions
contemplated by this Agreement and the
other Transaction Documents, and all
documents and instruments incident to such
transactions and the terms thereof,
shall be reasonably satisfactory to such
Purchaser and the Purchaser's special
counsel, and such Purchaser and the
Purchaser's special counsel shall have
received all such counterpart originals or
certified or other copies of such
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documents (other than those that are not
required to be delivered by the Closing
Time pursuant to Section 7.17) as it or
they may reasonably request.
SECTION 3.09. PURCHASE PERMITTED BY APPLICABLE LAW, ETC. At
the Closing Time, such Purchaser's purchase
of the Purchased Securities shall
(a) be permitted by the laws and
regulations of each jurisdiction to which it is
subject, (b) not violate any Applicable Law
(including, without limitation,
Regulation U, T or X of the Board of
Governors of the Federal Reserve System)
and (c) not subject such Purchaser to any
tax, penalty or liability under or
pursuant to any Applicable Law, which
Applicable Law was not in effect on the
date hereof.
SECTION 3.10. TRANSACTION DOCUMENTS IN FORCE AND EFFECT;
INFORMATION.
(a) TRANSACTION DOCUMENTS. The Purchasers shall have received
true and correct copies of all Transaction
Documents (other than those that are
not required to be delivered by the Closing
Time pursuant to Section 7.17) and
(i) such documents (A) shall have been duly
executed and delivered by the
parties thereto, (B) shall be in form and
substance reasonably satisfactory to
the Purchasers and (C) shall be valid and
legally binding obligations of the
parties thereto enforceable against each of
them in accordance with its
respective terms, subject to the
Enforceability Exceptions, and (ii) there shall
have been no material amendments,
alterations, modifications or waivers of any
provision thereof since the date of this
Agreement.
(b) ACCURACY OF INFORMATION. All written information (other
than projections) furnished by the Issuers
and their respective representatives
to the Purchasers on or prior to the
Closing Time with respect to the business,
management, operations, affairs, condition
(financial or otherwise), assets,
property, prospects or results of
operations of the Issuers and their respective
Subsidiaries shall be accurate and complete
in all material respects.
SECTION 3.11. NO VIOLATION; NO LEGAL CONSTRAINTS; CONSENTS,
AUTHORIZATIONS AND FILINGS, ETC.
(a) The consummation by the Issuers and their respective
Subsidiaries of the Transactions shall not
contravene, violate or conflict with
any Applicable Law, except for violations
which, individually or in the
aggregate, do not and would not have a
Material Adverse Effect.
(b) All consents, authorizations and filings, if any, required
in connection with the execution, delivery
and performance by each of the
Issuers and their respective Subsidiaries
of the Transaction Documents (other
than those that are not required to be
delivered by the Closing Time pursuant to
Section 7.17) to which it is a party shall
have been obtained or made and shall
be in full force and effect, except for
such consents, authorizations and
filings the failure of which to obtain or
make, individually or in the
aggregate, does not and would not have a
Material Adverse Effect.
(c) There shall be no inquiry, injunction, restraining order,
action, suit or proceeding pending or
entered or any statute or rule proposed,
enacted or promulgated by any Governmental
Authority or any other Person which,
in the opinion of the Purchasers, (i)
individually or in the aggregate, has had
or would reasonably be expected to have a
Material Adverse Effect or which seeks
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to enjoin or seek damages against any
Issuer or any of its Subsidiaries or any
of the Purchasers as a result of the
Transactions, including the issuance of the
Notes, or (ii) relates to any of the
Transactions and has or will have a
material adverse effect on any Purchaser or
(iii) alleges liability on the part
of any Purchaser in connection with this
Agreement, any other Transaction
Documents or the Transactions or any of the
other transactions contemplated
hereby or thereby or (iv) would bar the
issuance of the Purchased Securities or
the use of the proceeds thereof in
accordance with the terms of this Agreement
and the other Transaction Documents.
SECTION 3.12. CONSUMMATION OF THE TRANSACTIONS.
(a) Prior to or at the Closing Time, a mortgage loan in an
aggregate principal amount of $49.0 million
shall be provided to the Company
pursuant to the SPV Financing
Agreement.
(b)
The Transactions shall be consummated concurrently with
the issuance and sale by the Company of the
Purchased Securities hereunder, in
each case in accordance with the terms of
the applicable Transaction Documents
(without any amendment thereto or waiver
thereunder unless consented to by each
Purchaser).
SECTION 3.13. FEES. The Company shall have paid all fees,
costs and expenses (including, without
limitation, legal fees and expenses and
the fees and expenses of appraisers,
consultants and other advisors) and other
compensation due and payable to each
Purchaser at the Closing Time.
SECTION 3.14. PRIVATE PLACEMENT NUMBERS. At or prior to the
Closing Time, the Company shall have
requested and received from S&P a private
placement number for each of the Notes and
Warrants.
SECTION 3.15. SIMULTANEOUS PURCHASE. Each of the Purchasers
shall have simultaneously purchased the
Purchased Securities to be purchased by
such Purchaser.
SECTION 3.16. DELIVERY OF DOCUMENTS. The Company shall have
delivered to each Purchaser such other
certificates, documents and agreements as
the Purchasers may reasonably request.
SECTION 3.17. PERSONAL PROPERTY REQUIREMENTS. The Agent shall
have received:
(a) all certificates, agreements or instruments representing
or evidencing the Securities Collateral (other than those that are
not
required to be delivered by the Closing Time pursuant to Section
7.17)
accompanied by instruments of transfer and stock powers undated
and
endorsed in blank;
(b) the Intercompany Note executed by and among the Company
and each of its Subsidiaries (except the SPV), accompanied by
instruments of transfer undated and endorsed in blank;
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(c) all other certificates, agreements, including control
agreements, or instruments necessary to perfect the Agent's
security
interest in all Chattel Paper, all Instruments, all Deposit
Accounts
and all Investment Property of each Issuer (as each such term
is
defined in the Security Agreement and to the extent required by
the
Security Agreement);
(d) UCC financing statements in appropriate form for filing
under the UCC, filings in appropriate form for filing with the
United
States Patent and Trademark Office and United States Copyright
Office
and such other documents under applicable Requirements of Law in
each
jurisdiction as may be necessary or appropriate or, in the opinion
of
the Agent, desirable to perfect the Liens created, or purported to
be
created, by the Security Documents (other than those that are
not
required to be delivered by the Closing Time pursuant to Section
7.17);
(e) certified copies of UCC, United States Patent and
Trademark Office and United States Copyright Office, tax and
judgment
lien searches, bankruptcy and pending lawsuit searches or
equivalent
reports or searches, each of a recent date listing all
effective
financing statements, lien notices or comparable documents that
name
any Issuer as debtor and that are filed in those state and
county
jurisdictions in which any property of any Issuer is located and
the
state and county jurisdictions in which any Issuer is organized
or
maintains its principal place of business and such other searches
that
the Agent or the Required Holders deem necessary or appropriate,
none
of which encumber the Collateral covered or intended to be covered
by
the Security Documents (other than Permitted Collateral Liens or
any
other Liens acceptable to the Agent); and
(f) evidence acceptable to the Agent of payment or
arrangements for payment by the Issuers of all applicable
recording
taxes, fees, charges, costs and expenses required for the recording
of
the Security Documents (other than those that are not required to
be
delivered by the Closing Time pursuant to Section 7.17).
SECTION 3.18. INSURANCE. The Agent shall have received a copy
of, or a certificate as to coverage under,
the insurance policies required by
Section 7.07 and the applicable provisions
of the Security Documents (other than
those that are not required to be delivered
by the Closing Time pursuant to
Section 7.17), each of which shall be
endorsed or otherwise amended to include a
"standard" or "New York" lender's loss
payable or mortgagee endorsement (as
applicable) and shall name the Agent, on
behalf of the Secured Parties, as
additional insured, in form and substance
satisfactory to the Agent and the
Required Holders.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE ISSUERS
Each Issuer, acting jointly and severally, represents and
warrants to each Purchaser as of the date
hereof and as of the Closing Time
that:
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SECTION 4.01. DUE INCORPORATION; POWER AND AUTHORITY. Each of
the Company and each of its Subsidiaries
(a) is a corporation or limited
liability company duly incorporated or
formed, validly existing and in good
standing under the laws of its jurisdiction
of incorporation, (b) is duly
qualified as a foreign corporation to
transact business and is in good standing
in each jurisdiction in which such
qualification is required, other than any
failures to so qualify or to be in good
standing which, individually or in the
aggregate, have not had and would not have
a Material Adverse Effect, (c) has
all requisite corporate power and authority
to own, lease and operate its
properties and to conduct its businesses as
they are currently conducted, and
(d) has all requisite corporate power and
authority to enter into and perform
its obligations under each of the
Transaction Documents to which it is a party.
SECTION 4.02. CAPITALIZATION. As of the date of this Agreement
the authorized Capital Stock of the Company
consists solely of 600,000,000
shares of its Common Stock, of which
351,394,737 shares were issued and
outstanding, 20 shares of its Series G
Preferred Stock, all of which were issued
and outstanding, 5,882 shares of its Series
H Preferred Stock, all of which were
issued and outstanding, and 600 shares of
its Series I Preferred Stock, all of
which were issued and outstanding. Except
as provided on SCHEDULE 4.02, no
shares of the Common Stock of the Company
were held by the Company in its
treasury or by the Company's Subsidiaries.
Except as set forth on SCHEDULE 4.02,
since the Audit Date, the Company (i) has
not issued any shares of any class of
its Capital Stock and (ii) has not split,
combined or reclassified any of its
shares of any class of its Capital Stock.
All the issued and outstanding shares
of Common Stock (including the Shares and
all shares of Common Stock to be
issued upon exercise of the Warrants) have
been duly authorized and are (or in
the case of the Shares and Common Stock
issued upon exercise of the Warrants,
will be) validly issued, fully paid and
nonassessable and are (or in the case of
the Shares and Common Stock issued upon
exercise of the Warrants, will be) free
of preemptive rights. The Company has duly
reserved for issuance a sufficient
number of shares of Common Stock for
issuance upon exercise of the Warrants at
the initial exercise rate thereof. Except
as set forth on SCHEDULE 4.02, there
are no securities of the Company or any of
its Subsidiaries that are convertible
into or exchangeable for shares of any
Capital Stock of the Company or any of
its Subsidiaries, and no options, warrants,
calls, subscriptions, convertible
securities, or other rights, agreements or
commitments which obligate the
Company or any of its Subsidiaries to
issue, transfer or sell any shares of
Capital Stock of, or other interests in,
the Company or any of its Subsidiaries.
Except as set forth on SCHEDULE 4.02, there
are no outstanding obligations of
the Company or any of its Subsidiaries to
repurchase, redeem or otherwise
acquire any shares of Capital Stock of the
Company or any of its Subsidiaries
and neither the Company nor any of its
Subsidiaries has any awards or options
outstanding under any stock option plans or
agreements or any other outstanding
stock-related awards. Except as set forth
on SCHEDULE 4.02, after the Closing
Time, neither the Company nor any of its
Subsidiaries will have any obligation
to issue, transfer or sell any shares of
Capital Stock of the Company or its
Subsidiaries. Except as set forth on
SCHEDULE 4.02, there are no voting trusts
or other agreements or understandings to
which the Company or any of its
Subsidiaries is a party with respect to the
holding, voting or disposing of
Capital Stock of the Company or any of its
Subsidiaries. Except as set forth on
SCHEDULE 4.02, as of the date hereof,
neither the Company nor any of its
Subsidiaries has any outstanding bonds,
debentures, notes or other obligations
or other securities (other than the Common
Stock) that entitle the holders
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thereof to vote with the stockholders of
the Company or any of its Subsidiaries
on any matter or which are convertible into
or exercisable for securities having
such a right to vote.
SECTION 4.03. EQUITY INTERESTS AND SUBSIDIARIES.
(a) EQUITY INTERESTS. SCHEDULES 1(A) and 10(A) to the
Perfection Certificate dated the Closing
Time set forth a list of (i) all the
Subsidiaries of the Company and their
jurisdictions of organization as of the
Closing Time and (ii) the number of each
class of its Capital Stock authorized,
and the number outstanding, at the Closing
Time and the number of shares covered
by all outstanding options, warrants,
rights of conversion or purchase and
similar rights at the Closing Time. Except
as set forth on SCHEDULE 4.03(A), all
outstanding shares of Capital Stock of each
Subsidiary of the Company are duly
and validly issued and are fully paid and
non-assessable, and are owned by the
Company, directly or indirectly through
Wholly Owned Subsidiaries. Except as set
forth on SCHEDULE 4.03(A), each Issuer is
the record and beneficial owner of,
and has good and marketable title to, the
Capital Stock pledged by it under the
Security Agreement, free of any and all
Liens, rights or claims of other
persons, except the security interest
created by the Security Agreement, and
there are no outstanding warrants, options
or other rights to purchase, or
shareholder, voting trust or similar
agreements outstanding with respect to, or
property that is convertible into, or that
requires the issuance or sale of, any
such Capital Stock.
(b) NO CONSENT OF THIRD PARTIES REQUIRED. Except as set forth
on SCHEDULE 4.03(B), no consent of any
person including any other general or
limited partner, any other member of a
limited liability company, any other
shareholder or any other trust beneficiary
is necessary (from the perspective of
a secured party) in connection with the
creation, perfection or first priority
status of the security interest of the
Agent in any Capital Stock pledged to the
Agent for the benefit of the Secured
Parties under the Security Agreement or the
exercise by the Agent of the voting or
other rights provided for in the Security
Agreement or the exercise of remedies in
respect thereof.
SECTION 4.04. DUE AUTHORIZATION, EXECUTION AND DELIVERY.
(a) AGREEMENT. This Agreement has been duly authorized,
executed and delivered by each Issuer and
constitutes a valid and legally
binding obligation of each Issuer,
enforceable against such Issuer in accordance
with its terms, subject to the
Enforceability Exceptions.
(b) NOTES AND SUBSIDIARY GUARANTEES. The Notes to be purchased
by the Purchasers from the Company are in
the form contemplated by this
Agreement, have been duly authorized for
issuance and sale pursuant to this
Agreement and, when issued and delivered by
the Company at the Closing Time as
provided herein, will have been duly
executed, issued and delivered by the
Company, and will constitute valid and
legally binding obligations of the
Company, enforceable against the Company in
accordance with their terms, subject
to the Enforceability Exceptions. The
Subsidiary Guarantees endorsed on the
Notes are in the form contemplated by this
Agreement, have each been duly
authorized for issuance pursuant to this
Agreement by each of the Guarantors
and, when the Notes are executed by the
Company, and delivered to the Purchasers
as provided for herein, will have been duly
executed, issued and delivered and
will constitute valid and legally binding
obligations of the Guarantors,
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enforceable against the Guarantors in
accordance with their terms, subject to
the Enforceability Exceptions.
(c) WARRANTS. The Warrants to be purchased by the Purchasers
from the Company are in the form
contemplated by this Agreement, have been duly
authorized for issuance and sale pursuant
to this Agreement and, when issued and
delivered by the Company at the Closing
Time as provided herein, will have been
duly executed, issued and delivered by the
Company, and will constitute valid
and legally binding obligations of the
Company, enforceable against the Company
it in accordance with their terms, subject
to the Enforceability Exceptions.
(d) REGISTRATION RIGHTS AGREEMENT. The Registration Rights
Agreement has been duly authorized,
executed and delivered by the Company and
constitutes a valid and legally binding
obligation of the Company, enforceable
against the Company in accordance with its
terms, subject to the Enforceability
Exceptions.
(e) OTHER TRANSACTION DOCUMENTS. Each Transaction Document
(other than those referred to in paragraphs
(a) through (d) of this Section 4.04
and other than those that are not required
to be delivered by the Closing Time
pursuant to Section 7.17) to which any
Issuer or any of its respective
Subsidiaries is a party (each such party, a
"COMPANY PARTY") (i) has been duly
authorized, executed and delivered by each
Company Party and (ii) constitutes a
valid and legally binding obligation of
each Company Party, enforceable against
such Company Party in accordance with its
terms, subject to the Enforceability
Exceptions.
SECTION 4.05. NON-CONTRAVENTION; AUTHORIZATIONS AND APPROVALS.
Except as set forth on SCHEDULE 4.05,
neither the Company nor any of its
Subsidiaries is (i) in violation of its
certificate of incorporation or bylaws
(or comparable constituent or governing
documents) or (ii) in default (or, with
the giving of notice, lapse of time or
both, would be in default) under any
note, bond, mortgage, indenture, deed of
trust, loan or credit agreement,
license, franchise, Permit, lease, contract
or other agreement, instrument,
commitment or obligation to which the
Company or any of its Subsidiaries is a
party or by which the Company or any of its
Subsidiaries or any of its
properties or assets is bound (including,
without limitation, the SPV Financing
Agreement), or under which the Company or
any of its Subsidiaries or any of its
properties or assets is entitled to a
benefit (each, a "Contract"), except for
any such defaults that, individually or in
the aggregate, have not had and would
not have a Material Adverse Effect. Except
as set forth on SCHEDULE 4.05, none
of (a) the execution and delivery by the
Company or any of its Subsidiaries of
any of the Transaction Documents to which
it is a party, (b) the performance by
any of them of their respective obligations
thereunder, (c) the consummation of
the transactions contemplated thereby or
(d) the issuance and delivery of the
Purchased Securities hereunder will: (i)
violate, conflict with or result in a
breach of any provisions of the certificate
of incorporation or bylaws (or
comparable constituent or governing
documents) of the Company or any of its
Subsidiaries; (ii) violate, conflict with,
result in a breach of any provision
of, constitute a default (or an event
which, with notice, lapse of time or both,
would constitute a default) under, result
in the termination or in a right of
termination of, accelerate the performance
required by or benefit obtainable
under, result in the triggering of any
payment or other obligations (including
any repurchase or repayment obligations)
pursuant to, result in the creation of
any Lien upon any of the properties of the
Company or any of its Subsidiaries
under, or result in their being declared
void, voidable, subject to withdrawal,
or without further binding effect, any of
the terms, conditions or provisions of
any Contract, except for any such
violations, conflicts, breaches, defaults,
accelerations, terminations or other
matters which, individually or in the
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aggregate, have not had and would not have
a Material Adverse Effect; (iii)
require any consent, approval or
authorization of, or declaration, filing or
registration with, any Governmental
Authority, except for those consents,
approvals, authorizations, declarations,
filings or registrations which have
been obtained or made or the failure of
which to obtain or make, individually or
in the aggregate, have not had and would
not have a Material Adverse Effect; or
(iv) violate any Applicable Laws applicable
to the Company, any of its
Subsidiaries or any of their respective
properties or assets, except for
violations which, individually or in the
aggregate, have not had and would not
have a Material Adverse Effect.
SECTION 4.06. COMPANY FINANCIAL STATEMENTS; COMPANY REPORTS.
(a) COMPANY FINANCIAL STATEMENTS. The Company has delivered to
the Purchasers (collectively, the "COMPANY
FINANCIAL STATEMENTS") (i) complete
and correct copies of the audited
consolidated balance sheets of the Company and
its Subsidiaries as of March 31, 2004, 2003
and 2002 and the related audited
consolidated statements of operations,
stockholders' equity and cash flows for
the years then ended, including the
footnotes thereto, certified by the
Company's independent certified public
accountants, (ii) complete and correct
copies of the unaudited consolidated
balance sheets of the Company and its
Subsidiaries as of June 30, 2004 and
September 30, 2004 and the related
unaudited consolidated statements of
operations, stockholders' equity and cash
flows for the quarter then ended, and (iii)
complete and correct copies of the
unaudited consolidated PRO FORMA balance
sheet of the Company and its
Subsidiaries as of September 30, 2004, and
the unaudited PRO FORMA consolidated
statements of operations for the year ended
March 31, 2004 and the six months
ended September 30, 2004. Each of the
consolidated balance sheets contained in
the Company Financial Statements fairly
presents the consolidated financial
position of the Company and its
Subsidiaries as of its date and each of the
consolidated statements of operations,
stockholders' equity and cash flows
included in the Company Financial
Statements fairly presents the consolidated
results of operations and income, retained
earnings and stockholders' equity or
cash flows, as the case may be, of the
Company and its Subsidiaries for the
periods to which they relate (subject, in
the case of any unaudited interim
financial statements, to normal year-end
adjustments that will not be material
in amount or effect), in each case in
accordance with GAAP applied on a
consistent basis during the periods
involved, except as noted therein. The PRO
FORMA financial statements of the Company
and its Subsidiaries contained in the
Company Financial Statements have been
prepared in accordance with the
Commission's rules and guidelines with
respect to PRO FORMA financial statements
and have been properly compiled on the
bases described therein, and the
assumptions used in the preparation thereof
are reasonable and the adjustments
used therein are appropriate to give effect
to the Transactions. All projections
provided by the Company to the Purchasers
in connection with the Transactions
have been prepared in good faith based on
assumptions believed by management of
the Company to be reasonable and subject to
the reservations stated therein.
Attached hereto as SCHEDULE 4.06 are true,
correct and complete copies of the
Company Financial Statements and all
projections delivered to the Purchasers at
or prior to the Closing Time.
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(b) COMPANY REPORTS. The Company has made available (including
being made available on EDGAR) to the
Purchasers each registration statement,
report or information statement prepared by
the Company since March 31, 2004
(the "AUDIT DATE"), including (i) the
Company's Annual Report on Form 10-K for
the year ended March 31, 2004, (ii) the
Company's Quarterly Reports on Form 10-Q
for the quarters ended June 30, 2004 and
September 30, 2004, and (iii) the
Registration Statement on Form S-1 declared
effective on December 21, 2004, each
in the form (including exhibits, annexes
and any amendments thereto) filed with
the Commission (collectively, including any
such reports filed subsequent to the
date hereof and as amended, the "COMPANY
REPORTS"). As of their respective dates
(or, if amended, as of the date of such
amendment) the Company Reports did not,
and any Company Reports filed with the
Commission subsequent to the date hereof
will not, contain any untrue statement of a
material fact or omit to state a
material fact required to be stated therein
or necessary to make the statements
made therein, in light of the circumstances
in which they were made, not
misleading. Each of the consolidated
balance sheets included in or incorporated
by reference into the Company Reports
(including the related notes and
schedules) fairly presents, or will fairly
present, the consolidated financial
position of the Company and its
Subsidiaries as of its date and each of the
consolidated statements of operations,
stockholders' equity or cash flows
included in or incorporated by reference
into the Company Reports (including any
related notes and schedules) fairly
presents, or will fairly present, the
results of operations and income, retained
earnings and stockholders' equity or
cash flows, as the case may be, of the
Company and its Subsidiaries for the
periods to which they relate (subject, in
the case of unaudited statements, to
normal year-end audit adjustments that will
not be material in amount or
effect), in each case in accordance with
GAAP consistently applied during the
periods involved, except as may be noted
therein.
SECTION 4.07. ABSENCE OF UNDISCLOSED LIABILITIES OR EVENTS.
(a) Except as set forth in SCHEDULE 4.07(A), neither the
Company nor any of its Subsidiaries has any
liabilities or obligations, whether
accrued, contingent or otherwise, except
for (i) liabilities and obligations in
the respective amounts reflected or
reserved against in the consolidated balance
sheet as of the Audit Date included in the
Company Financial Statements or
liabilities and obligations not required to
be disclosed in the consolidated
balance sheet in accordance with GAAP, (ii)
the Existing Convertible Notes or
(iii) liabilities and obligations incurred
in the ordinary course of business
since the Audit Date which, individually or
in the aggregate, have not had and
would not have a Material Adverse
Effect.
(b) Except as set forth in SCHEDULE 4.07(B), (i) since the
Audit Date there has been no change in the
business, management, operations,
affairs, condition (financial or
otherwise), assets, property, prospects or
results of operations of the Company or its
Subsidiaries except for changes
that, individually or in the aggregate,
have not had or would not have a
Material Adverse Effect and (ii) there are
no facts known to the Company that
have had or would have a Material Adverse
Effect that have not been set forth
herein or in the Disclosure Schedule.
SECTION 4.08. NO
ACTIONS OR PROCEEDINGS. Except as set forth
in SCHEDULE 4.08, there are no legal or
governmental actions, suits or
proceedings pending or, to the best of each
Issuer's knowledge, threatened
against or affecting the Company, any of
its Subsidiaries, any of their
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respective directors or officers (in their
capacities as such) or any of their
respective properties or assets which,
individually or in the aggregate, have
had or would have a Material Adverse Effect
or prohibit, delay or materially
restrict the consummation of any of the
Transactions or the other transactions
contemplated by this Agreement and the
other Transaction Documents. To the
knowledge of each Issuer, no Governmental
Authority has notified the Company or
any of its Subsidiaries of an intention to
conduct any audit, investigation or
other review with respect to the Company or
any of its Subsidiaries, except for
those investigations or reviews which,
individually or in the aggregate, have
not had or would not have a Material
Adverse Effect.
SECTION 4.09. PROPERTIES.
(a) GENERALLY. Each of the Company and its Subsidiaries has
good title to, or valid leasehold interests
in, all its property material to its
business, free and clear of all Liens
except for, in the case of Collateral,
Permitted Collateral Liens and, in the case
of all other material property,
Permitted Liens and minor irregularities or
deficiencies in title that,
individually or in the aggregate, do not
interfere with its ability to conduct
its business as currently conducted or to
utilize such property for its intended
purpose. The property of the Company and
its Subsidiaries, taken as a whole, (i)
is in good operating order, condition and
repair (ordinary wear and tear
excepted) and (ii) constitutes all the
property which is required for the
business and operations of the Company and
its Subsidiaries as presently
conducted.(a)
(b) REAL PROPERTY. SCHEDULES 8(A) and 8(B) to the Perfection
Certificate dated the Closing Time contain
a true and complete list of each
interest in Real Property (i) owned by the
Company or any of its Subsidiaries
(except the SPV) as of the date hereof and
describe the type of interest therein
held by the Company or such Subsidiary and
whether owned Real Property is leased
and if leased whether the underlying Lease
contains any option to purchase all
or any portion of such Real Property or any
interest therein or contains any
right of first refusal relating to any sale
of such Real Property or any portion
thereof or interest therein and (ii)
leased, subleased or otherwise occupied or
utilized by the Company or such Subsidiary,
as lessee, sublessee, franchisee or
licensee, as of the date hereof and
describe the type of interest therein held
by the Company or such Subsidiary and
whether any Lease requires the consent of
the landlord or tenant thereunder, or other
party thereto, to the Transactions.
(c) NO CASUALTY EVENT. Neither the Company nor any of its
Subsidiaries has received any notice of,
nor has any knowledge of, the
occurrence or pendency or contemplation of
any Casualty Event affecting all or
any portion of its property. Except as
noted on SCHEDULE 4.09(C), no Mortgage
encumbers improved Real Property that is
located in an area that has been
identified by the Secretary of Housing and
Urban Development as an area having
special flood hazards within the meaning of
the National Flood Insurance Act of
1968 unless flood insurance available under
such Act has been obtained in
accordance with Section 7.07.
(d) COLLATERAL. The Company and each of its Subsidiaries owns
or has rights to use all of the Collateral
and all rights with respect to any of
the foregoing used in, necessary for or
material to the Company's or such
Subsidiary's business as currently
conducted. The use by the Company and each of
its Subsidiaries of such Collateral and all
such rights with respect to the
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foregoing do not infringe on the rights of
any Person other than such
infringement which could not, individually
or in the aggregate, reasonably be
expected to result in a Material Adverse
Effect. No claim has been made and
remains outstanding that the Company's or
any Subsidiary's use of any Collateral
does or may violate the rights of any third
party that could, individually or in
the aggregate, reasonably be expected to
result in a Material Adverse Effect.
SECTION 4.10. INTELLECTUAL PROPERTY.
(a) OWNERSHIP/NO CLAIMS. Each of the Company and its
Subsidiaries owns, or is licensed to use,
all patents, patent applications,
trademarks, trade names, servicemarks,
copyrights, technology, trade secrets,
proprietary information, domain names,
know-how and processes necessary for the
conduct of its business as currently
conducted (the "INTELLECTUAL PROPERTY"),
except for those the failure to own or
license which, individually or in the
aggregate, could not reasonably be expected
to result in a Material Adverse
Effect. Except as set forth on SCHEDULE
4.10(A), no claim has been asserted and
is pending by any Person challenging or
questioning the use of any such
Intellectual Property or the validity or
effectiveness of any such Intellectual
Property, nor does the Company or any of
the other Issuers know of any valid
basis for any such claim. The use of such
Intellectual Property by the Company
or any of its Subsidiaries does not to the
knowledge of the Company and its
Subsidiaries infringe the rights of any
Person, except for such claims and
infringements that, individually or in the
aggregate, could not reasonably be
expected to result in a Material Adverse
Effect.
(b) REGISTRATIONS. Except pursuant to licenses and other user
agreements entered into by the Company or
any of its Subsidiaries in the
ordinary course of business that are listed
in SCHEDULE 12(A) or 12(B) to the
Perfection Certificate, on and as of the
date hereof (i) each of the Company and
its Subsidiaries owns and possesses the
right to use, and has done nothing to
authorize or enable any other person to
use, any copyright, patent or trademark
(as such terms are defined in the Security
Agreement) listed in SCHEDULE 12(A)
or 12(B) to the Perfection Certificate and
(ii) all registrations listed in
SCHEDULE 12(A) or 12(B) to the Perfection
Certificate are valid and in full
force and effect.
(c) NO VIOLATIONS OR PROCEEDINGS. To each of the Issuers'
knowledge, on and as of the date hereof,
there is no material violation by
others of any right of the Company or any
of its Subsidiaries with respect to
any copyright, patent or trademark listed
in SCHEDULE 12(A) or 12(B) to the
Perfection Certificate, pledged by it under
the name of such Issuer except as
may be set forth on SCHEDULE 4.10(C).
SECTION 4.11. TAXES. Except as set forth in SCHEDULE 4.11:
(a) all Tax Returns that are required to be filed at or before
the Closing Time by or with respect to the Company or any of
its
Subsidiaries, have been or will be timely filed at or before
the
Closing Time, and all such Tax Returns are or will be true and
complete
in all material respects;
(b) all Taxes shown to
be due on the Tax Returns referred to
in clause (a) and all other material Taxes due and payable through
the
Closing Time have been or will be timely paid in full;
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(c) adequate provision has been made (or prior to the Closing
Time will be made) for the payment of Taxes for which the Company
or
any of its Subsidiaries may be liable that are due and payable
after
the Closing Time and which relate to periods (or portions
thereof)
ending prior to the Closing Time;
(d) no examination or audit of any Tax Return is ongoing. No
legal proceeding relating to such Tax Returns is pending or, to
the
knowledge of the Company, is being threatened by any relevant
taxing
authority against the Company or any Subsidiary in respect of
any
material Tax. There are no material unsatisfied liabilities for
Taxes
with respect to any notice of deficiency or similar document
received
by the Company or any Subsidiary with respect to any material
Tax
(other than liabilities for Taxes asserted under any such notice
of
deficiency or similar documents which are being contested in good
faith
and with respect to which adequate reserves for payment have
been
established in accordance with GAAP);
(e) no waivers of statutes of limitation have been given by or
requested with respect to any Taxes of the Company or any of
its
Subsidiaries;
(f) none of the Company or any of its Subsidiaries will be
required, as a result of (i) a change in accounting method to
include
any adjustment under Section 481 of the Code (or any similar
provision
of state, local or foreign law) in taxable income for any Tax
period
ending at or after the Closing Time, (ii) any "closing agreement"
as
described in Section 7121 of the Code (or any similar provision
of
state, local or foreign Tax law) or (iii) any installment sale,
receipt
of prepaid income or open transaction, to include any item of
income in
or exclude any item of deduction from any Tax period ending at or
after
the Closing Time;
(g) there are no Liens on any of the assets of the Company or
any of its Subsidiaries that arose in connection with any failure
(or
alleged failure) to pay any Tax;
(h) neither the Company nor any of its Subsidiaries has ever
been a member of an affiliated, combined, consolidated or unitary
Tax
group for purposes of filing any Tax Return, other than a group
of
which the Company or one of its Subsidiaries is or was the
common
parent;
(i) no closing agreements, private letter rulings, technical
advance memoranda or similar agreement or rulings have been
entered
into or issued by any taxing authority with respect to the Company
or
any of its Subsidiaries;
(j) neither the Company nor any of its Subsidiaries or any
predecessors to any of such entities has made any consent under
Section
341 of the Code with respect to such Issuer or any such
Subsidiary;
(k) the Company and each of its Subsidiaries has complied in
all material respects with its withholding obligations in respect
of
Taxes; and
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(l) neither the Company nor any of its Subsidiaries has
participated in any "reportable transaction" within the meaning
of
Treasury Regulation Section 1.6011-4 (or any predecessor
regulation) or
any "confidential corporate tax shelter" within the meaning of
Treasury
Regulation Section 301.6111-2 (or any predecessor regulation).
SECTION 4.12. EMPLOYEE BENEFIT PLANS. Except as set forth on
SCHEDULE 4.12,
(a) there has been no failure by any employee benefit plan,
within the meaning of Se
