EXHIBIT 10.13
EXECUTION COUNTERPART
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WATSCO, INC.
$125,000,000
PRIVATE SHELF AGREEMENT
AS OF JANUARY 31, 2000
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TABLE OF CONTENTS
PARAGRAPH PAGE
1. AUTHORIZATION OF ISSUE OF NOTES......................................................................1
2. PURCHASE AND SALE OF NOTES...........................................................................2
2A. Facility........................................................................................2
2B. Issuance Period.................................................................................2
2C. Periodic Spread Information.....................................................................2
2D. Request for Purchase............................................................................3
2E. Rate Quotes.....................................................................................4
2F. Acceptance......................................................................................4
2G. Market Disruption...............................................................................4
2H. Facility Closings...............................................................................5
2I. Fees............................................................................................5
3. CONDITIONS OF CLOSING................................................................................7
3A. Certain Documents...............................................................................7
3B. Opinion of Purchaser's Special Counsel.........................................................10
3C. Representations and Warranties; No Default.....................................................10
3D. Purchase Permitted by Applicable Laws..........................................................10
3E. Payment of Fees................................................................................10
3F. No Material Adverse Change.....................................................................10
3G. Private Placement Number.......................................................................10
4. PREPAYMENTS.........................................................................................10
4A. Required Prepayments of Shelf Notes............................................................11
4B. Optional Prepayment With Yield-Maintenance Amount..............................................11
4C. Notice of Optional Prepayment..................................................................11
4D. Application of Prepayments.....................................................................11
4E. Retirement of Notes............................................................................11
5. AFFIRMATIVE COVENANTS...............................................................................12
5A. Reporting Requirements.........................................................................12
5B. Inspection of Property.........................................................................14
5C. Covenant to Secure Notes Equally...............................................................15
5D. Guaranteed Obligations.........................................................................15
5E. Maintenance of Insurance.......................................................................15
5F. Maintenance of Corporate Existence/Compliance with Law/Preservation of Property................15
5G. Compliance with Environmental Laws.............................................................16
5H. No ▇▇▇▇▇▇▇▇▇▇▇.................................................................................▇▇
▇▇. Financial Records..............................................................................16
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5J. Other Covenants................................................................................16
5K. Payment of Taxes and Claims....................................................................17
5L. Intercreditor Agreement........................................................................17
6. NEGATIVE COVENANTS..................................................................................17
6A. Financial Limitation...........................................................................17
6B. Liens, Debt and Other Restrictions.............................................................18
6C. Sale of Assets.................................................................................21
6D. Subsidiary Stock and Debt......................................................................22
6E. Sale of ▇▇▇▇▇▇▇▇▇▇▇............................................................................▇▇
▇▇. ERISA..........................................................................................22
6G. Environmental Matters..........................................................................23
6H. Specified Laws.................................................................................23
6I. Business Activities............................................................................23
7. EVENTS OF DEFAULT...................................................................................23
7A. Acceleration...................................................................................23
7B. Rescission of Acceleration.....................................................................26
7C. Notice of Acceleration or Rescission...........................................................26
7D. Other Remedies.................................................................................27
8. REPRESENTATIONS, COVENANTS AND WARRANTIES...........................................................27
8A. Organization...................................................................................27
8B. Financial Statements...........................................................................27
8C. Actions Pending................................................................................28
8D. Outstanding Debt...............................................................................28
8E. Title to Properties............................................................................28
8F. Taxes..........................................................................................28
8G. Conflicting Agreements and Other Matters.......................................................29
8H. Offering of Notes..............................................................................29
8I. Use of Proceeds................................................................................29
8J. ERISA..........................................................................................30
8K. Governmental Consent...........................................................................30
8L. Environmental Compliance.......................................................................30
8M. Disclosure.....................................................................................31
9. REPRESENTATIONS OF THE PURCHASERS...................................................................31
9A. Nature of Purchase.............................................................................31
9B. Source of Funds................................................................................32
10. DEFINITIONS; ACCOUNTING MATTERS.....................................................................33
10A. Yield-Maintenance Terms........................................................................33
10B. Other Terms....................................................................................34
10C. Accounting Principles, Terms and Determinations................................................45
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11. MISCELLANEOUS.......................................................................................45
11A. Payments.......................................................................................45
11B. Expenses.......................................................................................46
11C. Consent to Amendments..........................................................................47
11D. Form and Registration; Transfer and Exchange; Transfer Restrictions; Lost Notes................47
11E. Persons Deemed Owners; Participations..........................................................48
11F. Survival of Representations and Warranties; Entire Agreement...................................48
11G. Successors and Assigns.........................................................................48
11H. Independence of Covenants......................................................................49
11I. Notices........................................................................................49
11J. Payments Due on Non-Business Days..............................................................49
11K. Severability...................................................................................49
11L. Descriptive Headings...........................................................................50
11M. Satisfaction Requirement.......................................................................50
11N. Governing Law; Submission to Jurisdiction......................................................50
11O. Severalty of Obligations.......................................................................50
11P. Counterparts...................................................................................50
11Q. Binding Agreement..............................................................................51
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Purchaser Schedule
Information Schedule
EXHIBITS
Exhibit A - Form of Shelf Note
Exhibit B - Form of Request for Purchase
Exhibit C - Form of Confirmation of Acceptance
Exhibit D-1 - Form of Opinion of Company Counsel, Initial Closing Day
Exhibit D-2 - Form of Opinion of Florida Counsel to the Company,
Initial Closing Day
Exhibit D-3 - Form of Opinion of Company Counsel, Initial Funding Day
Exhibit D-4 - Form of Opinion of Florida Counsel to the Company,
Initial Funding Day
Exhibit D-5 - Form of Opinion of Company Counsel, Shelf Note Closing
Exhibit D-6 - Form of Opinion of Florida Counsel to the Company, Shelf
Note Closing
Exhibit E - Form of Guaranty Agreement
SCHEDULES
Schedule 3A Good Standing Certificates
Schedule 6B(1) Permitted Liens
Schedule 6B(2) Outstanding Debt
Schedule 6B(4) Permitted Investments
Schedule 8A Subsidiaries
Schedule 8C Pending Litigation
Schedule 8D Outstanding Debt
Schedule 8G Specified Agreements
Schedule 8L Environmental Compliance
Schedule ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇, INC.
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As of January 31, 2000
The Prudential Insurance Company
of America ("PRUDENTIAL")
Each Prudential Affiliate (as hereinafter defined)
which becomes bound by certain provisions of this
Agreement as hereinafter provided (together with
Prudential, the "PURCHASERS")
c/o Prudential Capital Group
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned, Watsco, Inc. (herein called the "COMPANY"), hereby
agrees with you as follows:
1. AUTHORIZATION OF ISSUE OF NOTES. The Company will authorize the
issue of its senior unsecured promissory notes (the "SHELF NOTES") in the
aggregate principal amount of $125,000,000, to be dated the date of issue
thereof, to mature, in the case of each Shelf Note so issued, no more than
twelve years after the date of original issuance thereof, to have an average
life, in the case of each Shelf Note so issued, of no more than ten years after
the date of original issuance thereof, to bear interest on the unpaid balance
thereof from the date thereof at the rate per annum, and to have such other
particular terms, as shall be set forth, in the case of each Shelf Note so
issued, in the Confirmation of Acceptance with respect to such Shelf Note
delivered pursuant to paragraph 2F, and to be substantially in the form of
Exhibit A attached hereto. The terms "SHELF NOTE" and "SHELF NOTES" as used
herein shall include each Shelf Note delivered pursuant to any provision of this
Agreement and each Shelf Note delivered in substitution or exchange for any such
Shelf Note pursuant to any such provision. The terms "NOTE" and "NOTES" as used
herein shall include each Shelf Note delivered pursuant to any provision of this
Agreement and each Note delivered in substitution or exchange for any such Note
pursuant to any such provision. Notes which have (i) the same final maturity,
(ii) the same principal prepayment dates, (iii) the same principal prepayment
amounts (as a percentage of the original principal amount of each Note), (iv)
the same interest rate, (v) the same interest payment periods and (vi) the same
date of issuance (which, in the case of a Note issued in exchange for another
Note, shall be deemed for these purposes the date on which such Note's ultimate
predecessor Note was issued), are herein called a "SERIES" of Notes.
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2. PURCHASE AND SALE OF NOTES.
2A. FACILITY. Prudential is willing to consider, in its sole discretion
and within limits which may be authorized for purchase by Prudential and
Prudential Affiliates from time to time, the purchase of Shelf Notes pursuant to
this Agreement. The willingness of Prudential to consider such purchase of Shelf
Notes is herein called the "FACILITY". At any time, the aggregate principal
amount of Shelf Notes stated in paragraph 1, minus the aggregate principal
amount of Shelf Notes purchased and sold pursuant to this Agreement prior to
such time, minus the aggregate principal amount of Accepted Notes (as
hereinafter defined) which have not yet been purchased and sold hereunder prior
to such time, plus the aggregate principal amount of Shelf Notes purchased and
sold pursuant to this Agreement and thereafter retired prior to such time is
herein called the "AVAILABLE FACILITY AMOUNT" at such time. NOTWITHSTANDING THE
WILLINGNESS OF PRUDENTIAL TO CONSIDER PURCHASES OF SHELF NOTES, THIS AGREEMENT
IS ENTERED INTO ON THE EXPRESS UNDERSTANDING THAT NEITHER PRUDENTIAL NOR ANY
PRUDENTIAL AFFILIATE SHALL BE OBLIGATED TO MAKE OR ACCEPT OFFERS TO PURCHASE
SHELF NOTES, OR TO QUOTE RATES, SPREADS OR OTHER TERMS WITH RESPECT TO SPECIFIC
PURCHASES OF SHELF NOTES, AND THE FACILITY SHALL IN NO WAY BE CONSTRUED AS A
COMMITMENT BY PRUDENTIAL OR ANY PRUDENTIAL AFFILIATE.
2B. ISSUANCE PERIOD. Shelf Notes may be issued and sold pursuant to
this Agreement until the earlier of:
(i) the third anniversary of the date of this Agreement (or if
such anniversary is not a Business Day, the Business Day next preceding
such anniversary),
(ii) the thirtieth day after Prudential shall have given to
the Company, or the Company shall have given to Prudential, a notice
stating that it elects to terminate the issuance and sale of Shelf
Notes pursuant to this Agreement (or if such thirtieth day is not a
Business Day, the Business Day next preceding such thirtieth day),
(iii) the last Closing Day after which there is no Available
Facility Amount,
(iv) the termination of the Facility under paragraph 7A, and
(v) the acceleration of any Note under paragraph 7A of this
Agreement.
The period during which Shelf Notes may be issued and sold pursuant to this
Agreement is herein called the "ISSUANCE PERIOD".
2C. PERIODIC SPREAD INFORMATION. Not later than 9:30 A.M. (New York
City local time) on a Business Day during the Issuance Period if there is an
Available Facility Amount on such Business Day, the Company may request by
telecopier or telephone, and Prudential will, to the extent reasonably
practicable, provide to the Company on such Business Day (or, if such request is
received after 9:30 A.M. (New York City local time) on such Business Day, on the
following Business Day), information (by telecopier or telephone) with respect
to various spreads at which Prudential or Prudential Affiliates might be
interested in purchasing Shelf
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Notes of different average lives; PROVIDED, HOWEVER, that the Company may not
make such requests more frequently than once in every five Business Days or such
other period as shall be mutually agreed to by the Company and Prudential. The
amount and content of information so provided shall be in the sole discretion of
Prudential but it is the intent of Prudential to provide information which will
be of use to the Company in determining whether to initiate procedures for use
of the Facility. Information so provided shall be representative of potential
interest only for the periods commencing on the day such information is provided
and ending on the earlier of the fifth Business Day after such day and the first
day after such day on which further spread information is provided. Prudential
may suspend or terminate providing information pursuant to this paragraph 2C for
any reason, including its determination that the credit quality of the Company
has declined since the date of this Agreement.
2D. REQUEST FOR PURCHASE. The Company may from time to time during the
Issuance Period make requests for purchases of Shelf Notes (each such request
being herein called a "REQUEST FOR PURCHASE"). Each Request for Purchase shall
be made to Prudential by telecopier or overnight delivery service, and shall:
(i) specify the aggregate principal amount of Shelf Notes
covered thereby, which shall not be less than the lesser of (A)
$10,000,000 and (B) the Available Facility Amount if such Available
Facility Amount is equal to or greater than $5,000,000 and not be
greater than the Available Facility Amount at the time such Request for
Purchase is made,
(ii) specify the principal amounts, final maturities (which
shall be no more than twelve years from the date of issuance), average
life (which shall be no more than 10 years from the date of issuance)
principal prepayment dates, if any, and amounts and interest payment
periods (which shall be quarterly or semiannually in arrears) of the
Shelf Notes covered thereby,
(iii) specify the use of proceeds of such Shelf Notes,
(iv) specify the proposed day for the closing of the purchase
and sale of such Shelf Notes, which shall be a Business Day during the
Issuance Period not less than 10 days and not more than 20 days after
the making of such Request for Purchase,
(v) specify the number of the account and the name and address
of the depository institution to which the purchase prices of such
Shelf Notes are to be transferred on the Closing Day for such purchase
and sale,
(vi) certify that the representations and warranties contained
in paragraph 8 are true on and as of the date of such Request for
Purchase and that there exists on the date of such Request for Purchase
no Event of Default or Default, and
(vii) be substantially in the form of Exhibit B attached
hereto.
Each Request for Purchase shall be in writing and shall be deemed made when
received by Prudential.
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2E. RATE QUOTES. Not later than five Business Days after the Company
shall have given Prudential a Request for Purchase pursuant to paragraph 2D,
Prudential may, but shall be under no obligation to, provide to the Company by
telephone or telecopier, in each case between 9:30 A.M. and 2:00 P.M. New York
City local time (or such later time as Prudential may elect), interest rate
quotes for the several principal amounts, maturities, principal prepayment
schedules, and interest payment periods of Shelf Notes specified in such Request
for Purchase. Each quote shall represent the interest rate per annum payable on
the outstanding principal balance of such Shelf Notes at which Prudential or a
Prudential Affiliate would be willing to purchase such Shelf Notes at 100% of
the principal amount thereof.
2F. ACCEPTANCE. Within 30 minutes after Prudential shall have provided
any interest rate quotes pursuant to paragraph 2E or such shorter period as
Prudential may specify to the Company (such period herein called the "ACCEPTANCE
WINDOW"), the Company may, subject to paragraph 2G, elect to accept such
interest rate quotes as to not less than the lesser of (A) $10,000,000 aggregate
principal amount of the Shelf Notes specified in the related Request for
Purchase or (B) the Available Facility Amount if such Available Facility Amount
is equal to or greater than $5,000,000. Such election shall be made by an
Authorized Officer of the Company notifying Prudential by telephone or
telecopier within the Acceptance Window (but not earlier than 9:30 A.M. or later
than 2:00 P.M., New York City local time) that the Company elects to accept such
interest rate quotes, specifying the Shelf Notes (each such Shelf Note being
herein called an "ACCEPTED NOTE") as to which such acceptance (herein called an
"ACCEPTANCE") relates. The day the Company notifies Prudential of an Acceptance
with respect to any Accepted Notes is herein called the "ACCEPTANCE DAY" for
such Accepted Notes. Any interest rate quotes as to which Prudential does not
receive an Acceptance within the Acceptance Window shall expire, and no purchase
or sale of Shelf Notes hereunder shall be made based on such expired interest
rate quotes. Subject to paragraph 2G and the other terms and conditions hereof,
the Company agrees to sell to Prudential or a Prudential Affiliate, and
Prudential agrees to purchase, or to cause the purchase by a Prudential
Affiliate of, the Accepted Notes at 100% of the principal amount of such Notes.
As soon as practicable following the Acceptance Day, the Company, Prudential and
each Prudential Affiliate which is to purchase any such Accepted Notes will
execute a confirmation of such Acceptance substantially in the form of Exhibit C
attached hereto (herein called a "CONFIRMATION OF ACCEPTANCE"). If the Company
should fail to execute and return to Prudential within three Business Days
following receipt thereof a Confirmation of Acceptance with respect to any
Accepted Notes, Prudential may at its election at any time prior to its receipt
thereof cancel the closing with respect to such Accepted Notes by so notifying
the Company in writing.
2G. MARKET DISRUPTION. Notwithstanding the provisions of paragraph 2F,
if Prudential shall have provided interest rate quotes pursuant to paragraph 2E
and thereafter prior to the time an Acceptance with respect to such quotes shall
have been notified to Prudential in accordance with paragraph 2F the domestic
market for U.S. Treasury securities or other financial instruments shall have
closed or there shall have occurred a general suspension, material limitation,
or significant disruption of trading in securities generally on the New York
Stock Exchange or in the domestic market for U.S. Treasury securities or other
financial instruments, then such interest rate quotes shall expire, and no
purchase or sale of Shelf Notes hereunder shall be made based on such expired
interest rate quotes. If the Company thereafter notifies Prudential of the
Acceptance of any such interest rate quotes, such Acceptance shall be
ineffective for all
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purposes of this Agreement, and Prudential shall promptly notify the Company
that the provisions of this paragraph 2G are applicable with respect to such
Acceptance.
2H. FACILITY CLOSINGS. Not later than 11:30 A.M. (New York City local
time) on the Closing Day for any Accepted Notes, the Company will deliver to
each Purchaser listed in the Confirmation of Acceptance relating thereto at the
offices of the Prudential Capital Group, 1114 Avenue of the Americas, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, the Accepted Notes to be purchased by such Purchaser
in the form of one or more Notes in authorized denominations as such Purchaser
may request for each Series of Accepted Notes to be purchased on the Closing
Day, dated the Closing Day and registered in such Purchaser's name (or in the
name of its nominee), against payment of the purchase price thereof by transfer
of immediately available funds for credit to the Company's account specified in
the Request for Purchase of such Notes. If the Company fails to tender to any
Purchaser the Accepted Notes to be purchased by such Purchaser on the scheduled
Closing Day for such Accepted Notes as provided above in this paragraph 2H, or
any of the conditions specified in paragraph 3 shall not have been fulfilled by
the time required on such scheduled Closing Day, the Company shall, prior to
1:00 P.M., New York City local time, on such scheduled Closing Day notify
Prudential (which notification shall be deemed received by each Purchaser) in
writing whether (i) such closing is to be rescheduled (such rescheduled date to
be a Business Day during the Issuance Period not less than one Business Day and
not more than 10 Business Days after such scheduled Closing Day (the
"RESCHEDULED CLOSING DAY") and certify to Prudential (which certification shall
be for the benefit of each Purchaser) that the Company reasonably believes that
it will be able to comply with the conditions set forth in paragraph 3 on such
Rescheduled Closing Day and that the Company will pay the Delayed Delivery Fee,
if applicable, in accordance with paragraph 2I(3) or (ii) such closing is to be
canceled. In the event that the Company shall fail to give such notice referred
to in the preceding sentence, Prudential (on behalf of each Purchaser) may at
its election, at any time after 1:00 P.M., New York City local time, on such
scheduled Closing Day, notify the Company in writing that such closing is to be
canceled. Notwithstanding anything to the contrary appearing in this Agreement,
the Company may elect to reschedule a closing with respect to any given Accepted
Notes on not more than one occasion, unless Prudential shall have otherwise
consented in writing.
2I. FEES.
2I(1) FACILITY FEE. In consideration for the time, effort and expense
involved in the preparation, negotiation and execution of this Agreement, at the
time of the execution and delivery of this Agreement by the Company and
Prudential, the Company will pay to Prudential in immediately available funds a
nonrefundable fee (herein called the "FACILITY FEE") in the amount of
$35,000.00.
2I(2) ISSUANCE FEE. The Company will pay to Prudential in immediately
available funds a fee (herein called the "ISSUANCE FEE") on each Closing Day
occurring after April 30, 2000 in an amount equal to 0.125% of the aggregate
principal amount of Notes sold on such Closing Day.
2I(3) DELAYED DELIVERY FEE. If the closing of the purchase and sale of
any Accepted Note is delayed for any reason beyond the original Closing Day for
such Accepted Note, the
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Company will pay to Prudential (a) on the Cancellation Date or actual closing
date of such purchase and sale and (b) if earlier, the next Business Day
following 90 days after the Acceptance Day for such Accepted Note and on each
Business Day following 90 days after the prior payment hereunder, a fee (herein
called the "DELAYED DELIVERY FEE") calculated as follows:
(BEY - MMY) X DTS/360 X PA
where "BEY" means Bond Equivalent Yield, i.e., the bond equivalent yield per
annum of such Accepted Note, "MMY" means Money Market Yield, i.e., the yield per
annum on a commercial paper investment of the highest quality selected by
Prudential on the date Prudential receives notice of the delay in the closing
for such Accepted Note having a maturity date or dates the same as, or closest
to, the Rescheduled Closing Day or Rescheduled Closing Days (a new alternative
investment being selected by Prudential each time such closing is delayed);
"DTS" means Days to Settlement, i.e., the number of actual days elapsed from and
including the original Closing Day with respect to such Accepted Note (in the
case of the first such payment with respect to such Accepted Note) or from and
including the date of the next preceding payment (in the case of any subsequent
delayed delivery fee payment with respect to such Accepted Note) to but
excluding the date of such payment; and "PA" means Principal Amount, i.e., the
principal amount of the Accepted Note for which such calculation is being made.
In no case shall the Delayed Delivery Fee be less than zero. If the foregoing
calculation yields a negative number or zero, no Delayed Delivery Fee shall be
due. Nothing contained herein shall obligate any Purchaser to purchase any
Accepted Note on any day other than the Closing Day for such Accepted Note, as
the same may be rescheduled from time to time in compliance with paragraph 2H.
2I(4) CANCELLATION FEE. If the Company at any time notifies Prudential
in writing that the Company is canceling the closing of the purchase and sale of
any Accepted Note, or if Prudential notifies the Company in writing under the
circumstances set forth in the last sentence of paragraph 2F or the penultimate
sentence of paragraph 2H that the closing of the purchase and sale of such
Accepted Note is to be canceled, or if the closing of the purchase and sale of
such Accepted Note is not consummated on or prior to the last day of the
Issuance Period (the date of any such notification, or the last day of the
Issuance Period, as the case may be, being herein called the "CANCELLATION
DATE"), the Company will pay the Purchasers in immediately available funds an
amount (the "CANCELLATION FEE") calculated as follows:
PI X PA
where "PI" means Price Increase, i.e., the quotient (expressed in decimals)
obtained by dividing (a) the excess of the ask price (as determined by
Prudential) of the Hedge Treasury Note(s) on the Cancellation Date over the bid
price (as determined by Prudential) of the Hedge Treasury Notes(s) having a
maturity date the same as, or closest to, such Accepted Note, on the Acceptance
Day (if the difference is a negative number or zero, no Cancellation Fee shall
be due) by (b) such bid price; and "PA" has the meaning ascribed to it in
paragraph 2I(3). The foregoing bid and ask prices shall be as reported by
Telerate Systems, Inc. (or, if such data for any reason ceases to be available
through Telerate Systems, Inc., any publicly available source of similar market
data). Each price shall be based on a U.S. Treasury security having a par value
of
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$100.00 and shall be rounded to the second decimal place. In no case shall the
Cancellation Fee be less than zero.
3. CONDITIONS OF CLOSING. The obligation of any Purchaser to purchase
and pay for any Notes is subject to the satisfaction of (i) the conditions set
forth in paragraph 3A(1) on or before January __, 2000 (hereinafter "INITIAL
CLOSING DAY"), which closing shall occur at the offices of King & ▇▇▇▇▇▇▇▇, ▇▇▇▇
Avenue of the Americas, New York, New York, (ii) the conditions set forth in
paragraph 3A(2) on or before the Closing Day for the initial purchase of any
Notes hereunder (the "INITIAL FUNDING DAY") and (iii) the conditions set forth
in paragraph 3A(3) on or before the Closing Day for any Notes of the following
conditions:
3A. CERTAIN DOCUMENTS. Such Purchaser shall have received the
following:
3A(1) INITIAL CLOSING DAY. Such Purchaser shall have received, each
dated the date of the Initial Closing Day:
(i) This Agreement duly executed by the parties hereto;
(ii) Certified copies of the resolutions of the Board of
Directors of the Company authorizing the execution and delivery of this
Agreement and the issuance of the Notes, and of all documents
evidencing other necessary corporate action and governmental approvals,
if any, with respect to this Agreement and the Notes;
(iii) A certificate of the Secretary or an Assistant Secretary
and one other officer of the Company certifying the names and true
signatures of the officers of the Company authorized to sign this
Agreement and the Notes and the other documents to be delivered
hereunder;
(iv) Certified copies of the Articles of Incorporation and
By-laws of the Company;
(v) A good standing certificate for the Company from the
Secretary of State of Florida dated of a recent date and good standing
and such other evidence of the status of the Company as such Purchaser
may reasonably request;
(vi) A favorable opinion of ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, PLLC, special
counsel to the Company (or such other counsel designated by the Company
and acceptable to the Purchaser(s)) satisfactory to such Purchaser and
substantially in the form of Exhibit D-1 attached hereto and as to such
other matters as such Purchaser may reasonably request. The Company
hereby directs each such counsel to deliver such opinion, agrees that
the issuance and sale of any Notes will constitute a reconfirmation of
such direction, and understands and agrees that each Purchaser
receiving such an opinion will and is hereby authorized to rely on such
opinion;
(vii) A favorable opinion of ▇▇▇▇▇▇▇▇▇ Traurig ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ & Quentel P.A., special Florida counsel to the Company (or such
other counsel designated by the Company and acceptable to the
Purchaser(s)) satisfactory to such Purchaser and substantially in the
form of Exhibit D-2 attached hereto and as to such other matters as
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such Purchaser may reasonably request. The Company hereby directs each
such counsel to deliver such opinion, agrees that the issuance and sale
of any Notes will constitute a reconfirmation of such direction, and
understands and agrees that each Purchaser receiving such an opinion
will and is hereby authorized to rely on such opinion; and
(viii) Additional documents or certificates with respect to
legal matters or corporate or other proceedings related to the
transactions contemplated hereby as may be reasonably requested by such
Purchaser.
3A(2) INITIAL FUNDING DAY. Such Purchaser shall have received (if not
previously delivered), in addition to the matters covered in paragraph 3A(3),
each dated the date of the Initial Funding Day:
(i) Each Guaranty Agreement duly executed by the applicable
Guarantor;
(ii) Certified copies of the resolutions of the Board of
Directors of each Guarantor authorizing the execution and delivery its
Guaranty Agreement and of all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to
its Guaranty Agreement;
(iii) A certificate of the Secretary or an Assistant Secretary
and one other officer of each Guarantor certifying the names and true
signatures of the officers of such Guarantor authorized to sign its
Guaranty Agreement and the other documents to be delivered thereunder;
(iv) Certified copies of the Articles of Incorporation and
By-laws of each Guarantor;
(v) A good standing certificate for each Guarantor from the
Secretary of State of the State of its formation dated of a recent date
and good standing or other certificates of qualification to do business
as a foreign corporation each Guarantor in the States specified on
Schedule 3A and such other evidence of the status of such Guarantor as
such Purchaser may reasonably request;
(vi) A favorable opinion of ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, PLLC, special
counsel to the Company (or such other counsel designated by the Company
and acceptable to the Purchaser(s)) satisfactory to such Purchaser and
substantially in the form of Exhibit D-3 attached hereto and as to such
other matters as such Purchaser may reasonably request. The Company
hereby directs each such counsel to deliver such opinion, agrees that
the issuance and sale of any Notes will constitute a reconfirmation of
such direction, and understands and agrees that each Purchaser
receiving such an opinion will and is hereby authorized to rely on such
opinion;
(vii) A favorable opinion of ▇▇▇▇▇▇▇▇▇ Traurig ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ & Quentel P.A., special Florida counsel to the Company (or such
other counsel designated by the Company and acceptable to the
Purchaser(s)) satisfactory to such Purchaser and substantially in the
form of Exhibit D-4 attached hereto and as to such other matters as
such Purchaser may reasonably request. The Company hereby directs each
such counsel
9
to deliver such opinion, agrees that the issuance and sale of any Notes
will constitute a reconfirmation of such direction, and understands and
agrees that each Purchaser receiving such an opinion will and is hereby
authorized to rely on such opinion;
(viii) Additional documents or certificates with respect to
legal matters or corporate or other proceedings related to the
transactions contemplated hereby as may be reasonably requested by such
Purchaser.
3A(3) SUBSEQUENT CLOSING DAY. Such Purchaser shall have received, each
dated the date of the applicable Closing Day:
(i) Certified copies of the resolutions of the Board of
Directors of the Company authorizing the execution and delivery and the
issuance of the Notes on such Closing Day, and of all documents
evidencing other necessary corporate action and governmental approvals,
if any, with respect to such Notes;
(ii) A certificate of the Secretary or an Assistant Secretary
and one other officer of the Company certifying the names and true
signatures of the officers of the Company authorized to sign such Notes
and the other documents to be delivered hereunder;
(iii) Certified copies of the Articles of Incorporation and
By-laws of the Company or confirmation that there have been no
modifications to such documents delivered on the Initial Closing Day;
(iv) A good standing certificate for the Company from the
Secretary of State of Florida dated of a recent date and good standing
and such other evidence of the status of the Company as such Purchaser
may reasonably request; and
(v) A favorable opinion of ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, PLLC, special
counsel to the Company (or such other counsel designated by the Company
and acceptable to the Purchaser(s)) satisfactory to such Purchaser and
substantially in the form of Exhibit D-5 attached hereto and as to such
other matters as such Purchaser may reasonably request. The Company
hereby directs each such counsel to deliver such opinion, agrees that
the issuance and sale of any Notes will constitute a reconfirmation of
such direction, and understands and agrees that each Purchaser
receiving such an opinion will and is hereby authorized to rely on such
opinion.
(vi) A favorable opinion of ▇▇▇▇▇▇▇▇▇ Traurig ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ & Quentel P.A., special Florida counsel to the Company (or such
other counsel designated by the Company and acceptable to the
Purchaser(s)) satisfactory to such Purchaser and substantially in the
form of Exhibit D-6 attached hereto and as to such other matters as
such Purchaser may reasonably request. The Company hereby directs each
such counsel to deliver such opinion, agrees that the issuance and sale
of any Notes will constitute a reconfirmation of such direction, and
understands and agrees that each Purchaser receiving such an opinion
will and is hereby authorized to rely on such opinion.
10
(vii) A Private Placement number issued by Standard & Poor's
CUSIP Service Bureau (in cooperation with the Securities Valuation
Office of the National Association of Insurance Commissioners) shall
have been obtained for the Notes to be purchased.
(viii) Additional documents or certificates with respect to
legal matters or corporate or other proceedings related to the
transactions contemplated hereby as may be reasonably requested by such
Purchaser.
3B. OPINION OF PURCHASER'S SPECIAL COUNSEL. Such Purchaser shall have
received from King & Spalding or such other counsel who is acting as special
counsel for it in connection with this transaction, a favorable opinion
satisfactory to such Purchaser as to such matters incident to the matters herein
contemplated as it may reasonably request.
3C. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The representations and
warranties contained in paragraph 8 shall be true on and as of such Closing Day,
except to the extent of changes caused by the transactions herein contemplated
and for any Closing Day after the Initial Closing Day changes since the date of
this Agreement which are disclosed in writing to Prudential and to which
Prudential shall have consented in writing; there shall exist on such Closing
Day no Event of Default or Default; and the Company shall have delivered to such
Purchaser an Officer's Certificate, dated such Closing Day, to both such
effects.
3D. PURCHASE PERMITTED BY APPLICABLE LAWS. The purchase of and payment
for the Notes to be purchased by such Purchaser on the terms and conditions
herein provided (including the use of the proceeds of such Notes by the Company)
shall not violate any applicable law or governmental regulation (including,
without limitation, Section 5 of the Securities Act or Regulation T, U or X of
the Board of Governors of the Federal Reserve System) and shall not subject such
Purchaser to any tax (other than any income taxes arising from such Purchaser's
ownership of the Notes), penalty, liability or other onerous condition under or
pursuant to any applicable law or governmental regulation, and such Purchaser
shall have received such certificates or other evidence as it may request to
establish compliance with this condition.
3E. PAYMENT OF FEES. The Company shall have paid to Prudential any fees
due it pursuant to or in connection with this Agreement, including any Facility
Fee due pursuant to paragraph 2I(1), any Issuance Fee due pursuant to paragraph
2I(2) and any Delayed Delivery Fee due pursuant to paragraph 2I(3) and any fees
and expenses of its legal counsel.
3F. NO MATERIAL ADVERSE CHANGE. Prudential shall have received a
certificate from the chief financial officer of the Company, dated the
applicable Closing Day, saying that no material adverse change in the financial
condition, business, operations or prospects of the Company or its Subsidiaries,
taken as a whole, has occurred since December 31, 1998.
3G. GUARANTY AGREEMENTS. Each Guaranty Agreement, on and after the date
of its execution and delivery, shall remain in full force and effect, and the
Company shall have delivered an Officer's Certificate, dated such Closing Day,
to such effect.
4. PREPAYMENTS. Any Shelf Notes shall be subject to required prepayment
as and to the extent provided in paragraph 4A. Any Shelf Notes shall also be
subject to prepayment under the circumstances set forth in paragraph 4B. Any
prepayment made by the Company
11
pursuant to any other provision of this paragraph 4 shall not reduce or
otherwise affect its obligation to make any required prepayment as specified in
paragraph 4A.
4A. REQUIRED PREPAYMENTS OF SHELF NOTES. Each Series of Shelf Notes
shall be subject to required prepayments, if any, set forth in the Notes of such
Series.
4B. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT. The Notes of
each Series shall be subject to prepayment, in whole at any time or from time to
time in part (in integral multiples of $1,000,000 and in a minimum amount of
$5,000,000), at the option of the Company, at 100% of the principal amount so
prepaid plus interest thereon to the prepayment date and the Yield-Maintenance
Amount, if any, with respect to each such Note. Any partial prepayment of a
Series of the Notes pursuant to this paragraph 4B shall be applied in
satisfaction of required payments of principal in inverse order of their
scheduled due dates.
4C. NOTICE OF OPTIONAL PREPAYMENT. The Company shall give the holder of
each Note of a Series to be prepaid pursuant to paragraph 4B irrevocable written
notice of such prepayment not less than 10 Business Days prior to the prepayment
date, specifying such prepayment date, the aggregate principal amount of the
Notes of such Series to be prepaid on such date, the principal amount of the
Notes of such Series held by such holder to be prepaid on that date and that
such prepayment is to be made pursuant to paragraph 4B. Notice of prepayment
having been given as aforesaid, the principal amount of the Notes specified in
such notice, together with interest thereon to the prepayment date and together
with the Yield-Maintenance Amount, if any, herein provided, shall become due and
payable on such prepayment date. The Company shall, on or before the day on
which it gives written notice of any prepayment pursuant to paragraph 4B, give
telephonic notice of the principal amount of the Notes to be prepaid and the
prepayment date to each Significant Holder which shall have designated a
recipient for such notices in the Purchaser Schedule attached hereto or the
applicable Confirmation of Acceptance or by notice in writing to the Company.
4D. APPLICATION OF PREPAYMENTS. In the case of each prepayment of less
than the entire unpaid principal amount of all outstanding Notes of any Series
pursuant to paragraphs 4A or 4B, the amount to be prepaid shall be applied pro
rata to all outstanding Notes of such Series (including, for the purpose of this
paragraph 4D only, all Notes prepaid or otherwise retired or purchased or
otherwise acquired by the Company or any of its Subsidiaries or Affiliates other
than by prepayment pursuant to paragraph 4A or 4B) according to the respective
unpaid principal amounts thereof.
4E. RETIREMENT OF NOTES. The Company shall not, and shall not permit
any of its Subsidiaries or Affiliates to, prepay or otherwise retire in whole or
in part prior to their stated final maturity (other than by prepayment pursuant
to paragraphs 4A or 4B or upon acceleration of such final maturity pursuant to
paragraph 7A), or purchase or otherwise acquire, directly or indirectly, Notes
of any Series held by any holder unless the Company or such Subsidiary or
Affiliate shall have offered to prepay or otherwise retire or purchase or
otherwise acquire, as the case may be, the same proportion of the aggregate
principal amount of Notes of such Series held by each other holder of Notes of
such Series at the time outstanding upon the same terms and conditions. Any
Notes so prepaid or otherwise retired or purchased or otherwise acquired by the
12
Company or any of its Subsidiaries or Affiliates shall not be deemed to be
outstanding for any purpose under this Agreement, except as provided in
paragraph 4D.
5. AFFIRMATIVE COVENANTS.
5A. REPORTING REQUIREMENTS.
5A(1) GENERAL INFORMATION. The Company covenants that it will deliver
to each Significant Holder:
(i) as soon as practicable and in any event within 45 days
after the end of each quarterly period (other than the fourth quarterly
period) in each fiscal year,
(1) Consolidated statements of income, stockholders'
equity and cash flows for the period from the beginning of the
current fiscal year to the end of such quarterly period, and
(2) a Consolidated balance sheet as at the end of
such quarterly period,
setting forth in each case in comparative form figures for the
corresponding period in the preceding fiscal year, all in reasonable
detail and reasonably satisfactory in form to the Required Holder(s)
and certified by an authorized financial officer of the Company as
fairly presenting, in all material respects, the financial condition of
the Company and its Consolidated Subsidiaries as of the end of such
period and the results of their operations for the period then ended in
accordance with generally accepted accounting principles, subject to
changes resulting from normal year-end adjustments and the inclusion of
abbreviated footnotes; PROVIDED, HOWEVER, that delivery pursuant to
clause (iii) below of copies of the Quarterly Report on Form 10-Q of
the Company for such quarterly period filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements of this
clause (i);
(ii) as soon as practicable and in any event within 90 days
after the end of each fiscal year,
(1) Consolidated statements of income, stockholders'
equity and cash flows for such year, and
(2) a Consolidated balance sheet as at the end of
such year,
setting forth in each case in comparative form corresponding
Consolidated figures from the preceding annual audit, all in reasonable
detail and reasonably satisfactory in scope to the Required Holder(s)
and reported on by independent public accountants of recognized
standing selected by the Company whose report shall be without
limitation as to the scope of the audit and reasonably satisfactory in
substance to the Required Holder(s); PROVIDED, HOWEVER, that delivery
pursuant to clause (iii) below of copies of the Annual Report on Form
10-K of the Company for such year filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements of this
clause (ii);
13
(iii) if the Company shall be publicly held, promptly upon
transmission thereof, copies of all such financial statements, proxy
statements, notices and reports as it shall send to its public
stockholders and copies of all registration statements (without
exhibits) and all reports (other than any registration statement filed
on Form S-8) which it files with the Securities and Exchange Commission
(or any governmental body or agency succeeding to the functions of the
Securities and Exchange Commission);
(iv) promptly upon receipt thereof, a copy of each other
report (including, without limitation, management letters) submitted to
the Company or any Subsidiary by independent accountants in connection
with any annual, interim or special audit made by them of the books of
the Company or any Subsidiary;
(v) promptly upon receipt thereof, a copy of each report,
survey, study, evaluation, assessment or other document prepared by any
consultant, engineer, Environmental Authority or other Person relating
to compliance by the Company or any Subsidiary with any Environmental
Requirements, if the cost of remediation, repair or compliance may be
reasonably expected to exceed $250,000 in any one case or in the
aggregate;
(vi) with reasonable promptness, upon the request of the
holder of any Note, provide such holder, and any qualified
institutional buyer designated by such holder, such financial and other
information as such holder may reasonably determine to be necessary in
order to permit compliance with the information requirements of Rule
144A under the Securities Act in connection with the resale of Notes,
except at such times as the Company is subject to the reporting
requirements of section 13 or 15(d) of the Exchange Act. For the
purpose of this clause (vi), the term "qualified institutional buyer"
shall have the meaning specified in Rule 144A under the Securities Act;
and
(vii) with reasonable promptness, such other data relating to
the business, operations, properties or financial condition of the
Company or any of its Subsidiaries as a Significant Holder may
reasonably request;
5A(2) OFFICER'S CERTIFICATES. Together with each delivery of financial
statements required by clauses 5A(i) and (ii) above, the Company will deliver to
each Significant Holder an Officer's Certificate demonstrating (with
computations in reasonable detail) compliance with the provisions of ▇▇▇▇▇▇▇▇▇▇
▇▇, ▇▇(▇), ▇▇(▇), 6B(3) and 6C and stating that there exists no Event of Default
or Default, or, if any Event of Default or Default exists, specifying the nature
and period of existence thereof and what action the Company has taken, is taking
or proposes to take with respect thereto;
5A(3) SPECIAL INFORMATION. The Company also covenants that immediately
after any Responsible Officer obtains actual knowledge of:
(a) an Event of Default or Default;
(b) a material adverse change in the financial condition,
business or operations of the Company and its Subsidiaries, taken as a
whole;
14
(c) legal proceedings filed against the Company and/or any
Subsidiary, which reasonably could be expected to have a material
adverse effect on the financial condition, business or operations of
the Company and its Subsidiaries, taken as a whole, or which in any
manner draws into question the validity of or reasonably could be
expected to impair the ability of the Company to perform its
obligations under this Agreement or the Notes;
(d) a default under any agreement or note evidencing Debt for
which the Company or any Subsidiary is liable;
(e) the occurrence of any other event that reasonably could be
expected to impair the ability of the Company to meet its obligations
hereunder;
(f) any (i) Environmental Liabilities, (ii) pending,
threatened or anticipated Environmental Proceedings, (iii)
Environmental Notices, (iv) Environmental Judgments and Orders, or (v)
Environmental Releases at, on, in, under or in any way affecting the
Properties which reasonably could be expected to have a material
adverse effect on the business, operations or financial condition of
the Company and its Subsidiaries, taken as a whole;
(g) with respect to any Plan that is subject to the funding
requirements of Section 302 of ERISA or Section 412 of the Code, the
Company (i) has given or is required to give notice to the Pension
Benefit Guaranty Corporation that a material reportable event has
occurred with respect to such Plan, (ii) has delivered notice to the
Pension Benefit Guaranty Corporation of any intent to withdraw from or
terminate any such Plan, or (iii) has failed to make timely a
contribution to any such Plan; or
(h) any material modification of any Rheem Agreement;
the Company will deliver to each Significant Holder an Officer's Certificate
specifying the nature and period of existence thereof and what action the
Company or the Subsidiary has taken, is taking or proposes to take with respect
thereto.
5B. INSPECTION OF PROPERTY. The Company covenants that, at such
reasonable times and upon reasonable notice and as often as a Significant Holder
may reasonably request, it will permit any Person designated by a Significant
Holder in writing, at such Significant Holder's expense unless a Default has
occurred and is continuing in which case at the Company's expense, to:
(i) visit and inspect any of the properties of the Company and
any Subsidiary;
(ii) examine the corporate books and financial records of the
Company and its Subsidiaries and make copies thereof or extracts
therefrom; and
(iii) discuss the affairs, finances and accounts of any of
such corporations with the principal officers of the Company or any
Subsidiary and their independent public accountants.
15
5C. COVENANT TO SECURE NOTES EQUALLY. The Company covenants that if it
or any Subsidiary shall create or assume any Lien upon any of its property or
assets, whether now owned or hereafter acquired, other than Liens permitted by
paragraph 6B(1) (unless prior written consent shall have been obtained under
paragraph 11C), it will make or cause to be made effective provision whereby the
Notes will be secured by such Lien equally and ratably with any and all other
Debt thereby secured so long as any such other Debt shall be so secured.
5D. GUARANTEED OBLIGATIONS. The Company covenants that if any Person
(other than the Company) Guarantees or provides collateral in any manner for any
Debt of the Company or any Subsidiary other than as permitted by paragraph
6B(1), it will simultaneously cause such Person to Guarantee or provide
collateral for the Notes equally and ratably with all Debt Guaranteed or secured
by such Person for so long as such Debt is Guaranteed and pursuant to
documentation in form and substance reasonably satisfactory to such holder.
Subject to the foregoing, the Company shall cause each of its Subsidiaries not
existing as of the date hereof to execute and deliver a guaranty agreement, in
substantially the form of the Guaranty Agreements, as soon as practicable and in
any event within thirty days of the creation or acquisition of any such
Subsidiary. The delivery of such guaranty agreement shall be accompanied by such
other documents as the Required Holders may reasonably request including
charter, bylaws, appropriate resolutions of the Board of Directors of any such
Subsidiary providing such a guaranty agreement and legal opinions. Upon the
delivery thereof, such guaranty agreement and such other documents shall
constitute Related Documents hereunder.
5E. MAINTENANCE OF INSURANCE. The Company covenants that it and each
Subsidiary will maintain, with responsible insurers, insurance with respect to
its properties and business against such casualties and contingencies
(including, but not limited to, public liability, larceny, embezzlement or other
criminal misappropriation) and in such amounts as is customary in the case of
similarly situated corporations engaged in the same or similar businesses.
5F. MAINTENANCE OF CORPORATE EXISTENCE/COMPLIANCE WITH LAW/PRESERVATION
OF PROPERTY. The Company covenants that, except as permitted under paragraphs
6B(3) and 6C, it and each Subsidiary will do or cause to be done all things
necessary to, at all times:
(i) preserve, renew and keep in full force and effect the
corporate existence of the Company and its Subsidiaries (other than
those Subsidiaries not material to the financial condition, business or
operations of the Company and its Subsidiaries taken as a whole);
(ii) comply with all laws and regulations (including, without
limitation, laws and regulations relating to equal employment
opportunity and employee safety) applicable to it and any Subsidiary
except where the failure to comply could not reasonably be expected to
have a material adverse effect on the business, operations or financial
condition of the Company and its Subsidiaries, taken as a whole;
(iii) maintain, preserve and protect all material licenses,
certificates, permits, franchises and intellectual property of the
Company and its Subsidiaries; and
16
(iv) preserve all the remainder of its property used or useful
in the conduct of its business and keep the same in good repair,
working order and condition excluding normal wear and tear, except
where the failure to preserve such property could not be reasonably
expected to have a material adverse effect on the business, operations
or financial condition of the Company and its Subsidiaries, taken as a
whole.
5G. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Company covenants that it
and each Subsidiary will, comply in a timely fashion with, or operate pursuant
to valid waivers of the provisions of, all applicable Environmental
Requirements, including, without limitation, the emission of wastewater
effluent, solid and hazardous waste and air emissions together with any other
applicable Environmental Requirements for conducting, on a timely basis,
periodic tests and monitoring for contamination of ground water, surface water,
air and land and for biological toxicity of the aforesaid, and all applicable
regulations of the Environmental Protection Agency or other relevant
Governmental Authority, except where the failure to comply could not reasonably
be expected to have a material adverse effect on the business, operations or
financial condition of the Company and its Subsidiaries, taken as a whole. The
Company agrees to indemnify and hold you, your officers, agents and employees
(each an "INDEMNIFIED PERSON") harmless from any loss, liability, claim or
expense that you may incur or suffer as a result of a breach by the Company or
any Subsidiary, as the case may be, of this covenant other than as a result of
the gross negligence or willful misconduct of such Indemnified Person. The
Company shall not be deemed to have breached or violated this paragraph 5G if
the Company or any Subsidiary is challenging in good faith by appropriate
proceedings diligently pursued the application or enforcement of such
Environmental Requirements for which adequate reserves have been established in
accordance with generally accepted accounting principles.
5H. NO INTEGRATION. The Company covenants that it has taken and will
take all necessary action so that the issuance of the Notes does not and will
not require registration under the Securities Act. The Company covenants that no
future offer and sale of debt securities of the Company of any class will be
made if there is a reasonable possibility that such offer and sale would, under
the doctrine of "integration", subject the issuance of the Notes to you to the
registration requirements of the Securities Act.
5I. FINANCIAL RECORDS. The Company covenants that it and each
Subsidiary will keep proper books of record and account in which full and
correct entries (in all material respects and subject to normal year end
adjustments and, as to interim statements, the absence of footnotes) will be
made of the business and affairs of the Company or such Subsidiary under
generally accepted accounting principles consistently applied (except for
changes disclosed in the financial statements furnished to you pursuant to
paragraph 5A and concurred in by the independent public accountants referred to
in paragraph 5A).
5J. OTHER COVENANTS. If (in the reasonable opinion of the Required
Holders) at any time and from time to time, after the date hereof, any of the
material covenants, material representations and warranties or material events
of default, or any other material term or provision (other than any term or
provision relating to payment terms, interest rates or penalties) (collectively,
"MATERIAL PROVISIONS"), contained in any document evidencing any Debt in excess
of $5,000,000, or in any document, agreement or instrument from time to time
entered into by the Company in respect thereof (collectively, the "OTHER DEBT
DOCUMENTS"), is more favorable to
17
the lender or beneficiary under such Other Debt Documents than are the terms of
this Agreement to the holders of the Notes, this Agreement shall be deemed
amended to contain each more favorable Material Provision on the same basis and
to the extent that such Material Provisions are reflected in such Other Debt
Documents. The Company hereby agrees to so amend this Agreement and to execute
and deliver all such documents required by the Required Holder(s) to reflect
such Amendment. Prior to the execution and delivery of such documents by the
Company, this Agreement shall be deemed to contain each more favorable Material
Provision for purposes of determining the rights and obligations hereunder.
5K. PAYMENT OF TAXES AND CLAIMS. The Company will, and will cause each
Subsidiary to, pay before they become delinquent:
(i) all taxes, assessments and governmental charges or levies
imposed upon it or any of its property other than any taxes,
assessments and government charges or levies being contested in good
faith by appropriate proceedings diligently conducted and with respect
to which adequate reserves or other appropriate provisions are being
maintained in accordance with generally accepted accounting principles;
and
(ii) all claims or demands of materialmen, mechanics,
carriers, warehousemen, vendors, landlords and other like Persons that,
if unpaid, could reasonable be expected to result in the creation of a
Lien upon any of its property:
PROVIDED, that items of the foregoing clauses (i) and (ii) need not be
paid
(1) while being actively contested in good faith and
by appropriate proceedings as long adequate book reserves have
been established and maintained and exist with respect
thereto, and
(2) if applicable, so long as the title to, and right
to use, such property, is not materially adversely affected
thereby.
5L. INTERCREDITOR AGREEMENT. Upon the termination, expiration,
extension, renewal or replacement of the Bank Agreement, the Company agrees to
use its best efforts to cause the applicable bank group to execute and deliver
an intercreditor agreement as it relates to guaranties of such Debt by
Subsidiaries among its bank group for any credit facility then in effect and the
Purchasers, in form and substance reasonably satisfactory to the Required
Holders.
6. NEGATIVE COVENANTS. Unless the Required Holders otherwise agree in
writing, the Company shall not, and shall not permit any Subsidiary, to take any
of the following actions or permit the occurrence or existence of any of the
following events or conditions:
6A. FINANCIAL LIMITATION. The Company covenants that it will not permit
at any time:
(i) Consolidated Debt to exceed 350% of Consolidated EBITDA
for the most recently ended four fiscal quarter period; or
18
(ii) Consolidated Debt to exceed 62.5% of Consolidated Total
Capitalization; or
(iii) Priority Debt to exceed 15% of Consolidated Net Worth;
PROVIDED, HOWEVER, if the Bank Agreement is amended to provide that the
Consolidated Debt to Consolidated EBITDA ratio for the most recently ended four
fiscal quarter period cannot exceed 3.75 to 1, the Purchasers agree to amend
clause (i) above so that 350% is increased to 375%.
6B. LIENS, DEBT AND OTHER RESTRICTIONS. The Company covenants that it
will not and will not permit any Subsidiary to:
6B(1) LIENS. Create, assume or suffer to exist any Lien upon any of its
property or assets, whether now owned or hereafter acquired (whether or not
provision is made for the equal and ratable securing of the Notes pursuant to
paragraph 5C), except:
(i) Liens existing on the Initial Closing Day and specified on
Schedule 6B(1);
(ii) Liens imposed by law for taxes, assessments or charges of
any Governmental Authority for claims not yet due or which are being
contested in good faith by appropriate proceedings diligently conducted
and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with generally accepted
accounting principles and which Liens do not constitute a prior or
senior lien;
(iii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law or
created in the ordinary course of business and in existence less than
120 days from the date of creation thereof for amounts not yet due or
which are being contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with
generally accepted accounting principles and which Liens do not
constitute a prior or senior lien;
(iv) Liens incurred or deposits made in the ordinary course of
business (including, without limitation, surety bonds and appeal bonds)
in connection with workers' compensation, taxes (and with respect to
Liens, to the extent permitted under paragraph 5K), unemployment
insurance and other types of social security benefits or to secure the
performance of tenders, bids, leases, contracts (other than for the
repayment of Debt), statutory obligations and other similar obligations
or arising as a result of progress payments under government contracts;
(v) easements (including reciprocal easement agreements and
utility agreements), rights-of-way, covenants, consents, reservations,
encroachments, variations and zoning and other restrictions, charges or
encumbrances (whether or not recorded), which do not interfere
materially with the ordinary conduct of the business of the Company and
its Subsidiaries taken as a whole and which do not materially detract
from the value of the property to which they attach or materially
impair the use thereof to the Company and its Subsidiaries taken as a
whole; and
19
(vi) any right of set off or banker's lien (whether by common
law, statute, contract or otherwise) in connection with ordinary course
of business deposit arrangements maintained by the Company or its
Subsidiaries with a bank a party to the Bank Agreement until August 8,
2002 or with its other banks or financial institutions so long as any
such bank or other financial institution (A) shall not at any time make
loans or otherwise extend credit to the Company or any Subsidiary, (B)
does not maintain accounts (for the deposit of cash or otherwise) for
the benefit of the Company or any Subsidiary, (C) shall have waived in
writing for the benefit of each holder of a Note such right of setoff
or banker's lien, or (D) shall be subject to a pro rata sharing
agreement in form and substance satisfactory to each Significant
Holder; or
(vii) any Lien renewing, extending, or refunding any
outstanding obligations secured by a Lien described in clause (i),
PROVIDED (A) the principal amount secured is not increased or the
weighted average life to maturity thereof reduced; (B) such Lien is not
extended to any other property of the Company or its Subsidiaries; (C)
the Debt secured thereby is permitted under paragraph 6A and (D) no
Default or Event of Default has occurred and is continuing;
(viii) Liens on insurance policies owned by the Company on the
lives of its officers securing policy loans obtained from the insurers
under such policies, PROVIDED that (A) the aggregate amount borrowed on
each policy shall not exceed the loan value thereof and (B) the Company
shall not incur any liability to repay any such loan; and
(ix) additional Liens securing Priority Debt permitted by
paragraph 6A(iii).
6B(2) DEBT. Create, incur, assume or suffer to exist any Debt, except:
(i) Debt represented by this Agreement or any of the Related
Documents;
(ii) Debt existing on the Initial Closing Day as set forth on
Schedule 6B(2) and in an amount not to exceed the principal amount
specified on such Schedule;
(iii) Debt of any Subsidiary owing to the Company or any other
Subsidiary of the Company;
(iv) Debt represented by endorsement of negotiable instruments
for collection in the ordinary course of business;
(v) additional Debt of the Company or any Subsidiary (whether
Secured or Unsecured) incurred in the ordinary course of business as
conducted on the date hereof.
Notwithstanding the foregoing exceptions to the prohibition against incurring or
maintaining Debt, the Company shall not permit at any time, prior to or after
the incurrence thereof, the aggregate outstanding amount of Debt to exceed the
limitations of paragraph 6A hereof or incur any Debt if a Default or Event of
Default has occurred and is continuing.
6B(3) MERGER OR CONSOLIDATION. Merge, consolidate or exchange shares
with any other Person, except that:
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(i) any Subsidiary may merge or consolidate with the Company
or any other Subsidiary;
(ii) the Company may merge or consolidate with any other
corporation (including a Subsidiary) PROVIDED (A) the Company is the
surviving corporation, and (B) immediately after giving effect to such
transaction, no Default or Event of Default shall occur or exist;
(iii) any Subsidiary may merge or consolidate with any other
corporation PROVIDED (A) such Subsidiary is the surviving corporation,
and (B) immediately after giving effect to such transaction, no Default
or Event of Default shall occur or exist; and
(iv) Dunhill may merge or consolidated with any other Person
in connection with a transaction permitted by paragraph 6C(iii); or
6B(4) INVESTMENTS. Make or permit to remain outstanding any Investments
except any of the following:
(i) securities of any Person acquired in an Acquisition
permitted hereunder;
(ii) Eligible Securities;
(iii) Investments existing on the Initial Closing Day and
specified in Schedule 6B(4);
(iv) accounts receivable arising and trade credit granted in
the ordinary course of business and any securities or other assets
received in satisfaction or partial satisfaction thereof in connection
with accounts of financially troubled Persons to the extent reasonably
necessary in order to prevent or limit loss;
(v) investments in Subsidiaries which are Guarantors;
(vi) additional investments in other Persons provided that (A)
the aggregate costs incurred in making such investments (reduced by
cash dividends or other cash payments received on or in consideration
of such investments) shall not exceed $20,000,000 in the aggregate at
any time and (B) prior to and immediately after giving effect to such
investment, no Default or Event of Default shall exist and be
continuing;
(vii) loans and advances between or among the Company and the
Guarantors permitted by paragraph 6B(2)(iii);
(viii) travel and entertainment advances made to employees of
the Company or any of its Subsidiaries in the ordinary course of
business;
(ix) Investments consisting of ownership interests in another
Person resulting from the dispositions or mergers permitted under
paragraphs 6C(iii) or 6B(3); and
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(x) notes of purchasers of Dunhill (A) not exceeding an
aggregate principal amount of $25,000,000 and (B) having a repayment
term less than or equal to seven years.
6B(5) TRANSACTIONS WITH RELATED PARTY. Except as permitted in paragraph
6B(3) and 6B(4), effect any transaction with any Affiliate or Subsidiary by
which any asset or services of the Company or a Subsidiary of the Company is
transferred to such Affiliate or Subsidiary, or from such Affiliate or
Subsidiary or enter into any other transaction with an Affiliate or Subsidiary,
on terms more favorable than would be reasonably expected to be given in a
similar transaction with an unrelated entity.
6C. SALE OF ASSETS. The Company will not, and will not permit any
Subsidiary to, Dispose of any property or assets (including the Capital Stock of
a Subsidiary), except:
(i) inventory in the ordinary course of business; or
(ii) any Subsidiary may Dispose of its assets to the Company
or a wholly-owned Subsidiary; or
(iii) the sale of substantially all of the stock or assets of
Dunhill, Inc. for Fair Market Value in which event, the Noteholders
agree to release the Guaranty Agreement of Dunhill, Inc.;
(iv) the Disposition of Eligible Securities in the ordinary
course of management of the investment portfolio of the Company and its
Subsidiaries;
(v) Dispositions of property that is substantially worn,
damaged, obsolete or in the judgment of the Company, no longer best
used or useful in its business or that of any Subsidiary;
(vi) Qualified Receivables Financings;
(vii) the Company or any Subsidiary may Dispose of its assets
(whether or not leased back) so long as, immediately after giving
effect to such proposed Disposition:
(A) the consideration for such assets represents the
Fair Market Value of such assets at the time of such
Disposition; and
(B) (1) the net book value of all assets so Disposed
of by the Company and its Subsidiaries (other than pursuant to
clause (iv)) does not constitute a Substantial Part of the
Consolidated assets or (2) the proceeds of such Disposition
are reinvested in a similar business or assets within 12
months of such Disposition; and
(C) no Default or Event of Default shall exist.
For purposes of this paragraph 6C:
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(i) "DISPOSE" means the sale, lease, transfer or other
disposition of property of the Company or any of its Subsidiaries, and
"DISPOSITION" and "DISPOSED OF" has a corresponding meaning to Dispose;
(ii) CALCULATION OF NET BOOK VALUE. The net book value of any
assets shall be determined as of the respective date of Disposition of
those assets; and
(iii) SALES OF LESS THAN ALL THE STOCK OF A SUBSIDIARY. In the
case of the sale or issuance of the stock of a Subsidiary, the amount
of Consolidated Assets contributed by the stock Disposed of shall be
assumed to be the percentage of outstanding stock sold or to be sold.
6D. SUBSIDIARY STOCK AND DEBT. The Company will not:
(i) directly or indirectly sell, assign, pledge or otherwise
dispose of any Debt of or any shares of stock of (or warrants, rights
or options to acquire stock of) any Subsidiary except to a wholly-owned
Subsidiary and except as permitted pursuant to paragraph 6C;
(ii) permit any Subsidiary directly or indirectly to sell,
assign, pledge or otherwise dispose of any Debt of the Company or any
other Subsidiary, or any shares of stock of (or warrants, rights or
options to acquire stock of) any other Subsidiary, except to the
Company or a wholly-owned Subsidiary and except as permitted pursuant
to paragraph 6C;
(iii) permit any Subsidiary directly or indirectly to issue or
sell any shares of its stock (or warrants, rights or options to acquire
its stock) except to the Company or a wholly-owned Subsidiary and
except as permitted pursuant to paragraph 6B(3) and 6C; or
(iv) permit any Subsidiary to enter into or otherwise be bound
by or subject to any contract or agreement (including, without
limitation, any provision of its certificate or articles of
incorporation or bylaws) that restricts its ability to pay dividends or
other distributions on account of its stock except for such
restrictions set forth in the Bank Agreement in effect on the Initial
Closing Day; or
(v) permit any Subsidiary to create, incur, assume or maintain
any Debt except as permitted by paragraph 6B(2).
6E. SALE OF RECEIVABLES. The Company covenants that it will not, and
will not permit any Subsidiary to, sell (with or without recourse), or discount
or otherwise sell for less than the face value thereof, any of its Receivables
other than in connection with a Qualified Receivables Financing.
6F. ERISA. The Company covenants that it will not, nor permit any
Subsidiary to:
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(i) terminate or withdraw from any Plan (other than a
Multiemployer Plan) resulting in the incurrence of any material
liability to the Pension Benefit Guaranty Corporation;
(ii) engage in or permit any Person to engage in any
prohibited transaction (as defined in Section 4975 of the Code)
involving any Plan (other than a Multiemployer Plan) which would
subject the Company or any Subsidiary to any material tax, penalty or
other liability;
(iii) incur or suffer to exist any material accumulated
funding deficiency (as defined in section 302 of ERISA and section 412
of the Code), whether or not waived, involving any Plan (other than a
Multiemployer Plan); or
(iv) allow or suffer to exist any risk or condition which
presents a risk of incurring a material liability to the Pension
Benefit Guaranty Corporation.
6G. ENVIRONMENTAL MATTERS. The Company covenants that it will not, and
will not permit any Third Party to, use, produce, manufacture, process,
generate, store, dispose of, manage at, or ship or transport to or from the
Properties any Hazardous Materials except for Hazardous Materials used,
produced, released or managed in the ordinary course of business in compliance
with all applicable Environmental Requirements except where the failure to do so
could not reasonably be expected to have a material adverse effect on the
business, operations or financial condition of the Company and its Subsidiaries
taken as a whole and except for Hazardous Materials released in amounts which do
not require remediation pursuant to applicable Environmental Requirements or if
remediation is required, such remediation could not reasonably be expected to
have a material adverse effect on the business, operations or financial
condition of the Company and its Subsidiaries taken as a whole.
6H. SPECIFIED LAWS. Neither the Company nor any agent acting on its
behalf will take any action which could reasonably be expected to cause this
Agreement or the Notes to violate Regulation T or any other regulation of the
Board of Governors of the Federal Reserve System or to violate the Exchange Act,
in any case as in effect now or as the same may hereafter be in effect.
6I. BUSINESS ACTIVITIES. Neither the Company nor any of its
Subsidiaries will engage directly or indirectly (whether through subsidiaries or
otherwise) in any type of business other than the businesses conducted by the
Company or such Subsidiary on the date hereof and in related businesses.
7. EVENTS OF DEFAULT.
7A. ACCELERATION. If any of the following events shall occur and be
continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law or
otherwise):
(i) the Company defaults in the payment of any principal of,
or Yield- Maintenance Amount payable with respect to, any Note when the
same shall become due, either by the terms thereof or otherwise as
herein provided; or
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(ii) the Company defaults in the payment of any interest on
any Note for more than 5 days after the date due; or
(iii) the Company or any Subsidiary defaults (whether as
primary obligor or as guarantor or other surety) in any payment of
principal of or interest on any other obligation for money borrowed (or
any Capitalized Lease Obligation, any obligation under a conditional
sale or other title retention agreement, any obligation issued or
assumed as full or partial payment for property whether or not secured
by a purchase money mortgage or any obligation under notes payable or
drafts accepted representing extensions of credit) beyond any period of
grace provided with respect thereto, or the Company or any Subsidiary
fails to perform or observe any other agreement, term or condition
contained in any agreement under which any such obligation is created
(or if any other event thereunder or under any such agreement shall
occur and be continuing) and the effect of such failure or other event
is to cause, or to permit the holder or holders of such obligation (or
a trustee on behalf of such holder or holders) to cause, such
obligation to become due (or to be repurchased by the Company or any
Subsidiary) prior to any stated maturity, PROVIDED that the aggregate
amount of all obligations as to which any default shall occur and be
continuing or any such a failure or other event permitting acceleration
(or resale to such Company or any such Subsidiary) shall occur and be
continuing exceeds $500,000; or
(iv) any representation or warranty made by the Company herein
or by the Company or any of its officers in any writing furnished in
connection with or pursuant to this Agreement shall be false in any
material respect on the date as of which made; or
(v) the Company fails to perform or observe any agreement
contained in paragraphs 5D or 5J or 6; or
(vi) the Company fails to perform or observe any other
agreement, term or condition contained herein and such failure shall
not be remedied within 30 days after the occurrence thereof; or
(vii) the Company or any Subsidiary makes an assignment for
the benefit of creditors or is generally not paying its debts as such
debts become due; or
(viii) any decree or order for relief in respect of the
Company or any Subsidiary is entered under any bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law, whether now or
hereafter in effect (herein called the "BANKRUPTCY LAW"), of any
jurisdiction; or
(ix) the Company or any Subsidiary petitions or applies to any
tribunal for, or consents to, the appointment of, or taking possession
by, a trustee, receiver, custodian, liquidator or similar official of
the Company or any Subsidiary, or of any substantial part of the assets
of the Company or any Subsidiary, or commences a voluntary case under
the Bankruptcy Law of the United States or any proceedings (other than
proceedings for the voluntary liquidation and dissolution of a
Subsidiary) relating to the Company or any Subsidiary under the
Bankruptcy Law of any other jurisdiction; or
25
(x) any such petition or application is filed, or any such
proceedings are commenced, against the Company or any Subsidiary and
the Company or such Subsidiary by any act indicates its approval
thereof, consent thereto or acquiescence therein, or an order, judgment
or decree is entered appointing any such trustee, receiver, custodian,
liquidator or similar official, or approving the petition in any such
proceedings, and such order, judgment or decree remains unstayed and in
effect for more than 60 days; or
(xi) any order, judgment or decree is entered in any
proceedings against the Company decreeing the dissolution of the
Company and such order, judgment or decree remains unstayed and in
effect for more than 60 days; or
(xii) any order, judgment or decree is entered in any
proceedings against the Company or any Subsidiary decreeing a split-up
of the Company or such Subsidiary which requires the divestiture of
assets representing a substantial part, or the divestiture of the stock
of a Subsidiary whose assets represent a substantial part, of the
consolidated assets of the Company and its Subsidiaries (determined in
accordance with generally accepted accounting principles) or which
requires the divestiture of assets, or stock of a Subsidiary, which
shall have contributed a substantial part of the consolidated net
income of the Company and its Subsidiaries (determined in accordance
with generally accepted accounting principles) for any of the three
fiscal years then most recently ended, and such order, judgment or
decree remains unstayed and in effect for more than 60 days; or
(xiii) one or more final judgments in an aggregate amount in
excess of $1,000,000 is rendered against the Company or any Subsidiary
and, within 60 days after entry thereof, any such judgment is not
discharged or execution thereof stayed pending appeal, or within 60
days after the expiration of any such stay, such judgment is not
discharged; or
(xiv) the Company or any ERISA Affiliate, in its capacity as
an employer under a Multiemployer Plan, makes a complete or partial
withdrawal from such Multiemployer Plan resulting in the incurrence by
such withdrawing employer of a withdrawal liability in an amount
exceeding $1,000,000; or
(xv) the Company or any Guarantor or any other Person shall
disavow or attempt to terminate any or all of the Guaranty Agreements
or any or all of the Guaranty Agreements shall cease to be in full
force and effect in whole or in part for any reason whatsoever; or
then:
(a) if such event is an Event of Default specified in clause
(i) or (ii) of this paragraph 7A, any holder (other than the Company or
any of its Subsidiaries) of any Note may at its option during the
continuance of such Event of Default, by notice in writing to the
Company, terminate the Facility and/or declare all of the Notes held by
such holder to be, and all of the Notes held by such holder shall
thereupon be and become, immediately
26
due and payable at par together with interest accrued thereon, without
presentment, demand, protest or notice of any kind, all of which are
hereby waived by the Company,
(b) if such event is an Event of Default specified in clause
(viii), (ix) or (x) of this paragraph 7A with respect to the Company,
the Facility shall automatically terminate and all of the Notes at the
time outstanding shall automatically become immediately due and payable
together with interest accrued thereon and together with the
Yield-Maintenance Amount, if any, with respect to each Note, without
presentment, demand, protest or notice of any kind, all of which are
hereby waived by the Company, and
(c) with respect to any event constituting an Event of
Default, the Required Holder(s) of the Notes of any Series may at its
or their option during the continuance of such Event of Default, by
notice in writing to the Company, terminate the Facility and/or declare
all of the Notes of such Series to be, and all of the Notes of such
Series shall thereupon be and become, immediately due and payable
together with interest accrued thereon and together with the
Yield-Maintenance Amount, if any, with respect to each Note of such
Series, without presentment, demand, protest or notice of any kind, all
of which are hereby waived by the Company.
7B. RESCISSION OF ACCELERATION. At any time after any or all of the
Notes of any Series shall have been declared immediately due and payable
pursuant to paragraph 7A, the Required Holder(s) of the Notes of such Series
may, by notice in writing to the Company, rescind and annul such declaration and
its consequences if:
(i) the Company shall have paid all overdue interest on the
Notes of such Series, the principal of and Yield-Maintenance Amount, if
any, payable with respect to any Notes of such Series which have become
due otherwise than by reason of such declaration, and interest on such
overdue interest and overdue principal and Yield-Maintenance Amount at
the rate specified in the Notes of such Series,
(ii) the Company shall not have paid any amounts which have
become due solely by reason of such declaration,
(iii) all Events of Default and Defaults, other than
non-payment of amounts which have become due solely by reason of such
declaration, shall have been cured or waived pursuant to paragraph 11C,
and
(iv) no judgment or decree shall have been entered for the
payment of any amounts due pursuant to the Notes of such Series or this
Agreement.
No such rescission or annulment shall extend to or affect any subsequent Event
of Default or Default or impair any right arising therefrom.
7C. NOTICE OF ACCELERATION OR RESCISSION. Whenever any Note shall be
declared immediately due and payable pursuant to paragraph 7A or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B, the
Company shall forthwith give written notice thereof to the holder of each Note
of each Series at the time outstanding.
27
7D. OTHER REMEDIES. If any Event of Default or Default shall occur and
be continuing, the holder of any Note may proceed to protect and enforce its
rights under this Agreement and such Note by exercising such remedies as are
available to such holder in respect thereof under applicable law, either by suit
in equity or by action at law, or both, whether for specific performance of any
covenant or other agreement contained in this Agreement or in aid of the
exercise of any power granted in this Agreement. No remedy conferred in this
Agreement upon the holder of any Note is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or now or hereafter existing at
law or in equity or by statute or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company represents,
covenants and warrants as follows (all references to "SUBSIDIARY" and
"SUBSIDIARIES" in this paragraph 8 shall be deemed omitted if the Company has no
Subsidiaries at the time the representations herein are made or repeated):
8A. ORGANIZATION.
(i) The Company is a corporation duly organized and existing
in good standing under the laws of the State of Florida, and each
Subsidiary is duly organized and existing in good standing under the
laws of the jurisdiction in which it is incorporated. Schedule 8A
hereto is an accurate and complete list of all Subsidiaries as of the
Initial Closing Day, including the jurisdiction of incorporation and
ownership of all such Subsidiaries. The Company and each Subsidiary has
the corporate power to own its respective properties and to carry on
its respective businesses as now being conducted and is duly qualified
and authorized to do business in each other jurisdiction in which the
character of its respective properties or the nature of its respective
businesses require such qualification or authorization except where the
failure to be so qualified or authorized could not reasonably be
expected to have a material adverse effect on the business, operations
or financial condition of the Company and its Subsidiaries, taken as a
whole.
(ii) No Subsidiary is a party to, or otherwise subject to, any
legal restriction or any agreement restricting the ability of such
Subsidiary to pay dividends out of profits or make other similar
distributions of profits to the Company or any of its Subsidiaries that
owns outstanding shares of Capital Stock or similar equity interests of
such Subsidiary.
8B. FINANCIAL STATEMENTS. The Company has furnished you with the
following financial statements, identified by a principal financial officer of
the Company:
(i) a Consolidated balance sheet as at the last day of the
fiscal year in each of the years 1997 to 1998, inclusive, a
Consolidated statement of income, stockholders' equity and cash flows
for each such year, all reported on by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLC; and
(ii) a Consolidated balance sheet as at September 30, 1999 and
Consolidated statements of income, stockholders' equity and cash flows
for the nine-month period ended on each such date, prepared by the
Company.
28
Those financial statements (including any related schedules and/or notes) fairly
present in all material respects (subject, as to interim statements, to the
absence of footnotes or to changes resulting from normal year-end adjustments)
the financial condition of the Company and have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved and show all liabilities, direct and contingent, of the Company
and its Subsidiaries required to be shown in accordance with such principles.
The balance sheets fairly present, in all material respects, the Consolidated
financial condition of the Company and its Subsidiaries as at the dates thereof,
and the statements of income, stockholders' equity and cash flows fairly
present, in all material respects, the Consolidated results of the operations of
the Company and its Subsidiaries, the changes in the Company's stockholders'
equity and their Consolidated cash flows for the periods indicated. There has
been no material adverse change in the business, condition (financial or
otherwise) or operations of the Company and its Subsidiaries taken as a whole
since December 31, 1998.
8C. ACTIONS PENDING. Except as set forth on Schedule 8C hereto, there
is no action, suit, investigation or proceeding pending or, to the knowledge of
the Company, threatened against the Company or any of its Subsidiaries, or any
properties or rights of the Company or any of its Subsidiaries, by or before any
court, arbitrator or administrative or governmental body which could reasonably
be expected to result in any material adverse change in the business, property
or assets, condition (financial or otherwise) or operations of the Company and
its Subsidiaries taken as a whole.
8D. OUTSTANDING DEBT. Neither the Company nor any of its Subsidiaries
has outstanding any Debt except as permitted by paragraphs 6A and 6B(2). There
exists no default under the provisions of any instrument evidencing such Debt or
of any agreement relating thereto. Schedule 8D hereto (as such Schedule 8D may
have been modified from time to time by written supplements thereto delivered by
the Company to Prudential) is an accurate and complete list of Debt of the
Company and its Subsidiaries on the applicable Closing Day.
8E. TITLE TO PROPERTIES. The Company has and each of its Subsidiaries
has good and indefeasible title to its respective real properties (other than
properties which it leases) and good title to all of its other respective
properties and assets, including the properties and assets reflected in the most
recent audited balance sheet referred to in paragraph 8B (other than properties
and assets disposed of in the ordinary course of business), subject to no Lien
of any kind except Liens permitted by paragraph 6B(1). All leases necessary in
any material respect for the conduct of the respective businesses of the Company
and its Subsidiaries are valid and subsisting and are in full force and effect.
8F. TAXES. The Company has filed and each of its Subsidiaries has filed
all federal, state and other income tax returns which, to the best knowledge of
the Chief Financial Officer of the Company and its Subsidiaries, are required to
be filed, and each has paid all taxes as shown on such returns and on all
assessments received by it to the extent that such taxes have become due, except
such taxes as are being contested in good faith by appropriate proceedings for
which adequate reserves have been established in accordance with generally
accepted accounting principles.
29
8G. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the Company nor
any of its Subsidiaries is a party to any contract or agreement or subject to
any charter or other corporate restriction which materially and adversely
affects its business, property or assets, condition (financial or otherwise) or
operations. Neither the execution nor delivery of this Agreement or the Notes,
nor the offering, issuance and sale of the Notes, nor fulfillment of nor
compliance with the terms and provisions hereof and of the Notes will conflict
with, or result in a breach of the terms, conditions or provisions of, or
constitute a default under, or result in any violation of, or result in the
creation of any Lien upon any of the properties or assets of the Company or any
of its Subsidiaries pursuant to, the charter or by-laws of the Company or any of
its Subsidiaries, any award of any arbitrator or any agreement (including any
agreement with stockholders), instrument, order, judgment, decree, statute, law,
rule or regulation to which the Company or any of its Subsidiaries is subject.
Neither the Company nor any of its Subsidiaries is a party to, or otherwise
subject to any provision contained in, any instrument evidencing Debt of the
Company or such Subsidiary, any agreement relating thereto or any other contract
or agreement (including its charter) which limits the amount of, or otherwise
imposes restrictions on the incurring of, Debt of the Company or such Subsidiary
of the type to be evidenced by the Notes except as set forth in the agreements
listed in Schedule 8G hereto.
8H. OFFERING OF NOTES. Neither the Company nor any agent acting on its
behalf has, directly or indirectly, offered the Notes or any similar security of
the Company for sale to, or solicited any offers to buy the Notes or any similar
security of the Company from, or otherwise approached or negotiated with respect
thereto with, any Person other than institutional investors, and neither the
Company nor any agent acting on its behalf has taken or will take any action
which would subject the issuance or sale of the Notes to the provisions of
Section 5 of the Securities Act or to the provisions of any securities or Blue
Sky law of any applicable jurisdiction. The Company hereby represents and
warrants to you that, within the preceding twelve months, neither the Company
nor any other Person acting on behalf of the Company has offered or sold to any
Person (other than accredited investors) any Notes, or any securities of the
same or a similar class as the Notes, or any other substantially similar
securities of the Company.
8I. USE OF PROCEEDS. None of the proceeds of the sale of any Notes will
be used, directly or indirectly, for the purpose, whether immediate, incidental
or ultimate, of purchasing or carrying any "margin stock" as defined in
Regulation U or X (12 C.F.R. Parts 221 and 224) of the Board of Governors of the
Federal Reserve System (herein called "margin stock") or for the purpose of
maintaining, reducing or retiring any Debt which was originally incurred to
purchase or carry any stock that is then currently a margin stock or for any
other purpose which might constitute the purchase of such Notes a "purpose
credit" within the meaning of such Regulation U, unless the Company shall have
delivered to the Purchaser which is purchasing such Notes, on the Closing Day
for such Notes, an opinion of counsel satisfactory to such Purchaser stating
that the purchase of such Notes does not constitute a violation of such
Regulation U. Neither the Company nor any agent acting on its behalf has taken
or will take any action which might cause this Agreement or the Notes to violate
Regulation U, Regulation T or any other regulation of the Board of Governors of
the Federal Reserve System or to violate the Exchange Act, in each case as in
effect now or as the same may hereafter be in effect. None of the proceeds of
the sale of the Notes has been or will be used to finance a Hostile Tender
Offer.
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8J. ERISA. No accumulated funding deficiency (as defined in section 302
of ERISA and section 412 of the Code), whether or not waived, exists with
respect to any Plan (other than a Multiemployer Plan). No liability to the
Pension Benefit Guaranty Corporation has been or is expected by the Company or
any ERISA Affiliate to be incurred with respect to any Plan (other than a
Multiemployer Plan) by the Company, any Subsidiary or any ERISA Affiliate which
is or would be materially adverse to the business, property or assets, condition
(financial or otherwise) or operations of the Company and its Subsidiaries taken
as a whole. Neither the Company, any Subsidiary nor any ERISA Affiliate has
incurred or presently expects to incur any withdrawal liability under Title IV
of ERISA with respect to any Multiemployer Plan which is or would be materially
adverse to the business, property or assets, condition (financial or otherwise)
or operations of the Company and its Subsidiaries taken as a whole. The
execution and delivery of this Agreement and the issuance and sale of the Notes
will be exempt from or will not involve any transaction which is subject to the
prohibitions of section 406 of ERISA and will not involve any transaction in
connection with which a penalty could be imposed under section 502(i) of ERISA
or a tax could be imposed pursuant to section 4975 of the Code. The
representation by the Company in the next preceding sentence is made in reliance
upon and subject to the accuracy of the representation of each Purchaser in
paragraph 9B as to the source of funds to be used by it to purchase any Notes.
8K. GOVERNMENTAL CONSENT. Neither the nature of the Company or of any
Subsidiary, nor any of their respective businesses or properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor any
circumstance in connection with the offering, issuance, sale or delivery of the
Notes is such as to require any authorization, consent, approval, exemption or
any action by or notice to or filing with any court or administrative or
governmental body (other than routine filings after the Closing Day for any
Notes with the Securities and Exchange Commission and/or state Blue Sky
authorities) in connection with the execution and delivery of this Agreement,
the offering, issuance, sale or delivery of the Notes or fulfillment of or
compliance with the terms and provisions hereof or of the Notes.
8L. ENVIRONMENTAL COMPLIANCE.
(i) The Company and its Subsidiaries and all of their
respective Properties have complied at all times (during such period of
time the Company or its Subsidiaries have owned or operated each such
Property) and in all respects with all Environmental Requirements where
failure to comply could reasonably be expected to have a material
adverse effect on the business, condition (financial or otherwise) or
operations of the Company and its Subsidiaries taken as a whole.
(ii) Except as set forth in Schedule 8L, neither the Company
nor any Subsidiary is subject to any Environmental Liability or
Environmental Requirement which could reasonably be expected to have a
material adverse effect on the business, condition (financial or
otherwise) or operations of the Company and its Subsidiaries, taken as
a whole.
(iii) Except as set forth in Schedule 8L, neither the Company
nor any Subsidiary has been designated as a potentially responsible
party under CERCLA or under any state statute similar to CERCLA. None
of the Properties has been identified on
31
any current or proposed National Priorities List under 40 C.F.R. ss.
300 or any list arising from a state statute similar to CERCLA. None of
the Properties has been identified on any CERCLIS list.
(iv) No Hazardous Materials have been or are being used,
produced, manufactured, processed, generated, stored, disposed of,
released, managed at or shipped or transported to or from the
Properties (during such period of time the Company or its Subsidiaries
have owned or operated each such Property) or, to the actual knowledge
of the Company, are otherwise present at, on, in or under the
Properties or, to the actual knowledge of the Company, at or from any
adjacent site or facility, except for Hazardous Materials used,
produced, manufactured, processed, generated, stored, disposed of,
released and managed in the ordinary course of the Company's and any
Subsidiary's business in compliance with all applicable Environmental
Requirements and except for Hazardous Materials present in amounts
which have not required and do not require remediation, pursuant to
applicable law or regulation, or if remediation is required, such
remediation could not reasonably be expected to have a material adverse
effect on the business, condition (financial or otherwise) or
operations of the Company and its Subsidiaries, taken as a whole.
(v) The Company and each Subsidiary have procured all permits
necessary under Environmental Requirements for the conduct of their
respective businesses or is otherwise in compliance with all applicable
Environmental Requirements, except to the extent the failure to do so
would not reasonably expected to have a material adverse effect on the
business, condition (financial or otherwise) or operations of the
Company and its Subsidiaries, taken as a whole.
8M. DISCLOSURE. Neither this Agreement nor any other document,
certificate or statement furnished to any Purchaser by or on behalf of the
Company in connection herewith contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained herein and therein not misleading. There is no fact peculiar to the
Company or any of its Subsidiaries which materially adversely affects or in the
future may (so far as the Company can now reasonably foresee) materially
adversely affect the business, property or assets, condition (financial or
otherwise) or operations of the Company or any of its Subsidiaries and which has
not been set forth in this Agreement.
9. REPRESENTATIONS OF THE PURCHASERS.
Each Purchaser represents as follows:
9A. NATURE OF PURCHASE. Such Purchaser will acquire any Shelf Notes
purchased from the Company pursuant to this Agreement for investment for its own
account, not as a nominee or agent, and not with a view to, or for resale in
connection with, any distribution thereof within the meaning of the Securities
Act, PROVIDED that the disposition of such Purchaser's property shall at all
times be and remain within its control.
32
9B. SOURCE OF FUNDS. You represent that at least one of the following
statements is an accurate representation as to each source of funds (a "SOURCE")
to be used by you to pay the purchase price of the Notes to be purchased by you
hereunder:
(a) the Source constitutes assets allocated to your "insurance
company general account" (as such term is defined under Section V of
the United States Department of Labor's Prohibited Transaction
Exemption ("PTE") 95-60), and as of the date of the purchase of the
Notes, you satisfy all of the applicable requirements for relief under
Sections I and IV of PTE 95-60; or
(b) if you are an insurance company, the Source does not
include assets allocated to any separate account maintained by you in
which any employee benefit plan (or its related trust) has any
interest, other than a separate account that is maintained solely in
connection with your fixed contractual obligations under which the
amounts payable, or credited, to such plan and to any participant or
beneficiary of such plan (including any annuitant) are not affected in
any manner by the investment performance of the separate account; or
(c) the Source is either (i) an insurance company pooled
separate account, within the meaning PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
the PTE 91-38 (issued July 12, 1991) and, except as you have disclosed
to the Company in writing pursuant to this clause (c), no employee
benefit plan or group of plans maintained by the same employer or
employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment
fund; or
(d) the Source constitutes asset of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that
are included in such investment fund, when combined with the assets of
all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM, the conditions of Part I(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a person controlling
or controlled by the QPAM (applying the definition of "control" in
Section V(e) of the QPAM Exemption) owns a 5% or more interest in the
company and (i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose assets are included in such investment
fund have been disclosed to the Company in writing pursuant to clause
(c); or
(e) the Source is a governmental plan; or
(f) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this clause (f); or
33
(g) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA.
As used in this paragraph 9B, the terms "EMPLOYEE BENEFIT PLAN", "GOVERNMENTAL
PLAN", "PARTY IN INTEREST" and "SEPARATE ACCOUNT" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
10. DEFINITIONS; ACCOUNTING MATTERS. For the purpose of this Agreement,
the terms defined in paragraphs 10A and 10B (or within the text of any other
paragraph) shall have the respective meanings specified therein and all
accounting matters shall be subject to determination as provided in paragraph
10C.
10A. YIELD-MAINTENANCE TERMS.
"CALLED PRINCIPAL" shall mean, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to paragraph 4B or is declared to be
immediately due and payable pursuant to paragraph 7A, as the context requires.
"DESIGNATED SPREAD" shall mean .50 of 1%.
"DISCOUNTED VALUE" shall mean, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due dates
to the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (as converted to reflect
the periodic basis on which interest on such Note is payable, if payable other
than on a semi-annual basis) equal to the Reinvestment Yield with respect to
such Called Principal.
"REINVESTMENT YIELD" shall mean, with respect to the Called Principal
of any Note, the Designated Spread over the yield to maturity implied by (i) the
yields reported, as of 10:00 A.M. (New York City local time) on the Business Day
next preceding the Settlement Date with respect to such Called Principal, on the
display designated as "Page 678" on the Telerate Service (or such other display
as may replace page 678 on the Telerate Service) for actively traded U.S.
Treasury securities having a maturity equal to the Remaining Average Life of
such Called Principal as of such Settlement Date, or (ii) if such yields shall
not be reported as of such time or the yields reported as of such time shall not
be ascertainable, the Treasury Constant Maturity Series yields reported, for the
latest day for which such yields shall have been so reported as of the Business
Day next preceding the Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded U.S. Treasury securities having a constant
maturity equal to the Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield shall be determined, if necessary, by (a)
converting U.S. Treasury ▇▇▇▇ quotations to bond-equivalent yields in accordance
with accepted financial practice and (b) interpolating linearly between yields
reported for various maturities.
"REMAINING AVERAGE LIFE" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the
sum of the products obtained by multiplying (a) each Remaining
34
Scheduled Payment of such Called Principal (but not of interest thereon) by (b)
the number of years (calculated to the nearest one-twelfth year) which will
elapse between the Settlement Date with respect to such Called Principal and the
scheduled due date of such Remaining Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
scheduled due date.
"SETTLEMENT DATE" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid pursuant to
paragraph 4 or is declared to be immediately due and payable pursuant to
paragraph 7A, as the context requires.
"YIELD-MAINTENANCE AMOUNT" shall mean, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Called
Principal of such Note over the sum of (i) such Called Principal plus (ii)
interest accrued thereon as of (including interest due on) the Settlement Date
with respect to such Called Principal. The Yield-Maintenance Amount shall in no
event be less than zero.
10B. OTHER TERMS.
"ACCEPTANCE" shall have the meaning specified in paragraph 2F.
"ACCEPTANCE DAY" shall have the meaning specified in paragraph 2F.
"ACCEPTANCE WINDOW" shall have the meaning specified in paragraph 2F.
"ACCEPTED NOTE" shall have the meaning specified in paragraph 2F.
"ACQUISITION" shall mean the acquisition of (i) a controlling equity
interest in another Person (including the purchase of an option, warrant or
convertible or similar type security to acquire such a controlling interest at
the time it becomes exercisable by the holder thereof), whether by purchase of
such equity interest or upon exercise of an option or warrant for, or conversion
of securities into, such equity interest, or (ii) assets of another Person which
constitute all or substantially all of the assets of such Person or of a line or
lines of business conducted by such Person.
"AFFILIATE" shall mean any Person (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is under
common control with the Company; or (ii) which beneficially owns or holds 10% or
more of the aggregate voting rights for all of Company's classes or outstanding
Voting Stock (or in the case of a Person which is not a corporation, 10% or more
of the aggregate voting rights of such Person) of the Company, or 10% or more of
any class of the outstanding voting stock (or in the case of a Person which is
not a corporation, 10% or more of the aggregate voting rights of such Person) of
which is beneficially owned or held by the Company. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting stock, by contract or otherwise.
35
"AUTHORIZED OFFICER" shall mean (i) in the case of the Company, its
chief executive officer, its president and chief operating officer, its chief
financial officer, any vice president of the Company designated as an
"Authorized Officer" of the Company in the Information Schedule attached hereto
or any vice president of the Company designated as an "Authorized Officer" of
the Company for the purpose of this Agreement in an Officer's Certificate
executed by the Company's chief executive officer or chief financial officer and
delivered to Prudential, and (ii) in the case of Prudential, any officer of
Prudential designated as its "Authorized Officer" in the Information Schedule or
any officer of Prudential designated as its "Authorized Officer" for the purpose
of this Agreement in a certificate executed by one of its Authorized Officers.
Any action taken under this Agreement on behalf of the Company by any individual
who on or after the date of this Agreement shall have been an Authorized Officer
of the Company and whom Prudential reasonably in good faith believes to be an
Authorized Officer of the Company at the time of such action shall be binding on
the Company even though such individual shall have ceased to be an Authorized
Officer of the Company, and any action taken under this Agreement on behalf of
Prudential by any individual who on or after the date of this Agreement shall
have been an Authorized Officer of Prudential and whom the Company reasonably in
good faith believes to be an Authorized Officer of Prudential at the time of
such action shall be binding on Prudential even though such individual shall
have ceased to be an Authorized Officer of Prudential.
"AVAILABLE FACILITY AMOUNT" shall have the meaning specified in
paragraph 2A.
"BANK AGREEMENT" shall mean Amended and Restated Revolving Credit and
Reimbursement Agreement dated as of August 8, 1997 among the Company; Bank of
America N.A., formerly NationsBank, N.A., as Agent; First Union National Bank
and SunTrust Bank, as Co-Agents; and each lender a party thereto, as it may be
amended, modified or supplemented from time to time.
"BANKRUPTCY LAW" shall have the meaning specified in clause (viii) of
paragraph 7A.
"BUSINESS DAY" shall mean any day other than (i) a Saturday or a
Sunday, (ii) a day on which commercial banks in States of New York and Florida
are required or authorized to be closed and (iii) for purposes of paragraph 2D
hereof only, a day on which Prudential is not open for business.
"CANCELLATION DATE" shall have the meaning specified in paragraph
2I(3).
"CANCELLATION FEE" shall have the meaning specified in paragraph 2I(3).
"CAPITAL STOCK" means, with respect to any Person, the outstanding
capital stock (or any options or warrants to purchase capital stock or other
securities exchangeable for or convertible into capital stock) of such Person.
"CAPITALIZED LEASE OBLIGATION" shall mean any rental obligation which,
under generally accepted accounting principles, is or will be required to be
capitalized on the books of the Company or any Subsidiary, taken at the amount
thereof accounted for as indebtedness (net of interest expenses) in accordance
with such principles.
36
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act.
"CERCLIS" shall mean the Comprehensive Environmental Response,
Compensation and Liability Inventory System established pursuant to CERCLA.
"CLOSING DAY" shall mean, with respect to any Accepted Note, the
Business Day specified for the closing of the purchase and sale of such Accepted
Note in the Request for Purchase of such Accepted Note, PROVIDED that (i) if the
Company and the Purchaser which is obligated to purchase such Accepted Note
agree on an earlier Business Day for such closing, the "Closing Day" for such
Accepted Note shall be such earlier Business Day, and (ii) if the closing of the
purchase and sale of such Accepted Note is rescheduled pursuant to paragraph 2H,
the Closing Day for such Accepted Note, for all purposes of this Agreement
except references to "original Closing Day" in paragraph 2I(3), shall mean the
Rescheduled Closing Day with respect to such Accepted Note.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations promulgated thereunder from time to
time.
"CONFIRMATION OF ACCEPTANCE" shall have the meaning specified in
paragraph 2F.
"CONSOLIDATED" shall mean, with respect to any item of financial
information, the item of financial information for the Company and its
Subsidiaries consolidated in accordance with generally accepted accounting
principles.
"CONSOLIDATED DEBT" shall mean all Debt for money borrowed of the
Company and its Subsidiaries all determined in accordance with generally
accepted accounting principles on a consolidated basis after eliminating all
inter-company transactions.
"CONSOLIDATED EBITDA" means, for any period, Consolidated Net Income
adjusted by adding thereto the amount of all amortization of intangibles,
interest, taxes and depreciation that was deducted in arriving at Consolidated
Net Income for such period PROVIDED, HOWEVER, that with respect to any
Acquisition that is accounted for as a "purchase", Consolidated EBITDA,
beginning with the period during which such Acquisition occurs, shall include
the results of operations of the Person or assets so acquired, which amounts
shall be determined on a historical pro forma basis as if such Acquisition had
been consummated as a "pooling of interests."
"CONSOLIDATED INTEREST EXPENSE" shall mean, for the Company and its
Subsidiaries on a Consolidated basis for the four fiscal quarters most recently
ended, all interest expense (as determined in accordance with generally accepted
accounting principles) on all Debt (including imputed interest in respect of
Capitalized Lease Obligations) net of interest income.
"CONSOLIDATED NET INCOME" shall mean any net earnings (or net loss) of
the Company and its Subsidiaries determined in accordance with generally
accepted accounting principles, on a consolidated basis, excluding;
(i) extraordinary gains (net of any extraordinary losses up to
the amount of any extraordinary gains);
37
(ii) net income of any Person (other than a Subsidiary) in
which the Company or a Subsidiary has an ownership interest unless
those net earnings have actually been received in the form of cash for
distributions;
(iii) any aggregate net gain (in excess of any net losses)
arising from the sale, exchange or other disposition of capital assets
(such term to include all fixed assets, whether tangible or intangible,
all inventory sold in conjunction with the disposition of fixed assets,
and all securities);
(iv) any write-up of any asset;
(v) any gain arising from the acquisition of any securities of
the Company or is Subsidiaries; or
(vi) net income or gain (but not any loss) resulting from a
change in accounting, discontinuing or disposing of operations, an
extraordinary event or prior period adjustments.
"CONSOLIDATED NET WORTH" shall mean, at any time, for the Company and
its Subsidiaries on a Consolidated basis shareholders' equity at such time
determined in accordance with generally accepted accounting principles.
"CONSOLIDATED TOTAL ASSETS" shall mean the aggregate amount carried as
total assets on the books of the Company and its Subsidiaries, on a consolidated
basis and after eliminating all inter-company items, in accordance with
generally accepted accounting principles.
"CONSOLIDATED TOTAL CAPITALIZATION" shall mean, at any time, the sum of
(i) Consolidated Debt at such time plus (ii) Consolidated Net Worth at such
time.
"DEBT" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable, accrued
expenses, withholding taxes and deferred taxes, in each case arising in
the ordinary course of business, but including, without limitation, all
liabilities created or arising under any conditional sale or other
title retention agreement with respect to any such property);
(c) its Capitalized Lease Obligations;
(d) all liabilities for borrowed money secured by any Lien
with respect to any property owned by such Person (whether or not it
has assumed or otherwise become liable for such liabilities); and
(e) any Guaranty of such Person with respect to liabilities of
a type described in any of clauses (a) through (d) hereof.
38
Debt of any Person shall include all obligations of such Person of the character
described in clauses (a) through (e) to the extent such Person remains legally
liable in respect thereof notwithstanding that any such obligation is deemed to
be extinguished under GAAP and excludes any accounts payable, accrued expenses,
withholding taxes and deferred taxes, in each case arising in the ordinary
course of business.
"DELAYED DELIVERY FEE" shall have the meaning specified in paragraph
2I(3).
"ELIGIBLE SECURITIES" means the following obligations and any other
obligations previously approved in writing by the Required Holders:
(i) Government Securities;
(ii) obligations of any corporation organized under the laws
of any State of the United States of America or under the laws of any
other nation, payable in the United States of America, expressed to
mature not later than 92 days following the date of issuance thereof
and rated in an investment grade rating category by either S&P or
Moody's;
(iii) interest bearing demand or time deposits or certificates
of deposit maturing within one year from the date of issuance thereof
and issued by a bank or trust company organized under the laws of the
United States or of any State thereof having capital surplus and
undivided profits aggregating at least $200,000,000 and being rated
"A-3" or better by S&P or "A" or better by Moody's;
(iv) Repurchase Agreements;
(v) Municipal Obligations;
(vi) Pre-Refunded Municipal Obligations;
(vii) shares of mutual funds which invest in obligations
described in clauses (i) through (vi) above, the shares of which mutual
funds are at all times rated "AAA" by S&P;
(viii) tax-exempt or taxable adjustable rate preferred stock
issued by a Person having a rating of its long term unsecured debt of
"A" or better by S&P or "A-3" or better by Moody's;
(ix) asset-backed remarketed certificates of participation
representing a fractional undivided interest in the assets of a trust,
which certificates are rated at least "A-1" by S&P and "P-1" by
Moody's; and
(x) subject to the limitation set forth in paragraph 6H,
equity or debt securities which are listed on a national securities
exchange or freely traded in the over-the-counter market so long as the
fair market value of such securities do not exceed in the aggregate
$5,000,000.
39
"ENVIRONMENTAL AUTHORITY" shall mean any foreign, federal, state, local
or regional government that exercises any duly authorized form of jurisdiction
or authority under any Environmental Requirement.
"ENVIRONMENTAL JUDGMENTS AND ORDERS" shall mean all judgments, decrees
or orders arising from or in any way associated with any Environmental
Requirements, whether or not entered upon consent or written agreements with an
Environmental Authority or other duly authorized entity arising from or in any
way associated with any Environmental Requirement, whether or not incorporated
in a judgment, degree or order.
"ENVIRONMENTAL LIABILITIES" shall mean any liabilities, whether accrued
or contingent, arising from or relating in any way to any Environmental
Requirements.
"ENVIRONMENTAL NOTICES" shall mean any written communication from any
Environmental Authority stating possible or alleged noncompliance with or
possible or alleged liability under any Environmental Requirement, including
without limitation any complaints, citations, demands or requests from any
Environmental Authority for correction of any purported violation of any
Environmental Requirements or any investigation concerning any purported
violation of any Environmental Requirements. Environmental Notices also shall
mean (i) any written communication from any other Person threatening litigation
or administrative proceedings against or involving the Company relating to
alleged violation of any Environmental Requirements and (ii) any complaint,
petition or similar documents filed by any other Person commencing litigation or
administrative proceedings against or involving the Company relating to alleged
violation of any Environmental Requirements.
"ENVIRONMENTAL PROCEEDINGS" shall mean any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.
"ENVIRONMENTAL RELEASES" shall mean releases (as defined in CERCLA or
under any applicable state or local environmental law or regulation) of
Hazardous Materials. Environmental Releases does not include releases for which
no remediation or reporting is required by applicable Environmental Requirements
and which do not present a danger to health, safety or the environment.
"ENVIRONMENTAL REQUIREMENTS" shall mean any applicable local, state or
federal law, rule, regulation, permit, order, decision, determination or
requirement relating in any way to Hazardous Materials or to health, safety or
the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA AFFILIATE" shall mean any corporation which is a member of the
same controlled group of corporations as the Company within the meaning of
section 414(b) of the Code, or any trade or business which is under common
control with the Company within the meaning of section 414(c) of the Code.
"ERISA LIEN" shall mean any mortgage, pledge, security interest,
encumbrance, deposit arrangement, lien (statutory or otherwise) or charge of any
kind (including any agreement to give
40
any of the foregoing) or any other type of preferential arrangement protecting a
creditor or securing an obligation associated with the Employee Retirement
Income Security Act of 1974.
"EVENT OF DEFAULT" shall mean any of the events specified in paragraph
7A, PROVIDED that there has been satisfied any requirement in connection with
such event for the giving of notice, or the lapse of time, or the happening of
any further condition, event or act, and "Default" shall mean any of such
events, whether or not any such requirement has been satisfied.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"FACILITY" shall have the meaning specified in paragraph 2A.
"FACILITY FEE" shall have the meaning specified in paragraph 2I(1).
"FAIR MARKET VALUE" means, at any time, the sale value of property that
would be realized in an arm's-length sale at such time between an informed and
willing buyer, and an informed and willing seller, under no compulsion to buy or
sell, respectively.
"GOVERNMENTAL AUTHORITY" shall mean any Federal, state, municipal,
local, national or other governmental department, commission, board, bureau,
court, agency or instrumentality or political subdivision thereof or any entity
or officer exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to any government or any court, in
each case whether associated with a State of the United States, the United
States, or a foreign entity or government.
"GOVERNMENT SECURITIES" shall mean direct obligations of, or
obligations the timely payment of principal and interest on which are fully and
unconditionally guaranteed by, the United States of America.
"GUARANTORS" shall mean, collectively, the Subsidiaries of the Company
listed on Schedule 10B and any Subsidiary that becomes a Guarantor in accordance
with paragraph 5D hereof.
"GUARANTY" or "GUARANTEE" shall mean, with respect to any Person, any
obligation (except the endorsement in the ordinary course of business of
negotiable instruments for deposit or collection) of such Person guaranteeing or
in effect guaranteeing any indebtedness, dividend or other obligation of any
other Person in any manner, whether directly or indirectly, including (without
limitation) obligations incurred through an agreement, contingent or otherwise,
by such Person:
(i) to purchase such indebtedness or obligation or any
property constituting security therefor;
(ii) to advance or supply funds for the purchase or payment of
such indebtedness or obligation, or to maintain any working capital or
other balance sheet condition or any income statement condition of any
Person or otherwise to advance or make available funds for the purchase
or payment of such indebtedness or obligation;
41
(iii) to lease properties or to purchase properties or
services primarily for the purpose of assuring the owner of such
indebtedness or obligation of the ability of any other Person to make
payment of the indebtedness or obligation; or
(iv) otherwise to assure the owner of such indebtedness or
obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"GUARANTY AGREEMENT" shall mean any one of the Guaranty Agreements.
"GUARANTY AGREEMENTS" shall mean each Guaranty Agreement, in
substantially the form of Exhibit E hereto, dated as of the date hereof (in the
case of the Guarantors listed on Schedule 10B) or dated the date upon which a
Subsidiary of the Company becomes a Guarantor in accordance with paragraph 5E,
executed and delivered by each Guarantor in each case in connection with this
Agreement, as such Guaranty Agreement may be amended, restated modified or
supplemented from time to time in accordance with its terms.
"HAZARDOUS MATERIALS" shall mean (a) hazardous waste as defined in the
Resource Conservation and Recovery Act of 1976, or in any applicable federal,
state or local law or regulation, (b) hazardous substances, as defined in
CERCLA, or in any applicable state or local law or regulation, (c) gasoline, or
any other petroleum product or by-product, (d) toxic substances, as defined in
the Toxic Substances Control Act of 1976, or in any applicable federal, state or
local law or regulation or (e) insecticides, fungicides, or rodenticides, as
defined in the Federal Insecticide, Fungicide, and Rodenticide Act of 1975, or
in any applicable federal, state or local law or regulation, as each such Act,
statute or regulation may be amended from time to time.
"HEDGE TREASURY NOTE(S)" shall mean, with respect to any Accepted Note,
the United States Treasury Note or Notes whose duration (as determined by
Prudential) most closely matches the duration of such Accepted Note.
"HOSTILE TENDER OFFER" shall mean, with respect to the use of proceeds
of any Note, any offer to purchase, or any purchase of, shares of capital stock
of any corporation or equity interests in any other entity, or securities
convertible into or representing the beneficial ownership of, or rights to
acquire, any such shares or equity interests, if such shares, equity interests,
securities or rights are of a class which is publicly traded on any securities
exchange or in any over-the-counter market, other than purchases of such shares,
equity interest, securities or rights representing less than 5% of the equity
interests or beneficial ownership of such corporation or other entity for
portfolio investment purposes, and such offer or purchase has not been duly
approved by the board of directors of such corporation or the equivalent
governing body of such other entity prior to the date on which the Company makes
the Request for Purchase of such Note.
"INCLUDING" shall mean, unless the context clearly requires otherwise,
"including without limitation".
42
"INITIAL CLOSING DAY" shall have the meaning specified in paragraph 3.
"INITIAL FUNDING DAY" shall have the meaning specified in paragraph 3.
"INSTITUTIONAL INVESTORS" shall mean (i) any bank, savings bank,
savings and loan association or insurance company, (ii) any pension plan or
portfolio or investment fund managed or administered by any bank, savings bank,
savings and loan association or insurance company, (iii) any investment company
owned by any bank, savings bank, savings and loan association or insurance
company, the majority of the shares of the capital stock of which are traded on
a national securities exchange or in the National Association of Securities
Dealers automated quotation system, or (iv) any investment banking company.
"INTANGIBLES" shall mean goodwill, patents, trademarks, trade names,
organization expense, licenses, franchises, exploration permits and import and
export permits and other like intangibles, determined in accordance with
generally accepted accounting principles.
"INVESTMENT" shall mean, when used with respect to any Person, any
direct or indirect advance, loan or other extension of credit or capital
contribution by such Person (by means of transfers of property to others or
payments for property or services for the account or use of others, or
otherwise) to any other Person, or any direct or indirect purchase or other
acquisition or beneficial ownership by such Person of, or of a beneficial
interest in, Capital Stock, partnership interests, bonds, notes, debentures or
other securities issued by any other Person or the assumption of any liability
of any other Person.
"ISSUANCE PERIOD" shall have the meaning specified in paragraph 2B.
"LIEN" shall mean any interest in property securing any obligation owed
to, or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute or contract, and including but not
limited to the lien or security interest arising from a mortgage, encumbrance,
pledge, security agreement, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes. For the purposes of this
Agreement, the Company and any Subsidiary shall be deemed to be the owner of any
property which it has acquired or holds subject to a conditional sale agreement,
financing lease, or other arrangement pursuant to which title to the property
has been retained by or vested in some other Person for security purposes.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc. or any successor
thereto.
"MATERIAL PROVISION" shall have the meaning specified in paragraph 5J.
"MULTIEMPLOYER PLAN" shall mean any Plan which is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA.
"MUNICIPAL OBLIGATIONS" means general obligations issued by, and
supported by the full taxing authority of, any state of the United States of
America or of any municipal corporation or other public body organized under the
laws of any such state which are rated in the highest investment rating category
by both S&P and Moody's.
43
"NOTES" shall have the meaning specified in paragraph 1.
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of
the Company by its President, one of its Vice Presidents or its Treasurer.
"PERSON" shall mean and include an individual, a partnership, a joint
venture, limited liability company, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.
"PLAN" shall mean any employee pension benefit plan (as such term is
defined in section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by the Company or any ERISA
Affiliate.
"PRE-REFUNDED MUNICIPAL OBLIGATIONS" means obligations of any State of
the United States of America or of any municipal corporation or other public
body organized under the laws of any such State which are rated, based on the
escrow, in the highest investment rating category by both S&P and Moody's and
which have been irrevocably called for redemption and advance refunded through
the deposit in escrow of Government Securities or other debt securities which
are (i) not callable at the option of the issuer thereof prior to maturity, (ii)
irrevocably pledged solely to the payment of all principal and interest on such
obligations as the same becomes due and (iii) in a principal amount and bear
such rate or rates of interest as shall be sufficient to pay in full all
principal of, interest, and premium, if any, on such obligations as the same
becomes due as verified by a nationally recognized firm of certified public
accountants.
"PRIORITY DEBT" means with respect any Person, at any time, without
duplication, the sum of
(i) Debt of each Subsidiary (other than Debt held by the
Company or another wholly-owned Subsidiary); and
(ii) Debt secured by any Lien other than a Lien described in
clauses (ii), (iii) or (v) of paragraph 6B(1).
"PROPERTIES" shall mean all real property owned, leased or otherwise
used or occupied by the Company or any Subsidiary, wherever located.
"PRUDENTIAL" shall mean The Prudential Insurance Company of America.
"PRUDENTIAL AFFILIATE" shall mean any corporation or other entity all
of the Voting Stock (or equivalent voting securities or interests) of which is
owned by Prudential either directly or through Prudential Affiliates.
"PURCHASERS" shall mean with respect to any Accepted Notes, Prudential
and/or the Prudential Affiliate(s), which are purchasing such Accepted Notes.
"QPAM EXEMPTION" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
44
"QUALIFIED RECEIVABLES FINANCING" shall mean, during any twelve month
period, any Receivables Financing of the Company or any Subsidiaries so long as
the aggregate face value of the Receivables of the Company or such Subsidiary so
sold or discounted in connection therewith, together with the aggregate face
value of all other then outstanding Receivables sold or discounted by the
Company and the Subsidiaries in other Receivables Financings prior to such time,
is less than or equal to thirty-three percent (33%) of the SUM of (i) the face
amount of the then outstanding Receivables so sold or discounted, PLUS (ii) the
face amount of the then outstanding Receivables of the Company and the
Subsidiaries not so sold or discounted by the Company and the Subsidiaries.
"RECEIVABLES" shall mean any accounts, contract rights and other forms
of obligations for the payment of money arising from the sale of goods or the
rendering of services by the Company or any of its Subsidiaries, including those
outstanding under any off balance sheet factoring agreement or asset
securitization program of the Company or any of its Subsidiaries.
"RECEIVABLES FINANCING" shall mean a transaction pursuant to which
funds are advanced to the Company and/or any of its Subsidiaries in exchange for
which the Company and/or any of its Subsidiaries shall pledged, sell or
otherwise transfer any or all of its Receivables to secure, in whole or in part,
the repayment of such funds.
"RELATED DOCUMENTS" shall mean this Agreement, any Note, each Guaranty
Agreement and any document or instrument executed in connection with any of the
foregoing.
"RENTALS" shall mean for any period of determination all fixed rents or
charges (including as such all payments during any such period of determination
which the lessee is obligated to make on termination of the lease or surrender
of the property) payable by the Company or a Subsidiary (as lessee, sublessee,
licensee, franchisee or the like) for such period under a lease, license, or
other agreement for the use or possession of real or personal property, tangible
or intangible, as determined in accordance with generally accepted accounting
principles.
"REQUEST FOR PURCHASE" shall have the meaning specified in paragraph
2D.
"REQUIRED HOLDER(S)" shall mean the holder or holders of at least
66-2/3% of the aggregate principal amount of the Notes or of a Series of Notes,
as the context may require, from time to time outstanding.
"RESCHEDULED CLOSING DAY" shall have the meaning specified in paragraph
2H.
"RESPONSIBLE OFFICER" shall mean the chief executive officer, chief
operating officer, chief financial officer or chief accounting officer of the
Company, general counsel of the Company or any other officer of the Company
involved principally in its financial administration or its controllership
function.
"RHEEM AGREEMENTS" shall mean each of the agreements between the
Company [AND/OR ITS SUBSIDIARIES] and Rheem Manufacturing Company, a New York
corporation.
"S&P" means Standard & Poor's Rating Group or any successor thereto.
45
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SERIES" shall have the meaning specified in paragraph 1.
"SIGNIFICANT HOLDER" shall mean (i) Prudential, so long as Prudential
or any Prudential Affiliate shall hold (or be committed under this Agreement to
purchase) any Note, or (ii) any other holder of at least 10% of the aggregate
principal amount of the Notes of any Series from time to time outstanding.
"SUBSIDIARY" shall mean any corporation or other entity in which 50% or
more of its outstanding voting stock or 50% or more of all equity interests is
owned directly or indirectly by the Company and/or by one or more of the
Company's Subsidiaries.
"SUBSTANTIAL PART" shall mean, with respect to any transfer, assets
which (i)(A) together with all other assets disposed of in the same fiscal year
constitute 10% or more of Consolidated Total Assets determined as of the end of
the immediately preceding fiscal year or (B) have contributed 10% or more of
Consolidated Net Income for any of the three most recently completed fiscal
years and (ii) from the date hereof the aggregate book value or, if higher, Fair
Market Value of all Disposed assets exceed 25% of Consolidated Total Assets.
"THIRD PARTY" shall mean all lessees, sublessees, licensees and other
users of the Properties, excluding those users of the Properties in the ordinary
course of the Company's business (consistent with its practices on the Initial
Closing Day) and on a temporary basis.
"TRANSFEREE" shall mean any direct or indirect transferee of all or any
part of any Note purchased by any Purchaser under this Agreement.
"VOTING STOCK" shall mean, with respect to any corporation, any shares
of stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(irrespective of whether 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).
10C. ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS. All references in
this Agreement to "generally accepted accounting principles" shall be deemed to
refer to generally accepted accounting principles in effect in the United States
at the time of application thereof. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all determinations with
respect to accounting matters hereunder shall be made, and all unaudited
financial statements and certificates and reports as to financial matters
required to be furnished hereunder shall be prepared, in accordance with
generally accepted accounting principles applied on a basis consistent with the
most recent audited financial statements delivered pursuant to clause (ii) of
paragraph 5A or, if no such statements have been so delivered, the most recent
audited financial statements referred to in clause (i) of paragraph 8B.
11. MISCELLANEOUS.
11A. PAYMENTS. The Company agrees that, so long as any Purchaser shall
hold any Note, it will make payments of principal of, interest on, and any
Yield-Maintenance Amount payable with respect to, such Note, which comply with
the terms of this Agreement, by wire
46
transfer of immediately available funds for credit (not later than 12:00 noon,
New York City local time, on the date due) to (i) the account or accounts of
such Purchaser specified in the Confirmation of Acceptance with respect to such
Note in the case of any Shelf Note or (ii) such other account or accounts in the
United States as such Purchaser may from time to time designate in writing,
notwithstanding any contrary provision herein or in any Note with respect to the
place of payment. Each Purchaser agrees that, before disposing of any Note, it
will make a notation thereon (or on a schedule attached thereto) of all
principal payments previously made thereon and of the date to which interest
thereon has been paid. The Company agrees to afford the benefits of this
paragraph 11A to any Transferee which shall have made the same agreement as the
Purchasers have made in this paragraph 11A.
11B. EXPENSES. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save Prudential, each
Purchaser and any Transferee harmless against liability for the payment of, all
out-of-pocket expenses arising in connection with such transactions, including:
(i) all taxes (together in each case with interest and
penalties, if any), other than state, federal, local or foreign income
taxes, intangible taxes, or franchise taxes, including without
limitation, all stamp, recording and other similar taxes, which may be
payable with respect to the execution and delivery of this Agreement or
the execution, delivery or acquisition of any Note;
(ii) all document production and duplication charges and the
fees and expenses of any special counsel engaged by the Purchasers in
connection with this Agreement, the transactions contemplated hereby
and any subsequent proposed modification of, or proposed consent under,
this Agreement, whether or not such proposed modification shall be
effected or proposed consent granted; PROVIDED, HOWEVER, that in
connection with the fees and expenses of legal counsel of the
Purchasers incurred prior to the Initial Closing Day, the Purchasers
shall agree to use the Facility Fee paid by the Company under paragraph
2I(1) to pay all or a portion of such fees and expenses; and
(iii) the costs and expenses, including fees and expenses of
legal counsel incurred by you, any other Purchaser or any Transferee in
connection with the restructuring, refinancing or "work out" of this
Agreement or the Notes or the transactions contemplated hereby or
thereby or in enforcing (or determining whether or how to enforce) any
rights under this Agreement or the Notes or in responding to any
subpoena or other legal process or informal investigative demand issued
in connection with this Agreement or the Notes or the transactions
contemplated hereby or by reason of your or any Transferee's having
acquired any Note, including without limitation costs and expenses
incurred in any bankruptcy case.
Notwithstanding the foregoing, the Company shall not be liable for any counsel
fees incurred by any Purchaser or Transferee arising in connection with a
transfer in the ordinary course of any Note or portion thereof or interest
therein by Prudential or any other Purchaser to any Transferee. The obligations
of the Company under this paragraph 11B shall survive the transfer of any Note
or portion thereof or interest therein by any Purchaser or any Transferee and
the payment of any Note.
47
11C. CONSENT TO AMENDMENTS. This Agreement may be amended, and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if the Company shall obtain the written consent
to such amendment, action or omission to act, of the Required Holder(s) of the
Notes of each Series except that, (i) with the written consent of the holders of
all Notes of a particular Series, and if an Event of Default shall have occurred
and be continuing, of the holders of all Notes of all Series, at the time
outstanding (and not without such written consents), the Notes of such Series
may be amended or the provisions thereof waived to change the maturity thereof,
to change or affect the principal thereof, or to change or affect the rate or
time of payment of interest on or any Yield-Maintenance Amount payable with
respect to the Notes of such Series, (ii) without the written consent of the
holder or holders of all Notes at the time outstanding, no amendment to or
waiver of the provisions of this Agreement shall change or affect the provisions
of paragraph 7A or this paragraph 11C insofar as such provisions relate to
proportions of the principal amount of the Notes of any Series, or the rights of
any individual holder of Notes, required with respect to any declaration of
Notes to be due and payable or with respect to any consent, amendment, waiver or
declaration, (iii) with the written consent of Prudential (and not without the
written consent of Prudential) the provisions of paragraph 2 may be amended or
waived (except insofar as any such amendment or waiver would affect any rights
or obligations with respect to the purchase and sale of Notes which shall have
become Accepted Notes prior to such amendment or waiver), and (iv) with the
written consent of all of the Purchasers which shall have become obligated to
purchase Accepted Notes of any Series (and not without the written consent of
all such Purchasers), any of the provisions of paragraphs 2 and 3 may be amended
or waived insofar as such amendment or waiver would affect only rights or
obligations with respect to the purchase and sale of the Accepted Notes of such
Series or the terms and provisions of such Accepted Notes. Each holder of any
Note at the time or thereafter outstanding shall be bound by any consent
authorized by this paragraph 11C, whether or not such Note shall have been
marked to indicate such consent, but any Notes issued thereafter may bear a
notation referring to any such consent. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein and in the Notes, the term "this Agreement" and references
thereto shall mean this Agreement as it may from time to time be amended or
supplemented. Prior to its effectiveness, any amendment, waiver or consent shall
be in writing and executed by the Company and the Required Holders or the
holders of all Notes, as applicable.
11D. FORM AND REGISTRATION; TRANSFER AND EXCHANGE; TRANSFER
RESTRICTIONS; LOST NOTES.
11D(1) FORM AND REGISTRATION. The Notes are issuable as registered
notes without coupons in denominations of at least $1,000,000, except as may be
necessary to reflect any principal amount not evenly divisible by $1,000,000.
The Company shall keep at its principal office a register in which the Company
shall provide for the registration of Notes and of transfers of Notes. Upon
surrender for registration of transfer of any Note at the principal office of
the Company, the Company shall, at its expense, execute and deliver one or more
new Notes of like tenor and of a like aggregate principal amount, registered in
the name of such transferee or transferees.
48
11D(2) TRANSFER AND EXCHANGE OF NOTES. At the option of the holder of
any Note, such Note may be exchanged for other Notes of like tenor and of any
authorized denominations, of a like aggregate principal amount, upon surrender
of the Note to be exchanged at the principal office of the Company. Whenever any
Notes are so surrendered for exchange, the Company shall, at its expense,
execute and deliver the Notes which the holder making the exchange is entitled
to receive. Each installment of principal payable on each installment date upon
each new Note issued upon any such transfer or exchange shall be in the same
proportion to the unpaid principal amount of such new Note as the installment of
principal payable on such date on the Note surrendered for registration of
transfer or exchange bore to the unpaid principal amount of such Note. No
reference need be made in any such new Note to any installment or installments
of principal previously due and paid upon the Note surrendered for registration
of transfer or exchange. Every Note surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer duly executed, by the holder of such Note or such holder's attorney
duly authorized in writing. Any Note or Notes issued in exchange for any Note or
upon transfer thereof shall carry the rights to unpaid interest and interest to
accrue which were carried by the Note so exchanged or transferred, so that
neither gain nor loss of interest shall result from any such transfer or
exchange.
11D(3) LOST NOTES. Upon receipt of written notice from the holder of
any Note of the loss, theft, destruction or mutilation of such Note and, in the
case of any such loss, theft or destruction, upon receipt of such holder's
unsecured indemnity agreement, in form and substance reasonably satisfactory to
the Company, or in the case of any such mutilation upon surrender and
cancellation of such Note, the Company will make and deliver a new Note, of like
tenor, in lieu of the lost, stolen, destroyed or mutilated Note.
11E. PERSONS DEEMED OWNERS; PARTICIPATIONS. Prior to due presentment
for registration of transfer, the Company may treat the Person in whose name any
Note is registered as the owner and holder of such Note for the purpose of
receiving payment of principal of and interest on, and any Yield-Maintenance
Amount payable with respect to, such Note and for all other purposes whatsoever,
whether or not such Note shall be overdue, and the Company shall not be affected
by notice to the contrary. Subject to the preceding sentence, the holder of any
Note may from time to time grant participations in all or any part of such Note
to any Person on such terms and conditions as may be determined by such holder
in its sole and absolute discretion.
11F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All
representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement and the Notes, the transfer by any Purchaser of any
Note or portion thereof or interest therein and the payment of any Note, and may
be relied upon by any Transferee, regardless of any investigation made at any
time by or on behalf of any Purchaser or any Transferee. Subject to the
preceding sentence, this Agreement and the Notes embody the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersede all prior agreements and understandings relating to such
subject matter.
11G. SUCCESSORS AND ASSIGNS. All covenants and other agreements in this
Agreement contained by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the
49
respective successors and assigns of the parties hereto (including, without
limitation, any Transferee) whether so expressed or not.
11H. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
independent effect so that if a particular action or condition is prohibited by
any one of such covenants, the fact that it would be permitted by an exception
to, or otherwise be in compliance within the limitations of, another covenant
shall not avoid the occurrence of a Default or Event of Default if such action
is taken or such condition exists.
11I. NOTICES. All written communications provided for hereunder (other
than communications provided for under paragraph 2) shall be sent by first class
mail or nationwide overnight delivery service (with charges prepaid) and (i) if
to any Purchaser, addressed as specified for such communications in the
Purchaser Schedule attached to the applicable Confirmation of Acceptance (in the
case of any Shelf Notes) or at such other address as any such Purchaser shall
have specified to the Company in writing, (ii) if to any other holder of any
Note, addressed to it at such address as it shall have specified in writing to
the Company or, if any such holder shall not have so specified an address, then
addressed to such holder in care of the last holder of such Note which shall
have so specified an address to the Company and (iii) if to the Company,
addressed to it at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇, telephone ▇▇▇-▇▇▇-▇▇▇▇, telecopy ▇▇▇-▇▇▇-▇▇▇▇,
PROVIDED, HOWEVER, that any such communication to the Company may also, at the
option of the Person sending such communication, be delivered by any other means
either to the Company at its address specified above or to any Authorized
Officer of the Company. Any communication pursuant to paragraph 2 shall be made
by the method specified for such communication in paragraph 2, and shall be
effective to create any rights or obligations under this Agreement only if, in
the case of a telephone communication, an Authorized Officer of the party
conveying the information and of the party receiving the information are parties
to the telephone call, and in the case of a telecopier communication, the
communication is signed by an Authorized Officer of the party conveying the
information, addressed to the attention of an Authorized Officer of the party
receiving the information, and in fact received at the telecopier terminal the
number of which is listed for the party receiving the communication in the
Information Schedule or at such other telecopier terminal as the party receiving
the information shall have specified in writing to the party sending such
information.
11J. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this Agreement or
the Notes to the contrary notwithstanding, any payment of principal of or
interest on, or Yield-Maintenance Amount payable with respect to, any Note that
is due on a date other than a Business Day shall be made on the next succeeding
Business Day. If the date for any payment is extended to the next succeeding
Business Day by reason of the preceding sentence, the period of such extension
shall be included in the computation of the interest payable on such Business
Day.
11K. SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
50
11L. DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
11M. SATISFACTION REQUIREMENT. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Agreement
required to be satisfactory to any Purchaser, to any holder of Notes or to the
Required Holder(s), the determination of such satisfaction shall be made by such
Purchaser, such holder or the Required Holder(s), as the case may be, in the
sole and exclusive judgment (exercised in good faith) of the Person or Persons
making such determination.
11N. GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement shall be
construed and enforced in accordance with, and the rights of the Parties shall
be governed by, the Internal Law of the State of New York. THE COMPANY HEREBY
SUBMITS TO THE JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK
LOCATED IN NEW YORK COUNTY, NEW YORK AND THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK AND IRREVOCABLY AGREES THAT, SUBJECT TO THE
SOLE AND ABSOLUTE ELECTION OF THE REQUIRED HOLDER(S) AND TO THE EXTENT PERMITTED
BY APPLICABLE LAW, ALL ACTIONS OR PROCEEDINGS RELATING TO THIS AGREEMENT OR THE
NOTES SHALL BE LITIGATED IN SUCH COURTS, AND THE COMPANY WAIVES ANY OBJECTION
WHICH IT MAY HAVE BASED ON IMPROPER VENUE OR FORUM NON CONVENIENS TO THE CONDUCT
OF ANY PROCEEDING IN ANY SUCH COURTS.
11O. SEVERALTY OF OBLIGATIONS. The sales of Notes to the Purchasers are
to be several sales, and the obligations of Prudential and the Purchasers under
this Agreement are several obligations. No failure by Prudential or any
Purchaser to perform its obligations under this Agreement shall relieve
Prudential, any other Purchaser or the Company of any of its obligations
hereunder, and neither Prudential nor any Purchaser shall be responsible for the
obligations of, or any action taken or omitted by, any other such Person
hereunder.
11P. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
51
11Q. BINDING AGREEMENT. When this Agreement is executed and delivered
by the Company and Prudential, it shall become a binding agreement between the
Company and Prudential. This Agreement shall also inure to the benefit of each
Purchaser which shall have executed and delivered a Confirmation of Acceptance,
and each such Purchaser shall be bound by this Agreement to the extent provided
in such Confirmation of Acceptance.
Very truly yours,
WATSCO, INC.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President - Finance,
Chief Financial Officer,
and Secretary
The foregoing Agreement is
hereby accepted as of the
date first above written.
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------
Vice President
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
EXHIBIT A
[FORM OF SHELF NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND
MAY NOT BE OFFERED OR SOLD IN VIOLATION OF SUCH ACT.
WATSCO, INC.
SENIOR SERIES ___ NOTE
No.____
ORIGINAL PRINCIPAL AMOUNT:
ORIGINAL ISSUE DATE:
INTEREST RATE:
INTEREST PAYMENT DATES:
FINAL MATURITY DATE:
PRINCIPAL PREPAYMENT DATES AND AMOUNTS:
FOR VALUE RECEIVED, the undersigned, WATSCO, INC. (herein called the
"COMPANY"), a corporation organized and existing under the laws of the State of
Florida, hereby promises to pay to ________________________, or registered
assigns, the principal sum of _______________________ DOLLARS [on the Final
Maturity Date specified above] [, payable on the Principal Prepayment Dates and
in the amounts specified above, and on the Final Maturity Date specified above
in an amount equal to the unpaid balance of the principal hereof,] with interest
(computed on the basis of a 360-day year--30-day month) (a) on the unpaid
balance thereof at the Interest Rate per annum specified above, payable on each
Interest Payment Date specified above and on the Final Maturity Date specified
above, commencing with the Interest Payment Date next succeeding the date
hereof, until the principal hereof shall have become due and payable, and (b) on
any overdue payment (including any overdue prepayment) of principal, any overdue
payment of Yield Maintenance Amount and any overdue payment of interest, payable
on each Interest Payment Date as aforesaid (or, at the option of the registered
holder hereof, on demand), at a rate per annum from time to time equal to the
greater of (i) 2% over the Interest Rate specified above or (ii) 2% over the
rate of interest publicly announced by ▇▇▇▇▇▇ Guaranty Trust Company of New York
from time to time in New York City as its Prime Rate.
Payments of principal, Yield Maintenance Amount, if any, and interest
are to be made at the main office of ▇▇▇▇▇▇ Guaranty Trust Company of New York
in New York City or at such other place as the holder hereof shall designate to
the Company in writing, in lawful money of the United States of America.
This Note is one of a series of Senior Notes (herein called the
"NOTES") issued pursuant to a Note Purchase and Private Shelf Agreement, dated
as of January __, 2000 (herein called the "AGREEMENT"), between the Company and
The Prudential Insurance Company of America and each Prudential Affiliate (as
defined in the Agreement) which becomes party thereto and is entitled to the
benefits thereof.
[This Note is subject to optional prepayment, in whole or from time to
time in part, on the terms specified in the Agreement.]
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for the then outstanding principal amount will be issued to, and registered in
the name of, the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this Note is registered
as the owner hereof for the purpose of receiving payment and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
In case an Event of Default shall occur and be continuing, the
principal of this Note may be declared or otherwise become due and payable in
the manner and with the effect provided in the Agreement.
The Company and any and all endorsers, guarantors and sureties
severally waive demand, presentment for payment, notice of dishonor or default,
notice of intent to accelerate, notice of acceleration (to the extent set forth
in the Agreement), protest and diligence in collecting.
Should any debt represented by this Note be collected at law or in
equity, or in bankruptcy or other proceedings, or should this Note be placed in
the hands of attorneys for collection, the Company agrees to pay, in addition to
the principal, Yield-Maintenance Amount, if any, and interest due and payable
hereon, all costs of collecting or attempting to collect this Note, including
attorneys' fees and expenses (including those incurred in connection with any
appeal).
Capitalized terms used and not otherwise defined herein shall have the
meanings (if any) provided in the Agreement.
A-2
This Note is intended to be performed in the State of New York and
shall be construed and enforced in accordance with the internal law of such
State. AS PROVIDED IN PARAGRAPH 11N OF THE AGREEMENT, THE COMPANY SUBMITS TO THE
JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK LOCATED IN NEW YORK
COUNTY, NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF NEW YORK IN ANY ACTION OR PROCEEDING RELATING TO THIS NOTE.
WATSCO, INC.
By:_________________________________
Title:
A-3
EXHIBIT B
[FORM OF REQUEST FOR PURCHASE]
WATSCO, INC.
Reference is made to the Note Purchase and Private Shelf Agreement (the
"AGREEMENT"), dated as of January __, 2000 between Watsco, Inc. (the "COMPANY")
and The Prudential Insurance Company of America ("PRUDENTIAL") and each
Prudential Affiliate which becomes party thereto. Capitalized terms used and not
otherwise defined herein shall have the respective meanings specified in the
Agreement.
Pursuant to ▇▇▇▇▇▇▇▇▇ ▇▇ of the Agreement, the Company hereby makes the
following Request for Purchase:
1. Aggregate principal amount of
the Notes covered hereby
(the "NOTES") ............ $
2. Individual specifications of the Notes:
Principal Final Maturity Principal Prepayment Interest Payment
Amount(1) Date Dates and Amounts Period(2)
---------------- ------------------- --------------------------- ----------------------
3. Use of proceeds of the Notes:
4. Proposed day for the closing of the purchase and sale of the Notes:
--------------------------------------
(1) Minimum principal amount of $10,000,000.
(2) Specify quarterly or semi-annually.
5. The purchase price of the Notes is to be transferred to:
Name, Address
and ABA Routing Number of
Number of Bank Account
----------------------------------------- -------------------------------
6. [Except as otherwise set forth in Exhibit A attached hereto, the Company certifies that:
(a) the representations and warranties contained in
paragraph 8 of the Agreement are true on and as of
the date of this Request for Purchase except to the
extent of changes caused by the transactions
contemplated in the Agreement; and
(b) there exists on the date of this Request for Purchase
no Event of Default or Default.
7. The Issuance Fee to be paid pursuant to the Agreement will be
paid by the Company on the closing date.
Dated: WATSCO, INC.
By: ________________________________
Authorized Officer
B-2
EXHIBIT C
[FORM OF CONFIRMATION OF ACCEPTANCE]
WATSCO, INC.
Reference is made to the Note Purchase and Private Shelf Agreement (the
"AGREEMENT"), dated as of January __, 2000 between Watsco, Inc. (the "COMPANY")
and The Prudential Insurance Company of America ("PRUDENTIAL") and each
Prudential Affiliate which becomes party thereto. All terms used herein that are
defined in the Agreement have the respective meanings specified in the
Agreement.
Prudential or the Prudential Affiliate which is named below as a
Purchaser of Notes hereby confirms the representations as to such Notes set
forth in paragraph 9 of the Agreement, and agrees to be bound by the provisions
of paragraphs 2F and 2H of the Agreement relating to the purchase and sale of
such Notes and by the provisions of the penultimate sentence of paragraph 11A of
the Agreement.
Pursuant to paragraph 2F of the Agreement, an Acceptance with respect
to the following Accepted Notes is hereby confirmed:
I. Accepted Notes: Aggregate principal
amount $__________________
(A) (a) Name of Purchaser:
(b) Principal amount:
(c) Final maturity date:
(d) Principal prepayment dates and amounts:
(e) Interest rate:
(f) Interest payment period:
(g) Payment and notice instructions: As set forth on attached
Purchaser Schedule
(B) (a) Name of Purchaser:
(b) Principal amount:
(c) Final maturity date:
(d) Principal prepayment dates and amounts:
(e) Interest rate:
(f) Interest payment period:
(g) Payment and notice instructions: As set forth on attached
Purchaser Schedule
[(C), (D)..... same information as above.]
II. Closing Day:
Dated: WATSCO, INC.
By:_________________________________
Title:______________________________
[THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA]
By:_________________________________
Vice President
[PRUDENTIAL AFFILIATE]
By:_________________________________
Vice President
C-2
EXHIBIT D-1
[FORM OF OPINION OF COMPANY'S COUNSEL]
[Letterhead of ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇]
[Date of Closing]
The Prudential Insurance Company of America
c/o Prudential Capital Group
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as counsel for Watsco, Inc. (the "COMPANY") in connection
with the Note Purchase and Private Shelf Agreement, dated as of January __, 2000
(the "AGREEMENT") between the Company and The Prudential Insurance Company of
America and each Prudential Affiliate which becomes a party thereto and each of
its Subsidiaries. Capitalized terms used and not otherwise defined herein shall
have the meanings provided in the Agreement. This letter is being delivered to
you in satisfaction of the condition set forth in paragraph 3A(1)(vi) of the
Agreement and with the understanding you are purchasing the Notes in reliance on
the opinions expressed herein.
In this connection, we have examined such certificates of public
officials, certificates of officers of the Company and its Subsidiaries and
copies certified to our satisfaction of corporate documents and records of the
Company and its Subsidiaries and of other papers, and have made such other
investigations, as we have deemed relevant and necessary as a basis for our
opinion hereinafter set forth. We have relied upon such certificates of public
officials and of officers of the Company with respect to the accuracy of
material factual matters contained therein which were not independently
established.
Based on the foregoing, it is our opinion that:
1. The Company and its Subsidiaries have the corporate power to carry
on their respective businesses as now being conducted.
2. The Agreement has been duly authorized by all requisite corporate
action and duly executed and delivered by authorized officers of the Company,
and is a valid obligation of the Company, legally binding upon and enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by (a) bankruptcy, insolvency, reorganization or other similar
laws affecting the enforcement of creditors' rights generally and (b) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
3. The execution and delivery of the Agreement and fulfillment of and
compliance with the provisions of the Agreement do not conflict with, or result
in a breach of the terms, conditions or provisions of, or constitute a default
under, or result in any violation of, or result in the creation of any Lien upon
any of the properties or assets of the Company or any of its Subsidiaries
pursuant to, or require any authorization, consent, approval, exemption, or
other action by or notice to or filing with any court, administrative or
governmental body or other Person (other than routine filings after the date
hereof with the Securities and Exchange Commission and/or state Blue Sky
authorities) pursuant to, the charter or by-laws of the Company or any of its
Subsidiaries, any applicable law (including any securities or Blue Sky law),
statute, rule or regulation or (insofar as is known to us after having made due
inquiry with respect thereto) any agreement (including, without limitation, any
agreement listed in Schedule 8G to the Agreement), instrument, order, judgment
or decree to which the Company or any of its Subsidiaries is a party or
otherwise subject.
Each of King & Spalding and any Transferee may rely on this opinion.
Very truly yours,
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
[FORM OF OPINION OF FLORIDA COUNSEL TO THE COMPANY]
[Letterhead of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇ P.A]
[Date of Closing]
The Prudential Insurance Company of America
c/o Prudential Capital Group
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as counsel for Watsco, Inc. (the "COMPANY") in connection
with the Note Purchase and Private Shelf Agreement, dated as of January __, 2000
(the "AGREEMENT") between the Company and The Prudential Insurance Company of
America and each Prudential Affiliate which becomes a party thereto and each of
its Subsidiaries identified on the attached Schedule. Capitalized terms used and
not otherwise defined herein shall have the meanings provided in the Agreement.
This letter is being delivered to you in satisfaction of the condition set forth
in paragraph 3A(1)(vii) of the Agreement and with the understanding you are
purchasing the Notes in reliance on the opinions expressed herein.
In this connection, we have examined such certificates of public
officials, certificates of officers of the Company and its Subsidiaries and
copies certified to our satisfaction of corporate documents and records of the
Company and its Subsidiaries and of other papers, and have made such other
investigations, as we have deemed relevant and necessary as a basis for our
opinion hereinafter set forth. We have relied upon such certificates of public
officials and of officers of the Company with respect to the accuracy of
material factual matters contained therein which were not independently
established.
Based on the foregoing, it is our opinion that:
1. The Company is a corporation duly organized and validly existing in
good standing under the laws of the State of Florida. The Company and its
Subsidiaries have the corporate power to carry on their respective businesses as
now being conducted.
2. The execution and delivery of the Agreement and fulfillment of and
compliance with the provisions of the Agreement do not require any
authorization, consent, approval, exemption, or other action by or notice to or
filing with any court, administrative or governmental body or other Person
(other than routine filings after the date hereof with the Securities and
Exchange Commission and/or state Blue Sky authorities) pursuant to, the charter
or by-laws of the Company or any Guarantor, any applicable Florida law
(including any
securities or Blue Sky law), statute, rule or regulation or (insofar as is known
to us after having made due inquiry with respect thereto) any order, judgment or
decree to which the Company or any Guarantor is a party or otherwise subject.
Each of King & Spalding and any Transferee may rely on this opinion.
Very truly yours,
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
[FORM OF OPINION OF COMPANY'S COUNSEL]
[Letterhead of ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇]
[Date of Closing]
The Prudential Insurance Company of America
c/o Prudential Capital Group
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as counsel for Watsco, Inc. (the "COMPANY") in connection
with the Note Purchase and Private Shelf Agreement, dated as of January __, 2000
(the "AGREEMENT") between the Company and The Prudential Insurance Company of
America and each Prudential Affiliate which becomes a party thereto and each of
the Subsidiaries (each a "GUARANTOR") in connection with its Guaranty Agreement
dated as of January __, 2000 (each a "GUARANTY AGREEMENT"). Capitalized terms
used and not otherwise defined herein shall have the meanings provided in the
Agreement. This letter is being delivered to you in satisfaction of the
condition set forth in paragraph 3A(2)(vi) of the Agreement and with the
understanding you are purchasing the Notes in reliance on the opinions expressed
herein.
In this connection, we have examined such certificates of public
officials, certificates of officers of the Company and the Guarantors and copies
certified to our satisfaction of corporate documents and records of the Company
and the Guarantors and of other papers, and have made such other investigations,
as we have deemed relevant and necessary as a basis for our opinion hereinafter
set forth. We have relied upon such certificates of public officials and of
officers of the Company with respect to the accuracy of material factual matters
contained therein which were not independently established. With respect to the
opinion expressed in paragraph 3 below, we have also relied upon the
representation made by you in paragraph 9A of the Agreement.
Based on the foregoing, it is our opinion that:
1. Each Subsidiary specified on the attached Schedule is a corporation
duly organized and validly existing in good standing under the laws of its
jurisdiction of incorporation. [COVER NORTH CAROLINA, DELAWARE AND NEW YORK]
2. Each Guaranty Agreement has been duly authorized by all requisite
corporate action and duly executed and delivered by authorized officers of the
Guarantor a party thereto,
and are valid obligations of such Guarantor, legally binding upon and
enforceable against such Guarantor in accordance with its terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights generally and
(b) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
3. The execution and delivery of each Guaranty Agreement and
fulfillment of and compliance with the provisions of such Guaranty Agreement
does not conflict with, or result in a breach of the terms, conditions or
provisions of, or constitute a default under, or result in any violation of, or
result in the creation of any Lien upon any of the properties or assets of the
Guarantor a party thereto pursuant to, or require any authorization, consent,
approval, exemption, or other action by or notice to or filing with any court,
administrative or governmental body or other Person (other than routine filings
after the date hereof with the Securities and Exchange Commission and/or state
Blue Sky authorities) pursuant to, the charter or by-laws of such Guarantor, any
applicable law (including any securities or Blue Sky law), statute, rule or
regulation or (insofar as is known to us after having made due inquiry with
respect thereto) any agreement (including, without limitation, any agreement
listed in Schedule 8G to the Agreement), instrument, order, judgment or decree
to which such Guarantor is a party or otherwise subject.
Each of King & Spalding and any Transferee may rely on this opinion.
Very truly yours,
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
[FORM OF OPINION OF FLORIDA COUNSEL TO THE COMPANY]
[Letterhead of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇ P.A]
[Date of Closing]
The Prudential Insurance Company of America
c/o Prudential Capital Group
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as counsel for Watsco, Inc. (the "COMPANY") in connection
with the Note Purchase and Private Shelf Agreement, dated as of January __, 2000
(the "AGREEMENT") between the Company and The Prudential Insurance Company of
America and each Prudential Affiliate which becomes a party thereto and each of
the Subsidiaries identified on the attached Schedule (each a "GUARANTOR") in
connection with its Guaranty Agreement dated as of January __, 2000 (each a
"GUARANTY AGREEMENT"). Capitalized terms used and not otherwise defined herein
shall have the meanings provided in the Agreement. This letter is being
delivered to you in satisfaction of the condition set forth in paragraph
3A(2)(vii) of the Agreement and with the understanding you are purchasing the
Notes in reliance on the opinions expressed herein.
In this connection, we have examined such certificates of public
officials, certificates of officers of the Company and the Guarantors and copies
certified to our satisfaction of corporate documents and records of the Company
and the Guarantors and of other papers, and have made such other investigations,
as we have deemed relevant and necessary as a basis for our opinion hereinafter
set forth. We have relied upon such certificates of public officials and of
officers of the Company with respect to the accuracy of material factual matters
contained therein which were not independently established. With respect to the
opinion expressed in paragraph 3 below, we have also relied upon the
representation made by you in paragraph 9A of the Agreement.
Based on the foregoing, it is our opinion that:
1. Each of the Guarantors is a corporation duly organized and validly
existing in good standing under the laws of the State of Florida.
2. The execution and delivery of each Guaranty Agreement and
fulfillment of and compliance with the provisions of such Guaranty Agreement
does not require any authorization, consent, approval, exemption, or other
action by or notice to or filing with any court,
administrative or governmental body or other Person (other than routine filings
after the date hereof with the Securities and Exchange Commission and/or state
Blue Sky authorities) pursuant to, the charter or by-laws of each Guarantor, any
applicable Florida law (including any securities or Blue Sky law), statute, rule
or regulation or (insofar as is known to us after having made due inquiry with
respect thereto) any order, judgment or decree to which such Guarantor is a
party or otherwise subject.
Each of King & Spalding and any Transferee may rely on this opinion.
Very truly yours,
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
[FORM OF OPINION OF COMPANY'S COUNSEL]
[Letterhead of ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇]
[Date of Closing]
[Name(s) and address(es) of
Purchaser(s)]
Ladies and Gentlemen:
We have acted as counsel for Watsco, Inc. (the "COMPANY") in connection
with the Note Purchase and Private Shelf Agreement, dated as of January __, 2000
(the "AGREEMENT") between the Company, on the one hand, and The Prudential
Insurance Company of America and each Prudential Affiliate which becomes a party
thereto, on the other hand, pursuant to which the Company has issued to you
today Senior Series ___ Notes of the Company in the aggregate principal amount
of $ (the "NOTES"). Capitalized terms used and not otherwise defined herein
shall have the meanings provided in the Agreement. This letter is being
delivered to you in satisfaction of the condition set forth in paragraph
3A(3)(v) of the Agreement and with the understanding that you are purchasing the
Notes in reliance on the opinions expressed herein.
In this connection, we have examined such certificates of public
officials, certificates of officers of the Company and copies certified to our
satisfaction of corporate documents and records of the Company and of other
papers, and have made such other investigations, as we have deemed relevant and
necessary as a basis for our opinion hereinafter set forth. We have relied upon
such certificates of public officials and of officers of the Company with
respect to the accuracy of material factual matters contained therein which were
not independently established. With respect to the opinion expressed in
paragraph 3 below, we have also relied upon the representation made by [each of]
you in paragraph 9A of the Agreement.
Based on the foregoing, it is our opinion that:
1. Each Subsidiary specified on the attached Schedule is a corporation
duly organized and validly existing in good standing under the laws of its
jurisdiction of incorporation. [COVER NORTH CAROLINA, DELAWARE AND NEW YORK] The
Company and its Subsidiaries have the corporate power to carry on their
respective businesses as now being conducted.
2. The Notes have been duly authorized by all requisite corporate
action and duly executed and delivered by authorized officers of the Company,
and are valid obligations of the Company, legally binding upon and enforceable
against the Company in accordance with their
respective terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and (b) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
3. It is not necessary in connection with the offering, issuance, sale
and delivery of the Notes under the circumstances contemplated by the Agreement
to register the Notes under the Securities Act or to qualify an indenture in
respect of the Notes under the Trust Indenture Act of 1939, as amended.
4. The extension, arranging and obtaining of the credit represented by
the Notes do not result in any violation of regulation T, U or X of the Board of
Governors of the Federal Reserve System.
5. The execution and delivery of the Notes, the offering, issuance and
sale of the Notes and fulfillment of and compliance with the respective
provisions of the Agreement and the Notes do not conflict with, or result in a
breach of the terms, conditions or provisions of, or constitute a default under,
or result in any violation of, or result in the creation of any Lien upon any of
the properties or assets of the Company or any of its Subsidiaries pursuant to,
or require any authorization, consent, approval, exemption, or other action by
or notice to or filing with any court, administrative or governmental body or
other Person (other than routine filings after the date hereof with the
Securities and Exchange Commission and/or state Blue Sky authorities) pursuant
to, the charter or by-laws of the Company or any of its Subsidiaries, any
applicable law (including any securities or Blue Sky law), statute, rule or
regulation or (insofar as is known to us after having made due inquiry with
respect thereto) any agreement (including, without limitation, any agreement
listed in Schedule 8G to the Agreement), instrument, order, judgment or decree
to which the Company or any of its Subsidiaries is a party or otherwise subject.
Each of King & Spalding and any Transferee may rely on this opinion.
Very truly yours,
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
[FORM OF OPINION OF FLORIDA COUNSEL TO THE COMPANY]
[Letterhead of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇ P.A]
[Date of Closing]
[Name(s) and address(es) of
Purchaser(s)]
Ladies and Gentlemen:
We have acted as counsel for Watsco, Inc. (the "COMPANY") in connection
with the Note Purchase and Private Shelf Agreement, dated as of January __, 2000
(the "AGREEMENT") between the Company, on the one hand, and The Prudential
Insurance Company of America and each Prudential Affiliate which becomes a party
thereto, on the other hand, pursuant to which the Company has issued to you
today Senior Series ___ Notes of the Company in the aggregate principal amount
of $ (the "NOTES"). Capitalized terms used and not otherwise defined herein
shall have the meanings provided in the Agreement. This letter is being
delivered to you in satisfaction of the condition set forth in paragraph
3A(3)(vi) of the Agreement and with the understanding that you are purchasing
the Notes in reliance on the opinions expressed herein.
In this connection, we have examined such certificates of public
officials, certificates of officers of the Company and copies certified to our
satisfaction of corporate documents and records of the Company and of other
papers, and have made such other investigations, as we have deemed relevant and
necessary as a basis for our opinion hereinafter set forth. We have relied upon
such certificates of public officials and of officers of the Company with
respect to the accuracy of material factual matters contained therein which were
not independently established. With respect to the opinion expressed in
paragraph 3 below, we have also relied upon the representation made by [each of]
you in paragraph 9A of the Agreement.
Based on the foregoing, it is our opinion that:
1. The Company is a corporation duly organized and validly existing in
good standing under the laws of the State of Florida. Each of the Subsidiaries
specified on the attached Schedule is a corporation duly organized and validly
existing in good standing under the laws of the State of Florida. The Company
and its Subsidiaries have the corporate power to carry on their respective
businesses as now being conducted.
2. The execution and delivery of the Notes, the offering, issuance and
sale of the Notes and fulfillment of and compliance with the respective
provisions of the Agreement and the Notes do not require any authorization,
consent, approval, exemption, or other action by or
notice to or filing with any court, administrative or governmental body or other
Person (other than routine filings after the date hereof with the Securities and
Exchange Commission and/or state Blue Sky authorities) pursuant to, the charter
or by-laws of the Company or any such Subsidiaries, any applicable Florida law
(including any securities or Blue Sky law), statute, rule or regulation or
(insofar as is known to us after having made due inquiry with respect thereto)
any instrument, order, judgment or decree to which the Company or any such
Subsidiaries is a party or otherwise subject.
Each of King & Spalding and any Transferee may rely on this opinion.
Very truly yours,
D-6-2
EXHIBIT E
[NAME OF SUBSIDIARY]
THIS GUARANTY AGREEMENT dated as of January __, 2000 by [Name of
Subsidiary] (the "GUARANTOR") in favor of The Prudential Insurance Company of
America and each Prudential Affiliate, together with any of their affiliates or
successors or assigns (collectively, the "NOTE PURCHASERS" and individually, a
"NOTE PURCHASER").
WHEREAS, the Guarantor and Watsco, Inc. ("PARENT") are collectively
engaged in, among other things, the business of distributing HVAC and related
equipment;
WHEREAS, the Guarantor will benefit from the financing provided by the
Note Purchasers to Parent pursuant to the Note Purchase and Private Shelf
Agreement (the "AGREEMENT") dated as of January __, 2000 between Parent and the
Note Purchasers as the continued success of the business operations of Guarantor
is directly dependent upon the ability of Parent to obtain adequate financing
for its business operations and the expansion of such business operations;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the Guarantor, the Guarantor
hereby agrees as follows:
SECTION 1. GUARANTY. The Guarantor hereby absolutely and
unconditionally guarantees the due and punctual payment and performance of: (i)
the principal of, and accrued interest on, the Notes when due (whether at stated
maturity, by acceleration or otherwise), (ii) all other monetary and nonmonetary
obligations of the Parent owed to the Note Purchasers under the Agreement, any
Note and any other agreement, document, guarantee or instrument executed in
connection therewith ("RELATED DOCUMENTS") including all fees, charges
(including, without limitation, any Yield-Maintenance Amount) and other amounts
payable by the Parent to the Note Purchasers thereunder, and (iii) any and all
extensions, renewals, modifications or substitutions of the foregoing (the items
set forth in clauses (i) through (iii) hereunder are collectively referred to
herein as the "OBLIGATIONS"); PROVIDED, HOWEVER, that the liability of the
Guarantor hereunder shall not exceed at any time the Maximum Amount (as
hereinafter defined) for the Guarantor. The "MAXIMUM AMOUNT" shall mean the
greater of (i) 95% of (a) the fair salable value of the assets of the Guarantor
as of the date hereof minus (b) the total liabilities of the Guarantor
(including contingent liabilities but excluding liabilities of the Guarantor
under this Guaranty Agreement) on the date hereof; and (ii) 95% of (x) the fair
salable value of the assets of the Guarantor from time to time minus (y) the
total liabilities of the Guarantor (including contingent liabilities but
excluding liabilities of the Guarantor under this Guaranty Agreement) at such
time to the extent permitted by applicable law.
SECTION 2. GUARANTY OF PAYMENT AND NOT OF COLLECTION. This
Guaranty Agreement shall be a guaranty of payment and not of collection. The
Note Purchasers shall not be obliged before enforcing this Guaranty Agreement
against the Guarantor: (a) to take any action in any court against the Parent or
any other guarantor of the Obligations or otherwise take any action to
enforce the rights and remedies of the Note Purchasers under the Agreement or
the Notes or any other Related Documents, (b) to make any claim in a liquidation
or bankruptcy of the Parent or any other guarantor of the Obligations or (c) to
make demand of the Parent or any other guarantor of the Obligations or to
enforce or seek to enforce any collateral or other security held by the
Collateral Agent or any other Person securing or otherwise in respect of the
Obligations. The Guarantor agrees that it shall be liable hereunder
notwithstanding (x) the dissolution or liquidation, or the merger, consolidation
or other change until the Obligations have been indefeasibly paid in full in
form of the Parent or any other guarantor of the Obligations, (y) any defect,
limitation or insufficiency in the borrowing powers of the Parent or in the
exercise thereof or (z) the invalidity, illegality or unenforceability of the
Agreement, the Notes or any other Related Documents.
SECTION 3. NO DISCHARGE. The Guarantor shall not be discharged
from its obligations hereunder by any concession, waiver or arrangement granted
to or made with the Parent or by anything done or omitted which but for this
provision might operate to so discharge the Guarantor from its obligations
hereunder or by any invalidity, unenforceability, limitation, release or the
lapse of any collateral security granted to the Note Purchasers or on behalf of
the Note Purchasers by the Parent or any other Person to secure any of the
Obligations.
SECTION 4. ACTION WITH RESPECT TO OBLIGATIONS. Each Note Purchaser
may, at any time and from time to time, without the consent of the Guarantor
under this Guaranty Agreement, and without discharging the Guarantor from its
obligations hereunder: (a) purchase Shelf Notes under the Agreement; (b) change
the manner, place or terms of payment, or change or extend the time of payment
of, or renew or alter the Obligations in any manner; (c) sell, exchange, release
or otherwise deal with all or any part of any collateral security at any time
granted, pledged or mortgaged by the Parent or any other Person to secure the
Obligations; (d) release anyone liable in any manner for the payment or
collection of the Obligations; (e) amend or otherwise alter the terms of the
Agreement, the Notes or any other Related Document; (f) exercise, or refrain
from exercising, any rights against the Parent or any other Person (including
any other guarantor of the Obligations); and (g) apply any sum, by whomsoever
paid or however realized, to the Obligations in such order as the Note
Purchasers shall elect.
SECTION 5. WAIVER. The Guarantor hereby waives notice of acceptance
hereof or any presentment, demand, protest or notice of any kind under this
Guaranty Agreement and any other act or thing or omission or delay to do any
other act or thing which might in any manner or to any extent vary the risk of
the Guarantor under this Guaranty Agreement or which might otherwise operate as
a discharge of the Guarantor under this Guaranty Agreement.
SECTION 6. INABILITY TO ACCELERATE NOTE. If an Event of Default shall
have occurred and be continuing and the Note Purchasers or the holder of any of
the Obligations is prevented from demanding or accelerating payment thereof by
reason of any automatic stay or otherwise, the Note Purchasers or such holder
shall be entitled to receive hereunder from the Guarantor, upon demand therefor,
the sums which would have otherwise been due had such acceleration occurred.
SECTION 7. REINSTATEMENT OF OBLIGATIONS. The Guarantor further confirms
that this Guaranty Agreement shall continue to be effective or be reinstated, as
the case may be, if at any
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time payment of any of the Obligations is rescinded or must otherwise be
restored by the Note Purchasers upon the bankruptcy or reorganization of any or
all of the Parent or the Guarantor or otherwise.
SECTION 8. WAIVER OF SUBROGATION. The Guarantor hereby waives, until
the Obligations have been indefeasibly paid in full, to the fullest extent any
and all claims the Guarantor may have against Parent arising out of any payment
by the Guarantor of any of the Obligations pursuant to this Guaranty Agreement,
including, but not limited to, all such claims of the Guarantor arising out of
any right of subrogation, indemnity, reimbursement, contribution, exoneration,
payment or other claim, cause of action, right or remedy, whether such claim
arises at law, in equity, or out of any written or oral agreement between the
Guarantor and Parent or otherwise. The waivers set forth herein in this Section
8 may not be revoked by the Guarantor without the prior written consent of the
Note Purchasers.
SECTION 9. PAYMENTS FREE AND CLEAR. All sums payable by the Guarantor
hereunder, whether of principal, interest, fees, expenses, premiums or
otherwise, shall be paid in full, without set-off or counterclaim or any
deduction or withholding whatsoever, or, in the event that the Guarantor is
required by law to make any such deduction or withholding, the Guarantor shall
pay to the Note Purchasers such additional amount as will result in the receipt
by the Note Purchasers of the full amount payable hereunder.
SECTION 10. SOLVENCY. As of the date hereof and after giving effect to
the guaranty contemplated hereunder (a) the amount of the "present fair salable
value" of the assets of the Guarantor will, as of such date, exceed the amount
of all "liabilities of the Guarantor, contingent or otherwise," as of such date,
as such quoted terms are determined in accordance with applicable federal and
state laws governing determinations of the solvency of debtors, (b) the present
fair salable value of the assets of the Guarantor will, as of the date hereof,
be greater than the amount that will be required to pay the liability of the
Guarantor, on its debts as such debts become absolute and matured, (c) the
Guarantor will not have, as of the date hereof, an unreasonably small amount of
capital with which to conduct its business, and (d) the Guarantor will be able
to pay its debts as they mature. For purposes of this Section "debt" means
"liability or a claim", and "claim" means any (x) right to payment, whether or
not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured; or (y) right to an equitable remedy for breach of performance if
such breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured or
unmatured, disputed, undisputed, secured or unsecured.
SECTION 11. GOVERNING LAW/JURISDICTION. This Guaranty Agreement shall
be construed and enforced in accordance with, and the rights of the parties
shall be governed by, the laws of the State of New York. THE GUARANTOR HEREBY
SUBMITS TO THE JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK
LOCATED IN NEW YORK COUNTY, NEW YORK AND THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND IRREVOCABLY AGREES THAT, SUBJECT TO THE
SOLE AND ABSOLUTE ELECTION OF THE REQUIRED HOLDERS, ALL ACTIONS OR PROCEEDINGS
RELATING TO THIS GUARANTY AGREEMENT OR THE NOTES OR ANY OTHER
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RELATED DOCUMENT SHALL BE LITIGATED IN SUCH COURTS, AND THE GUARANTOR WAIVES ANY
OBJECTION WHICH IT MAY HAVE BASED ON IMPROPER VENUE OR FORUM NON CONVENIENS TO
THE CONDUCT OF ANY PROCEEDING IN ANY SUCH COURT.
SECTION 12. NOTE ACCOUNTS. The Note Purchasers shall maintain books and
accounts setting forth the amounts of principal, interest and other sums paid
and payable with respect to the Notes, the Agreement and the Obligations, and in
the case of any dispute relating to any amounts outstanding with respect to any
of the Obligations, the entries in such account shall be binding upon the
Guarantor absent manifest error.
SECTION 13. WAIVER OF REMEDIES. No delay or failure on the part of the
Note Purchasers in the exercise of any right or remedy shall operate as a waiver
thereof, and no single or partial exercise by the Note Purchasers of any right
or remedy shall preclude other or further exercise thereof or the exercise of
any other right or remedy.
SECTION 14. BANKRUPTCY OF GUARANTOR. In case of bankruptcy of the
Guarantor, the Guarantor authorizes and directs the court, any trustee or the
debtor-in-possession to deliver to the Note Purchasers a sufficient amount of
property or money claimed as exempt or otherwise outside the estate of the
Guarantor to pay or satisfy any outstanding Obligations.
SECTION 15. SUCCESSORS AND ASSIGNS. Each reference herein to the Note
Purchasers shall be deemed to include each Note Purchaser's successors and
assigns (including, but not by way of limitation, any subsequent holder or
Transferee of any Notes or the Obligations) in whose favor the provisions of
this Guaranty Agreement shall also inure, and each reference herein to the
Guarantor shall be deemed to include the Guarantor's successors and assigns,
upon whom this Guaranty Agreement shall also be binding.
SECTION 16. AMENDMENTS. This Guaranty Agreement may not be amended or
waived except in a writing signed by the Required Holders and the Guarantor.
SECTION 17. PAYMENTS. All payments made by the Guarantor pursuant to
this Guaranty Agreement shall be made in the lawful currency of the United
States, in immediately available funds to the account of the Note Purchasers and
as identified in the Purchaser Schedule to the Agreement, not later than 11:00
a.m. New York time on the date one Business Day after demand therefor. All
notices or demands to the Guarantor shall be in writing and shall be telecopied,
mailed or hand delivered to the address for the Guarantor set forth below.
SECTION 18. SEVERABILITY. In case any provision of this Guaranty
Agreement shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby and the Guarantor shall use its best efforts to replace such
provision.
SECTION 19. HEADINGS. Section headings used in this Guaranty Agreement
are for convenience only and shall not affect the construction of this Guaranty
Agreement.
SECTION 20. DEFINITIONS. Terms used herein and not defined herein have
their respective defined meanings as set forth in the Agreement.
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IN WITNESS WHEREOF, the Guarantor has duly executed and delivered this
Guaranty Agreement as of the date and year first written above.
[NAME OF SUBSIDIARY]
By:_________________________________
Name:
Title:
Address for Notices:
c/o Watsco, Inc.
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Attention:__________________________
Telephone:__________________________
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