Note Purchase Agreement dated August 1, 1999 regarding $50,000,000 7.27%
Senior Notes Due 2009, among the Company, New York Life Insurance Company,
Mutual Trust Life Insurance Company, National Travelers Life Company,
Guarantee Reserve Life Insurance Company, Pioneer Mutual Life Insurance
Company, Great Western Insurance Company, The Catholic Aid Association, The
Reliable Life Insurance Company, The North West Life Assurance Company of
Canada, Lutheran Brotherhood and Modern Woodmen of America.
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▇. ▇▇▇▇▇▇▇▇, INC.
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NOTE PURCHASE AGREEMENT
----------------
Dated as of August 1, 1999
Re: $50,000,000 7.27% Senior Notes, Due 2009
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TABLE OF CONTENTS
PAGE
SECTION 1. AUTHORIZATION OF NOTES.........................................................................1
SECTION 2. SALE AND PURCHASE OF NOTES.....................................................................1
SECTION 3. CLOSING........................................................................................1
SECTION 4. CONDITIONS TO CLOSING..........................................................................2
Section 4.1 Representations and Warranties...............................................2
Section 4.2 Performance; No Default......................................................2
Section 4.3 Compliance Certificates......................................................2
Section 4.4 Opinions of Counsel..........................................................3
Section 4.5 Purchase Permitted By Applicable Law, etc....................................3
Section 4.6 Sale of Other Notes..........................................................3
Section 4.7 Payment of Special Counsel Fees..............................................3
Section 4.8 Private Placement Number.....................................................3
Section 4.9 Changes in Corporate Structure...............................................4
Section 4.10 Proceedings and Documents....................................................4
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................................................4
Section 5.1 Organization; Power and Authority............................................4
Section 5.2 Authorization, etc...........................................................4
Section 5.3 Disclosure...................................................................4
Section 5.4 Organization and Ownership of Shares of Subsidiaries; Affiliates.............5
Section 5.5 Financial Statements.........................................................6
Section 5.6 Compliance with Laws, Other Instruments, etc.................................6
Section 5.7 Governmental Authorizations, etc.............................................6
Section 5.8 Litigation; Observance of Agreements, Statutes and Orders....................6
Section 5.9 Taxes........................................................................7
Section 5.10 Title to Property; Leases....................................................7
Section 5.11 Licenses, Permits, etc.......................................................7
Section 5.12 Compliance with ERISA........................................................8
Section 5.13 Private Offering by the Company..............................................8
Section 5.14 Use of Proceeds; Margin Regulations..........................................9
Section 5.15 Existing Indebtedness; Future Liens..........................................9
Section 5.16 Foreign Assets Control Regulations, etc......................................9
Section 5.17 Status under Certain Statutes...............................................10
Section 5.18 Environmental Matters.......................................................10
Section 5.19 Parity of Obligations.......................................................10
Section 5.20 Year 2000 Compliance........................................................11
SECTION 6. REPRESENTATIONS OF THE PURCHASERS.............................................................11
Section 6.1 Purchase for Investment.....................................................11
Section 6.2 Source of Funds.............................................................11
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TABLE OF CONTENTS
PAGE
SECTION 7. INFORMATION AS TO COMPANY.....................................................................12
Section 7.1 Financial and Business Information..........................................12
Section 7.2 Officer's Certificate.......................................................15
Section 7.3 Inspection..................................................................16
SECTION 8. PREPAYMENT OF THE NOTES.......................................................................16
Section 8.1 Required Prepayments........................................................16
Section 8.2 Optional Prepayments with Make-Whole Amount.................................16
Section 8.3 Change in Control...........................................................17
Section 8.4 Allocation of Partial Prepayments...........................................19
Section 8.5 Maturity; Surrender, etc....................................................20
Section 8.6 Purchase of Notes...........................................................20
Section 8.7 Make-Whole Amount...........................................................20
SECTION 9. AFFIRMATIVE COVENANTS.........................................................................21
Section 9.1 Compliance with Law.........................................................21
Section 9.2 Insurance...................................................................22
Section 9.3 Maintenance of Properties...................................................22
Section 9.4 Payment of Taxes and Claims.................................................22
Section 9.5 Corporate Existence, etc....................................................22
Section 9.6 Notes to Rank Pari Passu....................................................23
Section 9.7 Year 2000 Compliance........................................................23
SECTION 10. NEGATIVE COVENANTS............................................................................23
Section 10.1 Transactions with Affiliates................................................23
Section 10.2 Merger, Consolidation, etc..................................................23
Section 10.3 Liens.......................................................................24
Section 10.4 Consolidated Adjusted Net Worth.............................................25
Section 10.5 Fixed Charge Coverage Ratio.................................................26
Section 10.6 Limitations on Debt.........................................................26
Section 10.7 Sale of Assets..............................................................27
Section 10.8 Restricted Payments.........................................................27
Section 10.9 Investments.................................................................29
Section 10.10 Line of Business............................................................31
SECTION 11. EVENTS OF DEFAULT.............................................................................31
SECTION 12. REMEDIES ON DEFAULT, ETC......................................................................33
Section 12.1 Acceleration................................................................33
Section 12.2 Other Remedies..............................................................34
Section 12.3 Rescission..................................................................34
Section 12.4 No Waivers or Election of Remedies, Expenses, etc...........................34
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.................................................35
Section 13.1 Registration of Notes.......................................................35
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TABLE OF CONTENTS
PAGE
Section 13.2 Transfer and Exchange of Notes..............................................35
Section 13.3 Replacement of Notes........................................................35
SECTION 14. PAYMENT OF NOTES..............................................................................36
▇▇▇▇▇▇▇ ▇▇.▇ ▇▇▇▇▇ of Payment............................................................36
Section 14.2 Home Office Payment.........................................................36
SECTION 15. EXPENSES, ETC.................................................................................36
Section 15.1 Transaction Expenses........................................................36
Section 15.2 Survival....................................................................37
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT..................................37
SECTION 17. AMENDMENT AND WAIVER..........................................................................37
Section 17.1 Requirements................................................................37
Section 17.2 Solicitation of Holders of Notes............................................38
Section 17.3 Binding Effect, etc.........................................................38
Section 17.4 Notes Held by Company, etc..................................................38
SECTION 18. NOTICES.......................................................................................39
SECTION 19. REPRODUCTION OF DOCUMENTS.....................................................................39
SECTION 20. CONFIDENTIAL INFORMATION......................................................................40
SECTION 21. SUBSTITUTION OF PURCHASER.....................................................................41
SECTION 22. MISCELLANEOUS.................................................................................41
Section 22.1 Successors and Assigns......................................................41
Section 22.2 Payments Due on Non-Business Days...........................................41
Section 22.3 Severability................................................................41
Section 22.4 Construction................................................................41
Section 22.5 Counterparts................................................................42
Section 22.6 Governing Law...............................................................42
Section 22.7 Jurisdiction................................................................42
Section 22.7 Agent for Service of Process................................................42
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SCHEDULES
SCHEDULE A INFORMATION RELATING TO PURCHASERS
SCHEDULE B DEFINED TERMS
SCHEDULE 4.9 CHANGES IN CORPORATE STRUCTURE
SCHEDULE 5.4 CORPORATE STRUCTURE
SCHEDULE 5.5 FINANCIAL STATEMENTS
SCHEDULE 5.11 LICENSES, PERMITS
SCHEDULE 5.15 EXISTING INDEBTEDNESS
SCHEDULE 8.3 PRINCIPAL STOCKHOLDERS AND CURRENT MANAGEMENT TEAM
SCHEDULE 10.9 EXISTING INVESTMENTS
EXHIBITS
EXHIBIT I FORM OF SENIOR NOTE
EXHIBIT 4.4(a) DESCRIPTION OF CLOSING OPINION OF COUNSEL TO THE COMPANY
EXHIBIT 4.4(b) DESCRIPTION OF SPECIAL COUNSEL'S CLOSING OPINION
▇. ▇▇▇▇▇▇▇▇, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
7.27% $50,000,000 Senior Notes, Due 2009
Dated as of
August 1, 1999
TO EACH OF THE PURCHASERS NAMED IN SCHEDULE A TO THIS AGREEMENT:
Ladies and Gentlemen:
▇. ▇▇▇▇▇▇▇▇, Inc., a Delaware corporation (the "COMPANY"), agrees
with the purchasers named in Schedule A to this Agreement (the "PURCHASERS")
as follows:
SECTION 1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of $50,000,000
aggregate principal amount of its 7.27% Senior Notes, Due 2009 (the "NOTES",
such term to include any such notes issued in substitution therefor pursuant
to Section 13 of this Agreement). The Notes shall be substantially in the
form set out in Exhibit 1, with such changes therefrom, if any, as may be
approved by each Purchaser and the Company. Certain capitalized terms used in
this Agreement are defined in Schedule B; references to a "Schedule" or an
"Exhibit" are, unless otherwise specified, to a Schedule or an Exhibit
attached to this Agreement.
SECTION 2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Company
will issue and sell to each Purchaser, and each Purchaser will purchase from
the Company, at the Closing provided for in Section 3, Notes in the principal
amount specified opposite each Purchaser's name in Schedule A at the purchase
price of 100% of the principal amount thereof. The obligations of each
Purchaser hereunder shall be several and not joint and no Purchaser shall
have any obligation or any liability to any Person for the performance or
non-performance by any other Purchaser hereunder.
SECTION 3. CLOSING.
The sale and purchase of the Notes to be purchased by each Purchaser
shall occur at the offices of ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ at 10:00 a.m., Chicago, Illinois time, at a closing (the
"CLOSING") on August 17, 1999 or on such other Business Day thereafter on or
prior to August 20, 1999 as may be agreed upon by the Company
and each Purchaser. At the Closing the Company will deliver to each Purchaser
the Notes to be purchased by such Purchaser in the form of a single Note (or
such greater number of Notes in denominations of at least $1,000,000 as such
Purchaser may request) dated the date of the Closing and registered in such
Purchaser's name (or in the name of such Purchaser's nominee), against
delivery by such Purchaser to the Company or its order of immediately
available funds in the amount of the purchase price therefor by wire transfer
of immediately available funds for the account of the Company to account
number 075-6087 at KeyBank National Association, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇, ABA No. ▇▇▇▇▇▇▇▇▇. If at the Closing the Company shall fail
to tender such Notes to any Purchaser as provided above in this Section 3, or
any of the conditions specified in Section 4 shall not have been fulfilled to
your satisfaction, such Purchaser shall, at its election, be relieved of all
further obligations under this Agreement, without thereby waiving any rights
such Purchaser may have by reason of such failure or such non-fulfillment.
SECTION 4. CONDITIONS TO CLOSING.
Each Purchaser's obligation to purchase and pay for the Notes to be
sold to such Purchaser at the Closing is subject to the fulfillment to each
Purchaser's reasonable satisfaction, prior to or at the Closing, of the
following conditions:
SECTION 4.1 REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Company in this Agreement
shall be correct when made and at the time of the Closing.
SECTION 4.2 PERFORMANCE; NO DEFAULT.
The Company shall have performed and complied with all agreements
and conditions contained in this Agreement required to be performed or
complied with by it prior to or at the Closing and after giving effect to the
issue and sale of the Notes (and the application of the proceeds thereof as
contemplated by Section 5.14) no Default or Event of Default shall have
occurred and be continuing. Neither the Company nor any Subsidiary shall have
entered into any transaction since the date of the Memorandum that would have
been prohibited by SECTIONS 10.1, 10.2, 10.3 or 10.6 hereof had such Sections
applied since such date.
SECTION 4.3 COMPLIANCE CERTIFICATES.
(a) OFFICER'S CERTIFICATE. The Company shall have delivered
to each Purchaser an Officer's Certificate, dated the date of the
Closing, certifying that the conditions specified in Sections 4.1,
4.2 and 4.9 have been fulfilled.
(b) SECRETARY'S CERTIFICATE. The Company shall have delivered
to each Purchaser a certificate certifying as to the resolutions
attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Notes and the Agreements.
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SECTION 4.4 OPINIONS OF COUNSEL.
Each Purchaser shall have received opinions in form and substance
satisfactory to it, dated the date of the Closing (a) from Berick, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇ Co., L.P.A., counsel for the Company, covering the matters set forth in
Exhibit 4.4(a) and covering such other matters incident to the transactions
contemplated hereby as each Purchaser or each Purchaser's counsel may
reasonably request (and the Company hereby instructs its counsel to deliver
such opinion to each Purchaser) and (b) from ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇,
Purchasers' special counsel in connection with such transactions,
substantially in the form set forth in Exhibit 4.4(b) and covering such other
matters incident to such transactions as each Purchaser may reasonably
request.
SECTION 4.5 PURCHASE PERMITTED BY APPLICABLE LAW, ETC.
On the date of the Closing each Purchaser's purchase of Notes shall (a)
be permitted by the laws and regulations of each jurisdiction to which you are
subject, without recourse to provisions (such as Section 1405(a)(8) of the New
York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (b) not
violate any applicable law or regulation (including, without limitation,
Regulation U, T or X of the Board of Governors of the Federal Reserve System)
and (c) not subject any Purchaser to any tax, penalty or liability under or
pursuant to any applicable law or regulation, which law or regulation was not in
effect on the date hereof. If requested by any Purchaser, such Purchaser shall
have received an Officer's Certificate certifying as to such matters of fact as
such Purchaser may reasonably specify to enable it to determine whether such
purchase is so permitted.
SECTION 4.6 SALE OF NOTES.
Contemporaneously with the Closing the Company shall sell to the
Purchasers and the Purchasers shall purchase the Notes to be purchased by them
at the Closing as specified in Schedule A.
SECTION 4.7 PAYMENT OF SPECIAL COUNSEL FEES.
Without limiting the provisions of Section 15.1, the Company shall
have paid on or before the Closing the fees, charges and disbursements of
each Purchaser's special counsel referred to in Section 4.4 to the extent
reflected in a statement of such counsel rendered to the Company at least one
Business Day prior to the Closing.
SECTION 4.8 PRIVATE PLACEMENT NUMBER.
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.
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SECTION 4.9 CHANGES IN CORPORATE STRUCTURE.
Except as specified in Schedule 4.9, the Company shall not have
changed its jurisdiction of incorporation or been a party to any merger or
consolidation and shall not have succeeded to all or any substantial part of
the liabilities of any other entity, at any time following the date of the
most recent financial statements referred to in Schedule 5.5.
SECTION 4.10 PROCEEDINGS AND DOCUMENTS.
All corporate and other proceedings in connection with the
transactions contemplated by this Agreement and all documents and instruments
incident to such transactions shall be reasonably satisfactory to each
Purchaser and special counsel to the Purchasers, and each Purchaser and
special counsel to the Purchasers shall have received all such counterpart
originals or certified or other copies of such documents as such Purchaser or
special counsel to the Purchaser may reasonably request.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
SECTION 5.1 ORGANIZATION; POWER AND AUTHORITY.
The Company is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation, and is
duly qualified as a foreign corporation and is in good standing in each
jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The Company has the corporate power and authority to
own or hold under lease the properties it purports to own or hold under
lease, to transact the business it transacts and proposes to transact, to
execute and deliver this Agreement and the Notes and to perform the
provisions hereof and thereof.
SECTION 5.2 AUTHORIZATION, ETC.
This Agreement and the Notes have been duly authorized by all
necessary corporate action on the part of the Company, and this Agreement
constitutes, and upon execution and delivery thereof each Note will
constitute, a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as such
enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (b) general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).
SECTION 5.3 DISCLOSURE.
The Company, through its agent, ▇▇▇▇▇▇▇▇ Investments Inc., has
delivered to Purchaser a copy of a Confidential Private Placement Memorandum
(the "MEMORANDUM"), relating to the
-4-
transactions contemplated hereby. The Memorandum fairly describes, in all
material respects, the general nature of the business and principal
properties of the Company and its Subsidiaries. This Agreement, the
Memorandum, the documents, certificates or other writings delivered to each
Purchaser by or on behalf of the Company in connection with the transactions
contemplated hereby and the financial statements listed in Schedule 5.5,
taken as a whole, do not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made. Since
August 31, 1998 there has been no change in the financial condition,
operations, business, properties or prospects of the Company or any
Subsidiary except changes that individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. There is no fact
known to the Company that could reasonably be expected to have a Material
Adverse Effect that has not been set forth herein or in the Memorandum or in
the other documents, certificates and other writings delivered to you by or
on behalf of the Company specifically for use in connection with the
transactions contemplated hereby.
SECTION 5.4 ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES;
AFFILIATES.
(a) Schedule 5.4 contains (except as noted therein) complete
and correct lists (i) of the Company's Subsidiaries, showing, as to
each Subsidiary, the correct name thereof, the jurisdiction of its
organization, and the percentage of shares of each class of its
capital stock or similar equity interests outstanding owned by the
Company and each other Subsidiary, (ii) of the Company's Affiliates,
other than Subsidiaries, and (iii) of the Company's directors and
senior officers.
(b) All of the outstanding shares of capital stock or similar
equity interests of each Subsidiary shown in Schedule 5.4 as being
owned by the Company and its Subsidiaries have been validly issued,
are fully paid and nonassessable and are owned by the Company or
another Subsidiary free and clear of any Lien (except as otherwise
disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a
corporation or other legal entity duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization,
and is duly qualified as a foreign corporation or other legal entity
and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to
which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Subsidiary has the corporate or
other power and authority to own or hold under lease the properties it
purports to own or hold under lease and to transact the business it
transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to any
legal restriction or any agreement (other than this Agreement, the
agreements listed on Schedule 5.4 and customary limitations imposed by
corporate law statutes) restricting the ability of such Subsidiary to
pay dividends out of profits or make any other similar distributions
of profits to the Company or any of its Subsidiaries that owns
outstanding shares of capital stock or similar equity interests of
such Subsidiary.
-5-
SECTION 5.5 FINANCIAL STATEMENTS.
The Company has delivered to each Purchaser copies of the financial
statements of the Company and its Subsidiaries listed on Schedule 5.5. All of
said financial statements (including in each case the related schedules and
notes) fairly present in all material respects the consolidated financial
position of the Company and its Subsidiaries as of the respective dates
specified in such financial statements and the consolidated results of their
operations and cash flows for the respective periods so specified and have
been prepared in accordance with GAAP consistently applied throughout the
periods involved except as set forth in the notes thereto (subject, in the
case of any interim financial statements, to normal year-end adjustments).
SECTION 5.6 COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.
The execution, delivery and performance by the Company of this
Agreement and the Notes will not (a) contravene, result in any breach of, or
constitute a default under, or result in the creation of any Lien in respect
of any property of the Company or any Subsidiary under, any indenture,
mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate
charter or by-laws, or any other agreement or instrument to which the Company
or any Subsidiary is bound or by which the Company or any Subsidiary or any
of their respective properties may be bound or affected, (b) conflict with or
result in a breach of any of the terms, conditions or provisions of any
order, judgment, decree, or ruling of any court, arbitrator or Governmental
Authority applicable to the Company or any Subsidiary or (c) violate any
provision of any statute or other rule or regulation of any Governmental
Authority applicable to the Company or any Subsidiary.
SECTION 5.7 GOVERNMENTAL AUTHORIZATIONS, ETC.
No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the
execution, delivery or performance by the Company of this Agreement or the
Notes.
SECTION 5.8 LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND
ORDERS.
(a) There are no actions, suits or proceedings pending or, to
the knowledge of the Company, threatened against or affecting the
Company or any Subsidiary or any property of the Company or any
Subsidiary in any court or before any arbitrator of any kind or before
or by any Governmental Authority that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect.
(b) Neither the Company nor any Subsidiary is in default
under any term of any agreement or instrument to which it is a party
or by which it is bound, or any order, judgment, decree or ruling of
any court, arbitrator or Governmental Authority or is in violation of
any applicable law, ordinance, rule or regulation (including without
limitation Environmental Laws) of any Governmental Authority, which
default or violation, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
-6-
SECTION 5.9 TAXES.
The Company and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes
shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or
franchises, to the extent such taxes and assessments have become due and
payable and before they have become delinquent, except for any taxes and
assessments (a) the amount of which is not individually or in the aggregate
Material or (b) the amount, applicability or validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which the Company or a Subsidiary, as the case may be, has established
adequate reserves in accordance with GAAP. The Company knows of no basis for
any other tax or assessment that could reasonably be expected to have a
Material Adverse Effect. The charges, accruals and reserves on the books of
the Company and its Subsidiaries in respect of Federal, state or other taxes
for all fiscal periods are adequate. The Federal income tax liabilities of
the Company and its Subsidiaries have been determined by the Internal Revenue
Service and paid for all fiscal years up to and including the fiscal year
ended August 31, 1994.
SECTION 5.10 TITLE TO PROPERTY; LEASES.
The Company and its Subsidiaries have good and sufficient title to
their respective properties that individually or in the aggregate are
Material, including all such properties reflected in the most recent audited
balance sheet referred to in Section 5.5 or purported to have been acquired
by the Company or any Subsidiary after said date (except as sold or otherwise
disposed of in the ordinary course of business), in each case free and clear
of Liens prohibited by this Agreement. All leases that individually or in the
aggregate are Material are valid and subsisting and are in full force and
effect in all material respects.
SECTION 5.11 LICENSES, PERMITS, ETC.
(a) Except as disclosed in Schedule 5.11, the Company and its
Subsidiaries own or possess all licenses, permits, franchises,
authorizations, patents, copyrights, service marks, trademarks and
trade names, or rights thereto, that individually or in the aggregate
are Material, without known conflict with the rights of others.
(b) To the best knowledge of the Company, no product of the
Company infringes in any material respect any license, permit,
franchise, authorization, patent, copyright, service ▇▇▇▇, trademark,
trade name or other right owned by any other Person.
(c) To the best knowledge of the Company, there is no
Material violation by any Person of any right of the Company or any
of its Subsidiaries with respect to any patent, copyright, service
▇▇▇▇, trademark, trade name or other right owned or used by the
Company or any of its Subsidiaries.
-7-
SECTION 5.12 COMPLIANCE WITH ERISA.
The Company and each ERISA Affiliate have operated and administered
each Plan in compliance with all applicable laws except for such instances of
noncompliance as have not resulted in and could not reasonably be expected to
result in a Material Adverse Effect. Neither the Company nor any ERISA
Affiliate has incurred any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to employee benefit
plans (as defined in Section 3 of ERISA), and no event, transaction or
condition has occurred or exists that could reasonably be expected to result
in the incurrence of any such liability by the Company or any ERISA
Affiliate, or in the imposition of any Lien on any of the rights, properties
or assets of the Company or any ERISA Affiliate, in either case pursuant to
Title I or IV of ERISA or to such penalty or excise tax provisions or to
Section 401(a)(29) or 412 of the Code, other than such liabilities or Liens
as would not be individually or in the aggregate Material.
The present value of the aggregate benefit liabilities under each of
the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial
assumptions specified for funding purposes in such Plan's most recent
actuarial valuation report, exceeded the aggregate current value of the
assets of such Plan allocable to such benefit liabilities by $1,211,373. The
term "BENEFIT LIABILITIES" has the meaning specified in section 4001 of ERISA
and the terms "CURRENT VALUE" and "PRESENT VALUE" have the meaning specified
in section 3 of ERISA.
The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multi-employer Plans that
individually or in the aggregate are Material.
The expected post-retirement benefit obligation (determined as of
the last day of the Company's most recently ended fiscal year in accordance
with Financial Accounting Standards Board Statement No. 106, without regard
to liabilities attributable to continuation coverage mandated by section
4980B of the Code) of the Company and its Subsidiaries noted in the financial
statements of the Company as at August 31, 1998 is $12,900,000.
The execution and delivery of this Agreement and the issuance and
sale of the Notes hereunder will not involve any transaction that is subject
to the prohibitions of section 406 of ERISA or in connection with which a tax
could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The
representation by the Company in the first sentence of this Section 5.12(e)
is made in reliance upon and subject to (i) the accuracy of each Purchaser's
representation in Section 6.2 as to the sources of the funds used to pay the
purchase price of the Notes to be purchased by you and (ii) the assumption,
made solely for the purpose of making such representation, that Department of
Labor Interpretive Bulletin 75-2 with respect to prohibited transactions
remains valid in the circumstances of the transactions contemplated herein.
SECTION 5.13 PRIVATE OFFERING BY THE COMPANY.
Neither the Company nor anyone acting on its behalf has offered the
Notes or any similar securities for sale to, or solicited any offer to buy
any of the same from, or otherwise approached
-8-
or negotiated in respect thereof with, any Person other than the Purchasers
and not more than 37 other Institutional Investors, each of which has been
offered the Notes at a private sale for investment. Neither the Company nor
anyone acting on its behalf has taken, or will take, any action that would
subject the issuance or sale of the Notes to the registration requirements of
Section 5 of the Securities Act.
SECTION 5.14 USE OF PROCEEDS; MARGIN REGULATIONS.
The Company will apply the proceeds of the sale of the Notes to
repay a portion of existing Indebtedness and for general corporate purposes.
No part of the proceeds from the sale of the Notes hereunder will be used,
directly or indirectly, for the purpose of buying or carrying any margin
stock within the meaning of Regulation G of the Board of Governors of the
Federal Reserve System (12 CFR 207), or for the purpose of buying or carrying
or trading in any securities under such circumstances as to involve the
Company in a violation of Regulation X of said Board (12 CFR 224) or to
involve any broker or dealer in a violation of Regulation T of said Board (12
CFR 220). Margin stock does not constitute more than 5% of the value of the
consolidated assets of the Company and its Subsidiaries and the Company does
not have any present intention that margin stock will constitute more than 5%
of the value of such assets. As used in this Section, the terms "margin
stock" and "purpose of buying or carrying" shall have the meanings assigned
to them in said Regulation U.
SECTION 5.15 EXISTING INDEBTEDNESS; FUTURE LIENS.
(a) Except as described therein, Schedule 5.15 sets forth a
complete and correct list of all outstanding Indebtedness of the
Company and its Subsidiaries as May 31, 1999, since which date there
has been no Material change in the amounts, interest rates, sinking
funds, installment payments or maturities of the Indebtedness of the
Company or its Subsidiaries. Neither the Company nor any Subsidiary is
in default and no waiver of default is currently in effect, in the
payment of any principal or interest on any Indebtedness of the
Company or such Subsidiary and no event or condition exists with
respect to any Indebtedness of the Company or any Subsidiary that
would permit (or that with notice or the lapse of time, or both, would
permit) one or more Persons to cause such Indebtedness to become due
and payable before its stated maturity or before its regularly
scheduled dates of payment.
(b) Except as described in Schedule 5.15, neither the Company
nor any Subsidiary has agreed or consented to cause or permit in the
future (upon the happening of a contingency or otherwise) any of its
property, whether now owned or hereafter acquired, to be subject to a
Lien not permitted by Section 10.3.
SECTION 5.16 FOREIGN ASSETS CONTROL REGULATIONS, ETC.
Neither the sale of the Notes by the Company hereunder nor its use
of the proceeds thereof will violate the Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the United
States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any
enabling legislation or executive order relating thereto.
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SECTION 5.17 STATUS UNDER CERTAIN STATUTES.
Neither the Company nor any Subsidiary is subject to regulation
under the Investment Company Act of 1940, as amended, the Public Utility
Holding Company Act of 1935, as amended, the Interstate Commerce Act, as
amended, or the Federal Power Act, as amended.
SECTION 5.18 ENVIRONMENTAL MATTERS.
Neither the Company nor any Subsidiary has knowledge of any claim or
has received any notice of any claim, and no proceeding has been instituted
raising any claim against the Company or any of its Subsidiaries or any of
their respective real properties now or formerly owned, leased or operated by
any of them or other assets, alleging any damage to the environment or
violation of any Environmental Laws, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect. Except as
otherwise disclosed to the Purchaser in writing,
(a) neither the Company nor any Subsidiary has knowledge of
any facts which would give rise to any claim, public or private, of
violation of Environmental Laws or damage to the environment emanating
from, occurring on or in any way related to real properties now or
formerly owned, leased or operated by any of them or to other assets
or their use, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has
stored any Hazardous Materials on real properties now or formerly
owned, leased or operated by any of them and has not disposed of any
Hazardous Materials in a manner contrary to any Environmental Laws in
each case in any manner that could reasonably be expected to result
in a Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Subsidiaries are in compliance
with applicable Environmental Laws, except where failure to comply
could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.19 PARITY OF OBLIGATIONS.
All obligations hereunder and under the Notes are direct and
unsecured obligations of the Company ranking pari passu as against the assets
of the Company with all other present and future unsecured Debt (actual or
contingent) of the Company which is not expressed to be subordinate or junior
in rank to any other unsecured Debt of the Company, including, without
limitation, Debt incurred under and pursuant to the Credit Agreement.
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SECTION 5.20 YEAR 2000 COMPLIANCE.
All Information Systems and Equipment are either Year 2000
Compliant, or any reprogramming, remediation or any other corrective action,
including the internal testing of all such Information Systems and Equipment,
is in the process of being completed. To the extent that such
reprogramming/remediation and testing action is required, the cost thereof,
as well as the cost of the reasonably foreseeable consequences of failure to
become Year 2000 Compliant, to the Company and its Subsidiaries (including
without limitation reprogramming errors and the failure or other systems or
equipment) would not reasonably be expected to result in a Material Adverse
Effect.
SECTION 6. REPRESENTATIONS OF THE PURCHASERS.
SECTION 6.1 PURCHASE FOR INVESTMENT.
Each Purchaser represents that it is purchasing the Notes for its
own account or for one or more separate accounts maintained by it for the
account of one or more pension or trust funds and not with a view to the
distribution thereof, PROVIDED that the disposition of such Purchaser's
property shall at all times be within its control. Each Purchaser understands
that the Notes have not been registered under the Securities Act and may be
resold only if registered pursuant to the provisions of the Securities Act or
if an exemption from registration is available, except under circumstances
where neither such registration nor such an exemption is required by law, and
that the Company is not required to register the Notes.
SECTION 6.2 SOURCE OF FUNDS.
Each Purchaser represents that at least one of the following
statements is an accurate representation as to each source of funds (a
"SOURCE") to be used by such Purchaser to pay the purchase price of the Notes
to be purchased by such Purchaser hereunder:
(a) the Source is an "INSURANCE COMPANY GENERAL ACCOUNT"
within the meaning of Department of Labor Prohibited Transaction
Exemption ("PTE") 95-60 (issued July 12, 1995) and there is no
employee benefit plan, treating as a single plan all plans maintained
by the same employer or employee organization, with respect to which
the amount of the general account reserves and liabilities for all
contracts held by or on behalf of such plan, exceed ten percent (10%)
of the total reserves and liabilities of such general account
(exclusive of separate account liabilities) plus surplus, as set forth
in the NAIC Annual Statement filed with such Purchaser's state of
domicile; or
(b) the Source is either (i) an insurance company pooled
separate account, within the meaning of 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 such Purchaser
has disclosed to the Company in writing pursuant to this paragraph
(b), no employee benefit plan or group of plans maintained by the same
employer or employee organization beneficially owns more than 10% of
all assets allocated to such pooled separate account or collective
investment fund; or
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(c) the Source constitutes assets of an "INVESTMENT FUND"
(within the meaning of Part V of the "QPAM Exemption") managed by a
"QUALIFIED PROFESSIONAL ASSET MANAGER" or "QPAM" (within the meaning
of Part V of the QPAM Exemption), no employee benefit plan's assets
that are included in such investment fund, when combined with the
assets of all other employee benefit plans established or maintained
by the same employer or by an affiliate (within the meaning of
Section V(c)(1) of the QPAM Exemption) of such employer or by the same
employee organization and managed by such QPAM, exceed 20% of the
total client assets managed by such QPAM, the conditions of Part I(c)
and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a
person controlling or controlled by the QPAM (applying the definition
of "control" in Section V(e) of the QPAM Exemption) owns a 5% or more
interest in the Company and (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 this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this paragraph (e); or
(f) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of ERISA.
If any Purchaser or any subsequent transferee of the Notes indicates
that such Purchaser or such transferee is relying on any representation
contained in paragraph (b), (c) or (e) above, the Company shall deliver on
the date of Closing and on the date of any applicable transfer a certificate,
which shall either state that (i) it is neither a party in interest nor a
"disqualified person" (as defined in Section 4975(e)(2) of the Internal
Revenue Code of 1986, as amended), with respect to any plan identified
pursuant to paragraphs (b) or (e) above, or (ii) with respect to any plan,
identified pursuant to paragraph (c) above, neither it nor any "affiliate"
(as defined in Section V(c) of the QPAM Exemption) has at such time, and
during the immediately preceding one year, exercised the authority to appoint
or terminate said QPAM as manager of any plan identified in writing pursuant
to paragraph (c) above or to negotiate the terms of said QPAM's management
agreement on behalf of any such identified plan. As used in this Section 6.2,
the terms "employee benefit plan", "governmental plan", "party in interest"
and "separate account" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.
SECTION 7. INFORMATION AS TO COMPANY.
SECTION 7.1 FINANCIAL AND BUSINESS INFORMATION.
The Company shall deliver to each Holder that is an Institutional
Investor:
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(a) QUARTERLY STATEMENTS -- within 90 days after the end of
each quarterly fiscal period in each fiscal year of the Company (other
than the last quarterly fiscal period of each such fiscal year),
duplicate copies of,
(i) a consolidated balance sheet of the Company
and its Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such quarter and (in the case of the second
and third quarters) for the portion of the fiscal year ending
with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial
position of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from year-end
adjustments; PROVIDED that delivery within the time period specified
above of copies of the Company's Quarterly Report on form 10-Q
prepared in compliance with the requirements therefor and filed with
the Securities and Exchange Commission shall be deemed to satisfy the
requirements of this Section 7.1(a);
(b) ANNUAL STATEMENTS -- within 120 days after the end
of each fiscal year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company
and its Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied by
(A) an opinion thereon of independent
certified public accountants of recognized national
standing, which opinion shall state that such
financial statements present fairly, in all material
respects, the financial position of the companies
being reported upon and their results of operations
and cash flows and have been prepared in conformity
with GAAP, and that the examination of such
accountants in connection with such financial
statements has been made in accordance with
generally accepted auditing standards, and that such
audit provides a reasonable basis for such opinion
in the circumstances; and
(B) a certificate of such accountants
stating that they have reviewed this Agreement and
stating further whether, in making their
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audit, they have become aware of any condition or
event that then constitutes a Default or an Event of
Default, and, if they are aware that any such
condition or event then exists, specifying the
nature and period of the existence thereof (it being
understood that such accountants shall not be
liable, directly or indirectly, for any failure to
obtain knowledge of any Default or Event of Default
unless such accountants should have obtained
knowledge thereof in making an audit in accordance
with generally accepted auditing standards or did
not make such an audit;
PROVIDED that the delivery within the time period specified above of
the Company's Annual Report on Form 10-K for such fiscal year
(together with the Company's annual report to shareholders, if any,
prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in
accordance with the requirements therefor and filed with the
Securities and Exchange Commission, together with the accountant's
certificate described in clause (B) above, shall be deemed to satisfy
the requirements of this Section 7.1(b).
(c) SEC AND OTHER REPORTS -- promptly upon their becoming
available, one copy of (I) each financial statement, report, notice or
proxy statement sent by the Company or any Subsidiary to public
securities holders generally, and (II) each regular or periodic
report, each registration statement (without exhibits except as
expressly requested by such holder), and each prospectus and all
amendments thereto filed by the Company or any Subsidiary with the
Securities and Exchange Commission and of all press releases and other
statements made available generally by the Company or any Subsidiary
to the public concerning developments that are Material;
(d) NOTICE OF DEFAULT OR EVENT OF DEFAULT -- promptly, and in
any event within five days after a Responsible Officer becoming aware
of the existence of any Default or Event of Default or that any Person
has given any notice or taken any action with respect to a claimed
default hereunder or that any Person has given any notice or taken any
action with respect to a claimed default of the type referred to in
Section 11(f), a written notice specifying the nature and period of
existence thereof and what action the Company is taking or proposes to
take with respect thereto;
(e) NOTICE OF ERISA MATTERS -- promptly, and in any event
within ten days after a Responsible Officer becoming aware of any of
the following, a written notice setting forth the nature thereof and
the action, if any, that the Company or an ERISA Affiliate proposes to
take with respect thereto:
(i) with respect to any Plan, any reportable event,
as defined in section 4043(b) of ERISA and the regulations
thereunder, for which notice thereof has not been waived
pursuant to such regulations as in effect on the date hereof;
or
(ii) the taking by the PBGC of steps to institute, or
the threatening by the PBGC of the institution of, proceedings
under section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
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receipt by the Company or any ERISA Affiliate of a notice
from a Multiemployer Plan that such action has been taken by
the PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could
result in the incurrence of any liability by the Company or
any ERISA Affiliate pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to
employee benefit plans, or in the imposition of any Lien on
any of the rights, properties or assets of the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or such
penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material
Adverse Effect;
(f) NOTICES FROM GOVERNMENTAL AUTHORITY -- promptly, and in
any event within 30 days of receipt thereof, copies of any notice to
the Company or any Subsidiary from any Federal or state Governmental
Authority relating to any order, ruling, statute or other law or
regulation that could reasonably be expected to have a Material
Adverse Effect; and
(g) REQUESTED INFORMATION -- with reasonable promptness, such
other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Company or
any of its Subsidiaries or relating to the ability of the Company to
perform its obligations hereunder and under the Notes as from time to
time may be reasonably requested by any such Holder.
SECTION 7.2 OFFICER'S CERTIFICATE.
Each set of financial statements delivered to a Holder pursuant to
Section 7.1(a) or 7.1(b) hereof shall be accompanied by a certificate of a
Senior Financial Officer setting forth:
(a) COVENANT COMPLIANCE -- the information (including
detailed calculations) required in order to establish whether the
Company was in compliance with the requirements of Section 10.3
through Section 10.8 hereof, inclusive, during the quarterly or
annual period covered by the statements then being furnished
(including with respect to each such Section, where applicable, the
calculations of the maximum or minimum amount, ratio or percentage, as
the case may be, permissible under the terms of such Sections, and the
calculation of the amount, ratio or percentage then in existence); and
(b) EVENT OF DEFAULT -- a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and
conditions of the Company and its Subsidiaries from the beginning of
the quarterly or annual period covered by the statements then being
furnished to the date of the certificate and that such review shall
not have disclosed the existence during such period of any condition
or event that constitutes a Default or an Event of Default or, if any
such condition or event existed or exists (including, without
limitation, any such event or condition resulting from the failure of
the Company or any
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Subsidiary to comply with any Environmental Law), specifying the
nature and period of existence thereof and what action the Company
shall have taken or proposes to take with respect thereto.
SECTION 7.3 INSPECTION.
The Company shall permit the representatives of each Holder that is
an Institutional Investor:
(a) NO DEFAULT -- if no Default or Event of Default then
exists, at the expense of such Holder and upon reasonable prior notice
to the Company, to visit the principal executive office of the
Company, to discuss the affairs, finances and accounts of the Company
and its Subsidiaries with the Company's officers, and (with the
consent of the Company, which consent will not be unreasonably
withheld) its independent public accountants, and (with the consent of
the Company, which consent will not be unreasonably withheld) to visit
the other offices and properties of the Company and each Subsidiary,
all at such reasonable times and as often as may be reasonably
requested in writing; and
(b) DEFAULT -- if a Default or Event of Default then exists,
at the expense of the Company, to visit and inspect any of the offices
or properties of the Company or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to
make copies and extracts therefrom, and to discuss their respective
affairs, finances and accounts with their respective officers and
independent public accountants (and by this provision the Company
authorizes said accountants to discuss the affairs, finances and
accounts of the Company and its Subsidiaries), all at such times and
as often as may be requested.
SECTION 8. PREPAYMENT OF THE NOTES.
SECTION 8.1 REQUIRED PREPAYMENTS.
No prepayments shall be required with respect to the Notes.
SECTION 8.2 OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT.
The Company may, at its option, upon notice as provided below,
prepay at any time all, or from time to time any part of, the Notes, in an
amount not less than 10% of the aggregate principal amount of the Notes then
outstanding in the case of a partial prepayment, at 100% of the principal
amount so prepaid, together with interest accrued thereon to the date of such
prepayment, plus the Make-Whole Amount determined for the prepayment date
with respect to such principal amount. The Company will give the Holders
written notice of each optional prepayment under this Section 8.2 not less
than 30 days and not more than 60 days prior to the date fixed for such
prepayment. Each such notice shall specify such date, the aggregate principal
amount of the Notes to be prepaid on such date, the principal amount of each
Note held by such Holder to be prepaid (determined in accordance with Section
8.4), and the interest to be paid on
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the prepayment date with respect to such principal amount being prepaid, and
shall be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make-Whole Amount due in connection with such prepayment
(calculated as if the date of such notice were the date of the prepayment),
setting forth the details of such computation. Two Business Days prior to
such prepayment, the Company shall deliver to each holder of Notes a
certificate of a Senior Financial Officer specifying the calculation of such
Make-Whole Amount as of the specified prepayment date.
SECTION 8.3 CHANGE IN CONTROL.
(a) NOTICE OF CHANGE IN CONTROL OR CONTROL EVENT.
The Company will, within two Business Days after any
Responsible Officer has knowledge of the occurrence of any Change in Control
or Control Event, give written notice of such Change in Control or Control
Event to each holder of Notes unless notice in respect of such Change in
Control (or the Change in Control contemplated by such Control Event) shall
have been given pursuant to subparagraph (b) of this Section 8.3. If a Change
in Control has occurred, such notice shall contain and constitute an offer to
purchase Notes as described in subparagraph (c) of this Section 8.3 and shall
be accompanied by the certificate described in subparagraph (g) of this
Section 8.3.
(b) CONDITION TO COMPANY ACTION.
The Company will not take any action that consummates or
finalizes a Change in Control unless (i) at least 60 days prior to such
action it shall have given to each Holder written notice containing and
constituting an offer to purchase Notes as described in subparagraph (c) of
this Section 8.3, accompanied by the certificate described in subparagraph
(g) of this Section 8.3, and (ii) contemporaneously with such action, it
purchases all Notes required to be purchased in accordance with this Section
8.3.
(c) OFFER TO PURCHASE NOTES.
The offer to purchase Notes contemplated by subparagraphs
(a) and (b) of this Section 8.3 shall be an offer to purchase, in accordance
with and subject to this Section 8.3, all, but not less than all, of the
Notes held by each holder (in this case only, "HOLDER" in respect of any Note
registered in the name of a nominee for a disclosed beneficial owner shall
mean such beneficial owner) on a date specified in such offer (the "PROPOSED
PURCHASE DATE"). If such Proposed Purchase Date is in connection with an
offer contemplated by subparagraph (a) of this Section 8.3, such date shall
be not less than 60 days and not more than 90 days after the date of such
offer (if the Proposed Purchase Date shall not be specified in such offer,
the Proposed Purchase Date shall be the 75th day after the date of such
offer).
(d) ACCEPTANCE.
Each Holder may accept or reject the offer to purchase made
pursuant to this Section 8.3 by causing a notice of such acceptance or
rejection to be delivered to the Company at
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least 15 days prior to the Proposed Purchase Date. A failure by any Holder to
respond to an offer to purchase made pursuant to this Section 8.3 shall be
deemed to constitute an acceptance of such offer by such Holder.
(e) PURCHASE.
Purchase of the Notes to be purchased pursuant to this
Section 8.3 shall be at 100% of the principal amount of such Notes, plus the
Make-Whole Amount determined for the date of purchase with respect to such
principal amount, together with interest on such Notes accrued to the date of
purchase. On the second Business Day preceding the date of purchase, the
Company shall deliver to the Holders of Notes being purchased a statement
showing the Make-Whole Amount due in connection with such purchase and
setting forth the details of the computation of such amount. The purchase
shall be made on the Proposed Purchase Date except as provided in
subparagraph (f) of this Section 8.3.
(f) DEFERRAL PENDING CHANGE IN CONTROL.
The obligation of the Company to purchase Notes pursuant to
the offers required by subparagraph (b) and accepted in accordance with
subparagraph (d) of this Section 8.3 is subject to the occurrence of the
Change in Control in respect of which such offers and acceptances shall have
been made. In the event that such Change in Control does not occur on or
prior to the Proposed Purchase Date in respect thereof, the purchase shall be
deferred until and shall be made on the date on which such Change in Control
occurs. The Company shall keep the Holders reasonably and timely informed of
(i) any such deferral of the date of purchase, (ii) the date on which such
Change in Control and the purchase are expected to occur, and (iii) any
determination by the Company that efforts to effect such Change in Control
have ceased or been abandoned (in which case the offers and acceptances made
pursuant to this Section 8.3 in respect of such Change in Control shall be
deemed rescinded).
(g) OFFICER'S CERTIFICATE.
Each offer to purchase the Notes pursuant to this Section
8.3 shall be accompanied by a certificate, executed by a Senior Financial
Officer of the Company and dated the date of such offer, specifying: (i) the
Proposed Purchase Date; (ii) that such offer is made pursuant to this Section
8.3; (iii) the principal amount of each Note offered to be purchased; (iv)
the estimated Make-Whole Amount due in connection with such purchase
(calculated as if the date of such notice were the date of the purchase)
setting forth the details of such computation; (v) the interest that would be
due on each Note offered to be purchased, accrued to the Proposed Purchase
Date; (vi) that the conditions of this Section 8.3 have been fulfilled; and
(vii) in reasonable detail, the nature and date or proposed date of the
Change in Control.
(h) DEFINITIONS.
"CHANGE IN CONTROL" shall be deemed to have occurred if any
person (as such term is used in section 13(d) and section 14(d)(2) of the
Exchange Act as in effect on the date of the Closing) or related persons
constituting a Group other than a Designated Person or Group
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become the "beneficial owners" (as such term is used in Rule 13d-3 under the
Exchange Act as in effect on the date of the Closing), directly or
indirectly, of more than 50% of the total voting power of all classes then
outstanding of the Company's voting stock.
"GROUP" shall mean any group of related persons
constituting a "Group" for the purposes of Section 13(d) of the Exchange Act,
or any successor provision.
"CONTROL EVENT" means:
(i) the execution by the Company or any of its
Subsidiaries or Affiliates of any agreement or letter of
intent with respect to any proposed transaction or event or
series of transactions or events which, individually or in
the aggregate, may reasonably be expected to result in a
Change of Control,
(ii) the execution of any written agreement which,
when fully performed by the parties thereto, would result in
a Change in Control, or
(iii) the making of any written offer by any person
(as such term is used in section 13(d) and section 14(d)(2)
of the Exchange Act as in effect on the date of the Closing)
or related persons constituting a group (as such term is used
in Rule 13d-5 under the Exchange Act as in effect on the date
of the Closing) to the holders of the common stock of the
Company, which offer, if accepted by the requisite number of
holders, would result in a Change in Control.
"DESIGNATED PERSON OR GROUP" means (i) the principal
stockholders listed on Schedule 8.3 and their heirs, (ii) members of the
current management team listed on Schedule 8.3 or a group of Persons
including members of the current management team or (iii) an employee stock
ownership plan of the Company.
SECTION 8.4 ALLOCATION OF PARTIAL PREPAYMENTS.
In the case of each partial prepayment of the Notes pursuant to
Section 8.2, the principal amount of the Notes to be prepaid shall be
allocated among all of the Notes at the time outstanding in proportion, as
nearly as practicable, to the respective unpaid principal amounts thereof not
theretofore called for prepayment.
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SECTION 8.5 MATURITY; SURRENDER, ETC.
In the case of each prepayment or purchase of Notes pursuant to this
Section 8, the principal amount of each Note to be prepaid or purchased shall
mature and become due and payable on the date fixed for such prepayment or
purchase, together with interest on such principal amount accrued to such
date and the applicable Make-Whole Amount, if any. From and after such date,
unless the Company shall fail to pay such principal amount when so due and
payable, together with the interest and Make-Whole Amount, if any, as
aforesaid, interest on such principal amount shall cease to accrue. Any Note
paid, purchased or prepaid in full shall be surrendered to the Company and
cancelled and shall not be reissued, and no Note shall be issued in lieu of
any prepaid or purchased principal amount of any Note.
SECTION 8.6 PURCHASE OF NOTES.
The Company will not and will not permit any Affiliate to purchase,
redeem, prepay or otherwise acquire, directly or indirectly, any of the
outstanding Notes except upon the purchase, payment or prepayment of the
Notes in accordance with the terms of this Agreement and the Notes. The
Company will promptly cancel all Notes acquired by it or any Affiliate
pursuant to any payment, prepayment or purchase of Notes pursuant to any
provision of this Agreement and no Notes may be issued in substitution or
exchange for any such Notes.
SECTION 8.7 MAKE-WHOLE AMOUNT.
"MAKE-WHOLE AMOUNT" means, with respect to any Note, an amount equal
to the excess, if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of such Note over the amount of
such Called Principal, PROVIDED that the Make-Whole Amount may in no event be
less than zero. For the purposes of determining the Make-Whole Amount, the
following terms have the following meanings:
"CALLED PRINCIPAL" means, with respect to any Note, the principal of
such Note that is to be prepaid or purchased pursuant to Section 8.2 or
Section 8.3 or has become or is declared to be immediately due and payable
pursuant to Section 12.1, as the context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due
dates to the Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor (applied
on the same periodic basis as that on which interest on the Notes is payable)
equal to the Reinvestment Yield with respect to such Called Principal.
"REINVESTMENT YIELD" means, with respect to the Called Principal of
any Note, (x) in the case of any calculation pursuant to Section 12.1, .75%
and (y) in all other instances, .50% over the yield to maturity implied by
(i) the yields reported, as of 10:00 A.M. (New York City time) on the third
Business Day preceding the Settlement Date with respect to such Called
Principal, on the relevant display provided by the Bloomberg Financial
Markets Services for actively traded on the run U.S. Treasury securities
having a maturity equal to the maturity of such Called
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Principal as of such Settlement Date, or (ii) if such yields are not reported
as of such time or the yields reported as of such time are not ascertainable,
the Treasury Constant Maturity Series Yields reported, for the latest day for
which such yields have been so reported as of the second Business Day
preceding the Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded on the run U.S. Treasury securities having a
constant maturity equal to the maturity of such Called Principal as of such
Settlement Date. Such implied yield will 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 (1) the actively traded U.S. Treasury security with the maturity
closest to and greater than the maturity and (2) the actively traded U.S.
Treasury security with the maturity closest to and less than the maturity.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such
Called Principal if no payment or purchase of such Called Principal were made
prior to its scheduled due date, PROVIDED that if such Settlement Date is not
a date on which interest payments are due to be made under the terms of the
Notes, then the amount of the next succeeding scheduled interest payment will
be reduced by the amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to Section 8.2, 8.3 or
12.1.
"SETTLEMENT DATE" means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid or purchased
pursuant to Section 8.2 or Section 8.3 or has become or is declared to be
immediately due and payable pursuant to Section 12.1, as the context requires.
SECTION 9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
SECTION 9.1 COMPLIANCE WITH LAW.
The Company will, and will cause each of its Subsidiaries to, comply
with all laws, ordinances or governmental rules or regulations to which each
of them is subject, including, without limitation, Environmental Laws, and
will obtain and maintain in effect all licenses, certificates, permits,
franchises and other governmental authorizations necessary to the ownership
of their respective properties or to the conduct of their respective
businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or
regulations or failures to obtain or maintain in effect such licenses,
certificates, permits, franchises and other governmental authorizations could
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
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SECTION 9.2 INSURANCE.
The Company will, and will cause each of its Subsidiaries to,
maintain, with financially sound and reputable insurers, insurance with
respect to their respective properties and businesses against such casualties
and contingencies, of such types, on such terms and in such amounts
(including deductibles, co-insurance and self-insurance, if adequate reserves
are maintained with respect thereto) as is customary in the case of entities
of established reputations engaged in the same or a similar business and
similarly situated.
SECTION 9.3 MAINTENANCE OF PROPERTIES.
The Company will, and will cause each of its Subsidiaries to,
maintain and keep, or cause to be maintained and kept, their respective
properties in good repair, working order and condition (other than ordinary
wear and tear), so that the business carried on in connection therewith may
be properly conducted at all times, PROVIDED that this Section shall not
prevent the Company or any Subsidiary from discontinuing the operation and
the maintenance of any of its properties if such discontinuance is desirable
in the conduct of its business and the Company has concluded that such
discontinuance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
SECTION 9.4 PAYMENT OF TAXES AND CLAIMS.
The Company will, and will cause each of its Subsidiaries to, file
all tax returns required to be filed in any jurisdiction and to pay and
discharge all taxes shown to be due and payable on such returns and all other
taxes, assessments, governmental charges, or levies imposed on them or any of
their properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become
delinquent and all claims for which sums have become due and payable that
have or might become a Lien on properties or assets of the Company or any
Subsidiary, PROVIDED that neither the Company nor any Subsidiary need pay any
such tax or assessment or claims if (a) the amount, applicability or validity
thereof is contested by the Company or such Subsidiary on a timely basis in
good faith and in appropriate proceedings, and the Company or a Subsidiary
has established adequate reserves therefor in accordance with GAAP on the
books of the Company or such Subsidiary or (b) the nonpayment of all such
taxes and assessments in the aggregate could not reasonably be expected to
have a Material Adverse Effect.
SECTION 9.5 CORPORATE EXISTENCE, ETC.
The Company will at all times preserve and keep in full force and
effect its corporate existence. Subject to Sections 10.2 and 10.7, the
Company will at all times preserve and keep in full force and effect the
corporate existence of each of its Subsidiaries and all rights and franchises
of the Company and its Subsidiaries unless, in the good faith judgment of the
Company, the termination of or failure to preserve and keep in full force and
effect such corporate existence, right or franchise could not, individually
or in the aggregate, have a Material Adverse Effect.
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SECTION 9.6 NOTES TO RANK PARI PASSU.
The Notes and all other obligations of the Company under this
Agreement are and at all times shall remain direct and unsecured obligations
of the Company ranking pari passu as against the assets of the Company with
all other Notes from time to time issued and outstanding hereunder without
any preference among themselves and pari passu with all other present and
future unsecured Debt (actual or contingent) of the Company which is not
expressed to be subordinate or junior in rank to any other unsecured Debt of
the Company, including, without limitation, Debt incurred under and pursuant
to the Credit Agreement.
SECTION 9.7 YEAR 2000 COMPLIANCE.
The Company will take all reasonable steps to ensure that its
Information Systems and Equipment are at all times Year 2000 Compliant, and
the Company shall notify the Holders promptly upon detecting any failure of
the Information Systems and Equipment to be Year 2000 Compliant except
insofar as the failure to do so will not result in a Material Adverse Effect.
In addition, the Company shall provide the Holders with such information
about its year 2000 computer readiness (including without limitation
information as to contingency plans, budgets and testing results) as the
Holders shall reasonably request.
SECTION 10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
SECTION 10.1 TRANSACTIONS WITH AFFILIATES.
The Company will not and will not permit any Subsidiary to enter
into directly or indirectly any transaction or Material group of related
transactions (including without limitation the purchase, lease, sale or
exchange of properties of any kind or the rendering of any service) with any
Affiliate (other than the Company or another Subsidiary), except in the
ordinary course and pursuant to the reasonable requirements of the Company's
or such Subsidiary's business and upon fair and reasonable terms no less
favorable to the Company or such Subsidiary than would be obtainable in a
comparable arm's-length transaction with a Person not an Affiliate.
SECTION 10.2 MERGER, CONSOLIDATION, ETC.
The Company shall not consolidate with or merge with any other
corporation or convey, transfer or lease substantially all of its assets in a
single transaction or series of transactions to any Person unless:
(a) the successor formed by such consolidation or the
survivor of such merger or the Person that acquires by conveyance,
transfer or lease substantially all of the assets of the Company as an
entirety, as the case may be (the "Successor Corporation"), shall be a
solvent corporation organized and existing under the laws of the
United States or any State thereof (including the District of
Columbia), and, if the Company is not such corporation, (i) such
corporation shall have executed and delivered to each Holder its
-23-
assumption of the due and punctual performance and observance of each
covenant and condition of this Agreement and the Notes and (ii) shall
have caused to be delivered to each Holder an opinion of nationally
recognized independent counsel, or other independent counsel
reasonably satisfactory to the Required Holders, to the effect that
all agreements or instruments effecting such assumption are
enforceable in accordance with their terms and comply with the terms
hereof;
(b) immediately after giving effect to such transaction, (i)
no Default or Event of Default shall have occurred and be continuing,
and (ii) the Successor Corporation would be permitted by the
provisions of Section 10.6(a)(v) to incur at least $1.00 of additional
Funded Debt.
No such conveyance, transfer or lease of substantially all of the assets of
the Company shall have the effect of releasing the Company or any successor
corporation that shall theretofore have become such in the manner prescribed
in this Section 10.2 from its liability under this Agreement or the Notes.
SECTION 10.3 LIENS.
The Company will not, and will not permit any of its Subsidiaries
to, create or incur, or suffer to be incurred or to exist, any Lien on its or
their property or assets, whether or not owned or hereafter acquired, or upon
any income or profits therefrom, or transfer any property for the purpose of
subjecting the same to the payment of obligations in priority to the payment
of its or their general creditors, or acquire or agree to acquire, or permit
any of its Subsidiaries to acquire, any property or assets upon conditional
sales agreements or other title retention devices, except:
(a) Liens for property taxes and assessments or governmental
charges or levies and Liens securing claims or demands of mechanics
and materialmen, provided payment thereof is not at the time required
by Section 9.4;
(b) Liens of or resulting from any judgment or award, the
time for the appeal or petition for rehearing of which shall not have
expired, or in respect of which the Company or a Subsidiary shall at
any time in good faith be prosecuting an appeal or proceeding for a
review and in respect of which a stay of execution pending such appeal
or proceeding for review shall have been secured;
(c) Liens incidental to the conduct of business or the
ownership of properties and assets (including, but not limited to,
Liens in connection with worker's compensation, unemployment insurance
and other like laws, warehousemen's and attorneys' liens and statutory
landlords' liens) and Liens to secure the performance of bids, tenders
or trade contracts, or to secure statutory obligations, surety or
appeal bonds or other Liens of like general nature incurred in the
ordinary course of business and not in connection with the incurrence
of Indebtedness, PROVIDED that such Liens do not, individually or in
the aggregate, materially impair the use of the property encumbered by
any such Lien in the operation of the business of the Company and its
Subsidiaries, taken as a whole, or the value of the property so
encumbered for the purposes of such business;
-24-
(d) Liens securing Indebtedness of the Company or any
Subsidiary existing or committed to as of the date of Closing and
reflected on Schedule 5.15 hereto;
(e) Liens incurred after the Closing given to secure the
payment of the purchase price incurred in connection with the
acquisition, construction or improvement of fixed assets of the
Company, which Liens are incurred contemporaneously with or within 180
days after the payment of such purchase price or completion of such
construction or improvement and Liens existing on fixed assets at the
time of acquisition thereof or at the time of acquisition by the
Company of any business entity then owning such fixed assets whether
by merger, consolidation or acquisition of substantially all of its
assets, and whether or not such existing Liens were given to secure
the payment of the purchase price of the fixed assets to which they
attach, PROVIDED that (i) the Lien shall attach solely to the fixed
assets acquired, constructed or improved, (ii) at the time of
acquisition, construction or improvement of such fixed assets, the
aggregate amount remaining unpaid on all Debt secured by such Liens on
such fixed assets whether or not assumed by the Company shall not
exceed an amount equal to 100% of the lesser of the total purchase
price or fair market value at the time of acquisition, construction or
improvement of such fixed assets (as determined in good faith by the
Board of Directors of the Company), and (iii) all Debt secured by such
Liens shall be incurred within the applicable limitations of this
Agreement including, without limitation, Section 10.6;
(f) any extension, renewal or refunding of any Lien permitted
by the preceding clauses (d) or (e) of this Section 10.3 in respect of
the same property theretofore subject to such Lien in connection with
the extension, renewal or refunding of the Debt secured thereby;
PROVIDED THAT (i) the principal amount of such extension, renewal or
refunding of Debt shall not exceed an amount equal to the original
principal amount incurred with respect thereto, (ii) the time
remaining until the maturity of such Debt shall not be reduced, (iii)
such Lien shall attach solely to the same such property, and (iv)
immediately after the consummation of the extension, renewal or
refunding and after giving effect thereto, (A) no Default or Event of
Default would exist, and (B) the Company would be permitted by the
provisions of Section 10.6(a)(iv) to incur at least $1.00 of
additional Funded Debt; and
(g) in addition to the Liens permitted under Section 10.3(a)
through (f), Liens securing Debt of the Company or any Subsidiary
within the limitations of Section 10.6(a)(iv).
SECTION 10.4 CONSOLIDATED ADJUSTED NET WORTH.
The Company will at all times keep and maintain Consolidated Adjusted
Net Worth at an amount not less than $250,000,000.
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SECTION 10.5 FIXED CHARGE COVERAGE RATIO.
The Company will keep and maintain the ratio of Consolidated Earnings
Available for Fixed Charges to Consolidated Fixed Charges, determined on a
Rolling Four Quarter Basis, at not less than 2.0 to 1.0.
SECTION 10.6 LIMITATIONS ON DEBT.
(a) The Company will not, and will not permit any Subsidiary
to, create, issue, assume, guarantee or otherwise incur or in any
manner be or become liable in respect of any Funded Debt, except:
(i) Funded Debt evidenced by the Notes;
(ii) Funded Debt of the Company and its
Subsidiaries outstanding as of the date of this Agreement
and described on Schedule 5.15 hereto;
(iii) Funded Debt of a Subsidiary to the Company or
to another Subsidiary;
(iv) Funded Debt of the Company and its
Subsidiaries secured by Liens permitted by Section 10.3(g);
PROVIDED that at the time of creation, issuance, assumption,
guarantee or incurrence thereof and after giving effect
thereto and to the application of the proceeds thereof:
(A) Priority Debt does not exceed 20%
of Consolidated Total Capitalization, and
(B) such Funded Debt shall be otherwise
permitted pursuant to clause (v) of this
Section 10.6(a); and
(v) unsecured Funded Debt of the Company and
Subsidiaries; PROVIDED that at the time of creation,
issuance, assumption, guarantee or incurrence thereof and
after giving effect thereto and to the application of the
proceeds thereof, Consolidated Funded Debt shall not exceed
55% of Consolidated Total Capitalization.
(b) The renewal, extension or refunding of any Funded Debt,
issued, incurred or outstanding pursuant to Section 10.6 (a) (other
than renewals, extensions or refundings of Funded Debt where there is
no increase in the outstanding principal amount of such Funded Debt)
shall constitute the issuance of additional Funded Debt which is, in
turn, subject to the limitations of the applicable provisions of this
Section 10.6.
(c) Any Person which becomes a Subsidiary after the date
hereof shall for all purposes of this Section 10.6 be deemed to have
created, assumed or incurred at the time
-26-
it becomes a Subsidiary all Debt of such Person existing immediately
after it becomes a Subsidiary.
SECTION 10.7 SALE OF ASSETS.
Except (i) as provided in Section 10.2 above, (ii) with respect to
inventory or other current assets in the ordinary course of business, (iii)
with respect to obsolete or worn out assets or assets no longer need for
operations, (iv) by a Subsidiary to the Company or any other Subsidiary, or
(v) by the Company to PTA.▇▇▇▇▇▇▇▇ Plastics, Indonesia, The Sunprene Co. or
to a Wholly-Owned Subsidiary, neither the Company nor any Subsidiary will
sell, lease, transfer or otherwise dispose of assets provided that the
foregoing restrictions do not apply to the sale of such assets for cash
consideration to a Person other than an Affiliate and all of the following
conditions are met:
(a) after giving effect to such disposition(s), the aggregate
net book value of such assets sold, leased, or otherwise disposed of
during either (x) the current fiscal year would not exceed 10% of
Consolidated Total Assets computed at the end of the most recent
fiscal year preceding such sale, lease or other disposition or (y) the
period from the Closing to the date of such sale, lease or other
disposition would not exceed 25% of Consolidated Total Assets computed
at the end of the most recent fiscal year preceding such sale, lease
or other disposition;
(b) in the opinion of the Company, the sale, lease or other
disposition is for fair market value and is in the best interest of
the Company; and
(c) immediately after the consummation of the transaction,
and after giving effect thereto, (x) no Default or Event of Default
would exist, and (y) the Company would be permitted by the provisions
of Section 10.6(a)(v) to incur at least $1.00 of additional Funded
Debt.
Dispositions of assets may be made in excess of the limits described
in clause (a) above if the net proceeds of such dispositions of assets in
excess of those permitted by clause (a) above are either (1) reinvested or
committed to be reinvested in assets in related businesses as determined by
the Company's Board of Directors within 12 months of such disposals; or (2)
to retire senior Debt of the Company (or, in the case of the Notes, the offer
of prepayment) on a PRO RATA basis at any applicable prepayment premium;
PROVIDED that the Company offers to each holder of the Notes to prepay its
Notes in an amount equal to its PRO RATA share of the amount being used to
retire senior Debt. It is understood and agreed by the Company that any such
amounts paid and applied to the prepayment of the Notes as hereinabove
provided shall be prepaid as and to the extent provided in Section 8.2.
SECTION 10.8 RESTRICTED PAYMENTS.
(a) The Company will not, and will not permit its
Subsidiaries to, except as hereinafter provided:
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(1) declare or pay any dividends, either in cash or property,
on any shares of its capital stock of any class (except dividends or
other distributions payable solely in shares of common stock of the
Company);
(2) directly or indirectly, or through any Subsidiary or
through any Affiliate of the Company, purchase, redeem or retire any
shares of its capital stock of any class or any warrants, rights or
options to purchase or acquire any shares of its capital stock (other
than in exchange for or out of the net cash proceeds to the Company
from the issue or sale of shares of common stock of the Company or
warrants, rights or options to purchase or acquire any shares of its
common stock);
(3) make any other payment or distribution, either directly
or indirectly or through any Subsidiary, in respect of its capital
stock; or
(4) make any optional payment in respect of Subordinated
Debt;
(such declarations or payments of dividends, purchases, redemptions or
retirements of capital stock (other than such purchases, redemptions or
retirements of common stock of the Company made under and pursuant to Section
10.9 hereof), warrants and Subordinated Debt, rights or options and all such
other payments or distributions being herein collectively called "RESTRICTED
PAYMENTS"), if after giving effect thereto the sum of (i) the aggregate
amount of Restricted Payments made during the period from and after the
Closing to and including the date of the making of the Restricted Payment in
question, PLUS (ii) the aggregate amount of all Restricted Investments made
by the Company or any Subsidiary during said period would exceed the sum of
(A) $50,000,000 PLUS (B) 50% of Consolidated Net Earnings for such period,
computed on a cumulative basis for said entire period (or if such
Consolidated Net Earnings on a cumulative basis is a deficit figure, then
MINUS 100% of such deficit).
(b) The Company will not, and will not permit its
Subsidiaries to, declare any dividend which constitutes a Restricted
Payment payable more than 60 days after the date of declaration
thereof, excluding dividends payable by a Subsidiary to another
Subsidiary or to the Company.
(c) For the purposes of this Section 10.8, the amount of any
Restricted Payment declared, paid or distributed in property shall be
deemed to be the greater of the book value or fair market value (as
determined in good faith by the Board of Directors of the Company) of
such property at the time of the making of the Restricted Payment in
question.
(d) The Company will not, and will not permit its
Subsidiaries to, authorize or make a Restricted Payment if after
giving effect to the proposed Restricted Payment (i) a Default or
Event of Default would exist, or (ii) the Company would not be
permitted by the provisions of Section 10.6(a)v) to incur at least
$1.00 of additional Funded Debt.
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SECTION 10.9 INVESTMENTS.
The Company will not, and will not permit any Subsidiary to, make
any Investments, other than:
(a) Investments by the Company and its Subsidiaries in and to
Subsidiaries, including any Investment in a corporation that operates
in lines of business similar to the Company's existing lines of
business which, after giving effect to such Investment, will become a
Subsidiary;
(b) Investments representing loans or advances to officers,
directors and employees for expenses (including moving expenses
related to a transfer) incidental to carrying on the business of the
Company or any Subsidiary in an aggregate outstanding amount not to
exceed $1,500,000;
(c) Investments in property or assets to be used in the
ordinary course of the business of the Company and its Subsidiaries as
described in Section 10.10 of this Agreement;
(d) Investments in the common stock of the Company in an
aggregate amount not to exceed $50,000,000;
(e) Investments of the Company existing as of the Closing and
described on Schedule 10.9 hereto;
(f) receivables arising from the sale of goods and services
in the ordinary course of business of the Company and its
Subsidiaries;
(g) Investments in joint ventures in which the Company has a
pro rata interest;
(h) Investments in direct obligations of the United States of
America or any agency or instrumentality of the United States of
America, the payment or guarantee of which constitutes a full faith
and credit obligation of the United States of America, in either case,
maturing within twelve months from the date of acquisition thereof;
(i) Investments in certificates of deposit and time deposits
maturing within one year from the date of issuance thereof, bankers'
acceptances, Eurodollar deposits, short-term investment funds and
money market certificates issued by a bank or trust company having
capital, surplus and undivided profits aggregating at least
$100,000,000, PROVIDED that at the time of acquisition thereof by the
Company or a Subsidiary, the senior unsecured long-term debt of such
bank or trust company or of the holding company of such bank or trust
company is rated, or has an equivalent rating of, "A" or better by
Standard & Poor's Ratings Group or "A2" or better by ▇▇▇▇▇'▇ Investors
Service, Inc.;
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(j) Investments in repurchase agreements with respect to any
Security described in clause (h) or clause (l) of this Section 10.9
entered into with a depository institution or trust company acting as
principal described in clause (i) of this Section 10.9 if such
repurchase agreements are by their terms to be performed by the
repurchase obligor and such repurchase agreements are deposited with a
bank or trust company of the type described in clause (i) of this
Section 10.9;
(k) Investments in foreign currency exchange Swaps entered
into in the ordinary course of business of the Company and its
Subsidiaries so long as such Investments are not made for speculative
purposes;
(l) Investments in readily-marketable obligations of
indebtedness of any State of the United States or any municipality
organized under the laws of any State of the United States or any
political subdivision thereof which, at the time of acquisition by the
Company or any Subsidiary, are accorded a rating of "SP-1" or "AA" by
Standard & Poor's Ratings Group, or "MIG-1" or "Aa" by ▇▇▇▇▇'▇
Investors Service, Inc. and which in any such case mature no later
than one year after the date of acquisition thereof;
(m) Investments in readily-marketable obligations of
indebtedness of any State of the United States or any municipality
organized under the laws of any State of the United States or any
political subdivision thereof which, at the time of acquisition by the
Company or any Subsidiary, are accorded an investment grade rating or
higher by Standard & Poor's Ratings Group or ▇▇▇▇▇'▇ Investors
Service, Inc. and which in any such case mature no later than three
years after the date of acquisition thereof;
(n) Investments in commercial paper of corporations organized
under the laws of the United States or any State thereof, maturing
within 270 days or less from the date of issuance which, at the time
of acquisition by the Company or any Subsidiary, are accorded one of
the top two rating classifications by Standard & Poor's Ratings Group
or by ▇▇▇▇▇'▇ Investors Service, Inc.; and
(o) other Investments (in addition to those permitted by the
foregoing provisions of this Section 10.9), PROVIDED that (1) all such
other Investments shall have been made out of funds available for
Restricted Payments which the Company or any Subsidiary would then be
permitted to make in accordance with the provisions of Section 10.8
and (2) after giving effect to such other Investments, (A) no Default
or Event of Default shall have occurred and be continuing, and (B) the
Company would be permitted by the provisions of Section 10.6(a)(v) to
incur at least $1.00 of additional Funded Debt.
In valuing any Investments for the purpose of applying the
limitations set forth in this Section 10.9, such Investments shall be taken
at the original cost thereof, without allowance for any subsequent write-offs
or appreciation or depreciation therein, but less any amount repaid or
recovered on account of capital or principal.
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For purposes of this Section 10.9, at any time when a corporation
becomes a Subsidiary, all Investments of such corporation at such time shall
be deemed to have been made by such corporation, as a Subsidiary, at such
time.
Notwithstanding anything to the contrary in this Agreement,
Investments permitted by clause (d) of this Section 10.9 shall not be
counted as a Restricted Payment under Section 10.8 hereof.
SECTION 10.10 LINE OF BUSINESS.
The Company will not, and will not permit any of its Subsidiaries
to, engage in any business if, as a result, the general nature of the
business in which the Company and its Subsidiaries, taken as a whole, would
then be engaged would be substantially changed from the general nature of the
business in which the Company and it Subsidiaries, taken as a whole, are
engaged on the date of this Agreement as described in the Memorandum.
SECTION 11. EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" shall exist if any of the following conditions
or events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or
Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
(b) the Company defaults in the payment of any interest on
any Note for more than five Business Days after the same becomes due
and payable; or
(c) the Company defaults in the performance of or compliance
with any term contained in Sections 10.4 through 10.8; or
(d) the Company defaults in the performance of or compliance
with any term contained herein (other than those referred to in
paragraphs (a), (b) and (c) of this Section 11) and such default is
not remedied within [60] days after the earlier of (i) a Responsible
Officer obtaining actual knowledge of such default and (ii) the
Company receiving written notice of such default from any Holder (any
such written notice to be identified as a "NOTICE OF DEFAULT" and to
refer specifically to this paragraph (d) of Section 11); or
(e) any representation or warranty made in writing by or on
behalf of the Company or by any officer of the Company in this
Agreement or in any writing furnished in connection with the
transactions contemplated hereby proves to have been false or
incorrect in any Material respect on the date as of which made; or
(f) (i) the Company or any Subsidiary is in default (as
principal or as guarantor or other surety) in the payment of any
principal of or premium or make-whole
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amount or interest on any Debt that is outstanding in an aggregate
principal amount of at least $10,000,000 beyond any period of grace
provided with respect thereto, or (ii) the Company or any Subsidiary
is in default in the performance of or compliance with any term of any
evidence of any Debt in an aggregate outstanding principal amount of
at least $10,000,000 or of any mortgage, indenture or other agreement
relating thereto or any other condition exists, and as a consequence
of such default or condition such Indebtedness has become, or has been
declared, due and payable before its stated maturity or before its
regularly scheduled dates of payment, or (iii) as a consequence of the
occurrence or continuation of any event or condition (other than the
passage of time or the right of the holder of Indebtedness to convert
such Indebtedness into equity interests), (x) the Company or any
Subsidiary has become obligated to purchase or repay Debt before its
regular maturity or before its regularly scheduled dates of payment in
an aggregate outstanding principal amount of at least $10,000,000,
or (y) one or more Persons have the right to require the Company or
any Subsidiary so to purchase or repay such Debt; or
(g) the Company or any Subsidiary (i) is generally not
paying, or admits in writing its inability to pay, its debts as they
become due, (ii) files, or consents by answer or otherwise to the
filing against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to
take advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction, (iii) makes an
assignment for the benefit of its creditors, (iv) consents to the
appointment of a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial
part of its property, (v) is adjudicated as insolvent or to be
liquidated, or (vi) takes corporate action for the purpose of any of
the foregoing; or
(h) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by the
Company or any of its Subsidiaries, a custodian, receiver, trustee or
other officer with similar powers with respect to it or with respect
to any substantial part of its property, or constituting an order for
relief or approving a petition for relief or reorganization or any
other petition in bankruptcy or for liquidation or to take advantage
of any bankruptcy or insolvency law of any jurisdiction, or ordering
the dissolution, winding-up or liquidation of the Company or any of
its Subsidiaries, or any such petition shall be filed against the
Company or any of its Subsidiaries and such petition shall not be
dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $10,000,000 are rendered against one or more
of the Company and its Subsidiaries and which judgments are not,
within 30 days after entry thereof, bonded, discharged or stayed
pending appeal, or are not discharged within 30 days after the
expiration of such stay; or
(j) (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is
sought or granted under section 412 of the Code, (ii) a notice
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of intent to terminate any Plan shall have been or is reasonably
expected to be filed with the PBGC or the PBGC shall have instituted
proceedings under ERISA section 4042 to terminate or appoint a trustee
to administer any Plan or the PBGC shall have notified the Company or
any ERISA Affiliate that a Plan may become a subject of any such
proceedings, (iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of section 4001(a)(18) of ERISA)
under all Plans subject to ERISA, determined in accordance with
Title IV of ERISA, shall exceed $5,000,000, (iv) the Company or any
ERISA Affiliate shall have incurred or is reasonably expected to incur
any liability pursuant to Title I or IV of ERISA or the penalty or
excise tax provisions of the Code relating to employee benefit plans,
(v) the Company or any ERISA Affiliate withdraws from any
Multiemployer Plan, or (vi) the Company or any Subsidiary establishes
or amends any employee welfare benefit plan that provides
post-employment welfare benefits in a manner that would increase the
liability of the Company or any Subsidiary thereunder; and any such
event or events described in clauses (i) through (vi) above, either
individually or together with any other such event or events, could
reasonably be expected to have a Material Adverse Effect.
As used in Section 11(j), the terms "EMPLOYEE BENEFIT PLAN" and "EMPLOYEE
WELFARE BENEFIT PLAN" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.
SECTION 12. REMEDIES ON DEFAULT, ETC.
SECTION 12.1 ACCELERATION.
(a) If an Event of Default with respect to the Company
described in paragraph (g) or (h) of Section 11 (other than an Event
of Default described in clause (i) of paragraph (g) or described in
clause (vi) of paragraph (g) by virtue of the fact that such clause
encompasses clause (i) of paragraph (g)) has occurred, all the Notes
then outstanding shall automatically become immediately due and
payable.
(b) If any other Event of Default has occurred and is
continuing, any Holder or Holders of more than 50% in principal amount
of the Notes at the time outstanding may at any time at its or their
option, by notice or notices to the Company, declare all the Notes
then outstanding to be immediately due and payable.
(c) If any Event of Default described in paragraph (a) or (b)
of Section 11 has occurred and is continuing, any Holder or Holders of
Notes at the time outstanding affected by such Event of Default may at
any time, at its or their option, by notice or notices to the Company,
declare all the Notes held by it or them to be immediately due and
payable.
Upon any Notes becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, plus (i) all accrued and
unpaid interest thereon and (ii) the Make-Whole Amount determined in respect
of such principal amount (to the full extent permitted by applicable law),
shall all be immediately due and payable, in each and every case without
presentment, demand, protest or further notice, all of which are hereby
waived. The Company acknowledges, and the parties hereto agree, that each
Holder has the right to maintain its
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investment in the Notes free from repayment by the Company (except as herein
specifically provided for) and that the provision for payment of a Make-Whole
Amount by the Company in the event that the Notes are prepaid or are
accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
SECTION 12.2 OTHER REMEDIES.
If any Default or Event of Default has occurred and is continuing,
and irrespective of whether any Notes have become or have been declared
immediately due and payable under Section 12.1, any Holder may proceed to
protect and enforce the rights of such Holder by an action at law, suit in
equity or other appropriate proceeding, whether for the specific performance
of any agreement contained herein or in any Note, or for an injunction
against a violation of any of the terms hereof or thereof, or in aid of the
exercise of any power granted hereby or thereby or by law or otherwise.
SECTION 12.3 RESCISSION.
At any time after any Notes have been declared due and payable, the
Holders of not less than 66-2/3% in principal amount of the Notes then
outstanding, by written notice to the Company, may rescind and annul any such
declaration and its consequences if (a) the Company has paid all overdue
interest on the Notes, all principal of and Make-Whole Amount, if any, on any
Notes that are due and payable and are unpaid other than by reason of such
declaration, and all interest on such overdue principal and Make-Whole
Amount, if any, and (to the extent permitted by applicable law) any overdue
interest in respect of the Notes, at the Default Rate, (b) all Events of
Default and Defaults, other than non-payment of amounts that have become due
solely by reason of such declaration, have been cured or have been waived
pursuant to Section 17, and (c) no judgment or decree has been entered for
the payment of any monies due pursuant hereto or to the Notes. No rescission
and annulment under this Section 12.3 will extend to or affect any subsequent
Event of Default or Default or impair any right consequent thereon.
SECTION 12.4 NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC.
No course of dealing and no delay on the part of any Holder in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such Holder's rights, powers or remedies. No right, power
or remedy conferred by this Agreement or by any Note upon any Holder thereof
shall be exclusive of any other right, power or remedy referred to herein or
therein or now or hereafter available at law, in equity, by statute or
otherwise. Without limiting the obligations of the Company under Section 15,
the Company will pay to each Holder on demand such further amount as shall be
sufficient to cover all costs and expenses of such Holder incurred in any
enforcement or collection under this Section 12, including, without
limitation, reasonable attorneys' fees, expenses and disbursements.
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SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
SECTION 13.1 REGISTRATION OF NOTES.
The Company shall keep at its principal executive office a register
for the registration and registration of transfers of Notes. The name and
address of each Holder of each transfer thereof and the name and address of
each transferee of one or more Notes shall be registered in such register.
Prior to due presentment for registration of transfer, the Person in whose
name any Note shall be registered shall be deemed and treated as the owner
and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall give
to any Holder promptly upon request therefor, a complete and correct copy of
the names and addresses of all registered Holders.
SECTION 13.2 TRANSFER AND EXCHANGE OF NOTES.
Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a
surrender for registration of transfer, duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered Holder or his
attorney duly authorized in writing and accompanied by the address for
notices of each transferee of such Note or part thereof), the Company shall
execute and deliver, at the Company's expense (except as provided below), one
or more new Notes (as requested by the holder thereof) in exchange therefor,
in an aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the form of Exhibit 1. Each
such new Note shall be dated and bear interest from the date to which
interest shall have been paid on the surrendered Note or dated the date of
the surrendered Note if no interest shall have been paid thereon. The Company
may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes. Notes
shall not be transferred in denominations of less than $1,000,000, provided
that if necessary to enable the registration of transfer by a Holder of its
entire holding of Notes, one Note may be in a denomination of less than
$1,000,000. Any transferee, by its acceptance of a Note registered in its
name (or the name of its nominee), shall be deemed to have made the
representation set forth in Section 6.2.
SECTION 13.3 REPLACEMENT OF NOTES.
Upon receipt by the Company of evidence reasonably satisfactory to
it of the ownership of and the loss, theft, destruction or mutilation of any
Note (which evidence shall be, in the case of an Institutional Investor,
notice from such Institutional Investor of such ownership and such loss,
theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the Holder is, or is a
nominee for, an original Purchaser or another Holder with a minimum
net worth of at least $25,000,000, such Person's own unsecured
agreement of indemnity shall be deemed to be satisfactory), or
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(b) in the case of mutilation, upon surrender and
cancellation thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a
new Note, dated and bearing interest from the date to which interest shall
have been paid on such lost, stolen, destroyed or mutilated Note or dated the
date of such lost, stolen, destroyed or mutilated Note if no interest shall
have been paid thereon.
SECTION 14. PAYMENT OF NOTES.
SECTION 14.1 PLACE OF PAYMENT.
Subject to Section 14.2, payments of principal, Make-Whole Amount,
if any, and interest becoming due and payable on the Notes shall be made in
Akron, Ohio at the principal office of the Company in such jurisdiction. The
Company may at any time, by notice to each Holder, change the place of
payment of the Notes so long as such place of payment shall be either the
principal office of the Company in such jurisdiction or the principal office
of a bank or trust company in such jurisdiction.
SECTION 14.2 HOME OFFICE PAYMENT.
So long as any Purchaser or its nominee shall be a Holder, and
notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for
principal, Make-Whole Amount, if any, and interest by the method and at the
address specified for such purpose below your name in Schedule A, or by such
other method or at such other address as such Purchaser or nominee shall have
from time to time specified to the Company in writing for such purpose,
without the presentation or surrender of such Note or the making of any
notation thereon, except that upon written request of the Company made
concurrently with or reasonably promptly after payment or prepayment in full
of any Note, such Purchaser or nominee shall surrender such Note for
cancellation, reasonably promptly after any such request, to the Company at
its principal executive office or at the place of payment most recently
designated by the Company pursuant to Section 14.1. Prior to any sale or
other disposition of any Note held by any Purchaser or its nominee will, at
its election, either endorse thereon the amount of principal paid thereon and
the last date to which interest has been paid thereon or surrender such Note
to the Company in exchange for a new Note or Notes pursuant to Section 13.2.
The Company will afford the benefits of this Section 14.2 to any
Institutional Investor that is the direct or indirect transferee of any Note
purchased by each Purchaser under this Agreement and that has made the same
agreement relating to such Note as each Purchaser has made in this Section
14.2.
SECTION 15. EXPENSES, ETC.
SECTION 15.1 TRANSACTION EXPENSES.
Whether or not the transactions contemplated hereby are consummated,
the Company will pay all costs and expenses (including reasonable attorneys'
fees of a special counsel and, if reasonably required, local or other
counsel) incurred by each Purchaser or Holder in connection
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with such transactions and in connection with any amendments, waivers or
consents under or in respect of this Agreement or the Notes (whether or not
such amendment, waiver or consent becomes effective), including, without
limitation: (a) the costs and expenses incurred in enforcing or defending (or
determining whether or how to enforce or defend) any rights under this
Agreement 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 by reason of being a Holder, and (b) the costs and
expenses, including financial advisors' fees, incurred in connection with the
insolvency or bankruptcy of the Company or any Subsidiary or in connection
with any work-out or restructuring of the transactions contemplated hereby
and by the Notes. The Company will pay, and will save each Purchaser or other
Holder harmless from, all claims in respect of any fees, costs or expenses if
any, of brokers and finders (other than those retained by such Purchaser or
other Holder).
SECTION 15.2 SURVIVAL.
The obligations of the Company under this Section 15 will survive
the payment or transfer of any Note, the enforcement, amendment or waiver of
any provision of this Agreement or the Notes, and the termination of this
Agreement.
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive
the execution and delivery of this Agreement and the Notes, the purchase or
transfer by any Purchaser of any Note or portion thereof or interest therein
and the payment of any Note, and may be relied upon by any subsequent Holder,
regardless of any investigation made at any time by or on behalf of any
Purchaser or any other Holder. All statements contained in any certificate or
other instrument delivered by or on behalf of the Company pursuant to this
Agreement shall be deemed representations and warranties of the Company under
this Agreement.
Subject to the preceding sentence, this Agreement and the Notes
embody the entire agreement and understanding between you and the Company and
supersede all prior agreements and understandings relating to the subject
matter hereof.
SECTION 17. AMENDMENT AND WAIVER.
SECTION 17.1 REQUIREMENTS.
This Agreement and the Notes may be amended, and the observance of
any term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and
the Required Holders, except that (a) no amendment or waiver of any of the
provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as
it is used therein), will be effective as to each Purchaser unless consented
to by each Purchaser in writing, and (b) no such amendment or waiver may,
without the written consent of each Holder at the time outstanding affected
thereby, (i) subject to the provisions of Section 12 relating to acceleration
or rescission, change the amount or time of any prepayment or payment of
principal
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of, or reduce the rate or change the time of payment or method of computation
of interest or of the Make-Whole Amount on, the Notes, (ii) change the
percentage of the principal amount of the Notes the Holders of which are
required to consent to any such amendment or waiver or (iii) amend any of
Sections 8, 11(a), 11(b), 12, 17 or 20.
SECTION 17.2 SOLICITATION OF HOLDERS OF NOTES.
(a) SOLICITATION.
The Company will provide each Holder (irrespective of the
amount of Notes then owned by it) with sufficient information,
sufficiently far in advance of the date a decision is required, to
enable such Holder to make informed and considered decision with
respect to any proposed amendment, waiver or consent in respect of any
of the provisions hereof or of the Notes. The Company will deliver
executed or true and correct copies of each amendment, waiver or
consent effected pursuant to the provisions of this Section 17 to each
Holder promptly following the date on which it is executed and
delivered by, or receives the consent or approval of, the requisite
Holders.
(b) PAYMENT.
The Company will not directly or indirectly pay or cause to
be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any Holder as
consideration for or as an inducement to the entering into by any
Holder of any waiver or amendment of any of the terms and provisions
hereof or of the Notes unless such remuneration is concurrently paid,
or security is concurrently granted, on the same terms, ratably to
each Holder then outstanding whether or not such Holder consented to
such waiver or amendment.
SECTION 17.3 BINDING EFFECT, ETC.
Any amendment or waiver consented to as provided in this Section 17
applies equally to all Holders and is binding upon them and upon each future
Holder and upon the Company without regard to whether such Note has been
marked to indicate such amendment or waiver. No such amendment or waiver will
extend to or affect any obligation, covenant, agreement, Default or Event of
Default not expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Company and any Holder nor any
delay in exercising any rights hereunder or under any Note shall operate as a
waiver of any rights of any Holder. As used herein, the term "this Agreement"
and references thereto shall mean this Agreement as it may from time to time
be amended or supplemented.
SECTION 17.4 NOTES HELD BY COMPANY, ETC.
Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then
outstanding approved or consented to any amendment, waiver or consent to be
given under this Agreement or the Notes, or have directed the taking of any
action provided herein or in the Notes to be taken upon the direction of the
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holders of a specified percentage of the aggregate principal amount of Notes
then outstanding, Notes directly or indirectly owned by the Company or any of
its Affiliates shall be deemed not to be outstanding.
SECTION 18. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery
service (with charges prepaid). Any such notice must be sent:
(i) if to a Purchaser or its nominee, to such
Purchaser or it at the address specified for such
communications in Schedule A, or at such other address as you
or it shall have specified to the Company in writing,
(ii) if to any other Holder, to such Holder at such
address as such other Holder shall have specified to the
Company in writing, or
(iii) if to the Company, to the Company at its
address set forth at the beginning hereof to the attention of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive Vice President Finance and
Administration, or at such other address as the Company shall
have specified to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when actually received.
SECTION 19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications that may
hereafter be executed, (b) documents received by each Holder at the Closing
(except the Notes themselves), and (c) financial statements, certificates and
other information previously or hereafter furnished to any Holder, may be
reproduced by such Holder by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and such Holder
may destroy any original document so reproduced. The Company agrees and
stipulates that, to the extent permitted by applicable law, any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such Holder in the
regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
This Section 19 shall not prohibit the Company or any Holder from contesting
any such reproduction to the same extent that it could contest the original,
or from introducing evidence to demonstrate the inaccuracy of any such
reproduction.
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SECTION 20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "CONFIDENTIAL INFORMATION"
means information delivered to each Holder by or on behalf of the Company or
any Subsidiary in connection with the transactions contemplated by or
otherwise pursuant to this Agreement that is proprietary in nature and that
was clearly marked or labeled or otherwise adequately identified when
received by such Holder as being confidential information of the Company or
such Subsidiary, PROVIDED that such term does not include information that
(a) was publicly known or otherwise known to such Holder prior to the time of
such disclosure, (b) subsequently becomes publicly known through no act or
omission by such Holder or any Person acting on such Holder's behalf, (c)
otherwise becomes known to such Holder other than through disclosure by the
Company or any Subsidiary or (d) constitutes financial statements delivered
to such Holder under Section 7.1 that are otherwise publicly available.
Each Holder will maintain the confidentiality of such Confidential
Information in accordance with procedures adopted by such Holder in good
faith to protect confidential information of third parties delivered to such
Holder, PROVIDED that such Holder may deliver or disclose Confidential
Information to (i) each Holder's directors, trustees, officers, employees,
agents, attorneys and affiliates (to the extent such disclosure reasonably
relates to the administration of the investment represented by each Holder's
Notes), (ii) each Holder's financial advisors and other professional advisors
who agree to hold confidential the Confidential Information substantially in
accordance with the terms of this Section 20, (iii) any other Holder, (iv)
any Institutional Investor to which any Holder sells or offers to sell such
Note or any part thereof or any participation therein (if such Person has
agreed in writing prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 20), (v) any Person from whom any
Holder offers to purchase any security of the Company (if such Person has
agreed in writing prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 20), (vi) any federal or state
regulatory authority having jurisdiction over any Holder, (vii) the National
Association of Insurance Commissioners or any similar organization, or any
nationally recognized rating agency that requires access to information about
such Holder's investment portfolio or (viii) any other Person to which such
delivery or disclosure may be necessary or appropriate (w) to effect
compliance with any law, rule, regulation or order applicable to any Holder,
(x) in response to any subpoena or other legal process, (y) in connection
with any litigation to which any Holder is a party or (z) if an Event of
Default has occurred and is continuing, to the extent any Holder may
reasonably determine such delivery and disclosure to be necessary or
appropriate in the enforcement or for the protection of the rights and
remedies under your Notes and this Agreement.
Each Holder, by its acceptance of a Note, will be deemed to have
agreed to be bound by and to be entitled to the benefits of this Section 20
as though it were a party to this Agreement. On reasonable request by the
Company in connection with the delivery to any holder of a Note of
information required to be delivered to such Holder under this Agreement or
requested by such Holder (other than a Holder that is a party to this
Agreement or its nominee, such Holder will confirm in writing that it is
bound by the provisions of this Section 20.
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SECTION 21. SUBSTITUTION OF PURCHASER.
Each Purchaser shall have the right to substitute any one of its
Affiliates as the purchaser of the Notes that such Purchaser has agreed to
purchase hereunder, by written notice to the Company, which notice shall be
signed by both such Purchaser and such Affiliate, shall contain such
Affiliate's agreement to be bound by this Agreement and shall contain a
confirmation by such Affiliate of the accuracy with respect to it of the
representations set forth in Section 6. Upon receipt of such notice, wherever
the word "Purchaser" is used in this Agreement (other than in this Section
21), such word shall be deemed to refer to such Affiliate in lieu of the
previous Purchaser. In the event that such Affiliate is so substituted as a
purchaser hereunder and such Affiliate thereafter transfers to any Purchaser
all of the Notes then held by such Affiliate, upon receipt by the Company of
notice of such transfer, wherever the word "Purchaser" is used in this
Agreement (other than in this Section 21), such word shall no longer be
deemed to refer to such Affiliate, but shall refer to the Purchaser, and the
Purchaser shall have all the rights of an original Holder under this
Agreement.
SECTION 22. MISCELLANEOUS.
SECTION 22.1 SUCCESSORS AND ASSIGNS.
All covenants and other agreements contained in this Agreement by or
on behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any
subsequent Holder) whether so expressed or not.
SECTION 22.2 PAYMENTS DUE ON NON-BUSINESS DAYS.
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or Make-whole Amount or interest
on any Note that is due on a date other than a Business Day shall be made on
the next succeeding Business Day without including the additional days
elapsed in the computation of the interest payable on such next succeeding
Business Day.
SECTION 22.3 SEVERABILITY.
Any provision of this Agreement that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall (to the full extent permitted by law) not invalidate
or render unenforceable such provision in any other jurisdiction.
SECTION 22.4 CONSTRUCTION.
Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant
contained herein, so that compliance with any one covenant shall not (absent
such an express contrary provision) be deemed to excuse compliance with any
other covenant. Where any provision herein refers to action to be taken by
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any Person, or which such Person is prohibited from taking, such provision
shall be applicable whether such action is taken directly or indirectly by
such Person.
SECTION 22.5 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each
of which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
SECTION 22.6 GOVERNING LAW.
This Agreement shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of
New York, excluding choice-of-law principles of the law of such State that
would require the application of the laws of a jurisdiction other than such
State.
SECTION 22.7 JURISDICTION.
The Company hereby irrevocably and unconditionally agrees that any
suit, action or proceeding with respect to this Agreement, or any proceeding
to execute or otherwise enforce any judgment in respect of any breach
thereof, brought by any registered Holder of a Note against the Company or
any of its property, may be brought by such Holder of a Note in the United
States District Court for the Southern District of New York or any New York
State Court sitting in the Borough of Manhattan in New York City, as such
Holder of a Note may in its sole discretion elect, and by the execution and
delivery of this Agreement, the Company irrevocably submits to the
jurisdiction of each such court; and agrees that process served either
personally or by registered mail shall constitute, to the extent permitted by
law, adequate service of process in any such suit. In addition the Company
hereby irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of venue in any
suit, action or proceeding arising out of or relating to this Agreement or
any Note, brought in the said courts, and hereby irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. Nothing herein shall in any way be deemed
to limit the ability of any registered Holder of a Note to serve any such
writs, process or summonses, in any manner permitted by applicable law or to
obtain jurisdiction over the Company in such other jurisdiction, and in such
manner, as may be permitted by applicable law.
SECTION 22.8 AGENT FOR SERVICE OF PROCESS.
WITHOUT LIMITING THE FOREGOING, THE COMPANY HEREBY APPOINTS, IN THE
CASE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN THE COURTS OF OR IN THE
STATE OF NEW YORK, CT CORPORATION TO RECEIVE, FOR IT AND ON ITS BEHALF,
SERVICE OF PROCESS IN THE STATE OF NEW YORK WITH RESPECT THERETO, PROVIDED
THE COMPANY MAY, AND IN THE EVENT THAT CT CORPORATION IS AT ANY TIME NO
LONGER DOMICILED IN THE STATE OF NEW
-42-
YORK, THE COMPANY SHALL, APPOINT CT CORPORATION OR ANY OTHER PERSON,
REASONABLY ACCEPTABLE TO THE REQUIRED HOLDERS, WITH OFFICES IN THE STATE OF
NEW YORK TO REPLACE SUCH AGENT FOR SERVICE OF PROCESS UPON DELIVERY TO THE
HOLDERS OF A REASONABLY ACCEPTABLE AGREEMENT OF SUCH NEW AGENT AGREEING SO TO
ACT. IF SERVICE OF PROCESS IS MADE BY ANY HOLDER OF A NOTE UPON SUCH
APPOINTEE, A COPY THEREOF SHALL ALSO BE PROVIDED TO THE COMPANY, BY
REGISTERED OR CERTIFIED MAIL, OR BY INTERNATIONALLY-RECOGNIZED EXPEDITED
DELIVERY SERVICE; PROVIDED THAT THE FAILURE OF SUCH HOLDER TO PROVIDE SUCH
COPY TO THE COMPANY SHALL NOT IMPAIR OR AFFECT IN ANY WAY THE VALIDITY OF
SUCH SERVICE OF PROCESS OR ANY JUDGMENT RENDERED IN ANY SUCH SUIT, ACTION, OR
PROCEEDING. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF
ANY HOLDER OF A NOTE TO SERVE ANY SUCH WRITS, PROCESS OR SUMMONSES IN ANY
MANNER PERMITTED BY APPLICABLE LAW, OR TO OBTAIN JURISDICTION OVER THE
COMPANY, IN SUCH OTHER JURISDICTION, AND IN SUCH MANNER, AS MAY BE PERMITTED
BY APPLICABLE LAW.
* * * * *
-43-
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Company.
Very truly yours,
▇. ▇▇▇▇▇▇▇▇, INC.
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
----------------------------
Its: Executive Vice President
----------------------------
The foregoing is hereby agreed to as of the date hereof.
NEW YORK LIFE INSURANCE COMPANY
By: /s/ S. ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------
Its: S. ▇▇▇▇▇▇ ▇▇▇▇▇, Director
----------------------------
MUTUAL TRUST LIFE INSURANCE COMPANY
NATIONAL TRAVELERS LIFE COMPANY
GUARANTEE RESERVE LIFE INSURANCE COMPANY
PIONEER MUTUAL LIFE INSURANCE COMPANY
GREAT WESTERN INSURANCE COMPANY
THE CATHOLIC AID ASSOCIATION
THE NORTH WEST LIFE ASSURANCE COMPANY OF CANADA
BY: ADVANTUS CAPITAL MANAGEMENT, INC.
BY: /s/ ▇▇▇ ▇. ▇▇ ▇▇▇▇▇▇▇
-------------------------------
ITS: VICE PRESIDENT
-------------------------------
LUTHERAN BROTHERHOOD
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Its: Assistant Vice President
-------------------------------
MODERN WOODMEN OF AMERICA
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Its: President, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
SCHEDULE B
DEFINED TERMS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"AFFILIATE" means, at any time, and with respect to any Person, (a)
any other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control
with, such first Person, and (b) any Person beneficially owning or holding,
directly or indirectly, 5% or more of any class of voting or equity interests
of the Company or any Subsidiary or any corporation of which the Company and
its Subsidiaries beneficially own or hold, in the aggregate, directly or
indirectly, 5% or more of any class of voting or equity interests. As used in
this definition, "CONTROL" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract or
otherwise. Unless the context otherwise clearly requires, any reference to an
"Affiliate" is a reference to an Affiliate of the Company.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a
day on which commercial banks in Akron, Ohio, or New York, are required or
authorized to be closed.
"CAPITAL LEASE" means, at any time, a lease with respect to which
the lessee is required concurrently to recognize the acquisition of an asset
and the incurrence of a liability in accordance with GAAP.
"CAPITALIZED LEASE OBLIGATIONS" means the amount of the obligations
of a Person as lessee under all Capital Leases which would be required to be
reflected as a liability on a balance sheet in accordance with GAAP.
"CLOSING" is defined in Section 3.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time, and the rules and regulations promulgated thereunder from time to
time.
"COMPANY" means ▇. ▇▇▇▇▇▇▇▇, Inc., a Delaware corporation.
"CONFIDENTIAL INFORMATION" is defined in Section 20.
"CONSOLIDATED ADJUSTED NET WORTH" means as of the date of any
determination thereof the amount of shareholders' equity as determined in
accordance with GAAP; PROVIDED THAT, in connection with any calculation of
Consolidated Adjusted Net Worth, Consolidated Adjusted Net Worth shall not be
affected by any effects of foreign currency translation adjustments .
"CONSOLIDATED DEBT" means as of the date of any determination
thereof all Debt of the Company and its Subsidiaries, after eliminating
intercompany items in accordance with GAAP.
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"CONSOLIDATED FIXED CHARGES" means with respect to any period, the
sum of (i) Consolidated Interest Expense and (ii) Consolidated Lease Rentals,
for such period.
"CONSOLIDATED FUNDED DEBT" means, without duplication, all Funded
Debt of the Company and its Subsidiaries, determined on a consolidated basis
in accordance with GAAP.
"CONSOLIDATED INCOME TAX EXPENSE" means for any period (without
duplication) all income tax expense of the Company and its Subsidiaries.
"CONSOLIDATED INTEREST EXPENSE" means for any period (without
duplication) all interest (including the interest component of rentals on
Capital Leases) and all amortization of debt discount and expense on all
Indebtedness (including, without limitation, payment-in-kind, zero coupon and
other like Securities) of the Company and its Subsidiaries.
"CONSOLIDATED LEASE RENTALS" means with respect to any period, the
sum of the minimum amount of rental and other obligations required to be paid
during such period by the Company or its Subsidiaries as lessee under all
leases of real or personal property (other than Capitalized Lease
Obligations), excluding any amounts required to be paid by the lessee
(whether or not designated as rental) which are (i) on account of maintenance
and repairs, insurance, taxes, assessments, water rates and similar charges,
or (ii) which are based on profits, revenues or sales realized by the lessee
from all leased property or otherwise based on the performance of the lessee.
"CONSOLIDATED NET EARNINGS" means (without duplication) for any
period consolidated net income (or loss) of the Company and its Subsidiaries,
as determined in accordance with GAAP, after excluding the sum of (i) net
earnings (or losses) of any Subsidiary accrued prior to the date it becomes a
Subsidiary or is merged with or consolidated into the Company or any
Subsidiary; (ii) the undistributed earnings of any Subsidiary which are
legally or contractually unavailable for payment to the Company; (iii) any
restoration to income of any contingency reserve (other than reserves
established in the normal course of business, such as allowances for
uncollectable accounts), except to the extent that such reserve was
established during such period; (iv) any gain on the sale or disposition of
Investments or fixed or capital assets, including any tax effect; (v) any
gains resulting from any write-up of assets; (vi) the proceeds of any life
insurance policy; (vii) any gain arising from the acquisition of any
securities of the Company or Subsidiary; (viii) any net income or loss
resulting from changes in GAAP, any discontinued operations or any gain or
loss resulting from any extraordinary items; (ix) any deferred or other
credit representing the excess of the equity in any Subsidiary over the cost
of the investment at the acquisition date; (x) in the case of a successor to
the Company by consolidation or merger, any earnings of the successor
corporation prior to such consolidation or merger; and (xi) any income not
freely convertible into Dollars.
"CONSOLIDATED NET EARNINGS AVAILABLE FOR FIXED CHARGES" means for
any period the sum of (i) Consolidated Net Earnings, (ii) Consolidated Income
Tax Expense and (iii) Consolidated Fixed Charges.
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"CONSOLIDATED TOTAL ASSETS" means as of the date of determination
thereof all assets of the Company and its Subsidiaries, after eliminating
intercompany items in accordance with GAAP.
"CONSOLIDATED TOTAL CAPITALIZATION" means the sum of Consolidated
Funded Debt and Consolidated Adjusted Net Worth.
"CREDIT AGREEMENT" means that certain Credit Agreement dated as of
March 13, 1995, among the Company, certain banking institutions party
thereto, and KeyBank, National Association, as Agent, as amended from time to
time, and including any renewals, replacements and refundings thereof.
"DEBT" means, without duplication and in respect to any Person, the
sum of (i) liabilities for borrowed money; (ii) its liabilities for the
deferred purchase price of property acquired by such Person (other than in
the ordinary course of business); (iii) Capitalized Lease Obligations; (iv)
all liabilities for borrowed money secured by any Lien on property owned; and
(v) any Guaranty of such Person with respect to liabilities described in (i)
through (iv) hereof.
"DEFAULT" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become
an Event of Default.
"DEFAULT RATE" means that rate of interest that is the greater of
(i) 1% per annum above the rate of interest stated in clause (a) of the first
paragraph of the Notes or (ii) 1% over the rate of interest publicly
announced by Citibank, N.A. in New York, New York as its "base" or "prime"
rate.
"ENVIRONMENTAL LAWS" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
but not limited to those related to hazardous substances or wastes, air
emissions and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the rules and regulations promulgated
thereunder from time to time in effect.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
"EVENT OF DEFAULT" is defined in Section 11.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FUNDED DEBT" of any Person means (i) all Debt of such Person having a
final maturity of one or more than one year from the date of origin thereof (or
which is renewable or extendible
B-3
at the option of the obligor for a period or periods more than one year from
the date of origin), including all payments in respect thereof that are
required to be made within one year from the date of any determination of
Funded Debt, whether or not the obligation to make such payments shall
constitute a current liability of the obligor under GAAP, (ii) all
Capitalized Lease Obligations of such Person, and (iii) all Guaranties by
such Person of Funded Debt of others; PROVIDED, that in the determination of
Funded Debt of the Company or any Subsidiary thereof, there shall not be
included Debt of the Company and any Subsidiary thereof outstanding under any
revolving credit agreement or line of credit providing for borrowings of less
than one year unless, during the 365-day period immediately preceding the
date of any such calculation of Funded Debt, there shall have not been a
period of at least 30 consecutive days on each day of which Debt of the
Company and any Subsidiary thereof outstanding under such revolving credit
agreement is equal to zero by virtue, and solely by virtue, of such Debt
having been paid from general corporate funds of the Company and any
Subsidiary thereof and not from funds borrowed by the Company and any
Subsidiary thereof pursuant to any other revolving credit agreement for the
purpose of paying such Debt. If there shall not have been such 30 consecutive
day period on each day of which such Debt was equal to zero, then and in such
event there shall be included in such calculation of Funded Debt an amount
equal to the average aggregate amount of all such Debt outstanding during
that period of 30 consecutive days during such preceding 365-day period
during which the average aggregate amount of such Debt was the lowest
outstanding amount.
"GAAP" means generally accepted accounting principles as in effect
from time to time in the United States of America.
"GOVERNMENTAL AUTHORITY" means
(a) the government of
(i) the United States of America or any State or
other political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or which
asserts jurisdiction over any properties of the Company or
any Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"GUARANTY" means, 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:
(a) to purchase such Indebtedness or obligation or any property
constituting security therefor;
B-4
(b) to advance or supply funds (i) for the purchase or payment of
such Indebtedness or obligation, or (ii) to maintain any working capital or
other balance sheet condition or any income statement condition of any other
Person or otherwise to advance or make available funds for the purchase or
payment of such Indebtedness or obligation;
(c) 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
(d) 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.
"HAZARDOUS MATERIAL" means any and all pollutants, toxic or
hazardous wastes or any other substances that might pose a hazard to health
or safety, the removal of which may be required or the generation,
manufacture, refining, production, processing, treatment, storage, handling,
transportation, transfer, use, disposal, release, discharge, spillage,
seepage, or filtration of which is or shall be restricted, prohibited or
penalized by any applicable law (including, without limitation, asbestos,
urea formaldehyde foam insulation and polychlorinated biphenyls).
"HOLDER" means, with respect to any Note, the Person in whose name
such Note is registered in the register maintained by the Company pursuant to
Section 13.1.
"INDEBTEDNESS" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising
in the ordinary course of business but including all liabilities
created or arising under any conditional sale or other title retention
agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien
with respect to any property owned by such Person (whether or not it
has assumed or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not
representing obligations for borrowed money);
B-5
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities
of a type described in any of clauses (a) through (f) hereof.
Indebtedness of any Person shall include all obligations of such Person of
the character described in clauses (a) through (g) to the extent such Person
remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under GAAP.
"INFORMATION SYSTEMS AND EQUIPMENT" means all computer hardware,
firmware and software, as well as other information processing systems, or
any equipment containing embedded microchips, whether directly or indirectly
owned, licensed, leased, operated or otherwise controlled by the Company or
any of its Subsidiaries, including through third-party service providers, and
which, in whole or part, are used, operated, relied upon or integral to the
Company's or any of its Subsidiaries' conduct of their businesses.
"INSTITUTIONAL INVESTOR" means (a) any original purchaser of a Note,
(b) any holder of a Note holding more than 5% of the aggregate principal
amount of the Notes then outstanding, and (c) any bank, trust company,
savings and loan association or other financial institution, any pension
plan, any investment company, any insurance company, any broker or dealer, or
any other similar financial institution or entity, regardless of legal form.
"INVESTMENTS" means all investments, in cash or by delivery of
property made, directly or indirectly in any Person, whether by acquisition
of shares of capital stock, indebtedness or other obligations or Securities
or by loan, advance, capital contribution or otherwise; PROVIDED, HOWEVER,
that "Investments" shall not mean or include routine investments in property
to be used or consumed in the ordinary course of business.
"LIEN" means, with respect to any Person, any mortgage, lien,
pledge, charge, security interest or other encumbrance, or any interest or
title of any vendor, lessor, lender or other secured party to or of such
Person under any conditional sale or other title retention agreement or
Capital Lease, upon or with respect to any property or asset of such Person
(including in the case of stock, stockholder agreements, voting trust
agreements and all similar arrangements).
"MAKE-WHOLE AMOUNT" is defined in Section 8.7.
"MATERIAL" means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Company
and its Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of
the Company and its Subsidiaries taken as a whole, or (b) the ability of the
Company to perform its obligations under this Agreement and the Notes, or (c)
the validity or enforceability of this Agreement or the Notes.
"MEMORANDUM" is defined in Section 5.3.
B-6
"MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan"
(as such term is defined in section 4001(a)(3) of ERISA).
"NOTES" is defined in Section 1.
"OFFICER'S CERTIFICATE" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend
to the subject matter of such certificate.
"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA or any successor thereto.
"PERSON" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"PLAN" means an "employee benefit plan" (as defined in section 3(3)
of ERISA) that is or, within the preceding five years, has been established
or maintained, or to which contributions are or, within the preceding five
years, have been made or required to be made, by the Company or any ERISA
Affiliate or with respect to which the Company or any ERISA Affiliate may
have any liability.
"PREFERRED STOCK" means any class of capital stock of a corporation
that is preferred over any other class of capital stock of such corporation
as to the payment of dividends or the payment of any amount upon liquidation
or dissolution of such corporation.
"PRIORITY DEBT" means, without duplication, the sum of (i) Funded
Debt of Subsidiaries (other than Funded Debt of a Subsidiary to the Company
or to another Wholly-Owned Subsidiary) and (ii) Debt secured by Liens
incurred under Section 10.3(g).
"PROPERTY" or "PROPERTIES" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible,
▇▇▇▇▇▇ or inchoate.
"QPAM EXEMPTION" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"REQUIRED HOLDERS" means, at any time, the holders of at least
66-2/3% in principal amount of the Notes at the time outstanding (exclusive
of Notes then owned by the Company or any of its Affiliates).
"RESPONSIBLE OFFICER" means any Senior Financial Officer and any
other officer of the Company with responsibility for the administration of
the relevant portion of this Agreement.
"RESTRICTED INVESTMENTS" means all Investments, other than
Investments described in clauses (a) through (n) of Section 10.9 hereof.
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"ROLLING FOUR QUARTER BASIS" means four consecutive quarterly
accounting periods treated as a single accounting period.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time.
"SECURITY" shall have the same meaning as in Section 2(1) of the
Securities Act.
"SENIOR FINANCIAL OFFICER" means the chief financial officer,
principal accounting officer, treasurer or comptroller of the Company.
"SUBORDINATED DEBT" means and includes any Debt incurred after the
Closing of any Person which shall contain or have applicable thereto
subordination provisions providing for the subordination thereof in right of
payment or security to other Debt of such Person.
"SUBSIDIARY" means, as to any Person, any corporation, association
or other business entity in which such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries owns
sufficient equity or voting interests to enable it or them (as a group)
ordinarily, in the absence of contingencies, to elect a majority of the
directors (or Persons performing similar functions) of such entity, and any
partnership or joint venture if more than a 50% interest in the profits or
capital thereof is owned by such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries (unless such partnership can
and does ordinarily take major business actions without the prior approval of
such Person or one or more of its Subsidiaries). Unless the context otherwise
clearly requires, any reference to a "Subsidiary" is a reference to a
Subsidiary of the Company.
"SWAPS" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps, foreign forward exchange
contracts, and similar obligations obligating such Person to make payments,
whether periodically or upon the happening of a contingency. For the purposes
of this Agreement, the amount of the obligation under any Swap shall be the
amount determined in respect thereof as of the end of the then most recently
ended fiscal quarter of such Person, based on the assumption that such Swap
had terminated at the end of such fiscal quarter, and in making such
determination, if any agreement relating to such Swap provides for the
netting of amounts payable by and to such Person thereunder or if any such
agreement provides for the simultaneous payment of amounts by and to such
Person, then in each such case, the amount of such obligation shall be the
net amount so determined.
"WHOLLY-OWNED SUBSIDIARY" means, at any time, any Subsidiary one
hundred percent (100%) of all of the equity interests (except directors'
qualifying shares) and voting interests of which are owned by any one or more
of the Company and the Company's other Wholly-Owned Subsidiaries at such time.
"YEAR 2000 COMPLIANT" means that all Information Systems and
Equipment accurately process date data (including without limitation
calculating, comparing and sequencing) in all material respects before,
during and after the year 2000, as well as same and multi-century dates, or
between the years 1999 and 2000, taking into account all leap years,
including the fact that the year 2000 is a leap year, and further that when
used in combination with, or interfacing with,
B-8
other Information Systems and Equipment, shall accurately accept, release and
exchange date data, and shall in all material respects continue to function
in the same manner as it performs today and shall not otherwise materially
impair the accuracy or functionality of Information Systems and Equipment.
B-9