Exhibit 4.1
▇▇▇▇▇▇▇ FURNITURE COMPANY, INC.
$30,000,000
PRIVATE SHELF FACILITY
Dated as of September 8, 1999, as
amended as of April 26, 2001
▇▇▇▇▇▇▇ FURNITURE COMPANY, INC.
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As of September 8, 1999
The Prudential Insurance Company
of America ("Prudential")
Each Prudential Affiliate (as hereinafter defined) which becomes bound by
certain provisions of this Agreement as hereinafter provided (together with
Prudential (the "Purchasers")
c/o Prudential Capital Group
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Ladies and Gentlemen:
The undersigned, ▇▇▇▇▇▇▇ Furniture Company, Inc. (herein called the
"Company"), hereby agrees with you as follows:
1. AUTHORIZATION OF ISSUE OF NOTES.
1A. Intentionally Omitted.
1B. Authorization of Issue of Shelf Notes. The Company will authorize
the issue of its senior promissory notes (the "Shelf Notes") in the aggregate
principal amount of $30,000,000, to be dated the date of issue thereof, to
mature, in the case of each Shelf Note so issued, no more than ten years after
the date of original issuance thereof, to have an average life, in the case of
each Shelf Note so issued, of no more than ten years after the date of original
issuance thereof, to bear interest on the unpaid balance thereof from the date
thereof at the rate per annum, and to have such other particular terms, as shall
be set forth, in the case of each Shelf Note so issued, in the Confirmation of
Acceptance with respect to such Shelf Note delivered pursuant to paragraph 2B(6)
and to be substantially in the form of Exhibit A-1 attached hereto. The terms
"Note" and "Notes" as used herein shall include each Shelf Note delivered
pursuant to any provision of this Agreement and each Note delivered in
substitution or exchange for any such Note pursuant to any such provision. Notes
which have (i) the same final maturity, (ii) the same principal prepayment
dates, (iii) the same principal prepayment amounts (as a percentage of the
original principal amount of each Note), (iv) the same interest rate, (v) the
same interest payment periods and (vi) the same date of issuance (which, in the
case of a Note issued in exchange for another Note, shall be deemed for these
purposes the date on which such Note's ultimate predecessor Note was issued),
are herein called a "Series" of Notes.
2. PURCHASE AND SALE OF NOTES.
2A. Intentionally Omitted.
2B. Purchase and Sale of Shelf Notes.
2B(1) Facility. Prudential is willing to consider, in its sole
discretion and within limits which may be authorized for purchase by Prudential
and Prudential Affiliates from time to time, the purchase of Shelf Notes
pursuant to this Agreement. The willingness of Prudential to consider such
purchase of Shelf Notes is herein called the "Facility". At any time, the
aggregate principal amount of Shelf Notes stated in paragraph 1B, minus the
aggregate principal amount of Shelf Notes purchased and sold pursuant to this
Agreement prior to such time, minus the aggregate principal amount of Accepted
Notes (as hereinafter defined) which have not yet been purchased and sold
hereunder prior to such time, plus the aggregate principal amount of Shelf Notes
purchased and sold pursuant to this Agreement and thereafter retired prior to
such time is herein called the "Available Facility Amount" at such time.
NOTWITHSTANDING THE WILLINGNESS OF PRUDENTIAL TO CONSIDER PURCHASES OF SHELF
NOTES, THIS AGREEMENT IS ENTERED INTO ON THE EXPRESS UNDERSTANDING THAT NEITHER
PRUDENTIAL NOR ANY PRUDENTIAL AFFILIATE SHALL BE OBLIGATED TO MAKE OR ACCEPT
OFFERS TO PURCHASE SHELF NOTES, OR TO QUOTE RATES, SPREADS OR OTHER TERMS WITH
RESPECT TO SPECIFIC PURCHASES OF SHELF NOTES, AND THE FACILITY SHALL IN NO WAY
BE CONSTRUED AS A COMMITMENT BY PRUDENTIAL OR ANY PRUDENTIAL AFFILIATE.
2B(2). Issuance Period. Shelf Notes may be issued and sold
pursuant to this Agreement until the earlier of:
(i) the third anniversary of the date of this Agreement
(or if any such anniversary is not a Business Day, the Business Day
next preceding such anniversary),
(ii) the thirtieth day after Prudential shall have given to
the Company, or the Company shall have given to Prudential, a notice
stating that it elects to terminate the issuance and sale of Shelf
Notes pursuant to this Agreement (or if such thirtieth day is not a
Business Day, the Business Day next preceding such thirtieth day),
(iii) The last Closing Day after which there is no
Available Facility Amount,
(iv) The termination of the Facility under paragraph 7,
and
(v) The acceleration of any Note under paragraph 7A of
this Agreement.
The period during which Shelf Notes may be issued and sold pursuant to this
Agreement is herein called the "Issuance Period".
2B(3). Request for Purchase. The Company may from time to time during
the Issuance Period make requests for purchases of Shelf Notes (each such
request being herein called a "Request for Purchase"). Each Request for Purchase
shall be made to Prudential by telecopier or overnight delivery service, and
shall:
(i) specify the aggregate principal amount of Shelf Notes
covered thereby, which shall not be less than $5,000,000 and not be
greater than the Available Facility Amount at the time such Request for
Purchase is made,
(ii) specify the principal amounts, final maturities (which
shall be no more than ten years from the date of issuance), principal
prepayment dates and amounts and interest payment periods (quarterly or
semi-annual in arrears) of the Shelf Notes covered thereby,
(iii) specify the use of proceeds of such Shelf Notes,
(iv) specify the proposed day for the closing of the purchase
and sale of such Shelf Notes, which shall be a Business Day during the
Issuance Period not less than 10 days and not more than 25 days after
the making of such Request for Purchase (the "Closing Day"),
(v) specify the number of the account and the name and address
of the depository institution to which the purchase prices of such
Shelf Notes are to be transferred on the Closing Day for such purchase
and sale,
(vi) certify that the representations and warranties contained
in paragraph 8 are true on and as of the date of such Request for
Purchase and that there exists on the date of such Request for Purchase
no Event of Default or Default,
(vii) specify the Designated Spread for such Shelf Notes, and
(viii) be substantially in the form of Exhibit B attached
hereto. Each Request for Purchase shall be in writing and shall be
deemed made when received by Prudential.
2B(4). Rate Quotes. Not later than five Business Days after the Company
shall have given Prudential a Request for Purchase pursuant to paragraph 2B(3),
Prudential may, but shall be under no obligation to, provide to the Company by
telephone or telecopier, in each case between 9:30 A.M. and 1:30 P.M. New York
City local time (or such later time as Prudential may elect) interest rate
quotes for the several principal amounts, maturities, principal prepayment
schedules, and interest payment periods of Shelf Notes specified in such Request
for Purchase. Each quote shall represent the interest rate per annum payable on
the outstanding principal balance of such Shelf Notes at which Prudential or a
Prudential Affiliate would be willing to purchase such Shelf Notes at 100% of
the principal amount thereof.
2B(5). Acceptance. Within 30 minutes after Prudential shall have
provided any interest rate quotes pursuant to paragraph 2B(4) or such shorter
period as Prudential may specify to the Company (such period herein called the
"Acceptance Window"), the Company may, subject to paragraph 2B(6), elect to
accept such interest rate quotes as to not less than $5,000,000 aggregate
principal amount of the Shelf Notes specified in the related Request for
Purchase. Such election shall be made by an Authorized Officer of the Company
notifying Prudential by telephone or telecopier within the Acceptance Window
(but not earlier than 9:30 a.m. or later than 2:00 p.m., New York City local
time) that the Company elects to accept such interest rate quotes, specifying
the Shelf Notes (each such Shelf Note being herein called an "Accepted Note") as
to which such acceptance (herein called a "Acceptance") relates. The day the
Company notifies Prudential of an Acceptance with respect to any Accepted Notes
is herein called the "Acceptance Day" for such Accepted Notes. Any interest rate
quotes as to which Prudential does not receive an Acceptance within the
Acceptance Window shall expire, and no purchase or sale of Shelf Notes hereunder
shall be made based on such expired interest rate quotes. Subject to paragraph
2B(6) and the other terms and conditions hereof, the Company agrees to sell to
Prudential or a Prudential Affiliate, and Prudential agrees to purchase, or to
cause the purchase by a Prudential Affiliate of, the Accepted Notes at 100% of
the principal amount of such Notes. As soon as practicable following the
Acceptance Day, the Company, Prudential and each Prudential Affiliate which is
to purchase any such Accepted Notes will execute a confirmation of such
Acceptance substantially in the form of Exhibit C attached hereto (herein called
a "Confirmation of Acceptance"). If the Company should fail to execute and
return to Prudential within three Business Days following receipt thereof a
Confirmation of Acceptance with respect to any Accepted Notes, Prudential may at
its election at any time prior to its receipt thereof cancel the closing with
respect to such Accepted Notes by so notifying the Company in writing.
2B(6). Market Disruption. Notwithstanding the provisions of paragraph
2B(5), if Prudential shall have provided interest rate quotes pursuant to
paragraph 2B(4) and thereafter prior to the time an Acceptance with respect to
such quotes shall have been notified to Prudential in accordance with paragraph
2B(5) the domestic market for U.S. Treasury securities or derivatives shall have
closed or there shall have occurred a general suspension, material limitation,
or significant disruption of trading in securities generally on the New York
Stock Exchange or in the domestic market for U.S. Treasury securities or
derivatives, then such interest rate quotes shall expire, and no purchase or
sale of Shelf Notes hereunder shall be made based on such expired interest rate
quotes. If the Company thereafter notifies Prudential of the Acceptance of any
such interest rate quotes, such Acceptance shall be ineffective for all purposes
of this Agreement, and Prudential shall promptly notify the Company that the
provisions of this paragraph 2B(6) are applicable with respect to such
Acceptance.
2B(7). Facility Closings. Not later than 11:30 A.M. (New York City
local time) on the Closing Day for any Accepted Notes, the Company will deliver
to each Purchaser listed in the Confirmation of Acceptance relating thereto at
the offices of the Prudential Capital Group, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, the Accepted Notes to be purchased by such
Purchaser in the form of one or more Notes in authorized denominations as such
Purchaser may request for each Series of Accepted Notes to be purchased on the
Closing Day, dated the Closing Day and registered in such Purchaser's name (or
in the name of its nominee), against payment of the purchase price thereof by
transfer of immediately available funds for credit to the Company's account
specified in the Request for Purchase of such Notes. If the Company fails to
tender to any Purchaser the Accepted Notes to be purchased by such Purchaser on
the scheduled Closing Day for such Accepted Notes as provided above in this
paragraph 2B(7), or any of the conditions specified in paragraph 3 shall not
have been fulfilled by the time required on such scheduled Closing Day, the
Company shall, prior to 1:00 P.M., New York City local time, on such scheduled
Closing Day notify Prudential (which notification shall be deemed received by
each Purchaser) in writing whether (i) such closing is to be rescheduled (such
rescheduled date to be a Business Day during the Issuance Period not less than
one Business Day and not more than 10 Business Days after such scheduled Closing
Day (the "Rescheduled Closing Day") and certify to Prudential (which
certification shall be for the benefit of each Purchaser) that the Company
reasonably believes that it will be able to comply with the conditions set forth
in paragraph 3 on such Rescheduled Closing Day and that the Company will pay the
Delayed Delivery Fee in accordance with paragraph 2B(8)(iii) or (ii) such
closing is to be canceled. In the event that the Company shall fail to give such
notice referred to in the preceding sentence, Prudential (on behalf of each
Purchaser) may at its election, at any time after 1:00 P.M., New York City local
time, on such scheduled Closing Day, notify the Company in writing that such
closing is to be canceled. Notwithstanding anything to the contrary appearing in
this Agreement, the Company may elect to reschedule a closing with respect to
any given Accepted Notes on not more than one occasion, unless Prudential shall
have otherwise consented in writing.
2B(8) . Fees.
2B(8)(i). Facility Fee. In consideration for the time, effort and
expense involved in the preparation, negotiation and execution of this
Agreement, at the time of the execution and delivery of this Agreement by the
Company and Prudential, the Company will pay to Prudential in immediately
available funds a fee (herein called the "Facility Fee") in the amount of
$25,000.
2B(8)(ii) Issuance Fee. The Company will pay to Prudential in
immediately available funds a fee (herein called the "Issuance Fee") on each
Closing Day (other than a Closing Day occurring on or before March 8, 2000) in
an amount equal to 1/8 of 1% of the aggregate principal amount of Notes sold on
such Closing Day.
2B(8)(iii) Delayed Delivery Fee. If the closing of the purchase and
sale of any Accepted Note is delayed for any reason beyond the original Closing
Day for such Accepted Note, the Company will pay to Prudential (a) on the
Cancellation Date or actual closing date of such purchase and sale and (b) if
earlier, the next Business Day following 90 days after the Acceptance Day for
such Accepted Note and on each Business Day following 90 days after the prior
payment hereunder, a fee (herein called the "Delayed Delivery Fee") calculated
as follows:
(BEY - MMY) X DTS/360 X PA
where "BEY" means Bond Equivalent Yield, i.e., the bond equivalent yield per
annum of such Accepted Note, "MMY" means Money Market Yield, i.e., the yield per
annum on a commercial paper investment of the highest quality selected by
Prudential on the date Prudential receives notice of the delay in the closing
for such Accepted Note having a maturity date or dates the same as, or closest
to, the Rescheduled Closing Day or Rescheduled Closing Days (a new alternative
investment being selected by Prudential each time such closing is delayed);
"DTS" means Days to Settlement, i.e., the number of actual days elapsed from and
including the original Closing Day with respect to such Accepted Note (in the
case of the first such payment with respect to such Accepted Note) or from and
including the date of the next preceding payment (in the case of any subsequent
delayed delivery fee payment with respect to such Accepted Note) to but
excluding the date of such payment; and "PA" means Principal Amount, i.e., the
principal amount of the Accepted Note for which such calculation is being made.
In no case shall the Delayed Delivery Fee be less than zero. Nothing contained
herein shall obligate any Purchaser to purchase any Accepted Note on any day
other than the Closing Day for such Accepted Note, as the same may be
rescheduled from time to time in compliance with paragraph 2B(7).
2B(8)(iv). Cancellation Fee. If the Company at any time notifies
Prudential in writing that the Company is canceling the closing of the purchase
and sale of any Accepted Note, or if Prudential notifies the Company in writing
under the circumstances set forth in the last sentence of paragraph 2B(5) or the
penultimate sentence of paragraph 2B(7) that the closing of the purchase and
sale of such Accepted Note is to be canceled, or if the closing of the purchase
and sale of such Accepted Note is not consummated on or prior to the last day of
the Issuance Period (the date of any such notification, or the last day of the
Issuance Period, as the case may be, being herein called the "Cancellation
Date"), the Company will pay the Purchasers in immediately available funds an
amount (the "Cancellation Fee") calculated as follows:
PI X PA
where "PI" means Price Increase, i.e., the quotient (expressed in decimals)
obtained by dividing (a) the excess of the ask price (as determined by
Prudential) of the Hedge Treasury Note(s) on the Cancellation Date over the bid
price (as determined by Prudential) of the Hedge Treasury Notes(s) on the
Acceptance Day for such Accepted Note by (b) such bid price; and "PA" has the
meaning ascribed to it in paragraph 2B(8)(iii). The foregoing bid and ask prices
shall be as reported by Telerate Systems, Inc. (or, if such data for any reason
ceases to be available through Bridge Telerate, any publicly available source of
similar market data). Each price shall be based on a U.S. Treasury security
having a par value of $100.00 and shall be rounded to the second decimal place.
In no case shall the Cancellation Fee be less than zero.
3. CONDITIONS OF CLOSING. The obligation of any Purchaser
to purchase and pay for any Notes is subject to the satisfaction, on or before
the Closing Day for such Notes, of the following conditions:
3A. Certain Documents. Such Purchaser shall have received the
following, each dated the date of the applicable Closing Day:
(i) The Note(s) to be purchased by such Purchaser.
(ii) Certified copies of the resolutions of the Board of
Directors of the Company authorizing the execution and delivery of this
Agreement and the issuance of the Notes, and of all documents
evidencing other necessary corporate action and governmental approvals,
if any, with respect to this Agreement and the Notes.
(iii) A certificate of the Secretary or an Assistant Secretary
and one other officer of the Company certifying the names and true
signatures of the officers of the Company authorized to sign this
Agreement and the Notes and the other documents to be delivered
hereunder.
(iv) Certified copies of the Certificate of Incorporation
and By-laws of the Company.
(v) A favorable opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Battle & ▇▇▇▇▇▇,
L.L.P., special counsel to the Company (or such other counsel
designated by the Company and acceptable to the Purchaser(s))
satisfactory to such Purchaser and substantially in the form of Exhibit
D attached hereto and as to such other matters as such Purchaser may
reasonably request. The Company hereby directs each such counsel to
deliver such opinion, agrees that the issuance and sale of any Notes
will constitute a reconfirmation of such direction, and understands and
agrees that each Purchaser receiving such an opinion will and is hereby
authorized to rely on such opinion.
(vi) A good standing certificate for the Company from the
Secretary of State of Delaware dated of a recent date and good standing
or other certificates of qualification to do business as a foreign
corporation for the Company in the State of Virginia and North Carolina
and such other evidence of the status of the Company as such Purchaser
may reasonably request.
(vii) Additional documents or certificates with respect to
legal matters or corporate or other proceedings related to the
transactions contemplated hereby as may be reasonably requested by such
Purchaser.
3B. Opinion of Purchaser's Special Counsel. Such Purchaser
shall have received from its in-house counsel a favorable opinion satisfactory
to such Purchaser as to such matters incident to the matters herein
contemplated as it may reasonably request.
3C. Representations and Warranties; No Default. The representations and
warranties contained in paragraph 8 shall be true in all material respects on
and as of such Closing Day, except to the extent of changes caused by the
transactions herein contemplated; there shall exist on such Closing Day no Event
of Default or Default; and the Company shall have delivered to such Purchaser an
Officer's Certificate, dated such Closing Day, to both such effects.
3D. Purchase Permitted by Applicable Laws. The purchase of and payment
for the Notes to be purchased by such Purchaser on the terms and conditions
herein provided (including the use of the proceeds of such Notes by the Company)
shall not violate any applicable law or governmental regulation (including,
without limitation, Section 5 of the Securities Act or Regulation U, T or X of
the Board of Governors of the Federal Reserve System) and shall not subject such
Purchaser to any tax, penalty, liability or other onerous condition under or
pursuant to any applicable law or governmental regulation, and such Purchaser
shall have received such certificates or other evidence as it may reasonably
request to establish compliance with this condition.
3E. Payment of Fees. The Company shall have paid to Prudential any fees
due it pursuant to or in connection with this Agreement, including any Facility
Fee due pursuant to paragraph 2B(8)(i), any Issuance Fee due pursuant to
paragraph 2B(8)(ii) and any Delayed Delivery Fee due pursuant to paragraph
2B(8)(iii).
3F. No Material Adverse Change. Prudential shall have received a
certificate from the chief financial officer of the Company, dated the
applicable Closing Day, saying that no material adverse change in the financial
condition, business, operations or prospects of the Company or its subsidiaries,
taken as a whole, has occurred since December 31, 1998.
3G. Completion of NAIC Year 2000 Questionnaire. The Company shall have
delivered to Prudential a copy of its response to the Year 2000 Due Diligence
Questionnaire supplied by the Securities Valuation Office of the National
Association of Insurance Commissioners.
4. PREPAYMENTS. Any Shelf Notes shall be subject to required prepayment
as and to the extent provided in paragraphs 4B. Any Shelf Notes shall also be
subject to prepayment under the circumstances set forth in paragraph 4C. Any
prepayment made by the Company pursuant to any other provision of this paragraph
4 shall not reduce or otherwise affect its obligation to make any required
prepayment as specified in paragraph 4B.
4A. Intentionally Omitted.
4B. Required Prepayments of Shelf Notes. Each Series of Shelf
Notes shall be subject to required prepayments, if any, set forth in the Notes
of such Series.
4C. Optional Prepayment With Yield-Maintenance Amount. The Notes of
each Series shall be subject to prepayment, in whole at any time or from time to
time in part (in integral multiples of $100,000 and in a minimum amount of
$1,000,000), at the option of the Company, at 100% of the principal amount so
prepaid plus interest thereon to the prepayment date and the Yield-Maintenance
Amount, if any, with respect to each such Note. Any partial prepayment of a
Series of the Notes pursuant to this paragraph 4C shall be applied in
satisfaction of required payments of principal in inverse order of their
scheduled due dates.
4D. Notice of Optional Prepayment. The Company shall give the holder of
each Note of a Series to be prepaid pursuant to paragraph 4C irrevocable written
notice of such prepayment not less than 5 Business Days prior to the prepayment
date, specifying such prepayment date, the aggregate principal amount of the
Notes of such Series to be prepaid on such date, the principal amount of the
Notes of such Series held by such holder to be prepaid on that date and that
such prepayment is to be made pursuant to paragraph 4C. Notice of prepayment
having been given as aforesaid, the principal amount of the Notes specified in
such notice, together with interest thereon to the prepayment date and together
with the Yield-Maintenance Amount, if any, herein provided, shall become due and
payable on such prepayment date. The Company shall use reasonable efforts, on or
before the day on which it gives written notice of any prepayment pursuant to
paragraph 4C, to give telephonic notice of the principal amount of the Notes to
be prepaid and the prepayment date to each Significant Holder which shall have
designated a recipient for such notices in the Purchaser Schedule attached
hereto or the applicable Confirmation of Acceptance or by notice in writing to
the Company.
4E. Application of Required Prepayments. In the case of each prepayment
of less than the entire unpaid principal amount of all outstanding Notes of any
Series pursuant to paragraphs 4A, 4B or 4C, the amount to be prepaid shall be
applied pro rata to all outstanding Notes of such Series (including, for the
purpose of this paragraph 4E only, all Notes prepaid or otherwise retired or
purchased or otherwise acquired by the Company or any of its Subsidiaries or
Affiliates other than by prepayment pursuant to paragraph 4A, 4B or 4C)
according to the respective unpaid principal amounts thereof.
4F. Retirement of Notes. The Company shall not, and shall not permit
any of its Subsidiaries or Affiliates to, prepay or otherwise retire in whole or
in part prior to their stated final maturity (other than by prepayment pursuant
to paragraphs 4B or 4C or upon acceleration of such final maturity pursuant to
paragraph 7A), or purchase or otherwise acquire, directly or indirectly, Notes
of any Series held by any holder unless the Company or such Subsidiary or
Affiliate shall have offered to prepay or otherwise retire or purchase or
otherwise acquire, as the case may be, the same proportion of the aggregate
principal amount of Notes of such Series held by each other holder of Notes of
such Series at the time outstanding upon the same terms and conditions. Any
Notes so prepaid or otherwise retired or purchased or otherwise acquired by the
Company or any of its Subsidiaries or Affiliates shall not be deemed to be
outstanding for any purpose under this Agreement, except as provided in
paragraph 4E.
5. AFFIRMATIVE COVENANTS.
5A. Reporting Requirements.
5A(1) General Information. The Company covenants that it will
deliver to each Significant Holder in triplicate:
(i) as soon as practicable and in any event within 45 days
after the end of each quarterly period (other than the fourth quarterly
period) in each fiscal year,
(1) Consolidated statements of income, stockholders'
equity and cash flows for the period from the beginning of the
current fiscal year to the end of such quarterly period, and
(2) a Consolidated balance sheet as at the end
of such quarterly period,
setting forth in each case in comparative form figures for the
corresponding period in the preceding fiscal year, all in reasonable
detail and satisfactory in form to the Required Holder(s) and certified
by an authorized financial officer of the Company as fairly presenting,
in all material respects, the financial condition of the Company and
its Consolidated Subsidiaries as of the end of such period and the
results of their operations for the period then ended in accordance
with generally accepted accounting principles, subject to changes
resulting from normal year-end adjustments and the inclusion of
abbreviated footnotes; provided, however, that delivery pursuant to
clause (iii) below of copies of the Quarterly Report on Form 10-Q of
the Company for such quarterly period filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements of this
clause (i);
(ii) as soon as practicable and in any event within 90
days after the end of each fiscal year,
(1) Consolidated statements of income,
stockholders' equity and cash flows for such year, and
(2) a Consolidated balance sheet as at the end
of such year,
setting forth in each case in comparative form corresponding
Consolidated figures from the preceding annual audit, all in reasonable
detail and satisfactory in scope to the Required Holder(s) and reported
on by independent public accountants of recognized standing selected by
the Company whose report shall be without limitation as to the scope of
the audit and reasonably satisfactory in substance to the Required
Holder(s); provided, however, that delivery pursuant to clause (iii)
below of copies of the Annual Report on Form 10-K of the Company for
such year filed with the Securities and Exchange Commission shall be
deemed to satisfy the requirements of this clause (ii);
(iii) promptly upon transmission thereof, copies of all such
financial statements, proxy statements, notices and reports as it shall
send to its public stockholders and copies of all registration
statements (without exhibits) and all reports (other than any
registration statement filed on Form S-8) which it files with the
Securities and Exchange Commission (or any governmental body or agency
succeeding to the functions of the Securities and Exchange Commission);
(iv) promptly upon receipt thereof, a copy of each other
report (including, without limitation, management letters) submitted to
the Company or any Subsidiary by independent accountants in connection
with any annual, interim or special audit made by them of the books of
the Company or any Subsidiary;
(v) promptly upon receipt thereof, a copy of each report,
survey, study, evaluation, assessment or other document prepared by any
consultant, engineer, Environmental Authority or other Person relating
to compliance by the Company or any Subsidiary with any Environmental
Requirements, if the cost of remediation, repair or compliance may be
reasonably expected to exceed $500,000 in any one case or in the
aggregate;
(vi) with reasonable promptness, upon the request of the
holder of any Note, provide such holder, and any qualified
institutional buyer designated by such holder, such financial and other
information as such holder may reasonably determine to be necessary in
order to permit compliance with the information requirements of Rule
144A under the Securities Act in connection with the resale of Notes,
except at such times as the Company is subject to the reporting
requirements of section 13 or 15(d) of the Exchange Act. For the
purpose of this clause (vii), the term "qualified institutional buyer"
shall have the meaning specified in Rule 144A under the Securities Act;
and
(vii) with reasonable promptness, such other financial
data as a Significant Holder may reasonably request;
5A(2) Quarterly Officer's Certificates. Together with each delivery of
financial statements required by clauses 5A(1)(i) and (ii) above, the Company
will deliver to each Significant Holder an Officer's Certificate demonstrating
(with computations in reasonable detail) compliance with the provisions of
paragraphs 6A, 6B and 6D and stating that there exists no Event of Default or
Default, or, if any Event of Default or Default exists, specifying the nature
and period of existence thereof and what action the Company has taken, is taking
or proposes to take with respect thereto;
5A(3) Annual Accountant's Letter. Together with each delivery of
financial statements required by clause 5A(1)(ii) above, the Company will
deliver to each Significant Holder a certificate of the independent public
accountants giving the report on such financial statements stating that, in
making the audit necessary for their report, they have obtained no knowledge of
any Event of Default or Default, or, if they have obtained knowledge of any
Event of Default or Default, specifying the nature and period of existence
thereof. The accountants, however, shall not be liable to anyone as a result of
this provision by reason of their failure to obtain knowledge of any Event of
Default or Default which would not be disclosed in the course of an audit
conducted in accordance with generally accepted auditing standards;
5A(4) Special Information. The Company also covenants that within 5
Business Days after any Responsible Officer obtains knowledge of:
(a) an Event of Default or Default;
(b) a material adverse change in the financial
condition, business or operations of the Company and its Subsidiaries,
taken as a whole;
(c) legal proceedings filed against the Company and/or any
Subsidiary, which reasonably could be expected to have a material
adverse effect on the financial condition, business or operations of
the Company and its Subsidiaries, taken as a whole, or which in any
manner draws into question the validity of or reasonably could be
expected to impair the ability of the Company to perform its
obligations under this Agreement or the Notes;
(d) a default under any agreement or note evidencing Debt for
which the Company or any Subsidiary is liable, which individually or in
the aggregate with all other agreements and notes in default for which
the Company or any Subsidiary is liable, exceed $3,500,000;
(e) the occurrence of any other event that reasonably
could be expected to impair the ability of the Company to meet its
obligations hereunder;
(f) any (i) Environmental Liabilities, (ii) pending,
threatened or anticipated Environmental Proceedings, (iii)
Environmental Notices, (iv) Environmental Judgments and Orders, or (v)
Environmental Releases at, on, in, under or in any way affecting the
Properties which reasonably could be expected to have a material
adverse effect on the business, operations or financial condition of
the Company and its Subsidiaries, taken as a whole; or
(g) with respect to any Plan that is subject to the funding
requirements of Section 302 of ERISA or Section 412 of the Code, the
Company (i) has given or is required to give notice to the Pension
Benefit Guaranty Corporation that a material reportable event has
occurred with respect to such Plan, (ii) has delivered notice to the
Pension Benefit Guaranty Corporation of any intent to withdraw from or
terminate any such Plan, or (iii) has failed to make timely a
contribution to any such Plan;
the Company will deliver to each Significant Holder an Officer's Certificate
specifying the nature and period of existence thereof and what action the
Company or the Subsidiary has taken, is taking or proposes to take with respect
thereto.
5B. Inspection of Property. The Company covenants that, at such
reasonable times and as often as a Significant Holder may reasonably request, it
will permit any Person designated by a Significant Holder in writing, at such
Significant Holder's expense unless a Default has occurred and is continuing in
which case at the Company's expense, to:
(i) visit and inspect any of the properties of the
Company and any Subsidiary;
(ii) examine the corporate books and financial records
of the Company and its Subsidiaries and make copies thereof or extracts
therefrom; and
(iii) discuss the affairs, finances and accounts of any of
such corporations with the principal officers of the Company or any
Subsidiary and independent public accountants to the Company.
5C. Covenant to Secure Notes Equally. The Company covenants that if it
or any Subsidiary shall create or assume any Lien upon any of its property or
assets, whether now owned or hereafter acquired, other than Liens permitted by
paragraph 6C(1) (unless prior written consent shall have been obtained under
paragraph 11C), it will make or cause to be made effective provision whereby the
Notes will be secured by such Lien equally and ratably with any and all other
Debt thereby secured so long as any such other Debt shall be so secured.
5D. Guaranteed Obligations. The Company covenants that if any Person
(other than the Company) guarantees or provides collateral in any manner for any
Debt of the Company or any Subsidiary, it will simultaneously cause such Person
to guarantee or provide collateral for the Notes equally and ratably with all
Debt guaranteed or secured by such Person pursuant to documentation in form and
substance reasonably satisfactory to such holder.
5E. Maintenance of Insurance. The Company covenants that it and each
Subsidiary will maintain, with responsible insurers, insurance with respect to
its properties and business against such casualties and contingencies
(including, but not limited to, public liability, larceny, embezzlement or other
criminal misappropriation) and in such amounts as is customary in the case of
similarly situated corporations engaged in the same or similar businesses.
5F. Maintenance of Corporate Existence/Compliance with Law/Preservation
of Property. The Company covenants that, except as permitted under paragraph
6C(3) and 6D, it and each Subsidiary will do or cause to be done all things
necessary to:
(i) preserve, renew and keep in full force and effect the
corporate existence of the Company and its Subsidiaries (other than
those Subsidiaries not material to the financial condition, business or
operations of the Company and its Subsidiaries taken as a whole);
(ii) comply with all laws and regulations (including, without
limitation, laws and regulations relating to equal employment
opportunity and employee safety) applicable to it and any Subsidiary
except where the failure to comply could not reasonably be expected to
have a material adverse effect on the business, operations or financial
condition of the Company and its Subsidiaries, taken as a whole;
(iii) maintain, preserve and protect all material
intellectual property of the Company and its Subsidiaries; and
(iv) preserve all the remainder of its property used or useful
in the conduct of its business and keep the same in good repair,
working order and condition excluding normal wear and tear.
5G. Compliance with Environmental Laws. The Company covenants that it
and each Subsidiary will, comply in a timely fashion with, or operate pursuant
to valid waivers of the provisions of, all applicable Environmental
Requirements, including, without limitation, the emission of wastewater
effluent, solid and hazardous waste and air emissions together with any other
applicable Environmental Requirements for conducting, on a timely basis,
periodic tests and monitoring for contamination of ground water, surface water,
air and land and for biological toxicity of the aforesaid, and all applicable
regulations of the Environmental Protection Agency or other relevant federal,
state or local governmental authority, except where the failure to comply could
not reasonably be expected to have a material adverse effect on the business,
operations or financial condition of the Company and its Subsidiaries, taken as
a whole. The Company agrees to indemnify and hold you, your officers, agents and
employees (each an "Indemnified Person") harmless from any loss, liability,
claim or expense that you may incur or suffer as a result of a breach by the
Company or any Subsidiary, as the case may be, of this covenant other than as a
result of the gross negligence or willful misconduct of such Indemnified Person.
The Company shall not be deemed to have breached or violated this paragraph 5G
if the Company or any Subsidiary is challenging in good faith by appropriate
proceedings diligently pursued the application or enforcement of such
Environmental Requirements for which adequate reserves have been established in
accordance with generally accepted accounting principles.
5H. No Integration. The Company covenants that it has taken and will
take all necessary action so that the issuance of the Notes does not and will
not require registration under the Securities Act. The Company covenants that no
future offer and sale of debt securities of the Company of any class will be
made if there is a reasonable possibility that such offer and sale would, under
the doctrine of "integration", subject the issuance of the Notes to you to the
registration requirements of the Securities Act.
5I. Financial Records. The Company covenants that it and each
Subsidiary will, keep proper books of record and account in which full and
correct entries (subject to normal year end adjustments and, as to interim
statements, the absence of footnotes) will be made of the business and affairs
of the Company or such Subsidiary under generally accepted accounting principles
consistently applied (except for changes disclosed in the financial statements
furnished to you pursuant to paragraph 5A and concurred in by the independent
public accountants referred to in paragraph 5A).
6. NEGATIVE COVENANTS. Unless the Required Holders otherwise
agree in writing, the Company shall not, and shall not permit any Subsidiary,
to take any of the following actions or permit the occurrence or existence
of any of the following events or conditions:
6A. Fixed Charge Coverage and Debt Limits. The Company
covenants that it will not at any time permit:
(i) Consolidated Operating Income to be less than 200% of
Consolidated Fixed Charges; or
(ii) Consolidated Debt to exceed 55% of Consolidated
Capitalization; or
(iii) Consolidated Priority Debt to exceed 10% of
Consolidated Net Worth.
6B. Dividend Limitation. The Company covenants that, except
as otherwise permitted by the following sentence, it will not:
(i) pay or declare any dividend on any class of its
stock or make any other distribution on account of any class of its
stock; or
(ii) redeem, purchase or otherwise acquire, directly or
indirectly, any shares of its stock (all of the foregoing being herein
called "Restricted Payments");
except out of Cumulative Amounts Available For Restricted Payments and so long
as
(1) at the time of declaration of such Restricted
Payment, no Default or Event of Default exists or would exist; and
(2) the Restricted Payment is made within 60 days after
the declaration thereof.
provided, however, that for purposes of (1) and (2) above, purchases of any
shares of its stock made pursuant to a Stock Repurchase Plan shall be deemed to
be declared on the date the Restricted Payment is made to acquire such stock.
The calculation of Restricted Payments and Cumulative Amounts Available
For Restricted Payments shall exclude: (x) stock splits, dividends paid, or
distributions made, in stock of the Company; or (y) exchanges of stock of one or
more classes of the Company, except to the extent cash or other value is
involved in such exchange. The term "stock" as used in this paragraph 6B shall
include warrants or options to purchase stock.
6C. Liens, Debt and Other Restrictions. The Company covenants
that it will not and will not permit any Subsidiary to:
6C(1) Liens. Create, assume or suffer to exist any Lien upon any of its
property or assets, whether now owned or hereafter acquired (whether or not
provision is made for the equal and ratable securing of the Notes pursuant to
paragraph 5C), except:
(i) Liens for taxes (including ad valorem and property taxes)
and assessments or governmental charges or levies not yet due or which
are being actively contested in good faith by appropriate proceedings;
(ii) other Liens incidental to the conduct of its business or
the maintenance, operation, construction or ownership of its property
and assets (including pledges or deposits in connection with workers'
compensation and social security taxes, assessments and charges, and
landlords, mechanics and materialmen Liens and survey exceptions or
encumbrances, easements or reservations, rights-of-way, or zoning
restrictions) provided that (A) such Liens were not incurred in
connection with the borrowing of money, or the obtaining of advances or
credit or the payment of the deferred purchase price of property and
(B) the existence of such Lien does not materially detract from the
value of such property or assets to the Company or any Subsidiary or
unreasonably interfere with the ordinary conduct of business;
(iii) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business to secure (or to
obtain letters of credit that secure) the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases,
performance bonds, purchase, construction or sales contracts and other
similar obligations, in each case not incurred or made in connection
with Debt;
(iv) to the extent permitted under paragraphs 6A and 6C(2),
any Lien created to secure all or any part of the purchase price
incurred or assumed to pay all or any part of the purchase price of
property acquired by the Company or a Subsidiary after the date of this
Agreement, provided that:
(A) any such Lien shall be confined solely to the
item or items of property so acquired and, if required by the
terms of the instrument originally creating such Lien, other
property which is an improvement to or for specific use with
such acquired property;
(B) the principal amount of the Debt secured by any
such Lien shall at no time exceed 100% of the lesser of (1)
the cost to the Company or the Subsidiary of the property
acquired and (2) the Fair Market Value of such property (as
determined in good faith by the Company's Board) at the time
of such acquisition; and
(C) any such Lien shall be created within 365 days
after the acquisition of the property or completion of the
improvements;
(v) Liens securing Capitalized Lease Obligations,
provided such Liens are limited to the property subject to such leases;
(vi) other Liens securing Priority Debt permitted under
paragraphs 6A and 6C(2); and
(vii) any right of set off or banker's lien (whether by common
law, statute, contract or otherwise) in favor of any Person to whom
neither the Company nor Subsidiary owes any Debt.
6C(2) Debt. Create, incur, assume or suffer to exist any Debt, except:
(i) Debt of any Subsidiary to the Company or any Wholly-
Owned Subsidiary;
(ii) other Debt of Subsidiaries permitted under paragraph
6A; and
(iii) other Debt of the Company (other than Debt owed to a
Subsidiary) if after giving effect thereto, the Company is in
compliance with the provisions of paragraph 6A.
6C(3) Merger or Consolidation. Merge, consolidate or exchange shares
with any other Person, except that:
(i) any Subsidiary may merge or consolidate with the Company
or any Wholly-Owned Subsidiary; provided, in the case of a Wholly-Owned
Subsidiary, it remains a Wholly-Owned Subsidiary after the merger or
consolidation; and
(ii) the Company may merge or consolidate with any other
corporation (including a Subsidiary) if the continuing or surviving
corporation is the Company and immediately after such merger or
consolidation, no Default or Event of Default shall have occurred or
exist.
6C(4) Sale or Discount of Receivables. Sell with recourse, or discount
or otherwise sell for less than the face value thereof, any of its notes or
accounts receivable.
6C(5) Change in Business. Enter into any business which is
substantially different from the manufacturing of home furnishings.
6C(6) Transactions with Related Party. Effect any transaction with any
Affiliate or Subsidiary (other than a Wholly-Owned Subsidiary) by which any
assets or services of the Company or a Subsidiary of the Company is transferred
to such Affiliate or Subsidiary (other than a Wholly-Owned Subsidiary), or from
such Affiliate or Subsidiary (other than a Wholly-Owned Subsidiary) or enter
into any other transaction with an Affiliate or Subsidiary (other than a
Wholly-Owned Subsidiary), on terms more favorable than would be reasonably
expected to be given in a similar transaction with an unrelated entity.
6C(7) Investments. Make, or permit to remain, an Investment except:
(i) any Investment in a Subsidiary or an entity that
becomes a Subsidiary simultaneously with such Investment,
(ii) any evidence of debt, maturing not more than one year
after the date of issue, issued by the United States of America, or any
instrumentality or agency thereof and guaranteed fully as to principal,
interest and premium, if any, by the United States of America,
(iii) any repurchase agreement or certificate of deposit,
maturing not more than one year after the date of purchase, issued by
the National Bank of Canada or a commercial bank, bank holding company
or trust company which is located within the United States of America,
organized under the laws of the United States of America or the laws of
any State thereof, is a member of the Federal Reserve System, has a
▇▇▇▇▇▇▇▇ Bank Watch Rating (or if no longer available, a comparable
rating system), at the time of determination, of "B" (or higher), and
has a combined capital and surplus and undivided profits of at least
$500,000,000,
(iv) commercial paper, maturing not more than 270 days after
the date of purchase, issued by a corporation (other than the Company
or any Subsidiary or Affiliate) organized and existing under the laws
of any state within the United States of America with a rating, at the
time as of which any determination thereof is to be made, of "P-1" (or
higher) according to ▇▇▇▇▇'▇ Investors Service (or if no longer
available, a comparable rating system), or "A-1" (or higher) according
to Standard & Poor's Corporation (or if no longer available, a
comparable rating system),
(v) property or assets acquired solely in exchange for
capital stock of the Company, and
(vi) any other Investment of the Company or any of its
Subsidiaries so long as the amount of all such Investments, other than
investments specified in clauses (i) through (v) above shall not exceed
an amount equal to 10% of Consolidated Net Worth.
6D. Sale of Property. The Company will not, and will not permit
any Subsidiary to, Dispose of any property or assets, except:
(i) The Company or any Subsidiary may sell inventory
in the ordinary course of business for Fair Market Value;
(ii) any Subsidiary may Dispose of its assets to the
Company or a Wholly-Owned Subsidiary;
(iii) the Company or any Subsidiary may Dispose of its assets
(whether or not leased back) so long as, immediately after giving
effect to such proposed Disposition:
(A) the consideration for such assets represents the
Fair Market Value of such assets (as determined in good faith
by the Company's Board) at the time of such Disposition; and
(B) the net book value of all assets so Disposed of
by the Company and its Subsidiaries during the prior 12
months, does not exceed 15% of Consolidated Assets; and
(C) the amount of Consolidated Operating Income
produced by all assets so Disposed of by the Company and its
Subsidiaries during the prior 12 months, does not exceed 15%
of Consolidated Operating Income at the end of the most
recently completed 12 months; and
(D) no Default or Event of Default shall exist;
provided, however, if after any Disposition, the net book value of all
assets Disposed of during the prior 12 months exceeds 15% of
Consolidated Assets or the Consolidated Operating Income produced by
all assets Disposed of during the prior 12 months exceeds 15% of
Consolidated Operating Income, the Company shall, within 12 months of
the date of such Disposition, apply the proceeds (net of reasonable
expenses) from such Disposition (or such portion thereof as is
necessary to cause compliance with the provisions of this paragraph
6D(iii)) to acquire operating assets and equipment to be used in the
furniture manufacturing business of the Company and its Wholly-Owned
Subsidiaries.
For purposes of this paragraph 6D:
(i) "Disposition" means the sale, lease, transfer or
other disposition of property, and "Disposed of" has a corresponding
meaning to Disposition;
(ii) Calculation of net book value/Consolidated Operating
Income. The net book value of any assets shall be determined as of the
respective date of Disposition of those assets and the Consolidated
Operating Income produced by any assets shall be determined using
Consolidated Operating Income for the 12 month period before the
respective date of Disposition of those assets; and
(iii) Sales of less than all the stock of a Subsidiary. In the
case of the sale or issuance of the stock of a Subsidiary, the amount
of Consolidated Operating Income, or amount of Consolidated Assets, as
the case may be, contributed by the stock Disposed of shall be assumed
to be the percentage of outstanding stock sold or to be sold.
6E. Subsidiary Stock and Debt. The Company will not:
(i) directly or indirectly sell, assign, pledge or otherwise
dispose of any Debt of or any shares of stock of (or warrants, rights
or options to acquire stock of) any Subsidiary except to a Wholly-Owned
Subsidiary and except as permitted pursuant to paragraph 6D;
(ii) permit any Subsidiary directly or indirectly to sell,
assign, pledge or otherwise dispose of any Debt of the Company or any
other Subsidiary, or any shares of stock of (or warrants, rights or
options to acquire stock of) any other Subsidiary, except to the
Company or a Wholly-Owned Subsidiary and except pursuant to paragraph
6D;
(iii) permit any Subsidiary to have outstanding any shares of
Preferred Stock other than Preferred Stock owned by the Company or a
Wholly-Owned Subsidiary;
(iv) permit any Subsidiary directly or indirectly to issue or
sell any shares of its stock (or warrants, rights or options to acquire
its stock) except to the Company or a Wholly-Owned Subsidiary and
except as permitted pursuant to paragraph 6C(3) and 6D; or
(v) permit any Subsidiary to enter into or otherwise be bound
by or subject to any contract or agreement (including, without
limitation, any provision of its certificate or articles of
incorporation or bylaws) that restricts its ability to pay dividends or
other distributions on account of its stock; or
(vi) permit any Subsidiary to create, incur, assume or
maintain any Debt except as permitted by paragraphs 6A and 6C(2).
6F. ERISA. The Company covenants that it will not nor permit any
Subsidiary to:
(i) terminate or withdraw from any Plan resulting
in the incurrence of any material liability to the Pension Benefit
Guaranty Corporation;
(ii) engage in or permit any Person to engage in any
prohibited transaction (as defined in Section 4975 of the Code)
involving any Plan (other than a Multiemployer Plan) which would
subject the Company or any Subsidiary to any material tax, penalty or
other liability;
(iii) incur or suffer to exist any material accumulated
funding deficiency (as defined in section 302 of ERISA and section 412
of the Code), whether or not waived, involving any Plan (other than a
Multiemployer Plan); or
(iv) allow or suffer to exist any risk or condition which
presents a risk of incurring a material liability to the Pension
Benefit Guaranty Corporation.
6G. Environmental Matters. The Company covenants that it will not, and
will not permit any Third Party to, use, produce, manufacture, process,
generate, store, dispose of, manage at, or ship or transport to or from the
Properties any Hazardous Materials except for Hazardous Materials used,
produced, released or managed in the ordinary course of business in compliance
with all applicable Environmental Requirements except where the failure to do so
could not reasonably be expected to have a material adverse effect on the
business, operations or financial condition of the Company and its Subsidiaries
taken as a whole and except for Hazardous Materials released in amounts which do
not require remediation pursuant to applicable Environmental Requirements or if
remediation is required, such remediation could not reasonably be expected to
have a material adverse effect on the business, operations or financial
condition of the Company and its Subsidiaries taken as a whole.
6H. Specified Laws. Neither the Company nor any agent acting on its
behalf will take any action which could reasonably be expected to cause this
Agreement or the Notes to violate Regulation U, Regulation T or any other
regulation of the Board of Governors of the Federal Reserve System or to violate
the Exchange Act, in any case as in effect now or as the same may hereafter be
in effect.
7. EVENTS OF DEFAULT.
7A. Acceleration. If any of the following events shall occur
and be continuing for any reason whatsoever (and whether such occurrence shall
be voluntary or involuntary or come about or be effected by operation of law or
otherwise):
(i) the Company defaults in the payment of any principal of or
Yield-Maintenance Amount payable with respect to any Note when the same
shall become due, either by the terms thereof or otherwise as herein
provided; or
(ii) the Company defaults in the payment of any interest on
any Note for more than 5 calendar days after the date due; or
(iii) the Company or any Subsidiary defaults (whether as
primary obligor or as guarantor or other surety) in any payment of
principal of or interest on any other obligation for money borrowed (or
any Capitalized Lease Obligation, any obligation under a conditional
sale or other title retention agreement, any obligation (other than a
current trade payable which does not constitute Debt) issued or assumed
as full or partial payment for property whether or not secured by a
purchase money mortgage or any obligation under notes payable or drafts
accepted representing extensions of credit) beyond any period of grace
provided with respect thereto; or the Company or any Subsidiary fails
to perform or observe any other agreement, term or condition contained
in any agreement under which any such obligation is created (or if any
other event thereunder or under any such agreement shall occur and be
continuing) and the effect of such failure or other event is to cause,
or to permit the holder or holders of such obligation (or a trustee on
behalf of such holder or holders) to cause, such obligation to become
due (or to be repurchased by the Company or any Subsidiary) prior to
any stated maturity, provided that the aggregate amount of all
obligations as to which such a payment default shall occur and be
continuing or such a failure or other event causing or permitting
acceleration (or resale to the Company or any Subsidiary) shall occur
and be continuing exceeds $3,500,000; or
(iv) any representation or warranty made by the Company herein
or by the Company or any of its officers in any writing furnished in
connection with or pursuant to this Agreement shall be false in any
material respect on the date as of which made; or
(v) the Company fails to perform or observe any agreement
contained in paragraph 6 (other than paragraphs 6C(6), 6F, 6G and 6H
and solely to the extent that a commercial bank, bank holding company
or trust company shall fail to meet the standards specified in clause
(iii) of paragraph 6C(7) after the date of an Investment by the Company
under such clause (iii), paragraphs 6C(7)(iii) and solely to the extent
a corporation shall fail to meet the standards specified in clause (iv)
of paragraph 6C(7) after the date of an Investment by the Company under
such clause (iv), paragraph 6C(7)(iv)); or
(vi) the Company fails to perform or observe any other
agreement contained herein and such failure shall not be remedied
within 30 days after any Responsible Officer obtains actual knowledge
thereof or after receipt by the Company of written notice from a holder
of a Note of such failure; or
(vii) the Company or any Subsidiary makes an assignment for
the benefit of creditors or is generally not paying its debts as such
debts become due; or
(viii) any decree or order for relief in respect of the
Company or any Subsidiary is entered under any bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law, whether now or
hereafter in effect (herein called the "Bankruptcy Law"), of any
jurisdiction; or
(ix) the Company or any Subsidiary petitions or applies to any
tribunal for, or consents to, the appointment of, or taking possession
by, a trustee, receiver, custodian, liquidator or similar official of
the Company or any Subsidiary, or of any substantial part of the assets
of the Company or any Subsidiary, or commences a voluntary case under
the Bankruptcy Law of the United States or any proceedings (other than
proceedings for the voluntary liquidation and dissolution of a
Subsidiary) relating to the Company or any Subsidiary under the
Bankruptcy Law of any other jurisdiction; or
(x) any such petition or application is filed, or any such
proceedings are commenced, against the Company or any Subsidiary and
the Company or such Subsidiary by any act indicates its approval
thereof, consent thereto or acquiescence therein; or an order, judgment
or decree is entered appointing any such trustee, receiver, custodian,
liquidator or similar official, or approving the petition in any such
proceedings, and such order, judgment or decree remains unstayed and in
effect for more than 60 days; or
(xi) any order, judgment or decree is entered in any
proceedings against the Company decreeing the dissolution of the
Company and such order, judgment or decree remains unstayed and in
effect for more than 60 days; or
(xii) any order, judgment or decree is entered in any
proceedings against the Company or any Subsidiary decreeing a split-up
of the Company or such Subsidiary which requires the divestiture of
assets representing a substantial part (being an amount equal to 15% of
Consolidated Assets), or the divestiture of the stock of a Subsidiary
whose assets represent a substantial part, of the consolidated assets
of the Company and its Subsidiaries (determined in accordance with
generally accepted accounting principles) or which requires the
divestiture of assets, or stock of a Subsidiary, which shall have
contributed at least 15% of Consolidated Operating Income for any of
the three fiscal years then most recently ended, and such order,
judgment or decree remains unstayed and in effect for more than 60
days; or
(xiii) a final judgment or judgments in an amount in excess of
$3,500,000, individually or in the aggregate, shall be rendered against
the Company or any Subsidiary (for which no insurer has acknowledged,
in writing, responsibility for liability, subject to customary
deductible) and, within 60 days after entry thereof, such judgment is
not discharged or execution thereof stayed pending appeal, or within 60
days after the expiration of any such stay, such judgment is not
discharged; or
(xiv) the Company or any ERISA Affiliate, in its capacity as
an employer under a Multiemployer Plan, makes a complete or partial
withdrawal from such Multiemployer Plan resulting in the incurrence by
such withdrawing employer of a withdrawal liability in an amount
exceeding $3,500,000; or
then:
(a) if such event is an Event of Default specified in clause
(i) or (ii) of this paragraph 7A, the holder of any Note (other than
the Company or any Subsidiary or Affiliate) may at its option, by
written notice to the Company, terminate the Facility and/or declare
such Note to be, and such Note shall thereupon be and become,
immediately due and payable at par together with interest accrued and
unpaid thereon, without presentment, demand, protest or other notice of
any kind (including, without limitation, notice of intent to
accelerate), all of which are hereby waived by the Company,
(b) if such event is an Event of Default specified in any of
clauses (vii), (viii), (ix) or (x) of this paragraph 7A with respect to
the Company, the Facility shall automatically terminate and all of the
Notes at the time outstanding shall automatically become immediately
due and payable at par together with interest accrued and unpaid
thereon, without presentment, demand, protest or notice of any kind
(including, without limitation, notice of intent to accelerate and
notice of acceleration of maturity), all of which are hereby waived by
the Company, and
(c) if such event is any Event of Default other than specified
in clauses (vii) (viii), (ix) or (x) of this paragraph 7A with respect
to the Company, the Required Holder(s) may, at its or their option, by
written notice to the Company, terminate the Facility and declare all
of the Notes to be, and all of the Notes shall thereupon be and become,
immediately due and payable, together with interest accrued and unpaid
thereon and, to the extent permitted by applicable law, the
Yield-Maintenance Amount, if any, with respect to each Note, without
presentment, demand, protest or other notice of any kind (including,
without limitation, notice of intent to accelerate), all of which are
hereby waived by the Company, provided that, to the extent permitted by
applicable law, the Yield-Maintenance Amount, if any, with respect to
each Note shall be due and payable upon such declaration only if:
(x) such Event of Default does not arise under
clause (vii), (viii), (ix) or (x) of this paragraph 7A with
respect to the Company,
(y) the Required Holder(s) shall have given to the
Company, at least 10 Business Days before such declaration,
written notice stating its or their intention so to declare
the Notes to be immediately due and payable and identifying
one or more such Events of Default whose occurrences on or
before the date of such notice permits such declaration, and
(z) one or more of the Events of Default so
identified shall be continuing at the time of such
declaration.
7B. Rescission of Acceleration. At any time after any or all of
the Notes shall have been declared immediately due and payable pursuant to
paragraph 7A, the Required Holder(s) may, by notice in writing to the
Company, rescind and annul such declaration and its consequences if:
(i) the Company shall have paid all accrued and unpaid overdue
interest on the Notes, the principal of and Yield-Maintenance Amount,
if any, payable with respect to any Notes which have become due
otherwise than by reason of such declaration, and accrued and unpaid
interest on such overdue interest and overdue principal and
Yield-Maintenance Amount at the rate specified in the Notes,
(ii) the Company shall not have paid any amounts which
have become due solely by reason of such declaration,
(iii) all Events of Default and Defaults, other than
non-payment of amounts which have become due solely by reason of such
declaration, shall have been cured or waived pursuant to paragraph 11C,
and
(iv) no judgment or decree shall have been entered for the
payment of any amounts due pursuant to the Notes or this Agreement.
No such rescission or annulment shall extend to or affect any subsequent Event
of Default or Default or impair any right arising therefrom.
7C. Notice of Acceleration or Rescission. Whenever any Note shall be
declared immediately due and payable pursuant to paragraph 7A or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B, the
Company shall forthwith give written notice thereof to the holder of each Note
at the time outstanding.
7D. Other Remedies. If any Event of Default or Default shall occur and
be continuing, the holder of any Note may proceed to protect and enforce its
rights under this Agreement and such Note by exercising such remedies as are
available to such holder in respect thereof under applicable law, either by suit
in equity or by action at law, or both, whether for specific performance of any
covenant or other agreement contained in this Agreement or in aid of the
exercise of any power granted in this Agreement. No remedy conferred in this
Agreement upon the holder of any Note is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or now or hereafter existing at
law or in equity or by statute or otherwise.
8. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants as follows:
8A. Organization. The Company is a corporation duly organized and
existing in good standing under the laws of the State of Delaware, and each
Subsidiary is duly organized and existing in good standing under the laws of the
jurisdiction in which it is incorporated. Schedule 8A hereto is an accurate and
complete list of all Subsidiaries as of the Date of Closing, including the
jurisdiction of incorporation and ownership of all such Subsidiaries, and as of
December 31, 1998, the percentage of such Subsidiary's contribution to
Consolidated Operating Income. The Company and each Subsidiary has the corporate
power to own its respective properties and to carry on its respective businesses
as now being conducted and is duly qualified and authorized to do business in
each other jurisdiction in which the character of its respective properties or
the nature of its respective businesses require such qualification or
authorization except where the failure to be so qualified or authorized could
not reasonably be expected to have a material adverse effect on the business,
operations or financial condition of the Company and its Subsidiaries, taken as
a whole.
8B. Financial Statements. The Company has furnished you with the
following financial statements, identified by a principal financial officer of
the Company:
(i) a Consolidated balance sheet as at the last day of the
fiscal year in each of the years 1994 to 1998, inclusive, a
Consolidated statement of income for each such year, and Consolidated
statements of stockholder's equity and cash flows for 1994 to and
including 1998, all reported on by Coopers and ▇▇▇▇▇▇▇ or its
successor, PriceWaterhouseCoopers; and
(ii) a Consolidated balance sheet as at June 26, 1999 and
Consolidated statements of income, stockholders' equity and cash flows
for the six-month period ended on each such date, prepared by the
Company.
Those financial statements (including any related schedules and/or notes) fairly
present in all material respects (subject, as to interim statements, to the
absence of footnotes or to changes resulting from normal year-end adjustments)
the financial condition of the Company and have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved and show all liabilities, direct and contingent, of the Company
and its Subsidiaries required to be shown in accordance with such principles.
The balance sheets fairly present, in all material respects, the Consolidated
financial condition of the Company and its Subsidiaries as at the dates thereof,
and the statements of income, stockholders' equity and cash flows fairly
present, in all material respects, the Consolidated results of the operations of
the Company and its Subsidiaries, the changes in the Company's stockholders'
equity and their Consolidated cash flows for the periods indicated. There has
been no material adverse change in the business, condition (financial or
otherwise) or operations of the Company and its Subsidiaries taken as a whole
since December 31, 1998.
8C. Actions Pending. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened against the
Company or any Subsidiary, or any properties or rights of the Company or any
Subsidiary, by or before any court, arbitrator or administrative or governmental
body which could reasonably be expected result in any material adverse change in
the business, condition (financial or otherwise) or operations of the Company
and its Subsidiaries taken as a whole.
8D. Outstanding Debt. Neither the Company nor any Subsidiary has
any Debt outstanding except as permitted by paragraphs 6A and 6C(2). There is
no default under the provisions of any instrument evidencing any Debt or of
any agreement relating thereto. Schedule 8D hereto is an accurate and
complete list of Debt of the Company and its Subsidiaries on the Date of
Closing.
8E. Title to Properties. The Company and each Subsidiary have good and
indefeasible title to their respective real properties (other than leased
properties or which individually or in the aggregate are not material to the
Company) and good title to all of their other respective properties and assets,
including the properties and assets reflected in the balance sheet as at June
26, 1999 referred to in paragraph 8B (other than properties and assets disposed
of in the ordinary course of business or which individually or in the aggregate
are not material to the Company), subject to no Lien of any kind except Liens
permitted by paragraph 6C(1). All leases necessary in any material respect for
the conduct of the respective business of the Company and its Subsidiaries are
valid and subsisting and are in full force and effect.
8F. Taxes. The Company has and each Subsidiary has filed all federal,
state and other income tax returns which, to the best knowledge of the
Responsible Officers of the Company, are required to be filed (giving effect to
any extensions granted), and each has paid all taxes as shown on such returns
and on all assessments received by it to the extent that such taxes have become
due (including any extensions granted), except such taxes as are being contested
in good faith by appropriate proceedings for which adequate reserves have been
established in accordance with generally accepted accounting principles.
8G. Conflicting Agreements and Other Matters. Neither the Company nor
any Subsidiary is a party to any contract or agreement or subject to any charter
or other corporate restriction which materially and adversely affects its
business, property or assets, or financial condition of the Company and its
Subsidiaries taken as a whole. Neither the execution nor delivery of this
Agreement or the Notes, nor the offering, issuance and sale of the Notes, nor
fulfillment of nor compliance with the terms and provisions hereof and of the
Notes will conflict with, or result in a breach of the terms, conditions or
provisions of, or constitute a default under, or result in any violation of, or
result in the creation of any Lien upon any of the properties or assets of the
Company or any Subsidiary pursuant to, the charter or by-laws of the Company or
any Subsidiary, any award of any arbitrator or any agreement (including any
agreement with stockholders), instrument, order, judgment, decree, statute, law,
rule or regulation to which the Company or any Subsidiary is subject. Neither
the Company nor any Subsidiary is a party to, or otherwise subject to any
provision contained in, any instrument evidencing Debt of the Company or such
Subsidiary, any agreement relating thereto or any other contract or agreement
(including its charter) which limits the amount of, or otherwise imposes
restrictions on the incurring of, Debt of the Company of the type to be
evidenced by the Notes except as set forth in the agreements listed in Schedule
8G attached hereto.
8H. Offering of Notes. Neither the Company nor any agent acting on its
behalf has, directly or indirectly, offered the Notes or any similar security of
the Company for sale to, or solicited any offers to buy the Notes or any similar
security of the Company from, or otherwise approached or negotiated with respect
thereto with, any Person other than accredited investors, and neither the
Company nor any agent acting on its behalf has taken any action which would
reasonably be expected to subject the issuance or sale of the Notes to the
provisions of section 5 of the Securities Act or to the provisions of any
securities or Blue Sky law of any applicable jurisdiction. The Company hereby
represents and warrants to you that, within the preceding twelve months, neither
the Company nor any other Person acting on behalf of the Company has offered or
sold to any Person (other than accredited investors) any Notes, or any
securities of the same or a similar class as the Notes, or any other
substantially similar securities of the Company.
8I. Use of Proceeds. Margin stock within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System (12 CFR 221) does not
constitute more than 10% 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 10% of the value of such assets. The
proceeds of sale of the Notes will be used for general corporate purposes. None
of such proceeds will be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of purchasing or carrying any margin stock or
for the purpose of maintaining, reducing or retiring any Debt which was
originally incurred to purchase or carry any stock that is currently a margin
stock or for any other purpose which might constitute this transaction a
"purpose credit" within the meaning of such Regulation U. Neither the Company
nor any agent acting on its behalf has taken any action which might cause this
Agreement or the Notes to violate Regulation U, Regulation T or any other
regulation of the Board of Governors of the Federal Reserve System or to violate
the Exchange Act.
8J. ERISA. No accumulated funding deficiency (as defined in section 302
of ERISA and section 412 of the Code), whether or not waived, exists with
respect to any Plan (other than a Multiemployer Plan). No liability to the
Pension Benefit Guaranty Corporation has been or is expected by the Company or
any ERISA Affiliate to be incurred with respect to any Plan (other than a
Multiemployer Plan) by the Company, any Subsidiary or any ERISA Affiliate which
is or would be materially adverse to the business, condition (financial or
otherwise) or operations of the Company and its Subsidiaries taken as a whole.
Neither the Company, any Subsidiary or any ERISA Affiliate has incurred or
presently expects to incur any withdrawal liability under Title IV of ERISA with
respect to any Multiemployer Plan which is or would be materially adverse to the
business, condition (financial or otherwise) or operations of the Company and
its Subsidiaries taken as a whole. The execution and delivery of this Agreement
and the issuance and sale of the Notes will be exempt from, or will not involve
any transaction which is subject to, the prohibitions of section 406 of ERISA
and will not involve any transaction in connection with which a penalty could be
imposed under section 502(i) of ERISA or a tax could be imposed pursuant to
section 4975 of the Code. The representation by the Company in the next
preceding sentence is made in reliance upon and subject to the accuracy of your
representation in paragraph 9B.
8K. Governmental Consent. Assuming the representations made by you in
paragraph 9 are accurate, neither the nature of the Company or of any
Subsidiary, nor any of their respective businesses or properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor any
circumstance in connection with the offering, issuance, sale or delivery of the
Notes is such as to require any authorization, consent, approval, exemption or
other action by or notice to or filing with any court or administrative or
governmental body (other than those which are made or obtained prior to Closing
and routine filings after the date of any Closing with the Securities and
Exchange Commission and/or state Blue Sky authorities) in connection with the
execution and delivery of this Agreement, the offering, issuance, sale or
delivery of the Notes or fulfillment of or compliance with the terms and
provisions hereof or of the Notes.
8L. Environmental Compliance.
(i) The Company and its Subsidiaries and all of their respective
Properties have complied at all times and in all respects with all Environmental
Requirements where failure to comply could reasonably be expected to have a
material adverse effect on the business, condition (financial or otherwise) or
operations of the Company and its Subsidiaries taken as a whole.
(ii) Neither the Company nor any Subsidiary is subject to any
Environmental Liability or Environmental Requirement which could reasonably be
expected to have a material adverse effect on the business, condition (financial
or otherwise) or operations of the Company and its Subsidiaries, taken as a
whole.
(iii) Neither the Company nor any Subsidiary has been designated as a
potentially responsible party under CERCLA or under any state statute similar to
CERCLA. Except as specified on Schedule 8L, none of the Properties has been
identified on any current or proposed National Priorities List under 40 C.F.R.
ss. 300 or any list arising from a state statute similar to CERCLA. None of the
Properties has been identified on any CERCLIS list.
(iv) No Hazardous Materials have been or are being used, produced,
manufactured, processed, generated, stored, disposed of, released, managed at or
shipped or transported to or from the Properties or are otherwise present at,
on, in or under the Properties or, to the actual knowledge of the Company, at or
from any adjacent site or facility, except for Hazardous Materials used,
produced, manufactured, processed, generated, stored, disposed of, released and
managed in the ordinary course of business in compliance with all applicable
Environmental Requirements and except for Hazardous Materials present in amounts
which have not required and do not require remediation, pursuant to applicable
law or regulation, or if remediation is required, such remediation could not
reasonably be expected to have a material adverse effect on the business,
condition (financial or otherwise) or operations of the Company and its
Subsidiaries, taken as a whole.
(v) The Company and each Subsidiary have procured all permits necessary
under Environmental Requirements for the conduct of their respective businesses
or is otherwise in compliance with all applicable Environmental Requirements,
except to the extent the failure to do so could not reasonably be expected to
have a material adverse effect on the business, condition (financial or
otherwise) or operations of the Company and its Subsidiaries, taken as a whole.
8M. Disclosure. Neither this Agreement nor any other document,
certificate or statement furnished to you by or on behalf of the Company in
connection herewith contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
and therein not misleading. There is no fact peculiar to the Company or any
Subsidiary which materially adversely affects or in the future may (so far as
the Company can now reasonably foresee) materially adversely affect the
business, property or assets, or financial condition of the Company and its
Subsidiaries taken as a whole and which has not been set forth in this Agreement
or in the other documents, certificates and statements furnished to you by or on
behalf of the Company prior to the date hereof in connection with the
transactions contemplated hereby.
8N. Hostile Tender Offers. None of the proceeds of the sale of
any Notes will be used to finance a Hostile Tender Offer.
8O. Year 2000. The Company's disclosure with respect to Year 2000
contained in its Quarterly Report on Form 10-Q for the quarter ended June 26,
1996 does not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make statements made, in light of the
circumstances under which they were made, not misleading.
9. REPRESENTATIONS OF THE PURCHASER. You represent as follows:
9A. Nature of Purchase. You are acquiring the Notes to be purchased by
you hereunder for your own account and not with a view to or for sale in
connection with any distribution thereof within the meaning of the Securities
Act, provided that the disposition of your property shall at all times be and
remain within your control.
9B. Source of Funds. No part of the funds being used by you to pay the
purchase price of the Notes being purchased by you hereunder constitutes assets
allocated to any separate account maintained by you in which any employee plan,
other than employee benefit plans identified on a list which has been furnished
by you to the Company, participates to the extent of 10% or more. For the
purpose of this paragraph 9B, the terms "separate account" and "employee benefit
plan" shall have the respective meanings specified in section 3 of ERISA.
10. DEFINITIONS. For the purpose of this Agreement, the terms
defined in the introductory sentence and in paragraphs 1 and 2 shall have the
respective meanings specified therein, and the following terms shall
have the meanings specified with respect thereto below:
10A. Yield-Maintenance Terms.
"Called Principal" shall mean, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to paragraph 4C or is declared to be
immediately due and payable pursuant to paragraph 7A, as the context requires.
"Designated Spread" shall mean 0% in the case of each Note of any
Series unless the Confirmation of Acceptance with respect to the Notes of such
Series specifies a different Designated Spread in which case it shall mean, with
respect to each Note of such Series, the Designated Spread so specified.
"Discounted Value" shall mean, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due dates
to the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Note is payable) equal to the
Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" shall mean, with respect to the Called Principal
of any Note, the Designated Spread over the yield to maturity implied by (i) the
yields reported, as of 10:00 A.M. (New York City time) on the Y-M Business Day
next preceding the Settlement Date with respect to such Called Principal, on the
display designated as "Page 678" on the Telerate (or such other display as may
replace Page 678 on the Telerate) for actively traded U.S. Treasury securities
having a maturity equal to the Remaining Average Life of such Called Principal
as of such Settlement Date, or (ii) if such yields shall not be reported as of
such time or the yields reported as of such time shall not be ascertainable, the
Treasury Constant Maturity Series yields reported, for the latest day for which
such yields shall have been so reported as of the Y-M Business Day next
preceding the Settlement Date with respect to such Called Principal, in Federal
Reserve Statistical Release H.15 (519) (or any comparable successor publication)
for actively traded U.S. Treasury securities having a constant maturity equal to
the Remaining Average Life of such Called Principal as of such Settlement Date.
Such implied yield shall be determined, if necessary, by (a) converting U.S.
Treasury ▇▇▇▇ quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between yields reported for
various maturities.
"Remaining-Average Life" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the
sum of the products obtained by multiplying (a) each Remaining Scheduled Payment
of such Called Principal (but not of interest thereon) by (b) the number of
years (calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
scheduled due date.
"Settlement Date" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid pursuant to
paragraph 4B or is declared to be immediately due and payable pursuant to
paragraph 7A, as the context requires.
"Telerate" shall mean Bridge Telerate, Inc. or such other
nationally recognized service providing comparable services as you may select
as a substitute therefor.
"Yield-Maintenance Amount" shall mean, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Called
Principal of such Note over the sum of (i) such Called Principal plus (ii)
interest accrued thereon as of (including interest due on) the Settlement Date
with respect to such Called Principal. The Yield-Maintenance Amount shall in no
event be less than zero.
"Y-M Business Day" shall mean any day other than a Saturday, Sunday or
a day on which commercial banks in New York City are required or authorized to
be closed.
10B. Other Terms.
"Acceptance" is defined in paragraph 2B(5) of this Agreement.
"Acceptance Day" is defined in paragraph 2B(5) of this Agreement.
"Acceptance Window" is defined in paragraph 2B(5) of this Agreement.
"Accepted Note" is defined in paragraph 2B(5) of this Agreement.
"Affiliate" shall mean with respect to any Person, any other Person (a)
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person, (b) which other Person beneficially owns or
holds 5% or more of the shares of any class of Voting Stock of such Person or
(c) 5% or more of any class of the Voting Stock of which is beneficially owned
or held by such designated entity. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any entity, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such entity, whether through the
ownership of Voting Stock or by contract or otherwise. Affiliate shall not
include Subsidiaries.
"Authorized Officer" shall mean (i) in the case of the Company, its
chief executive officer, its chief financial officer, any vice president of the
Company designated as an "Authorized Officer" of the Company in the Information
Schedule attached hereto or any vice president of the Company designated as an
"Authorized Officer" of the Company for the purpose of this Agreement in an
Officer's Certificate executed by the Company's chief executive officer or chief
financial officer and delivered to Prudential, and (ii) in the case of
Prudential, any officer of Prudential designated as its "Authorized Officer" in
the Information Schedule or any officer of Prudential designated as its
"Authorized Officer" for the purpose of this Agreement in a certificate executed
by one of its Authorized Officers. Any action taken under this Agreement on
behalf of the Company by any individual who on or after the date of this
Agreement shall have been an Authorized Officer of the Company and whom
Prudential in good faith believes to be an Authorized Officer of the Company at
the time of such action shall be binding on the Company even though such
individual shall have ceased to be an Authorized Officer of the Company, and any
action taken under this Agreement on behalf of Prudential by any individual who
on or after the date of this Agreement shall have been an Authorized Officer of
Prudential and whom the Company in good faith believes to be an Authorized
Officer of Prudential at the time of such action shall be binding on Prudential
even though such individual shall have ceased to be an Authorized Officer of
Prudential.
"Available Facility Amount" shall have the meaning specified in
paragraph 2(B)(1) of this Agreement.
"Bankruptcy Law" is defined in clause (viii) of paragraph 7A of this
Agreement.
"Board" shall mean, for any Person, its Board of Directors or
equivalent governing body.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which commercial banks in New York City or Charlotte, North Carolina are
required or authorized to be closed.
"Cancellation Date" is defined in paragraph 2B(8)(iv) of this
Agreement.
"Cancellation Fee" is defined in paragraph 2B(8)(iv) of this Agreement.
"Capitalized Lease Obligation" shall mean any rental obligation which,
under generally accepted accounting principles, would be required to be
capitalized on the books of the Company or any Subsidiary, taken at the amount
thereof accounted for as indebtedness (net of interest expense) in accordance
with such principles.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act.
"CERCLIS" shall mean the Comprehensive Environmental Response,
Compensation and Liability Inventory System established pursuant to CERCLA.
"Closing Day" is defined in paragraph 2B(3)(iv).
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Confirmation of Acceptance" is defined in paragraph 2B(5) of this
Agreement.
"Consolidated" shall mean the consolidated financial information of the
Company and its Subsidiaries under generally accepted accounting principles.
"Consolidated Assets" shall mean, as at any date of determination, the
total assets of the Company and its Subsidiaries appearing on a Consolidated
balance sheet prepared under generally accepted accounting principles as of the
date of determination, after deducting any reserves applicable thereto and after
eliminating all intercompany transactions and all amounts properly attributable
to minority interests, if any, in the stock and surplus of Subsidiaries.
"Consolidated Capitalization" shall mean, at any time, the sum of (i)
Consolidated Debt at such time plus (ii) Consolidated Net Worth at such time.
"Consolidated Fixed Charges" shall mean, for the Company and its
Subsidiaries on a Consolidated basis, the sum (without duplication) of:
(i) all Rentals (excluding all principal components of Rentals
under Capitalized Lease Obligations) paid during the most recently
completed four fiscal quarters (the "Prior Period"); and
(ii) all Consolidated Interest Charges for the Prior Period.
"Consolidated Interest Charges" shall mean, for the Company and its
Subsidiaries on a Consolidated basis for the four fiscal quarters most recently
ended, all interest expense (as determined in accordance with generally accepted
accounting principles) on all Debt (including Capitalized Lease Obligations) net
of interest income.
"Consolidated Net Earnings" shall mean, for any applicable period, for
the Company and its Subsidiaries on a Consolidated basis, the excess of (a)
gross revenues over (b) all expenses and charges of a proper character
(including current and deferred taxes on income and current additions to
reserves) each for the applicable period, but not including in gross revenues:
(i) any gains (net of expenses and taxes applicable thereto)
in excess of losses resulting from the sales, conversions or other
dispositions of capital assets outside the ordinary course of business,
(ii) any gains resulting from the write-up of assets,
(iii) any earnings or deferred credit (or amortization of a
deferred credit) of any Person acquired by the Company or any
Subsidiary through purchase, merger or consolidation or otherwise for
any year prior to the year of acquisition not included in gross
revenues under generally accepted accounting principles, or
(iv) any deferred credit representing the excess of equity
in any Subsidiary of the Company at the date of acquisition over the
cost of the investment in such Subsidiary,
(v) proceeds of life insurance policies on any Responsible
Officer exceeding $250,000 for such period,
(vi) gains arising from the acquisition of debt securities for
a cost less than the principal amount and accrued interest,
(vii) extraordinary items or transactions of a non-recurring
or non-operating and material nature or arising from gains or sales
relating to the discontinuance of operations, or
(viii) any portion of the net earnings (included in the
determination of such Consolidated Net Earnings or such Consolidated
Net Loss) of any Subsidiary which for any reason shall be unavailable
for payment of dividends to the Company,
all as determined in accordance with generally accepted accounting principles.
If the above calculation results in an amount less than zero, then for such
period there shall be a "Consolidated Net Loss" as determined below.
"Consolidated Net Loss" shall mean, for any applicable period, for the
Company and its Subsidiaries on a Consolidated basis, the excess of (a) expenses
and charges of a proper character (including current and deferred taxes on
income, provision for taxes an unremitted foreign earnings which are included in
gross revenues, and current additions to resources) over (b) gross revenues for
the same period, but not including in gross revenues those items listed in
clauses (i) through (iv), inclusive, in the definition Consolidated Net Earnings
above, all as determined in accordance with generally accepted accounting
principles. If the above calculation results in an amount of zero or more, then
for such period there shall be "Consolidated Net Earnings" as determined above.
"Consolidated Net Worth" shall mean, at any time, for the Company and
its Subsidiaries on a Consolidated basis shareholders' equity at such time
determined in accordance with generally accepted accounting principles.
"Consolidated Operating Income" shall mean, for the Company and its
Subsidiaries on a Consolidated basis for the four fiscal quarters most recently
ended, Consolidated Net Earnings, or Consolidated Net Loss, as the case may be,
for such period, plus to the extent deducted in calculating such Consolidated
Net Earnings or Consolidated Net Loss, taxes, Consolidated Interest Charges and
Rentals.
"Consolidated Priority Debt" shall mean, on a Consolidated basis on any
date of determination, the sum (without duplication) of:
(i) the aggregate amount of Debt of all Subsidiaries, plus
(ii) Debt of any Person which is secured by, or otherwise
benefitting from, a Lien on any property, tangible or intangible, of
the Company or any Subsidiary, whether or not the Company or such
Subsidiary has assumed or become liable for the payment of such Debt,
plus
(iii) the present value of the rental obligations of the
Company or a Subsidiary as lessee under a Capitalized Lease Obligation
(discounted according to generally accepted accounting principles at
the debt rate implicit in the lease).
"Cumulative Amounts Available For Restricted Payments" shall mean for
the period (taken as one accounting period) beginning on January 1, 1999, and
ending as of the last day of the most recently completed fiscal quarter before
any proposed Restricted Payment:
(1) $25,000,000; plus
(2) 50% of Consolidated Net Earnings or 100% of the
Consolidated Net Loss, as the case may be, during such period; plus
(3) the total net cash proceeds received by the Company
from the sale of its stock during such period; less
(4) the aggregate amount of all Restricted Payments made
during such period. "Debt" shall mean with respect to any Person, at
any date of determination,
(i) all indebtedness for borrowed money which such Person has
directly or indirectly created, incurred or assumed (including, without
limitation, all Capitalized Lease Obligations); and
(ii) all indebtedness, whether or not for borrowed money,
secured by any Lien on any property or asset owned or held by such
Person subject thereto, whether or not the indebtedness secured thereby
shall have been assumed by such Person; and
(iii) any indebtedness, whether or not for borrowed money,
with respect to which such Person has become directly or indirectly
liable and which represents or has been incurred to finance the
purchase price (or a portion thereof) of any property or services or
business acquired by such Person, whether by purchase, consolidation,
merger or otherwise other than any trade payable in the ordinary course
of business that is a current liability under generally accepted
accounting principles; and
(iv) any indebtedness of the character referred to in clauses
(i), (ii) or (iii) of this definition deemed to be extinguished under
generally accepted accounting principles but for which such Person
remains legally liable to the extent the market value of any assets
such Person has placed in trust for the benefit of the holders of that
indebtedness is less than the aggregate amount of that indebtedness;
and
(v) any indebtedness of any other Person of the character
referred to in subdivision (i), (ii), (iii) or (iv) of this definition
with respect to which the Person whose Debt is being determined has
become liable by way of a Guarantee;
all as determined in accordance with generally accepted accounting principles,
provided, however, Debt shall not include endorsement of negotiable instruments
for collection in the ordinary course of business.
"Delay Delivery Fee" is defined in paragraph 2B(8)(iii) of this
Agreement.
"Disposition" is defined in paragraph 6D of this Agreement.
"Environmental Authority" shall mean any foreign, federal, state, local
or regional government that exercises any form of jurisdiction or authority
under any Environmental Requirement.
"Environmental Judgments and Orders" shall mean all judgments, decrees
or orders arising from or in any way associated with any Environmental
Requirements, whether or not entered upon consent or written agreements with an
Environmental Authority or other entity arising from or in any way associated
with any Environmental Requirement, whether or not incorporated in a judgment,
degree or order.
"Environmental Liabilities" shall mean any liabilities, whether accrued
or contingent, arising from or relating in any way to any Environmental
Requirements.
"Environmental Notices" shall mean any written communication from any
Environmental Authority stating possible or alleged noncompliance with or
possible or alleged liability under any Environmental Requirement, including
without limitation any complaints, citations, demands or requests from any
Environmental Authority for correction of any purported violation of any
Environmental Requirements or any investigation concerning any purported
violation of any Environmental Requirements. Environmental Notices also shall
mean (i) any written communication from any other Person threatening litigation
or administrative proceedings against or involving the Company relating to
alleged violation of any Environmental Requirements and (ii) any complaint,
petition or similar documents filed by any other Person commencing litigation or
administrative proceedings against or involving the Company relating to alleged
violation of any Environmental Requirements.
"Environmental Proceedings" shall mean any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.
"Environmental Releases" shall mean releases (as defined in CERCLA or
under any applicable state or local environmental law or regulation) of
Hazardous Materials. Environmental Releases does not include releases for which
no remediation or reporting is required by applicable Environmental Requirements
and which do not present a danger to health, safety or the environment.
"Environmental Requirements" shall mean any applicable local, state or
federal law, rule, regulation, permit, order, decision, determination or
requirement relating in any way to Hazardous Materials or to health, safety or
the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" shall mean any corporation which is a member of the
same controlled group of corporations as the Company within the meaning of
section 414(b) of the Code, or any trade or business which is under common
control with the Company within the meaning of section 414(c) of the Code.
"Event of Default" shall mean any of the events specified in paragraph
7A, provided that there has been satisfied any requirement in connection with
such event for the giving of notice, or the lapse of time, or the happening of
any further condition, event or act, and "Default" shall mean any of such
events, whether or not any such requirement has been satisfied.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Facility" is defined in paragraph 2B(1) of this Agreement.
"Facility Fee" is defined in paragraph 2B(8)(i) of this Agreement.
"Fair Market Value" shall mean at any time, the sale value of property
that would be realized in an arm's-length sale at such time between an informed
and willing buyer, and an informed and willing seller, under no compulsion to
buy or sell, respectively.
"Guarantee" shall mean, with respect to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
Debt, lease, dividend or other obligation of another, including, without
limitation, any such obligation directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary course of business) or
discounted or sold with recourse by such Person, or in respect of which such
Person is otherwise directly or indirectly liable, including, without
limitation, any such obligation in effect guaranteed by such Person through any
agreement (contingent or otherwise) to purchase, repurchase or otherwise acquire
such obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain the solvency or
any balance sheet or other financial condition of the obligor of such
obligation, or to make payment for any products, materials or supplies or for
any transportation or services regardless of the non-delivery or non-furnishing
thereof, in any such case if the purpose or intent of such agreement is to
provide assurance that such obligation will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected against loss in respect thereof. The amount of any
Guarantee shall be equal to the outstanding principal amount of the obligation
guaranteed or such lesser amount to which the maximum exposure of the guarantor
shall have been specifically limited.
"Hazardous Materials" shall mean (a) hazardous waste as defined in the
Resource Conservation and Recovery Act of 1976, or in any applicable federal,
state or local law or regulation, (b) hazardous substances, as defined in
CERCLA, or in any applicable state or local law or regulation, (c) gasoline, or
any other petroleum product or by-product, (d) toxic substances, as defined in
the Toxic Substances Control Act of 1976, or in any applicable federal, state or
local law or regulation or (e) insecticides, fungicides, or rodenticides, as
defined in the Federal Insecticide, Fungicide, and Rodenticide Act of 1975, or
in any applicable federal, state or local law or regulation, as each such Act,
statute or regulation may be amended from time to time.
"Hedge Treasury Note(s)" shall mean, with respect to any Accepted Note,
the United States Treasury Note or Notes whose duration (as determined by
Prudential) most closely matches the duration of such Accepted Note.
"Hostile Tender Offer" shall mean, with respect to the use of proceeds
of any Note, any offer to purchase, or any purchase of, shares of capital stock
of any corporation or equity interests in any other entity, or securities
convertible into or representing the beneficial ownership of, or rights to
acquire, any such shares or equity interests, if such shares, equity interests,
securities or rights are of a class which is publicly traded on any securities
exchange or in any over-the-counter market, other than purchases of such shares,
equity interests, securities or rights representing less than 5% of the equity
interests or beneficial ownership of such corporation or other entity for
portfolio investment purposes, and such offer or purchase has not been duly
approved by the board of directors of such corporation or the equivalent
governing body of such other entity prior to the date on which the Company makes
the Request for Purchase of such Note.
"Investment" shall mean, when used with respect to any Person, any
direct or indirect advance, loan or other extension of credit (other than the
creation of receivables in the ordinary course of business) or capital
contribution by such Person (by means of transfers of property to others or
payments for property or services for the account or use of others, or
otherwise) to any other Person, or any direct or indirect purchase or other
acquisition by such Person of, or of a beneficial interest in, capital stock,
partnership interests, bonds, notes, debentures or other securities issued by
any other Person.
"Issuance Fee" is defined in paragraph 2B(8)(ii) of this Agreement.
"Issuance Period" is defined in paragraph 2B(2) of this Agreement.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien (statutory or otherwise), or charge of any kind (including any agreement to
give any of the foregoing, any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or agreement to
give any financing statement under the Uniform Commercial Code of any
jurisdiction) or any other type of preferential arrangement for the purpose, or
having the effect, of protecting a creditor against loss or securing the payment
or performance of an obligation, including any rights of setoff (whether by
statute, common law, contract or otherwise).
"Multiemployer Plan" shall mean any Plan which is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).
"Notes" is defined in paragraph 1B of this Agreement.
"Officer's Certificate" shall mean a certificate signed in the name of
the Company by its Chairman, President, one of its Vice Presidents or its
Treasurer.
"Person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a government
or any department or agency thereof.
"Plan" shall mean any "employee pension benefit plan" (as such term is
defined in section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by the Company or any ERISA
Affiliate.
"Preferred Stock", as applied to any corporation, shall mean shares of
stock of such corporation which are entitled to preference or priority over any
other shares of such corporation in respect of the payment of dividends or
distribution of assets upon liquidation or both.
"Properties" shall mean all real property owned, leased or otherwise
used or occupied by the Company or any Subsidiary, wherever located.
"Prudential" is defined in the Introduction of this Agreement.
"Prudential Affiliate" shall mean (i) any corporation or other entity
controlling, controlled by, or under common control with, Prudential and (ii)
any managed account or investment fund which is managed by Prudential or a
Prudential Affiliate described in clause (i) of this definition. For purposes of
this definition the terms "control", "controlling" and "controlled" shall mean
the ownership, directly or through subsidiaries, of a majority of a
corporation's or other entity's voting stock or equivalent voting securities or
interests.
"Purchasers" is defined in the Introduction of this Agreement.
"Rentals" shall mean for any period of determination all fixed rents or
charges (including as such all payments during any such period of determination
which the lessee is obligated to make on termination of the lease or surrender
of the property) payable by the Company or a Subsidiary (as lessee, sublessee,
license, franchisee or the like) for such period under a lease, license, or
other agreement for the use or possession of real or personal property, tangible
or intangible, as determined in accordance with generally accepted accounting
principles.
"Request for Purchase" is defined in paragraph 2B(3) of this Agreement.
"Required Holder(s)" shall mean the holder or holders of at least 66
2/3% of the aggregate principal amount of the Notes from time to time
outstanding.
"Rescheduled Closing Day" is defined in paragraph 2B(7) of this
Agreement.
"Responsible Officer" shall mean the chief executive officer, chief
operating officer, principal financial officer, principal accounting officer,
treasurer or assistant treasurer of the Company or any other senior executive
officer of the Company involved principally in its financial administration or
its controllership function.
"Restricted Payments" is defined in paragraph 6B of this Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Series A Closing Day" is defined in paragraph 2A of this Agreement.
"Shelf Notes" is defined in paragraph 1B of this Agreement.
"Significant Holder" shall mean (i) you, so long as you shall hold (or
be committed under this Agreement to purchase) any Note, or (ii) any other
Person which holds at least $5,000,000 of the aggregate principal amount of the
Notes from time to time outstanding.
"Stock Repurchase Plan" shall mean a plan approved by the Board of
Directors of the Company authorizing the appropriate officers of the Company to
purchase shares of stock of the Company, from time to time, on the open market
through negotiated purchases or otherwise.
"Subsidiary" shall mean any corporation or partnership organized under
the laws of any state of the United States of America which conducts the major
portion of its business in and makes the major portion of its sales to Persons
located in the United States or Canada, whose accounts are or are required to be
consolidated with the Company's under generally accepted accounting principles.
"Third Party" shall mean all lessees, sublessees, licensees and other
users of the Properties, excluding those users of the Properties in the ordinary
course of the Company's business (consistent with its practices on the Date of
Closing) and on a temporary basis.
"Transferee" shall mean any direct or indirect transferee of all or any
part of any Note purchased by you under this Agreement.
"Voting Stock" shall mean, with respect to any corporation, any shares
of stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency).
"Wholly-Owned Subsidiary" shall mean any Subsidiary, all of the Voting
Stock of which shall, at the time of determination, be owned by the Company or
another Wholly-Owned Subsidiary.
10C. Accounting Principles, Terms and Determinations. All references in
this Agreement to "generally accepted accounting principles" shall be deemed to
refer to generally accepted accounting principles in effect in the United States
at the time of application thereof. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all determinations with
respect to accounting matters hereunder shall be made, and all unaudited
financial statements and certificates and reports as to financial matters
required to be furnished hereunder shall be prepared, in accordance with
generally accepted accounting principles, applied on a basis consistent with the
most recent audited consolidated financial statements of the Company and its
Subsidiaries delivered pursuant to clause (ii) of paragraph 5A or, if no such
statements have been so delivered, the most recent audited financial statements
referred to in clause (i) of paragraph 8B, subject in the case of, interim
statements to normal year end adjustments and to the absence of footnotes.
11. MISCELLANEOUS.
11A. Note Payments. The Company agrees that, so long as you shall hold
any Note, it will make payments of principal of, interest on, and any
Yield-Maintenance Amount payable with respect to such Note, which comply with
the terms of this Agreement, by wire transfer of immediately available funds for
credit (not later than 12:00 noon, New York City time, on the date due) to your
account or accounts as specified in the Purchaser Schedule attached hereto, or
such other account or accounts in the United States as you may designate in
writing, notwithstanding any contrary provision herein or in any Note with
respect to the place of payment. You agree (and any Transferee shall agree as a
condition to the transfer of any Note or part thereof) that, before disposing of
any Note, you (and any such Transferee) will make a notation thereon (or on a
schedule attached thereto) of all principal payments previously made thereon and
of the date to which interest thereon has been paid. The Company agrees to
afford the benefits of this paragraph 11A to any Transferee which shall have
made the same agreement as you have made in this paragraph 11A.
11B. Expenses. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save you and any
Transferee harmless against liability for the payment of, all reasonable
out-of-pocket expenses actually incurred (including without limitation legal
fees) arising in connection with such transactions, including:
(i) all taxes (together in each case with interest and
penalties, if any), other than state or federal income taxes or
franchise taxes, including without limitation, all stamp, intangibles,
recording and other taxes, which may be payable with respect to the
execution and delivery of this Agreement or the execution, delivery or
acquisition of any Note;
(ii) all reasonable document production and duplication
charges and the reasonable fees and expenses of any special counsel
engaged by you or any Transferee after the Date of Closing in
connection with this Agreement or the Notes and any subsequent proposed
modification or waiver of, or proposed consent under, this Agreement or
the Notes, whether or not such proposed modification or waiver shall be
effected or proposed consent granted, and
(iii) the reasonable costs and expenses, including reasonable
attorneys' fees, actually incurred by you or such Transferee in
connection with the restructuring, refinancing or "work out" of this
Agreement or the Notes or the transactions contemplated hereby or
thereby or in enforcing (or determining whether or how to enforce) any
rights under this Agreement or the Notes or in responding to any
subpoena or other legal process or informal investigative demand issued
in connection with this Agreement or the Notes or the transactions
contemplated hereby or by reason of your or any Transferee's having
acquired any Note, including without limitation costs and expenses
incurred in any bankruptcy case.
The obligations of the Company under this paragraph 11B shall survive the
transfer of any Note or portion thereof or interest therein by you or any
Transferee and the payment of any Note.
11C. Consent to Amendments. This Agreement may be amended, and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if the Company shall obtain the written consent
to such amendment, action or omission to act, of the Required Holder(s) except
that, without the written consent of the holder or holders of all Notes at the
time outstanding, no amendment to this Agreement shall change:
(i) the maturity of any Note,
(ii) the principal of, or the rate or time of
payment of interest on or any Yield-Maintenance Amount payable on any
Note,
(iii) the time, amount or allocation of any prepayments, or
(iv) the proportion of the principal amount of the
Notes required for any consent, amendment, waiver or declaration.
Each holder of any Note at the time or thereafter outstanding shall be bound by
any consent authorized by this paragraph 11C, whether or not such Note shall
have been marked to indicate such consent, but any Notes issued thereafter may
bear a notation referring to any such consent. No course of dealing between the
Company and the holder of any Note nor any delay in exercising any rights
hereunder or under any Note shall operate as a waiver of any rights of any
holder of such Note. As used herein and in the Notes, the term "this Agreement"
and references thereto shall mean this Agreement as it may from be amended or
supplemented time to time.
11D. Form, Registration, Transfer and Exchange of Notes; Lost Notes.
The Notes are issuable in registered form without coupons in denominations of at
least $1,000,000, except as may be necessary to reflect any principal amount not
evenly divisible by $1,000,000. The Company shall keep at its principal office a
register in which the Company shall provide for the registration of Notes and a
record of transfers of the Notes. Upon surrender for registration of transfer of
any Note at the principal office of the Company, the Company shall, at its
expense, execute and deliver one or more new Notes of like tenor and of a like
aggregate principal amount, registered in the name of such transferee or
transferees. At the option of the holder of any Note, such Note may be exchanged
for other Notes of like tenor and of any authorized denominations, of a like
aggregate principal amount, upon surrender of the Note to be exchanged at the
principal office of the Company. Whenever any Notes are so surrendered for
exchange, the Company shall, at its expense, execute and deliver the Notes which
the holder making the exchange is entitled to receive. Every Note surrendered
for registration of transfer or exchange shall be duly endorsed, or be
accompanied by a written instrument of transfer duly executed, by the holder of
such Note or such holder's attorney duly authorized in writing. Any Note or
Notes issued in exchange for any Note or upon transfer thereof shall carry the
rights to unpaid interest and interest to accrue which were carried by the Note
so exchanged or transferred, so that neither gain nor loss of interest shall
result from any such transfer or exchange. Upon receipt of written notice from
the holder of any Note of the loss, theft, destruction or mutilation of such
Note and, in the case of any such loss, theft or destruction, upon receipt of
such holder's unsecured indemnity agreement, or in the case of any such
mutilation upon surrender and cancellation of such Note, the Company will make
and deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed or
mutilated Note.
11E. Persons Deemed Owners; Participations. Prior to due presentment
for registration of transfer, the Company shall treat the Person in whose name
any Note is registered as the owner and holder of such Note for the purpose of
receiving payment of principal of, interest on and any Yield-Maintenance Amount
payable with respect to such Note and for all other purposes whatsoever, whether
or not such Note shall be overdue, and the Company shall not be affected by
notice to the contrary. Subject to the preceding sentence, the holder of any
Note may from time to time grant participations in such Note to any Person
(other than any Person not an institutional investor) on such terms and
conditions as may be determined by such holder in its sole and absolute
discretion.
11F. Survival of Representations and Warranties; Entire Agreement. All
representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement and the Notes, the transfer by you of any Note or
portion thereof or interest therein and the payment of any Note, and may be
relied upon by any Transferee, regardless of any investigation made at any time
by or on behalf of you or any Transferee. 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.
11G. Successors and Assigns; Transfer Provisions. All covenants and
other agreements in this Agreement contained by or on behalf of either of the
parties hereto shall bind and inure to the benefit of the respective successors
and assigns of the parties hereto (including, without limitation, any
Transferee) whether so expressed or not.
11H. Disclosure to Other Persons; Confidentiality. The Company
acknowledges that the holder of any Note may deliver copies of any financial
statements and other documents or information delivered to such holder, and
disclose any other information disclosed to such holder, by or on behalf of the
Company or any Subsidiary in connection with or pursuant to this Agreement only
to:
(i) such holder's directors, officers, employees, agents
and professional consultants,
(ii) any other holder of any Note,
(iii) any Person to which such holder offers to sell such Note
or any part thereof, provided that each such Person agrees in writing
to observe the confidentiality standards described in this paragraph
11H,
(iv) any Person to which such holder sells or offers to sell a
participation in all or any part of such Note, provided that each such
Person agrees in writing to observe the confidentiality standards
described in this paragraph 11H,
(v) any Person from which such holder offers to purchase any
security of the Company, provided that each such Person agrees in
writing to observe the confidentiality standards described in this
paragraph 11H,
(vi) any federal or state regulatory authority having
jurisdiction over such holder,
(vii) the National Association of Insurance Commissioners
or any similar organization or
(viii) any other Person to which such delivery or disclosure
may be necessary or reasonably appropriate (a) in compliance with any
law, rule, regulation or order applicable to such holder, (b) in
response to any subpoena or other legal process or informal
investigative demand or (c) in connection with any litigation to which
such holder is a party.
Subject to the foregoing, each holder of a Note hereby agrees to use
its best efforts to hold in confidence and not to disclose any Confidential
Information; provided, that such holder will be free, after notice to the
Company, to correct any false or misleading information which may become public
concerning its relationship to the Company. For the purpose of this paragraph
11H, the term "Confidential Information" shall mean information about the
Company or any Subsidiary furnished by the Company or any Subsidiary to such
holder, but does not include any information (i) which as publicly known, or
otherwise known to such holder, at the time of disclosure, (ii) which
subsequently becomes publicly known through no act or omission by such holder,
or (iii) which otherwise becomes known to such holder other than through
disclosure by the Company or any Subsidiary.
11I. Notices. All written communications provided for hereunder
shall be sent by first class mail or nationwide overnight delivery service
(with charges prepaid) and
(i) if to you, addressed to you at the address specified for
such communications in the Purchaser Schedule attached hereto, or at
such other address as you shall have specified to the Company in
writing,
(ii) if to any other holder of any Note, addressed to such
other holder at such address as such other holder shall have specified
to the Company in writing or, if any such other holder shall not have
so specified an address to the Company, then addressed to such other
holder in care of the last holder of such Note which shall have so
specified an address to the Company, and
(iii) if to the Company, addressed to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Telephone: (▇▇▇) ▇▇▇-▇▇▇▇,
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
Senior Vice President - Finance and Administration, or at such other
address as the Company shall have specified to the holder of each Note
in writing.
11J. Payments Due on Non-Business Days. Anything in this Agreement or
the Notes to the contrary notwithstanding, any payment of principal of or
interest on any Note that is due on a date other than a Business Day shall be
made on the next succeeding Business Day. If the date for any payment is
extended to the next succeeding Business Day by reason of the preceding
sentence, the period of such extension shall not be included in the computation
of the interest payable on such Business Day.
11K. Satisfaction Requirement. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Agreement
required to be satisfactory to you or to the Required Holder(s), the
determination of such satisfaction shall be made by you or the Required
Holder(s), as the case may be, in the sole and exclusive judgment (exercised in
good faith) of the Person or Persons making such determination.
11L. Independence of Covenants. All covenants of the Company hereunder
shall be of independent effect so that if a particular action or condition is
not permitted by any one of such covenants, the fact that it would be permitted
by an exception to, or otherwise be within the other limitations of, another
covenant, shall not avoid the occurrence of an Event of Default or Default if
such action is taken or condition exists.
11M. 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. THE COMPANY HEREBY SUBMITS TO THE JURISDICTION OF THE
SUPREME COURT OF THE STATE OF NEW YORK LOCATED IN NEW YORK COUNTY, NEW YORK AND
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND
IRREVOCABLY AGREES THAT, SUBJECT TO THE SOLE AND ABSOLUTE ELECTION OF THE
REQUIRED HOLDER(S) AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, ALL ACTIONS OR
PROCEEDINGS RELATING TO THIS AGREEMENT OR THE NOTES SHALL BE LITIGATED IN SUCH
COURTS, AND THE COMPANY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED ON IMPROPER
VENUE OR FORUM NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY SUCH
COURTS.
11N. Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11O. Descriptive Headings. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
11P. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument.
If you agree to the foregoing, please sign the form of acceptance on
the enclosed counterpart of this letter and return the same to the Company,
whereupon this letter shall become a binding agreement between the Company and
you.
Very truly yours,
▇▇▇▇▇▇▇ FURNITURE COMPANY, INC.
By: s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------------
Title: Senior Vice President
Finance and administration
The foregoing Agreement is hereby accepted as of the date first above written.
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Title: Vice President