EXHIBIT 10.20
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CIRCOR INTERNATIONAL, INC.
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Note Purchase Agreement
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DATED AS OF OCTOBER 19, 1999
$75,000,000 8.23% SENIOR NOTES DUE OCTOBER 19, 2006
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TABLE OF CONTENTS
PAGE
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1. AUTHORIZATION OF NOTES; UNCONDITIONAL GUARANTEE..........................1
1.1. AUTHORIZATION OF NOTES..............................................1
1.2. UNCONDITIONAL GUARANTEE.............................................1
2. SALE AND PURCHASE OF NOTES...............................................1
3. CLOSING..................................................................1
4. CONDITIONS TO CLOSING....................................................1
4.1. REPRESENTATIONS AND WARRANTIES......................................1
4.2. PERFORMANCE; NO DEFAULT.............................................1
4.3. COMPLIANCE CERTIFICATES.............................................1
4.4. OPINIONS OF COUNSEL.................................................1
4.5. PURCHASE PERMITTED BY APPLICABLE LAW, ETC...........................1
4.6. SALE OF OTHER NOTES.................................................1
4.7. PAYMENT OF SPECIAL COUNSEL FEES.....................................1
4.8. PRIVATE PLACEMENT NUMBER............................................1
4.9. CHANGES IN CORPORATE STRUCTURE......................................1
4.10. INSURANCE..........................................................1
4.11. ENVIRONMENTAL INFORMATION..........................................1
4.12. SOLVENCY ANALYSIS..................................................1
4.13. MATERIAL AGREEMENTS, ETC...........................................1
4.14. CONSUMMATION OF TRANSACTION........................................1
4.15. CREDIT RATING......................................................1
4.16. PROCEEDINGS AND DOCUMENTS..........................................1
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................1
5.1. CORPORATE EXISTENCE.................................................1
5.2. ACTION..............................................................1
5.3. TRUE AND COMPLETE DISCLOSURE........................................1
5.4. SUBSIDIARIES, ETC...................................................1
5.5. FINANCIAL CONDITION.................................................1
5.6. NO BREACH...........................................................1
5.7. APPROVALS...........................................................1
5.8. LITIGATION..........................................................1
5.9. TAXES...............................................................1
5.10. TITLE TO ASSETS....................................................1
5.11. REAL PROPERTY......................................................1
5.12. COMPLIANCE WITH ERISA..............................................1
5.13. PRIVATE OFFERING BY THE COMPANY....................................1
5.14. USE OF PROCEEDS....................................................1
5.15. MATERIAL AGREEMENTS AND LIENS......................................1
5.16. FOREIGN ASSETS CONTROL REGULATIONS, ETC............................1
5.17. INVESTMENT COMPANY ACT.............................................1
5.18. PUBLIC UTILITY HOLDING COMPANY ACT.................................1
5.19. ENVIRONMENTAL MATTERS..............................................1
5.20. CAPITALIZATION.....................................................1
5.21. YEAR 2000..........................................................1
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6. REPRESENTATIONS OF THE PURCHASER........................................1
6.1. PURCHASE FOR INVESTMENT............................................1
6.2. SOURCE OF FUNDS....................................................1
7. INFORMATION AS TO COMPANY...............................................1
7.1. FINANCIAL AND BUSINESS INFORMATION.................................1
7.2. OFFICER'S CERTIFICATE..............................................1
7.3. INSPECTION.........................................................1
8. PAYMENT OF THE NOTES....................................................1
8.1. REQUIRED PREPAYMENTS; PAYMENT AT MATURITY..........................1
8.2. OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT........................1
8.3. CHANGE IN CONTROL..................................................1
8.4. ALLOCATION OF PARTIAL PREPAYMENTS..................................1
8.5. MATURITY; SURRENDER, ETC...........................................1
8.6. NO OTHER OPTIONAL PREPAYMENTS OR PURCHASE OF NOTES.................1
8.7. MAKE-WHOLE AMOUNT..................................................1
9. AFFIRMATIVE COVENANTS...................................................1
9.1. EXISTENCE, ETC.....................................................1
9.2. INSURANCE..........................................................1
10. NEGATIVE COVENANTS.....................................................1
10.1. TRANSACTIONS WITH AFFILIATES......................................1
10.2. MERGER, CONSOLIDATION, ETC........................................1
10.3. SALE OF ASSETS, ETC...............................................1
10.4. LIMITATIONS ON LIENS..............................................1
10.5. DEBT..............................................................1
10.6. PRIORITY DEBT.....................................................1
10.7. DEBT MAINTENANCE..................................................1
10.8. CONSOLIDATED MINIMUM NET WORTH....................................1
10.9. FIXED CHARGE COVERAGE RATIO.......................................1
10.10. LINES OF BUSINESS................................................1
10.11. CERTAIN OBLIGATIONS..............................................1
10.12. ADDITIONAL SUBSIDIARY GUARANTORS.................................1
10.13. MODIFICATIONS OF MATERIAL AGREEMENTS.............................1
11. EVENTS OF DEFAULT......................................................1
12. REMEDIES ON DEFAULT, ETC...............................................1
12.1. ACCELERATION......................................................1
12.2. OTHER REMEDIES....................................................1
12.3. RESCISSION........................................................1
12.4. NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC.................1
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES..........................1
13.1. REGISTRATION OF NOTES.............................................1
13.2. TRANSFER AND EXCHANGE OF NOTES....................................1
13.3. REPLACEMENT OF NOTES..............................................1
14. PAYMENTS ON NOTES......................................................1
14.1. PLACE OF PAYMENT..................................................1
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14.2. HOME OFFICE PAYMENT................................................1
15. EXPENSES, ETC...........................................................1
15.1. TRANSACTION EXPENSES...............................................1
15.2. SURVIVAL...........................................................1
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT............1
17. AMENDMENT AND WAIVER....................................................1
17.1. REQUIREMENTS.......................................................1
17.2. SOLICITATION OF HOLDERS OF NOTES...................................1
17.3. BINDING EFFECT, ETC................................................1
17.4. NOTES HELD BY COMPANY, ETC.........................................1
18. NOTICES.................................................................1
19. REPRODUCTION OF DOCUMENTS...............................................1
20. CONFIDENTIAL INFORMATION................................................1
21. SUBSTITUTION OF PURCHASER...............................................1
22. GUARANTEE...............................................................1
22.1. THE GUARANTEE......................................................1
22.2. OBLIGATIONS UNCONDITIONAL..........................................1
22.3. REINSTATEMENT......................................................1
22.4. SUBROGATION........................................................1
22.5. REMEDIES...........................................................1
22.6. INSTRUMENT FOR THE PAYMENT OF MONEY................................1
22.7. CONTINUING GUARANTEE...............................................1
22.8. RIGHTS OF CONTRIBUTION.............................................1
22.9. GENERAL LIMITATION ON GUARANTEED OBLIGATIONS.......................1
23. MISCELLANEOUS...........................................................1
23.1. SUCCESSORS AND ASSIGNS.............................................1
23.2. PAYMENTS DUE ON NON-BUSINESS DAYS; WHEN PAYMENTS DEEMED RECEIVED...1
23.3. SEVERABILITY.......................................................1
23.4. CONSTRUCTION.......................................................1
23.5. COUNTERPARTS.......................................................1
23.6. GOVERNING LAW......................................................1
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SCHEDULE A -- Information Relating to Purchasers
SCHEDULE B -- Defined Terms
SCHEDULE 3 -- CIRCOR International, Inc. Payment Instructions
SCHEDULE 4.9 -- Changes in Corporate Structure
SCHEDULE 5.3 -- True and Complete Disclosure
SCHEDULE 5.4 -- Subsidiaries; Ownership of Subsidiary Stock; Existing
Investments
SCHEDULE 5.5 -- Financial Statements and Material Contingent Liabilities
SCHEDULE 5.11 -- Real Property
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Material Agreements and Liens
SCHEDULE 5.19 -- Environmental Matters
SCHEDULE 5.20 -- Capitalization
SCHEDULE 10.1 -- Transactions with Affiliates
EXHIBIT 1 -- Form of 8.23% Senior Note due October 19, 2006
EXHIBIT 4.4(a) -- Form of Opinion of Special Counsel for the Company
EXHIBIT 4.4(b) -- Form of Opinion of Special Counsel for the Purchasers
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CIRCOR INTERNATIONAL, INC.
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
8.23% Senior Notes Due October 19, 2006
To Each of the Purchasers Listed in
the Attached Schedule A:
Ladies and Gentlemen:
CIRCOR INTERNATIONAL, INC., a Delaware corporation (together with its
successors and assigns, the "Company") and each of the Subsidiaries of the
Company identified under the caption "SUBSIDIARY GUARANTORS" on the signature
pages hereto (together with any other Subsidiary of the Company that guarantees
the Guaranteed Obligations in accordance with Section 22, the "Subsidiary
Guarantors" and, together with the Company, the "Obligors"), agree with you as
follows:
1. AUTHORIZATION OF NOTES; UNCONDITIONAL GUARANTEE
1.1. Authorization of Notes.
The Company will authorize the issue and sale of $75,000,000 aggregate
principal amount of its 8.23% Senior Notes due October 19, 2006 (the "Notes",
such term to include any such notes issued in substitution therefor pursuant to
Section 13 of this Agreement or the Other Agreements (as hereinafter defined)).
The Notes shall be substantially in the form set out in Exhibit 1, with such
changes therefrom, if any, as may be approved by you and the Company. Certain
capitalized terms used in this Agreement are defined in Schedule B; references
to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule
or an Exhibit attached to this Agreement.
1.2. Unconditional Guarantee.
To induce you and each of the other purchasers named in Schedule A (the
"Other Purchasers") to purchase the Notes from the Company in accordance with
the terms hereof, the obligations of the Company hereunder and under the Notes
are fully and unconditionally guaranteed by the Subsidiary Guarantors, as
provided in Section 22.
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2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closing
provided for in Section 3, Notes in the principal amount specified below your
name in Schedule A at the purchase price of 100% of the principal amount
thereof. Contemporaneously with entering into this Agreement, the Company is
entering into separate Note Purchase Agreements (the "Other Agreements")
identical with this Agreement with each of the Other Purchasers, providing for
the sale at such Closing to each of the Other Purchasers of Notes in the
principal amount specified below its name in Schedule A. Your obligation
hereunder and the obligations of the Other Purchasers under the Other Agreements
are several and not joint obligations and you shall have no obligation under any
Other Agreement and no liability to any Person for the performance or
non-performance by any Other Purchaser thereunder.
3. CLOSING
The sale and purchase of the Notes to be purchased by you and the Other
Purchasers shall occur at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m., local time, at a closing (the
"Closing") on October 19, 1999 or on such other Business Day as may be agreed
upon by the Company and you and the Other Purchasers. At the Closing the Company
will deliver to you the Notes to be purchased by you in the form of a single
Note (or such greater number of Notes in denominations of at least $100,000 as
you may request), dated the date of the Closing and registered in your name (or
in the name of your nominee), as indicated in Schedule A, against payment by
federal funds wire transfer in immediately available funds of the amount of the
purchase price therefor as directed by the Company in Schedule 3. If at the
Closing the Company shall fail to tender such Notes to you as provided above in
this Section 3, or any of the conditions specified in Section 4 shall not have
been fulfilled to your satisfaction, you shall, at your election, be relieved of
all further obligations under this Agreement, without thereby waiving any rights
you may have by reason of such failure or such nonfulfillment.
4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold to you at the
Closing is subject to the fulfillment to your satisfaction, prior to or at the
Closing, of the following conditions:
4.1. Representations and Warranties.
The representations and warranties of the Company in this Agreement shall
be correct when made and at the time of the Closing.
4.2. Performance; No Default.
The Company shall have performed and complied with all agreements and
conditions contained in this Agreement required to be performed or complied with
by
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it prior to or at the Closing and after giving effect to the issue and sale of
the Notes (and the application of the proceeds thereof as contemplated by
Schedule 5.14) no Default or Event of Default shall have occurred and be
continuing. Neither the Company nor any Subsidiary shall have entered into any
transaction since the date of the Memorandum that would have been prohibited by
any of Sections 10.1, 10.3 or 10.4 had such Sections applied since such date.
4.3. Compliance Certificates.
(a) Officer's Certificate. The Company shall have delivered to you an
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Officer's Certificate, dated the date of the Closing, (i) certifying that
the conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled,
and (ii) with a list of Immaterial Subsidiaries as of the date of the
Closing (and including calculations demonstrating that such Subsidiaries
comply with the definition of "Immaterial Subsidiary" in Schedule B).
(b) Secretary's Certificate. Each Obligor shall have delivered to you
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a certificate of its Secretary or one of its Assistant Secretaries, dated
the date of the Closing, certifying as to the resolutions attached thereto
and other corporate proceedings relating to the authorization, execution
and delivery of this Agreement and the Other Agreements, and, in the case
of the Company, the Notes.
4.4. Opinions of Counsel.
You shall have received opinions in form and substance satisfactory to you,
dated the date of the Closing, from
(a) ▇▇▇▇▇▇▇, Procter & ▇▇▇▇ LLP, counsel to the Obligors in the form
set out in Exhibit 4.4(a) (and each Obligor hereby instructs such counsel
to deliver such opinion to you) and
(b) ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, your special counsel in connection with such
transactions, substantially in the form set out in Exhibit 4.4(b) and
covering such other matters incident to such transactions as you may
reasonably request.
4.5. Purchase Permitted By Applicable Law, etc.
On the date of the Closing your purchase of Notes shall (a) be permitted by
the laws and regulations of each jurisdiction to which you are subject, without
recourse to provisions (such as section 1405(a)(8) of the New York Insurance
Law) permitting limited investments by insurance companies without restriction
as to the character of the particular investment, (b) not violate any applicable
law or regulation (including, without limitation, Regulation T, U or X of the
Board of Governors of the Federal Reserve System) and (c) not subject you to any
tax, penalty or liability under or pursuant to any applicable law or regulation.
If requested by you, you shall have received an Officer's Certificate certifying
as to such matters of
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fact as you may reasonably specify to enable you to determine whether such
purchase is so permitted.
4.6. Sale of Other Notes.
Contemporaneously with the Closing the Company shall sell to the Other
Purchasers and the Other Purchasers shall purchase the Notes to be purchased by
them at the Closing as specified in Schedule A.
4.7. Payment of Special Counsel Fees.
Without limiting the provisions of Section 15.1, the Company shall have
paid on or before the Closing the fees, charges and disbursements of your
special counsel referred to in Section 4.4(b) to the extent reflected in a
statement of such counsel rendered to the Company at least one Business Day
prior to the date of the Closing.
4.8. Private Placement Number.
A Private Placement Number issued by Standard & Poor's CUSIP Service Bureau
(in cooperation with the Securities Valuation Office of the National Association
of Insurance Commissioners) shall have been obtained for the Notes.
4.9. Changes in Corporate Structure.
Except as specified in Schedule 4.9, the Company shall not have changed its
jurisdiction of incorporation or been a party to any merger or consolidation
and, except for the Transaction, shall not have succeeded to all or any
substantial part of the liabilities of any other entity, at any time following
the date of the most recent financial statements referred to in Schedule 5.5.
4.10. Insurance.
The Company shall have delivered to you certificates of insurance
evidencing the existence of all insurance required to be maintained by the
Company pursuant to Section 9.2. In addition, the Company shall have delivered a
certificate of a Senior Financial Officer of the Company setting forth the
insurance obtained by it in accordance with the requirements of Section 9.2 and
stating that such insurance is in full force and effect and that all premiums
then due and payable thereon have been paid.
4.11. Environmental Information.
The Company shall have delivered to you copies of all of the written
information referred to in Section 5.19, together with a report by Pilko &
Associates with respect to such information.
4.12. Solvency Analysis.
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The Company shall have delivered to you a certificate from a Senior
Financial Officer of the Company, which presents an analysis to the effect that,
as of the date of the Closing and after giving effect to the Transaction, the
issuance and sale of the Notes and to the other transactions contemplated
hereby, (a) the aggregate value of all properties of the Company and its
Subsidiaries at their present fair saleable value (i.e., the amount that may be
realized within a reasonable time, considered to be six months to one year,
either through collection or sale at the regular market value, conceiving the
latter as the amount that could be obtained for the property in question within
such period by a capable and diligent businessperson from an interested buyer
who is willing to purchase under ordinary selling conditions), exceed the amount
of all the debts and liabilities (including contingent, subordinated, unmatured
and unliquidated liabilities and their probable amounts) of the Company and its
Subsidiaries, (b) the Company and its Subsidiaries will not, on a consolidated
basis, have an unreasonably small capital with which to conduct their business
operations as heretofore conducted, and (c) the Company and its Subsidiaries
will have, on a consolidated basis, sufficient cash flow to enable them to pay
their debts as they mature. You shall have also received a certificate from a
Senior Financial Officer of the Company certifying the conclusions specified in
clauses (a), (b) and (c) above and that the assumptions contained in such
analyses were at the time made, and on the date of the Closing are, fair and
reasonable and accurately computed.
4.13. Material Agreements, etc.
The Company shall have delivered to you, and you shall be satisfied with,
copies of any and all Material Agreements.
4.14. Consummation of Transaction.
The Company shall have delivered to you evidence and documentation, to your
reasonable satisfaction, in connection with the terms and conditions of the
Transaction (any such conditions requiring the satisfaction of any Person other
than you and the Other Purchasers to be deemed to require your satisfaction).
You shall have received an opinion of counsel to the Company regarding
substantive consolidation in form and substance satisfactory to you.
4.15. Credit Rating.
You shall have received evidence and documentation, to your satisfaction,
that confirms (either on a preliminary or a final basis) the Company's credit
rating on the date of the Closing as being at least "BBB-" by Duff & ▇▇▇▇▇▇
Credit Rating Co.
4.16. Proceedings and Documents.
All corporate and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident to
such transactions shall be satisfactory to you and your special counsel, and you
and
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your special counsel shall have received all such counterpart originals or
certified or other copies of such documents as you or they may reasonably
request.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you, as of the date of the Closing
that:
5.1. Corporate Existence.
Each of the Obligors and the Company's Material Subsidiaries: (a) is a
corporation, partnership or other entity duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization; (b) has all
requisite corporate or other power, and has all material governmental licenses,
authorizations, consents and approvals necessary to own its assets and carry on
its business as now being or as proposed to be conducted; and (c) is qualified
to do business and is in good standing in all jurisdictions in which the nature
of the business conducted by it makes such qualification necessary and where
failure so to qualify could reasonably be expected to (either individually or in
the aggregate) have a Material Adverse Effect.
5.2. Action.
Each Obligor has all necessary corporate power, authority and legal right
to execute, deliver and perform its obligations under this Agreement and the
Other Agreements and each agreement in respect of the Transaction to which it is
a party, and, in the case of the Company, the Notes; the execution, delivery and
performance by each Obligor of this Agreement and the Other Agreements and each
agreement in respect of the Transaction to which it is a party, and, in the case
of the Company, the Notes, have been duly authorized by all necessary corporate
action on its part (including, without limitation, any required shareholder
approvals); and this Agreement and the Other Agreements and each agreement in
respect of the Transaction to which any Obligor is a party have been duly and
validly executed and delivered by each Obligor and constitutes, and each of the
Notes, when executed and delivered by the Company, will constitute, its legal,
valid and binding obligation, enforceable against each Obligor in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws of general applicability
affecting the enforcement of creditors' rights.
5.3. True and Complete Disclosure.
This Agreement (with exhibits and schedules), the CIRCOR International,
Inc. Registration Statement on Form 10 (File No. 000-26961), in the form in
which it was declared effective by the Securities and Exchange Commission on
October 18, 1999 (including all exhibits thereto), and the Private Placement
Memorandum, dated August 1999 (the "Memorandum"), delivered to you and each
Other Purchaser through the Company's agent, ING Barings LLC, relating to the
transactions contemplated hereby, together with the information, reports,
financial
6
statements, exhibits and schedules furnished in writing by or on behalf of the
Obligors to you in connection with the negotiation, preparation or delivery of
this Agreement, the Other Agreements and the Notes, or included herein or
therein or delivered pursuant hereto or thereto (collectively, the "Disclosure
Documents"), when taken as a whole do not contain any untrue statement of
material fact or omit to state any material fact necessary to make the
statements herein or therein, in light of the circumstances under which they
were made, not misleading, except as disclosed in Schedule 5.3. All written
information furnished after the date hereof by the Obligors to you in connection
with this Agreement, the Other Agreements and the Notes and the transactions
contemplated hereby and thereby will be true, complete and accurate in every
material respect, on the date as of which such information is stated or
certified; provided, however, that the Company makes no representation as to any
financial projections other than that such projections have been made in good
faith and on reasonable assumptions, have been accurately calculated and have
not been delivered with the intent to misinform or mislead and are estimates and
not a guaranty of actual results. There is no fact known to the Company that
could reasonably be expected to have a Material Adverse Effect that has not been
disclosed herein, or in the Disclosure Documents. Notwithstanding the foregoing,
the Company has read the letter of ▇▇▇▇▇▇▇, Procter & ▇▇▇▇ LLP, dated October
19, 1999, a copy of which is attached as Exhibit 5.3, and to the best of the
Company's knowledge, information and belief, as of the date hereof, all facts,
statements, assumptions and conclusions contained in Section I of such opinion
letter are true and correct and have been true and correct since the formation
of ▇▇▇▇▇ Industries, Inc., in all material respects.
5.4. Subsidiaries, Etc.
(a) Set forth in Schedule 5.4 is a complete and correct list, as of
the date hereof, of all of the Subsidiaries, together with, for each such
Subsidiary, (i) the jurisdiction of organization of such Subsidiary, (ii)
each Person holding ownership interests in such Subsidiary and (iii) the
nature of the ownership interests held by each such Person and the
percentage of ownership of such Subsidiary represented by such ownership
interests. Except as disclosed in Schedule 5.4, (x) each of the Obligors
owns, free and clear of Liens, and has the unencumbered right to vote, all
outstanding ownership interests in each Person shown to be held by it in
Schedule 5.4, (y) all of the issued and outstanding Capital Stock of each
such Person organized as a corporation is validly issued, fully paid and
nonassessable and (z) there are no outstanding Equity Rights with respect
to such Person.
(b) Set forth in Schedule 5.4 is a complete and correct list, as of
the date of this Agreement, of all Investments held by any of the Obligors
in any Person and, for each such Investment, (x) the identity of the Person
or Persons holding such Investment and (y) the nature of such Investment.
Except as disclosed in Schedule 5.4, each of the Obligors owns, free and
clear of all Liens, all such Investments.
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(c) Except as provided in Schedule 5.4, none of the Subsidiaries is,
on the date of this Agreement, subject to any indenture, agreement,
instrument or other arrangement of the type described in the last sentence
of Section 10.11.
5.5. Financial Condition.
The Company has heretofore furnished to you and each Other Purchaser
copies of the financial statements of the Company and its Subsidiaries listed in
Schedule 5.5. All such financial statements are complete and correct and fairly
present the combined financial condition of the Company and its Subsidiaries as
at the respective dates specified in such Schedule and the combined results of
their operations for the respective periods so specified, all in accordance with
generally accepted accounting principles and practices applied on a consistent
basis. Except as set forth in the Memorandum or as expressly described in
Schedule 5.3, or in one of the documents, certificates or other writings
identified therein, or in the financial statements listed in Schedule 5.5,
neither the Company nor any of its respective Subsidiaries has on the date
hereof any material contingent liabilities, liabilities for taxes, unusual
forward or long-term commitments or unrealized or anticipated losses from any
unfavorable commitments, except as referred to or reflected or provided for in
said financial statements as at said dates. Since June 30, 1999, taking into
account that the Transaction had occurred on October 18, 1999, there has been no
material adverse change in the combined financial condition, operations or
business taken as a whole of the Company and its Subsidiaries from that set
forth in the Memorandum or the financial statements listed in Schedule 5.5 as at
the respective dates specified in Schedule 5.5.
5.6. No Breach.
(a) None of the execution and delivery of this Agreement, the Other
Agreements and the Notes, the consummation of the transactions herein and
therein contemplated or compliance with the terms and provisions hereof and
thereof will conflict with or result in a breach of, or require any consent
under, the charter or by-laws of any Obligor, or any applicable law or
regulation, or any order, writ, injunction or decree of any court or other
Governmental Authority or agency, or any material agreement or instrument
to which the Company or any of its Subsidiaries is a party or by which any
of them or any of their property is bound or to which any of them is
subject, or constitute a material default under any such material agreement
or instrument, or result in the creation or imposition of any Lien upon any
property of the Company or any of its Subsidiaries pursuant to the terms of
any such material agreement or instrument.
(b) None of the execution and delivery of any of the agreements in
respect of the Transaction, the consummation of the transactions therein
contemplated or compliance with the terms and provisions thereof will (i)
conflict with or result in a breach of, or require any consent under, the
charter or by-laws of any Obligor, or (ii) except where the failure to
obtain the
8
same could not reasonably be expected to have a Material Adverse Effect,
conflict with or result in a breach of, or require any consent under, any
applicable law or regulation, or any order, writ, injunction or decree of
any court or other Governmental Authority or agency, or any material
agreement or instrument to which the Company or any of its Subsidiaries
is a party or by which any of them or any of their property is bound or
to which any of them is subject, or (iii) except where the same could not
reasonably be expected to have a Material Adverse Effect, constitute a
material default under any such agreement or instrument, or result in the
creation or imposition of any Lien upon any property of the Company or
any of its Subsidiaries pursuant to the terms of any such agreement or
instrument.
5.7. Approvals.
No authorizations, approvals or consents of, and no filings or
registrations with, any Governmental Authority, which have not been obtained or
made, are necessary for the execution, delivery or performance by any Obligor of
this Agreement and each agreement in respect of the Transaction to which an
Obligor is a party or by the Company of the Notes or for the legality, validity
or enforceability hereof or thereof.
5.8. Litigation.
There are no legal or arbitral proceedings, or any proceedings by or
before any Governmental Authority, now pending or (to the knowledge of the
Company) threatened against (a) the Company or any of its Subsidiaries or (b)
▇▇▇▇▇ Industries, Inc, that, if adversely determined could reasonably be
expected to (either individually or in the aggregate) have a Material Adverse
Effect.
5.9. Taxes.
Immediately following completion of the Transaction, the Company and its
Subsidiaries (excluding Foreign Subsidiaries) are members of an affiliated group
of corporations filing consolidated returns for federal income tax purposes, of
which the Company is the "common parent" (within the meaning of Section 1504 of
the Code) of such group. There is no tax sharing, tax allocation or similar
agreement currently in effect providing for the manner in which tax payments
owing by the members of such affiliated group (whether in respect of federal or
state income or other taxes) are allocated among the members of the group. The
Company and its Subsidiaries have filed (either directly or indirectly through
the Company or ▇▇▇▇▇ Industries, Inc., which has filed returns and paid all
taxes due on the Company's behalf prior to the completion of the Transaction)
all federal income tax returns and all other material tax returns that are
required to be filed by them and have paid (either directly or indirectly
through the Company or ▇▇▇▇▇ Industries, Inc., which has filed returns and paid
all taxes due on the Company's behalf prior to the completion of the
Transaction) all taxes due pursuant to such returns or pursuant to any
assessment received by the Company or by the Company or any of its Subsidiaries.
The charges, accruals and reserves on the books of the Company and its
Subsidiaries
9
in respect of taxes and other governmental charges are, in the opinion of the
Company adequate. The Company has not given or been requested to give a waiver
of the statute of limitations relating to the payment of federal, state, local
and foreign taxes or other impositions.
5.10. Title to Assets.
Immediately following completion of the Transaction, the Company will
own and have on the date of the Closing good and marketable title (subject only
to Liens permitted by Section 10.4 hereof) to the properties shown to be owned
in the most recent financial statements referred to in Section 5.5 (other than
properties disposed of in the ordinary course of business or otherwise permitted
to be disposed of pursuant to Section 10.3). Immediately following completion of
the Transaction, the Company will own and have on the date of the Closing good
and marketable title to, and enjoy peaceful and undisturbed possession of, all
properties (subject only to Liens permitted by Section 10.4) that are materially
necessary for the operation and conduct of its businesses.
5.11. Real Property.
Set forth in Schedule 5.11 is a list, as of the date of the Closing, of
all of the real property interests held by the Company and its Subsidiaries
(other than any Immaterial Subsidiary), indicating in each case whether the
respective property is owned or leased, the identity of the owner or lessee and
the location of the respective property.
5.12. Compliance with ERISA.
(a) The Company and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws except for
such instances of noncompliance as have not resulted in and could not
reasonably be expected to result in a Material Adverse Effect. Neither
the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the
Code relating to employee benefit plans (as defined in section 3(3) of
ERISA), and no event, transaction or condition has occurred or exists
that could reasonably be expected to result in the incurrence of any such
liability by the Company or any ERISA Affiliate, or in the imposition of
any Lien on any of the rights, properties or assets of the Company or any
ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to
such penalty or excise tax provisions or to section 401(a)(29) or 412 of
the Code, other than such liabilities or Liens as would not be
individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under
each of the Plans (other than Multiemployer Plans), determined as of the
end of such Plan's most recently ended plan year on the basis of the
actuarial assumptions specified for funding purposes in such Plan's most
recent actuarial valuation report, did not exceed the aggregate current
value of the
10
assets of such Plan allocable to such benefit liabilities by more than
$500,000. The term "benefit liabilities" has the meaning specified in
section 4001(a)(16) of ERISA and the terms "current value" and "present
value" have the meanings specified in sections 3(26) and 3(27) of ERISA,
respectively.
(c) The Company and the ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that individually or in the aggregate are Material.
(d) The expected postretirement benefit obligation (determined as of
the last day of the Company's most recently ended fiscal year in
accordance with Financial Accounting Standards Board Statement No. 106,
without regard to liabilities attributable to continuation coverage
mandated by section 4980B of the Code) of the Company and its
Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the issuance
and sale of the Notes hereunder will not involve any transaction that is
subject to the prohibitions of section 406 of ERISA or in connection with
which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the
Code. The representation by the Company in the first sentence of this
Section 5.12(e) is made in reliance upon and subject to the accuracy of
your representation in Section 6.2 as to the Sources used to pay the
purchase price of the Notes to be purchased by you.
(f) Schedule 5.12 sets forth all ERISA Affiliates and all "employee
benefit plans" maintained by the Company (or any "affiliate" thereof) or in
respect of which the Notes could constitute an "employer security" ("employee
benefit plan" has the meaning specified in section 3(3) of ERISA, "affiliate"
has the meaning specified in section 407(d)(7) of ERISA and section V of the
Department of Labor Prohibited Transaction Exemption 95-60 (60 FR 35925, July
12, 1995) and "employer security" has the meaning specified in section 407(d)(1)
of ERISA).
5.13. Private Offering by the Company.
Neither the Company, any of the Subsidiary Guarantors nor anyone acting
on their behalf has offered the Notes or any similar securities for sale to, or
solicited any offer to buy any of the same from, or otherwise approached or
negotiated in respect thereof with, any Person other than you, the Other
Purchasers and not more than 44 other Institutional Investors, each of which has
been offered the Notes at a private sale for investment. Neither the Company,
any of the Subsidiary Guarantors nor anyone acting on their behalf has taken, or
will take, any action that would subject the issuance or sale of the Notes to
the registration requirements of section 5 of the Securities Act.
5.14. Use of Proceeds.
11
The Company will apply the proceeds of the sale of the Notes as set forth
in Schedule 5.14. Neither of the Company nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose, whether immediate, incidental or ultimate, of buying or
carrying margin stock, and no part of the proceeds of the sale of the Notes
hereunder will be used to buy or carry any margin stock. Margin stock does not
constitute more than 1% 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 1% of the value of such assets. As used
in this Section, the terms "margin stock" and "purpose of buying or carrying"
shall have the meanings assigned to them in Regulation U of the Board of
Governors of the Federal Reserve System (12 CFR 221).
5.15. Material Agreements and Liens.
(a) Schedule 5.15 sets forth a complete and correct list, as of the
date of the Closing, of each credit agreement, loan agreement, indenture,
purchase agreement, guarantee, letter of credit or other arrangement
providing for or otherwise relating to any Debt or any extension of
credit (or commitment for any extension of credit) to, or guarantee by,
the Company or any of its Subsidiaries (other than any Immaterial
Subsidiary), in each case in respect of Debt not less than $1,000,000 and
the aggregate principal or face amount outstanding or that may become
outstanding under each such arrangement is correctly described in
Schedule 5.15. Schedule 5.15 also includes a list of the principal
agreements evidencing or documenting the Transaction.
(b) Schedule 5.15 sets forth a complete and correct list, as of the date
of the Closing, of each Lien securing Debt of any Person and covering any
property of the Company or any of its Subsidiaries (other than any Immaterial
Subsidiary), and the aggregate Debt secured (or that may be secured) by each
such Lien and the property covered by each such Lien is correctly described in
Schedule 5.15.
5.16. Foreign Assets Control Regulations, etc.
Neither the sale of the Notes by the Company hereunder nor the Company's
use of the proceeds thereof will violate the Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
5.17. Investment Company Act.
Neither the Company nor any of its Subsidiaries is an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
5.18. Public Utility Holding Company Act.
12
Neither the Company nor any of its Subsidiaries is a "holding company",
or an "affiliate" of a "holding company" or a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
5.19. Environmental Matters.
Each of the Company and its Subsidiaries has obtained all environmental,
health and safety permits, licenses and other authorizations required under all
Environmental Laws to carry on its business as conducted, giving effect to the
consummation of the Transaction, except to the extent failure to have any such
permit, license or authorization would not (either individually or in the
aggregate) have a Material Adverse Effect. Each of such permits, licenses and
authorizations is in full force and effect and each of the Company and its
Subsidiaries is in compliance with the terms and conditions thereof, and is also
in compliance with applicable Environmental Laws and any plan, order, decree,
judgment, injunction, notice or demand letter issued, entered, promulgated or
approved thereunder, except to the extent that such failure to have a permit,
license or authorization in full force and effect or such failure to comply with
applicable Environmental Laws would not (either individually or in the
aggregate) have a Material Adverse Effect.
In addition, except as set forth in Schedule 5.19 (and except, in the
case of clauses (a) through (f) below, with respect to any Immaterial
Subsidiary):
(a) No notice, notification, demand, request for information,
citation, summons or order has been issued, no complaint has been filed,
no penalty has been assessed and, to the knowledge of the Company or any
of its Subsidiaries, no investigation or review is pending or threatened
by any governmental or other entity with respect to any alleged failure
by the Company or any of its Subsidiaries to have any environmental,
health or safety permit, license or other authorization required under
any Environmental Law in connection with the conduct of the business of
the Company or any of its Subsidiaries or with respect to any generation,
treatment, storage, recycling, transportation, discharge or disposal, or
any Release of any Hazardous Materials generated by the Company or any of
its Subsidiaries, in each case, to the extent that the same could
reasonably be expected to have a Material Adverse Effect.
(b) Neither the Company nor any of its Subsidiaries owns, operates or
leases a treatment, storage or disposal facility requiring a permit under
the Resource Conservation and Recovery Act of 1976, as amended, or under
any comparable state or local statute; and (except to the extent in
material compliance with applicable Environmental Laws)
(i) no polychlorinated biphenyls (PCB's) are present at any site
or facility now or previously owned, operated or leased by the
Company or any of its Subsidiaries;
13
(ii) no asbestos or asbestos-containing materials are present
at any site or facility now or previously owned, operated or leased by
the Company or any of its Subsidiaries;
(iii) there are no underground storage tanks or surface
impoundments for Hazardous Materials, active or abandoned, at any site
or facility now or previously owned, operated or leased by the Company
or any of its Subsidiaries; and
(iv) no Hazardous Materials have been Released at, on or under
any site or facility now or previously owned, operated or leased by
the Company or any of its Subsidiaries in a reportable quantity
established by statute, ordinance, rule, regulation or order.
(c) Neither the Company nor any of its Subsidiaries has transported
or arranged for the transportation of any Hazardous Material to any
location that is listed on the National Priorities List ("NPL") under the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), listed for possible inclusion on the NPL by
the Environmental Protection Agency in the Comprehensive Environmental
Response and Liability Information System, as provided for by 40 C.F.R. ss.
300.5 ("CERCLIS"), or on any similar state or local list or that is the
subject of Federal, state or local enforcement actions.
(d) No written notification of a Release of a Hazardous Material has
been filed by or on behalf of the Company or any of its Subsidiaries and no
site or facility owned, operated or leased by the Company or any of its
Subsidiaries is listed or proposed for listing on the NPL, CERCLIS or any
similar state list of sites requiring investigation or clean-up.
(e) No Liens have arisen under or pursuant to any Environmental Laws
on any site or facility owned, operated or leased by the Company or any of
its Subsidiaries, and, to the knowledge of the Company or any of its
Subsidiaries, no government action has been taken or is in process that
could subject any such site or facility to such Liens and neither the
Company nor any of its Subsidiaries has been required to place any notice
or restriction relating to the presence of Hazardous Materials at any site
or facility owned by it in any deed to the real property on which such site
or facility is located.
(f) All environmental site assessments and investigations, conducted
by or that are in the possession of the Company or any of its Subsidiaries
concerning matters relevant to any site or facility owned, operated or
leased by the Company or any of its Subsidiaries have been made available
to you and the Other Purchasers.
5.20. Capitalization.
14
The authorized Capital Stock of the Company immediately following
completion of the Transaction will consist of an aggregate of 30,000,000 shares
consisting of (i) 29,000,000 shares of common stock, par value $0.10 per share,
of which 13,228,877 shares are duly and validly issued and outstanding, each of
which shares is fully paid and nonassessable and (ii) 1,000,000 shares of
preferred stock, of which no shares are duly and validly issued and outstanding.
As of the date of the Closing, (x) except as set forth in Schedule 5.20, there
are no outstanding Equity Rights with respect to the Company and (y) except as
set forth in Schedule 5.20, there are no outstanding obligations of the Company
or any of its Subsidiaries to repurchase, redeem, or otherwise acquire any
shares of Capital Stock of the Company nor are there any outstanding obligations
of the Company or any of its Subsidiaries to make payments to any Person, such
as "phantom stock" payments, where the amount thereof is calculated with
reference to the fair market value or equity value of the Company or any of its
Subsidiaries.
5.21. Year 2000.
Each Obligor has reviewed the areas within its business and operations
which could be adversely affected by, and has developed or is developing a
program to address on a timely basis, the risk that computer applications used
by such Obligor may be unable to recognize and properly perform date-sensitive
functions involving certain dates prior to and any date after December 31, 1999
(the "Year 2000 Problem"). Based on such review and program and to the knowledge
of each Obligor's respective management, the Year 2000 Problem could not
reasonably be expected to have a Material Adverse Effect.
6. REPRESENTATIONS OF THE PURCHASER.
6.1. Purchase for Investment.
You represent that you are purchasing the Notes for your own account or
for one or more separate accounts maintained by you or for the account of one or
more pension or trust funds and not with a view to the distribution thereof,
provided that the disposition of your or their property shall at all times be
within your or their control. You understand that the Notes have not been
registered under the Securities Act and may be resold only if registered
pursuant to the provisions of the Securities Act or if an exemption from
registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to register the Notes.
6.2. Source of Funds.
You represent that at least one of the following statements is an
accurate representation as to each source of funds (a "Source") to be used by
you to pay the purchase price of the Notes to be purchased by you hereunder:
(a) the Source is an "insurance company general account" as defined
in United States Department of Labor Prohibited Transaction
15
Exemption ("PTE") 95-60 (60 FR 35925, July 12, 1995) and in respect thereof
you represent that there is no "employee benefit plan" (as defined in
section 3(3) of ERISA and section 4975(e)(1) of the Code, treating as a
single plan all plans maintained by the same employer or employee
organization or affiliate thereof) with respect to which the amount of the
general account reserves and liabilities of all contracts held by or on
behalf of such plan exceeds 10% of the total reserves and liabilities of
such general account (exclusive of separate account liabilities) plus
surplus, as set forth in the National Association of Insurance
Commissioners' Annual Statement filed with your state of domicile and that
such acquisition is eligible for and satisfies the other requirements of
such exemption; or
(b) if you are an insurance company, the Source does not include
assets allocated to any separate account maintained by you in which any
employee benefit plan (or its related trust) has any interest, other than a
separate account that is maintained solely in connection with your fixed
contractual obligations under which the amounts payable, or credited, to
such plan and to any participant or beneficiary of such plan (including any
annuitant) are not affected in any manner by the investment performance of
the separate account; or
(c) the Source is either (i) an insurance company pooled separate
account, within the meaning of PTE 90-1 (55 FR 2891, January 29, 1990), or
(ii) a bank collective investment fund, within the meaning of the PTE 91-38
(56 FR 31966, July 12, 1991) and, except as you have disclosed to the
Company in writing pursuant to this paragraph (c), no employee benefit plan
or group of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled
separate account or collective investment fund; or
(d) the Source constitutes assets of an "investment fund" (within the
meaning of part V of PTE 84-14 (49 FR 9494, March 13, 1984) (the "QPAM
Exemption")) managed by a "qualified professional asset manager" or "QPAM"
(within the meaning of part V of the QPAM Exemption), no employee benefit
plan's assets that are included in such investment fund, when combined with
the assets of all other employee benefit plans established or maintained by
the same employer or by an affiliate (within the meaning of section V(c)(1)
of the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM, the conditions of part I(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a person controlling or
controlled by the QPAM (applying the definition of "control" in section
V(e) of the QPAM Exemption) owns a 5% or more interest in the Company and
(i) the identity of such QPAM and (ii) the names of all employee benefit
plans whose assets are included in such investment fund have been disclosed
to the Company in writing pursuant to this paragraph (d); or
16
(e) the Source is a governmental plan; or
(f) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans, each
of which has been identified to the Company in writing pursuant to this
paragraph (f); or
(g) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms "employee benefit plan",
"governmental plan" and "separate account" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
7. INFORMATION AS TO COMPANY.
7.1. Financial and Business Information.
The Company shall deliver to each holder of Notes that is an Institutional
Investor:
(a) Quarterly Statements -- within 45 days after the end of each
--------------------
quarterly fiscal period in each fiscal year of the Company (other than the
last quarterly fiscal period of each such fiscal year), duplicate copies
of,
(i) a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of operations, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such quarter and (in the case of the second and
third quarters) for the portion of the fiscal year ending with such
quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly financial
statements generally, and certified by a Senior Financial Officer as fairly
presenting, in all material respects, the consolidated financial position
of the companies being reported on and their consolidated results of
operations and cash flows, subject to changes resulting from year-end
adjustments, provided that delivery within the time period specified above
of copies of the Company's Quarterly Report on Form 10-Q prepared in
compliance with the requirements therefor and filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements of this
Section 7.1(a);
(b) Annual Statements - within 120 days after the end of each fiscal
-----------------
year of the Company, duplicate copies of,
17
(i) consolidated and consolidating balance sheets of the Company
and its Subsidiaries, as at the end of such year, and
(ii) consolidated and consolidating statements of operations,
changes in shareholders' equity and cash flows of the Company and its
Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP,
and accompanied by
(A) an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall
state that such financial statements present fairly, in all
material respects, the consolidated and consolidating financial
positions of the companies being reported upon and their
consolidated and consolidating results of operations and cash
flows and have been prepared in conformity with GAAP, and that
the examination of such accountants in connection with such
financial statements has been made in accordance with generally
accepted auditing standards, and that such audit provides a
reasonable basis for such opinion in the circumstances, and
(B) a certificate of such accountants stating that they have
reviewed this Agreement and stating further whether, in making
their audit, they have become aware of any condition or event
that then constitutes a Default or an Event of Default, and, if
they are aware that any such condition or event then exists,
specifying the nature and period of the existence thereof (it
being understood that such accountants shall not be liable,
directly or indirectly, for any failure to obtain knowledge of
any Default or Event of Default unless such accountants should
have obtained knowledge thereof in making an audit in accordance
with generally accepted auditing standards or did not make such
an audit),
provided that the delivery within the time period specified above of the
--------
Company's Annual Report on Form 10-K for such fiscal year prepared in
accordance with the requirements therefor and filed with the Securities and
Exchange Commission, together with the accountant's certificate described
in clause (B) above, shall be deemed to satisfy the requirements of this
Section 7.1(b);
(c) SEC and Other Reports -- promptly upon their becoming available,
---------------------
one copy of (i) each financial statement, report (including, without
limitation, the Company's annual report to shareholders, if any, prepared
pursuant to Rule 14a-3 under the Exchange Act), notice or proxy statement
18
sent by the Company or any Subsidiary to public securities holders
generally, and (ii) each regular or periodic report, each registration
statement (without exhibits except as expressly requested by such holder),
and each prospectus and all amendments thereto filed by the Company or any
Subsidiary with the Securities and Exchange Commission and of all press
releases and other statements made available generally by the Company or
any Subsidiary to the public concerning developments that are Material;
(d) Notice of Default or Event of Default -- promptly, and in any
-------------------------------------
event within five Business Days after a Responsible Officer becoming aware
of the existence of any Default or Event of Default or that any Person has
given any notice or taken any action with respect to a claimed default
hereunder or that any Person has given any notice or taken any action with
respect to a claimed default of the type referred to in Section 11(f), a
written notice specifying the nature and period of existence thereof and
what action the Company is taking or proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within five Business
-------------
Days after a Responsible Officer becoming aware of any of the following, a
written notice setting forth the nature thereof and the action, if any,
that the Company or an ERISA Affiliate proposes to take with respect
thereto:
(i) with respect to any Plan, any reportable event, as defined
in section 4043(c) of ERISA and the regulations thereunder, for which
notice thereof has not been waived pursuant to such regulations as in
effect on the date of the Closing; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings under
section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Company or any
ERISA Affiliate of a notice from a Multiemployer Plan that such action
has been taken by the PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could result in
the incurrence of any liability by the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, or in the
imposition of any Lien on any of the rights, properties or assets of
the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA
or such penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then existing,
could reasonably be expected to have a Material Adverse Effect;
(f) Notices from Governmental Authority -- promptly, and in any event
-----------------------------------
within 30 days of receipt thereof, copies of any notice to the Company
19
or any Subsidiary from any Federal or state Governmental Authority relating
to any order, ruling, statute or other law or regulation that could
reasonably be expected to have a Material Adverse Effect;
(g) Actions, Proceedings - promptly after a Responsible Officer
--------------------
becomes aware of the commencement thereof, notice of any action or
proceeding relating to the Company or any Subsidiary in any court or before
any Governmental Authority or arbitration board or tribunal as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected to have a Material
Adverse Effect; and
(h) Requested Information -- with reasonable promptness, such other
---------------------
data and information relating to the business, operations, affairs,
financial condition, assets or properties of the Company or any of its
Subsidiaries or relating to the ability of the Obligors to perform their
obligations hereunder and under the Notes as from time to time may be
reasonably requested by any such holder of Notes, or such information
regarding the Company required to satisfy the requirements of 17 C.F.R.
230.144A, as amended from time to time, in connection with any contemplated
transfer of the Notes.
7.2. Officer's Certificate
Each set of financial statements delivered to a holder of Notes pursuant to
Section 7.1(a) or Section 7.1(b) hereof shall be accompanied by a certificate of
a Senior Financial Officer setting forth:
(a) Covenant Compliance -- the information (including detailed
-------------------
calculations) required in order to establish whether the Company was in
compliance with the requirements of Sections 10.3 through 10.9, inclusive,
during the quarterly or annual period covered by the statements then being
furnished (including with respect to each such Section, where applicable,
the calculations of the maximum or minimum amount, ratio or percentage, as
the case may be, permissible under the terms of such Sections, and the
calculation of the amount, ratio or percentage then in existence); and
(b) Event of Default -- a statement that such officer has reviewed the
----------------
relevant terms hereof and has made, or caused to be made, under his or her
supervision, a review of the transactions and conditions of the Company and
its Subsidiaries from the beginning of the quarterly or annual period
covered by the statements then being furnished to the date of the
certificate and that such review has not disclosed the existence during
such period of any condition or event that constitutes a Default or an
Event of Default or, if any such condition or event existed or exists
(including, without limitation, any such event or condition resulting from
the failure of the Company or any Subsidiary to comply with any
Environmental Law), specifying the nature
20
and period of existence thereof and what action the Company shall have
taken or proposes to take with respect thereto.
7.3. Inspection.
The Company shall permit the representatives of each holder of Notes that
is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then exists, at
----------
the expense of such holder and upon reasonable prior notice to the Company,
to visit the principal executive office of the Company, to discuss the
affairs, finances and accounts of the Company and its Subsidiaries with the
Company's officers, and (with the consent of the Company, which consent
will not be unreasonably withheld) its independent public accountants, and
(with the consent of the Company, which consent will not be unreasonably
withheld) to visit the other offices and properties of the Company and each
Subsidiary, all at such reasonable times and as often as may be reasonably
requested in writing; and
(b) Default -- if a Default or Event of Default then exists, at the
-------
expense of the Company to visit and inspect any of the offices or
properties of the Company or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent public
accountants (and by this provision the Company authorizes said accountants
to discuss the affairs, finances and accounts of the Company and its
Subsidiaries), all at such times and as often as may be requested.
8. PAYMENT OF THE NOTES.
8.1. Required Prepayments; Payment at Maturity.
On October 19, 2002 and on each October 19 thereafter to and including
October 19, 2005 the Company will prepay $15,000,000 principal amount (or such
lesser principal amount as shall then be outstanding) of the Notes at par and
without payment of the Make-Whole Amount or any premium, and the Company will
pay all of the principal amount of the Notes remaining outstanding, if any, on
October 19, 2006. Each partial prepayment of the Notes pursuant to Section 8.2
or Section 8.3 will reduce the principal amount of each mandatory prepayment
applicable to the Notes, as set forth in this Section 8.1, and the payment at
maturity of the Notes, in the same proportion as the aggregate unpaid principal
amount of the Notes is reduced as a result of such prepayment.
8.2. Optional Prepayments with Make-Whole Amount.
The Company may, at its option, upon notice as provided below, prepay at
any time all, or from time to time any part of, the Notes, in an amount not less
than 10% of the aggregate principal amount of the Notes then outstanding in the
case of a
21
partial prepayment, at 100% of the principal amount so prepaid, plus the
Make-Whole Amount determined for the prepayment date with respect to such
principal amount. The Company will give each holder of Notes written notice of
each optional prepayment under this Section 8.2 not less than 30 days and not
more than 60 days prior to the date fixed for such prepayment. Each such notice
shall specify such prepayment date, the aggregate principal amount of the Notes
to be prepaid on such date, the principal amount of each Note held by such
holder to be prepaid (determined in accordance with Section 8.4), and the
interest to be paid on the prepayment date with respect to such principal amount
being prepaid, and shall be accompanied by a certificate of a Senior Financial
Officer as to the estimated Make-Whole Amount due in connection with such
prepayment (calculated as if the date of such notice were the date of the
prepayment), setting forth the details of such computation. Two Business Days
prior to such prepayment, the Company shall deliver to each holder of Notes a
certificate of a Senior Financial Officer specifying the calculation of such
Make-Whole Amount as of the specified prepayment date.
8.3. Change in Control.
(a) Notice of Change in Control or Control Event. The Company will,
within five Business Days after any Responsible Officer of the Company has
knowledge of the occurrence of any Change in Control or Control Event, give
written notice of such Change in Control or Control Event to each holder of
Notes unless notice in respect of such Change in Control (or the Change in
Control contemplated by such Control Event) shall have been given pursuant
to Section 8.3(b). If a Change in Control has occurred, such notice shall
contain and constitute an offer to prepay Notes as described in Section
8.3(c) and shall be accompanied by the certificate described in Section
8.3(g).
(b) Condition to Action of Company. The Company will not take any
action that consummates or finalizes a Change in Control unless
(i) at least 30 days prior to such action the Company shall
have given to each holder of Notes written notice containing and
constituting an offer to prepay Notes as described in Section
8.3(c), accompanied by the certificate described in Section
8.3(g), and
(ii) contemporaneously with such action, the Company prepays
all Notes required to be prepaid in accordance with this Section
8.3.
(c) Offer to Prepay Notes. The offer to prepay Notes contemplated by
Section 8.3(a) and Section 8.3(b) shall be an offer to prepay, in
accordance with and subject to this Section 8.3, all, but not less than
all, the Notes held by each holder (in this case only, "holder" in respect
of any Note registered in the name of a nominee for a disclosed beneficial
owner shall mean such beneficial owner) on a date specified in such offer
(the
22
"Proposed Prepayment Date"). If such Proposed Prepayment Date is in
connection with an offer contemplated by Section 8.3(a), such date shall be
not less than 30 days and not more than 60 days after the date of such
offer. If the Proposed Prepayment Date shall not be specified in such
offer, the Proposed Prepayment Date shall be the 30th day after the date of
such offer.
(d) Acceptance. A holder of Notes may accept the offer to prepay made
pursuant to this Section 8.3 by causing a notice of such acceptance to be
delivered to the Company at least five Business Days prior to the Proposed
Prepayment Date. A failure by a holder of Notes to respond to an offer to
prepay made pursuant to this Section 8.3 shall be deemed to constitute an
acceptance of such offer by such holder.
(e) Prepayment. Prepayment of the Notes to be prepaid pursuant to this
Section 8.3 shall be at 100% of the principal amount of such Notes,
together with any Make-Whole Amount with respect thereto and interest on
the Notes then being prepaid accrued to the date of prepayment. The
prepayment shall be made on the Proposed Prepayment Date except as provided
in Section 8.3(f).
(f) Deferral of Obligation to Purchase. The obligation of the Company
to prepay Notes pursuant to the offers accepted in accordance with Section
8.3(d) is subject to the occurrence of the Change in Control in respect of
which such offers and acceptances shall have been made. In the event that
such Change in Control does not occur on the Proposed Prepayment Date in
respect thereof, the prepayment shall be deferred until and shall be made
on the date on which such Change in Control occurs. The Company shall keep
each holder of Notes reasonably and timely informed of
(i) any such deferral of the date of prepayment,
(ii) the date on which such Change in Control and the
prepayment are expected to occur, and
(iii) any determination by the Company that efforts to effect
such Change in Control have ceased or been abandoned (in which
case the offers and acceptances made pursuant to this Section 8.3
in respect of such Change in Control shall be deemed rescinded).
(g) Officer's Certificate. Each offer to prepay the Notes pursuant to
this Section 8.3 shall be accompanied by a certificate, executed by a
Senior Financial Officer of the Company and dated the date of such offer,
specifying:
(i) the Proposed Prepayment Date;
(ii) that such offer is made pursuant to this Section 8.3;
23
(iii) the principal amount of each Note offered to be prepaid;
(iv) the last date upon which the offer can be accepted or
rejected, and setting forth the consequences of failing to provide an
acceptance or rejection, as provided in Section 8.3(d);
(v) the interest that would be due on each Note offered to be
prepaid, accrued to the Proposed Prepayment Date;
(vi) the calculation of the estimated Make-Whole Amount, if any,
due in connection with each Note offered to be prepaid ; and
(vii) in reasonable detail, the nature and date or proposed date
of the Change in Control.
8.4. Allocation of Partial Prepayments.
In the case of each partial prepayment of the Notes under Section 8.2, the
principal amount of the Notes to be prepaid shall be allocated among all of the
Notes at the time outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts thereof not theretofore called for
prepayment.
8.5. Maturity; Surrender, etc.
In the case of each prepayment of Notes pursuant to this Section 8, the
principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.
8.6. No Other Optional Prepayments or Purchase of Notes.
The Company will not prepay (whether directly or indirectly by purchase,
redemption or other acquisition) any of the outstanding Notes except upon the
payment or prepayment of the Notes in accordance with the terms of this Section
8. The Company will promptly cancel all Notes acquired by it or any Affiliate
pursuant to any payment, prepayment or purchase of Notes pursuant to any
provision of this Section 8 and no Notes may be issued in substitution or
exchange for any such Notes.
24
8.7. Make-Whole Amount.
The term "Make-Whole Amount" means, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of such Note over the amount of
such Called Principal, provided that the Make-Whole Amount may in no event be
--------
less than zero. For the purposes of determining the Make-Whole Amount, the
following terms have the following meanings:
"Called Principal" means, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to Section 8.2 or Section 8.3 or
has become or is declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.
"Discounted Value" means, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due
dates to the Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor
(applied on the same periodic basis as that on which interest on the Notes
is payable) equal to the Reinvestment Yield with respect to such Called
Principal.
"Reinvestment Yield" means, with respect to the Called Principal of
any Note, 0.50% over the yield to maturity implied by (a) the yields
reported, as of 10:00 A.M. (New York City time) on the second Business Day
preceding the Settlement Date with respect to such Called Principal, on the
display designated as "Page UST" on the Bloomberg Financial Market Service
(or such other display as may replace Page "UST" on the Bloomberg Financial
Market Service) for actively traded U.S. Treasury securities having a
maturity equal to the Remaining Average Life of such Called Principal as of
such Settlement Date, or (b) if such yields are not reported as of such
time or the yields reported as of such time are not ascertainable, the
Treasury Constant Maturity Series Yields reported, for the latest day for
which such yields have been so reported as of the second Business Day
preceding the Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded 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 will be determined, if necessary,
by (i) converting U.S. Treasury ▇▇▇▇ quotations to bond-equivalent yields
in accordance with accepted financial practice and (ii) interpolating
linearly between (1) the actively traded U.S. Treasury security with the
maturity closest to and greater than the Remaining Average Life and (2) the
actively traded U.S. Treasury security with the maturity closest to and
less than the Remaining Average Life.
25
"Remaining Average Life" means, with respect to any Called Principal,
the number of years (calculated to the nearest one-twelfth year) obtained
by dividing (a) such Called Principal into (b) the sum of the products
obtained by multiplying (i) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by (ii) the number
of years (calculated to the nearest one-twelfth year) that 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" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to
its scheduled due date, provided that if such Settlement Date is not a date
on which interest payments are due to be made under the terms of the Notes,
then the amount of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to Section 8.2,
Section 8.3 or 12.1.
"Settlement Date" means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid pursuant to
Section 8.2 or Section 8.3 or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context requires.
9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
9.1. Existence, Etc.
The Company will, and will cause each of its Subsidiaries (other than, in
the case of clauses (a) through (c) below, any Immaterial Subsidiaries) to:
(a) preserve and maintain its legal existence and all of its material
rights, privileges, licenses and franchises (provided that nothing in this
Section 9.1 shall prohibit any transaction expressly permitted under
Sections 10.2 and 10.3);
(b) comply with the requirements of all applicable laws, rules,
regulations and orders of governmental or regulatory authorities if failure
to comply with such requirements could (either individually or in the
aggregate) reasonably be expected to have a Material Adverse Effect;
(c) pay and discharge all taxes, assessments and governmental charges
or levies imposed on it or on its income or profits or on any of its
property prior to the date on which penalties attach thereto, except for
any such tax, assessment, charge or levy the payment of which is being
contested
26
in good faith and by proper proceedings and against which adequate reserves
are being maintained;
(d) maintain all of its properties used or useful in its business in
good working order and condition, ordinary wear and tear excepted,
except as could not reasonably be expected to have a Material Adverse
Effect; and
(e) keep adequate records and books of account, in which complete
entries will be made in accordance with generally accepted accounting
principles consistently applied.
9.2. Insurance.
The Company will, and will cause each of its Material Subsidiaries to,
maintain insurance with financially sound and reputable insurance companies, and
with respect to property and risks of a character usually maintained by
corporations engaged in the same or a similar business and similarly situated,
against loss, damage and liability of the kinds and in the amounts customarily
maintained by such corporations. On or before the date of the Closing, the
Company will deliver to you certificates of insurance reasonably satisfactory to
you evidencing the existence of all insurance required to be maintained by the
Company hereunder setting forth the respective coverages, limits of liability,
carrier, policy number and period of coverage and showing that such insurance
will remain in effect through the December 31 falling at least six months after
the date hereof, subject only to the payment of premiums as they become due.
Thereafter, on or before each November 15 in each year (commencing with November
15, 2000), the Company will deliver to each holder of Notes that is an
Institutional Investor certificates of insurance evidencing that all insurance
required to be maintained by the Company hereunder will be in effect through the
December 31 of the calendar year following the calendar year of the current
November 15, subject only to the payment of premiums as they become due.
10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
10.1. Transactions with Affiliates.
Except as expressly permitted by this Agreement and except for the
Transaction, the Company will not, nor will it permit any of its Subsidiaries
to, directly or indirectly: (a) make any Investment in an Affiliate; (b)
transfer, sell, lease, assign or otherwise dispose of any property to an
Affiliate; (c) merge into or consolidate with or purchase or acquire property
from an Affiliate; or (d) enter into any other transaction directly or
indirectly with or for the benefit of an Affiliate (including, without
limitation, Guaranties and assumptions of obligations of an Affiliate); provided
that (x) any Affiliate who is an individual may serve as a director, officer or
employee of the Company or any of its Subsidiaries and receive reasonable
compensation for his or her services in such capacity, (y) the Company
27
and its Subsidiaries may enter into transactions (other than extensions of
credit by the Company or any of its Subsidiaries to an Affiliate) in the
ordinary course and pursuant to the reasonable requirements of the Company's or
such Subsidiary's business and if the monetary or business consideration arising
therefrom would be substantially as advantageous to the Company and its
Subsidiaries as the monetary or business consideration that would obtain in a
comparable transaction with a Person not an Affiliate, and (z) agreements
between the Company and ▇▇▇▇▇ Industries, Inc. (and its affiliates) to the
extent identified on Schedule 10.1, shall not be prohibited by this Section
10.1.
10.2. Merger, Consolidation, etc.
The Company will not, and will not permit any of its Subsidiaries to,
consolidate with or merge with any other Person or convey, transfer or lease
substantially all of its assets in a single transaction or series of
transactions to any Person (except that a Subsidiary of the Company may (x)
consolidate with or merge with the Company or a Wholly-Owned Subsidiary (that is
not a Foreign Subsidiary) if the Company or such Wholly-Owned Subsidiary is the
continuing or surviving corporation and if immediately after giving effect to
such transaction no Default or Event of Default would exist, (y) consolidate
with or merge with any other Person, so long as (1) the successor formed by such
consolidation or the survivor of such merger shall be a Subsidiary Guarantor,
(2) such Subsidiary Guarantor would be permitted by the provisions of Section
10.5 and Section 10.6 to incur at least $1.00 of additional Debt, and (3)
immediately after giving effect to such transaction no Default or Event of
Default would exist, and (z) convey, transfer or lease all of its assets in
compliance with the provisions of Section 10.3), provided that the foregoing
restriction does not apply to the consolidation or merger of the Company with,
or the conveyance, transfer or lease of substantially all of the assets of the
Company in a single transaction or series of transactions to, any Person so long
as:
(a) the successor formed by such consolidation or the survivor of
such merger or the Person that acquires by conveyance, transfer or lease
substantially all of the assets of the Company as an entirety, as the
case may be (the "Successor Corporation"), shall be a solvent
corporation organized and existing under the laws of the United States
of America, any State thereof or the District of Columbia;
(b) if the Company is not the Successor Corporation, such
corporation shall have executed and delivered to each holder of Notes
its assumption of the due and punctual performance and observance of
each covenant and condition of this Agreement, the Other Agreements and
the Notes (pursuant to such agreements and instruments as shall be
reasonably satisfactory to the Required Holders), and the Company shall
have caused to be delivered to each holder of Notes an opinion of
nationally recognized independent counsel, or other independent counsel
reasonably satisfactory to the Required Holders, to the effect that all
agreements or instruments effecting such assumption are enforceable in
accordance with their terms and comply with the terms hereof; and
28
(c) immediately after giving effect to such transaction:
(i) no Default or Event of Default would exist, and
(ii) the Successor Corporation would be permitted by the
provisions of Section 10.5 to incur at least $1.00 of additional
Funded Debt owing to a Person other than a Subsidiary of the
Successor Corporation.
No such conveyance, transfer or lease of substantially all of the assets
of the Company shall have the effect of releasing the Company or any Successor
Corporation from its liability under this Agreement or the Notes.
10.3. Sale of Assets, etc.
(a) Sale of Assets. Except as permitted under Section 10.2, the
Company will not, and will not permit any of its Subsidiaries to, make any
Asset Disposition unless:
(i) in the good faith opinion of the Company, the Asset
Disposition is in exchange for consideration having a Fair Market
Value at least equal to that of the property exchanged and is in
the best interest of the Company or such Subsidiary;
(ii) immediately prior to and after giving effect to the
Asset Disposition, no Default or Event of Default would exist;
(iii) immediately after giving effect to the Asset
Disposition, the Disposition Value of all property that was the
subject of any Asset Disposition occurring in the then current
fiscal year of the Company would not exceed 10% of Consolidated
Total Assets determined as of the end of the then most recently
ended fiscal year of the Company; and
(iv) immediately after giving effect to the Asset
Disposition, the Disposition Value of all property that was the
subject of any Asset Disposition occurring on or after the date
of the Closing would not exceed 25% of Consolidated Total Assets
determined as of the end of the then most recently ended fiscal
quarter of the Company.
If the Net Proceeds Amount for any Transfer is applied to a Debt
Prepayment Application or a Property Reinvestment Application within 365
days after such Transfer, then such Transfer, only for the purpose of
determining compliance with subsections (iii) and (iv) of this Section
10.3(a) as of a date on or after the Net Proceeds Amount is so applied,
shall be deemed not to be an Asset Disposition.
29
(b) Disposal of Ownership of a Subsidiary. The Company will not, and
will not permit any of its Subsidiaries to, Transfer any shares of
Subsidiary Stock (including, without limitation, pursuant to any merger,
consolidation or other transaction specified in Section 10.2 hereof), nor
will the Company permit any such Subsidiary to issue or Transfer any shares
of its own Subsidiary Stock, provided that the foregoing restrictions do
not apply to:
(i) the issue of directors' qualifying shares by any such
Subsidiary;
(ii) any such Transfer of Subsidiary Stock constituting a
Transfer described in clause (a) of the definition of "Asset
Disposition"; and
(iii) the Transfer of all of the Subsidiary Stock of a
Subsidiary owned by the Company and the other Subsidiaries if:
(A) such Transfer satisfies the requirements of Section
10.3(a) hereof,
(B) in connection with such Transfer the entire
investment (whether represented by stock, Debt, claims or
otherwise) of the Company and the other Subsidiaries in such
Subsidiary is sold, transferred or otherwise disposed of to a
Person other than (1) the Company, (2) another Subsidiary not
being simultaneously disposed of, or (3) an Affiliate, and
(c) the Subsidiary being disposed of has no continuing Investment in
any other Subsidiary not being simultaneously disposed of or in the
Company.
10.4. Limitations on Liens.
The Company will not, nor will it permit any of its Subsidiaries (other
than any Immaterial Subsidiary) to, create, incur, assume or suffer to exist any
Lien upon any of its property, whether now owned or hereafter acquired (whether
or not provision is made for the equal and ratable securing of the Notes in
accordance with the last paragraph of this Section 10.4), except:
(a) Liens in existence on the date hereof and securing the Debt of
the Company and its Subsidiaries referred to in Part B of Schedule 5.15;
(b) Liens imposed by any Governmental Authority for taxes,
assessments or charges not yet due or that are being contested in good
faith and by appropriate proceedings if adequate reserves with respect
thereto are
30
maintained on the books of the Company or the affected Subsidiaries, as the
case may be, in accordance with GAAP;
(c) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business that are not
overdue for a period of more than 30 days or that are being contested in
good faith and by appropriate proceedings and Liens securing judgments but
only to the extent for an amount and for a period not resulting in an Event
of Default under Section 11(i) hereof;
(d) pledges or deposits under worker's compensation, unemployment
insurance and other social security legislation;
(e) deposits to secure the performance of bids, trade contracts (other
than for Debt), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(f) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and encumbrances
consisting of zoning restrictions, easements, licenses, restrictions on the
use of property or minor imperfections in title thereto that, in the
aggregate, are not material in amount, and that do not in any case
materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the business of the Company or any
of its Subsidiaries;
(g) Liens on property of any corporation that becomes a Subsidiary of
the Company after the date of this Agreement, provided that (i) such Liens
are in existence at the time such corporation becomes a Subsidiary of the
Company and were not created in anticipation thereof, (ii) each such Lien
shall extend 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 is acquired for specific use
in connection with such acquired property; and (iii) the principal amount
of the Debt secured by any such Lien shall at no time exceed an amount
equal to the lesser of (A) the cost to such corporation of the property (or
improvement thereon) so acquired and (B) the Fair Market Value (as
determined in good faith by the board of directors of such corporation) of
such property (or improvement thereon) at the time of such acquisition;
(h) Liens created to secure all or any part of the purchase price, or
to secure Debt incurred or assumed to pay all or any part of the purchase
price or cost of construction, of real and/or tangible personal property
(or any improvement thereon) acquired or constructed by the Company or a
Subsidiary after the date of the Closing, provided that (i) any such Lien
shall extend solely to the item or items of such property (or improvement
thereon) so acquired or constructed and, if required by the terms of the
instrument originally creating such Lien, other property (or improvement
thereon) which
31
is an improvement to or is acquired for specific use in connection with
such acquired or constructed property (or improvement thereon) or which is
real property being improved by such acquired or constructed property (or
improvement thereon), (ii) the principal amount of the Debt secured by any
such Lien shall at no time exceed an amount equal to the lesser of (A) the
cost to the Company or such Subsidiary of the property (or improvement
thereon) so acquired or constructed and (B) the Fair Market Value (as
determined in good faith by the board of directors of the Company) of such
property (or improvement thereon) at the time of such acquisition or
construction, and (iii) any such Lien shall be created contemporaneously
with, or within 120 days after, the acquisition or construction of such
property;
(i) Liens on property or assets of the Company or any of its
Subsidiaries securing Debt owing to the Company or to any of its
Wholly-Owned Subsidiaries;
(j) any Lien renewing, extending or refunding any Lien permitted by
paragraph (a) of this Section 10.4, provided that (i) the principal amount
of Debt secured by such Lien immediately prior to such extension, renewal
or refunding is not increased or the maturity thereof reduced, (ii) such
Lien is not extended to any other property and (iii) immediately after such
extension, renewal or refunding no Default or Event of Default would exist;
and
(k) other Liens not otherwise permitted by paragraphs (a) through (j),
provided that the total amount of all outstanding Debt secured by such
Liens would be permitted by the provisions of Section 10.6 at such time.
If, notwithstanding the prohibition contained herein, the Company shall, or
shall permit any of its Subsidiaries (other than any Immaterial Subsidiary) to,
create, incur, assume or suffer to exist any Lien upon any of its property,
whether now owned or hereafter acquired, other than those Liens permitted by the
provisions of paragraphs (a) through (k) of this Section 10.4, it will make or
cause to made effective provision whereby the Notes and the Unconditional
Guarantee will be secured equally and ratably with any and all other obligations
thereby secured, such security to be pursuant to agreements reasonably
satisfactory to the Required Holders and, in any such case, the Notes and the
Unconditional Guarantee shall have the benefit, to the fullest extent that, and
with such priority as, the holders of the Notes may be entitled under applicable
law, of an equitable Lien on such property. Such violation of this Section 10.4
will constitute an Event of Default, whether or not provision is made for an
equal and ratable Lien pursuant to this Section 10.4.
10.5. Debt.
The Company will not, and will not permit any Subsidiary to, directly or
indirectly, create, incur, assume, guarantee, or otherwise become directly or
indirectly liable with respect to, any Debt, unless on the date the Company or
such
32
Subsidiary becomes liable with respect to any such Debt and immediately after
giving effect thereto and the concurrent retirement of any other Debt,
(a) no Default or Event of Default exists, and
(b) Consolidated Total Debt does not exceed 60% of Consolidated
Total Capitalization as of the then most recently ended fiscal quarter of
the Company.
10.6. Priority Debt.
The Company will not, and will not permit any Subsidiary to, directly or
indirectly, create, incur, assume, guarantee, or otherwise become directly or
indirectly liable with respect to, any Priority Debt, unless on the date the
Company or such Subsidiary becomes liable with respect to any such Priority Debt
and immediately after giving effect thereto and the concurrent retirement of any
other Debt,
(a) no Default or Event of Default exists, and
(b) Priority Debt does not exceed 20% of Consolidated Net Worth
as of the then most recently ended fiscal quarter of the Company.
10.7. Debt Maintenance.
The Company will not, at any time, permit the ratio of:
(a) Consolidated Funded Debt at such time; to
(b) EBITDA for the period of four consecutive fiscal quarters of
the Company most recently ended at such time;
to be greater than the ratio applicable for such quarter as set forth in the
chart below:
------------------------------------------------------------- -----------------
Fiscal Quarters Ratio
------------------------------------------------------------- -----------------
For Fiscal Quarters ending on or prior to the earlier of
the date of the Equity Offering and one year from the date 3.50 : 1.0
of the Closing
------------------------------------------------------------- -----------------
For Fiscal Quarters thereafter and ending on or before the
earlier of the date two years from the date of the Equity 3.25 : 1.0
Offering and the date three years from the date of the Closing
------------------------------------------------------------- -----------------
For each Fiscal Quarter ending thereafter
3.00 : 1.0
------------------------------------------------------------- -----------------
10.8. Consolidated Minimum Net Worth.
33
(a) The Company will not, at any time prior to the Equity Offering,
permit Consolidated Net Worth to be less than the sum of (i) $125,000,000
plus (ii) an aggregate amount equal to 25% of Consolidated Net Income
(but, in each case, only if a positive number) for each completed fiscal
quarter beginning with the fiscal quarter ended December 31, 1999.
(b) The Company will not, at any time after the Equity Offering,
permit Consolidated Net Worth to be less than the sum of (i) $150,000,000
plus (ii) an aggregate amount equal to 25% of Consolidated Net Income
(but, in each case, only if a positive number) for each completed fiscal
quarter beginning with the fiscal quarter ended immediately after the
Equity Offering.
10.9. Fixed Charge Coverage Ratio.
The Company will not, at any time, permit the Fixed Charge Coverage
Ratio to be less than 2.50 to 1.
10.10. Lines of Business.
Neither the Company nor any of its Subsidiaries will engage to any
substantial extent in any line or lines of business activity other than the
business of designing, manufacturing or distributing fluid control components,
valves and related products and services for use in fluid -control systems.
10.11. Certain Obligations.
The Company will, and will cause each of its Subsidiaries to, take such
action from time to time as shall be necessary to ensure that each of its
Subsidiaries (other than Suzhou ▇▇▇▇▇ Valve Co., Ltd.) is a Wholly-Owned
Subsidiary. The Company will not, and will not permit any of its Subsidiaries
to, enter into, after the date of this Agreement, any indenture, agreement,
instrument or other arrangement that, directly or indirectly, prohibits or
restrains, or has the effect of prohibiting or restraining, or imposes
materially adverse conditions upon, the incurrence or payment of Debt, the
granting of Liens, the declaration or payment of dividends, the making of loans,
advances or Investments or the sale, assignment, transfer or other disposition
of property.
10.12. Additional Subsidiary Guarantors.
The Company will take such action, and will cause each of its
Subsidiaries to take such action, from time to time as shall be necessary to
ensure that all Subsidiaries of the Company (other than Foreign Subsidiaries,
unless such Foreign Subsidiary has issued any Guaranty with respect to any Debt
(including any Guaranty with respect to the Bank Credit Agreement)) are
Subsidiary Guarantors and, thereby, "Obligors" hereunder. Without limiting the
generality of the foregoing, in the event that the Company or any of its
Subsidiaries shall form or acquire any new Subsidiary (other than Foreign
Subsidiaries), the Company or the respective Subsidiary will cause such new
Subsidiary to become a "Subsidiary Guarantor" (and,
34
thereby, an "Obligor") hereunder pursuant to a written instrument in form and
substance satisfactory to each holder of the Notes, and to deliver such proof of
corporate action, incumbency of officers, opinions of counsel and other
documents as is consistent with those delivered by each Obligor pursuant to
Section 4 upon the date of the Closing or as the Required Holders shall have
requested.
10.13. Modifications of Material Agreements.
The Company will not, nor will it permit any of its Subsidiaries to,
consent to any modification, supplement or waiver of any of the provisions of
any Material Agreement, which modification, supplement or waiver is materially
adverse to the interests of any holder of the Notes, without the prior consent
of the Required Holders.
11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or Make-Whole
Amount, if any, on any Note when the same becomes due and payable,
whether at maturity or at a date fixed for prepayment or by declaration
or otherwise; or
(b) the Company defaults in the payment of any interest on any Note
for more than five Business Days after the same becomes due and payable;
or
(c) the Company defaults in the performance of or compliance with any
term contained in any of Sections 7.1(a), 7.1(b), 7.1(d), 7.1(e), 9, or
10.1 through 10.9, inclusive; or
(d) the Company defaults in the performance of or compliance with any
term contained herein (other than those referred to in paragraphs (a),
(b) and (c) of this Section 11) and such default is not remedied within
30 days after the earlier of (i) a Responsible Officer obtaining actual
knowledge of such default and (ii) the Company receiving written notice
of such default from any holder of a Note; or
(e) any representation or warranty made in writing by or on behalf of
any of the Obligors or by any officer of any of the Obligors in this
Agreement or in any writing furnished in connection with the transactions
contemplated hereby proves to have been false or incorrect in any
material respect on the date as of which made; or
(f) (i) the Company or any Material Subsidiary is in default (as
principal or as guarantor or other surety) in the payment of any
principal of or premium or make-whole amount or interest on any Debt of
the Company or any Material Subsidiary (other than Debt under this
Agreement and the
35
Notes) beyond any period of grace provided with respect thereto, that
individually or together with such other Debt as to which any such failure
exists has an aggregate outstanding principal amount of at least
$10,000,000, or
(ii) the Company or any Material Subsidiary is in default in the
performance of or compliance with any term of any evidence of any Debt
of the Company or any Material Subsidiary (other than Debt under this
Agreement and the Notes), that individually or together with such
other Debt as to which any such failure exists has an aggregate
outstanding principal amount of at least $10,000,000, or of any
mortgage, indenture or other agreement relating thereto or any other
condition exists, and as a consequence of such default or condition
such Debt has become, or has been declared (or one or more Persons are
entitled to declare such Debt to be), due and payable before its
stated maturity or before its regularly scheduled dates of payment, or
(iii) as a consequence of the occurrence or continuation of any
event or condition (other than the passage of time or the right of the
holder of Debt to convert such Debt into equity interests),
(A) the Company or any Material Subsidiary has become
obligated to purchase or repay Debt before its regular maturity
or before its regularly scheduled dates of payment in an
aggregate outstanding principal amount of at least $10,000,000,
or
(B) one or more Persons have the right to require the
Company or any Material Subsidiary so to purchase or repay such
Debt; or
(g) the Company or any Material Subsidiary (i) is generally not
paying, or admits in writing its inability to pay, its debts as they become
due, (ii) files, or consents by answer or otherwise to the filing against
it of, a petition for relief or reorganization or arrangement or any other
petition in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law of
any jurisdiction, (iii) makes an assignment for the benefit of its
creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with
respect to any substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes corporate action for the
purpose of any of the foregoing; or
(h) a court or Governmental Authority of competent jurisdiction
enters an order appointing, without consent by the Company or any Material
Subsidiary, a custodian, receiver, trustee or other officer with similar
powers
36
with respect to the Company or any Material Subsidiary or with respect to
any substantial part of the property of the Company or any Material
Subsidiary, or constituting an order for relief or approving a petition for
relief or reorganization or any other petition in bankruptcy or for
liquidation or to take advantage of any bankruptcy or insolvency law of any
jurisdiction, or ordering the dissolution, winding-up or liquidation of the
Company or any Material Subsidiary, or any such petition shall be filed
against the Company or any Material Subsidiary and such petition shall not
be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $5,000,000 are rendered against one or more of the
Company and its Subsidiaries (other than any Immaterial Subsidiary) and
which judgments are not, within 45 days after entry thereof, bonded,
discharged or stayed pending appeal, or are not discharged within 45 days
after the expiration of such stay; or
(j) if
(i) the Unconditional Guarantee shall cease to be in full force
and effect or shall be declared by a court or other Governmental
Authority of competent jurisdiction to be void, voidable or
unenforceable against any Subsidiary Guarantor,
(ii) the validity or enforceability of this Agreement against
any Subsidiary Guarantor shall be contested by such Subsidiary
Guarantor or any Subsidiary thereof, or
(iii) any Subsidiary Guarantor or any Subsidiary thereof shall
deny that such Subsidiary Guarantor has any further liability or
obligation under this Agreement; or
(k) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is sought
or granted under section 412 of the Code, (ii) a notice of intent to
terminate any Plan shall have been or is reasonably expected to be filed
with the PBGC or the PBGC shall have instituted proceedings under ERISA
section 4042 to terminate or appoint a trustee to administer any Plan or
the PBGC shall have notified the Company or any ERISA Affiliate that a Plan
may become a subject of any such proceedings, (iii) the aggregate "amount
of unfunded benefit liabilities" (within the meaning of section 4001(a)(18)
of ERISA) under all Plans, determined in accordance with Title IV of ERISA,
shall exceed $5,000,000, (iv) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability pursuant to Title
I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans, (v) the Company or any ERISA Affiliate
withdraws from any Multiemployer Plan, or (vi) the Company or any
Subsidiary establishes or
37
amends any employee welfare benefit plan that provides post-employment
welfare benefits in a manner that would increase the liability of the
Company or any Subsidiary thereunder; and any such event or events
described in clauses (i) through (vi) above, either individually or
together with any other such event or events, could reasonably be expected
to have a Material Adverse Effect.
As used in Section 11(k), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in section 3 of ERISA.
12. REMEDIES ON DEFAULT, ETC.
12.1. Acceleration.
(a) If an Event of Default with respect to the Company described in
paragraph (g) or paragraph (h) of Section 11 (other than an Event of
Default described in clause (i) of paragraph (g) or described in clause
(vi) of paragraph (g) by virtue of the fact that such clause encompasses
clause (i) of paragraph (g)) has occurred, all the Notes then outstanding
shall automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, any
holder or holders of more than 50% in principal amount of the Notes at the
time outstanding may at any time at its or their option, by notice or
notices to the Company, declare all the Notes then outstanding to be
immediately due and payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder or holders of Notes
at the time outstanding affected by such Event of Default may at any time,
at its or their option, by notice or notices to the Company, declare all
the Notes held by it or them to be immediately due and payable.
Upon any Notes becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Notes will forthwith mature and the entire
unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest
thereon and (y) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
38
12.2. Other Remedies.
If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Notes have become or have been declared immediately
due and payable under Section 12.1, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any Note, or for an
injunction against a violation of any of the terms hereof or thereof, or in aid
of the exercise of any power granted hereby or thereby or by law or otherwise.
12.3. Rescission.
At any time after any Notes have been declared due and payable pursuant
to clause (b) or clause (c) of Section 12.1, the holders of not less than 66-
2/3% in principal amount of the Notes then outstanding, by written notice to the
Company, may rescind and annul any such declaration and its consequences if (a)
the Company has paid all overdue interest on the Notes, all principal of and
Make-Whole Amount, if any, due and payable on any Notes other than by reason of
such declaration, and all interest on such overdue principal and Make-Whole
Amount, if any, and (to the extent permitted by applicable law) any overdue
interest in respect of the Notes, at the Default Rate, (b) all Events of Default
and Defaults, other than non-payment of amounts that have become due solely by
reason of such declaration, have been cured or have been waived pursuant to
Section 17, and (c) no judgment or decree has been entered for the payment of
any monies due pursuant hereto or to the Notes. No rescission and annulment
under this Section 12.3 will extend to or affect any subsequent Event of Default
or Default or impair any right consequent thereon.
12.4. No Waivers or Election of Remedies, Expenses, etc.
No course of dealing and no delay on the part of any holder of any Note
in exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under Section 15, the Company
will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including, without limitation,
reasonable attorneys' fees, expenses and disbursements.
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
13.1. Registration of Notes.
39
The Company shall keep at its principal executive office a register for
the registration and registration of transfers of Notes. The name and address of
each holder of one or more Notes, each transfer thereof and the name and address
of each transferee of one or more Notes shall be registered in such register.
Prior to due presentment for registration of transfer, the Person in whose name
any Note shall be registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and the Company shall not be affected by any
notice or knowledge to the contrary. The Company shall give to any holder of a
Note that is an Institutional Investor promptly upon request therefor, a
complete and correct copy of the names and addresses of all registered holders
of Notes.
13.2. Transfer and Exchange of Notes.
Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a surrender
for registration of transfer, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
his attorney duly authorized in writing and accompanied by the address for
notices of each transferee of such Note or part thereof), the Company shall
execute and deliver, at the Company's expense (except as provided below), one or
more new Notes (as requested by the holder thereof) in exchange therefor, in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the form of Exhibit 1. Each
such new Note shall be dated and bear interest from the date to which interest
shall have been paid on the surrendered Note or dated the date of the
surrendered Note if no interest shall have been paid thereon. The Company may
require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of Notes. Notes shall not be
transferred in denominations of less than $100,000, provided that if necessary
--------
to enable the registration of transfer by a holder of its entire holding of
Notes, one Note may be in a denomination of less than $100,000. Any transferee,
by its acceptance of a Note registered in its name (or the name of its nominee),
shall be deemed to have made the representation set forth in Section 6.2.
13.3. Replacement of Notes.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from
such Institutional Investor of such ownership and such loss, theft, destruction
or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is a
--------
nominee for, an original purchaser or a Qualified Institutional Buyer,
such Person's own unsecured agreement of indemnity shall be deemed to be
satisfactory), or
40
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.
14. PAYMENTS ON NOTES.
14.1. Place of Payment.
Subject to Section 14.2, payments of principal, Make-Whole Amount, if
any, and interest becoming due and payable on the Notes shall be made in
Burlington, Massachusetts at the principal office of the Company in such
jurisdiction. The Company may at any time, by notice to each holder of a Note,
change the place of payment of the Notes so long as such place of payment shall
be either the principal office of the Company in such jurisdiction or the
principal office of a bank or trust company in such jurisdiction. The Company
may at any time thereafter, by notice to each holder of a Note, change the place
of payment of the Notes so long as such place of payment shall be either a
principal office of the Company in the United States or a principal office of a
bank or trust company in the United States.
14.2. Home Office Payment.
So long as you or your nominee shall be the holder of any Note, and
notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for principal,
Make-Whole Amount, if any, and interest by the method and at the address
specified for such purpose below your name in Schedule A, or by such other
method or at such other address as you shall have from time to time specified to
the Company in writing for such purpose, without the presentation or surrender
of such Note or the making of any notation thereon, except that upon written
request of the Company made concurrently with or reasonably promptly after
payment or prepayment in full of any Note, you shall surrender such Note for
cancellation, reasonably promptly after any such request, to the Company at its
principal executive office or at the place of payment most recently designated
by the Company pursuant to Section 14.1. Prior to any sale or other disposition
of any Note held by you or your nominee you will, at your election, either
endorse thereon the amount of principal paid thereon and the last date to which
interest has been paid thereon or surrender such Note to the Company in exchange
for a new Note or Notes pursuant to Section 13.2. The Company will afford the
benefits of this Section 14.2 to any Institutional Investor that is the direct
or indirect transferee of any Note purchased by you under this Agreement and
that has made the same agreement relating to such Note as you have made in this
Section 14.2.
15. EXPENSES, ETC.
41
15.1. Transaction Expenses.
Whether or not the transactions contemplated hereby are consummated, the
Company will pay all costs and expenses (including reasonable attorneys' fees of
one special counsel for all Purchasers and, if reasonably required, local or
other counsel) incurred by you and each Other Purchaser or holder of a Note in
connection with such transactions and in connection with any amendments, waivers
or consents under or in respect of this Agreement or the Notes (whether or not
such amendment, waiver or consent becomes effective), including, without
limitation: (a) the costs and expenses incurred in enforcing or defending (or
determining whether or how to enforce or defend) any rights under this Agreement
or the Notes or in responding to any subpoena or other legal process or informal
investigative demand issued in connection with this Agreement or the Notes, or
by reason of being a holder of any Note, and (b) the costs and expenses,
including financial advisors' fees, incurred in connection with the insolvency
or bankruptcy of the Company or any Subsidiary or in connection with any
work-out or restructuring of the transactions contemplated hereby and by the
Notes. The Company will pay, and will save you and each other holder of a Note
harmless from, all claims in respect of any fees, costs or expenses if any, of
brokers and finders (other than those retained by you).
15.2. Survival.
The obligations of the Company under this Section 15 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement or the Notes, and the termination of this Agreement.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by you of any Note or portion thereof or interest therein and the payment of any
Note, and may be relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any other holder of
a Note. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant to this Agreement shall be
deemed representations and warranties of the Company under this Agreement.
Subject to the preceding sentence, this Agreement and the Notes embody the
entire agreement and understanding between you and the Obligors and supersede
all prior agreements and understandings relating to the subject matter hereof.
17. AMENDMENT AND WAIVER.
17.1. Requirements.
This Agreement and the Notes may be amended, and the observance of any
term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and the
Required Holders,
42
except that (a) no amendment or waiver of any of the provisions of any of
Sections 1, 2, 3, 4, 5, 6 and 21, or any defined term (as it is used therein),
will be effective as to you unless consented to by you in writing, (b) no such
amendment or waiver may, without the written consent of the holder of each Note
at the time outstanding affected thereby, (i) subject to the provisions of
Section 12 relating to acceleration or rescission, change the amount or time of
any prepayment or payment of principal of, or change the rate or change the time
of payment or method of computation of interest or of the Make-Whole Amount on,
the Notes, (ii) change the percentage of the principal amount of the Notes the
holders of which are required to consent to any such amendment or waiver, or
(iii) amend any of Sections 8, 11(a), 11(b), 12, 17, 20 or 22, and (c) no
amendment or waiver of any of the provisions of Section 22, or any defined term
(as it used therein), will be effective as to any Subsidiary Guarantor unless
consented to by such Subsidiary Guarantor in writing.
17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of the Notes
------------
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is
required, to enable such holder to make an informed and considered
decision with respect to any proposed amendment, waiver or consent in
respect of any of the provisions hereof or of the Notes. The Company will
deliver executed or true and correct copies of each amendment, waiver or
consent effected pursuant to the provisions of this Section 17 to each
holder of outstanding Notes promptly following the date on which it is
executed and delivered by, or receives the consent or approval of, the
requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay or cause
-------
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes
as consideration for or as an inducement to the entering into by any
holder of Notes of any waiver or amendment of any of the terms and
provisions hereof unless such remuneration is concurrently paid, or
security is concurrently granted, on the same terms, ratably to each
holder of Notes then outstanding even if such holder did not consent to
such waiver or amendment.
17.3. Binding Effect, etc.
Any amendment or waiver consented to as provided in this Section 17
applies equally to all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the Company without regard to whether such
Note has been marked to indicate such amendment or waiver. No such amendment or
waiver will extend to or affect any obligation, covenant, agreement, Default or
Event of Default not expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Company and 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, the term
"this Agreement" and
43
references thereto shall mean this Agreement as it may from time to time be
amended or supplemented.
17.4. Notes held by Company, etc.
Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company or any of its
Affiliates shall be deemed not to be outstanding.
18. NOTICES.
All notices and communications provided for hereunder shall be in writing
and sent (a) by telecopy if the sender on the same day sends a confirming copy
-
of such notice by a recognized overnight delivery service (charges prepaid), or
(b) by registered or certified mail with return receipt requested (postage
-
prepaid), or (c) by a recognized overnight delivery service (with charges
-
prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address
specified for such communications in Schedule A, or at such other
address as you or it shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at such
address as such other holder shall have specified to the Company in
writing,
(iii) if to the Company, to the Company at its address set forth
at the beginning hereof to the attention of ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., or at
such other address as the Company shall have specified to the holder
of each Note in writing, or
(iv) if to any Subsidiary Guarantor, to such Subsidiary
Guarantor in care of the Company.
Notices under this Section 18 will be deemed given only when actually received.
19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating hereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates
44
that, to the extent permitted by applicable law, any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding (whether or not the original is in existence and whether or not such
reproduction was made by you in the regular course of business) and any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 19 shall not prohibit the
Company or any other holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from introducing evidence
to demonstrate the inaccuracy of any such reproduction.
20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential Information" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified when received by you as being confidential
information of the Company or such Subsidiary, provided that such term does not
include information that
(a) was publicly known or otherwise known to you prior to the time of
such disclosure,
(b) subsequently becomes publicly known through no act or omission by
you or any person acting on your behalf,
(c) otherwise becomes known to you other than through disclosure by
the Company or any Subsidiary by a Person who was not, to your knowledge,
bound by any confidentiality obligation to the Company, or
(d) constitutes financial statements delivered to you under Section
7.1 that are otherwise publicly available.
You will maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by you in good faith to protect confidential
information of third parties delivered to you, provided that you may deliver or
disclose Confidential Information to:
(i) your directors, officers, trustees, employees, agents,
attorneys and affiliates (to the extent such disclosure reasonably
relates to the administration of the investment represented by your
Notes),
(ii) your financial advisors and other professional advisors who
agree to hold confidential the Confidential Information substantially
in accordance with the terms of this Section 20,
(iii) any other holder of any Note,
45
(iv) any Institutional Investor to which you sell or offer to
sell such Note or any part thereof or any participation therein (if
such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section
20),
(v) any Person from which you offer to purchase any security of
the Company (if such Person has agreed in writing prior to its receipt
of such Confidential Information to be bound by the provisions of this
Section 20),
(vi) any federal or state regulatory authority having
jurisdiction over you,
(vii) the National Association of Insurance Commissioners or any
similar organization, or any nationally recognized rating agency that
requires access to information about your investment portfolio or
(viii) any other Person to which such delivery or disclosure may
be necessary or appropriate
(A) to effect compliance with any law, rule, regulation or
order applicable to you,
(B) in response to any subpoena or other legal process,
(C) in connection with any litigation to which you are a
party or
(D) if an Event of Default has occurred and is continuing,
to the extent you may reasonably determine such delivery and
disclosure to be necessary or appropriate in the enforcement or
for the protection of the rights and remedies under your Notes
and this Agreement.
Each holder of a Note, by its acceptance of a Note, will be deemed to have
agreed to be bound by and to be entitled to the benefits of this Section 20 as
though it were a party to this Agreement. On reasonable request by the Company
in connection with the delivery to any holder of a Note of information required
to be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company embodying the provisions of
this Section 20.
21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your Affiliates as the
purchaser of the Notes that you have agreed to purchase hereunder, by written
notice to the Company, which notice shall be signed by both you and such
Affiliate,
46
shall contain such Affiliate's agreement to be bound by this Agreement and shall
contain a confirmation by such Affiliate of the accuracy with respect to it of
the representations set forth in Section 6. Upon receipt of such notice,
wherever the word "you" is used in this Agreement (other than in this Section
21), such word shall be deemed to refer to such Affiliate in lieu of you. In the
event that such Affiliate is so substituted as a purchaser hereunder and such
Affiliate thereafter transfers to you all of the Notes then held by such
Affiliate, upon receipt by the Company of notice of such transfer, wherever the
word "you" is used in this Agreement (other than in this Section 21), such word
shall no longer be deemed to refer to such Affiliate, but shall refer to you,
and you shall have all the rights of an original holder of the Notes under this
Agreement.
22. GUARANTEE.
22.1. The Guarantee.
The Subsidiary Guarantors hereby jointly and severally guarantee to you
and to each holder of any Note or Notes at any time outstanding, the prompt
payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the principal of, and interest and Make-Whole Amount (if any) on,
the Notes and all other amounts from time to time owing to the holders of the
Notes by the Company under this Agreement and under the Notes (including,
without limitation, taxes, and reasonable costs, expenses, and fees of
attorneys), and the prompt performance and observance by the Company of all
covenants, agreements and conditions on its part to be performed and observed
hereunder, in each case strictly in accordance with the terms hereof (such
obligations being herein collectively called the "Guaranteed Obligations"). The
Subsidiary Guarantors hereby further jointly and severally agree that if the
Company shall fail to pay in full when due (whether at stated maturity, by
acceleration or otherwise) any of the Guaranteed Obligations, the Subsidiary
Guarantors will promptly pay the same, upon demand, and that in the case of any
extension of time of payment or renewal of any of the Guaranteed Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
by acceleration or otherwise) in accordance with the terms of such extension or
renewal.
22.2. Obligations Unconditional.
The obligations of the Subsidiary Guarantors under this Section 22 (the
"Unconditional Guarantee") are absolute and unconditional, joint and several,
irrespective of the value, genuineness, validity, regularity or enforceability
of the obligations of the Company under this Agreement, the Notes or any other
agreement or instrument referred to herein or therein, or any substitution,
release or exchange of any other guarantee of or security for any of the
Guaranteed Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section 22 that the obligations of the Subsidiary
Guarantors hereunder shall be absolute and unconditional, joint and several,
under any and all circumstances. Without limiting the generality of the
47
foregoing, it is agreed that the occurrence of any one or more of the following
shall not alter or impair the liability of the Subsidiary Guarantors under this
Section 22, such liability to remain absolute and unconditional as described
above:
(a) at any time or from time to time, without notice to the Subsidiary
Guarantors, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or compliance
shall be waived;
(b) any of the acts mentioned in any of the provisions of this
Agreement or the Notes or any other agreement or instrument referred to
herein or therein shall be done or omitted;
(c) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this Agreement
or the Notes or any other agreement or instrument referred to herein or
therein shall be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or exchanged in
whole or in part or otherwise dealt with; or
(d) any lien or security interest granted to, or in favor of, any of
the holders of the Notes as security for any of the Guaranteed Obligations
shall fail to be perfected.
The Subsidiary Guarantors hereby expressly waive diligence, presentment,
demand of payment, protest and all notices whatsoever (except as otherwise
provided herein), and any requirement that the holders of the Notes exhaust any
right, power or remedy or proceed against the Company under this Agreement or
the Notes or any other agreement or instrument referred to herein or therein, or
against any other Person under any other guarantee of, or security for, any of
the Guaranteed Obligations.
22.3. Reinstatement.
The obligations of the Subsidiary Guarantors under this Section 22 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of the Company in respect of the Guaranteed Obligations is
rescinded or must be otherwise restored by any holder of any of the Guaranteed
Obligations or is repaid in good faith settlement of a pending or threatened
avoidance claim, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise and the Subsidiary Guarantors jointly and severally
agree that they will indemnify the holders of the Notes on demand for all
reasonable costs and expenses (including, without limitation, fees of counsel)
incurred by the holders of the Notes in connection with such settlement or
rescission or restoration, including any such costs and expenses incurred in
defending against any claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law.
48
22.4. Subrogation.
The Subsidiary Guarantors hereby jointly and severally agree that until
the payment and satisfaction in full of all Guaranteed Obligations under this
Agreement they shall not exercise any right or remedy arising by reason of any
performance by them of their guarantee in Section 22.1 hereof, whether by
subrogation or otherwise, against the Company or any other guarantor of any of
the Guaranteed Obligations or any security for any of the Guaranteed
Obligations.
22.5. Remedies.
The Subsidiary Guarantors jointly and severally agree that, as between
the Subsidiary Guarantors and the holders of the Notes, the obligations of the
Company under this Agreement and the Notes may be declared to be forthwith due
and payable as provided in Section 12 hereof (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 12)
for purposes of Section 22.1 hereof notwithstanding any stay, injunction or
other prohibition preventing such declaration (or such obligations from becoming
automatically due and payable) as against the Company and that, in the event of
such declaration (or such obligations being deemed to have become automatically
due and payable), such obligations (whether or not due and payable by the
Company) shall forthwith become due and payable by the Subsidiary Guarantors for
purposes of said Section 22.1.
22.6. Instrument for the Payment of Money.
Each Subsidiary Guarantor hereby acknowledges that the guarantee in this
Section 22 constitutes an instrument for the payment of money, and consents and
agrees that any holder of the Notes, at its sole option, in the event of a
dispute by such Subsidiary Guarantor in the payment of any moneys due hereunder,
shall have the right to bring motion-action under New York CPLR Section 3213.
22.7. Continuing Guarantee.
The guarantee in this Section 22 is a continuing guarantee, and shall
apply to all Guaranteed Obligations whenever arising.
22.8. Rights of Contribution.
The Subsidiary Guarantors hereby agree, as between themselves, that if
any Subsidiary Guarantor shall become an Excess Funding Guarantor (as defined
below) by reason of the payment by such Subsidiary Guarantor of any Guaranteed
Obligations, each other Subsidiary Guarantor shall, on demand of such Excess
Funding Guarantor (but subject to the next sentence), pay to such Excess Funding
Guarantor an amount equal to such Subsidiary Guarantor's Pro Rata Share (as
defined below and determined, for this purpose, without reference to the
properties, debts and liabilities of such Excess Funding Guarantor) of the
Excess Payment (as defined below) in respect of such Guaranteed Obligations. The
payment obligation of a Subsidiary Guarantor to any Excess Funding Guarantor
under this Section 22.8
49
shall be subordinate and subject in right of payment to the prior payment in
full of the obligations of such Subsidiary Guarantor under the other provisions
of this Section 22 and such Excess Funding Guarantor shall not exercise any
right or remedy with respect to such excess until payment and satisfaction in
full of all of such obligations.
For purposes of this Section 22.8,
(i) "Excess Funding Guarantor" shall mean, in respect of any
Guaranteed Obligations, a Subsidiary Guarantor that has paid an amount
in excess of its Pro Rata Share of such Guaranteed Obligations,
(ii) "Excess Payment" shall mean, in respect of any Guaranteed
Obligations, the amount paid by an Excess Funding Guarantor in excess
of its Pro Rata Share of such Guaranteed Obligations and
(iii) "Pro Rata Share" shall mean, for any Subsidiary Guarantor,
the ratio (expressed as a percentage) of (x) the amount by which the
aggregate present fair saleable value of all properties of such
Subsidiary Guarantor (excluding any shares of stock of any other
Subsidiary Guarantor) exceeds the amount of all the debts and
liabilities of such Subsidiary Guarantor (including contingent,
subordinated, unmatured and unliquidated liabilities, but excluding
the obligations of such Subsidiary Guarantor hereunder and any
obligations of any other Subsidiary Guarantor that have been
Guaranteed by such Subsidiary Guarantor) to (y) the amount by which
the aggregate fair saleable value of all properties of all of the
Subsidiary Guarantors exceeds the amount of all the debts and
liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of the
Subsidiary Guarantors hereunder) of all of the Subsidiary Guarantors,
all as of the date of the Closing. If any Subsidiary becomes a
Subsidiary Guarantor hereunder subsequent to the date of the Closing,
then for purposes of this Section 22.8 such subsequent Subsidiary
Guarantor shall be deemed to have been a Subsidiary Guarantor as of
the date of the Closing and the aggregate present fair saleable value
of the properties, and the amount of the debts and liabilities, of
such Subsidiary Guarantor as of the date of the Closing shall be
deemed to be equal to such value and amount on the date such
Subsidiary Guarantor becomes a Subsidiary Guarantor hereunder.
22.9. General Limitation on Guaranteed Obligations.
In any action or proceeding involving any state corporate law, or any
state or federal bankruptcy, insolvency, reorganization or other law affecting
the rights of creditors generally, if the obligations of any Subsidiary
Guarantor under Section
50
22.1 would otherwise, taking into account the provisions of Section 22.8, be
held or determined to be void, invalid or unenforceable, or subordinated to the
claims of any other creditors, on account of the amount of its liability under
said Section 22.1, then, notwithstanding any other provision hereof to the
contrary, the amount of such liability shall, without any further action by such
Subsidiary Guarantor, any holder of the Notes or any other Person, be
automatically limited and reduced to the highest amount that is valid and
enforceable and not subordinated to the claims of other creditors as determined
in such action or proceeding.
23. MISCELLANEOUS.
23.1. Successors and Assigns.
All covenants and other agreements contained in this Agreement by or
on behalf of any of the parties hereto bind and inure to the benefit of
their respective successors and assigns (including, without limitation,
any subsequent holder of a Note) whether so expressed or not.
23.2. Payments Due on Non-Business Days; When Payments Deemed Received.
(a) Payments Due on Non-Business Days. Anything in this Agreement or
---------------------------------
the Notes to the contrary notwithstanding, any payment of principal of or
Make-Whole Amount or interest on any Note that is due on a date other
than a Business Day shall be made on the next succeeding Business Day
without including the additional days elapsed in the computation of the
interest payable on such next succeeding Business Day.
(b) Payments, When Received. Any payment to be made to the holders of
-----------------------
Notes hereunder or under the Notes shall be deemed to have been made on
the Business Day such payment actually becomes available to such holder
at such holder's bank prior to 12:00 noon (local time of such bank).
23.3. Severability.
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
23.4. Construction.
Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained
herein, so that compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by any Person,
or which such Person is
51
prohibited from taking, such provision shall be applicable whether such action
is taken directly or indirectly by such Person.
23.5. Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
23.6. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND
THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE
THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
[Remainder of page intentionally blank. Next page is signature page.]
52
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Company.
Very truly yours,
CIRCOR INTERNATIONAL, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: President
SUBSIDIARY GUARANTORS
---------------------
CIRCOR, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: President
CIRCOR IP HOLDING CO.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: President
CIRCLE SEAL CONTROLS, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: President
53
CIRCLE SEAL CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: President
GO REGULATOR, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: President
▇▇▇▇, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: President
KF INDUSTRIES, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: President
54
KF SALES CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: President
▇▇▇▇▇▇ CONTROLS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: President
▇▇▇▇▇▇ ENGINEERING COMPANY,
INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: President
The foregoing is hereby
agreed to as of the
date thereof.
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signature
ALLSTATE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title:
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signature
MINNESOTA LIFE INSURANCE COMPANY
By: Advantus Capital Management, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
FARM BUREAU LIFE INSURANCE COMPANY OF MICHIGAN
By: Advantus Capital Management, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
INTER-STATE ASSURANCE COMPANY
By: Advantus Capital Management, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
UNITED MUTUAL LIFE INSURANCE COMPANY - ANNUITY PORTFOLIO
By: Advantus Capital Management, Inc.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
NATIONAL TRAVELERS LIFE COMPANY
By: Advantus Capital Management, Inc.
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇.▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
MUTUAL TRUST LIFE INSURANCE COMPANY
By: Advantus Capital Management, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
COLUMBIAN MUTUAL LIFE INSURANCE COMPANY
By: Advantus Capital Management, Inc.
By: /s/ ▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇
Title: Vice President
FARM BUREAU GENERAL INSURANCE COMPANY OF MICHIGAN
By: Advantus Capital Management, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
MONY LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
THE GUARDIAN LIFE INSURANCE COMPANY OF AMERICA
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Second Vice President
THE CANADA LIFE INSURANCE COMPANY
By: /s/ C. ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Name: C. ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Associate Treasurer
CANADA LIFE INSURANCE COMPANY OF AMERICA
By: /s/ C. ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Name: C. ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Treasurer
55