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EXHIBIT 10(aj)
WYLE ELECTRONICS
NOTE PURCHASE AND PRIVATE SHELF AGREEMENT
$30,000,000
6.98% SERIES A SENIOR NOTES DUE APRIL 26, 2001
$20,000,000
PRIVATE SHELF FACILITY
DATED AS OF APRIL 26, 1996
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TABLE OF CONTENTS
(not part of agreement)
Page
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1. AUTHORIZATION OF ISSUE OF NOTES....................................... 1
1A. AUTHORIZATION OF ISSUE OF SERIES A NOTES................ 1
1B. AUTHORIZATION OF ISSUE OF SHELF NOTES................... 1
2. PURCHASE AND SALE OF NOTES............................................ 2
2A. PURCHASE AND SALE OF SERIES A NOTES..................... 2
2B. PURCHASE AND SALE OF SHELF NOTES........................ 2
2B(1). FACILITY................................................ 2
2B(2). ISSUANCE PERIOD......................................... 3
2B(3). REQUEST FOR PURCHASE.................................... 3
2B(4). RATE QUOTES............................................. 3
2B(5). ACCEPTANCE.............................................. 4
2B(6). MARKET DISRUPTION....................................... 4
2B(7). FACILITY CLOSINGS....................................... 4
2B(8). FEES.................................................... 5
2B(8)(i). STRUCTURING FEE......................................... 5
2B(8)(ii). ISSUANCE FEE............................................ 5
2B(8)(iii). DELAYED DELIVERY FEE.................................... 5
2B(8)(iv). CANCELLATION FEE........................................ 6
3. CONDITIONS OF CLOSING................................................. 6
3A. CERTAIN DOCUMENTS....................................... 6
3B. OPINION OF PURCHASER'S SPECIAL COUNSEL.................. 8
3C. REPRESENTATIONS AND WARRANTIES; NO DEFAULT.............. 8
3D. PURCHASE PERMITTED BY APPLICABLE LAWS................... 8
3E. PAYMENT OF FEES......................................... 8
4. PREPAYMENTS........................................................... 8
4A. NO REQUIRED PREPAYMENTS OF SERIES A NOTES............... 8
4B. REQUIRED PREPAYMENTS OF SHELF NOTES..................... 8
4C. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT....... 8
4D. NOTICE OF OPTIONAL PREPAYMENT........................... 9
4E. APPLICATION OF PREPAYMENTS.............................. 9
4F. RETIREMENT OF NOTES..................................... 9
5. AFFIRMATIVE COVENANTS................................................. 10
5A. FINANCIAL STATEMENTS; NOTICE OF DEFAULTS................ 10
5B. INFORMATION REQUIRED BY RULE 144A....................... 11
5C. INSPECTION OF PROPERTY.................................. 11
5D. COVENANT TO SECURE NOTES EQUALLY........................ 12
5E. MAINTENANCE OF INSURANCE................................ 12
5F. COMPLIANCE WITH LAWS.................................... ▇▇
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▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.................................................... ▇▇
▇▇. CONSOLIDATED TANGIBLE NET WORTH......................... 12
6B. INTENTIONALLY OMITTED................................... 12
6C. LIEN, FUNDED DEBT AND OTHER RESTRICTIONS................ 13
6C(1). LIEN RESTRICTIONS....................................... 13
6C(2). DEBT RESTRICTIONS....................................... 14
6C(3). LOANS, ADVANCES AND INVESTMENTS......................... 14
6C(4). SALE OF STOCK AND DEBT OF SUBSIDIARIES.................. 15
6C(5). MERGER AND CONSOLIDATION................................ 15
6C(6). TRANSFER OF ASSETS...................................... 15
6C(7). SALE AND LEASE-BACK..................................... 16
6C(8). SALE OR DISCOUNT OF RECEIVABLES......................... 16
6D. GUARANTOR REVENUES & ASSETS LIMITS...................... 16
7. EVENTS OF DEFAULT..................................................... 16
7A. ACCELERATION............................................ 16
7B. RESCISSION OF ACCELERATION.............................. 20
7C. NOTICE OF ACCELERATION OR RESCISSION.................... 20
7D. OTHER REMEDIES.......................................... 20
8. REPRESENTATIONS, COVENANTS AND WARRANTIES............................. 20
8A. ORGANIZATION............................................ 21
8B. FINANCIAL STATEMENTS.................................... 21
8C. ACTIONS PENDING......................................... 21
8D. OUTSTANDING DEBT........................................ 21
8E. TITLE TO PROPERTIES..................................... 22
8F. TAXES................................................... 22
8G. CONFLICTING AGREEMENTS AND OTHER MATTERS................ 22
8H. OFFERING OF NOTES....................................... 22
8I. USE OF PROCEEDS......................................... 23
8J. ERISA................................................... 23
8K. GOVERNMENTAL CONSENT.................................... 23
8L. ENVIRONMENTAL COMPLIANCE................................ 24
8M. DISCLOSURE.............................................. 24
8N. HOSTILE TENDER OFFERS................................... 24
9. REPRESENTATIONS OF THE PURCHASERS..................................... 24
9A. NATURE OF PURCHASE...................................... 24
9B. SOURCE OF FUNDS......................................... 24
10. DEFINITIONS; ACCOUNTING MATTERS....................................... 25
10A. YIELD-MAINTENANCE TERMS................................. 25
10B. OTHER TERMS............................................. 26
10C. ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS......... 34
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11. MISCELLANEOUS......................................................... 34
11A. NOTE PAYMENTS........................................... 34
11B. EXPENSES................................................ 34
11C. CONSENT TO AMENDMENTS................................... 35
11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES;
LOST NOTES.............................................. 35
11E. PERSONS DEEMED OWNERS; PARTICIPATIONS; RIGHT OF
FIRST OFFER............................................. 36
11F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT............................................... 37
11G. SUCCESSORS AND ASSIGNS.................................. 37
11H. INDEPENDENCE OF COVENANTS............................... 37
11I. NOTICES................................................. 38
11J. PAYMENTS DUE ON NON-BUSINESS DAYS....................... 38
11K. SEVERABILITY............................................ 38
11L. DESCRIPTIVE HEADINGS.................................... 38
11M. SATISFACTION REQUIREMENT................................ 39
11N. GOVERNING LAW........................................... 39
11O. SEVERALTY OF OBLIGATIONS................................ 39
11P. COUNTERPARTS............................................ 39
11Q. BINDING AGREEMENT....................................... 40
EXHIBITS AND SCHEDULES
Purchaser Schedule for Series A Notes
Information Schedule
Exhibit A-1 -- Form of Series A Note
Exhibit A-2 -- Form of Shelf Note
Exhibit B -- Form of Request for Purchase
Exhibit C -- Form of Confirmation of Acceptance
Exhibit D-1 -- Form of Opinion of Company Counsel, Series A Note Closing
Exhibit D-2 -- Form of Opinion of Company Counsel, Shelf Note Closing
Exhibit E -- Form of Guaranty Agreement
Schedule 6C -- Existing Liens and Funded Debt
Schedule 8G -- Agreements Restricting Debt
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WYLE ELECTRONICS
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
As of April 26, 1996
The Prudential Insurance Company
of America ("PRUDENTIAL")
Pruco Life Insurance Company ("PRUCO")
Each Prudential Affiliate (as hereinafter
defined) which becomes bound by certain
provisions of this Agreement as hereinafter
provided (together with Prudential and Pruco,
the "PURCHASERS")
c/o Prudential Capital Group
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned, Wyle Electronics (herein called the "COMPANY"),
hereby agrees with you as follows:
1. AUTHORIZATION OF ISSUE OF NOTES.
1A. AUTHORIZATION OF ISSUE OF SERIES A NOTES. The Company will
authorize the issue of its guaranteed senior promissory notes (the "SERIES A
NOTES") in the aggregate principal amount of $30,000,000, to be dated the date
of issue thereof, to mature April 26, 2001, to bear interest (computed on the
basis of a 360 day year -- 30 day month) on the unpaid balance thereof from the
date thereof until the principal thereof shall have become due, payable semi-
annually on the twenty-sixth day of April and October in each year at the rate
of 6.98% per annum, and on overdue principal, Yield-Maintenance Amount and
interest at the rate and at the time specified therein, and to be substantially
in the form of Exhibit A-1 attached hereto. The terms "SERIES A NOTE" and
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"SERIES A NOTES" as used herein shall include each Series A Note delivered
pursuant to any provision of this Agreement and each Series A Note delivered in
substitution or exchange for any such Series A Note pursuant to any such
provision.
1B. AUTHORIZATION OF ISSUE OF SHELF NOTES. The Company will
authorize the issue of its additional guaranteed senior promissory notes (the
"SHELF NOTES") in the aggregate principal amount of $20,000,000, to be dated
the date of issue thereof, to mature, in the
case of each Shelf Note so issued, no more than ten years after the date of
original issuance thereof, to have an average life, in the case of each Shelf
Note so issued, of no more than ten years after the date of original issuance
thereof, to bear interest on the unpaid balance thereof from the date thereof at
the rate per annum, and to have such other particular terms, as shall be set
forth, in the case of each Shelf Note so issued, in the Confirmation of
Acceptance with respect to such Shelf Note delivered pursuant to paragraph
2B(5), and to be substantially in the form of Exhibit A-2 attached hereto.
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The terms "SHELF NOTE" and "SHELF NOTES" as used herein shall include each Shelf
Note delivered pursuant to any provision of this Agreement and each Shelf Note
delivered in substitution or exchange for any such Shelf Note pursuant to any
such provision. The terms "NOTE" and "NOTES" as used herein shall include each
Series A Note and each Shelf Note delivered pursuant to any provision of this
Agreement and each Note delivered in substitution or exchange for any such Note
pursuant to any such provision. Notes which have (i) the same final maturity,
(ii) the same principal prepayment dates, (iii) the same principal prepayment
amounts (as a percentage of the original principal amount of each Note), (iv)
the same interest rate, (v) the same interest payment periods and (vi) the same
date of issuance (which, in the case of a Note issued in exchange for another
Note, shall be deemed for these purposes the date on which such Note's ultimate
predecessor Note was issued), are herein called a "SERIES" of Notes.
2. PURCHASE AND SALE OF NOTES.
2A. PURCHASE AND SALE OF SERIES A NOTES. The Company hereby agrees
to sell to Prudential and Pruco and, subject to the terms and conditions herein
set forth, Prudential and Pruco each agrees to purchase from the Company the
aggregate principal amount of Series A Notes set forth opposite its name on the
Purchaser Schedule attached hereto at 100% of such aggregate principal amount.
On April 26, 1996 or any other date prior to April 26, 1996 upon which the
Company, Prudential and Pruco may agree (herein called the "SERIES A CLOSING
DAY"), the Company will deliver to each of Prudential and Pruco at the offices
of Prudential Capital Group, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, one or more Series A Notes registered in its name, evidencing the
aggregate principal amount of Series A Notes to be purchased by each of
Prudential and Pruco and in the denomination or denominations specified with
respect to each of Prudential and Pruco in the Purchaser Schedule attached
hereto, against payment of the purchase price thereof by transfer of immediately
available funds for credit to the Company's account #▇▇▇▇▇-▇▇▇▇▇ at Bank of
America, Global Payment Operations #5693, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, ABA Routing Number ▇▇▇-▇▇▇-▇▇▇.
2B. PURCHASE AND SALE OF SHELF NOTES.
2B(1). FACILITY. Prudential is willing to consider, in its sole
discretion and within limits which may be authorized for purchase by Prudential
and Prudential Affiliates from time to time, the purchase of Shelf Notes
pursuant to this Agreement. The willingness of Prudential to consider such
purchase of Shelf Notes is herein called the "FACILITY". At any time, the
aggregate principal amount of Shelf Notes stated in paragraph 1B, minus the
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aggregate principal amount of Shelf Notes purchased and sold pursuant to this
Agreement prior to such time, minus the aggregate principal amount of Accepted
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Notes (as hereinafter defined) which have not yet been purchased and sold
hereunder prior to such time, is herein called the
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"AVAILABLE FACILITY AMOUNT" at such time. NOTWITHSTANDING THE WILLINGNESS OF
PRUDENTIAL TO CONSIDER PURCHASES OF SHELF NOTES, THIS AGREEMENT IS ENTERED INTO
ON THE EXPRESS UNDERSTANDING THAT NEITHER PRUDENTIAL NOR ANY PRUDENTIAL
AFFILIATE SHALL BE OBLIGATED TO MAKE OR ACCEPT OFFERS TO PURCHASE SHELF NOTES,
OR TO QUOTE RATES, SPREADS OR OTHER TERMS WITH RESPECT TO SPECIFIC PURCHASES OF
SHELF NOTES, AND THE FACILITY SHALL IN NO WAY BE CONSTRUED AS A COMMITMENT BY
PRUDENTIAL OR ANY PRUDENTIAL AFFILIATE.
2B(2). ISSUANCE PERIOD. Shelf Notes may be issued and sold pursuant
to this Agreement until the earlier of (i) the second anniversary of the date of
this Agreement (or if such anniversary is not a Business Day, the Business Day
next preceding such anniversary) and (ii) the thirtieth day after Prudential
shall have given to the Company, or the Company shall have given to Prudential,
written notice stating that it elects to terminate the issuance and sale of
Shelf Notes pursuant to this Agreement (or if such thirtieth day is not a
Business Day, the Business Day next preceding such thirtieth day). The period
during which Shelf Notes may be issued and sold pursuant to this Agreement is
herein called the "ISSUANCE PERIOD".
2B(3). REQUEST FOR PURCHASE. The Company may from time to time during
the Issuance Period make requests for purchases of Shelf Notes (each such
request being herein called a "REQUEST FOR PURCHASE"). Each Request for
Purchase shall be made to Prudential by telecopier or overnight delivery
service, and shall (i) specify the aggregate principal amount of Shelf Notes
covered thereby, which shall not be less than $5,000,000 and not be greater than
the Available Facility Amount at the time such Request for Purchase is made,
(ii) specify the principal amounts, final maturities, principal prepayment dates
and amounts and interest payment periods (quarterly or semi-annual in arrears)
of the Shelf Notes covered thereby, (iii) specify the use of proceeds of such
Shelf Notes, (iv) specify the proposed day for the closing of the purchase and
sale of such Shelf Notes, which shall be a Business Day during the Issuance
Period not less than 10 days and not more than 25 days after the making of such
Request for Purchase, (v) specify the number of the account and the name and
address of the depository institution to which the purchase prices of such Shelf
Notes are to be transferred on the Closing Day for such purchase and sale, (vi)
certify that the representations and warranties contained in paragraph 8 are
true on and as of the date of such Request for Purchase and that there exists on
the date of such Request for Purchase no Event of Default or Default, (vii)
specify the Designated Spread for such Shelf Notes and (viii) be substantially
in the form of Exhibit B attached hereto. Each Request for Purchase shall be in
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writing and shall be deemed made when received by Prudential.
2B(4). RATE QUOTES. Not later than five Business Days after the
Company shall have given Prudential a Request for Purchase pursuant to paragraph
2B(3), Prudential may, but shall be under no obligation to, provide to the
Company by telephone or telecopier, in each case between 9:30 A.M. and 1:30 P.M.
New York City local time (or such later time as Prudential may elect) interest
rate quotes for the several principal amounts, maturities, principal prepayment
schedules, and interest payment periods of Shelf Notes specified in such Request
for Purchase. Each quote shall represent the interest rate per annum payable
on the outstanding principal balance of such Shelf Notes at which Prudential or
a Prudential Affiliate would be willing to purchase such Shelf Notes at 100% of
the principal amount thereof.
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2B(5). ACCEPTANCE. Within 30 minutes after Prudential shall have
provided any interest rate quotes pursuant to paragraph 2B(4) or such shorter
period as Prudential may specify to the Company (such period herein called the
"ACCEPTANCE WINDOW"), the Company may, subject to paragraph 2B(6), elect to
accept such interest rate quotes as to not less than $5,000,000 aggregate
principal amount of the Shelf Notes specified in the related Request for
Purchase. Such election shall be made by an Authorized Officer of the Company
notifying Prudential by telephone or telecopier within the Acceptance Window
that the Company elects to accept such interest rate quotes, specifying the
Shelf Notes (each such Shelf Note being herein called an "ACCEPTED NOTE") as to
which such acceptance (herein called an "ACCEPTANCE") relates. The day the
Company notifies an Acceptance with respect to any Accepted Notes is herein
called the "ACCEPTANCE DAY" for such Accepted Notes. Any interest rate quotes
as to which Prudential does not receive an Acceptance within the Acceptance
Window shall expire, and no purchase or sale of Shelf Notes hereunder shall be
made based on such expired interest rate quotes. Subject to paragraph 2B(6) and
the other terms and conditions hereof, the Company agrees to sell to Prudential
or a Prudential Affiliate, and Prudential agrees to purchase, or to cause the
purchase by a Prudential Affiliate of, the Accepted Notes at 100% of the
principal amount of such Notes. As soon as practicable following the Acceptance
Day, the Company, Prudential and each Prudential Affiliate which is to purchase
any such Accepted Notes will execute a confirmation of such Acceptance
substantially in the form of Exhibit C attached hereto (herein called a
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"CONFIRMATION OF ACCEPTANCE"). If the Company should fail to execute and return
to Prudential within three Business Days following receipt thereof a
Confirmation of Acceptance with respect to any Accepted Notes, Prudential may
at its election at any time prior to its receipt thereof cancel the closing with
respect to such Accepted Notes by so notifying the Company in writing.
2B(6). MARKET DISRUPTION. Notwithstanding the provisions of paragraph
2B(5), if Prudential shall have provided interest rate quotes pursuant to
paragraph 2B(4) and thereafter prior to the time an Acceptance with respect to
such quotes shall have been notified to Prudential in accordance with paragraph
2B(5) the domestic market for U.S. Treasury securities or derivatives shall
have closed or there shall have occurred a general suspension, material
limitation, or significant disruption of trading in securities generally on the
New York Stock Exchange or in the domestic market for U.S. Treasury securities
or derivatives, then such interest rate quotes shall expire, and no purchase or
sale of Shelf Notes hereunder shall be made based on such expired interest rate
quotes. If the Company thereafter notifies Prudential of the Acceptance of any
such interest rate quotes, such Acceptance shall be ineffective for all purposes
of this Agreement, and Prudential shall promptly notify the Company that the
provisions of this paragraph 2B(6) are applicable with respect to such
Acceptance.
2B(7). FACILITY CLOSINGS. Not later than 11:30 A.M. (New York City
local time) on the Closing Day for any Accepted Notes, the Company will deliver
to each Purchaser listed in the Confirmation of Acceptance relating thereto at
the offices of the Prudential Capital Group which the Purchasers specify, the
Accepted Notes to be purchased by such Purchaser in the form of one or more
Notes in authorized denominations as such Purchaser may request for each Series
of Accepted Notes to be purchased on the Closing Day, dated the Closing Day and
registered in such Purchaser's name (or in the name of its nominee), against
payment of the purchase price thereof by transfer of immediately available funds
for credit to the Company's account specified in the Request for Purchase of
such Notes. If the Company fails
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to tender to any Purchaser the Accepted Notes to be purchased by such Purchaser
on the scheduled Closing Day for such Accepted Notes as provided above in this
paragraph 2B(7), or any of the conditions specified in paragraph 3 shall not
have been fulfilled by the time required on such scheduled Closing Day, the
Company shall, prior to 1:00 P.M., New York City local time, on such scheduled
Closing Day notify Prudential (which notification shall be deemed received by
each Purchaser) in writing whether (i) such closing is to be rescheduled (such
rescheduled date to be a Business Day during the Issuance Period not less than
one Business Day and not more than 10 Business Days after such scheduled Closing
Day (the "RESCHEDULED CLOSING DAY")) and certify to Prudential (which
certification shall be for the benefit of each Purchaser) that the Company
reasonably believes that it will be able to comply with the conditions set forth
in paragraph 3 on such Rescheduled Closing Day and that the Company will pay the
Delayed Delivery Fee in accordance with paragraph 2B(8)(iii) or (ii) such
closing is to be canceled. In the event that the Company shall fail to give such
notice referred to in the preceding sentence, Prudential (on behalf of each
Purchaser) may at its election, at any time after 1:00 P.M., New York City local
time, on such scheduled Closing Day, notify the Company in writing that such
closing is to be canceled. Notwithstanding anything to the contrary appearing in
this Agreement, the Company may not elect to reschedule a closing with respect
to any given Accepted Notes on more than one occasion, unless Prudential shall
have otherwise consented in writing.
2B(8). FEES.
2B(8)(i). STRUCTURING FEE. In consideration for the time, effort and
expense involved in the preparation, negotiation and execution of this
Agreement, the Company has paid to Prudential in immediately available funds a
fee (herein called the "STRUCTURING FEE") in the amount of $25,000.
2B(8)(ii). ISSUANCE FEE. The Company will pay to Prudential in
immediately available funds a fee (herein called the "ISSUANCE FEE") on each
Closing Day (other than the Series A Closing Day and any other Closing Day which
occurs on or before August 26, 1996) in an amount equal to 0.15% of the
aggregate principal amount of Notes sold on such Closing Day.
2B(8)(iii). DELAYED DELIVERY FEE. If the closing of the purchase and
sale of any Accepted Note is delayed for any reason beyond the original Closing
Day for such Accepted Note, the Company will pay to Prudential (a) on the
Cancellation Date or actual closing date of such purchase and sale and (b) if
earlier, the next Business Day following 90 days after the Acceptance Day for
such Accepted Note and on each Business Day following 90 days after the prior
payment hereunder, a fee (herein called the "DELAYED DELIVERY FEE") calculated
as follows:
(BEY - MMY) X DTS/360 X PA
where "BEY" means Bond Equivalent Yield, i.e., the bond equivalent yield per
annum of such Accepted Note; "MMY" means Money Market Yield, i.e., the yield per
annum on a commercial paper investment of the highest quality selected by
Prudential on the date Prudential receives notice of the delay in the closing
for such Accepted Note having a maturity date or dates the same as, or closest
to, the Rescheduled Closing Day or Rescheduled Closing Days (a new
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alternative investment being selected by Prudential each time such closing is
delayed); "DTS" means Days to Settlement, i.e., the number of actual days
elapsed from and including the original Closing Day with respect to such
Accepted Note (in the case of the first such payment with respect to such
Accepted Note) or from and including the date of the next preceding payment (in
the case of any subsequent delayed delivery fee payment with respect to such
Accepted Note) to but excluding the date of such payment; and "PA" means
Principal Amount, i.e., the principal amount of the Accepted Note for which such
calculation is being made. In no case shall the Delayed Delivery Fee be less
than zero. Nothing contained herein shall obligate any Purchaser to purchase any
Accepted Note on any day other than the Closing Day for such Accepted Note, as
the same may be rescheduled from time to time in compliance with paragraph
2B(7).
2B(8)(iv). CANCELLATION FEE. If the Company at any time notifies
Prudential in writing that the Company is canceling the closing of the purchase
and sale of any Accepted Note, or if Prudential notifies the Company in writing
under the circumstances set forth in the last sentence of paragraph 2B(5) or the
penultimate sentence of paragraph 2B(7) that the closing of the purchase and
sale of such Accepted Note is to be canceled, or if the closing of the purchase
and sale of such Accepted Note is not consummated on or prior to the last day of
the Issuance Period (the date of any such notification, or the last day of the
Issuance Period, as the case may be, being herein called the "CANCELLATION
DATE"), the Company will pay to Prudential in immediately available funds an
amount (the "CANCELLATION FEE") calculated as follows:
PI X PA
where "PI" means Price Increase, i.e., the quotient (expressed in decimals)
obtained by dividing (a) the excess of the ask price (as determined by
Prudential) of the Hedge Treasury Note(s) on the Cancellation Date over the bid
price (as determined by Prudential) of the Hedge Treasury Notes(s) on the
Acceptance Day for such Accepted Note by (b) such bid price; and "PA" has the
meaning ascribed to it in paragraph 2B(8)(iii). The foregoing bid and ask
prices shall be as reported by Telerate Systems, Inc. (or, if such data for any
reason ceases to be available through Telerate Systems, Inc., any publicly
available source of similar market data). Each price shall be based on a U.S.
Treasury security having a par value of $100.00 and shall be rounded to the
second decimal place. In no case shall the Cancellation Fee be less than zero.
3. CONDITIONS OF CLOSING. The obligation of any Purchaser to
purchase and pay for any Notes is subject to the satisfaction, on or before the
Closing Day for such Notes, of the following conditions:
3A. CERTAIN DOCUMENTS. Such Purchaser shall have received the
following, each dated the date of the applicable Closing Day:
(i) The Note(s) to be purchased by such Purchaser.
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(ii) The Guaranty dated the Series A Closing Day in the form of
Exhibit E attached hereto.
(iii) Certified copies of the resolutions of the Boards of Directors
of the Company and the Guarantor authorizing (as applicable) the execution
and delivery of this Agreement and the Guaranty and the issuance of the
Notes, and of all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Agreement, the
Guaranty and the Notes.
(iv) Certificates of the Secretary or an Assistant Secretary and one
other officer of the Company and the Guarantor certifying the names and
true signatures of the officers of the Company and the Guarantor authorized
(as applicable) to sign this Agreement, the Guaranty and the Notes and the
other documents to be delivered hereunder.
(v) Certified copies of the Articles of Incorporation and By-laws
of the Company and the Guarantor.
(vi) A favorable opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General Counsel of
the Company (or such other counsel designated by the Company and acceptable
to the Purchaser(s)) satisfactory to such Purchaser and substantially in
the form of Exhibit D-1 (in the case of the Series A Notes) or D-2 (in the
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case of any Shelf Notes) attached hereto and as to such other
matters as such Purchaser may reasonably request. The Company hereby
directs each such counsel to deliver such opinion, agrees that the issuance
and sale of any Notes will constitute a reconfirmation of such direction,
and understands and agrees that each Purchaser receiving such an opinion
will and is hereby authorized to rely on such opinion.
(vii) Good standing certificates for the Company and the Guarantor
from the Secretary of State of California dated as of a recent date and
such other evidence of the status of the Company and the Guarantor as such
Purchaser may reasonably request.
(viii) Certified copies of Requests for Information or Copies (Form
UCC-11) or equivalent reports listing all effective financing statements
which name the Company or any Subsidiary (under its present name and
previous names) as debtor and which are filed in the offices of the
Secretaries of State of California and Arizona, together with copies of
such financing statements.
(ix) Additional documents or certificates with respect to legal
matters or corporate or other proceedings related to the transactions
contemplated hereby as may be reasonably requested by such Purchaser.
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3B. OPINION OF PURCHASER'S SPECIAL COUNSEL. Such Purchaser shall
have received from ▇▇▇▇▇ ▇. ▇▇▇▇▇, Assistant General Counsel of Prudential or
such other counsel who is acting as special counsel for it in connection with
this transaction, a favorable opinion satisfactory to such Purchaser as to such
matters incident to the matters herein contemplated as it may reasonably
request.
3C. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The representations
and warranties (i) of the Company contained in paragraph 8 hereof and (ii) of
the Guarantor in Section 3 of the Guaranty shall be true on and as of such
Closing Day, except to the extent of changes caused by the transactions herein
contemplated; there shall exist on such Closing Day no Event of Default or
Default; and the Company and the Guarantor (as appropriate) shall have delivered
to such Purchaser an Officer's Certificate, dated such Closing Day, to both such
effects.
3D. PURCHASE PERMITTED BY APPLICABLE LAWS. The purchase of and
payment for the Notes to be purchased by such Purchaser on the terms and
conditions herein provided (including the use of the proceeds of such Notes by
the Company) shall not violate any applicable law or governmental regulation
(including, without limitation, Section 5 of the Securities Act or Regulation G,
T or X of the Board of Governors of the Federal Reserve System) and shall not
subject such Purchaser to any tax, penalty, liability or other onerous condition
under or pursuant to any applicable law or governmental regulation, and such
Purchaser shall have received such certificates or other evidence as it may
request to establish compliance with this condition.
3E. PAYMENT OF FEES. The Company shall have paid to Prudential any
fees due it pursuant to or in connection with this Agreement, including any
Issuance Fee due pursuant to paragraph 2B(8)(ii) and any Delayed Delivery Fee
due pursuant to paragraph 2B(8)(iii).
4. PREPAYMENTS. The Series A Notes and any Shelf Notes shall be
subject to required prepayment as and to the extent provided in paragraphs 4A
and 4B, respectively. The Series A Notes and any Shelf Notes shall also be
subject to prepayment under the circumstances set forth in paragraph 4C. Any
prepayment made by the Company pursuant to any other provision of this paragraph
4 shall not reduce or otherwise affect its obligation to make any required
prepayment as specified in paragraph 4A or 4B.
4A. NO REQUIRED PREPAYMENTS OF SERIES A NOTES. The Series A Notes
shall not be subject to required prepayment.
4B. REQUIRED PREPAYMENTS OF SHELF NOTES. Each Series of Shelf Notes
shall be subject to the required prepayments, if any, set forth in the Notes of
such Series.
4C. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT. The Notes of
each Series shall be subject to prepayment, in whole at any time or from time to
time in part (in integral multiples of $100,000 and in a minimum amount of
$1,000,000), at the option of the
8
Company, at 100% of the principal amount so prepaid plus interest thereon to the
prepayment date and the Yield-Maintenance Amount, if any, with respect to each
such Note. Any partial prepayment of a Series of the Notes pursuant to this
paragraph 4C shall be applied in satisfaction of required payments of principal
in inverse order of their scheduled due dates. Any prepayment of the Notes which
is made as contemplated by clause (iii)(b) of paragraph 6C(6) shall be made
pursuant to this paragraph 4C. Any purchase of Notes pursuant to paragraph
11E(3) shall not be subject to this paragraph 4C.
4D. NOTICE OF OPTIONAL PREPAYMENT. The Company shall give the holder
of each Note of a Series to be prepaid pursuant to paragraph 4C irrevocable
written notice of such prepayment not less than 5 Business Days prior to the
prepayment date, specifying such prepayment date, the aggregate principal amount
of the Notes of such Series to be prepaid on such date, the principal amount of
the Notes of such Series held by such holder to be prepaid on that date and that
such prepayment is to be made pursuant to paragraph 4C. Notice of prepayment
having been given as aforesaid, the principal amount of the Notes specified in
such notice, together with interest thereon to the prepayment date and together
with the Yield-Maintenance Amount, if any, herein provided, shall become due and
payable on such prepayment date. The Company shall, on or before the day on
which it gives written notice of any prepayment pursuant to paragraph 4C, give
telephonic notice of the principal amount of the Notes to be prepaid and the
prepayment date to each Significant Holder which shall have designated a
recipient for such notices in the Purchaser Schedule attached hereto or the
applicable Confirmation of Acceptance or by notice in writing to the Company.
4E. APPLICATION OF PREPAYMENTS. In the case of each prepayment of
less than the entire unpaid principal amount of all outstanding Notes of any
Series pursuant to paragraph 4B or 4C, the amount to be prepaid shall be applied
pro rata to all outstanding Notes of such Series (including, for the purpose of
this paragraph 4E only, all Notes prepaid or otherwise retired or purchased or
otherwise acquired by the Company or any of its Subsidiaries or Affiliates other
than by prepayment pursuant to paragraph 4B or 4C) according to the respective
unpaid principal amounts thereof.
4F. RETIREMENT OF NOTES. The Company shall not, and shall not permit
any of its Subsidiaries or Affiliates to, prepay or otherwise retire in whole or
in part prior to their stated final maturity (other than by prepayment pursuant
to paragraph 4B or 4C or upon acceleration of such final maturity pursuant to
paragraph 7A), or purchase or otherwise acquire, directly or indirectly, Notes
of any Series held by any holder unless the Company or such Subsidiary or
Affiliate shall have offered to prepay or otherwise retire or purchase or
otherwise acquire, as the case may be, the same proportion of the aggregate
principal amount of Notes of such Series held by each other holder of Notes of
such Series at the time outstanding upon the same terms and conditions. Any
Notes so prepaid or otherwise retired or purchased or otherwise acquired by the
Company or any of its Subsidiaries or Affiliates shall not be deemed to be
outstanding for any purpose under this Agreement, except as provided in
------
paragraph 4E.
9
5. AFFIRMATIVE COVENANTS. During the Issuance Period and so long
thereafter as any Note is outstanding and unpaid, the Company covenants as
follows:
5A. FINANCIAL STATEMENTS; NOTICE OF DEFAULTS. The Company covenants
that it will deliver to each Significant Holder in triplicate:
(i) as soon as practicable and in any event within 55 days after the
end of each quarterly period (other than the last quarterly period) in each
fiscal year (or, if sooner, on the date delivered to any other creditor of
the Company or a Subsidiary), consolidated statements of income, cash flows
and shareholders' equity of the Company and its Subsidiaries for the
period from the beginning of the current fiscal year to the end of such
quarterly period, and a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarterly period, setting forth in each
case in comparative form figures for the corresponding period in the
preceding fiscal year, all in reasonable detail and certified by an
authorized financial officer of the Company, subject to changes resulting
from year-end adjustments; provided, however, that delivery pursuant to
-------- -------
clause (iii) below of copies of the Quarterly Report on Form 10-Q of the
Company for such quarterly period filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this clause (i);
(ii) as soon as practicable and in any event within 100 days after the
end of each fiscal year (or, if sooner, the date delivered to any other
creditor of the Company or a Subsidiary), consolidated statements of
income, cash flows and shareholders' equity of the Company and its
Subsidiaries for such year, and a consolidated balance sheet of the
Company and its Subsidiaries as at the end of such year, setting forth in
each case in comparative form corresponding consolidated figures from the
preceding annual audit, all in reasonable detail and satisfactory in form
to the Required Holder(s) and reported on by independent public
accountants of recognized national standing selected by the Company whose
report shall be without limitation as to scope of the audit and
satisfactory in substance to the Required Holder(s); provided, however,
-------- -------
that delivery pursuant to clause (iii) below of copies of the Annual Report
on Form 10-K of the Company for such fiscal year filed with the Securities
and Exchange Commission shall be deemed to satisfy the requirements of this
clause (ii);
(iii) promptly upon transmission thereof, copies of all such
financial statements, proxy statements, notices and reports as it shall
send to its public stockholders and copies of all registration statements
(without exhibits and exclusive of any registration statement on From S-8
or any successor thereto) and all reports which it files with the
Securities and Exchange Commission (or any governmental body or agency
succeeding to the functions of the Securities and Exchange Commission);
10
(iv) promptly upon receipt thereof, a notice that independent
accountants have submitted to the board of directors of the Company or any
Subsidiary any other report in connection with any annual, interim or
special audit made by them of the books of the Company or any Subsidiary;
and
(v) with reasonable promptness, such other financial data (including
reports with respect to any special audit referenced in clause (iv), above)
as such Significant Holder may reasonably request.
Together with each delivery of financial statements required by clauses (i) and
(ii) above, the Company will deliver to each Significant Holder an Officer's
Certificate demonstrating (with computations in reasonable detail) compliance
by the Company and its Subsidiaries with the provisions of ▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇(▇),
▇▇(▇), ▇▇(▇), ▇▇(▇), ▇▇(▇), 6C(7) and 6D (including, with respect to paragraph
6C(2), the relevant 45-day period for each rolling twelve-month period ended
during such fiscal period) and stating that there exists no Event of Default or
Default, or, if any Event of Default or Default exists, specifying the nature
and period of existence thereof and what action the Company proposes to take
with respect thereto. Together with each delivery of financial statements
required by clause (ii) above, the Company will deliver to each Significant
Holder a certificate of such accountants stating that, in making the audit
necessary for their report on such financial statements, they have obtained no
knowledge of any Event of Default or Default, or, if they have obtained
knowledge of any Event of Default or Default, specifying the nature and period
of existence thereof. Such accountants, however, shall not be liable to anyone
by reason of their failure to obtain knowledge of any Event of Default or
Default which would not be disclosed in the course of an audit conducted in
accordance with generally accepted auditing standards.
The Company also covenants that immediately after any Responsible
Officer obtains knowledge of an Event of Default or Default, it will deliver to
each Significant Holder an Officer's Certificate specifying the nature and
period of existence thereof and what action the Company proposes to take with
respect thereto.
5B. INFORMATION REQUIRED BY RULE 144A. The Company covenants that it
will, upon the request of the holder of any Note, provide such holder, and any
qualified institutional buyer designated by such holder, such financial and
other information as such holder may reasonably determine to be necessary in
order to permit compliance with the information requirements of Rule 144A under
the Securities Act in connection with the resale of Notes, except at such times
as the Company is subject to and in compliance with the reporting requirements
of section 13 or 15(d) of the Exchange Act. For the purpose of this paragraph
5B, the term "QUALIFIED INSTITUTIONAL BUYER" shall have the meaning specified in
Rule 144A under the Securities Act.
5C. INSPECTION OF PROPERTY. The Company covenants that it will
permit any Person designated by any Significant Holder in writing, at such
Significant Holder's expense, to visit and inspect any of the properties of the
Company and its Subsidiaries, to examine the corporate books and financial
records of the Company and its Subsidiaries and make copies
11
thereof or extracts therefrom and to discuss the affairs, finances and accounts
of any of such corporations with the principal officers of the Company and its
independent public accountants, all at such reasonable times and as often as
such Significant Holder may reasonably request.
5D. COVENANT TO SECURE NOTES EQUALLY. The Company covenants that, if
it or any Subsidiary shall create or assume any Lien upon any of its property or
assets, whether now owned or hereafter acquired, other than Liens permitted by
the provisions of paragraph 6C(1) (unless prior written consent to the creation
or assumption thereof shall have been obtained pursuant to paragraph 11C), it
will make or cause to be made effective provision whereby the Notes will be
secured by such Lien equally and ratably with any and all other Debt thereby
secured so long as any such other Debt shall be so secured.
5E. MAINTENANCE OF INSURANCE. The Company covenants that it and each
Subsidiary will maintain, with financially sound and reputable insurers,
insurance in such amounts and against such liabilities and hazards as
customarily is maintained by other companies operating similar businesses.
Together with each delivery of financial statements under paragraph 5A, the
Company will, upon the request of any Significant Holder, deliver an Officer's
Certificate specifying the details of such insurance in effect.
5F. COMPLIANCE WITH LAWS. The Company covenants that it will, and
will cause each of the Subsidiaries to, comply in a timely fashion with, or
operate pursuant to valid waivers of the provisions of, all applicable statutes,
rules, regulations and orders of all federal, state, local and foreign
governments, courts, agencies or regulatory bodies, including all Environmental
Laws, except (i) where a good faith dispute exists between the Company or a
Subsidiary and any such governmental authority regarding compliance with or
application of any such statute, rule, regulation or order (including
Environmental Laws) and (ii) where noncompliance would not materially adversely
affect the business, condition (financial or otherwise) or operations of the
Company and the Subsidiaries taken as a whole.
6. NEGATIVE COVENANTS. During the Issuance Period and so long
thereafter as any Note or other amount due hereunder is outstanding and unpaid,
the Company covenants as follows:
6A. CONSOLIDATED TANGIBLE NET WORTH. The Company covenants that it
will not permit Consolidated Tangible Net Worth at any time to be less than an
amount equal to $160,000,000 plus (a) the proceeds from the sale of preferred or
common stock of the Company issued after the date hereof (excluding the proceeds
from common stock issued pursuant to the exercise of stock options) and (b) to
the extent positive, an amount equal to 25% of Consolidated Net Earnings for the
period, taken as one accounting period, commencing on January 1, 1996, and
ending as of the last day of the fiscal quarter most recently ended as of any
date of determination.
6B. [INTENTIONALLY OMITTED.]
12
6C. LIEN, DEBT AND OTHER RESTRICTIONS. The Company covenants and
agrees that the Company shall not and shall not permit any Subsidiary to:
6C(1). LIEN RESTRICTIONS. Create, assume or suffer to exist any Lien
of any kind on or with respect to any of its property or assets, whether now
owned or hereafter acquired (whether or not provision is made for the equal and
ratable securing of Notes in accordance with the provisions of paragraph 5D
hereof), except
(i) Liens for taxes not yet due or which are being actively
contested in good faith by appropriate proceedings,
(ii) other Liens incidental to the conduct of its business or the
ownership of its property and assets which were not incurred in connection
with the borrowing of money or the obtaining of advances or credit, and
which do not in the aggregate materially detract from the value of the
property or assets of the Company and its Subsidiaries taken as a whole or
materially impair the use thereof in the operation of the business of the
Company and its Subsidiaries taken as a whole,
(iii) Liens on property or assets of a Subsidiary to secure
obligations of such Subsidiary to the Company or another Subsidiary,
(iv) any Lien existing on any property of any corporation at the time
it becomes a Subsidiary, or existing prior to the time of acquisition upon
any property acquired by the Company or any Subsidiary through purchase,
merger or consolidation or otherwise, whether or not assumed by the Company
or such Subsidiary, or placed upon property at the time of acquisition by
the Company or any Subsidiary, to secure a portion of the purchase price
thereof, provided that (a) any such Lien shall not encumber any other
property of the Company or such Subsidiary and (b) at the time of
incurrence of any such Lien the aggregate amount of Debt secured by all
such Liens does not exceed 10% of Consolidated Tangible Net Worth,
(v) any Lien on property of the Company or a Subsidiary which is in
existence on the date of this Agreement, and which is set forth on Schedule
6C hereto,
(vi) any Lien renewing, extending or refunding any Lien permitted by
clauses (iv) and (v) of this paragraph 6C(1), provided that (a) the
--------
principal amount of Debt secured thereby is not increased, and (b) the Lien
is not extended to other property, and
(vii) other Liens securing Debt, provided that the aggregate amount
--------
of Priority Debt outstanding at no time exceeds 15% of Consolidated
Tangible Net Worth;
13
6C(2). DEBT RESTRICTIONS. Create, incur, assume or suffer to exist
any Debt except
(i) Funded Debt of the Company represented by the Notes and of the
Guarantor represented by the Guaranty,
(ii) Debt of the Company and Subsidiaries outstanding as of the date
of this Agreement as set forth on Schedule 6C, and
(iii) other Debt of the Company and its Subsidiaries,
provided that (a) at the time of incurrence of any Debt after the date hereof
--------
the ratio of Total Debt to Consolidated Capitalization shall not exceed .55 to
1.00, (b) the ratio of Total Debt to Consolidated Capitalization shall not
exceed .50 to 1.00 at any time during a period of 45 consecutive days in each
rolling twelve-month period ended on the last day of a calendar month and (c)
Priority Debt shall at no time exceed 15% of Consolidated Tangible Net Worth;
6C(3). LOANS, ADVANCES AND INVESTMENTS. Make or permit to remain
outstanding any loan or advance to, or own, purchase or acquire stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any Person, except that the Company and its Subsidiaries may
(i) make or permit to remain outstanding loans or advances to any
Subsidiary,
(ii) own, purchase or acquire stock, obligations or securities of a
corporation which immediately after such purchase or acquisition will be a
Subsidiary,
(iii) acquire and own stock, obligations or securities received in
settlement of debt (created in the ordinary course of business) owing to
the Company or any Subsidiary,
(iv) own, purchase or acquire (a) prime commercial paper (rated A1/P1
or A2/P2), (b) certificates of deposit in and repurchase agreements from
United States commercial banks having capital resources in excess of
$150,000,000, in each case due within one year from the date of purchase
and payable in the United States in United States dollars, (c) Euro-dollar
deposits in commercial banks having capital resources in excess of
$150,000,000, due within one year from the date of purchase and payable in
the United States in United States dollars, (d) obligations of the United
States Government or any agency thereof and (e) obligations guaranteed by
the United States Government,
(v) provided that the aggregate amount thereof outstanding at no
time shall exceed $2,000,000 (a) make or permit to remain outstanding
travel
14
and other like advances to officers and employees in the ordinary
course of business, (b) guarantee obligations of officers and employees and
(c) make or permit to remain outstanding advances to or investments in
connection with the relocation of officers and employees, and
(vi) make other loans, advances and investments, provided that the
aggregate amount thereof (at original cost, in the case of investments)
shall at no time exceed 10% of Consolidated Tangible Net Worth;
6C(4). SALE OF STOCK AND DEBT OF SUBSIDIARIES. Sell or otherwise
dispose of, or part with control of, any shares of stock (except Directors'
qualifying shares) or Debt of any Subsidiary, except to the Company or another
Subsidiary, and except that all shares of stock and Debt of any Subsidiary at
the time owned by or owed to the Company and all Subsidiaries may be sold as an
entirety to any Person for a consideration which represents fair value (as
determined in good faith by the Board of Directors of the Company) at the time
of sale of the shares of stock and Debt so sold, provided that (a) the sale of
--------
such Subsidiary shall be treated as a sale of the assets of such Subsidiary and
is permitted by clause (iii) of paragraph 6C(6) and (b) at the time of such
sale, such Subsidiary shall not own, directly or indirectly, any shares of stock
or Debt of any other Subsidiary or of the Company (unless all of the shares of
stock and Debt of such other Subsidiary owned, directly or indirectly, by the
Company and all Subsidiaries are simultaneously being sold as permitted by this
paragraph 6C(4));
6C(5). MERGER AND CONSOLIDATION. Merge with or into or consolidate
with any other Person, except that
(i) any Subsidiary may merge with the Company (provided that the
Company shall be the continuing or surviving corporation) or with any one
or more other Subsidiaries, and
(ii) the Company may merge with any other corporation, provided that
--------
(a) the Company shall be the continuing or surviving corporation and (b)
immediately after giving effect thereto, no Default or Event of Default
would exist;
6C(6). TRANSFER OF ASSETS. Transfer any of its assets except that
------
(i) any Subsidiary may Transfer assets to the Company or another
Subsidiary,
(ii) the Company or any Subsidiary may sell inventory in the ordinary
course of business, and
(iii) the Company or any Subsidiary may otherwise Transfer assets,
provided that (a) after giving effect thereto (1) the Annual Percentage of
--------
Assets Transferred pursuant to this clause (iii) and paragraph 6C(4) shall
not exceed 15% and (2) the Cumulative Percentage of Assets Transferred
pursuant to this
15
clause (iii) and paragraph 6C(4) shall not exceed 40% or (b) within five
Business Days after receipt thereof the aggregate proceeds from such
Transfer (net of expenses reasonably incurred in connection with such
Transfer) are applied to the prepayment of unsecured senior debt of the
Company (including the Notes, which prepayment of the Notes shall be made
pursuant to paragraph 4C hereof) on a pro rata basis;
--- ----
6C(7). SALE AND LEASE-BACK. Enter into any arrangement with any
lender or investor or to which such lender or investor is a party providing for
the leasing by the Company or any Subsidiary for more than one year of real
property which is to be sold or transferred by the Company or any Subsidiary to
such lender or investor or to any Person to whom funds have been or are to be
advanced by such lender or investor on the security of such property or rental
obligations of the Company or any Subsidiary; provided that the Company or any
--------
Subsidiary may enter into such arrangements with (i) the Company or any other
Subsidiary and (ii) other Persons to the extent that the aggregate value of all
assets sold by the Company and Subsidiaries to such other Persons during the
period commencing January 1, 1996 through any date of determination does not
exceed 5% of Consolidated Tangible Net Worth at the time of sale; and
6C(8). SALE OR DISCOUNT OF RECEIVABLES. Sell with recourse, pledge
or discount or otherwise sell for less than the face value thereof, any of its
notes or accounts receivable; provided that foreign Subsidiaries may (as and to
--------
the extent reflected on Schedule 6C) pledge notes or accounts receivable as
security for Debt described on Schedule 6C not to exceed $670,000 at any time
outstanding.
6D. GUARANTOR REVENUES AND ASSETS LIMITS. The Company covenants that
(i) the consolidated assets of the Guarantor and its subsidiaries shall not at
any time exceed 15% of the consolidated assets of the Company and Subsidiaries
and (ii) the consolidated revenues of the Guarantor and its subsidiaries shall
not exceed 25% of the consolidated revenues of the Company and Subsidiaries
during any period of twelve consecutive calendar months. The foregoing covenant
should be of no further force or effect at such time as (i) Prudential and the
holders of the Notes have entered into an inter-creditor agreement (which inter-
creditor agreement shall be in form and content satisfactory to them) with the
lenders under the Bank Agreement providing for the sharing of amounts received
from the Guarantor pursuant to the Guaranty and the Guarantor's guaranty of the
Bank Agreement or (ii) the lenders under the Bank Agreement have released the
guaranty provided by the Guarantor of the obligations under the Bank Agreement,
in which event the holders and Prudential agree that the Guaranty shall be
released.
7. EVENTS OF DEFAULT.
7A. ACCELERATION. If any of the following events shall occur and be
continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law or
otherwise):
16
(i) the Company defaults in the payment of any principal of or Yield-
Maintenance Amount on any Note when the same shall become due, either by
the terms thereof or otherwise as herein provided; or
(ii) the Company defaults in the payment of any interest on any Note
for more than 10 days after the date due; or
(iii)(a) the Company or any Subsidiary defaults (whether as primary
obligor or as surety) in any payment of principal of or interest on any
other obligation for money borrowed (or any Capitalized Lease Obligation,
any obligation under a conditional sale or other title retention agreement,
any obligation issued or assumed as full or partial payment for property
whether or not secured by a purchase money mortgage or any obligation under
notes payable or drafts accepted representing extensions of credit) or (b)
the Company or any Subsidiary fails to perform or observe any other
agreement, term or condition contained in any agreement under which any
such obligation referred to in sub- clause (a) above is created (or if any
other event thereunder or under any such agreement shall occur and be
continuing) and the effect of such failure or other event is to cause, or
to permit the holder or holders of such obligation (or a trustee on behalf
of such holder or holders) to cause, such obligation to become due (or to
be repurchased by the Company or any Subsidiary ) prior to any stated
maturity and the Company shall not have received a waiver from the holders
of such obligation within 45 days after any officer of the Company obtains
actual knowledge of the default thereunder (such 45-day period to be deemed
to have expired if such obligation is accelerated, required to be
repurchased or is otherwise the subject of enforcement), provided that the
--------
aggregate amount of all obligations as to which such a payment default
shall occur and be continuing or such a failure or other event causing or
permitting acceleration, enforcement or resale to the Company or any
Subsidiary shall occur and be continuing exceeds $5,000,000; or
(iv) any representation or warranty made by the Company herein or by
the Company or any of its officers in any writing furnished in connection
with or pursuant to this Agreement shall be false in any material respect
on the date as of which made; or
(v) the Company fails to perform or observe any agreement contained in
paragraph 6; or
(vi) the Company fails to perform or observe any other agreement, term
or condition contained herein and such failure shall not be remedied within
30 days after any Responsible Officer obtains actual knowledge thereof; or
17
(vii) the Company or any Subsidiary makes an assignment for the
benefit of creditors or is generally not paying its debts as such debts
become due; or
(viii) any decree or order for relief in respect of the Company or
any Subsidiary is entered under any bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution or liquidation
or similar law, whether now or hereafter in effect (herein called the
"BANKRUPTCY LAW"), of any jurisdiction; or
(ix) the Company or any Subsidiary petitions or applies to any
tribunal for, or consents to, the appointment of, or taking possession by,
a trustee, receiver, custodian, liquidator or similar official of the
Company or any Subsidiary, or of any substantial part of the assets of the
Company or any Subsidiary, or commences a voluntary case under the
Bankruptcy Law of the United States or any proceedings (other than
proceedings for the voluntary liquidation and dissolution of a Subsidiary)
relating to the Company or any Subsidiary under the Bankruptcy Law of any
other jurisdiction; or
(x) any such petition or application is filed, or any such proceedings
are commenced, against the Company or any Subsidiary and the Company or
such Subsidiary by any act indicates its approval thereof, consent thereto
or acquiescence therein, or an order, judgment or decree is entered
appointing any such trustee, receiver, custodian, liquidator or similar
official, or approving the petition in any such proceedings, and such
order, judgment or decree remains unstayed and in effect for more than 30
days; or
(xi) any order, judgment or decree is entered in any proceedings
against the Company decreeing the dissolution of the Company and such
order, judgment or decree remains unstayed and in effect for more than 60
days: or
(xii) any order, judgment or decree is entered in any proceedings
against the Company or any Subsidiary decreeing a split-up of the Company
or such Subsidiary which requires the divestiture of assets representing a
substantial part, or the divestiture of the stock of a Subsidiary whose
assets represent a substantial part, of the consolidated assets of the
Company and its Subsidiaries (determined in accordance with generally
accepted accounting principles) or which requires the divestiture of
assets, or stock of a Subsidiary, which shall have contributed a
substantial part of the consolidated net income of the Company and its
Subsidiaries (determined in accordance with generally accepted accounting
principles) for any of the three fiscal years then most recently ended, and
such order, judgment or decree remains unstayed and in effect for more than
60 days; or
18
(xiii) one or more final judgments in an aggregate amount in excess
of $10,000,000 (excluding from such calculation any judgment which is
covered by insurance or a bond, to the extent of such coverage) is
rendered against the Company or any Subsidiary and, within 60 days after
entry thereof, any such judgment is not discharged or execution thereof
stayed pending appeal, or within 60 days after the expiration of any such
stay, such judgment is not discharged; or
(xiv) if (a) any Plan shall fail to satisfy any applicable 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, (b) a notice of intent to
terminate any Plan shall have been or is reasonably expected to be filed
with the PBGC or the PBCG shall have instituted proceedings under ERISA
section 4042 to terminate or appoint a trustee to administer any Plan or
the PBCG shall have notified the Company or any ERISA Affiliate that a Plan
may become a subject of any such proceedings, (c) 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 $1,000,000, (d) 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, (e) the Company or any ERISA Affiliate
withdraws from any Multiemployer Plan, or (f) the Company or any Subsidiary
establishes or amends any employee welfare benefit plan that provides post-
employment welfare benefits in a manner that would increase the liability
of the Company or any Subsidiary thereunder; and any such event or events
described in clauses (a) through (f) above, either individually or together
with any other such event or events, could reasonably be expected to have a
material adverse effect on the financial condition of the Company and its
Subsidiaries taken as a whole; or
(xv) a default occurs under the Guaranty or the Guaranty shall cease
to be, or shall be asserted by the Guarantor not to be, enforceable against
the Guarantor;
then (a) if such event is an Event of Default specified in clause (i) or (ii) of
this paragraph 7A, any holder of any Note may at its option during the
continuance of such Event of Default, by notice in writing to the Company,
declare all of the Notes held by such holder to be, and all of the Notes held by
such holder shall thereupon be and become, immediately due and payable at par
together with interest accrued thereon, without presentment, demand, protest or
notice of any kind, all of which are hereby waived by the Company, (b) if such
event is an Event of Default specified in clause (viii), (ix) or (x) of this
paragraph 7A with respect to the Company, all of the Notes at the time
outstanding shall automatically become immediately due and payable together with
interest accrued thereon and together with the Yield-Maintenance Amount, if any,
with respect to each Note, without presentment, demand, protest or notice of
19
any kind, all of which are hereby waived by the Company, and (c) with respect to
any event constituting an Event of Default, the Required Holder(s) of the Notes
of any Series may at its or their option during the continuance of such Event of
Default, by notice in writing to the Company, declare all of the Notes of such
Series to be, and all of the Notes of such Series shall thereupon be and become,
immediately due and payable together with interest accrued thereon and together
with the Yield-Maintenance Amount, if any, with respect to each Note of such
Series, without presentment, demand, protest or notice of any kind, all of which
are hereby waived by the Company.
7B. RESCISSION OF ACCELERATION. At any time after any or all of the
Notes of any Series shall have been declared immediately due and payable
pursuant to paragraph 7A, the Required Holder(s) of the Notes of such Series
may, by notice in writing to the Company, rescind and annul such declaration and
its consequences if (i) the Company shall have paid all overdue interest on the
Notes of such Series, the principal of and Yield-Maintenance Amount, if any,
payable with respect to any Notes of such Series which have become due otherwise
than by reason of such declaration, and interest on such overdue interest and
overdue principal and Yield-Maintenance Amount at the rate specified in the
Notes of such Series, (ii) the Company shall not have paid any amounts which
have become due solely by reason of such declaration, (iii) all Events of
Default and Defaults, other than non-payment of amounts which have become due
solely by reason of such declaration, shall have been cured or waived pursuant
to paragraph 11C, and (iv) no judgment or decree shall have been entered for the
payment of any amounts due pursuant to the Notes of such Series or this
Agreement. No such rescission or annulment shall extend to or affect any
subsequent Event of Default or Default or impair any right arising therefrom.
7C. NOTICE OF ACCELERATION OR RESCISSION. Whenever any Note shall be
declared immediately due and payable pursuant to paragraph 7A or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B, the
Company shall forthwith give written notice thereof to the holder of each Note
of each Series at the time outstanding.
7D. OTHER REMEDIES. If any Event of Default or Default shall occur
and be continuing, the holder of any Note may proceed to protect and enforce its
rights under this Agreement and such Note by exercising such remedies as are
available to such holder in respect thereof under applicable law, either by suit
in equity or by action at law, or both, whether for specific performance of any
covenant or other agreement contained in this Agreement or in aid of the
exercise of any power granted in this Agreement. No remedy conferred in this
Agreement upon the holder of any Note is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be in
addition to every other remedy conferred herein or now or hereafter existing at
law or in equity or by statute or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company
represents, covenants and warrants as follows (all references to "Subsidiary"
and "Subsidiaries" in this paragraph 8 shall be deemed omitted if the Company
has no Subsidiaries at the time the representations herein are made or
repeated):
20
8A. ORGANIZATION. The Company is a corporation duly organized and
existing in good standing under the laws of the State of California, each
Subsidiary is duly organized and existing in good standing under the laws of
the jurisdiction in which it is incorporated, and the Company has and each
Subsidiary has the corporate power to own its respective property and to carry
on its respective business as now being conducted.
8B. FINANCIAL STATEMENTS. The Company has furnished each Purchaser
of the Series A Notes and any Accepted Notes with the following financial
statements, identified by a principal financial officer of the Company: (i) a
consolidated balance sheet of the Company and its Subsidiaries as at December 31
in each of the three fiscal years of the Company most recently completed prior
to the date as of which this representation is made or repeated to such
Purchaser (other than fiscal years completed within 100 days prior to such date
for which audited financial statements have not been released) and consolidated
statements of income, cash flows and shareholders' equity of the Company and its
Subsidiaries for each such year, all reported on by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP and (ii)
a consolidated balance sheet of the Company and its Subsidiaries as at the end
of the quarterly period (if any) most recently completed prior to such date and
after the end of such fiscal year (other than quarterly periods completed within
55 days prior to such date for which financial statements have not been
released) and the comparable quarterly period in the preceding fiscal year and
consolidated statements of income, cash flows and shareholders' equity for the
periods from the beginning of the fiscal years in which such quarterly periods
are included to the end of such quarterly periods, prepared by the Company.
Such financial statements (including any related schedules and/or notes) are
true and correct in all material respects (subject, as to interim statements, to
changes resulting from audits and year-end adjustments), have been prepared in
accordance with generally accepted accounting principles consistently followed
throughout the periods involved and show all liabilities, direct and contingent,
of the Company and its Subsidiaries required to be shown in accordance with such
principles. The balance sheets fairly present the condition of the Company and
its Subsidiaries as at the dates thereof, and the statements of income,
stockholders' equity and cash flows fairly present the results of the operations
of the Company and its Subsidiaries and their cash flows for the periods
indicated. There has been no material adverse change in the business, property
or assets, condition (financial or otherwise), operations or prospects of the
Company and its Subsidiaries taken as a whole since the end of the most recent
fiscal year for which such audited financial statements have been furnished.
8C. ACTIONS PENDING. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened against the
Company or any of its Subsidiaries, or any properties or rights of the Company
or any of its Subsidiaries, by or before any court, arbitrator or administrative
or governmental body which might result in any material adverse change in the
business, property or assets, condition (financial or otherwise) or operations
of the Company and its Subsidiaries taken as a whole.
8D. OUTSTANDING DEBT. The Company and Subsidiaries have no
outstanding Debt as of the Series A Closing Day other than as set forth on
Schedule 6C. Neither the Company nor any of its Subsidiaries has outstanding
any Debt except as permitted by
21
paragraph 6C(2). There exists no default under the provisions of any instrument
evidencing such outstanding Debt or of any agreement relating thereto.
8E. TITLE TO PROPERTIES. The Company has and each of its
Subsidiaries has good and indefeasible title to its respective real properties
(other than properties which it leases) and good title to all of its other
respective properties and assets, including the properties and assets reflected
in the most recent audited balance sheet referred to in paragraph 8B (other than
properties and assets disposed of in the ordinary course of business), subject
to no Lien of any kind except Liens permitted by paragraph 6C(1). All leases
necessary in any material respect for the conduct of the respective businesses
of the Company and its Subsidiaries are valid and subsisting and are in full
force and effect.
8F. TAXES. The Company has and each of its Subsidiaries has filed
all federal, state and other income tax returns which, to the best knowledge of
the officers of the Company and its Subsidiaries, are required to be filed, and
each has paid all taxes as shown on such returns and on all assessments received
by it to the extent that such taxes have become due, except such taxes as are
being contested in good faith by appropriate proceedings for which adequate
reserves have been established in accordance with generally accepted accounting
principles.
8G. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the Company
nor any of its Subsidiaries is a party to any contract or agreement or subject
to any charter or other corporate restriction which materially and adversely
affects its business, property or assets, condition (financial or otherwise) or
operations. Neither the execution nor delivery of this Agreement, the Guaranty
or the Notes, nor the offering, issuance and sale of the Notes, nor fulfillment
of nor compliance with the terms and provisions hereof, of the Guaranty and of
the Notes will conflict with, or result in a breach of the terms, conditions or
provisions of, or constitute a default under, or result in any violation of, or
result in the creation of any Lien upon any of the properties or assets of the
Company or any of its Subsidiaries pursuant to, the articles of incorporation or
by-laws of the Company or any of its Subsidiaries, any award of any arbitrator
or any agreement (including any agreement with shareholders), instrument, order,
judgment, decree, statute, law, rule or regulation to which the Company or any
of its Subsidiaries is subject. Neither the Company nor any of its
Subsidiaries is a party to, or otherwise subject to any provision contained in,
any instrument evidencing Indebtedness of the Company or such Subsidiary, any
agreement relating thereto or any other contract or agreement (including its
articles of incorporation) which limits the amount of, or otherwise imposes
restrictions on the incurring of, Debt of the Company of the type to be
evidenced by the Notes, or of the Guarantor of the type to be evidenced by the
Guaranty, except in each case as set forth in the agreements listed in Schedule
--------
8G attached hereto (as such Schedule 8G may have been modified from time to time
--
subsequent to the Series A Closing Day by written supplements thereto delivered
by the Company to Prudential).
8H. OFFERING OF NOTES. Neither the Company nor any agent acting on
its behalf has, directly or indirectly, offered the Notes or any similar
security of the Company for sale to, or solicited any offers to buy the Notes or
any similar security of the Company from,
22
or otherwise approached or negotiated with respect thereto with, any Person
other than institutional investors, and neither the Company nor any agent acting
on its behalf has taken or will take any action which would subject the issuance
or sale of the Notes to the provisions of Section 5 of the Securities Act or to
the provisions of any securities or Blue Sky law of any applicable jurisdiction.
8I. USE OF PROCEEDS. The proceeds of the Series A Notes will be used
to repay indebtedness. None of the proceeds of the sale of any Notes will be
used, directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying any "MARGIN STOCK" as defined in Regulation
G (12 CFR Part 207) of the Board of Governors of the Federal Reserve System
(herein called "margin stock") or for the purpose of maintaining, reducing or
retiring any Indebtedness which was originally incurred to purchase or carry any
stock that is then currently a margin stock or for any other purpose which might
constitute the purchase of such Notes a "purpose credit" within the meaning of
such Regulation G, unless the Company shall have delivered to the Purchaser
which is purchasing such Notes, on the Closing Day for such Notes, an opinion of
counsel satisfactory to such Purchaser stating that the purchase of such Notes
does not constitute a violation of such Regulation G. Neither the Company nor
any agent acting on its behalf has taken or will take any action which might
cause this Agreement or the Notes to violate Regulation G, Regulation T or any
other regulation of the Board of Governors of the Federal Reserve System or to
violate the Exchange Act, in each case as in effect now or as the same may
hereafter be in effect.
8J. ERISA. No accumulated funding deficiency (as defined in section
302 of ERISA and section 412 of the Code), whether or not waived, exists with
respect to any Plan (other than a Multiemployer Plan). No liability to the
Pension Benefit Guaranty Corporation has been or is expected by the Company or
any ERISA Affiliate to be incurred with respect to any Plan (other than a
Multiemployer Plan) by the Company, any Subsidiary or any ERISA Affiliate which
is or would be materially adverse to the business, property or assets, condition
(financial or otherwise) or operations of the Company and its Subsidiaries taken
as a whole. Neither the Company, any Subsidiary nor any ERISA Affiliate has
incurred or presently expects to incur any withdrawal liability under Title IV
of ERISA with respect to any Multiemployer Plan which is or would be materially
adverse to the business, property or assets, condition (financial or otherwise)
or operations of the Company and its Subsidiaries taken as a whole. The
execution and delivery of this Agreement and the issuance and sale of the Notes
will be exempt from or will not involve any transaction which is subject to the
prohibitions of section 406 of ERISA and will not involve any transaction in
connection with which a penalty could be imposed under section 502(i) of ERISA
or a tax could be imposed pursuant to section 4975 of the Code. The
representation by the Company in the next preceding sentence is made in reliance
upon and subject to the accuracy of the representation of each Purchaser in
paragraph 9B as to the source of funds to be used by it to purchase any Notes.
8K. GOVERNMENTAL CONSENT. Neither the nature of the Company or of
any Subsidiary, nor any of their respective businesses or properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor any
circumstance in connection with the offering, issuance, sale or delivery of the
Notes or issuance of the Guaranty is such as to
23
require any authorization, consent, approval, exemption or any action by or
notice to or filing with any court or administrative or governmental body (other
than routine filings after the Closing Day for any Notes with the Securities and
Exchange Commission and/or state Blue Sky authorities) in connection with the
execution and delivery of this Agreement or the Guaranty, the offering,
issuance, sale or delivery of the Notes or fulfillment of or compliance with the
terms and provisions hereof or of the Guaranty or the Notes.
8L. ENVIRONMENTAL COMPLIANCE. The Company and its Subsidiaries and
all of their respective properties and facilities have complied at all times and
in all respects with all Environmental Laws except, in any such case, where
------
failure to comply would not result in a material adverse effect on the business,
condition (financial or otherwise) or operations of the Company and its
Subsidiaries taken as a whole.
8M. DISCLOSURE. Neither this Agreement nor the Guaranty nor any
other document, certificate or statement furnished to any Purchaser by or on
behalf of the Company or the Guarantor in connection herewith or with the
Guaranty contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein and
therein not misleading. There is no fact peculiar to the Company or any of its
Subsidiaries which materially adversely affects or in the future may (so far as
the Company can now foresee) materially adversely affect the business, property
or assets, condition (financial or otherwise) or operations of the Company or
any of its Subsidiaries and which has not been set forth in this Agreement and
the schedules hereto.
8N. HOSTILE TENDER OFFERS. None of the proceeds of the sale of any
Notes will be used to finance a Hostile Tender Offer.
9. REPRESENTATIONS OF THE PURCHASERS.
Each Purchaser represents as follows:
9A. NATURE OF PURCHASE. Such Purchaser is not acquiring the Notes
purchased by it hereunder with a view to or for sale in connection with any
distribution thereof within the meaning of the Securities Act, provided that
the disposition of such Purchaser's property shall at all times be and remain
within its control.
9B. SOURCE OF FUNDS. The source of the funds being used by such
Purchaser to pay the purchase price of the Notes being purchased by such
Purchaser hereunder constitutes assets allocated to: (i) the "insurance company
general account" of such Purchaser (as such term is defined under Section V of
the Untied States Department of Labor's Prohibited Transaction Class Exemption
("PTCE") 95-60), and as of the date of the purchase of the Notes such Purchaser
satisfies all of the applicable requirements for relief under Sections I and IV
of PTCE 95-60 or (ii) a separate account maintained by such Purchaser in which
no employee benefit plan, other than employee benefit plans identified on a list
which has been furnished by such Purchaser to the Company, participates to the
extent
24
of 10% or more. For the purpose of this paragraph 9B, the terms "SEPARATE
ACCOUNT" and "EMPLOYEE BENEFIT PLAN" shall have the respective meanings
specified in section 3 of ERISA.
10. DEFINITIONS; ACCOUNTING MATTERS. For the purpose of this
Agreement, the terms defined in paragraphs 10A and 10B (or within the text of
any other paragraph) shall have the respective meanings specified therein and
all accounting matters shall be subject to determination as provided in
paragraph 10C.
10A. YIELD-MAINTENANCE TERMS.
"CALLED PRINCIPAL" shall mean, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to paragraph 4C or is declared to be
immediately due and payable pursuant to paragraph 7A, as the context requires.
"DESIGNATED SPREAD" shall mean 0 in the case of each Series A Note and
0 in the case of each Note of any other Series unless the Confirmation of
Acceptance with respect to the Notes of such Series specifies a different
Designated Spread in which case it shall mean, with respect to each Note of such
Series, the Designated Spread so specified.
"DISCOUNTED VALUE" shall mean, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due dates
to the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (as converted to reflect
the periodic basis on which interest on such Note is payable, if payable other
than on a semi-annual basis) equal to the Reinvestment Yield with respect to
such Called Principal.
"REINVESTMENT YIELD" shall mean, with respect to the Called Principal
of any Note, the Designated Spread over the yield to maturity implied by (i) the
yields reported, as of 10:00 A.M. (New York City local time) on the Business Day
next preceding the Settlement Date with respect to such Called Principal, on the
display designated as "Page 678" on the Telerate Service (or such other display
as may replace page 678 on the Telerate Service) for actively traded U.S.
Treasury securities having a maturity equal to the Remaining Average Life of
such Called Principal as of such Settlement Date, or if such yields shall not be
reported as of such time or the yields reported as of such time shall not be
ascertainable, (ii) the Treasury Constant Maturity Series yields reported, for
the latest day for which such yields shall have been so reported as of the
Business Day next preceding the Settlement Date with respect to such Called
Principal, in Federal Reserve Statistical Release H.15 (519) (or any comparable
successor publication) for actively traded U.S. Treasury securities having a
constant maturity equal to the Remaining Average Life of such Called Principal
as of such Settlement Date. Such implied yield shall be determined, if
necessary, by (a) converting U.S. Treasury ▇▇▇▇ quotations to bond-equivalent
yields in accordance with accepted financial practice and (b) interpolating
linearly between yields reported for various maturities.
25
"REMAINING AVERAGE LIFE" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest one-
twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) each Remaining Scheduled Payment of
such Called Principal (but not of interest thereon) by (b) the number of years
(calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
scheduled due date.
"SETTLEMENT DATE" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid pursuant to
paragraph 4C or is declared to be immediately due and payable pursuant to
paragraph 7A, as the context requires.
"YIELD-MAINTENANCE AMOUNT" shall mean, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Called
Principal of such Note over the sum of (i) such Called Principal plus (ii)
interest accrued thereon as of (including interest due on) the Settlement Date
with respect to such Called Principal. The Yield-Maintenance Amount shall in no
event be less than zero.
10B. OTHER TERMS.
"ACCEPTANCE" shall have the meaning specified in paragraph 2B(5).
"ACCEPTANCE DAY" shall have the meaning specified in paragraph 2B(5).
"ACCEPTANCE WINDOW" shall have the meaning specified in paragraph
2B(5).
"ACCEPTED NOTE" shall have the meaning specified in paragraph 2B(5).
"AFFILIATE" shall mean any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, the Company,
except a Subsidiary. A Person shall be deemed to control a corporation if such
Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such corporation, whether through
the ownership of voting securities, by contract or otherwise.
"ANNUAL PERCENTAGE OF ASSETS TRANSFERRED" shall mean, with respect to
any four consecutive fiscal quarter period, the sum of the Percentages of Assets
Transferred for each asset of the Company and its Subsidiaries that is
Transferred during such period.
26
"AUTHORIZED OFFICER" shall mean (i) in the case of the Company, its
chief executive officer, its chief financial officer, any vice president of the
Company designated as an "Authorized Officer" of the Company in the Information
Schedule attached hereto or any vice president or other officer of the Company
designated as an "Authorized Officer" of the Company for the purpose of this
Agreement in an Officer's Certificate executed by the Company's chief executive
officer or chief financial officer and delivered to Prudential, and (ii) in the
case of Prudential, any officer of Prudential designated as its "Authorized
Officer" in the Information Schedule or any officer of Prudential designated as
its "Authorized Officer" for the purpose of this Agreement in a certificate
executed by one of its Authorized Officers. Any action taken under this
Agreement on behalf of the Company by any individual who on or after the date of
this Agreement shall have been an Authorized Officer of the Company and whom
Prudential in good faith believes to be an Authorized Officer of the Company at
the time of such action shall be binding on the Company even though such
individual shall have ceased to be an Authorized Officer of the Company, and any
action taken under this Agreement on behalf of Prudential by any individual who
on or after the date of this Agreement shall have been an Authorized Officer of
Prudential and whom the Company in good faith believes to be an Authorized
Officer of Prudential at the time of such action shall be binding on Prudential
even though such individual shall have ceased to be an Authorized Officer of
Prudential.
"AVAILABLE FACILITY AMOUNT" shall have the meaning specified in
paragraph 2B(1).
"BANK AGREEMENT" shall mean the First Amended and Restated Credit
Agreement dated as of December 29, 1995 among the Company, Bank of America
National Trust and Savings Association and the other financial institutions
named as parties thereto, as amended as of April 26, 1996.
"BANKRUPTCY LAW" shall have the meaning specified in clause (viii) of
paragraph 7A.
"BUSINESS DAY" shall mean any day other than (i) a Saturday or a
Sunday, (ii) a day on which commercial banks in New York City are required or
authorized to be closed and (iii) for purposes of paragraph 2B(3) hereof only, a
day on which The Prudential Insurance Company of America is not open for
business.
"CANCELLATION DATE" shall have the meaning specified in paragraph
2B(8)(iv).
"CANCELLATION FEE" shall have the meaning specified in paragraph
2B(8)(iv).
"CAPITALIZED LEASE OBLIGATION" shall mean any rental obligation which,
under generally accepted accounting principles, is or will be required to be
capitalized on the books of the Company or any Subsidiary, taken at the amount
thereof accounted for as indebtedness (net of interest expenses) in accordance
with such principles.
"CLOSING DAY" shall mean, with respect to the Series A Notes, the
Series A Closing Day and, with respect to any Accepted Note, the Business Day
specified for the closing
27
of the purchase and sale of such Accepted Note in the Request for Purchase of
such Accepted Note, provided that (i) if the Company and the Purchaser which is
--------
obligated to purchase such Accepted Note agree on an earlier Business Day for
such closing, the "CLOSING DAY" for such Accepted Note shall be such earlier
Business Day, and (ii) if the closing of the purchase and sale of such Accepted
Note is rescheduled pursuant to paragraph 2B(7), the Closing Day for such
Accepted Note, for all purposes of this Agreement except references to "original
Closing Day" in paragraph 2B(8)(iii), shall mean the Rescheduled Closing Day
with respect to such Accepted Note.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"CONFIRMATION OF ACCEPTANCE" shall have the meaning specified in
paragraph 2B(5).
"CONSOLIDATED CAPITALIZATION" shall mean, at any time of determination
thereof, the sum of Total Debt and Consolidated Tangible Net Worth.
"CONSOLIDATED NET EARNINGS" shall mean, for any period, the
consolidated gross revenues of the Company and its Subsidiaries less all
operating and non-operating expenses of the Company and its Subsidiaries
including all charges of a proper character (including current and deferred
taxes on income, provision for taxes and unremitted foreign earnings which are
included in gross revenues and current additions to reserves), but not
including, for amounts in excess of $100,000 only, (i) extraordinary items as
determined in accordance with generally accepted accounting principles, or (ii)
any gains or losses (including the effect of expenses and taxes applicable
thereto) resulting from the sale, conversion or other disposition of capital
assets (i.e. assets other than current assets) or any gains resulting from the
write-up of assets (other than the write-up of current assets as a result of
revaluations or realignment of currencies), any equity of the Company or any
Subsidiary in the unremitted earnings of any Person which is not a Subsidiary,
any earnings of any Person acquired by the Company or any Subsidiary through
purchase, merger or consolidation or otherwise for any period prior to the date
of acquisition, or any deferred credit representing the excess of equity in any
Subsidiary at the date of acquisition over the cost of the investment in such
Subsidiary.
"CONSOLIDATED TANGIBLE NET WORTH" shall mean, as of any time of
determination thereof, the shareholders' equity of the Company less the
aggregate unamortized amount of Intangibles booked by the Company and
Subsidiaries subsequent to December 31, 1995.
"CUMULATIVE PERCENTAGE OF ASSETS TRANSFERRED" shall mean, with respect
to the period commencing January 1, 1996 through any date of determination, the
sum of the Percentages of Assets Transferred for each asset of the Company and
its Subsidiaries that is Transferred during such period.
"CURRENT DEBT" shall mean, with respect to any Person, all
Indebtedness of such Person for borrowed money which by its terms or by the
terms of any instrument or agreement relating thereto matures on demand or
within one year from the date of the
28
creation thereof and is not directly or indirectly renewable or extendible at
the option of the debtor to a date more than one year from the date of the
creation thereof, provided that Indebtedness for borrowed money outstanding
under a revolving credit or similar agreement which obligates the lender or
lenders to extend credit over a period of more than one year shall constitute
Funded Debt and not Current Debt, even though such Indebtedness by its terms
matures on demand or within one year from the date of the creation thereof.
"DEBT" shall mean Current Debt and Funded Debt.
"DELAYED DELIVERY FEE" shall have the meaning specified in paragraph
2B(8)(iii).
"ENVIRONMENTAL LAWS" shall mean all federal, state, local and foreign
laws relating to pollution or protection of the environment, including laws
relating to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes into the environment (including, without limitation,
ambient air, surface water, ground water or land), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes, and any and all regulations, codes,
plans, orders, decrees, judgments, injunctions, notices or demand letters
issued, entered, promulgated or approved thereunder.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA AFFILIATE" shall mean any corporation which is a member of the
same controlled group of corporations as the Company within the meaning of
section 414(b) of the Code, or any trade or business which is under common
control with the Company within the meaning of section 414(c) of the Code.
"EVENT OF DEFAULT" shall mean any of the events specified in paragraph
7A, provided that there has been satisfied any requirement in connection with
such event for the giving of notice, or the lapse of time, or the happening of
any further condition, event or act, and "DEFAULT" shall mean any of such
events, whether or not any such requirement has been satisfied.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"FACILITY" shall have the meaning specified in paragraph 2B(1).
"FUNDED DEBT" shall mean with respect to any Person, all Indebtedness
of such Person which by its terms or by the terms of any instrument or agreement
relating thereto matures, or which is otherwise payable or unpaid, more than one
year from, or is directly or indirectly renewable or extendible at the option of
the debtor to a date more than one year (including an option of the debtor under
a revolving credit or similar agreement obligating the
29
lender or lenders to extend credit over a period of more than one year) from,
the date of the creation thereof.
"GUARANTEE" shall mean, with respect to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
indebtedness, lease, dividend or other obligation of another, including, without
limitation, any such obligation directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary course of business) or
discounted or sold with recourse by such Person, or in respect of which such
Person is otherwise directly or indirectly liable, including, without
limitation, any such obligation in effect guaranteed by such Person through any
agreement (contingent or otherwise) to purchase, repurchase or otherwise acquire
such obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain the solvency or
any balance sheet or other financial condition of the obligor of such
obligation, or to make payment for any products, materials or supplies or for
any transportation or service, regardless of the non-delivery or non-furnishing
thereof, in any such case if the purpose or intent of such agreement is to
provide assurance that such obligation will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected against loss in respect thereof. The amount of any
Guarantee shall be equal to the outstanding principal amount of the obligation
guaranteed or such lesser amount to which the maximum exposure of the guarantor
shall have been specifically limited.
"GUARANTOR" shall mean Wyle Distribution Group - Santa ▇▇▇▇▇, Inc., a
California corporation.
"GUARANTY" shall mean the guaranty agreement of the Guarantor in the
form of Exhibit E hereto.
"HEDGE TREASURY NOTE(S)" shall mean, with respect to any Accepted
Note, the United States Treasury Note or Notes whose duration (as determined by
Prudential) most closely matches the duration of such Accepted Note.
"HOSTILE TENDER OFFER" shall mean, with respect to the use of proceeds
of any Note, any offer to purchase, or any purchase of, shares of capital stock
of any corporation or equity interests in any other entity, or securities
convertible into or representing the beneficial ownership of, or rights to
acquire, any such shares or equity interests, if such shares, equity interests,
securities or rights are of a class which is publicly traded on any securities
exchange or in any over-the-counter market, other than purchases for portfolio
investment purposes of such shares, equity interests, securities or rights
which, together with any such shares, equity, interests, securities or rights
than held, represent less than 5% of the equity interests or beneficial
ownership of such corporation or other entity, and such offer or purchase has
not been duly approved by the board of directors of such corporation or the
equivalent governing body of such other entity prior to the date on which the
Company makes the Request for Purchase of such Note.
30
"INCLUDING" shall mean, unless the context clearly requires otherwise,
"including without limitation".
"INDEBTEDNESS" shall mean, with respect to any Person, without
duplication, (i) all items (excluding items of contingency reserves or of
reserves for deferred income taxes) which in accordance with generally accepted
accounting principles would be included in determining total liabilities as
shown on the liability side of a balance sheet of such Person as of the date on
which Indebtedness is to be determined, (ii) all indebtedness secured by any
Lien on any property or asset owned or held by such Person subject thereto,
whether or not the indebtedness secured thereby shall have been assumed, and
(iii) all indebtedness of others with respect to which such Person has become
liable by way of Guarantee.
"INTANGIBLES" shall mean (i) the good will and deferred financing
charges of the Company and Subsidiaries and (ii) the excess over $100,000 of the
aggregate book value of the Company's and Subsidiaries' patents, trademarks,
trade names, and any other items classified as intangibles under generally
accepted accounting principles; but shall not include up to $33,000,000 of
Intangibles booked in connection with the Company's acquisition of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, Ltd. and its affiliated companies.
"ISSUANCE FEE" shall have the meaning specified in paragraph
2B(8)(ii).
"ISSUANCE PERIOD" shall have the meaning specified in paragraph 2B(2).
"LIEN" shall mean any mortgage, pledge, security interest,
encumbrance, lien (statutory or otherwise) or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction) or any other type of preferential arrangement for the purpose,
or having the effect, of protecting a creditor against loss or securing the
payment or performance of an obligation.
"MULTIEMPLOYER PLAN" shall mean any Plan which is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA.
"NOTES" shall have the meaning specified in paragraph 1B.
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of
the Company by an Authorized Officer of the Company.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor or replacement entity thereto under ERISA.
"PERCENTAGE OF ASSETS TRANSFERRED" shall mean, with respect to each
asset Transferred pursuant to clause (iii) of paragraph 6C(6) or paragraph
6C(4), the ratio (expressed as a percentage) of (i) the value of such asset
(which value, with respect to each
31
asset, shall be the higher of its fair market value or its net book value on the
date of its Transfer) to (ii) the consolidated assets of the Company and
Subsidiaries as of the last day of the fiscal quarter immediately preceding the
date of such Transfer.
"PERSON" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a government
or any department or agency thereof.
"PLAN" shall mean any employee pension benefit plan (as such term is
defined in section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by the Company or any ERISA
Affiliate.
"PRIORITY DEBT" shall mean (i) Debt of the Company secured by a Lien,
exclusive of Debt secured by Liens permitted by clauses (iv), (v) and (vi) of
paragraph 6C(1), and (ii) Debt of Subsidiaries, including Debt resulting from a
Guarantee provided by a Subsidiary (other than the Guaranty, the Guarantor's
guarantee of the notes of the Company issued under the note agreement dated
January 2, 1990 and the Guarantor's guarantee of up to $140,000,000 of Debt of
the Company under the Bank Agreement), and excluding Debt of a Subsidiary
secured by Liens permitted by clauses (iv) and (vi) of paragraph 6C(1).
"PRUCO" shall mean Pruco Life Insurance Company.
"PRUDENTIAL" shall mean The Prudential Insurance Company of America.
"PRUDENTIAL AFFILIATE" shall mean (i) any corporation or other entity
all of the Voting Stock (or equivalent voting securities or interests) of which
is owned by Prudential either directly or through Prudential Affiliates and
(ii) any trust managed by Prudential or a Prudential Affiliate described in the
foregoing clause (i).
"PURCHASERS" shall mean Prudential with respect to the Series A Notes
and, with respect to any Accepted Notes, Prudential and/or the Prudential
Affiliate(s), which are purchasing such Accepted Notes.
"REQUEST FOR PURCHASE" shall have the meaning specified in paragraph
2B(3).
"REQUIRED HOLDER(S)" shall mean the holder or holders of more than 50%
of the aggregate principal amount of the Notes or of a Series of Notes, as the
context may require, from time to time outstanding; provided that for purposes
--------
of an acceleration of Notes of any Series pursuant to clause (c) of paragraph
7A, it shall mean the holder or holders of at least 66 2/3% of the Notes of such
Series.
"RESCHEDULED CLOSING DAY" shall have the meaning specified in
paragraph 2B(7).
"RESPONSIBLE OFFICER" shall mean the chief executive officer, chief
operating officer, chief financial officer or chief accounting officer of the
Company, general counsel of the
32
Company or any other officer of the Company involved principally in its
financial administration or its controllership function.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SERIES" shall have the meaning specified in paragraph 1B.
"SERIES A CLOSING DAY" shall have the meaning specified in paragraph
2A.
"SERIES A NOTE(S)" shall have the meaning specified in paragraph 1A.
"SHELF NOTES" shall have the meaning specified in paragraph 1B.
"SIGNIFICANT HOLDER" shall mean (i) Prudential, so long as Prudential
or any Prudential Affiliate shall hold (or be committed under this Agreement to
purchase) any Note, or (ii) any other holder of at least 5% of the aggregate
principal amount of the Notes of any Series from time to time outstanding.
"STRUCTURING FEE" shall have the meaning provided in paragraph
2B(8)(i).
"SUBSIDIARY" shall mean any corporation organized under the laws of
any state of the United States of America, Canada, or any province of Canada,
which conducts the major portion of its business in and makes the major portion
of its sales to Persons located in the United States of America or Canada, and
all of the stock of every class of which, except directors' qualifying shares
shall, at the time as of which any determination is being made, be owned by the
Company either directly or through Subsidiaries.
"TOTAL DEBT" shall mean, as of any time of determination thereof
without duplication, the aggregate amount of Debt of the Company and
Subsidiaries, exclusive of (i) Debt of Subsidiaries owed to the Company and
===
other Subsidiaries and (ii) Debt of the Company owed to a Subsidiary which has
executed and delivered to Prudential (for the benefit of all holders of Notes)
an agreement containing subordination provisions substantially in the form set
forth in Section 2.7 of Exhibit E hereto.
"TRANSFER" shall mean, with respect to any item, the sale, exchange,
conveyance, lease, transfer or other disposition of such item.
"TRANSFEREE" shall mean any direct or indirect transferee of all or
any part of any Note purchased by any Purchaser under this Agreement.
"VOTING STOCK" shall mean, with respect to any corporation, any shares
of stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency).
33
10C. ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS. All references
in this Agreement to "generally accepted accounting principles" shall be deemed
to refer to generally accepted accounting principles in effect in the United
States at the time of application thereof. Unless otherwise specified herein,
all accounting terms used herein shall be interpreted, all determinations with
respect to accounting matters hereunder shall be made, and all unaudited
financial statements and certificates and reports as to financial matters
required to be furnished hereunder shall be prepared, in accordance with
generally accepted accounting principles applied on a basis consistent with the
most recent audited financial statements delivered pursuant to clause (ii) of
paragraph 5A or, if no such statements have been so delivered, the most recent
audited financial statements referred to in clause (i) of paragraph 8B.
11. MISCELLANEOUS.
11A. NOTE PAYMENTS. The Company agrees that, so long as any Purchaser
shall hold any Note, it will make payments of principal of, interest on, and any
Yield-Maintenance Amount payable with respect to, such Note, which comply with
the terms of this Agreement, by wire transfer of immediately available funds for
credit (not later than 12:00 noon, New York City local time, on the date due) to
(i) the account or accounts of such Purchaser specified in the Purchaser
Schedule attached hereto in the case of any Series A Note, (ii) the account or
accounts of such Purchaser specified in the Confirmation of Acceptance with
respect to such Note in the case of any Shelf Note or (iii) such other account
or accounts in the United States as such Purchaser may from time to time
designate in writing, notwithstanding any contrary provision herein or in any
Note with respect to the place of payment. Each Purchaser agrees that, before
disposing of any Note, it will make a notation thereon (or on a schedule
attached thereto) of all principal payments previously made thereon and of the
date to which interest thereon has been paid. The Company agrees to afford the
benefits of this paragraph 11A to any Transferee which shall have made the same
agreement as the Purchasers have made in this paragraph 11A.
11B. EXPENSES. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save Prudential, each
Purchaser and any Transferee harmless against liability for the payment of, all
out-of-pocket expenses arising in connection with such transactions, including
(i) all document production and duplication charges and the fees and expenses of
any special counsel engaged by the Purchasers or any Transferee in connection
with this Agreement, the transactions contemplated hereby and any subsequent
proposed modification of, or proposed consent under, this Agreement, whether or
not such proposed modification shall be effected or proposed consent granted
(exclusive of any such amounts incurred through the Series A Closing Day), and
(ii) the costs and expenses, including attorneys' fees, incurred by any
Purchaser or any Transferee in enforcing (or determining whether or how to
enforce) any rights under this Agreement or the Notes or in responding to any
subpoena or other legal process or informal investigative demand issued in
connection with this Agreement or the transactions contemplated hereby or by
reason of any Purchaser's or any Transferee's having acquired any Note,
including without limitation costs and expenses incurred in any bankruptcy case.
The obligations of the Company under
34
this paragraph 11B shall survive the transfer of any Note or portion thereof or
interest therein by any Purchaser or any Transferee and the payment of any Note.
11C. CONSENT TO AMENDMENTS. This Agreement may be amended, and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if the Company shall obtain the written consent
to such amendment, action or omission to act, of the Required Holder(s) of the
Notes of each Series except that, (i) with the written consent of the holders of
all Notes of a particular Series, and if an Event of Default shall have occurred
and be continuing, of the holders of all Notes of all Series, at the time
outstanding (and not without such written consents), the Notes of such Series
may be amended or the provisions thereof waived to change the maturity thereof,
to change or affect the principal thereof, or to change or affect the rate or
time of payment of interest on or any Yield-Maintenance Amount payable with
respect to the Notes of such Series, (ii) without the written consent of the
holder or holders of all Notes at the time outstanding, no amendment to or
waiver of the provisions of this Agreement shall change or affect the provisions
of paragraph 7A or this paragraph 11C insofar as such provisions relate to
proportions of the principal amount of the Notes of any Series, or the rights of
any individual holder of Notes, required with respect to any declaration of
Notes to be due and payable or with respect to any consent, amendment, waiver or
declaration, (iii) with the written consent of Prudential (and not without the
written consent of Prudential) the provisions of paragraph 2B may be amended or
waived (except insofar as any such amendment or waiver would affect any rights
or obligations with respect to the purchase and sale of Notes which shall have
become Accepted Notes prior to such amendment or waiver), and (iv) with the
written consent of all of the Purchasers which shall have become obligated to
purchase Accepted Notes of any Series (and not without the written consent of
all such Purchasers), any of the provisions of paragraphs 2B and 3 may be
amended or waived insofar as such amendment or waiver would affect only rights
or obligations with respect to the purchase and sale of the Accepted Notes of
such Series or the terms and provisions of such Accepted Notes. Each holder of
any Note at the time or thereafter outstanding shall be bound by any consent
authorized by this paragraph 11C, whether or not such Note shall have been
marked to indicate such consent, but any Notes issued thereafter may bear a
notation referring to any such consent. No course of dealing between the
Company and the holder of any Note nor any delay in exercising any rights
hereunder or under any Note shall operate as a waiver of any rights of any
holder of such Note. As used herein and in the Notes, the term "THIS AGREEMENT"
and references thereto shall mean this Agreement as it may from time to time be
amended or supplemented.
11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES.
The Notes are issuable as registered notes without coupons in denominations of
at least $100,000, except as may be necessary to reflect any principal amount
not evenly divisible by $100,000. The Company shall keep at its principal
office a register in which the Company shall provide for the registration of
Notes and of transfers of Notes. Upon surrender for registration of transfer of
any Note at the principal office of the Company, the Company shall, at its
expense, execute and deliver one or more new Notes of like tenor and of a like
aggregate principal amount, registered in the name of such transferee or
transferees. At the option of the holder of any Note, such Note may be
exchanged for other Notes of like tenor and of any
35
authorized denominations, of a like aggregate principal amount, upon surrender
of the Note to be exchanged at the principal office of the Company. Whenever any
Notes are so surrendered for exchange, the Company shall, at its expense,
execute and deliver the Notes which the holder making the exchange is entitled
to receive. Each prepayment of principal payable on each prepayment date upon
each new Note issued upon any such transfer or exchange shall be in the same
proportion to the unpaid principal amount of such new Note as the prepayment of
principal payable on such date on the Note surrendered for registration of
transfer or exchange bore to the unpaid principal amount of such Note. No
reference need be made in any such new Note to any prepayment or prepayments of
principal previously due and paid upon the Note surrendered for registration of
transfer or exchange. Every Note surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer duly executed, by the holder of such Note or such holder's attorney
duly authorized in writing. Any Note or Notes issued in exchange for any Note or
upon transfer thereof shall carry the rights to unpaid interest and interest to
accrue which were carried by the Note so exchanged or transferred, so that
neither gain nor loss of interest shall result from any such transfer or
exchange. Upon receipt of written notice from the holder of any Note of the
loss, theft, destruction or mutilation of such Note and, in the case of any such
loss, theft or destruction, upon receipt of such holder's unsecured indemnity
agreement, or in the case of any such mutilation upon surrender and cancellation
of such Note, the Company will make and deliver a new Note, of like tenor, in
lieu of the lost, stolen, destroyed or mutilated Note.
11E. PERSONS DEEMED OWNERS; PARTICIPATIONS; RIGHT OF FIRST OFFER.
(i) Prior to due presentment for registration of transfer, the Company
may treat the Person in whose name any Note is registered as the owner and
holder of such Note for the purpose of receiving payment of principal of
and interest on, and any Yield-Maintenance Amount payable with respect to,
such Note and for all other purposes whatsoever, whether or not such Note
shall be overdue, and the Company shall not be affected by notice to the
contrary.
(ii) Subject to the preceding clause (i), the holder of any Note may
from time to time grant participations in all or any part of such Note to
any Person on such terms and conditions as may be determined by such holder
in its sole and absolute discretion.
(iii) In the event any holder shall desire to sell a Note, or any
part thereof, such holder shall promptly notify the Company in writing of
the material terms and conditions of such proposed sale (the "PROPOSAL")
whereupon the Company shall have a period of thirty days after receipt
thereof in which to agree in writing to repurchase the Note or part
thereof being offered pursuant to the Proposal for the cash consideration
stated in the Proposal and on the other terms and conditions thereof. If
the Company has not agreed in writing to repurchase such Note or part
thereof on the terms and conditions set forth
36
in the Proposal on or before the expiration of thirty days after the
Company's receipt thereof, said holder may sell such Note or part thereof
strictly on the terms and conditions set forth in the Proposal (provided
that the cash consideration received may be greater than that set forth in
the proposal). If the closing of such transfer does not take place within
ninety days after the Company's right to purchase has expired, such holder
shall again offer such Note or part thereof to the Company in accordance
with the above-described terms before any sale to a third party. If the
Company agrees to repurchase such Note or part thereof, the closing will
take place on the terms and conditions set forth in the Proposal except
that the closing will be no earlier than fifteen days after such holder's
receipt of the Company's acceptance of the Proposal. This right of first
offer will apply to any subsequent sale of a Note or any part thereof. Any
repurchase of a Note by the Company pursuant to this paragraph 11E shall
not be deemed a prepayment of such note pursuant to the provisions of
paragraph 4 of this Agreement. Nothing in this clause (iii) shall be deemed
to prohibit the holder from selling participations in the Notes or any
Note, but in any such event, the Company shall not be required to recognize
any participant as a Noteholder or to issue new Notes to any such
participant. This clause (iii) shall not apply to sales or proposed sales
of Notes (or parts thereof) by Prudential or a Prudential Affiliate to
Prudential or a Prudential Affiliate.
11F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement and the Notes, the transfer by any Purchaser of any
Note or portion thereof or interest therein and the payment of any Note, and may
be relied upon by any Transferee, regardless of any investigation made at any
time by or on behalf of any Purchaser or any Transferee. Subject to the
preceding sentence, this Agreement and the Notes embody the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersede all prior agreements and understandings relating to such
subject matter.
11G. SUCCESSORS AND ASSIGNS. All covenants and other agreements in
this Agreement contained by or on behalf of any of the parties hereto shall bind
and inure to the benefit of the respective successors and assigns of the parties
hereto (including, without limitation, any Transferee) whether so expressed or
not.
11H. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be
given independent effect so that if a particular action or condition is
prohibited by any one of such covenants, the fact that it would be permitted by
an exception to, or otherwise be in compliance within the limitations of,
another covenant shall not (i) avoid the occurrence of a Default or Event of
Default if such action is taken or such condition exists or (ii) in any way
prejudice an attempt by the holder of any Note to prohibit, through equitable
action or otherwise, the taking of any action by the Company or any Subsidiary
which would result in a Default or Event of Default.
37
11I. NOTICES. All written communications provided for hereunder
(other than communications provided for under paragraph 2) shall be sent by
first class mail or nationwide overnight delivery service (with charges prepaid)
and (i) if to any Purchaser, addressed as specified for such communications in
the Purchaser Schedule attached hereto (in the case of the Series A Notes) or
the Purchaser Schedule attached to the applicable Confirmation of Acceptance (in
the case of any Shelf Notes) or at such other address as any such Purchaser
shall have specified to the Company in writing, (ii) if to any other holder of
any Note, addressed to it at such address as it shall have specified in writing
to the Company or, if any such holder shall not have so specified an address,
then addressed to such holder in care of the last holder of such Note which
shall have so specified an address to the Company and (iii) if to the Company,
addressed to it at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Chief Financial Officer, provided, however, that any such communication to the
-------- -------
Company may also, at the option of the Person sending such communication, be
delivered by any other means either to the Company at its address specified
above or to any Authorized Officer of the Company. Any communication pursuant
to paragraph 2 shall be made by the method specified for such communication in
paragraph 2, and shall be effective to create any rights or obligations under
this Agreement only if, in the case of a telephone communication, an Authorized
Officer of the party conveying the information and of the party receiving the
information are parties to the telephone call, and in the case of a telecopier
communication, the communication is signed by an Authorized Officer of the party
conveying the information, addressed to the attention of an Authorized Officer
of the party receiving the information, and in fact received at the telecopier
terminal the number of which is listed for the party receiving the communication
in the Information Schedule or at such other telecopier terminal as the party
receiving the information shall have specified in writing to the party sending
such information.
11J. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this Agreement or
the Notes to the contrary notwithstanding, any payment of principal of or
interest on, or Yield-Maintenance Amount payable with respect to, any Note that
is due on a date other than a Business Day shall be made on the next succeeding
Business Day. If the date for any payment is extended to the next succeeding
Business Day by reason of the preceding sentence, the period of such extension
shall be included in the computation of the interest payable on such Business
Day.
11K. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11L. DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
38
11M. SATISFACTION REQUIREMENT. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Agreement
required to be satisfactory to any Purchaser, to any holder of Notes or to the
Required Holder(s), the determination of such satisfaction shall be made by such
Purchaser, such holder or the Required Holder(s), as the case may be, in the
sole and exclusive judgment (exercised in good faith) of the Person or Persons
making such determination.
11N. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE
INTERNAL LAW OF THE STATE OF CALIFORNIA.
11O. SEVERALTY OF OBLIGATIONS. The sales of Notes to the Purchasers
are to be several sales, and the obligations of Prudential and the Purchasers
under this Agreement are several obligations. No failure by Prudential or any
Purchaser to perform its obligations under this Agreement shall relieve any
other Purchaser or the Company of any of its obligations hereunder, and neither
Prudential nor any Purchaser shall be responsible for the obligations of, or any
action taken or omitted by, any other such Person hereunder.
11P. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
39
11Q. BINDING AGREEMENT. When this Agreement is executed and delivered
by the Company, Prudential and Pruco, it shall become a binding agreement
between the Company, Prudential and Pruco. This Agreement shall also inure to
the benefit of each Purchaser which shall have executed and delivered a
Confirmation of Acceptance, and each such Purchaser shall be bound by this
Agreement to the extent provided in such Confirmation of Acceptance.
Very truly yours,
WYLE ELECTRONICS
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President and Controller
The foregoing Agreement is hereby accepted
as of the date first above written.
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /s/ E. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------
Vice President
PRUCO LIFE INSURANCE COMPANY
By: /s/ E. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------
Assistant Vice President
40