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Exhibit 10.1
FINANCING AND SHARE PURCHASE AGREEMENT
between
▇▇▇▇▇, Inc.
and
BANK OF AMERICA, NA
Dated as of
August 16, 1999
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms..................................................1
1.2 Other Interpretive Provisions.........................................13
1.3 Accounting Principles.................................................14
ARTICLE II
SALE AND PURCHASE
2.1 Sale and Purchase of Shares..........................................14
2.2 Business Days........................................................15
2.3 Alternative Consideration............................................15
2.4 No Representation or Warranty........................................16
2.5 Purchaser's Obligations Unconditional................................16
ARTICLE III
TAXES AND YIELD PROTECTION
3.1 Taxes................................................................17
3.2 Increased Costs and Reduction of Return..............................18
3.3 Funding Losses.......................................................19
3.4 Certificates of Seller...............................................19
3.5 Survival.............................................................19
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
4.1 Corporate Existence and Power........................................19
4.2 Corporate Authorization; No Contravention............................20
4.3 Governmental Authorization...........................................20
4.4 Binding Effect.......................................................20
4.5 Litigation...........................................................20
4.6 No Default...........................................................21
4.7 ERISA Compliance.....................................................21
4.8 Margin Regulations...................................................21
4.9 Title to Properties..................................................22
4.10 Taxes................................................................22
4.11 Financial Condition..................................................22
4.12 Environmental Matters................................................22
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4.13 Regulated Entities...................................................22
4.14 No Burdensome Restrictions...........................................23
4.15 Copyrights, Patents, Trademarks and Licenses, etc....................23
4.16 Subsidiaries.........................................................23
4.17 Insurance............................................................23
4.18 Swap Obligations.....................................................23
4.19 Full Disclosure......................................................23
4.20 Year 2000............................................................23
4.21 No Registration......................................................24
ARTICLE V
AFFIRMATIVE COVENANTS OF PURCHASER
5.1 Financial Statements.................................................24
5.2 Certificates; Other Information......................................24
5.3 Notices..............................................................25
5.4 Preservation of Corporate Existence, Etc.............................26
5.5 Maintenance of Property..............................................26
5.6 Insurance............................................................26
5.7 Payment of Obligations...............................................26
5.8 Compliance with Laws.................................................27
5.9 Compliance with ERISA................................................27
5.10 Inspection of Property and Books and Records.........................27
5.11 Environmental Laws...................................................27
5.12 Year 2000............................................................27
ARTICLE VI
NEGATIVE COVENANTS OF PURCHASER
6.1 Financial Condition Covenants........................................28
6.2 Limitation on Liens..................................................28
6.3 Disposition of Assets................................................29
6.4 Consolidations and Mergers...........................................30
6.5 Loans and Investments................................................30
6.6 Limitation on Subsidiary Indebtedness................................31
6.7 Transactions with Affiliates.........................................32
6.8 Use of Proceeds......................................................32
6.9 Swap Contracts.......................................................32
6.10 Restricted Payments..................................................32
6.11 ERISA................................................................32
6.12 Change in Business...................................................33
6.13 Accounting Changes...................................................33
6.14 HSW Mortgage Loan....................................................33
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE SELLER
7.1 Corporate Existence and Power........................................33
7.2 Corporate Authorization; Valid, Legal and Binding Agreement..........33
7.3 Governmental Authorization...........................................33
ARTICLE VIII
ACCELERATION
8.1 Event of Default.....................................................34
8.2 Termination Events...................................................36
8.3 Acceleration.........................................................36
8.4 Rights Not Exclusive.................................................38
8.5 Termination..........................................................38
ARTICLE IX
CONDITIONS PRECEDENT
9.1 Conditions to be Satisfied in Advance of the Disbursement Date.......39
9.2 Further Conditions to be Satisfied at or Before Disbursement.........40
ARTICLE X
MISCELLANEOUS
10.1 Costs and Expenses...................................................40
10.2 Notices..............................................................40
10.3 Amendments; Waivers..................................................41
10.4 Indemnification by the Purchaser.....................................42
10.5 Further Assurances...................................................42
10.6 Severability.........................................................42
10.7 Assignment...........................................................43
10.8 No Third Party Rights; Successors and Assigns; Binding Effect........43
10.9 Governing Law........................................................43
10.10 Submission to Jurisdiction and Waiver of Immunity....................43
10.11 Waiver of Jury Trial.................................................43
10.12 Set-off..............................................................44
10.13 Confidentiality......................................................44
10.14 Counterparts.........................................................44
Exhibit A - Purchase Schedule................................................A-1
Exhibit B - Form of Compliance Certificate...................................B-1
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FINANCING AND SHARE PURCHASE AGREEMENT
THIS FINANCING AND SHARE PURCHASE AGREEMENT (this "Agreement")
is made as of this 16th day of August, 1999, by and between ▇▇▇▇▇, Inc., a North
Carolina corporation (the "Purchaser"), and Bank of America, N.A., a United
States national banking association ("Bank of America") (the "Seller," and
together with the Purchaser, the "Parties").
W I T N E S S E T H :
WHEREAS, the Purchaser, together with its affiliated companies
(the "▇▇▇▇▇ Group"), desires to borrow funds from the Seller and the Seller
desires to lend such funds to the ▇▇▇▇▇ Group;
WHEREAS, the Seller is entering into a loan agreement with
Lanfin Investments Inc., a corporation organized under the laws of Ontario,
Canada, and a subsidiary of the Purchaser ("▇▇▇▇▇"), to be dated as of the date
hereof (the "Loan Agreement"), pursuant to which the Seller agrees to make a
loan in the amount of 50,000,000 Canadian dollars (the "Loan") to ▇▇▇▇▇;
WHEREAS, the Seller is entering into an agreement with Lanhold
Investments Inc., a Delaware corporation (the "Issuer") wholly owned by the
Purchaser, to be dated as of the date hereof (the "Subscription Agreement"),
pursuant to which the Seller agrees to subscribe to purchase from the Issuer and
the Issuer agrees to sell to the Seller, on the Scheduled Subscription Dates (as
defined below), an aggregate of 2,704 Shares (as defined below);
WHEREAS, the transactions contemplated in the Loan Agreement
and the Subscription Agreement, together with the transactions contemplated in
this Agreement and the other Transaction Agreements (as defined below),
constitute a single, integrated financing transaction (the "Financing");
WHEREAS, the Purchaser and the Seller desire to provide for
the purchase by the Purchaser and the sale and delivery by the Seller of the
Shares on each Scheduled Purchase Date, in each case at the price, and in
accordance with the terms and conditions, set forth herein, as well as for
certain other terms of the Financing;
NOW THEREFORE, in consideration of the mutual promises,
representations and warranties set forth herein, the Parties hereby agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. The following terms have the
following meanings:
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"Accelerated Closing Date" has the meaning ascribed to it in
Subsection 8.3(a).
"Acceleration Notice" has the meaning ascribed to it in
Subsection 8.3(a).
"Acquisition" means any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly, in (a) the
acquisition of all or substantially all of the assets of a Person, or of any
business or division of a Person, (b) the acquisition of in excess of 50% of the
capital stock, partnership interests, membership interests or equity of any
Person, or otherwise causing any Person to become a Subsidiary or (c) a merger
or consolidation or any other combination with another Person (other than a
Person that is a Subsidiary), provided that the Company or the Subsidiary is the
surviving entity.
"Affected Party" has the meaning ascribed to it in Subsection
8.2(b).
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with such Person. A Person shall be deemed to control another Person if
the controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities or membership interests, by contract
or otherwise.
"Agreement" has the meaning ascribed to it in the Preamble.
"Applicable Margin" means (a) initially, 0.75% per annum, and
(b) beginning on any date on which the Applicable Margin is to be adjusted
pursuant to the paragraph following the table below, the rate per annum set
forth in the table below opposite the applicable Total Debt to EBITDA Ratio:
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Total Debt to EBITDA Ratio Applicable Margin
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Less than or equal to 1.25 to 1 0.750%
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Less than or equal to 2.00 to 1 but greater 0.875%
than 1.25 to 1
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Greater than 2.00 to 1 1.125%
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The Applicable Margin shall be adjusted, to the extent applicable, 46 days (or,
in the case of the last fiscal quarter of any year, 101 days) after the end of
each fiscal quarter (or, if earlier, 10 days following delivery by the Purchaser
of the financial statements required by Subsection 5.1(a) or 5.1(b), as
applicable, and the related Compliance Certificate required by Subsection 5.2(a)
for such fiscal quarter), based on the Total Debt to EBITDA Ratio as of the last
day of such fiscal quarter, provided, that if the Applicable Margin changes
during any Floating Amount Calculation Period, the Applicable Margin for that
period shall be equal to the sum of the following amounts for each Applicable
Margin that is in effect for any day during such Floating Amount Calculation
Period: the Applicable Margin times a fraction with a numerator equal to the
number of days in such Floating Amount Calculation Period on which such
Applicable
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Margin is in effect and a denominator equal to the total number of days in such
Floating Amount Calculation Period; it being understood that if the Purchaser
fails to deliver the financial statements required by Subsection 5.1(a) or
5.1(b), as applicable, and the related Compliance Certificate required by
Subsection 5.2(a) by the 46th day (or, if applicable, the 101st day) after any
fiscal quarter, the Applicable Margin shall be 1.125% until such financial
statements and Compliance Certificate are delivered.
"Attorney Costs" means and includes all reasonable fees and
disbursements of any law firm or other external counsel and, without
duplication, the allocated cost of internal legal services and all reasonable
disbursements of internal counsel provided that all attorney's fees shall be
determined without regard to any statutory presumption based on the standard
hourly rates for such attorneys and the actual hours expended.
"Bank Holding Company Act" means the Bank Holding Company Act
of 1956, as amended, and the rules and regulations of the Federal Reserve Board
thereunder.
"Bankruptcy Code" means Title 11 of the United States Code.
"Beneficial Owner" means "beneficial owner" as such term is
defined in Rule 13d-3 of the SEC under the Securities Exchange Act of 1934 as in
effect on the date hereof.
"Business Day" means a day on which banks are not required or
authorized by law to close in New York (New York), Charlotte (North Carolina) or
Toronto (Ontario).
"Canadian dollars" and "C$" each mean the lawful money of
Canada.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other law,
rule or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any corporation controlling a bank.
"Change of Control" means any of the following events:
(a) any Person or group (within the meaning of Rule 13d-5 of
the SEC under the Securities Exchange Act of 1934 as in effect on the
date hereof) (other than the Van Every Family) shall become the
Beneficial Owner of 20% or more of the capital stock or other equity
interests of the Purchaser the holders of which are entitled under
ordinary circumstances (irrespective of whether at the time the holders
of such stock or other equity interests shall have or might have voting
power by reason of the happening of any contingency) to vote for the
election of the directors of the Purchaser; or
(b) a majority of the members of the Board of Directors of the
Purchaser shall cease to be Continuing Members.
"Code" means the Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder.
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"Compliance Certificate" means a certificate substantially in
the form of Exhibit B.
"Computation Period" means any period of four consecutive
fiscal quarters ending on the last day of a fiscal quarter.
"Contingent Obligation" means, as to any Person, without
duplication, any direct or indirect liability of such Person, whether or not
contingent, with or without recourse, (a) with respect to any Indebtedness,
lease, dividend, letter of credit or other obligation (the "primary
obligations") of another Person (the "primary obligor"), including any
obligation of such Person (i) to purchase, repurchase or otherwise acquire such
primary obligations or any security therefor, (ii) to advance or provide funds
for the payment or discharge of any such primary obligation, or to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet item, level of income or
financial condition of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation, or (iv) otherwise to assure or hold harmless the holder
of any such primary obligation against loss in respect thereof (each, a
"Guaranty Obligation"); (b) with respect to any Surety Instrument issued for the
account of such Person or as to which such Person is otherwise liable for
reimbursement of drawings or payments; or (c) in respect of any Swap Contract.
The amount of any Contingent Obligation shall (a) in the case of Guaranty
Obligations, be deemed equal to the stated or determinable amount of the primary
obligation in respect of which such Guaranty Obligation is made or, if not
stated or if indeterminable, the maximum reasonably anticipated liability in
respect thereof, and (b) in the case of other Contingent Obligations, be equal
to the maximum reasonably anticipated liability in respect thereof.
"Continuing Member" means a member of the Board of Directors
of the Purchaser who either (a) was a member of the Purchaser's Board of
Directors on the date hereof and has been such continuously thereafter or (b)
became a member of such Board of Directors after the date hereof and whose
election or nomination for election was approved by a vote of the majority of
the Continuing Members then members of the Purchaser's Board of Directors.
"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other document to
which such Person is a party or by which it or any of its property is bound.
"Credit Agreement" has the meaning ascribed to it in
Subsection 6.2(b).
"Disbursement Date" means August 16, 1999.
"Disclosure Memorandum" means the disclosure memorandum dated
May 7, 1999 of the Purchaser delivered to NationsBank, N.A., as administrative
agent, and to certain lenders pursuant to the Credit Agreement.
"EBIT" means, for any Computation Period, the Purchaser's
consolidated earnings from continuing operations for such period, plus, to the
extent deducted in determining
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such earnings, Interest Expense and income taxes, minus, to the extent included
in determining such earnings, any income tax refunds.
"EBITDA" means, for any Computation Period, the Purchaser's
consolidated earnings from continuing operations for such period plus, to the
extent deducted in determining such earnings, Interest Expense and income taxes,
depreciation and amortization, minus, to the extent included in determining such
earnings, any income tax refunds.
"Environmental Claims" means all claims, however asserted, by
any Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or injury
to the environment.
"Environmental Laws" means all federal, state or local laws,
statutes, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authorities, in each case
relating to environmental and human health matters.
"Equity Funding Agreement" means the Equity Funding Agreement,
dated as of the date hereof, among the Purchaser, ▇▇▇▇▇ and the Issuer.
"ERISA" means the Employee Retirement Income Security Act of
1974, and the regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Purchaser within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by the Purchaser or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan year in which it was
a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
substantial cessation of operations which is treated as such a withdrawal; (c) a
complete or partial withdrawal by the Purchaser or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the treatment
of a Pension Plan amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any liability under Title IV of
ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Purchaser or any ERISA Affiliate.
"Escrow Agent" means The Bank of New York, acting in the
capacity of escrow agent under the Escrow Agreement, and any successor escrow
agent thereto.
"Escrow Agreement" means the Escrow Agreement, dated as of the
date hereof, among the Purchaser, the Seller, the Escrow Agent and the other
parties named therein.
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"Eurodollar Reserve Percentage" means for any day the maximum
reserve percentage (expressed as a decimal, rounded upward, if necessary, to the
next 1/100th of 1%) in effect on such day (whether or not applicable to the
Seller) under regulations issued from time to time by the FRB for determining
the maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities").
"Event of Default" means any of the events or circumstances
specified in Section 8.1.
"Financing" has the meaning ascribed to it in the Preamble.
"▇▇▇▇▇" has the meaning ascribed to it in the Preamble.
"Floating Amount" has the meaning ascribed to in Subsection
2.1(b).
"Floating Amount Calculation Period" means the period from
(and including) the Disbursement Date (in the case of the initial Floating
Amount Calculation Period) or the next preceding Scheduled Purchase Date (in the
case of any subsequent Floating Amount Calculation Period ) and, subject to
Section 2.2, to (and excluding) the next succeeding Scheduled Purchase Date.
"Floating Rate" means LIBOR (Reserve Adjusted) plus the
Applicable Margin.
"FRB" means the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of its principal
functions.
"GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board (or
agencies with similar functions of comparable stature and authority within the
U.S. accounting profession), which are applicable to the circumstances as of the
date of determination.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Guaranty Obligation" has the meaning specified in the
definition of Contingent Obligation.
"HSW Mortgage Loan" means the mortgage loan in the original
principal amount of US$95,000,000 owing by the Purchaser to HSW Mortgage Corp.
and secured by a deed of trust on the real property of the Purchaser contiguous
to and including its corporate headquarters located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, North Carolina.
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"Implementation Agreement" means the Implementation Agreement,
dated as of the date hereof, between the Purchaser, the Seller and the Issuer.
"Indebtedness" of any Person means, without duplication, (a)
all indebtedness of such Person for borrowed money; (b) all obligations issued,
undertaken or assumed by such Person as the deferred purchase price of property
or services (other than trade payables entered into in the ordinary course of
business on ordinary terms); (c) all reimbursement or payment obligations of
such Person with respect to Surety Instruments; (d) all obligations of such
Person evidenced by notes, bonds, debentures or similar instruments; (e) all
indebtedness of such Person created or arising under any conditional sale or
other title retention agreement, or incurred as financing, in either case with
respect to property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such property); (f) all obligations of such Person
with respect to capital leases which should be recorded on a balance sheet of
such Person in accordance with GAAP; (g) all indebtedness of the types referred
to in clauses (a) through (f) above secured by (or for which the holder of such
indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property (including accounts and contracts rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness, provided that the amount of any such Indebtedness
shall be deemed to be the lesser of the face principal amount thereof and the
fair market value of the property subject to such Lien; and (h) all Guaranty
Obligations of such Person in respect of indebtedness or obligations of others.
For all purposes of this Agreement, the Indebtedness of any Person shall include
all Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer to the extent of such Person's liability
therefor; provided that to the extent that any such Indebtedness is expressly
non-recourse to such Person it shall not be included as Indebtedness.
"Indemnified Liabilities" has the meaning ascribed to it in
Section 10.4.
"Indemnified Person" has the meaning ascribed to it in Section
10.4.
"Independent Auditor" has the meaning ascribed to it in
Subsection 5.1(a).
"Insolvency Proceeding" means, with respect to any Person, (a)
any case, action or proceeding with respect to such Person before any court or
other Governmental Authority relating to bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding-up or relief of debtors or (b)
any general assignment for the benefit of creditors, composition, marshalling of
assets for creditors, or other, similar arrangement in respect of its creditors
generally or any substantial portion of its creditors, in each case undertaken
under any U.S. Federal, state or other foreign law, including the Bankruptcy
Code.
"Interest Coverage Ratio" means, for any Computation Period,
the ratio of (a) EBIT for such Computation Period to (b) Interest Expense for
such period.
"Interest Expense" means for any period, without duplication,
the consolidated interest expense (whether paid or accrued) of the Purchaser and
its Subsidiaries for such period (including all imputed interest on capital
leases) plus the interest component of synthetic leases
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(regardless of the accounting treatment of the synthetic leases) plus
consolidated yield or discount accrued during such period on the aggregate
outstanding investment or claim held by purchasers, assignees or other
transferees of (or of interests in) receivables of the Purchaser and its
Subsidiaries in connection with any Securitization Transaction (regardless of
the accounting treatment of such Securitization Transaction).
"Interest Payment Date" has the meaning ascribed to it in the
Loan Agreement.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
"Issuer" has the meaning ascribed to it in the Preamble.
"Lender" has the meaning ascribed to it in the Loan Agreement.
"LIBOR" means the London Interbank Offered Rate for deposits
in Canadian dollars, being determined by the Seller to be either:
(i) the offered rate (if any) for the term of the
Floating Amount Calculation Period for which such rate is determined which
appears on page 3740 of the Telerate screen for deposits in Canadian dollars for
such Floating Amount Calculation Period at 11:00 a.m. London time on the
relevant Quotation Date or, if such page or such service shall cease to be
available, such other page or service displaying the London Interbank Offered
Rates in Canadian dollars of prime banks as the Seller shall, with the approval
of the Purchaser, such approval not to be unreasonably withheld or delayed,
select as at 11:00 a.m. London time on the relevant Quotation Date for the term
of such Floating Amount Calculation Period; or
(ii) if no such display rate is then available for such
period or currency and, at such time, the Seller has not selected any
alternative service as contemplated in (i) above, the rate identified by the
Seller as the rate at which it is offered deposits in an amount approximately
equal to the Principal Amount in Canadian dollars and for the term of such
Floating Amount Calculation Period by prime banks in the London Interbank Market
at 11:00 a.m. London time on the relevant Quotation Date for the term of such
Floating Amount Calculation Period.
"LIBOR (Reserve Adjusted)" means, for any Floating Amount
Calculation Period, the rate of interest per annum (rounded upward to the next
1/100th of 1%) determined by the Seller as follows:
LIBOR LIBOR
= ----------------------------------------
(Reserve Adjusted) 1.00 minus Eurodollar Reserve Percentage
"Lien" means any security interest, mortgage, deed of trust,
pledge, hypothecation, assignment, charge or deposit arrangement, encumbrance,
lien (statutory or other) or preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising under
or evidenced by any conditional sale or other title retention agreement, the
interest of a lessor under a capital lease, or any financing lease having
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substantially the same economic effect as any of the foregoing, but not
including the interest of a lessor under an operating lease).
"Loan" has the meaning ascribed to it in the Preamble.
"Loan Agreement" has the meaning ascribed to it in the
Preamble.
"London Banking Day" means any day on which commercial banks
are open for business (including dealings in foreign exchange and foreign
currency deposits) in London.
"Margin Stock" means "margin stock" as such term is defined in
Regulation T, U, or X of the FRB.
"Material Adverse Effect" means a material adverse change in,
or a material adverse effect upon, the operations, business, properties, assets,
liabilities (actual or contingent), or financial condition of the Purchaser and
its Subsidiaries taken as a whole.
"Material Financial Obligations" means Indebtedness or
Contingent Obligations of the Purchaser or any Subsidiary or obligations of the
Purchaser or any Subsidiary in respect of any Securitization Transaction, in an
aggregate principal amount (for all applicable Indebtedness, Contingent
Obligations and obligations in respect of Securitization Transactions) equal to
or greater than US$7,500,000.
"Multiemployer Plan" means a "multiemployer plan," within the
meaning of Section 4001(a)(3) of ERISA, with respect to which the Purchaser or
any ERISA Affiliate may have liability.
"Nonvoting Stock" means the 3,000 shares of the Issuer's stock
that have no voting rights and that are authorized in the Issuer's Articles of
Incorporation.
"Obligations" means the obligation of the Purchaser to
purchase and pay for Shares hereunder and all other advances, debts,
liabilities, obligations, covenants and duties arising under any Transaction
Agreement owing by the Purchaser or any Transaction Subsidiary to the Seller or
any other Indemnified Person, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter arising.
"Organization Documents" means (i) for any corporation, the
certificate of incorporation, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of such corporation,
any shareholder rights agreement, and all applicable resolutions of the board of
directors (or any committee thereof) of such corporation, (ii) for any
partnership or joint venture, the partnership or joint venture agreement and any
other organizational document of such entity, (iii) for any limited liability
company, the certificate or articles of organization, the operating agreement
and any other organizational document of such limited liability company, (iv)
for any trust, the declaration of trust, the trust agreement and any other
organizational document of such trust and (v) for any other entity, the document
or agreement pursuant to which such entity was formed and any other
organizational document of such entity.
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"Other Taxes" means any present or future stamp, court or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery, performance, enforcement or registration of, or otherwise with respect
to, this Agreement or any other Transaction Agreement.
"Parties" has the meaning ascribed to it in the Preamble.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions under ERISA.
"Pension Plan" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA, other than a Multiemployer Plan,
with respect to which the Purchaser or any ERISA Affiliate may have any
liability.
"Permitted Liens" has the meaning ascribed to it in Section
6.2.
"Permitted Swap Obligations" means all obligations (contingent
or otherwise) of the Purchaser or any Subsidiary existing or arising under Swap
Contracts, provided that such obligations are (or were) entered into by such
Person in the ordinary course of business for the purpose of directly mitigating
risks associated with (a) raw materials purchases, (b) interest or currency
exchange rates, (c) operating expenses or other anticipated obligations of such
Person, (d) other liabilities, commitments or assets held or reasonably
anticipated by such Person or (e) changes in the value of securities issued by
such Person in conjunction with a securities repurchase program not otherwise
prohibited hereunder.
"Person" means an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section
3(3) of ERISA), other than a Multiemployer Plan, with respect to which the
Purchaser or any ERISA Affiliate may have any liability, and includes any
Pension Plan.
"Principal Amount" means C$50,000,000.
"Purchase Amount" has the meaning ascribed to it in Subsection
2.1(b).
"Purchase Closing Date" has the meaning ascribed to it in
Subsection 2.1(c).
"Purchaser" has the meaning ascribed to it in the Preamble.
"Purchaser Acceleration Amount" has the meaning ascribed to it
in Subsection 8.3(e).
"Quotation Date" means the second London Banking Day preceding
the first day of a Floating Amount Calculation Period.
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"Reportable Event" means, any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder, other than any such
event for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC.
"Requirement of Law" means, as to any Person, any United
States, state or foreign law (statutory or common), treaty, rule or regulation
or determination of an arbitrator or of a Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.
"Responsible Officer" means the chief executive officer, the
president or any vice president of the Purchaser, or any other officer of the
Purchaser having substantially the same authority and responsibility; or, with
respect to financial matters, the chief financial officer or the treasurer of
the Purchaser, or any other officer of the Purchaser having substantially the
same authority and responsibility.
"Restricted Subsidiary" has the meaning ascribed to it in
Section 6.4.
"Scheduled Purchase Date" means each one of the dates set
forth in Exhibit A hereto, or, if such day is not a Business Day, the next
succeeding Business Day, unless such next succeeding Business Day falls in a
different calendar month, in which case such date shall be the next preceding
Business Day.
"Scheduled Subscription Date" means each one of the dates set
forth in Exhibit A to the Subscription Agreement, subject to adjustment as
provided therein.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"Securities Act" means the Securities Act of 1933, as amended.
"Securitization Transaction" means any sale, assignment or
other transfer by the Purchaser or any Subsidiary of accounts receivable, lease
receivables or other payment obligations owing to the Purchaser or any
Subsidiary or any interest in any of the foregoing, together in each case with
any collections and other proceeds thereof, any collection or deposit accounts
related thereto, and any collateral, guaranties or other property or claims in
favor of the Purchaser or such Subsidiary supporting or securing payment by the
obligor thereon of, or otherwise related to, any such receivables.
"Seller" has the meaning ascribed to it in the Preamble.
"Share" means a share of the Nonvoting Stock.
"Subscription Agreement" has the meaning ascribed to it in the
Preamble.
"Subscription Acceleration Event" has the meaning ascribed to
it in the Subscription Agreement.
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"Subsidiary" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which more than 50% of the voting stock, membership interests or other equity
interests is owned or controlled directly or indirectly by such Person, or one
or more of the Subsidiaries of such Person, or a combination thereof. Unless the
context otherwise clearly requires, references herein to a "Subsidiary" refer to
a Subsidiary of the Purchaser, including the Issuer and ▇▇▇▇▇.
"Surety Instruments" means all letters of credit (including
standby and commercial), banker's acceptances, bank guaranties, shipside bonds,
surety bonds and similar instruments.
"Swap Contract" means any agreement, whether or not in
writing, relating to any transaction that is a rate swap, basis swap, forward
rate transaction, commodity swap, commodity option, equity or equity index swap
or option, bond, note or ▇▇▇▇ option, interest rate option, forward foreign
exchange transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, swaption, currency option or any other, similar
transaction (including any option to enter into any of the foregoing) or any
combination of the foregoing, and, unless the context otherwise clearly
requires, any master agreement relating to or governing any or all of the
foregoing.
"Taxes" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or similar charges
and all liabilities with respect thereto imposed by Canada or any taxing
jurisdiction thereof or therein.
"Termination Event" means any of the events or circumstances
specified in Section 8.2.
"Total Debt to EBITDA Ratio" means, for any Computation
Period, the ratio of (a) Total Indebtedness as of the last day of such
Computation Period, to (b) EBITDA for such Computation Period.
"Total Indebtedness" means, at any time, all Indebtedness of
the Purchaser and its Subsidiaries determined on a consolidated basis and to the
extent not included in the definition of Indebtedness, the aggregate outstanding
investment or claim held at such time by purchasers, assignees or other
transferees of (or of interests in) receivables or other rights to payment of
the Purchaser and its Subsidiaries in connection with any Securitization
Transaction (regardless of the accounting treatment of such Securitization
Transaction).
"Transaction Agreements" means this Agreement, the
Subscription Agreement, the Loan Agreement, the Equity Funding Agreement, the
Escrow Agreement and the Implementation Agreement.
"Transaction Subsidiary" means any Subsidiary that is a party
to any of the Transaction Agreements.
"Unfunded Pension Liability" means the excess of a Pension
Plan's benefit liabilities under Section 4001(a)(16) of ERISA, over the current
value of such Plan's assets,
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determined in accordance with the assumptions used for funding such Pension Plan
pursuant to Section 412 of the Code for the applicable plan year.
"United States" and "U.S." each mean the United States of
America.
"United States dollars" and "US$" each mean the lawful money
of the United States.
"Unmatured Event of Default" means any event or circumstance
which, with the giving of notice, the lapse of time or both, will (if not cured,
waived or otherwise remedied during such time) constitute an Event of Default.
"Van Every Family" means (i) a lineal descendant of Salem A.
Van Every, Sr., including adopted persons as well as persons related by blood,
(ii) a spouse, widow or widower of an individual described in clause (i) above
or (iii) a trust, estate, custodian and other fiduciary or similar account for
the benefit of an individual described in either clause (i) or clause (ii)
above.
"Wholly Owned Subsidiary" means any corporation in which
(other than directors' qualifying shares required by law) 100% of the capital
stock of each class having ordinary voting power, and 100% of the capital stock
of every other class, in each case, at the time as of which any determination is
being made, is owned, beneficially and of record, by the Purchaser, or by one or
more of the other Wholly Owned Subsidiaries, or both.
"Year 2000 Problem" means the inability of certain computer
applications to recognize correctly and perform date-sensitive functions
involving certain dates prior to and after December 31, 1999.
1.2 Other Interpretive Provisions.
(a) The meanings of defined terms are equally applicable
to the singular and plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar
words refer to this Agreement as a whole and not to any particular provision of
this Agreement; and Subsection, Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
(iii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including"; the words "to" and "until" each mean "to but excluding", and the
word "through" means "to and including."
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(d) Unless otherwise expressly provided herein, (i)
references to agreements (including this Agreement) and other contractual
instruments shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Transaction Agreement, and
(ii) references to any statute or regulation are to be construed as including
all statutory and regulatory provisions consolidating, amending, replacing,
supplementing or interpreting the statute or regulation.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(f) This Agreement may use several different limitations,
tests or measurements to regulate the same or similar matters. All such
limitations, tests and measurements are cumulative and shall each be performed
in accordance with their terms. Unless otherwise expressly provided herein, any
reference to any action of the Seller by way of consent, approval or waiver
shall be deemed modified by the phrase "in its sole discretion."
(g) This Agreement and the other Transaction Agreements
are the result of negotiations among and have been reviewed by counsel to the
Purchaser and the Seller, and are the products of all parties. Accordingly, they
shall not be construed against the Seller merely because of the Seller's
involvement in their preparation.
1.3 Accounting Principles.
(a) Unless the context otherwise clearly requires, all
accounting terms not expressly defined herein shall be construed, and all
financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied; provided that if the Purchaser
notifies the Seller that the Purchaser wishes to amend any covenant in Article
VI to eliminate the effect of any change in GAAP on the operation of such
covenant (or if the Seller notifies the Purchaser that the Seller wishes to
amend Article VI for such purpose), then the Purchaser's compliance with such
covenant shall be determined on the basis of GAAP in effect immediately before
the relevant change in GAAP became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Purchaser
and the Seller.
(b) References herein to "fiscal year" and "fiscal
quarter" refer to such fiscal periods of the Purchaser.
ARTICLE II
SALE AND PURCHASE
2.1 Sale and Purchase of Shares. (a) Subject to the terms
and conditions hereof, and in reliance upon the representations and warranties
set forth herein, the Seller agrees to sell to the Purchaser, and the Purchaser
agrees to purchase from the Seller, on each Scheduled Purchase Date, the
aggregate number of Shares set forth opposite such Scheduled Purchase Date in
Exhibit A hereto.
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(b) The aggregate purchase price for the Shares with
respect to each Scheduled Purchase Date (the "Purchase Amount") shall be equal
to (i) with respect to any Scheduled Purchase Date other than the last Scheduled
Purchase Date, the Floating Amount and (ii) with respect to the last Scheduled
Purchase Date, the sum of the Floating Amount and the Principal Amount. As used
herein, "Floating Amount" means, with respect to any Scheduled Purchase Date, an
amount in Canadian dollars equal to (i) the product of the Principal Amount
times the Floating Rate, multiplied by (ii) a fraction, the numerator of which
shall be the actual number of days in the Floating Amount Calculation Period
ending on such Scheduled Purchase Date and the denominator of which shall be
360.
(c) The closing for the purchase and sale of the Shares
with respect to any Scheduled Purchase Date shall take place on such Scheduled
Purchase Date or on such other date and in such other place as the Purchaser and
the Seller may agree in writing (each such dates being hereinafter referred to
as a "Purchase Closing Date"), all in accordance with the procedures and
provisions of the Escrow Agreement.
No later than 10:00 a.m., New York time, on each Purchase
Closing Date:
(i) the Purchaser shall pay to the Seller the Purchase
Amount for the Shares purchased on such date by appropriate wire transfer of
immediately available funds to an account designated by the Seller;
(ii) promptly upon giving irrevocable instructions for the
payment of the Purchase Amount as provided in the previous paragraph (i) the
Purchaser shall provide to the Seller notice that the Purchaser has paid the
Purchase Amount for the Shares purchased on such date (such notice to be
accompanied by appropriate wire transfer reference information); and
(iii) the Seller shall promptly deliver such Shares to the
Purchaser and execute all instruments of transfer or assignment as may be
reasonably requested by Purchaser to effect the unconditional delivery and
transfer of such Shares to the Purchaser, all in accordance with the procedures
and provisions of the Escrow Agreement.
2.2 Business Days. Any payment stated to be due
hereunder, any delivery of Shares stated to be made hereunder and any Floating
Amount Calculation Period stated to end, on a given day shall be made or shall
end (as the case may be), if such day is not a Business Day, on the next
succeeding Business Day, unless such next succeeding Business Day falls in a
different calendar month, in which case such payment shall be made or such
Floating Amount Calculation Period shall end (as the case may be) on the next
preceding Business Day.
2.3 Alternative Consideration. (a) So long as the sale
and purchase of Shares hereunder has not been accelerated pursuant to the
provisions of Section 8.3, if the Issuer fails to perform its obligations to
issue and deliver Shares on any Scheduled Subscription Date under the
Subscription Agreement, in lieu of delivering Shares on the Purchase Closing
Date corresponding to the Scheduled Purchase Date falling on such Scheduled
Subscription Date as contemplated by Subsection 2.1(c)(iii), the Seller hereby
irrevocably transfers and assigns to the Purchaser, without recourse, the
Seller's right to receive such Shares pursuant to the Subscription Agreement,
and the Purchaser shall pay, as contemplated by Subsections 2.1(b) and
2.1(c)(i), the
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Purchase Amount for the Shares scheduled to be purchased on such date in
exchange for such transfer and assignment.
(b) The Seller's assignment of the right to receive the
Shares referred to in Subsection 2.3(a) shall fully discharge the Seller's
obligation to deliver Shares on the relevant Purchase Closing Date, and shall be
without prejudice to the rights of the Seller under Section 8.3. Upon any such
assignment, the Purchaser is hereby authorized by the Seller to take all such
steps as may be necessary to enforce the rights hereby assigned to it.
2.4 No Representation or Warranty. (a) The Seller makes
no representation or warranty and assumes no responsibility with respect to the
authorization, execution, legality, validity, enforceability, genuineness or
value of the Shares, except that the Seller represents and warrants that the
Shares will be sold to the Purchaser hereunder free and clear of any Lien
created by the Seller (other than any Lien created hereunder or under any other
Transaction Agreement).
(b) The Seller makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with, or with respect to the execution,
legality, validity, enforceability, genuineness, sufficiency or value of, the
Loan Agreement, the Subscription Agreement, any other Transaction Agreement or
any other instrument or document furnished pursuant thereto, other than the
representations and warranties of the Seller set forth in Article VII hereof and
Section 5.2 of the Subscription Agreement.
(c) The Seller makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any of the
Transaction Subsidiaries or the performance or observance by any of the
Transaction Subsidiaries of any of its obligations under the Loan Agreement, the
Subscription Agreement or any other Transaction Agreement or any other
instrument or document furnished pursuant thereto.
2.5 Purchaser's Obligations Unconditional. The
obligations of the Purchaser hereunder, including the Purchaser's obligation to
pay each Purchase Amount as contemplated herein, shall be unconditional and
absolute and, without limiting the generality of the foregoing, shall not be
released, discharged or otherwise affected by:
(a) the legality, validity, regularity or enforceability
of any other Transaction Agreement;
(b) any defense, set-off or counterclaim which may at any
time be available to or be asserted by any Transaction Subsidiary against the
Seller;
(c) any modification or amendment of or supplement to any
Transaction Agreement;
(d) any failure by any Transaction Subsidiary to perform
any of its obligations under any Transaction Agreement for any reason
whatsoever, including any failure by ▇▇▇▇▇ to make any payment under the Loan
Agreement (whether or not resulting in any Subscription Acceleration Event under
the Subscription Agreement or in any Event of Default under the Loan
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Agreement), any failure by the Issuer to issue or deliver any Shares under the
Subscription Agreement or any failure by the Escrow Agent to perform its
obligations under the Escrow Agreement;
(e) the absence of any action to enforce a Transaction
Agreement or to recover a judgment against any Transaction Subsidiary;
(f) any change in the corporate existence, structure or
ownership of any Transaction Subsidiary, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting a Transaction Subsidiary or
its assets or any resulting release or discharge of any obligation of any
Transaction Subsidiary in respect of the Transaction Agreements;
(g) any assignment of rights in lieu of delivery of
Shares in accordance with the provisions of Sections 2.3 or 8.3; and
(h) any other act or omission to act or delay of any kind
by any Transaction Subsidiary or any other Person or any other circumstance
whatsoever which might, but for the provisions of this paragraph, constitute a
legal or equitable discharge of the Purchaser's obligations hereunder.
ARTICLE III
TAXES AND YIELD PROTECTION
3.1 Taxes. (a) Any and all payments by the Purchaser to
the Seller under this Agreement shall be made free and clear of, and without
deduction or withholding for, any Taxes. In addition, the Purchaser shall pay
all Other Taxes.
(b) If the Purchaser shall be required by law to deduct
or withhold any Taxes or Other Taxes from or in respect of any amount payable
hereunder to the Seller, then:
(i) the amount payable shall be increased as
necessary so that, after making all required deductions and
withholdings (including deductions and withholdings applicable to
additional sums payable under this Section), the Seller receives and
retains an amount equal to the sum it would have received and retained
had no such deductions or withholdings been made; provided, however,
that no such increased amounts shall be payable in respect of Taxes
imposed on or measured by the Seller's net income by the jurisdiction
(or any political subdivision thereof) under the laws of which the
Seller is organized or has its principal place of business or maintains
its applicable lending office;
(ii) the Purchaser shall make such deductions and
withholdings; and
(iii) the Purchaser shall pay the full amount
deducted or withheld to the relevant taxing authority or other
authority in accordance with applicable law.
(c) The Purchaser agrees to indemnify and hold harmless
the Seller for the full amount of Taxes and Other Taxes in the amount that the
Seller specifies as necessary to
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preserve the yield after Taxes and Other Taxes the Seller would have received
under the Financing if such Taxes or Other Taxes had not been imposed, and any
liability (including penalties, interest, additions to tax and expenses) arising
therefrom or with respect thereto; provided, however, that no such amounts shall
be payable in respect of Taxes imposed on or measured by the Seller's net income
by the jurisdiction or any political subdivision thereof under the laws of which
the Seller is organized or has its principal place of business or maintains its
applicable lending office. Payment under this indemnification shall be made
within 30 days after the date the Seller makes written demand therefor.
Notwithstanding the foregoing provisions of this Subsection 3.1(c), if the
Seller fails to notify the Purchaser of any event or circumstance which would
entitle the Seller to compensation pursuant to this Subsection 3.1(c) within 120
days after such event or circumstance, then the Seller shall not be entitled to
compensation from the Purchaser for any amount arising prior to the date which
is 120 days before the date on which the Seller notifies the Purchaser of such
event or circumstance.
(d) Within 30 days after the date of any payment by the
Purchaser of any Taxes or Other Taxes pursuant to paragraph (b) above, the
Purchaser shall furnish the Seller the original or a certified copy of a receipt
evidencing payment thereof, or other evidence of payment satisfactory to the
Seller.
3.2 Increased Costs and Reduction of Return. (a) If the
Seller determines that, due to either (i) the introduction of or any change
(other than any change by way of imposition of or increase in reserve
requirements included in the calculation of LIBOR (Reserve Adjusted)) in or in
the interpretation of any law or regulation or (ii) compliance by the Seller
with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), there shall be any increase
in the cost to the Seller of agreeing to make or making, funding or maintaining
the Financing, then the Purchaser shall be liable for, and shall from time to
time upon demand pay to the Seller, additional amounts as are sufficient to
compensate the Seller for such increased cost.
(b) If the Seller shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or administration of
any Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or (iv)
compliance by the Seller or any corporation controlling the Seller with any
Capital Adequacy Regulation affects or would affect the amount of capital
required or expected to be maintained by the Seller or any corporation
controlling the Seller and (taking into consideration the Seller's or such
corporation's policies with respect to capital adequacy and the Seller's desired
return on capital) determines that the amount of such capital is increased as a
consequence of the Financing, then, upon demand of the Seller to the Purchaser,
the Purchaser agrees to pay to the Seller, from time to time as specified by the
Seller, additional amounts sufficient to compensate the Seller for such
increase.
(c) Notwithstanding the foregoing provisions of this
Section 3.2, if the Seller fails to notify the Purchaser of any event or
circumstance which would entitle the Seller to compensation pursuant to this
Section 3.2 within 60 days after such event or circumstance, then the Seller
shall not be entitled to compensation from the Purchaser for any amount arising
prior
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to the date which is 60 days before the date on which the Seller notifies the
Purchaser of such event or circumstance.
3.3 Funding Losses. The Purchaser shall reimburse the
Seller and hold the Seller harmless from any loss or expense which the Seller
may sustain or incur as a consequence of the fact that, upon any acceleration of
the sale and purchase of the Shares pursuant to Section 8.3, the Accelerated
Closing Date does not fall on a Scheduled Purchase Date, including any such loss
or expense arising from the liquidation or reemployment of funds obtained by it
to maintain the Financing or from fees payable to terminate the deposits from
which such funds were obtained. For purposes of calculating amounts payable by
the Purchaser to the Seller under this Section, the Principal Amount (and each
related reserve, special deposit or similar requirement) shall be conclusively
deemed to have been funded at LIBOR by a matching deposit or other borrowing in
the interbank market for a comparable amount and for a comparable period,
whether or not such Principal Amount is in fact so funded.
3.4 Certificate of Seller. In order to claim
reimbursement or compensation under this Article III the Seller shall deliver to
the Purchaser a certificate setting forth in reasonable detail the amount
payable to the Seller hereunder and the manner in which such amount has been
calculated, and any such certificate shall be conclusive and binding on the
Purchaser in the absence of manifest error.
3.5 Survival. The agreement and obligations of the
Purchaser in this Article III shall survive the termination of this Agreement
and the payment of all other Obligations.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser represents and warrants to the Seller that:
4.1 Corporate Existence and Power. The Purchaser and
each of its Subsidiaries:
(a) is a corporation duly organized, validly existing
and, if applicable in the jurisdiction of its incorporation, in good standing
under the laws of the jurisdiction of its incorporation;
(b) has the power and authority and all governmental
licenses, authorizations, consents and approvals (i) to own its assets and to
carry on its business and (ii) in the case of the Purchaser and each Transaction
Subsidiary, to execute, deliver and perform its obligations under the
Transaction Agreements to which the Purchaser or such Transaction Subsidiary is
a party;
(c) is duly qualified as a foreign corporation and is
licensed and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification or license; and
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(d) is in compliance with all Requirements of Law;
except, in each case referred to in subparagraph (b)(i), paragraph (c) or
paragraph (d), to the extent that the failure to do so could not reasonably be
expected to have a Material Adverse Effect.
4.2 Corporate Authorization; No Contravention. The
execution, delivery and performance by the Purchaser and each Transaction
Subsidiary of the Transaction Agreements to which the Purchaser or such
Transaction Subsidiary is a party have been duly authorized by all necessary
corporate action of the Purchaser or such Transaction Subsidiary, and do not and
will not:
(a) contravene the terms of any of the Purchaser's or
such Transaction Subsidiary's Organization Documents;
(b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, any document evidencing any
material Contractual Obligation to which the Purchaser or any of its
Subsidiaries is a party or any order, injunction, writ or decree of any
Governmental Authority to which the Purchaser or any of its Subsidiaries or any
of its or their property is subject; or
(c) violate any Requirement of Law.
4.3 Governmental Authorization. No approval, consent,
exemption, authorization or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Purchaser of
this Agreement or against the Purchaser or any of the Transaction Subsidiaries
of any other Transaction Agreement to which the Purchaser or such Transaction
Subsidiary is a party.
4.4 Binding Effect. This Agreement constitutes a legal,
valid and binding obligation of the Purchaser, enforceable against the Purchaser
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles relating to
enforceability; each other Transaction Agreement to which the Purchaser or any
Transaction Subsidiary is a party constitutes a legal, valid and binding
obligation of the Purchaser or such Transaction Subsidiary, enforceable against
the Purchaser or such Transaction Subsidiary in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability.
4.5 Litigation. Except as specifically disclosed in Part
I of the Disclosure Memorandum, there are no actions, suits, proceedings, claims
or disputes pending or, to the best knowledge of the Purchaser, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, against the Purchaser or any Subsidiary or any of their respective
properties (a) which purport to affect or pertain to this Agreement or any other
Transaction Agreement, or any of the transactions contemplated hereby or
thereby; or (b) as to which there exists a reasonable likelihood of an adverse
determination, which determination
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would reasonably be expected to have a Material Adverse Effect. No injunction,
writ, temporary restraining order or other order of any nature has been issued
by any court or other Governmental Authority purporting to enjoin or restrain
the execution, delivery or performance of this Agreement or any other
Transaction Agreement, or directing that the transactions provided for herein or
therein not be consummated as herein or therein provided.
4.6 No Default. No Event of Default or Unmatured Event of
Default exists or would result from the incurring of any Obligations by the
Purchaser. Neither the Purchaser nor any Subsidiary is in default under or with
respect to any Contractual Obligation in any respect which, individually or
together with all such defaults, could reasonably be expected to have a Material
Adverse Effect.
4.7 ERISA Compliance. Except as specifically disclosed
in Schedule 4.7:
(a) Each Plan is in compliance in all material respects
with the applicable provisions of ERISA, the Code and other federal or state
law. Each Plan which is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS and to the best knowledge
of the Purchaser, nothing has occurred which would cause the loss of such
qualification. The Purchaser and each ERISA Affiliate have made all required
contributions to any Plan subject to Section 412 of the Code, and no application
for a funding waiver or an extension of any amortization period pursuant to
Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of the
Purchaser, threatened claims, actions or lawsuits, or actions by any
Governmental Authority, with respect to any Plan which have resulted or could
reasonably be expected to result in a Material Adverse Effect. There has been no
prohibited transaction or violation of the fiduciary responsibility rules with
respect to any Plan which has resulted or could reasonably be expected to result
in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably
expected to occur; (ii) no contribution failure has occurred with respect to a
Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA;
(iii) no Pension Plan has any Unfunded Pension Liability; (iv) neither the
Purchaser nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of ERISA); (v) neither
the Purchaser nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred which, with the giving of notice
under Section 4219 of ERISA, would result in such liability) under Section 4201
or 4243 of ERISA with respect to a Multiemployer Plan; and (vi) neither the
Purchaser nor any ERISA Affiliate has engaged in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA.
4.8 Margin Regulations. Neither the Purchaser nor any
Subsidiary is generally engaged in the business of purchasing or selling Margin
Stock or extending credit for the purposes of purchasing or carrying Margin
Stock.
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4.9 Title to Properties. The Purchaser and each
Subsidiary have good record and marketable title in fee simple to, or valid
leasehold interests in, all real property necessary or used in the ordinary
conduct of their respective businesses, except for such liens, title defects and
other matters affecting title as could not, individually or in the aggregate,
have a Material Adverse Effect. As of the date hereof, the property of the
Purchaser and its Subsidiaries is subject to no Liens other than Permitted
Liens.
4.10 Taxes. The Purchaser and its Subsidiaries have filed
all U.S. federal and other material tax returns and reports required to be
filed, and have paid all federal and other material taxes, assessments, fees and
other governmental charges levied or imposed upon them or their properties,
income or assets otherwise due and payable, except those which are being
contested in good faith by appropriate proceedings and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against the Purchaser or any Subsidiary that would, if made, have a
Material Adverse Effect.
4.11 Financial Condition. (a) The audited consolidated
financial statements of the Purchaser and its Subsidiaries dated as of December
26, 1998, and the related consolidated statements of income or operations,
stockholders' equity and cash flows for the fiscal year ended on that date,
copies of which shall have been previously delivered to the Seller:
(i) were prepared in accordance with GAAP
consistently applied throughout the periods covered thereby, except as
otherwise expressly noted therein;
(ii) fairly present the financial condition of the
Purchaser and its Subsidiaries as of the dates thereof and the results
of operations for the periods covered thereby; and
(iii) except as specifically disclosed in Part II of
the Disclosure Memorandum, show all material indebtedness and other
liabilities, absolute or contingent, of the Purchaser and its
consolidated Subsidiaries as of the dates thereof, including
liabilities for all material taxes and material Contingent Obligations.
(b) Since December 26, 1998, there has been no Material
Adverse Effect.
4.12 Environmental Matters. Except as specifically
disclosed in Part III of the Disclosure Memorandum, the Purchaser is in material
compliance with all applicable Environmental Laws and is not subject to
Environmental Claims except for such non-compliance and Environmental Claims
that could not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.
4.13 Regulated Entities. None of the Purchaser, any Person
controlling the Purchaser, or any Subsidiary is an "investment company" within
the meaning of the Investment Company Act of 1940. The Purchaser is not subject
to regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, any state public utilities code, or any
other Federal or state statute or regulation limiting its ability to incur
Indebtedness.
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4.14 No Burdensome Restrictions. Neither the Purchaser nor
any Subsidiary is a party to or bound by any Contractual Obligation, or subject
to any restriction in any Organization Document or any Requirement of Law, which
could reasonably be expected to have a Material Adverse Effect.
4.15 Copyrights, Patents, Trademarks and Licenses, etc.
The Purchaser and its Subsidiaries own or are licensed or otherwise have the
right to use all of the material patents, trademarks, service marks, trade
names, copyrights, contractual franchises, authorizations and other rights that
are reasonably necessary for the operation of their respective businesses,
without conflict with the rights of any other Person. To the best knowledge of
the Purchaser, no slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be
employed, by the Purchaser or any Subsidiary, and which is material to the
business or operations of the Purchaser and its Subsidiaries, infringes upon any
rights held by any other Person.
4.16 Subsidiaries. The Purchaser has no Subsidiaries other
than those specifically disclosed in part (a) of Schedule 4.16 and has no equity
investments in any other corporation or entity other than those specifically
disclosed in part (b) of Schedule 4.16. Except as otherwise contemplated by the
Transaction Agreements, the Purchaser owns, directly or indirectly, all of the
issued and outstanding capital stock of the Issuer and ▇▇▇▇▇.
4.17 Insurance. The properties of the Purchaser and each
Subsidiary are insured with financially sound and reputable insurance companies
not Affiliates of the Purchaser, in such amounts, with such deductibles and
covering such risks as are customarily carried by companies engaged in similar
businesses and owning similar properties in localities where the Purchaser or
such Subsidiary operates.
4.18 Swap Obligations. Neither the Purchaser nor any of
its Subsidiaries has incurred any outstanding obligations under any Swap
Contracts, other than Permitted Swap Obligations.
4.19 Full Disclosure. The representations and warranties
made by the Purchaser or any Transaction Subsidiary in the Transaction
Agreements as of the date such representations and warranties are made or deemed
made, and the statements contained in any exhibit, report or certificate
furnished by or on behalf of the Purchaser or any Transaction Subsidiary in
connection with the Transaction Agreements, taken as a whole, do not contain any
untrue statement of a material fact or omit any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered.
4.20 Year 2000. The Purchaser and its Subsidiaries are
taking all reasonably necessary and appropriate steps to ascertain the extent
of, and to quantify and successfully address, business and financial risks
facing the Purchaser and its Subsidiaries as a result of the Year 2000 Problem,
including risks resulting from the failure of key vendors and customers of the
Purchaser to successfully address the Year 2000 Problem and (b) the Purchaser's
and its Subsidiaries' material computer applications are reasonably expected to,
on a timely basis,
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adequately address the Year 2000 Problem, except to the extent failure to do so
could not reasonably be expected to have a Material Adverse Effect.
4.21 No Registration. The Purchaser (i) understands that
the Shares are not being and will not be registered under the Securities Act and
are being sold to it in a transaction that is exempt from the registration
requirements of the Securities Act, (ii) has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of an investment in the Shares, (iii) is an "accredited investor" (within
the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act) able to bear the economic risk of investment in the Shares, and
(iv) is not acquiring the Shares with a view to any distribution thereof in
violation of the Securities Act.
ARTICLE V
AFFIRMATIVE COVENANTS OF PURCHASER
So long as the Purchaser shall not have made payment in full
of the Purchase Amounts for all Shares purchased hereunder or any other
Obligation shall remain unpaid or unsatisfied, unless the Seller waives
compliance in writing:
5.1 Financial Statements. The Purchaser shall deliver to
the Seller, in form and detail satisfactory to the Seller:
(a) as soon as available, but not later than 100 days
after the end of each fiscal year, a copy of the audited consolidated balance
sheet of the Purchaser and its Subsidiaries as at the end of such year and the
related consolidated statements of income or operations, stockholders' equity
and cash flows for such year, setting forth in each case in comparative form the
figures for the previous fiscal year, and accompanied by the opinion of KPMG LLP
or another nationally-recognized independent public accounting firm
("Independent Auditor"), which opinion (i) shall state that such consolidated
financial statements present fairly the Purchaser's consolidated financial
position for the periods indicated in conformity with GAAP and (ii) shall not be
qualified or limited because of a restricted or limited examination by the
Independent Auditor of any material portion of the Purchaser's or any
Subsidiary's records; and
(b) as soon as available, but not later than 45 days
after the end of each of the first three fiscal quarters of each fiscal year, a
copy of the unaudited consolidated balance sheet of the Purchaser and its
Subsidiaries as of the end of such quarter and the related consolidated
statements of income, stockholders' equity and cash flows for the period
commencing on the first day and ending on the last day of such quarter, and
certified by a Responsible Officer of the Purchaser as fairly presenting, in
accordance with GAAP (subject to ordinary, good faith year-end audit
adjustments), the financial position and the results of operations of the
Purchaser and its Subsidiaries as of such date and for such period.
5.2 Certificates; Other Information. The Purchaser shall
furnish to the Seller:
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(a) concurrently with the delivery of the financial
statements referred to in Subsections 5.1(a) and (b), a Compliance Certificate
executed by a Responsible Officer of the Purchaser;
(b) promptly, copies of all financial statements and
reports that the Purchaser sends to its shareholders, and copies of all
financial statements and regular, periodic or special reports (including Forms
10-K, 10-Q and 8-K) that the Purchaser or any Subsidiary may make to, or file
with, the SEC; and
(c) promptly, such additional information regarding the
business, financial or corporate affairs of the Purchaser or any Subsidiary as
the Seller may from time to time reasonably request.
5.3 Notices. The Purchaser shall promptly (or, in the
case of any event described in clause (c)(ii) below, not less than 10 days prior
to the occurrence of such event) notify the Seller:
(a) of the occurrence of any Event of Default or
Unmatured Event of Default known to the Purchaser;
(b) of any of the following matters that has resulted or
is reasonably expected to result in a Material Adverse Effect: (i) breach or
non-performance of, or any default under, a Contractual Obligation of the
Purchaser or any Subsidiary; (ii) any dispute, litigation, investigation,
proceeding or suspension between the Purchaser or any Subsidiary and any
Governmental Authority; or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting the Purchaser or any
Subsidiary including pursuant to any applicable Environmental Laws;
(c) of the occurrence of any of the following events
known to the Purchaser which affect the Purchaser or any ERISA Affiliate, and
deliver to the Seller a copy of any notice with respect to such event that is
filed with a Governmental Authority and any notice delivered by a Governmental
Authority to the Purchaser or any ERISA Affiliate with respect to such event:
(i) an ERISA Event;
(ii) a contribution failure with respect to a
Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA;
(iii) a material increase in the Unfunded Pension
Liability of any Pension Plan;
(iv) the adoption of, or the commencement of
contributions to, any Plan subject to Section 412 of the Code by the
Purchaser or any ERISA Affiliate; or
(v) the adoption of any amendment to a Plan subject
to Section 412 of the Code, if such amendment results in a material
increase in contributions or Unfunded Pension Liability; and
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(d) of any material change in accounting policies or
financial reporting practices by the Purchaser and its consolidated
Subsidiaries.
Each notice under this Section shall be accompanied by a
written statement by a Responsible Officer setting forth details of the
occurrence referred to therein, and stating what action the Purchaser or any
affected Subsidiary proposes to take with respect thereto. Each notice under
Subsection 5.3(a) shall describe with particularity any and all clauses or
provisions of this Agreement or any other Transaction Agreement that, to the
best of such Responsible Officer's knowledge, have been breached or violated.
5.4 Preservation of Corporate Existence, Etc. The
Purchaser shall, and shall cause each Subsidiary to:
(a) preserve and maintain in full force and effect its
corporate existence and valid existence under the laws of its jurisdiction of
organization;
(b) preserve and maintain in full force and effect all
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary in the normal conduct of its business (except (i) in
connection with transactions permitted by Section 6.7 and sales of assets
permitted by Section 6.3 and (ii) to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect);
(c) use reasonable efforts, in the ordinary course of
business, to preserve its business organization and goodwill; and
(d) preserve or renew all of its registered patents,
trademarks, trade names and service marks, the non-preservation of which could
reasonably be expected to have a Material Adverse Effect.
5.5 Maintenance of Property. The Purchaser shall, and
shall cause each Subsidiary to, maintain and preserve all its property which is
used or useful in its business in good working order and condition, ordinary
wear and tear excepted, except to the extent that failure to do so would not
reasonably be expected to have a Material Adverse Effect.
5.6 Insurance. The Purchaser shall, and shall cause each
Subsidiary to, maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons.
5.7 Payment of Obligations. The Purchaser shall, and
shall cause each Subsidiary to, pay and discharge, as the same shall become due
and payable, all their respective material obligations and liabilities,
including:
(a) all material tax liabilities, assessments and
governmental charges or levies upon it or its properties or assets, unless the
same are being contested in good faith by appropriate proceedings and adequate
reserves in accordance with GAAP are being maintained by the Purchaser or such
Subsidiary; and
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(b) all material claims which, if unpaid, would by law
become a Lien upon its property unless the same are contested in good faith by
appropriate proceedings and adequate reserves in accordance with GAAP are being
maintained by the Purchaser or such Subsidiary.
5.8 Compliance with Laws. The Purchaser shall, and shall
cause each Subsidiary to, comply in all material respects with all material
Requirements of Law of any Governmental Authority having jurisdiction over it or
its business (including the Federal Fair Labor Standards Act, 29 U.S.C. ss. 2.01
et seq.), except such as may be contested in good faith or as to which a bona
fide dispute may exist.
5.9 Compliance with ERISA. The Purchaser shall, and shall
cause each of its ERISA Affiliates to: (a) maintain each Plan in compliance in
all material respects with the applicable provisions of ERISA, the Code and
other federal or state law; (b) cause each Plan which is qualified under Section
401(a) of the Code to maintain such qualification; and (c) make all required
contributions to any Plan subject to Section 412 of the Code.
5.10 Inspection of Property and Books and Records. The
Purchaser shall, and shall cause each Subsidiary to, maintain proper books of
record and account, in which full, true and correct entries (sufficient to
permit the preparation of consolidated financial statements in conformity with
GAAP) shall be made of all financial transactions and matters involving the
assets and business of the Purchaser and such Subsidiary. The Purchaser shall
permit, and shall cause each Subsidiary to permit, the Seller or its
representatives, at any reasonable time during normal business hours, upon
advance request of the Seller, to visit and inspect the properties of the
Purchaser or any Subsidiary, to examine their respective corporate, financial
and operating records, and make copies thereof or abstracts therefrom, and to
discuss the affairs, finances and accounts of the Purchaser or any Subsidiary
with the appropriate officers of the Purchaser or such Subsidiary.
5.11 Environmental Laws. The Purchaser shall, and shall
cause each Subsidiary to, conduct its operations and keep and maintain its
property in material compliance with all material Environmental Laws, except
such as may be contested in good faith or as to which a bona fide dispute may
exist.
5.12 Year 2000. The Purchaser and its Subsidiaries shall
take all reasonably necessary and appropriate steps to ascertain the extent of,
and to quantify and successfully address, business and financial risks facing
the Purchaser and its subsidiaries as a result of the Year 2000 Problem,
including risks resulting from the failure of key vendors and customers of the
Purchaser to successfully address the Year 2000 Problem.
ARTICLE VI
NEGATIVE COVENANTS OF PURCHASER
So long as the Purchaser shall not have made payment in full
of the Purchase Amounts for all Shares purchased hereunder or any other
Obligation shall remain unpaid or unsatisfied, unless the Seller waives
compliance in writing:
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6.1 Financial Condition Covenants.
(a) Total Debt to EBITDA Ratio. The Purchaser shall not
permit the Total Debt to EBITDA Ratio to be greater than (i) for each
Computation Period ending on or prior to April 12, 2002, 3.00 to 1, and (ii) for
any Computation Period ending thereafter, 2.50 to 1.
(b) Interest Coverage Ratio. The Purchaser shall not
permit, as of the last day of any Computation Period, the Interest Coverage
Ratio to be less than (i) for each Computation Period ending on or prior to
April 12, 2002, 2.50 to 1, and (ii) for any Computation Period ending
thereafter, 3.00 to 1.
6.2 Limitation on Liens. The Purchaser shall not, and
shall not suffer or permit any Subsidiary to, directly or indirectly, make,
create, incur, assume or suffer to exist any Lien upon or with respect to any
part of its property, whether now owned or hereafter acquired, other than the
following ("Permitted Liens"):
(a) any Lien existing on property of the Purchaser or any
Subsidiary on the date hereof and set forth in Schedule 6.2 securing
Indebtedness outstanding on such date, and any extension, renewal or replacement
of any such Lien so long as the principal amount secured thereby is not
increased and the scope of the property subject to such Lien is not extended;
(b) any Lien created under the Credit Agreement, dated as
of April 12, 1999, among ▇▇▇▇▇, Inc., and the other parties named therein, as
amended as of the date hereof (the "Credit Agreement");
(c) Liens for taxes, fees, assessments or other
governmental charges which are not delinquent or remain payable without penalty,
or to the extent that non-payment thereof is permitted by Section 5.7, provided
that no notice of lien has been filed or recorded under the Code or any other
Requirement of Law;
(d) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in the ordinary course
of business which are not delinquent or remain payable without penalty or which
are being contested in good faith and by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the property
subject thereto;
(e) Liens (other than any Lien imposed by ERISA)
consisting of pledges or deposits required in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other social
security legislation;
(f) Liens on the property of the Purchaser or any
Subsidiary securing (i) the non-delinquent performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, (ii) surety
bonds (excluding appeal bonds and other bonds posted in connection with court
proceedings or judgments) and (iii) other non-delinquent obligations of a like
nature; in each case incurred in the ordinary course of business, provided all
such Liens in the aggregate would not (even if enforced) cause a Material
Adverse Effect;
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(g) Liens consisting of judgment or judicial attachment
liens and liens securing contingent obligations on appeal bonds and other bonds
posted in connection with court proceedings or judgments, provided that all such
liens in the aggregate at any time outstanding for the Purchaser and its
Subsidiaries do not exceed US$5,000,000 unless, in the case of judgment and
judicial attachment liens, the enforcement of such liens is effectively stayed;
(h) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business which,
individually or in the aggregate, do not materially detract from the value of
the property subject thereto or interfere with the ordinary conduct of the
businesses of the Purchaser and its Subsidiaries;
(i) purchase money security interests on any property
acquired or held by the Purchaser or its Subsidiaries in the ordinary course of
business, securing Indebtedness incurred or assumed for the purpose of financing
all or any part of the cost of acquiring such property; provided that (i) any
such Lien attaches to such property concurrently with or within 90 days after
the acquisition thereof, (ii) such Lien attaches solely to the property so
acquired in such transaction, (iii) the principal amount of the debt secured
thereby does not exceed 100% of the cost of such property, and (iv) the
principal amount of the Indebtedness secured by any and all such purchase money
security interests shall not at any time exceed US$5,000,000;
(j) Liens securing obligations in respect of capital
leases on assets subject to such leases, provided that such capital leases are
otherwise permitted hereunder;
(k) Liens arising solely by virtue of any statutory or
common law provision relating to banker's liens, rights of set-off or similar
rights and remedies as to deposit accounts or other funds maintained with a
creditor depository institution; provided, that (i) such deposit account is not
a dedicated cash collateral account and is not subject to restrictions against
access by the Purchaser in excess of those set forth by regulations promulgated
by the FRB, and (ii) such deposit account is not intended by the Purchaser or
any Subsidiary to provide collateral to the depository institution;
(l) Liens arising in connection with Securitization
Transactions; provided, that the aggregate investment or claim held at any time
by all purchasers, assignees or other transferees of (or of interests in)
receivables and other rights to payment in all Securitization Transactions shall
not exceed US$25,000,000; and
(m) other Liens securing Indebtedness not at any time
exceeding in the aggregate of US$10,000,000.
6.3 Disposition of Assets. The Purchaser shall not, and
shall not permit any Subsidiary to, directly or indirectly, sell, assign, lease,
convey, transfer or otherwise dispose of (whether in one or a series of
transactions) any property (including accounts and notes receivable, with or
without recourse) or enter into any agreement to do any of the foregoing,
except:
(a) dispositions of inventory, or used, worn-out or
surplus equipment, all in the ordinary course of business;
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(b) the sale, assignment or other transfer of accounts
receivable, lease receivables or other rights to payment pursuant to any
Securitization Transaction; provided, that the aggregate investment or claim
held at any time by all purchasers, assignees or other transferees of (or of
interests in) such receivables or other rights to payment shall not exceed
US$25,000,000; and
(c) the sale of assets that are leased back to the
Purchaser or a Subsidiary, involving amounts not to exceed US$10,000,000 in the
aggregate in any fiscal year; and
(d) dispositions not otherwise permitted hereunder which
are made for fair market value; provided that (i) at the time of any
disposition, no Event of Default shall exist or shall result from such
disposition and (ii) the aggregate value of all assets so disposed of by the
Purchaser and its Subsidiaries in any fiscal year shall not exceed
US$10,000,000.
6.4 Consolidations and Mergers. The Purchaser shall not,
and shall not permit any Subsidiary to, merge, consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any other Person, except:
(a) any Subsidiary may merge with the Purchaser, provided
that the Purchaser shall be the continuing or surviving corporation, or with any
one or more Subsidiaries, provided that if any transaction shall be between a
Subsidiary and a Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary shall be
the continuing or surviving corporation, or the continuing or surviving
corporation shall be a Wholly-Owned Subsidiary;
(b) any Subsidiary may sell all or substantially all of
its assets (upon voluntary liquidation or otherwise), to the Purchaser or
another Wholly-Owned Subsidiary; and
(c) any merger, consolidation or disposition in
connection with a transaction permitted by Section 6.3 or an Acquisition
permitted by Section 6.5;
provided that, notwithstanding the foregoing, the Purchaser shall not permit any
of South MECKCA, LLC, West MECKCA, LLC, Norbehouse, LP, and HSW Mortgage Corp.
(each a "Restricted Subsidiary") to merge, consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any other Person, except that (x)
any Restricted Subsidiary may merge with the Purchaser, provided that the
Purchaser shall be the continuing or surviving corporation, or with any one or
more of Restricted Subsidiaries, and (y) any Restricted Subsidiary may sell all
or substantially all of its assets (upon voluntary liquidation or otherwise), to
the Purchaser or another Restricted Subsidiary.
6.5 Loans and Investments. The Purchaser shall not, and
shall not permit any Subsidiary to, purchase or acquire, or make any commitment
to purchase or acquire, any capital stock, equity interest or obligations or
other securities of, or any interest in, any Person, or make or commit to make
any Acquisition, or make or commit to make any advance, loan, extension of
credit or capital contribution to or any other investment in any Person
(including any Affiliate of the Purchaser) (any of the foregoing an
"Investment"), except for:
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(a) Investments held by the Purchaser or any Subsidiary
in the form of cash equivalents or short term marketable securities;
(b) extensions of credit in the nature of accounts
receivable or notes receivable arising from the sale or lease of goods or
services in the ordinary course of business;
(c) Investments by the Purchaser in any of its
Subsidiaries or by any of its Subsidiaries to another of its Subsidiaries;
(d) other Investments (including those incurred in order
to consummate Acquisitions not otherwise prohibited herein), provided that no
Event of Default or Unmatured Event of Default exists or will result therefrom;
(e) Investments constituting Permitted Swap Obligations
or payments or advances under Swap Contracts relating to Permitted Swap
Obligations;
(f) pledges or deposits required in the ordinary course
of business in connection with workmen's compensation, unemployment insurance
and other social security legislation;
(g) advances, loans or extensions of credit to suppliers
in the ordinary course of business by the Purchaser and its Subsidiaries;
(h) advances, loans or extensions of credit in the
ordinary course of business by the Purchaser and its Subsidiaries to employees
of the Purchaser and its Subsidiaries;
(i) repurchases by the Purchaser of its common stock to
the extent permitted by Section 6.10; and
(j) loans to an employee stock ownership plan established
by the Purchaser, the proceeds of which are used solely to purchase stock of the
Purchaser.
6.6 Limitation on Subsidiary Indebtedness. The Purchaser
shall not permit its Subsidiaries to create, incur, assume or suffer to exist,
or otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness (other than Indebtedness owing to the Purchaser or another
Subsidiary and any Indebtedness created pursuant to the Transaction Agreements)
(but including any deferred promissory notes (the "Deferred Notes") issued by a
Subsidiary pursuant to the Purchaser's Agreement of Purchase and Sale with the
shareholders of Tamming Foods Ltd. in the original amount of C$21,000,000) at
any time outstanding in an aggregate amount not to exceed the excess of (i)
US$65,000,000 over (ii) to the extent not constituting Indebtedness, obligations
of its Subsidiaries in respect of Securitization Transactions to the extent of
the aggregate investment or claim held at any time by purchasers, assignees or
other transferees of (or of interests in) receivables and other rights to
payment in Securitization Transactions, provided that the Purchaser shall not
permit HSW Mortgage Corp., Norbehouse, LP, South MECKCA, LLC and West MECKCA,
LLC to create, incur, assume or suffer to exist, or otherwise become or remain
directly or indirectly liable with respect to, any Indebtedness.
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6.7 Transactions with Affiliates. The Purchaser shall
not, and shall not permit any Subsidiary to, enter into any transaction with any
Affiliate of the Purchaser (other than the Purchaser or a Subsidiary), except
upon fair and reasonable terms no less favorable to the Purchaser or such
Subsidiary than would obtain in a comparable arm's-length transaction with a
Person not an Affiliate of the Purchaser or such Subsidiary.
6.8 Use of Proceeds. The Purchaser shall not, and shall
not suffer or permit any Subsidiary to, use any portion of the Financing,
directly or indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or
otherwise refinance indebtedness of the Purchaser or others incurred to purchase
or carry Margin Stock or (iii) to extend credit for the purpose of purchasing or
carrying any Margin Stock.
6.9 Swap Contracts. The Purchaser shall not, and shall
not permit any Subsidiary to, create, incur, assume or suffer to exist any
obligations under Swap Contracts except for Permitted Swap Obligations.
6.10 Restricted Payments. The Purchaser shall not
(i) declare or make any dividend payment or other distribution of assets,
properties, cash, rights, obligations or securities on account of any shares of
any class of its capital stock or (ii) purchase, redeem or otherwise acquire for
value, or permit any Subsidiary to purchase or otherwise acquire for value, any
shares of the Purchaser's capital stock or any warrants, rights or options to
acquire such shares, now or hereafter outstanding, except that:
(a) the Purchaser may declare and make dividend payments
or other distributions payable solely in its common stock;
(b) the Purchaser may purchase, redeem or otherwise
acquire shares of its common stock or warrants or options to acquire any such
shares with the proceeds received from the substantially concurrent issue of new
shares of its common stock;
(c) so long as (1) no Event of Default or Unmatured Event
of Default exists or would result therefrom and (2) the Purchaser's consolidated
stockholders' equity, after giving effect thereto, is not less than
US$125,000,000, the Purchaser may (x) declare and pay cash dividends to its
stockholders; and (y) purchase, redeem or otherwise acquire shares of its common
stock or warrants or options to acquire such shares; and
(d) HSW Mortgage Corp. may declare and pay cash dividends
to the holders of its 10% Series A Cumulative Preferred Stock in an aggregate
amount not exceeding US$15,000 in any fiscal year.
6.11 ERISA. The Purchaser shall not, and shall not permit
any of its ERISA Affiliates to, (a) engage in a prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in liability of the
Purchaser in an aggregate amount in excess of US$5,000,000 or (b) engage in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.
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6.12 Change in Business. The Purchaser shall not, and
shall not suffer or permit any Subsidiary to, engage in any material line of
business substantially different from those lines of business carried on by the
Purchaser and its Subsidiaries on the date hereof.
6.13 Accounting Changes. The Purchaser shall not, and
shall not permit any Subsidiary to, make any significant change in accounting
treatment or reporting practices, except as required by GAAP.
6.14 HSW Mortgage Loan. The Purchaser shall not, and
shall not permit any Subsidiary to, sell or otherwise dispose of any of its
interest in South MECKCA, LLC, West MECKCA, LLC, Norbehouse, LP, or HSW Mortgage
Corp. The Purchaser shall not permit HSW Mortgage Corp. to sell or otherwise
dispose of or encumber any of its rights under or in respect of the HSW Mortgage
Loan or the related deed of trust existing on the date hereof.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Purchaser that:
7.1 Corporate Existence and Power. The Seller:
(a) has been duly organized and is validly existing as a
national banking association, has full corporate power and authority to own its
assets and to conduct its business, and is in good standing under the laws of
the jurisdiction of its incorporation;
(b) has the power and authority and all governmental
licenses, authorizations, consents and approvals to execute, deliver and perform
its obligations under this Agreement and the other Transaction Agreements to
which it is a party; and
(c) is licensed and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification or license (other than where
the failure to be so qualified would not have a material adverse effect on the
Seller or the Seller's assets).
7.2 Corporate Authorization; Valid, Legal and Binding
Agreement. The execution, delivery and performance by the Seller of this
Agreement and the other Transaction Agreements to which it is a party have been
duly authorized by all necessary corporate action, and this Agreement and the
other Transaction Agreements to which it is a party are valid obligations of the
Seller, legally binding upon and enforceable against the Seller in accordance
with their respective terms, except as such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, rehabilitation, moratorium or
other similar laws affecting the enforcement of creditors' rights generally and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
7.3 Governmental Authorization. No approval, consent,
exemption, authorization or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or
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enforcement against, the Seller of this Agreement or any other Transaction
Agreement to which it is a party.
ARTICLE VIII
ACCELERATION
8.1 Event of Default. Any of the following shall
constitute an "Event of Default":
(a) Non-Payment. The Purchaser fails to pay, (i) when and
as required to be paid herein, any amount of Principal Amount, or (ii) within
three Business Days after the same becomes due, any Floating Amount, interest,
fee or any other amount payable hereunder or under any other Transaction
Agreement.
(b) Representation or Warranty. Any representation or
warranty by the Purchaser or any transaction Subsidiary made or deemed made
herein or in any other Transaction Agreement, or which is contained in any
certificate, document or financial or other statement by the Purchaser or any
Responsible Officer of the Purchaser furnished at any time under this Agreement
or under any other Transaction Agreement, is incorrect in any material respect
on or as of the date made or deemed made.
(c) Specific Defaults. The Purchaser fails to perform or
observe any term, covenant or agreement of the Purchaser contained in Subsection
5.3(a), Section 6.2, 6.3, 6.4, 6.8, 6.11 or 6.13.
(d) Other Defaults. The Purchaser fails to perform or
observe any other term or covenant contained in this Agreement or any other
Transaction Agreement to which it is a party, and such failure shall continue
unremedied for a period of 30 days after the date upon which written notice
thereof is given to the Purchaser by the Seller.
(e) Cross-Default. The Purchaser or any Subsidiary
(A) fails to make any payment in respect of Material Financial Obligations when
due (whether by scheduled maturity, required prepayment, acceleration, demand,
or otherwise); or (B) fails to perform or observe any other condition or
covenant, or any other event shall occur or condition shall exist, under any
agreement or instrument relating to Material Financial Obligations if the effect
of such failure, event or condition is to cause, or to permit the holder or
holders of such Material Financial Obligations or the beneficiary or
beneficiaries of such Material Financial Obligations (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause, such
Material Financial Obligations to become due and payable prior to the stated
maturity thereof or such Material Financial Obligations to become payable or
cash collateral in respect thereof to be demanded.
(f) Insolvency; Voluntary Proceedings. The Purchaser or
any Subsidiary (i) ceases or fails to be solvent, or generally fails to pay, or
admits in writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or otherwise; (ii)
voluntarily ceases to conduct its business in the ordinary course;
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(iii) commences any Insolvency Proceeding with respect to itself; or (iv) takes
any action to effectuate or authorize any of the foregoing.
(g) Involuntary Proceedings. (i) Any involuntary
Insolvency Proceeding is commenced or filed against the Purchaser or any
Subsidiary, or any writ, judgment, warrant of attachment, execution or similar
process is issued or levied against a substantial part of the Purchaser's or any
Subsidiary's properties, and such proceeding or petition shall not be dismissed,
or such writ, judgment, warrant of attachment, execution or similar process
shall not be released, vacated or fully bonded, within 60 days after
commencement, filing or levy; (ii) the Purchaser or any Subsidiary admits the
material allegations of a petition against it in any Insolvency Proceeding, or
an order for relief (or similar order under non-U.S. law) is ordered in any
Insolvency Proceeding with respect to the Purchaser or such Subsidiary; or (iii)
the Purchaser or any Subsidiary acquiesces in the appointment of a receiver,
trustee, custodian, conservator, liquidator, mortgagee in possession (or agent
therefor), or other similar Person for itself or a substantial portion of its
property or business.
(h) ERISA. (i) An ERISA Event shall occur with respect to
a Pension Plan or Multiemployer Plan which has resulted or could reasonably be
expected to result in liability of the Purchaser under Title IV of ERISA to the
Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of
US$5,000,000; (ii) a contribution failure shall occur with respect to a Pension
Plan sufficient to give rise to a Lien under Section 302(f) of ERISA; (iii) the
aggregate amount of Unfunded Pension Liability among all Pension Plans at any
time exceeds US$5,000,000; or (iv) the Purchaser or any ERISA Affiliate shall
fail to pay when due, after the expiration of any applicable grace period (or
any period during which (x) the Purchaser is permitted to contest its obligation
to make such payment without incurring any liability (other than interest) or
penalty and (y) the Purchaser is contesting such obligation in good faith and by
appropriate proceedings), any installment payment with respect to its withdrawal
liability under Section 4201 of ERISA or any contribution obligation under
Section 4243 of ERISA, in each case under a Multiemployer Plan in an aggregate
amount in excess of US$5,000,000.
(i) Loan Termination or Acceleration. The obligations of
the Lender under Loan Agreement are terminated pursuant to Section 3.2 thereof,
or the Loan is declared to be immediately due and payable under Section 10.2 of
the Loan Agreement, in the absence of any event specified in Subsection 10.1(d)
of the Loan Agreement.
(j) Judgments. One or more non-interlocutory judgments,
non-interlocutory orders, decrees or arbitration awards is entered against the
Purchaser or any Subsidiary involving in the aggregate a liability (to the
extent not covered by independent third-party insurance as to which the insurer
does not dispute coverage) as to any single or related series of transactions,
incidents or conditions of US$10,000,000 or more, and the same shall remain
unvacated and unstayed pending appeal for a period of 30 days after the entry
thereof.
(k) Change of Control. Any Change of Control occurs.
(l) Ownership of Certain Subsidiaries. The Purchaser
shall fail to own, directly or indirectly, 100% of the capital stock of the
Issuer and ▇▇▇▇▇ (other than as contemplated by the Transaction Agreements).
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Each of the foregoing shall constitute an Event of Default
whether or not any Subscription Acceleration Event shall have occurred under the
Subscription Agreement and whether or not any assignment of rights shall have
occurred under Sections 3.1 or 3.2 thereof.
8.2 Termination Events. Any of the following shall
constitute a "Termination Event":
(a) Material Adverse Change in Law. The Seller determines
that, due to the promulgation or adoption of or any change in or in the
interpretation of any Requirement of Law, a material decrease in the after-tax
yield the Seller receives under the Financing has occurred or will occur (other
than any decrease caused by a generally applicable change in income tax rates),
provided, that the Seller shall use reasonable efforts (consistent with legal
and regulatory restrictions) to take such measures as are necessary to eliminate
such decrease, if such measures in the Seller's sole judgment are not otherwise
disadvantageous to it and will not result in any cost or expense for the Seller
not reimbursed pursuant to Article III.
(b) Change in Tax Characterization. Either of the Seller
or the Purchaser determines, based upon an opinion of independent counsel of
recognized standing, that the promulgation or adoption of any Requirement of
Law, or any change in any Requirement of Law, or in the interpretation or
administration of any Requirement of Law, causes it to be more likely than not
that the Financing would be characterized for U.S. federal income tax purposes
in a manner materially different from that contemplated in the Implementation
Agreement and such change in characterization would have a materially adverse
effect on at least one party (the "Affected Party").
(c) Illegality. The Seller determines, based upon an
opinion of independent counsel of recognized standing, that the promulgation or
adoption of any Requirement of Law, or any change in any Requirement of Law, or
in the interpretation or administration of any Requirement of Law, has made it
or will make it unlawful, or that any central bank or other Governmental
Authority has asserted that it is or will be unlawful, for the Seller to
maintain the Financing, including under the Bank Holding Company Act.
(d) Foreign Exchange Controls. Any Requirement of Law
imposes limitations on the amount of, or otherwise materially restricts the
ability of any party to make, any payment hereunder or under any other
Transaction Agreement to a resident of a country other than that of the payor.
(e) Loan Default. Any event specified in Section 10.1 of
the Loan Agreement (other than an event specified in Subsection 10.1(d) thereof)
occurs and the Lender has not declared the Loan to be immediately due and
payable pursuant to Section 10.2 thereof.
Each of the foregoing shall constitute a Termination Event
whether or not any Subscription Acceleration Event shall have occurred under the
Subscription Agreement and whether or not any assignment of rights shall have
occurred under Sections 3.1 or 3.2 thereof.
8.3 Acceleration. (a) If any Event of Default, other than
an Event of Default specified in paragraphs (f), (g) or (i) of Section 8.1, or
any Termination Event, shall occur and be continuing, the Seller (or the
Affected Party in the case of a Termination Event specified in
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Subsection 8.2(b)), may, by notice to the other Party (the "Acceleration
Notice"), cause the sale and purchase of Shares hereunder to be accelerated,
whereupon, no later than 10:00 a.m., New York time, on the earlier of (i) the
next succeeding Scheduled Purchase Date and (ii) the thirtieth Business Day
after the date of such Acceleration Notice (or in the case of a Termination
Event specified in Subsection 8.2(c), the date (if earlier) on which the Seller
may no longer continue to maintain the Financing) (the "Accelerated Closing
Date"), the Purchaser Acceleration Amount shall become immediately due and
payable without any other notice or formality being required and the Purchaser
shall pay to the Seller the Purchaser Acceleration Amount on such Accelerated
Closing Date and shall provide notice to the Seller that it has paid the
Purchaser Acceleration Amount (such notice to be accompanied by a copy of the
Fed wire transfer instructions stating the wire reference number).
(b) If any Event of Default specified in paragraphs (f),
(g) or (i) of Section 8.1 shall occur, the sale and purchase of Shares hereunder
shall be accelerated automatically and the Purchaser Acceleration Amount shall
become immediately due and payable without any notice or other formality being
required. On the date following the occurrence of such event that the Seller
designates as the Accelerated Closing Date by notice to the Purchaser (which
date, in the event of the occurrence of an Event of Default specified in
paragraph (i) of Section 8.1 only, and in the absence of any other Event of
Default, shall be not earlier than two nor later than four Business Days
following the occurrence of such Event of Default), the Purchaser shall pay to
the Seller the Purchaser Acceleration Amount, and shall provide notice to the
Seller that it has paid the Purchaser Acceleration Amount (such notice to be
accompanied by a copy of the wire transfer instructions stating the Fed wire
reference number).
(c) If on or prior to the Accelerated Closing Date as
determined pursuant to any of the foregoing provisions of this Section 8.3, the
Subscription Agreement has been accelerated pursuant to the provisions of
Section 3.2 thereof and the Seller has received Shares constituting part or all
of the Acceleration Amount (as defined therein), the Seller shall deliver to the
Purchaser such Shares constituting part or all of the Acceleration Amount, in
accordance with the provisions of Subsection 2.1(c)(iii). In any other case,
upon acceleration of the sale and purchase of Shares pursuant to any of the
provisions of this Section 8.3, the Seller hereby irrevocably transfers and
assigns to the Purchaser, without recourse, all of the Seller's right, title and
interest in and to the Loan Agreement (to the extent not previously transferred
pursuant to the Subscription Agreement), the Subscription Agreement, and the
Escrow Agreement, and the Purchaser hereby irrevocably accepts and assumes from
the Seller all of the Seller's obligations and liabilities (if any) under the
Loan Agreement (to the extent not previously transferred pursuant to the
Subscription Agreement), the Subscription Agreement, and the Escrow Agreement,
in each case effective as of such Accelerated Closing Date.
(d) The parties acknowledge that any assignment and
assumption pursuant to this Section 8.3 is conditional, and shall take effect
automatically, as of the Accelerated Closing Date, and that until such time the
Purchaser shall have no rights or obligations under the Loan Agreement (other
than rights and obligations previously transferred to the Purchaser pursuant to
the provisions of this Agreement or the Subscription Agreement). Upon any
assignment and assumption of the Loan Agreement, the Subscription Agreement and
the Escrow Agreement pursuant to Subsection 8.3(c), the Seller shall be released
from all of its obligations thereunder, and the Purchaser is hereby authorized
by the Seller to take all such steps as may be necessary to
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enforce the rights hereby assigned to it. Any such assignment and assumption
shall fully discharge the Seller's obligation to sell and deliver Shares
hereunder (whether or not, in case of any acceleration pursuant to Subsection
8.3(b), the Purchaser makes the election referred to in Subsection 8.3(f)
below).
(e) As used herein, "Purchaser Acceleration Amount" shall
mean, with respect to any Accelerated Closing Date, the Principal Amount, plus
an amount equal to (i) the product of the Principal Amount times the Floating
Rate for the Floating Amount Calculation Period during which such Accelerated
Closing Date falls, multiplied by (ii) a fraction, the numerator of which shall
be the actual number of days elapsed from the next preceding Scheduled Purchase
Date to such Accelerated Closing Date, and the denominator of which shall be
360.
(f) Notwithstanding the foregoing, if an Event of Default
specified in paragraph (h) of Section 8.1 shall occur and no other Event of
Default shall occur, the Purchaser may elect by notice given to the Seller at
least one Business Day prior to the Accelerated Closing Date determined pursuant
to Subsection 8.3(b) to pay Purchase Amounts on each Scheduled Purchase Date in
accordance with the provisions of Subsections 2.1(b) and 2.1(c) in lieu of
paying the Purchaser Acceleration Amount on such Accelerated Closing Date. Such
notice shall be irrevocable and if the Purchaser makes such election, it shall
remain subject to its absolute and unconditional obligation to pay Purchase
Amounts on each Scheduled Purchase Date notwithstanding the release and
discharge of the Seller from any further obligation to deliver shares to the
Purchaser on or after such Accelerated Closing Date. In the event that after
such election, any subsequent Event of Default (other than an Event of Default
specified in paragraphs (f) or (g) of Section 8.1) or any Termination Event
shall occur and be continuing, the Seller may cause the Purchaser Acceleration
Amount to become due and payable by notice to the Purchaser specifying an
Accelerated Closing Date, whereupon the Purchaser Acceleration Amount shall
become immediately due and payable without any notice or other formality being
required and the Purchaser shall pay to the Seller the Purchaser Acceleration
Amount on such Accelerated Closing Date (such notice to be accompanied by a copy
of the Fed wire transfer instructions stating the Fed wire reference number). In
the event that after such election, any Event of Default specified in paragraphs
(f) or (g) of Section 8.1 shall occur, the Purchaser Acceleration Amount shall
become immediately due and payable without any notice or other formality being
required, and the Purchaser shall pay to the Seller the Purchaser Acceleration
Amount on the date following the occurrence of such event that the Seller
designates as the Accelerated Closing Date by notice to the Purchaser, and shall
provide notice to the Seller that it has paid the Purchaser Acceleration Amount
(such notice to be accompanied by a copy of the Fed wire transfer instructions
stating the Fed wire reference number).
8.4 Rights Not Exclusive. The rights provided for in this
Agreement are cumulative and are not exclusive of any other rights, powers,
privileges or remedies provided by law or in equity, or under any other
instrument, document or agreement now existing or hereafter arising.
8.5 Termination. Following any acceleration of this
Agreement pursuant to Section 8.3, this Agreement shall terminate immediately at
such time as the respective obligations of the Seller and the Purchaser pursuant
to Section 8.3 shall have been completed
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(including, in case of any election made by the Purchaser under Subsection
8.3(f), payment in full of each Purchase Amount), and neither Party shall be
under any further obligation to, or have any further claim against, the other
Party with respect to this Agreement; provided, however, that the obligations of
the Purchaser under Article III, Section 10.1 and Section 10.4 shall remain in
effect.
ARTICLE IX
CONDITIONS PRECEDENT
9.1 Conditions to be Satisfied in Advance of the
Disbursement Date. (a) The obligations of the Seller hereunder are subject to
the conditions that the Seller shall have received, on or before the
Disbursement Date, all of the following, in form and substance satisfactory to
the Seller:
(i) Financing and Share Purchase Agreement; Transaction
Agreements. This Agreement and the other Transaction Agreements
executed by each party hereto and thereto.
(ii) Resolutions; Incumbency.
(x) copies of the resolutions of the Board of Directors
of the Purchaser providing authorization for the
execution and delivery by the Purchaser of this
Agreement and the other Transaction Agreements to
which the Purchaser is a party and the consummation
of the transactions contemplated hereby and thereby,
certified as of the Disbursement Date by the
Secretary or an Assistant Secretary of the Purchaser;
and
(y) a certificate of the Secretary or Assistant Secretary
of the Purchaser certifying the names and true
signatures of the officers of the Purchaser
authorized to execute and deliver this Agreement and
the other Transaction Agreements to which the
Purchaser is a party, as well as any Compliance
Certificates and similar documents hereunder or
thereunder on behalf of the Purchaser.
(iii) Legal Opinions. An opinion of Kennedy, Covington,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P., special counsel to the Purchaser, dated the
Disbursement Date, in form and substance acceptable to the Seller, and
an opinion of ▇▇▇▇▇ ▇▇▇▇ L.L.P., special counsel to the Purchaser,
dated the Disbursement Date, in form and substance acceptable to the
Seller.
(iv) Payment of Fees. Evidence of payment by the Purchaser
of all accrued and unpaid fees pursuant to the letter agreement dated
August 13, 1999, as well as costs and expenses to the extent then due
and payable on such date, together with Attorney Costs of the Seller to
the extent invoiced prior to or on such date.
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(v) Other Documents. Such other approvals, opinions,
documents or materials as the Seller may reasonably request.
(b) The obligations of the Purchaser hereunder shall be
subject to the condition that the Purchaser shall have received, on or before
the Disbursement Date, in form and substance satisfactory to the Purchaser, this
Agreement and the other Transaction Agreements executed by each party hereto and
thereto.
9.2 Further Conditions to be Satisfied at or Before
Disbursement. The obligations of the Seller hereunder are subject to the further
conditions that at the time of the disbursement of the Loan pursuant to the Loan
Agreement, (i) the representations and warranties in Article IV shall be true
and correct at and as of such time as if made at and as of such time, (ii) no
Event of Default or Unmatured Event of Default shall exist or shall result from
the disbursement of the Loan and (iii) since December 26, 1998, no event or
circumstance has occurred that has resulted or could reasonably be expected to
result in a Material Adverse Effect.
ARTICLE X
MISCELLANEOUS
10.1 Costs and Expenses. The Purchaser agrees to:
(a) whether or not the transactions contemplated hereby
are consummated, pay or reimburse the Seller within ten Business Days after
demand (subject to Subsection 9.1(iv)) for all reasonable costs and expenses
incurred by the Seller in connection with the negotiation, development,
preparation, delivery, documentation, administration and execution of, and any
amendment, supplement, waiver or modification to (in each case, whether or not
consummated), this Agreement, any other Transaction Agreement and any other
document prepared in connection herewith or therewith, and the consummation of
the transactions contemplated hereby and thereby, including Attorney Costs
incurred by the Seller with respect thereto; and
(b) pay or reimburse the Seller within ten Business Days
after demand for all reasonable costs and expenses (including Attorney Costs)
incurred by it in connection with the enforcement, attempted enforcement, or
preservation of any rights or remedies under this Agreement or any other
Transaction Agreement (including in connection with any "workout" or
restructuring regarding the Financing, and including in any Insolvency
Proceeding or appellate proceeding).
10.2 Notices. Any notice hereunder to either Party or by
either Party to the Escrow Agent shall be in writing and shall be deemed to be
duly given and received when it is either: (i) delivered personally against
receipt (including delivery by courier service or by any nationally recognized
overnight delivery service), in which case it shall be deemed received upon
delivery; (ii) sent by certified mail, return receipt requested, in which case
it shall be deemed received on the date on which the acknowledgment receipt is
signed (or refused); or (iii) sent by confirmed facsimile transmission, in which
case it shall be deemed received on the date of the
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confirmed transmission; in each case, to the respective addresses for the
Parties set forth below in this Section 10.2 or to such other address as the
intended recipient may subsequently specify in a notice to the other Party
delivered in accordance with this Section 10.2 at least ten (10) Business Days
prior to the effective date of such other address.
For notices to the Purchaser:
▇▇▇▇▇, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Mr. B. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
For notices to the Seller:
Bank of America, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Counsel
Tel.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Banc of America Securities, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Structured Capital Markets
Tel.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
For notices to the Escrow Agent:
The Bank of New York
Insurance Trust and Escrow Department
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Sharia ▇▇▇▇▇-▇▇▇
10.3 Amendments; Waivers. Any provision of this Agreement
may be amended or waived if, and only if, such amendment or waiver is in writing
and signed, in the
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case of an amendment, by both Parties or, in the case of a waiver, by the Party
against whom the waiver is to be effective. No failure or delay by either Party
in exercising any right, power or privilege granted hereunder, or available at
law or equity, shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
10.4 Indemnification by the Purchaser. Whether or not the
transactions contemplated hereby and by the other Transaction Agreements are
consummated, the Purchaser agrees to indemnify and defend the Seller and each of
its officers, directors, employees, counsel, agents and attorneys-in-fact (each
an "Indemnified Person") against, and hold each Indemnified Person harmless
from, any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses and disbursements (including Attorney
Costs) of any kind or nature whatsoever which may at any time (including at any
time following the payment of all Obligations and the termination of this
Agreement and the other Transaction Agreements) be imposed on, incurred by or
asserted against any such Person in any way relating to or arising out of this
Agreement, any other Transaction Agreement or any document contemplated hereby
or thereby or referred to herein or therein, or the transactions contemplated
hereby or thereby, or any action taken or omitted by any such Person under or in
connection with any of the foregoing, including with respect to any
investigation, litigation or proceeding (including any Insolvency Proceeding or
appellate proceeding) related to or arising out of this Agreement or any other
Transaction Agreement or the use of the proceeds of the Financing, whether or
not any Indemnified Person is a party thereto (all the foregoing, collectively,
the "Indemnified Liabilities"); provided, that the Purchaser shall not have any
obligation hereunder to any Indemnified Person with respect to Indemnified
Liabilities resulting solely from the gross negligence or willful misconduct of
such Indemnified Person.
10.5 Further Assurances. From time to time on and after
the date hereof through the earlier of the Purchase Closing Date with respect to
the last Scheduled Purchase Date and the date of termination of this Agreement
pursuant to Section 8.5, each of the Parties shall take, or cause to be taken,
all action and do, or cause to be done, all things necessary, proper and
advisable to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement in accordance with the terms and
conditions hereof, including using reasonable efforts to cause the execution and
delivery of all such deeds, agreements, assignments and further instruments of
transfer and conveyance necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement in accordance with the
terms and conditions hereof.
10.6 Severability. If any provision (or portion thereof)
of this Agreement shall be invalid or unenforceable under any applicable law, to
the extent permitted by law such invalidity or unenforceability shall not affect
the validity or enforceability of any other provision hereof. In addition, in
the event that any provision (or portion thereof) of this Agreement is
determined by a court to be unenforceable as drafted by virtue of the scope,
duration, extent, or character of any obligation contained therein, it is the
Parties' intention that such provision (or portion thereof) shall be construed
in a manner designed to effectuate the purposes of such provision to the maximum
extent enforceable under such applicable law.
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10.7 Assignment. This Agreement shall be binding upon and
inure to the benefit of the Purchaser and the Seller and their respective
successors and assigns; provided, however, that the Purchaser may not assign any
of its rights or obligations under this Agreement without the prior written
consent of the Seller.
10.8 No Third Party Rights; Successors and Assigns;
Binding Effect. This Agreement is not intended and shall not be construed to
create any rights in any Person other than the Parties and their respective
successors and permitted assigns and no Person shall assert any rights as third
party beneficiary hereunder. Whenever either Party is referred to, such
reference shall be deemed to include the successors and permitted assigns of
such Party, and this Agreement shall be binding upon, and inure to the benefit
of, the Parties and their respective successors and permitted assigns.
10.9 Governing Law. This Agreement shall be governed by
and construed in accordance with the law of the State of New York (without
giving effect to choice of law principles, but giving effect to the provisions
of New York General Obligations Law ss.5-1401).
10.10 Submission to Jurisdiction and Waiver of Immunity.
(a) Each Party irrevocably and unconditionally
(i) consents and submits to the non-exclusive jurisdiction of any United States
Federal or New York State court sitting in the Borough of Manhattan, City and
State of New York and any appellate court from any such court, solely for the
purpose of any suit, action or proceeding brought to enforce its obligations
under this Agreement or relating in any way to this Agreement or the
transactions hereunder and (ii) waives, to the fullest extent it may effectively
do so, any defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court and any objection that it may now or hereafter have
to the laying of venue of any such action, suit or proceeding in any such court.
(b) To the extent that either Party has or hereafter may
acquire any immunity (sovereign or otherwise) from any legal action, suit or
proceeding, from jurisdiction of any court or from setoff or any legal process
(whether service or notice, attachment prior to judgment, attachment in aid of
execution of judgment, execution of judgment or otherwise) with respect to
itself or any of its property, such Party hereby irrevocably waives and agrees
not to plead or claim such immunity in respect of any action brought to enforce
its obligations under this Agreement or relating in any way to this Agreement or
the transaction under this Agreement.
10.11 WAIVER OF JURY TRIAL. THE PURCHASER AND THE SELLER
EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER
TRANSACTION AGREEMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN
ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR ANY ASSIGNEE, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE PURCHASER AND THE SELLER EACH
AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL
WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT
THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY
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IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER TRANSACTION AGREEMENTS OR ANY
PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENT, RENEWAL, SUPPLEMENT OR MODIFICATION TO THIS AGREEMENT AND THE OTHER
TRANSACTION AGREEMENTS.
10.12 Set-off. In addition to any rights and remedies of
the Seller provided by law, if an Unmatured Event of Default under Subsection
8.1(a), (f) or (g) or any Event of Default exists, the Seller is authorized at
any time and from time to time, without prior notice to the Purchaser, any such
notice being expressly waived by the Purchaser to the fullest extent permitted
by law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held by, and other indebtedness at any
time owing by, the Seller to or for the credit or the account of the Purchaser
against any and all Obligations owing to the Seller, now or hereafter existing,
irrespective of whether or not the Seller shall have made demand under this
Agreement and although such Obligations may be contingent or unmatured. The
Seller agrees promptly to notify the Purchaser after any such set-off and
application made by the Seller; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and application.
10.13 Confidentiality. Each party hereto agrees not to
disclose this Agreement, any other Transaction Agreement or the provisions
hereof or thereof or any or Schedules or Exhibits hereto or thereto or any
transactions contemplated hereby or thereby to any Person that is not a party to
this Agreement or any other Transaction Agreement except (a) at the request of
or pursuant to any requirement of any Governmental Authority to which such party
is subject or in connection with an examination of such party by any such
authority, (b) pursuant to subpoena or other court process, (c) when required to
do so in accordance with the provisions of any applicable legal, regulatory or
listing requirement, (d) to such party's independent auditors and other
professional advisors, (e) to any permitted assignee of any of the Transaction
Agreements, (f) to any Affiliate of such party, or (g) as required by any rating
agency or in the interest of appropriate disclosure to investors, lenders, bond
holders or other security holders, provided that in the case of (d), (e) or (f),
the recipient shall have agreed to be bound by the confidentiality provisions
hereof.
10.14 Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be deemed an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument,
and all of which together shall constitute one same and single instrument.
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IN WITNESS WHEREOF, the Parties have signed this Agreement on
the date and year first above written.
PURCHASER:
▇▇▇▇▇, INC.
By: s/ B. ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name:
Title:
SELLER:
BANK OF AMERICA, N.A.
By:
By: s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Principal
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EXHIBIT A
Scheduled
Purchase
Date Purchased Shares
----------------- ----------------
December 14, 1999 44.64198540
June 14, 2000 68.07903001
December 14, 2000 68.07903001
June 14, 2001 67.70698740
December 14, 2001 68.07903010
June 14, 2002 67.70698740
December 14, 2002 68.82303898
June 14, 2003 67.70698745
December 14, 2003 67.70698745
June 14, 2004 67.70698745
December 14, 2004 68.07903010
June 14, 2005 67.70698745
August 14, 2005 1911.97693080
A-1
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EXHIBIT B
FORM OF
COMPLIANCE CERTIFICATE
To: Bank of America, N.A.
Reference is made to the Financing and Share Purchase Agreement dated
as of August 16, 1999 (as amended or otherwise modified from time to time, the
"Financing and Share Purchase Agreement") between ▇▇▇▇▇, Inc. (the "Purchaser"),
and Bank of America, N.A. (the "Seller"). Terms used but not otherwise defined
herein are used herein as defined in the Financing and Share Purchase Agreement.
I. Reports. Enclosed herewith is (i) a copy of the [annual
audited/quarterly] report of the Purchaser as at __________, ______
(the "Computation Date"), which report fairly presents the consolidated
financial position of the Purchaser and its Subsidiaries as of the
Computation Date and (ii) a copy of the Purchaser's most recent [Form
10-Q/Form 10-K] filed with the SEC.
II. Financial Tests. The Purchaser hereby certifies and warrants to you
that the following is a true and correct computation as at the
Computation Date of the following ratios and/or financial restrictions
contained in the Financing and Share Purchase Agreement:
A. Subsection 6.1(a) Total Debt to EBITDA Ratio
(1) Total Indebtedness as of the last day of the
Computation Period ending on the Computation Date: $____
(2) EBITDA for the Computation Period ending on the
Computation Date $____
(3) Ratio of Item (1) to Item (2):
(4) Maximum ratio allowed: ___ to 1
B. Subsection 6.1(b) Interest Coverage Ratio
(1) EBIT for the Computation Period ending on the
Computation Date: $_____
(2) Interest Expense for the Computation Period ending on
the Computation Date: $_____
(3) Ratio of Item (1) to Item (2):
(4) Minimum ratio allowed: ____ to 1
B-1
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III. Defaults. The Purchaser hereby further certifies and warrants to you as
of the date of the filing of the [Form 10-Q/Form 10-K] referred to in
clause I that no Event of Default or Unmatured Event of Default has
occurred and is continuing.
IN WITNESS WHEREOF, the Purchaser has caused this Certificate to be
executed and delivered by its duly authorized officer this ______ day of
_____________, _____.
▇▇▇▇▇, INC.
By: ___________________________________
Title: ________________________________
▇-▇
▇▇
▇▇▇▇▇▇▇▇ ▇.▇
▇▇▇▇▇
▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇ 4.16
SUBSIDIARIES OF ▇▇▇▇▇, INC.
Name of Subsidiary State (Province) of Incorporation
------------------ ---------------------------------
▇▇▇▇▇ Mfg. LLC (1) North Carolina
Cape Cod Potato Chip Company (1) Massachusetts
Caronuts, Inc. (1) North Carolina
Vista Bakery, Inc. (1) North Carolina
Lanhold Investments Inc. (1) Delaware
Tamming Foods Ltd. (2) Ontario
Lanfin Investments Inc. (2) Ontario
Foodpak Systems Ltd. (2) Ontario
South MECKCA, LLC (1) Delaware
West MECKCA, LLC (1) Delaware
Norbehouse, LP (3) Delaware
HSW Mortgage Corp. (4) North Carolina
--------------------------
(1) ▇▇▇▇▇, Inc. owns 100% of the outstanding voting equity securities.
(2) Subsidiary of Lanhold Investments Inc., which owns 100% of the outstanding
voting equity securities.
(3) Subsidiary of South MECKCA, LLC and West MECKCA, LLC. South MECKCA, LLC is
the sole general partner and owns 1% of the total capital and West MECKLA,
LLC is the sole limited partner and owns 99% of the total capital.
(4) Subsidiary of Norbehouse, L.P., which owns 100% of the outstanding voting
equity securities and 0% of the outstanding 10% Series A Cumulative
Preferred stock.
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Schedule 6.2
PERMITTED LIENS
Deed of trust on all real property of ▇▇▇▇▇ , Inc. contiguous to and including
the corporate headquarters, located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, securing a $95 million note held by HSW Mortgage. A 1.33 acre portion of
the property subject to the deed of trust (part of a larger parcel containing a
total of 5.36 acres and having Charlotte-Mecklenburg property tax identification
number 205-161-14) is subject to a Purchase and Sale Agreement. The subject
property consists of a one story office building with 5,388 square feet of
office space located on the 1.33 acre parcel. ▇▇▇▇▇ has reserved an easement
across the 1.33 acre site for the benefit of the retained property which
consists of 4.03 acres.