DAMES & XXXXX, INC.
$10,000,000 7.19% Senior Notes, Series F,
Due December 16, 2004,
and
$10,000,000 7.23% Senior Notes, Series G,
Due December 16, 2005
______________
NOTE PURCHASE AGREEMENT
_____________
Dated as of December 16, 1996
TABLE OF CONTENTS
(Not a part of the Agreement)
SECTION HEADING Page
SECTION 1. AUTHORIZATION OF NOTES 1
SECTION 2. SALE AND PURCHASE OF NOTES 1
SECTION 3. CLOSING 2
SECTION 4. CONDITIONS TO CLOSING 2
Section 4.1. Representations and Warranties 2
Section 4.2. Performance; No Default. 2
Section 4.3. Compliance Certificates 2
Section 4.4. Opinions of Counsel 3
Section 4.5. Purchase Permitted By Applicable Law, etc 3
Section 4.6. Payment of Special Counsel Fees. 3
Section 4.7. Private Placement Number 3
Section 4.8. Changes in Corporate Structure 3
Section 4.9. Proceedings and Documents 3
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY 4
Section 5.1. Organization; Power and Authority 4
Section 5.2. Authorization, etc 4
Section 5.3. Disclosure 4
Section 5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates 4
Section 5.5. Financial Statements 5
Section 5.6. Compliance with Laws, Other Instruments, etc 5
Section 5.7. Governmental Authorizations, etc 6
Section 5.8. Litigation; Observance of Agreements, Statutes and
Orders 6
Section 5.9. Taxes 6
Section 5.10. Title to Property; Leases 6
Section 5.11. Licenses, Permits, etc 7
Section 5.12. Compliance with ERISA 7
Section 5.13. Private Offering by the Company 8
Section 5.14. Use of Proceeds; Margin Regulations 8
Section 5.15. Existing Indebtedness; Future Liens 8
Section 5.16. Foreign Assets Control Regulations, etc 8
Section 5.17. Status under Certain Statutes 9
Section 5.18. Environmental Matters 9
SECTION 6. REPRESENTATIONS OF THE PURCHASER 9
Section 6.1. Purchase for Investment 9
Section 6.2. Source of Funds 10
SECTION 7. INFORMATION AS TO COMPANY 11
Section 7.1. Financial and Business Information 11
Section 7.2. Officer's Certificate 14
Section 7.3. Inspection 15
SECTION 8. PREPAYMENT OF THE NOTES 15
Section 8.1. Required Prepayments 15
Section 8.2. Optional Prepayments with Make-Whole Amount 16
Section 8.3. Allocation of Partial Prepayments 16
Section 8.4. Maturity; Surrender, etc 16
Section 8.5. Purchase of Notes 16
Section 8.6. Make-Whole Amount 16
SECTION 9. AFFIRMATIVE COVENANTS 18
Section 9.1. Compliance with Law 18
Section 9.2. Insurance 18
Section 9.3. Maintenance of Properties 18
Section 9.4. Payment of Taxes and Claims 19
Section 9.5. Corporate Existence, etc 19
Section 9.6. Subsidiary Guaranties 19
SECTION 10. NEGATIVE COVENANTS 20
Section 10.1. Transactions with Affiliates 20
Section 10.2. Nature of Business 20
Section 10.3. Consolidated Net Worth 20
Section 10.4. Fixed Charges Coverage Ratio 20
Section 10.5. Limitations on Indebtedness 21
Section 10.6. Limitation on Liens 22
Section 10.7. Mergers, Consolidations and Sales of Assets 24
Section 10.8. Designation of Subsidiaries 28
SECTION 11. EVENTS OF DEFAULT 28
SECTION 12. REMEDIES ON DEFAULT, ETC 31
Section 12.1. Acceleration 31
Section 12.2. Other Remedies 31
Section 12.3. Rescission 31
Section 12.4. No Waivers or Election of Remedies, Expenses, etc 32
SECTION 13. REGISTRATION; EXCHANGE, SUBSTITUTION OF NOTES 32
Section 13.1. Registration of Notes 32
Section 13.2. Transfer and Exchange of Notes 32
Section 13.3. Replacement of Notes 33
SECTION 14. PAYMENTS ON NOTES 33
Section 14.1. Place of Payment 33
Section 14.2. Home Office Payment 33
SECTION 15. EXPENSES, ETC 34
Section 15.1. Transaction Expenses 34
Section 15.2. Survival 34
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT 34
Section 17. Amendment and Waiver 35
Section 17.1. Requirements 35
Section 17.2. Solicitation of Holders of Notes 35
Section 17.3. Binding Effect, etc 35
Section 17.4. Notes Held by Company, etc 36
SECTION 18. NOTICES 36
SECTION 19. REPRODUCTION OF DOCUMENTS 36
SECTION 20. CONFIDENTIAL INFORMATION 37
SECTION 21. SUBSTITUTION OF PURCHASER 38
SECTION 22. MISCELLANEOUS 38
Section 22.1. Successors and Assigns 38
Section 22.2. Payments Due on Non-Business Days 38
Section 22.3. Severability 38
Section 22.4. Construction 39
Section 22.5. Counterparts 39
Section 22.6. Governing Law 39
Signature 40
SCHEDULE A INFORMATION RELATING TO PURCHASER
SCHEDULE B DEFINED TERMS
SCHEDULE 5.4 SUBSIDIARIES OF THE COMPANY AND OWNERSHIP OF SUBSIDIARY
STOCK
SCHEDULE 5.5 FINANCIAL STATEMENTS
SCHEDULE 5.14 USE OF PROCEEDS
SCHEDULE 5.15 EXISTING INDEBTEDNESS
SCHEDULE 5.18 ENVIRONMENTAL LIABILITIES
EXHIBIT 1 FORM OF 7.19% SENIOR NOTE, SERIES F, DUE DECEMBER 16, 2004
EXHIBIT 2 FORM OF 7.23% SENIOR NOTE, SERIES G, DUE DECEMBER 16, 2005
EXHIBIT 3(a) FORM OF OPINION OF SPECIAL COUNSEL FOR THE PURCHASER
EXHIBIT 3(b) FORM OF OPINION OF SPECIAL COUNSEL FOR THE COMPANY
DAMES & XXXXX, INC.
000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000,
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Re: $10,000,000 7.19% Senior Notes, Series F,
Due December 16, 2004,
and
$10,000,000 7.23% Senior Notes, Series G,
Due December 16, 2005
Dated as of
December 16, 1996
To the Purchaser Named in Schedule A
Hereto who is a Signatory Hereto
Ladies and Gentlemen:
Dames & Xxxxx, Inc., a Delaware corporation (the "Company"), agrees with
you as follows:
Section 1. Authorization of Notes.
The Company will authorize the issue and sale of its 7.19% Senior
Notes, Series F, due December 16, 2004 (the "Series F Notes") in an aggregate
principal amount of $10,000,000 and its 7.23% Senior Notes, Series G, due
December 16, 2005 (the "Series G Notes") in an aggregate principal amount of
$10,000,000 (the Series F Notes and the Series G Notes are hereinafter
collectively referred to as the "Notes", such term to include any such notes
issued in substitution therefor pursuant to Section 13 of this Agreement).
The Series F Notes and the Series G Notes shall be substantially in the form
set out in Exhibits 1 and 2, respectively, with such changes therefrom, if
any, as may be approved by you and the Company. Certain capitalized terms
used in this Agreement are defined in Schedule B; references to a "Schedule"
or an "Exhibit" are, unless otherwise specified, to a Schedule or an Exhibit
attached to this Agreement.
Section 2. Sale and Purchase of Notes.
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closing
provided for in Section 3, Notes of the series and in the principal amount
specified opposite your name in Schedule A at the purchase price of 100% of
the principal amount thereof and on the date specified opposite your name in
Schedule A.
Section 3. Closing.
The sale and purchase of the Notes to be purchased by you shall occur at
the offices of Xxxxxxx and Xxxxxx, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000, at 10:00 a.m. Chicago time, on December 16, 1996 or on such later date
(not later than December 18, 1996) as shall be agreed upon by the Company
and you (the "Closing"). At the Closing the Company will deliver to you the
Notes of the series to be purchased by you in the form of a single Note (or
such greater number of Notes in denominations of at least $1,000,000, or such
lesser amount as shall constitute your entire commitment, as you may request)
dated the date of the Closing and registered in your name (or in the name of
your nominee), against delivery by you to the Company or its order of
immediately available funds in the amount of the purchase price therefor by
wire transfer of immediately available funds for the account of the Company
to account number 0491-12465 at Sanwa Bank California, 000 Xxxxx Xxxxxxxx
Xx., Xxx Xxxxxxx, Xxxxxxxxxx 00000, ABA No. 000000000. If at the Closing
the Company shall fail to tender such Notes to you as provided above in this
Section 3, or any of the conditions specified in Section 4 shall not have
been fulfilled to your satisfaction, you shall, at your election, be relieved
of all further obligations under this Agreement, without thereby waiving any
rights you may have by reason of such failure or such nonfulfillment.
Section 4. Conditions to Closing.
Your obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your satisfaction, prior to or
at the Closing, of the following conditions:
Section 4.1. Representations and Warranties. The representations
and warranties of the Company in this Agreement shall be correct when made
and at the time of the Closing.
Section 4.2. Performance; No Default. The Company shall have
performed and complied with all agreements and conditions contained in this
Agreement required to be performed or complied with by it prior to or at the
Closing, and after giving effect to the issue and sale of the Notes (and the
application of the proceeds thereof as contemplated by Schedule 5.14), no
Default or Event of Default shall have occurred and be continuing. Neither
the Company nor any Subsidiary shall have entered into any transaction since
September 27, 1996 that would have been prohibited by Sections 10.1, 10.5,
10.6 or 10.8 hereof had such Sections applied since such date.
Section 4.3. Compliance Certificates.
(a) Officer's Certificate. The Company shall have delivered
to you an Officer's Certificate, dated the date of the Closing, certifying
that the conditions specified in Sections 4.1 and 4.2 and Section 4.8, have
been fulfilled.
(b) Secretary's Certificate. The Company shall have delivered to
you a certificate certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery
of the Notes and this Agreement.
Section 4.4. Opinions of Counsel. You shall have received
opinions in form and substance satisfactory to you, dated the date of the
Closing (a) from Xxxxxxx & XxXxxxxx, counsel for the Company, covering the
matters set forth in Exhibit 3(b) and covering such other matters incident to
the transactions contemplated hereby as you or your counsel may reasonably
request (and the Company hereby instructs its counsel to deliver such opinion
to you) and (b) from Xxxxxxx and Xxxxxx, your special counsel in connection
with such transactions, substantially in the form set forth in Exhibit 3(a)
and covering such other matters incident to such transactions as you may
reasonably request.
Section 4.5. Purchase Permitted By Applicable Law, etc. On the
date of the Closing your purchase of Notes shall (a) be permitted by the laws
and regulations of each jurisdiction to which you are subject, without
recourse to provisions (such as Section 1405(a)(8) of the New York Insurance
Law) permitting limited investments by insurance companies without
restriction as to the character of the particular investment, (b) not violate
any applicable law or regulation (including, without limitation, Regulation
G, T or X of the Board of Governors of the Federal Reserve System) and (c)
not subject you to any tax, penalty or liability under or pursuant to any
applicable law or regulation, which law or regulation was not in effect on
the date hereof. If requested by you, you shall have received an Officer's
Certificate certifying as to such matters of fact as you may reasonably
specify to enable you to determine whether such purchase is so permitted.
Section 4.6. Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.1, the Company shall have paid on or before the
Closing the fees, charges and disbursements of your special counsel referred
to in Section 4.4 to the extent reflected in a statement of such counsel
rendered to the Company at least one Business Day prior to the Closing.
Section 4.7. Private Placement Number. On or prior to the
Closing, a Private Placement Number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained for each
series of Notes.
Section 4.8. Changes in Corporate Structure. As of the date of the
Closing the Company shall not have changed its jurisdiction of incorporation
or been a party to any merger or consolidation and shall not have succeeded
to all or any substantial part of the liabilities of any other entity, at any
time following the date of the most recent financial statements referred to
in Schedule 5.5.
Section 4.9. Proceedings and Documents. All corporate and other
proceedings inconnection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to you and your special counsel, and you and your special
counsel shall have received all such counterpart originals or certified or
other copies of such documents as you or they may reasonably request.
Section 5. Representations and Warranties of the Company.
The Company represents and warrants to you that:
Section 5.1. Organization; Power and Authority. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which
the failure to be so qualified or in good standing could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
The Company has the corporate power and authority to own or hold under
lease the properties it purports to own or hold under lease, to transact the
business it transacts and proposes to transact, to execute and deliver this
Agreement and the Notes and to perform the provisions hereof and thereof.
Section 5.2. Authorization, etc. This Agreement and the Notes
have been duly authorized by all necessary corporate action on the part of
the Company, and this Agreement constitutes, and upon execution and delivery
thereof each Note will constitute, a legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, 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).
Section 5.3. Disclosure. This Agreement, the documents,
certificates or other writings delivered to you by or on behalf of the
Company in connection with the transactions contemplated hereby and the
financial statements listed in Schedule 5.5, taken as a whole, do not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading in light of the
circumstances under which they were made. Except as disclosed in one
of the documents, certificates or other writings identified herein, or in the
financial statements listed in Schedule 5.5, since March 29, 1996, there has
been no change in the financial condition, operations, business or
properties of the Company or any Subsidiary except changes that individually
or in the aggregate could not reasonably be expected to have a Material
Adverse Effect. There is no fact known to the Company that could reasonably
be expected to have a Material Adverse Effect that has not been set forth
herein or in the other documents, certificates and other writings delivered to
you by or on behalf of the Company specifically for use in connection with
the transactions contemplated hereby.
Section 5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates.
(a) Schedule 5.4 contains (except as noted therein) complete
and correct lists (i) of the Company's Subsidiaries, showing, as to each
Subsidiary, the correct name thereof, the jurisdiction of its organization,
and the percentage of shares of each class of its capital stock or similar
equity interests outstanding owned by the Company and each other Subsidiary,
(ii) of the Company's Affiliates, other than Subsidiaries, (iii) of the
Company's Restricted Subsidiaries and (iv) of the Company's directors
and executive officers.
(b) All of the outstanding shares of capital stock or similar
equity interests of each Subsidiary shown in Schedule 5.4 as being owned by
the Company and its Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Company or another Subsidiary free and
clear of any Lien except as disclosed in Schedule 5.4.
(c) Each Subsidiary identified in Schedule 5.4 is a corporation
or other legal entity duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, and is duly qualified as
a foreign corporation or other legal entity and is in good standing in each
jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Subsidiary has the corporate or other
power and authority to own or hold under lease the properties it purports to
own or hold under lease and to transact the business it transacts and
proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to, any
legal restriction or any agreement (other than this Agreement, the agreements
listed on Schedule 5.4 and customary limitations imposed by corporate law
statutes) restricting the ability of such Subsidiary to pay dividends out of
profits or make any other similar distributions of profits to the Company or
any of its Subsidiaries that owns outstanding shares of capital stock or
similar equity interests of such Subsidiary.
Section 5.5. Financial Statements. The Company has delivered to
you copies of the financial statements of the Company and its Subsidiaries
listed on Schedule 5.5. All of said financial statements (including in each
case the related schedules and notes) fairly present in all material respects
the consolidated financial position of the Company and its Subsidiaries as of
the respective dates specified in such financial statements and the
consolidated results of their operations and cash flows for the respective
periods so specified and have been prepared in accordance with GAAP
consistently applied throughout the periods involved except as set forth in
the notes thereto (subject, in the case of any interim financial statements,
to normal year-end adjustments and except that interim financial statements
do not contain all of the footnote disclosures required by GAAP for annual
financial statements).
Section 5.6. Compliance with Laws, Other Instruments, etc. The
execution, delivery and performance by the Company of this Agreement and the
Notes will not (a) contravene, result in any breach of, or constitute a
default under, or result in the creation of any Lien in respect of any property
of the Company or any Subsidiary under, any indenture, mortgage, deed of
trust, loan, purchase or credit agreement, lease, corporate charter or
by-laws, or any other agreement or instrument to which the Company or any
Subsidiary is bound or by which the Company or any Subsidiary or any of their
respective properties may be bound or affected, (b) conflict with or result
in a breach of any of the terms, conditions or provisions of any order,
judgment, decree, or ruling of any court, arbitrator or Governmental
Authority applicable to the Company or any Subsidiary or (c) violate any
provision of any statute or other rule or regulation of any Governmental
Authority applicable to the Company or any Subsidiary.
Section 5.7. Governmental Authorizations, etc. No consent,
approval or authorization of, or registration, filing or declaration with,
any Governmental Authority is required on the part of the Company in
connection with the execution, delivery or performance by the Company of this
Agreement or the Notes.
Section 5.8. Litigation; Observance of Agreements, Statutes and
Orders.
(a) There are no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company or any
Subsidiary or any property of the Company or any Subsidiary in any court or
before any arbitrator of any kind or before or by any Governmental Authority
that, individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default
under any term of any agreement or instrument to which it is a party or by
which it is bound, or any order, judgment, decree or ruling of any court,
arbitrator or Governmental Authority or is in violation of any applicable
law, ordinance, rule or regulation (including without limitation
Environmental Laws) of any Governmental Authority, which default or
violation, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
Section 5.9. Taxes. The Company and its Subsidiaries have filed
all tax returns that are required to have been filed in any jurisdiction, and
have paid all taxes shown to be due and payable on such returns and all other
taxes and assessments levied upon them or their properties, assets, income or
franchises, to the extent such taxes and assessments have become due and
payable and before they have become delinquent, except for any taxes and
assessments (a) the amount of which is not individually or in the aggregate
Material or (b) the amount, applicability or validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which the Company or a Subsidiary, as the case may be, has established
adequate reserves in accordance with GAAP. The Company knows of no
reasonable basis for any other tax or assessment that could reasonably be
expected to have a Material Adverse Effect. The charges, accruals and
reserves on the books of the Company and its Subsidiaries in respect of
Federal, state or other taxes for all fiscal periods are reasonable in
accordance with GAAP. The Federal income tax liabilities of the Company
and its Subsidiaries have been closed by the Internal Revenue Service and
paid for all fiscal years up to and including the fiscal year ended March 27,
1992.
Section 5.10. Title to Property; Leases. The Company and its
Subsidiaries have good and sufficient title to their respective properties
that individually or in the aggregate are Material, including all such
properties reflected in the most recent audited balance sheet referred to in
Section 5.5 or purported to have been acquired by the Company or any
Subsidiary after said date (except as sold or otherwise disposed of in the
ordinary course of business), in each case free and clear of Liens prohibited
by this Agreement. All leases that individually or in the aggregate are
Material are valid and subsisting and are in full force and effect in all
material respects.
Section 5.11. Licenses, Permits, etc.
(a) The Company and its Subsidiaries own or possess all licenses,
permits, franchises, authorizations, patents, copyrights, service marks,
trademarks and trade names, or rights thereto, that individually or in the
aggregate are Material, without known conflict with the rights of others.
(b) To the best knowledge of the Company, no product of the
Company infringes in any Material respect any license, permit, franchise,
authorization, patent, copyright, service xxxx, trademark, trade name or
other right owned by any other Person.
(c) To the best knowledge of the Company, there is no
Material violation by any Person of any right of the Company or any of its
Subsidiaries with respect to any patent, copyright, service xxxx, trademark,
trade name or other right owned or used by the Company or any of its
Subsidiaries.
Section 5.12. Compliance with ERISA.
(a) The Company and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws except for such
instances of noncompliance as have not resulted in and could not reasonably
be expected to result in a Material Adverse Effect. Neither the Company nor
any ERISA Affiliate has incurred any liability pursuant to Title I or IV of
ERISA or the penalty or excise tax provisions of the Code relating to
employee benefit plans (as defined in Section 3 of ERISA), and no event,
transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company or
any ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax
provisions or to Section 401(a)(29) or 412 of the Code, other than such
liabilities or Liens as would not be individually or in the aggregate Material.
(b) The Company maintains no defined benefit Plans.
(c) The Company and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under Section 4201 or 4204 of ERISA in respect of Multiemployer
Plans that individually or in the aggregate are Material.
(d) The expected post-retirement benefit obligation
(determined as of the last day of the Company's most recently ended fiscal
year in accordance with Financial Accounting Standards Board Statement No.
106, without regard to liabilities attributable to continuation coverage
mandated by Section 4980B of the Code) of the Company and its Subsidiaries is
not Material.
(e) The execution and delivery of this Agreement and the
issuance and sale of the Notes hereunder will not involve any transaction
that is subject to the prohibitions of Section 406 of ERISA or in connection
with which a tax could be imposed pursuant to Section 4975(c)(1)(A)-(D) of the
Code. The representation by the Company in the first sentence of this
Section 5.12(e) is made in reliance upon and subject to the accuracy of your
representation in Section 6.2 as to the sources of the funds used to pay the
purchase price of the Notes to be purchased by you.
Section 5.13. Private Offering by the Company. Neither the
Company nor anyone acting on its behalf has offered the Notes or any similar
securities for sale to, or solicited any offer to buy any of the same from,
or otherwise approached or negotiated in respect thereof with, any Person
other than you who has been offered the Notes at a private sale for
investment. Neither the Company nor anyone acting on its behalf has taken,
or will take, any action that would subject the issuance or sale of the Notes
to the registration requirements of Section 5 of the Securities Act.
Section 5.14. Use of Proceeds; Margin Regulations. The Company
will apply the proceeds of the sale of the Notes as set forth in Schedule
5.14. No part of the proceeds from the sale of the Notes hereunder will be
used for the purpose of buying or carrying any margin stock within the
meaning of Regulation G of the Board of Governors of the Federal Reserve
System (12 CFR 207), or for the purpose of buying or carrying or trading in
any securities under such circumstances as to involve the Company in a
violation of Regulation X of said Board (12 CFR 224) or to involve any
broker or dealer in a violation of Regulation T of said Board (12 CFR 220).
As of September 27, 1996, margin stock (excluding treasury stock) did not
constitute more than 4.7% of the value of the consolidated assets of the
Company and its Subsidiaries and the Company does not have any present
intention that margin stock (excluding treasury stock) will constitute more
than 9.5% of the value of such assets. As used in this Section, the terms
"margin stock" and "purpose of buying or carrying" shall have the meanings
assigned to them in said Regulation G.
Section 5.15. Existing Indebtedness; Future Liens.
(a) Schedule 5.15 sets forth a complete and correct list of each
item of Indebtedness in excess of $500,000 in principal amount outstanding of
the Company and its Subsidiaries together with the aggregate amount of all
other outstanding Indebtedness of the Company and its Subsidiaries as of
December 2, 1996, since which date there has been no Material change in the
amounts, interest rates, sinking funds, installment payments or maturities of
such Indebtedness of the Company or its Subsidiaries. Neither the Company
nor any Subsidiary is in default and no waiver of default is currently in
effect, in the payment of any principal or interest on any Indebtedness of
the Company or such Subsidiary and no event or condition exists with respect
to any Indebtedness of the Company or any Subsidiary that would permit (or
that with notice or the lapse of time, or both, would permit) one or more
Persons to cause such Indebtedness to become due and payable before its
stated maturity or before its regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company
nor any Subsidiary has agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of its property,
whether now owned or hereafter acquired, to be subject to a Lien not
permitted by Section 10.6.
Section 5.16. Foreign Assets Control Regulations, etc. Neither
the sale of the Notes by the Company hereunder nor its use of the proceeds
thereof will violate the Trading with the Enemy Act, as amended, or any of
the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
Section 5.17. Status under Certain Statutes. Neither the Company
nor any Subsidiary is an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended, or is
subject to regulation under the Public Utility Holding Company Act of
1935, as amended, or the Federal Power Act, as amended.
Section 5.18. Environmental Matters. Neither the Company nor any
Subsidiary has knowledge of any claim or has received any notice of any
claim, and no proceeding has been instituted raising any claim against the
Company or any of its Subsidiaries or any of their respective real properties
now or formerly owned, leased or operated by any of them or other assets,
alleging a release of Hazardous Materials to the environment in quantities or
concentrations which typically would require a cleanup or alleging a
violation of any Environmental Laws, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect. Except as
otherwise disclosed in Schedule 5.18:
(a) neither the Company nor any Subsidiary has knowledge of
any facts which would give rise to any claim, public or private, of
violation of Environmental Laws or for a release of Hazardous Materials
emanating from, occurring on or in any way related to real properties
now or formerly owned, leased or operated by any of them or to other
assets or their use, except, in each case, such as could not reasonably
be expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has
stored any Hazardous Materials on real properties now or formerly owned,
leased or operated by any of them, or has disposed of any Hazardous
Materials, in a manner contrary to any Environmental Laws in each case
in any manner that could reasonably be expected to result in a Material
Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Subsidiaries are in compliance
with applicable Environmental Laws, as interpreted or administered by
courts or administrative agencies on the date hereof, except where
failure to comply could not reasonably be expected to result in a
Material Adverse Effect.
Section 6. Representations of the Purchaser.
Section 6.1. Purchase for Investment. You represent that you are
purchasing the Notes for your own account or for one or more separate
accounts maintained by you or for the account of one or more pension or trust
funds, in any such case for investment and not with a view to the
distribution thereof, provided that the disposition of your or their property
shall at all times be within your or their control. You understand that the
Notes have not been registered under the Securities Act and may be resold
only if registered pursuant to the provisions of the Securities Act or if an
exemption from registration is available, except under circumstances where
neither such registration nor such an exemption is required by law, and that
the Company is not required to register the Notes. You further represent
that you are an accredited investor within the meaning of Rule 501 of
Regulation D promulgated under the Securities Act.
Section 6.2. Source of Funds. You represent that at least one of
the following statements is an accurate representation as to each source of
funds (a "Source") to be used by you to pay the purchase price of the Notes
to be purchased by you hereunder:
(a) the Source is an "insurance company general account"
within the meaning of Department of Labor Prohibited Transaction
Exemption ("PTE") 95-60 (issued July 12, 1995) and there is no "employee
benefit plan", treating as a single plan, all plans maintained by the
same employer or employee organization, with respect to which the amount
of the general account reserves and liabilities for all contracts held
by or on behalf of such plan, exceed ten percent (10%) of the total
reserves and liabilities of such general account (exclusive of separate
account liabilities) plus surplus, as set forth in the NAIC Annual
Statement filed with your state of domicile; or
(b) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
the PTE 91-38 (issued July 12, 1991) and, except as you have disclosed
to the Company in writing pursuant to this paragraph (b), no employee
benefit plan or group of plans maintained by the same employer or
employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment
fund; or
(c) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that
are included in such investment fund, when combined with the assets of all
other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM, the conditions of Part l(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a person controlling
or controlled by the QPAM (applying the definition of "control" in
Section V(e) of the QPAM Exemption) owns a 5% or more interest in the
Company and (i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose assets are included in such investment fund
have been disclosed to the Company in writing pursuant to this paragraph
(c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee benefit
plans, each of which has been identified to the Company in writing
pursuant to this paragraph (e); or
(f) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of ERISA.
The Company shall deliver a certificate on the date of the
Closing, with respect to you and on or prior to the date of any transfer of
the Notes, with respect to any subsequent holder of the Notes, which
certificate shall either state that (i) it is neither a "party in interest"
(as defined in Title I, Section 3(14) of ERISA) nor a "disqualified person"
(as defined in Section 4975(e)(2) of the Code) with respect to any plan
identified pursuant to paragraphs (b) or (e) above, or (ii) with respect to any
plan, identified pursuant to paragraph (c) above, neither it nor any
"affiliate" (as defined in Section V(c) of the QPAM Exemption) has at such
time, and during the immediately preceding one year, exercised the authority
to appoint or terminate said QPAM as manager of the assets of any plan
identified in writing pursuant to paragraph (c) above or to negotiate the
terms of said QPAM's management agreement on behalf of any such identified
plans.
As used in this Section 6.2, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall have
the respective meanings assigned to such terms in Section 3 of ERISA.
Section 7. Information as to Company.
Section 7.1. Financial and Business Information. The Company
shall deliver to each holder of Notes that is an Institutional Investor:
(a) Quarterly Statements within 45 days after the end of
each quarterly fiscal period in each fiscal year of the Company (other
than the last quarterly fiscal period of each such fiscal year),
duplicate copies of:
(i) a consolidated balance sheet of the Company and its
Restricted Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Restricted Subsidiaries for such quarter and (in the case of
the second and third quarters) for the portion of the fiscal
year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable detail,
prepared in accordance with GAAP applicable to quarterly financial
statements generally, and certified by a Senior Financial Officer as fairly
presenting, in all material respects, the financial position of the companies
being reported on and their results of operations and cash flows, subject to
changes resulting from year-end adjustments, provided that so long as
each Subsidiary of the Company is a Restricted Subsidiary, delivery within
the time period specified above of copies of the Company's Quarterly Report
on Form 10-Q prepared in compliance with the requirements therefor and filed
with the Securities and Exchange Commission shall be deemed to satisfy
the requirements of this Section 7.1(a); provided further thatin the event
that there is any change in generally accepted accounting principles after
the Closing which affects any computation or definition under this Agreement,
the Company shall deliver a report prepared by a Senior Financial Officer
of the Company and reviewed by its independent accountants reconciling the
financial statements required to be delivered by the terms of this Section
7.1(a) with the financial statements permitted to be delivered pursuant to
the foregoing proviso which report shall show all appropriate adjustment
entries in sufficient detail in connection with such reconciliation;
(b) Annual Statements within 90 days after the end of each
fiscal year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and its
Restricted Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Restricted Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP, and
accompanied by
(A) an opinion thereon of independent certified
public accountants of recognized national standing,
which opinion shall state that such financial statements
present fairly, in all material respects, the financial
position of the companies being reported upon and their
results of operations and cash flows and have been
prepared in conformity with GAAP, and that the
examination of such accountants in connection with such
financial statements has been made in accordance with
generally accepted auditing standards, and that such
audit provides a reasonable basis for such opinion in the
circumstances,
(B) a certificate of such accountants stating
that they have reviewed this Agreement and stating
further whether, in making their audit, they have become
aware of any condition or event that then constitutes a
Default or an Event of Default, and, if they are aware
that any such condition or event then exists, specifying
the nature and period of the existence thereof (it being
understood that such accountants shall not be liable,
directly or indirectly, for any failure to obtain
knowledge of any Default or Event of Default unless such
accountants should have obtained knowledge thereof in
making an audit in accordance with generally accepted
auditing standards or did not make such an audit), and
(C) in the event that there is any change in
generally accepted accounting principles after the
Closing which affects any computation or definition under
this Agreement, a report prepared by a Senior Financial
Officer of the Company and reviewed by its independent
accountants reconciling the financial statements required
to be delivered by the terms of this Section 7.1(b) with
the financial statements permitted to be delivered
pursuant to the following proviso which report shall show
all appropriate adjustment entries in sufficient detail
in connection with such reconciliation;
provided that so long as each Subsidiary of the Company is a Restricted
Subsidiary, delivery within the time period specified above of copies of
the Company's Annual Report on Form 10-K prepared in compliance with the
requirements therefor and filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this Section
7.1(b);
(c) SEC and Other Reports promptly, and in any event within
15 days of their becoming available or being filed, one copy of (i) each
financial statement, report, notice or proxy statement sent by the
Company or any Subsidiary to public securities holders generally,
and (ii) each regular or periodic report, each registration statement
(without exhibits except as expressly requested by such holder), and
each prospectus and all amendments thereto filed by the Company or any
Subsidiary with the Securities and Exchange Commission and of all
press releases and other statements made available generally by the
Company or any Subsidiary to the public concerning developments that are
Material;
(d) Notice of Default, Event of Default or Acceleration of
the Notes promptly, and in any event within five days after a
Responsible Officer becoming aware of (i) the existence of any Default
or Event of Default or that any Person has given any notice or taken
any action with respect to a claimed default hereunder or that any
Person has given any notice or taken any action with respect to a
claimed default of the type referred to in Section 11(f), a written
notice specifying the nature and period of existence thereof and what
action the Company is taking or proposes to take with respect thereto,
or (ii) the acceleration of any Note pursuant to Section 12.1 hereof, a
written notice setting forth the principal amount of each Note so
accelerated, the name of the holder thereof and the circumstances
surrounding such acceleration;
(e) ERISA Matters promptly, and in any event within five days
after a Responsible Officer becoming aware of any of the following, a
written notice setting forth the nature thereof and the action, if any,
that the Company or an ERISA Affiliate proposes to take with respect
thereto:
(i) with respect to any Plan, any reportable event,
as defined in Section 4043(b) of ERISA and the regulations
thereunder, for which notice thereof has not been waived
pursuant to such regulations as in effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or
the threatening by the PBGC of the institution of, proceedings
under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the receipt
by the Company or any ERISA Affiliate of a notice from a
Multiemployer Plan that such action has been taken by the PBGC
with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could
result in the incurrence of any liability by the Company or
any ERISA Affiliate pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to
employee benefit plans, or in the imposition of any Lien
on any of the rights, properties or assets of the Company or
any ERISA Affiliate pursuant to Title I or IV of ERISA or such
penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material
Adverse Effect;
(f) Notices from Governmental Authority promptly, and in
any event within 30 days of receipt thereof, copies of any notice to the
Company or any Subsidiary from any Federal or state Governmental
Authority relating to any order, ruling, statute or other law or
regulation that could reasonably be expected to have a Material Adverse
Effect;
(g) Audit Reports. Promptly upon receipt thereof, one copy
of each interim or special audit made by independent accountants of the
books of the Company or any Restricted Subsidiary and any management
letter received from such accountants;
(h) Designation of Subsidiaries. Promptly after the
designation of any Unrestricted Subsidiary as a Restricted Subsidiary,
as set forth in Section 10.8, a copy of the resolution effecting such
designation duly certified by the Secretary or an Assistant Secretary
of the Company, together with a certificate of a Responsible Officer
setting forth in reasonable detail all facts and computations required
in order to establish that such designation was effective and is
permitted by the terms of this Agreement; and
(i) Requested Information with reasonable promptness, such
other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Company or any
of its Subsidiaries or relating to the ability of the Company to perform
its obligations hereunder and under the Notes as from time to time may be
reasonably requested by any such holder of Notes.
Section 7.2. Officer's Certificate. Each set of financial
statements delivered to a holder of Notes pursuant to Section 7.1(a) or
Section 7.1(b) hereof shall be accompanied by a certificate of a Senior
Financial Officer setting forth:
(a) Covenant Compliance the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Section 10.3, Section 10.4 and
Section 10.5 hereof, inclusive, during the quarterly or annual period
covered by the statements then being furnished (including with respect
to each such Section, where applicable, the calculations of the maximum
or minimum amount, ratio or percentage, as the case may be, permissible
under the terms of such Sections, and the calculation of the amount,
ratio or percentage then in existence); and
(b) Event of Default a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and
conditions of the Company and its Subsidiaries from the beginning of the
quarterly or annual period covered by the statements then being
furnished to the date of the certificate and that such review shall not
have disclosed the existence during such period of any condition or
event that constitutes a Default or an Event of Default or, if any such
condition or event existed or exists (including, without limitation, any
such event or condition which constitutes a Default or an Event of
Default resulting from the failure of the Company or any Subsidiary to
comply with any Environmental Law), specifying the nature and period
of existence thereof and what action the Company shall have taken or
proposes to take with respect thereto.
Section 7.3. Inspection. The Company shall permit the
representatives of each holder of Notes that is an Institutional Investor
(subject to compliance with Section 20 hereof):
(a) No Default if no Default or Event of Default then exists,
at the expense of such holder and upon reasonable prior notice to the
Company, to visit the principal executive office of the Company, to
discuss the affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and (with the consent of the
Company, which consent will not be unreasonably withheld) its
independent public accountants, and (with the consent of the Company,
which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Subsidiary, all at such
reasonable times and as often as may be reasonably requested in writing;
and
(b) Default if a Default or Event of Default then exists, at
the expense of the Company, to visit and inspect any of the offices or
properties of the Company or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent
public accountants (and by this provision the Company authorizes said
accountants to discuss the affairs, finances and accounts of the Company
and its Subsidiaries, provided that any Institutional Investor
exercising its right to meet with the Company's accountants shall give
the Company at least two Business Days' advance notice of the date of
any such discussions and the Company shall have the right to be present
in connection therewith, it being understood that the failure of the
Company to attend such meeting shall not preclude the Institutional
Investors from proceeding with such meeting), all at such times and as
often as may be requested.
Section 8. Prepayment of the Notes.
Section 8.1. Required Prepayments. No prepayments shall be
required with respect to the Notes.
Section 8.2. Optional Prepayments with Make-Whole Amount. The
Company may, at its option, upon notice as provided below, prepay on any date
that is a Business Day and on which an interest payment is due all, or any
part of, the Notes, in an amount not less than 5% of the aggregate principal
amount of the Notes then outstanding in the case of a partial prepayment, at
100% of the principal amount so prepaid, together with interest accrued
thereon to the date of such prepayment, plus the Make-Whole Amount determined
for the prepayment date with respect to such principal amount. The Company
will give each holder of Notes written notice of each optional prepayment
under this Section 8.2 not less than 30 days and not more than 60 days prior
to the date fixed for such prepayment. Each such notice shall specify such
date, the aggregate principal amount of the Notes to be prepaid on such date,
the principal amount of each Note held by such holder to be prepaid
(determined in accordance with Section 8.3), and the interest to be paid on
the prepayment date with respect to such principal amount being prepaid, and
shall be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make-Whole Amount due in connection with such prepayment
(calculated as if the date of such notice were the date of the prepayment),
setting forth the details of such computation. Two Business Days prior to
such prepayment, the Company shall deliver, via telefacsimile as set forth in
Section 18 hereof, to each holder of Notes a certificate of a Senior
Financial Officer specifying the calculation of such Make-Whole Amount as of
the specified prepayment date.
Section 8.3. Allocation of Partial Prepayments. All partial
prepayments of principal pursuant to Section 8.2 shall be: (a) allocated
among each of the series of Notes in proportion to the aggregate principal
amount outstanding of such series of Notes and (b) allocated pro rata among all
of the holders of each such series of Notes at the time outstanding.
Section 8.4. Maturity; Surrender, etc. In the case of each
prepayment of Notes pursuant to this Section 8, the principal amount of each
Note to be prepaid shall mature and become due and payable on the date fixed
for such prepayment, together with interest on such principal amount accrued
to such date and the applicable Make-Whole Amount, if any. From and after such
date, unless the Company shall fail to pay such principal amount when so due
and payable, together with the interest and Make-Whole Amount, if any, as
aforesaid, interest on such principal amount shall cease to accrue. Any Note
paid or prepaid in full shall be surrendered to the Company and cancelled and
shall not be reissued, and no Note shall be issued in lieu of any prepaid
principal amount of any Note.
Section 8.5. Purchase of Notes. The Company will not and will not
permit any Affiliate or Restricted Subsidiary to purchase, redeem, prepay or
otherwise acquire, directly or indirectly, any of the outstanding Notes
except upon the payment or prepayment of the Notes in accordance with
the terms of this Agreement and the Notes. The Company will promptly cancel
all Notes acquired by it or any Affiliate or Restricted Subsidiary pursuant
to any payment, prepayment or purchase of Notes pursuant to any provision of
this Agreement and no Notes may be issued in substitution or exchange for any
such Notes.
Section 8.6. Make-Whole Amount. The term "Make-Whole Amount"
means, with respect to any Note, an amount equal to the excess, if any, of
the Discounted Value of the Remaining Scheduled Payments with respect to the
Called Principal of such Note over the amount of such Called Principal,
provided that the Make-Whole Amount may in no event be less than zero. For the
purposes of determining the Make-Whole Amount, the following terms have the
following meanings:
"Called Principal" means, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to Section 8.2 or has become
or is declared to be immediately due and payable pursuant to Section
12.1, as the context requires.
"Discounted Value" means, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called Principal of
any Note, 0.50% over the yield to maturity implied by (i) the yields
reported, as of 10:00 A.M. (New York City time) on the second Business
Day preceding the Settlement Date with respect to such Called Principal,
on the display designated on page "USD" of the Bloomberg Financial Markets
Services Screen (or such other display as may replace page "USD" of the
Bloomberg Financial Markets Services Screen) for actively traded U.S.
Treasury securities having a maturity equal to the Remaining Life of
such Called Principal as of such Settlement Date, or (ii) if such yields
are not reported as of such time or the yields reported as of such time
are not ascertainable, the Treasury Constant Maturity Series Yields
reported, for the latest day for which such yields have been so reported
as of the second Business Day preceding the Settlement Date with respect
to such Called Principal, in Federal Reserve Statistical Release H.15
(519) (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the Remaining
Life of such Called Principal as of such Settlement Date. Such implied
yield in (i) or (ii) above will be determined, if necessary, by (a)
converting U.S. Treasury xxxx quotations to bond-equivalent yields in
accordance with accepted financial practice and (b) interpolating
linearly (calculated to the nearest one-one hundredth percent) between
(1) the actively traded U.S. Treasury security with the duration closest
to and greater than the Remaining Life and (2) the actively traded U.S.
Treasury security with the duration closest to and less than the
Remaining Life.
"Remaining Life" means, with respect to any Called Principal, the
number of years (calculated to the nearest one-twelfth year) that will
elapse between the Settlement Date with respect to such Called Principal
and the scheduled due date of such Called Principal.
"Remaining Scheduled Payments" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, provided that if such
Settlement Date is not a date on which interest payments are due to be
made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on such
Settlement Date pursuant to Section 8.2 or 12.1.
"Settlement Date" means, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2 or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context requires.
Section 9. Affirmative Covenants.
The Company covenants that so long as any of the Notes are outstanding:
Section 9.1. Compliance with Law. The Company will, and will
cause each of its Subsidiaries to, comply with all laws, ordinances or
governmental rules or regulations to which each of them is subject,
including, without limitation, Environmental Laws, and will obtain and maintain
in effect all licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their respective
properties or to the conduct of their respective businesses, in each case to
the extent necessary to ensure that non-compliance with such laws, ordinances
or governmental rules or regulations or failures to obtain or maintain in
effect such licenses, certificates, permits, franchises and other governmental
authorizations could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
Section 9.2. Insurance. The Company shall maintain (in conjunction
with its self-insurance program referred to below), and shall cause each
Subsidiary to maintain (in conjunction with such self-insurance program),
with financially sound and reputable independent insurers, insurance with
respect to its properties and business against loss, damage, casualties or
contingencies, of the kinds customarily insured against by Persons of
established reputations engaged in the same or similar business, of such
types and in such amounts (including deductibles, co-insurance and
self-insurance, if adequate reserves are maintained with respect thereto) as
are customarily carried under similar circumstances by such other Persons.
Section 9.3. Maintenance of Properties. The Company will, and
will cause each of its Subsidiaries to, maintain and keep, or cause to be
maintained and kept, their respective properties in good repair, working
order and condition (other than ordinary wear and tear), so that the business
carried on in connection therewith may be properly conducted at all times,
provided that this Section shall not prevent the Company or any Subsidiary
from discontinuing the operation and the maintenance of any of its properties
if such discontinuance is desirable in the conduct of its business and the
Company has concluded that such discontinuance could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 9.4. Payment of Taxes and Claims. The Company will, and
will cause each of its Subsidiaries to, file all tax returns required to be
filed in any jurisdiction and to pay and discharge all taxes shown to be due
and payable on such returns and all other taxes, assessments, governmental
charges, or levies imposed on them or any of their properties, assets, income
or franchises, to the extent such taxes and assessments have become due and
payable and before they have become delinquent and all claims for which sums
have become due and payable that have or might become a Lien on properties or
assets of the Company or any Subsidiary (except to the extent the payment
thereof is not subject to penalty or interest), provided that neither the
Company nor any Subsidiary need pay any such tax or assessment or claim if
(i) the amount, applicability or validity thereof is contested by the Company
or such Subsidiary on a timely basis in good faith and in appropriate
proceedings, and the Company or such Subsidiary has established adequate
reserves therefor in accordance with GAAP on the books of the Company or such
Subsidiary or (ii) the nonpayment of all such taxes, assessments and claims
in the aggregate could not reasonably be expected to have a Material Adverse
Effect.
Section 9.5. Corporate Existence, etc. Subject to Section 10.7(a),
the Company will at all times preserve and keep in full force and effect its
corporate existence. Subject to Section 10.7, the Company will at all times
preserve and keep in full force and effect the corporate existence of each of
its Subsidiaries (unless merged into the Company or a Subsidiary) and all
rights and franchises of the Company and its Subsidiaries unless, in the good
faith judgment of the Company, the termination of or failure to preserve and
keep in full force and effect such corporate existence, right or franchise
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
Section 9.6. Subsidiary Guaranties. If at any time, pursuant to
the terms and conditions of any line of credit or bank, loan, note or other
credit agreement (individually, a "Credit Agreement"), any existing or newly
acquired or formed Subsidiary grants to any one or more Institutional
Investors, a guaranty of obligations owing by the Company, if any, under any
Credit Agreement, the Company shall cause such Subsidiary to execute and
deliver to the holders of the Notes a Guaranty in substantially the same form
as the agreement delivered to such Institutional Investor, or any one or more
of them, and the Company shall deliver, or shall cause to be delivered, to
the holders of the Notes (a) an intercreditor agreement in form and substance
reasonably satisfactory to the Required Holders which will be entered into by
any such Institutional Investor or Investors which has or have received any
such subsidiary Guaranty and the holders of the Notes, pursuant to which each
of the parties thereto shall agree that each of such Institutional Investors
and the holders of the Notes shall share the proceeds from the enforcement of
each such subsidiary Guaranty on an equal and ratable basis, (b) all such
certificates, resolutions, legal opinions and other related items in
substantially the same forms as those delivered to and accepted by such
Institutional Investor or Investors which have received the benefit of any
such subsidiary Guaranty, and (c) all such amendments to this Agreement, as
may reasonably be deemed necessary by the Required Holders in order to
reflect the existence of each such subsidiary Guaranty and such intercreditor
agreement.
Section 10. Negative Covenants.
The Company covenants that so long as any of the Notes are outstanding:
Section 10.1. Transactions with Affiliates. The Company will not,
and will not permit any Restricted Subsidiary to, enter into any material
transaction with any Affiliate (other than transactions with the Company or
any other Restricted Subsidiary) on terms less favorable to the Company or
such Restricted Subsidiary than those available in a comparable arms-length
transaction; provided that the foregoing shall not apply to legitimate
business transactions with Affiliates designed to protect, maintain or
enhance the value of the Company's or any Wholly-owned Restricted Subsidiary's
business or investments. Notwithstanding the foregoing, the Company may (i)
make loans or advances in the ordinary course of business to executive
officers of the Company, including reasonable relocation expenses and (ii)
make loans or advances to executive officers of the Company related to the
Company's Stock Purchase Programs; provided that the aggregate amount of any
such loans or advances made pursuant to the forgoing clauses (i) and (ii)
shall not exceed $5,000,000 in the aggregate at any one time outstanding.
Section 10.2. Nature of Business. The Company will not, and will
not permit any Restricted Subsidiary to, engage in any business if, as a
result, the general nature of the business which would then be engaged in by
the Company and its Restricted Subsidiaries on a consolidated basis would be
substantially changed from the general nature of the business engaged in or
proposed to be engaged in by the Company and its Restricted Subsidiaries as
described in the Private Placement Memorandum, dated February, 1996 prepared
by B.A. Securities, Inc. and Xxxxxxxxxxx & Co., Inc. relating to the issue by
the Company of its senior notes, due 2001 to 2006.
Section 10.3. Consolidated Net Worth. From and after the date of
the Closing until the Net Worth Reset Date the Company will not at any time
permit Consolidated Net Worth to be an amount less than the sum of (a)
$118,000,000 plus (b) 40% of Consolidated Net Income computed on a cumulative
basis for each of the elapsed fiscal quarters beginning after December 27,
1996; provided that notwithstanding that Consolidated Net Income for any
elapsed fiscal quarter may be a deficit figure, no reduction as a result
thereof shall be made in the sum to be maintained pursuant hereto. From and
after the Net Worth Reset Date, the Company will not at any time permit
Consolidated Net Worth to be an amount less than the sum of (y) the Reset Net
Worth Amount plus (z) 25% of Consolidated Net Income computed on a cumulative
basis for each of the elapsed fiscal quarters beginning after the Net Worth
Reset Date; provided that notwithstanding that Consolidated Net Income for
any elapsed fiscal quarter may be a deficit figure, no reduction as a result
thereof shall be made in the sum to be maintained pursuant hereto.
Section 10.4. Fixed Charges Coverage Ratio. The Company will not
permit, as calculated on the last day of each fiscal quarter, the ratio of
(a) Consolidated Modified EBITDA for the four fiscal quarter period ending on
such date to (b) Consolidated Fixed Charges for such four fiscal quarter
period to be less than 1.75 to 1.00.
Section 10.5. Limitations on Indebtedness.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, create, issue, assume, guarantee or otherwise incur any
Indebtedness, except:
(i) Funded Debt evidenced by the Notes;
(ii) Funded Debt of the Company and its Restricted
Subsidiaries outstanding as of the Closing and described on Schedule
5.15 hereto;
(iii) Funded Debt of a Restricted Subsidiary owed to the
Company or to a Wholly-owned Restricted Subsidiary;
(iv) Funded Debt of the Company and its Restricted
Subsidiaries, provided that at the time of creation, issuance,
assumption, guarantee or incurrence thereof and after giving
effect thereto and to the application of the proceeds thereof:
(1) Consolidated Funded Debt shall not exceed the
applicable percentage of Consolidated Capitalization set forth
below opposite the period during which such additional Funded
Debt is to be created, issued, assumed, guaranteed or incurred:
For the Period Percent of Consolidated
Capitalization
From September 27, 1996 to and 56%
including March 28, 1997
From March 29, 1997 to and
including September 26, 1997 55%
From September 27, 1997 to and
including March 27, 1998 54%
From March 28, 1998 to and including
September 25, 1998 52%
From September 26, 1998 and thereafter 50%
(2) Consolidated Indebtedness shall not exceed 60% of
Consolidated Total Capitalization, and
(3) in the case of the issuance of any Funded Debt of the
Company or any of its Restricted Subsidiaries secured by Liens
permitted by Section 10.6(h) and any Funded Debt of a
Restricted Subsidiary (other than Funded Debt incurred under
clause (iii) above), the sum of (A) the aggregate amount of
all Indebtedness secured by Liens permitted by Section 10.6(h)
plus (B) the aggregate amount of all Indebtedness of
Restricted Subsidiaries (other than Funded Debt incurred under
clause (iii) above), shall not exceed 15% of Consolidated Net
Worth; and
(v) Current Debt of the Company or any Restricted Subsidiary,
provided that
(1) during the twelve-month period immediately preceding
the date of any determination hereunder, there shall have been
a period of 28 consecutive days during which Consolidated
Indebtedness did not exceed 50% of Consolidated Capitalization
on each day of such 28-day period and which Current Debt shall
during each day of such 28-day period be deemed to constitute
outstanding Funded Debt for purposes of any determination of
additional Funded Debt to be issued or incurred within the
limitations of Section 10.5(a)(iv)(1);
(2) in the case of the issuance of any Current Debt of
the Company or any of its Restricted Subsidiaries secured by
Liens permitted by Section 10.6(h) and any Current Debt of a
Restricted Subsidiary, the sum of (A) the aggregate amount of
all Indebtedness secured by Liens permitted by Section 10.6(h)
plus (B) the aggregate amount of all Indebtedness of
Restricted Subsidiaries, shall not exceed 15% of Consolidated
Net Worth; and
(3) at the time of creation, issuance, assumption,
guarantee or incurrence thereof and after giving effect
thereto and to the application of the proceeds thereof,
Consolidated Indebtedness shall not exceed 60% of Consolidated
Total Capitalization.
(b) The renewal, extension or refunding of any Indebtedness issued,
incurred or outstanding pursuant to Section 10.5(a) shall constitute the
issuance of additional Indebtedness which is, in turn, subject to the
limitations of the applicable provisions of this Section 10.5.
(c) Any Person that becomes a Restricted Subsidiary after the date
hereof shall for all purposes of this Section 10.5 shall be deemed to
have created, assumed or incurred at the time it becomes a Restricted
Subsidiary all Indebtedness of such Person existing immediately after it
becomes a Restricted Subsidiary.
Section 10.6. Limitation on Liens. The Company will not, and will
not permit any of its Restricted Subsidiaries to, create or incur, or suffer
to be incurred or to exist, any Lien on its or their property or assets,
whether now owned or hereafter acquired, or upon any income or profits
therefrom, or transfer any property for the purpose of subjecting the same
to the payment of obligations in priority to the payment of its or their
general creditors, or acquire or agree to acquire, or permit any of its
Restricted Subsidiaries to acquire, any property or assets upon conditional
sales agreements or other title retention devices, except:
(a) Liens for property taxes and assessments or governmental
charges or levies and Liens securing claims or demands of mechanics and
materialmen, provided that payment thereof is not at the time required
by Section 9.4;
(b) Liens of or resulting from any litigation or legal proceeding
which are currently being contested in good faith by appropriate
proceedings and for which the Company or the relevant Restricted
Subsidiary shall have set aside on its books reserves in accordance with
GAAP; provided that the Company or such Restricted Subsidiary need not
so contest any such litigation or legal proceeding as long as, and only
as long as, all judgments against the Company and its Restricted
Subsidiaries which are not stayed, bonded or discharged do not, at any
one time, exceed $1,000,000 in the aggregate;
(c) Liens incidental to the conduct of business or the ownership
of properties and assets (including Liens in connection with worker's
compensation, unemployment insurance and other like laws, warehousemen's
and attorneys' liens and statutory landlords' liens) and Liens to secure
the performance of bids, tenders or trade contracts, or to secure
statutory obligations, indemnity, surety or appeal bonds or other Liens
of like general nature, in any such case not incurred in connection with
the borrowing of money, which in any such case would not have a Material
Adverse Effect, provided in each case, the obligation secured is not
overdue or, if overdue, is being contested in good faith by appropriate
actions or proceedings;
(d) minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and other
similar purposes, or zoning or other restrictions as to the use of real
properties, which do not in any event materially impair their use in the
operation of the business of the Company and its Restricted Subsidiaries;
(e) (i) Liens securing Indebtedness of a Restricted Subsidiary to
the Company and (ii) Liens constituting a lease on property owned by the
Company and its Subsidiaries entered into in the ordinary course of
business pursuant to which the Company or its Subsidiaries is the lessor
so long as such lease is not entered into in connection with the
borrowing of money by the Company or its Subsidiaries;
(f) Liens existing as of the date of the Closing and described on
Schedule 5.15 hereto;
(g) Liens created or incurred after the date of the Closing given
to secure the payment of the purchase price or financing incurred in
connection with the acquisition, purchase or improvement of fixed
assets, useful and intended to be used in carrying on the business of
the Company or any of its Restricted Subsidiaries, provided that (i) the
Lien shall attach solely to the fixed assets acquired, purchased or
improved, (ii) such Lien shall have been created or incurred within 90
days after the date of acquisition, purchase or improvement, (iii) at
the time of the imposition of the Lien, the aggregate amount remaining
unpaid on all Indebtedness secured by Liens on such fixed assets
(whether or not assumed by the Company or any of its Restricted
Subsidiaries) shall not exceed an amount equal to the total acquisition
or purchase price or the price of such improvements, and (iv) all
such Indebtedness shall have been incurred within the limitations
provided in Section 10.5(a)(iv) or (a)(v), as the case may be; and
(h) Liens created or incurred after the Closing given to secure
Indebtedness of the Company or any of its Restricted Subsidiaries, in
addition to the Liens permitted by the preceding clauses (a) through (g)
hereof, provided that all Indebtedness secured by such Liens shall have
been incurred within the limitations provided in Section 10.5 (a)(iv) or
(a)(v), as the case may be.
Section 10.7. Mergers, Consolidations and Sales of Assets.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, consolidate with or be a party to a merger with any
other Person, or sell, lease, convey or transfer all or substantially all
of its assets; provided that:
(i) any Restricted Subsidiary may merge or consolidate with
or into the Company or any Wholly-owned Restricted Subsidiary so long as
in any merger or consolidation involving the Company, the Company shall
be the surviving or continuing corporation;
(ii) the assets and the equity Securities of any Restricted
Subsidiary may be sold, leased, conveyed or otherwise transferred within
the limitations of Sections 10.7(b) or (c), as applicable;
(iii) the Company may consolidate or merge with or into any
other Person if (1) the Person which results from such consolidation or
merger (the "surviving corporation") is a corporation organized under
the laws of any state of the United States or the District of Columbia,
(2) the due and punctual payment of the principal of and premium, if any,
and interest on all of the Notes, according to their tenor, and the due
and punctual performance and observation of all of the covenants in the
Notes and this Agreement to be performed or observed by the Company are
expressly assumed in writing by the surviving corporation and the
surviving corporation shall furnish to the holders of the Notes an
opinion of counsel satisfactory to such holders to the effect that the
instrument of assumption has been duly authorized, executed and
delivered and constitutes the legal, valid and binding contract and
agreement of the surviving corporation enforceable in accordance with
its terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles, and (3) at the time of such consolidation or
merger and immediately after giving effect thereto, (A) no Default or
Event of Default would exist and (B) the surviving corporation would be
permitted by the provisions of Section 10.5(a)(iv) to incur at least
$1.00 of additional Funded Debt; and
(iv) the Company may sell, convey or otherwise transfer all or
substantially all of its assets (other than stock of a Restricted
Subsidiary, which may only be sold or otherwise disposed of pursuant to
Section 10.7(c)) to any Person for consideration which represents the
fair market value of such assets (as determined in good faith by the
Board of Directors of the Company) at the time of such sale or other
disposition if (1) the acquiring Person (the "acquiring corporation") is
a corporation organized under the laws of any state of the United States
or the District of Columbia, (2) the due and punctual payment of the
principal of and premium, if any, and interest on all of the Notes,
according to their tenor, and the due and punctual performance and
observation of all of the covenants in the Notes and this Agreement to be
performed or observed by the Company are expressly assumed in writing by
the acquiring corporation and the acquiring corporation shall furnish to
the holders of the Notes an opinion of counsel satisfactory to such
holders to the effect that the instrument of assumption has been duly
authorized, executed and delivered and constitutes the legal, valid
and binding contract and agreement of the acquiring corporation
enforceable in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles, and (3) at the time of
such acquisition and immediately after giving effect thereto, (A) no
Default or Event of Default would exist and (B) the acquiring corporation
would be permitted by the provisions of Section 10.5(a)(iv) to incur at
least $1.00 of additional Funded Debt.
(b) The Company will not, and will not permit any of its
Restricted Subsidiaries to, sell, lease, transfer, or convey assets
(except assets sold in the ordinary course of business and except as
provided in Section 10.7(a)(iv)); provided that the foregoing
restrictions do not apply to:
(i) the sale, lease, transfer or conveyance of assets of a
Restricted Subsidiary to the Company or a Wholly-owned Restricted
Subsidiary; or
(ii) the sale of assets of the Company or a Restricted
Subsidiary, provided that (1) the same such assets are leased by the
Company or a Restricted Subsidiary, in any such case as lessee, within
180 days of the date of acquisition or completion of construction of such
assets by the Company or such Restricted Subsidiary (an "Exempted Sale
and Leaseback Transaction"), (2) immediately after the consummation of
such sale and after giving effect thereto, no Default or Event of
Default would exist, (3) immediately after the consummation of such sale
and after giving effect thereto, the Company would be permitted by the
provisions of Section 10.5(a)(iv) to incur at least $1.00 of additional
Funded Debt and (4) the proceeds were or are applied within 180 days of
such date of consummation to either (A) the acquisition of fixed assets
useful and intended to be used in the operation of the business of
the Company and its Restricted Subsidiaries as described in Section 10.2
and having a fair market value (as determined in good faith by the
Company) at least equal to that of the assets so disposed of and/or (B)
the prepayment at any applicable prepayment premium, on a pro rata basis,
of Senior Indebtedness of the Company, provided that without regard to
such requirement of application on a pro rata basis (y) in the event such
assets were acquired by the Company or any Restricted Subsidiary with
Indebtedness incurred under a revolving Credit Agreement, proceeds from
the sale of all such assets so acquired, together with proceeds from the
sale of assets within the limitations of Section 10.7(b)(iii) and (c)
(iii), in an aggregate amount not exceeding $5,000,000 may be applied to
the repayment of the Company's obligations under a revolving Credit
Agreement under which such Indebtedness was borrowed and (z) in the
event such assets were secured by a Lien against the Company or any
Restricted Subsidiary, the proceeds may be applied to the repayment of
the Company's or such Restricted Subsidiary's obligations in respect of
the Indebtedness secured by such Lien; or
(iii) the sale of such assets for cash or other property to a
Person or Persons if all of the following conditions are met:
(1) such assets (valued at net book value) do not,
together with all other assets of the Company and its
Restricted Subsidiaries previously sold, conveyed or otherwise
transferred during the same fiscal year (other than in the
ordinary course of business), exceed 15% of Consolidated Total
Assets determined as of the end of the immediately preceding
fiscal year;
(2) in the case of a sale of assets the proceeds of which
exceed $1,000,000, in the opinion of the Board of Directors of
the Company, the sale is for fair value and is in the best
interests of the Company; and
(3) immediately after the consummation of the transaction
and after giving effect thereto, (A) no Default or Event of
Default would exist, and (B) the Company would be permitted by
the provisions of Section 10.5(a)(iv) to incur at least $1.00 of
additional Funded Debt;
provided, however, that for purposes of the calculation in accordance
with clause (iii)(1) above, there shall not be included any assets the
proceeds of which were or are applied within 180 days of the date of
sale of such assets to either (y) the acquisition of fixed assets useful
and intended to be used in the operation of the business of the Company
and its Restricted Subsidiaries as described in Section 10.2 and having
a fair market value (as determined in good faith by the Company) at
least equal to that of the assets so disposed of and/or (z) the
prepayment at any applicable prepayment premium, on a pro rata basis, of
Senior Indebtedness of the Company, provided that, without regard to
such requirement of application on a pro rata basis (yy) in the event
such assets were acquired by the Company or any Restricted Subsidiary
with Indebtedness incurred under a revolving Credit Agreement, proceeds
from the sale of all such assets so acquired, together with proceeds
from the sale of assets within the limitations of Section 10.7(b)(ii)
and (c)(iii), in an aggregate amount not exceeding $5,000,000 may be
applied to the repayment of the Company's obligations under a revolving
Credit Agreement under which such Indebtedness was borrowed and (zz) in
the event such assets were secured by a Lien against the Company or any
Restricted Subsidiary, the proceeds may be applied to the repayment of
the Company's or such Restricted Subsidiary's obligations in respect of
the Indebtedness secured by such Lien.
It is understood and agreed by the Company that any optional prepayment
of the Notes as hereinabove provided shall be made pursuant to and to the
extent provided in Section 8.2. Computations pursuant to this Section 10.7(b)
shall include dispositions made pursuant to Section 10.7(c) and computations
pursuant to Section 10.7(c) shall include dispositions made pursuant to
this Section 10.7(b).
(c) The Company will not, and will not permit any Restricted
Subsidiary to, sell, pledge, transfer or convey any equity Securities
(including as "equity Securities" for the purposes of this Section any
shares of capital stock, options or warrants to purchase equity
Securities or other Securities exchangeable for or convertible into
equity Securities or any other form of equity or voting interest) of a
Restricted Subsidiary (said stock, options, warrants and other Securities
herein called "Subsidiary Equity Securities") nor will any Restricted
Subsidiary issue, sell, pledge, transfer or convey any its own Subsidiary
Equity Securities, provided that the foregoing restrictions do not apply
to:
(i) the issue of Regulatory Shares; or
(ii) the issue of Subsidiary Equity Securities to the Company
or another Wholly-owned Restricted Subsidiary; or
(iii) the sale, transfer or conveyance at any one time to a
Person (other than directly or indirectly to an Affiliate) of the entire
Investment of the Company and its Restricted Subsidiaries in any
Restricted Subsidiary if all of the following conditions are met:
(1) such assets (valued at net book value) do not,
together with all other assets of the Company and its
Restricted Subsidiaries previously sold, conveyed or
otherwise transferred during the same fiscal year (other than
in the ordinary course of business), exceed 15% of Consolidated
Total Assets determined as of the end of the immediately
preceding fiscal year;
(2) in the case of a sale of assets the proceeds of
which exceed $1,000,000, in the opinion of the Board of
Directors of the Company, the sale is for fair value and is in
the best interests of the Company;
(3) immediately after the consummation of the
transaction and after giving effect thereto, such Restricted
Subsidiary shall have no Indebtedness of or continuing
Investment in the equity Securities of the Company or of any
of its respective Restricted Subsidiaries and any such
Indebtedness or Investment shall have been discharged or
acquired, as the case may be, by the Company or any of its
Restricted Subsidiaries; and
(4) immediately after the consummation of the
transaction and after giving effect thereto, (A) no Default or
Event of Default would exist, and (B) the Company would be
permitted by the provisions of Section 10.5(a)(iv) to incur at
least $1.00 of additional Funded Debt;
provided, however, that for purposes of the calculation in accordance
with clause (iii)(1) above, there shall not be included any assets the
proceeds of which were or are applied within 180 days of the date of
sale of such assets to either (y) the acquisition of fixed assets useful
and intended to be used in the operation of the business of the Company
and its Restricted Subsidiaries as described in Section 10.2 and having
a fair market value (as determined in good faith by the Company) at
least equal to that of the assets so disposed of and/or (z) the
prepayment at any applicable prepayment premium, on a pro rata basis, of
Senior Indebtedness of the Company, provided that, without regard to
such requirement of application on a pro rata basis (yy) in the event
such assets were acquired by the Company or any Restricted Subsidiary
with Indebtedness incurred under a revolving Credit Agreement, proceeds
from the sale of all such assets so acquired, together with proceeds from
the sale of assets within the limitations of Section 10.7(b)(ii) and (b)
(iii), in an aggregate amount not exceeding $5,000,000 may be applied to
the repayment of the Company's obligations under a revolving Credit
Agreement under which such Indebtedness was borrowed and (zz) in the
event such assets were secured by a Lien against the Company or any
Restricted Subsidiary, the proceeds may be applied to the repayment of
the Company's or such Restricted Subsidiary's obligations in respect of
the Indebtedness secured by such Lien. It is understood and agreed by
the Company that any optional prepayment of the Notes as hereinabove
provided shall be made pursuant to and to the extent provided in Section
8.2.
Computations pursuant to this Section 10.7(c) shall include dispositions
made pursuant to Section 10.7(b) and computations pursuant to Section 10.7(b)
shall include dispositions made pursuant to this Section 10.7(c).
Section 10.8. Designation of Subsidiaries. The Company may
designate any Unrestricted Subsidiary as a Restricted Subsidiary, provided
that: (a) the Company shall have given not less than 15 days prior written
notice to the holders of the Notes that the Board of Directors of the Company
has made such determination, (b) at the time of such designation and
immediately after giving effect thereto: (i) no Default or Event of Default
would exist and (ii) the Company would be permitted by the provisions of
Section 10.5(a)(iv) to incur at least $1.00 of additional Funded Debt, and (c)
such Unrestricted Subsidiary shall not at any time after the date of this
Agreement have previously been designated as a Restricted Subsidiary.
Section 11. Events of Default.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or
Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any
Note for more than five Business Days after the same becomes due and
payable; or
(c) the Company defaults in the performance of or compliance with
any term contained in Sections 10.1 through 10.8 and Section 7.1(d); or
(d) the Company defaults in the performance of or compliance with
any term contained herein (other than those referred to in paragraphs
(a), (b) and (c) of this Section 11) and such default is not remedied
within 30 days after the earlier of (i) a Responsible Officer obtaining
actual knowledge of such default and (ii) the Company receiving written
notice of such default from any holder of a Note (any such written
notice to be identified as a "notice of default" and to refer
specifically to this paragraph (d) of Section 11); or
(e) any representation or warranty made in writing by or on
behalf of the Company or by any officer of the Company in this Agreement
or in any writing furnished in connection with the transactions
contemplated hereby proves to have been false or incorrect in any
material respect on the date as of which made; or
(f) (i) the Company or any Subsidiary is in default (as principal
or as guarantor or other surety) in the payment of any principal of or
premium or make-whole amount or interest on any Indebtedness that is
outstanding in an aggregate principal amount of at least $10,000,000
beyond any period of grace provided with respect thereto, or (ii) the
Company or any Subsidiary is in default in the performance of or
compliance with any term of any evidence of any Indebtedness in an
aggregate outstanding principal amount of at least $10,000,000 or of any
mortgage, indenture or other agreement relating thereto or any other
condition exists, and as a consequence of such default or condition such
Indebtedness has become, or has been declared (or one or more Persons are
entitled to declare such Indebtedness to be), due and payable before its
stated maturity or before its regularly scheduled dates of payment, or
(iii) as a consequence of the occurrence or continuation of any event or
condition (other than the passage of time or the right of the holder of
Indebtedness to convert such Indebtedness into equity interests), (x) the
Company or any Subsidiary has become obligated to purchase or repay
Indebtedness before its regular maturity or before its regularly
scheduled dates of payment in an aggregate outstanding principal amount
of at least $10,000,000, or (y) one or more Persons have the right to
require the Company or any Subsidiary so to purchase or repay such
Indebtedness; or
(g) the Company or any Subsidiary (i) is generally not paying, or
admits in writing its inability to pay, its debts as they become due,
(ii) files, or consents by answer or otherwise to the filing against it
of, a petition for relief or reorganization or arrangement or any other
petition in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law
of any jurisdiction, (iii) makes an assignment for the benefit of its
creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with
respect to any substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes corporate action for the
purpose of any of the foregoing; or
(h) a court or governmental authority of competent jurisdiction
enters an order appointing, without consent by the Company or any of its
Subsidiaries, a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial
part of its property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in bankruptcy
or for liquidation or to take advantage of any bankruptcy or insolvency
law of any jurisdiction, or ordering the dissolution, winding-up or
liquidation of the Company or any of its Subsidiaries, or any such
petition, order or approval shall be filed against the Company or any of
its Subsidiaries and such petition, order or approval shall not be
dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $3,000,000 are rendered against one or more of
the Company and its Subsidiaries and which judgments are not, within 60
days after entry thereof, bonded, discharged or stayed pending appeal,
or are not discharged within 60 days after the expiration of such stay;
or
(j) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is
sought or granted under Section 412 of the Code, (ii) a notice of
intent to terminate any Plan shall have been or is reasonably expected
to be filed with the PBGC or the PBGC shall have instituted proceedings
under ERISA Section 4042 to terminate or appoint a trustee to administer
any Plan or the PBGC shall have notified the Company or any ERISA
Affiliate that a Plan may become a subject of any such proceedings,
(iii) the aggregate "amount of unfunded benefit liabilities" (within the
meaning of Section 4001(a)(18) of ERISA) under all Plans, determined in
accordance with Title IV of ERISA, shall exceed $5,000,000, (iv) the
Company or any ERISA Affiliate shall have incurred or is reasonably
expected to incur any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to employee
benefit plans, (v) the Company or any ERISA Affiliate withdraws from any
Multiemployer Plan, or (vi) the Company or any Subsidiary establishes or
amends any employee welfare benefit plan that provides post-employment
welfare benefits in a manner that would increase the liability of the
Company or any Subsidiary thereunder; and any such event or events
described in clauses (i) through (vi) above, either individually or
together with any other such event or events, could reasonably be
expected to have a Material Adverse Effect.
As used in Section 11(j), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.
Section 12. Remedies on Default, etc.
Section 12.1. Acceleration. If an Event of Default with respect to
the Company described in paragraph (g) or (h) of Section 11 (other than an
Event of Default described in clause (i) of paragraph (g) or described in
clause (vi) of paragraph (g) by virtue of the fact that such clause
encompasses clause (i) of paragraph (g)) has occurred, all the Notes then
outstanding shall automatically become immediately due and payable. If any
other Event of Default has occurred and is continuing, any holder or holders
of more than 33-1/3% in principal amount of the Notes at the time outstanding
may at any time at its or their option, by notice or notices to the Company,
declare all the Notes then outstanding to be immediately due and payable. If
any Event of Default described in paragraph (a) or (b) of Section 11 has
occurred and is continuing, any holder or holders of Notes at the time
outstanding affected by such Event of Default may at any time, at its or
their option, by notice or notices to the Company, declare all the Notes held
by it or them to be immediately due and payable. Upon any Note becoming due
and payable under this Section 12.1, whether automatically or by declaration,
such Note will forthwith mature and the entire unpaid principal amount of such
Note, plus (i) all accrued and unpaid interest thereon and (ii) the Make-Whole
Amount determined in respect of such principal amount (to the full extent
permitted by applicable law), shall all be immediately due and payable, in
each and every case without presentment, demand, protest or further notice,
all of which are hereby waived. The Company acknowledges, and the parties
hereto agree, that each holder of a Note has the right to maintain its
investment in the Notes free from repayment by the Company (except as herein
specifically provided for), and that the provision for payment of a Make-Whole
Amount by the Company in the event that the Notes are prepaid or are
accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under uch circumstances.
Section 12.2. Other Remedies. If any Default or Event of Default
has occurred and is continuing, and irrespective of whether any Notes have
become or have been declared immediately due and payable under Section 12.1,
the holder of any Note at the time outstanding may proceed to protect and
enforce the rights of such holder by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement
contained herein or in any Note, or for an injunction against a violation of
any of the terms hereof or thereof, or in aid of the exercise of any power
granted hereby or thereby or by law or otherwise.
Section 12.3. Rescission. At any time after any Notes have been
declared due and payable pursuant to the second sentence of Section 12.1, the
holders of not less than 67% in principal amount of the Notes then
outstanding, by written notice to the Company, may rescind and annul any such
declaration and its consequences if (a) the Company has paid all overdue
interest on the Notes, all principal of and Make-Whole Amount, if any, on any
Notes that are due and payable and are unpaid other than by reason of such
declaration, and all interest on such overdue principal and Make-Whole
Amount, if any, and (to the extent permitted by applicable law) any overdue
interest in respect of the Notes, at the Default Rate, (b) all Events of
Default and Defaults, other than non-payment of amounts that have become due
solely by reason of such declaration, have been cured or have been waived
pursuant to Section 17, and (c) no judgment or decree has been entered for the
payment of any monies due pursuant hereto or to the Notes. No rescission and
annulment under this Section 12.3 will extend to or affect any subsequent
Event of Default or Default or impair any right consequent thereon.
Section 12.4. No Waivers or Election of Remedies, Expenses, etc.
No course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right,
power or remedy conferred by this Agreement or by any Note upon any holder
thereof shall be exclusive of any other right, power or remedy referred to
herein or therein or now or hereafter available at law, in equity, by statute
or otherwise. Without limiting the obligations of the Company under Section
15, the Company will pay to the holder of each Note on demand such further
amount as shall be sufficient to cover all costs and expenses of such holder
incurred in any enforcement or collection under this Section 12, including,
without limitation, reasonable attorneys' fees, expenses and disbursements.
Section 13. Registration; Exchange; Substitution of Notes.
Section 13.1. Registration of Notes. The Company shall keep at its
principal executive office a register for the registration and registration
of transfers of Notes. The name and address of each holder of one or more
Notes, each transfer thereof and the name and address of each transferee
of one or more Notes shall be registered in such register. Prior to due
presentment for registration of transfer, the Person in whose name any Note
shall be registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and the Company shall not be affected by any
notice or knowledge to the contrary. The Company shall give to any holder of
a Note that is an Institutional Investor promptly upon request therefor, a
complete and correct copy of the names and addresses of all registered
holders of Notes.
Section 13.2. Transfer and Exchange of Notes. Upon surrender of
any Note at the principal executive office of the Company for registration of
transfer or exchange (and in the case of a surrender for registration of
transfer, duly endorsed or accompanied by a written instrument of transfer
duly executed by the registered holder of such Note or its attorney duly
authorized in writing and accompanied by the address for notices of each
transferee of such Note or part thereof), the Company shall execute and
deliver, at the Company's expense (except as provided below), one or
more new Notes (as requested by the holder thereof) in exchange therefor, of
the same series and in an aggregate principal amount equal to the unpaid
principal amount of the surrendered Note. Each such new Note shall be
payable to such Person as such holder may request and shall be substantially
in the form of Exhibit 1 or 2, as the case may be. Each such new Note shall
be dated and bear interest from the date to which interest shall have been
paid on the surrendered Note or dated the date of the surrendered Note if no
interest shall have been paid thereon. The Company may require payment of
a sum sufficient to cover any stamp tax or governmental charge imposed in
respect of any such transfer of Notes. Notes shall not be transferred in
denominations of less than $1,000,000, provided that if necessary to enable
the registration of transfer by a holder of its entire holding of Notes, one
Note may be in a denomination of less than $1,000,000. Any transferee of a
Note, or purchaser of a participation therein, shall, by its acceptance of
such Note be deemed to make the same representations to the Company regarding
the Note or a participation therein as you have made pursuant to Section 6.
Section 13.3. Replacement of Notes. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss,
theft, destruction or mutilation of any Note (which evidence shall be, in the
case of an Institutional Investor, notice from such Institutional Investor of
such ownership and such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note
is, or is a nominee for, you or another holder of a Note with a minimum
net worth of at least $50,000,000, such Person's own unsecured
agreement of indemnity shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a
new Note of the same series, dated and bearing interest from the date to
which interest shall have been paid on such lost, stolen, destroyed or
mutilated Note or dated the date of such lost, stolen, destroyed or mutilated
Note if no interest shall have been paid thereon.
Section 14. Payments on Notes.
Section 14.1. Place of Payment. Subject to Section 14.2, payments
of principal, Make-Whole Amount, if any, and interest becoming due and
payable on the Notes shall be originated from New York, New York. The
Company may at any time, by notice to each holder of a Note, change the
place of payment of the Notes so long as such place of payment shall be
either the principal office of the Company in the United States or the
principal office of a bank or trust company in the United States.
Section 14.2. Home Office Payment. So long as you or your nominee
shall be the holder of any Note, and notwithstanding anything contained in
Section 14.1 or in such Note to the contrary, the Company will pay all sums
becoming due on such Note for principal, Make-Whole Amount, if any, and
interest by the method and at the address specified for such purpose below
your name in Schedule A, or by such other method or at such other address as
you shall have from time to time specified to the Company in writing for such
purpose, without the presentation or surrender of such Note or the making of
any notation thereon, except that upon written request of the Company made
concurrently with or reasonably promptly after payment or prepayment in full
of any Note, you shall surrender such Note for cancellation, reasonably
promptly after any such request, to the Company at its principal executive
office or at the place of payment most recently designated by the Company
pursuant to Section 14.1. The Company will make such payments in immediately
available funds, no later than 12:00 p.m. New York, New York time on the date
due. If for any reason whatsoever the Company does not make any such payment
by such 12:00 p.m. transmittal time, such payment shall be deemed to have
been made on the next following Business Day and such payment shall bear
interest at the overdue rate set forth in the Note. Prior to any sale or
other disposition of any Note held by you or your nominee you will, at your
election, either endorse thereon the amount of principal paid thereon and the
last date to which interest has been paid thereon or surrender such Note to the
Company in exchange for a new Note or Notes pursuant to Section 13.2. The
Company will afford the benefits of this Section 14.2 to any Institutional
Investor that is the direct or indirect transferee of any Note purchased by
you under this Agreement and that has made the same agreement relating
to such Note as you have made in this Section 14.2.
Section 15. Expenses, Etc.
Section 15.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all costs and
expenses (including reasonable attorneys' fees of one special counsel and, if
reasonably required, local or other counsel) incurred by you and each other
holder of a Note in connection with such transactions and in connection with
any amendments, waivers or consents under or in respect of this Agreement or
the Notes (whether or not such amendment, waiver or consent becomes
effective), including, without limitation: (a) the costs and expenses
incurred in enforcing or defending (or determining whether or how to enforce or
defend) any rights under this Agreement or the Notes or in responding to any
subpoena or other legal process or informal investigative demand issued in
connection with this Agreement or the Notes, or by reason of being a holder
of any Note, and (b) the costs and expenses, including financial advisors'
fees, incurred in connection with the insolvency or bankruptcy of the Company
or any Subsidiary or in connection with any work-out or restructuring of the
transactions contemplated hereby and by the Notes. The Company will pay, and
will save you and each other holder of a Note harmless from, all claims in
respect of any fees, costs or expenses, if any, of brokers and finders (other
than those retained by you).
Section 15.2. Survival. The obligations of the Company under this
Section 15 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement or the Notes, and the
termination of this Agreement.
Section 16. Survival of Representations and Warranties; Entire Agreement.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or
transfer by you of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any subsequent holder of a
Note, regardless of any investigation made at any time by or on behalf of you
or any other holder of a Note. All statements contained in any certificate
or other instrument delivered by or on behalf of the Company pursuant to this
Agreement shall be deemed representations and warranties of the Company under
this Agreement. Subject to the preceding sentence, this Agreement and the
Notes embody the entire agreement and understanding between you and the
Company and supersede all prior agreements and understandings relating to the
subject matter hereof.
Section 17. Amendment and Waiver.
Section 17.1. Requirements. This Agreement and the Notes may be
amended, and the observance of any term hereof or of the Notes may be waived
(either retroactively or prospectively), with (and only with) the written
consent of the Company and the Required Holders, except that (a) no amendment
or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof,
or any defined term (as it is used therein), will be effective as to you
unless consented to by you in writing, and (b) no such amendment or waiver
may, without the written consent of the holder of each Note at the time
outstanding affected thereby, (i) subject to the provisions of Section 12
relating to acceleration or rescission, change the amount or time of any
prepayment or payment of principal of, or reduce the rate or change the time
of payment or method of computation of interest or of the Make-Whole Amount
on, the Notes, (ii) change the percentage of the principal amount of the Notes
the holders of which are required to consent to any such amendment or waiver,
or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.
Section 17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of
the Notes (irrespective of the amount of Notes then owned by it) with a
reasonably sufficient amount of information, with reasonable prior notice in
advance of the date a decision is required, to enable such holder to make
an informed and considered decision with respect to any proposed amendment,
waiver or consent in respect of any of the provisions hereof or of the Notes.
The Company will deliver executed or true and correct copies of each
amendment, waiver or consent effected pursuant to the provisions of this
Section 17 to each holder of outstanding Notes promptly following the date on
which it is executed and delivered by, or receives the consent or approval
of, the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay
or cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, or grant any security, to any holder
of Notes as consideration for or as an inducement to the entering into by any
holder of Notes of any waiver or amendment of any of the terms and provisions
hereof or of the Notes unless such remuneration is concurrently paid, or
security is concurrently granted, on the same terms, ratably to each holder
of Notes then outstanding whether or not such holder consented to such
waiver or amendment.
Section 17.3. Binding Effect, etc. Any amendment or waiver
consented to as provided in this Section 17 applies equally to all holders of
Notes and is binding upon them and upon each future holder of any Note and
upon the Company without regard to whether such Note has been marked to
indicate such amendment or waiver. No such amendment or waiver will extend
to or affect any obligation, covenant, agreement, Default or Event of Default
not expressly amended or waived or impair any right consequent thereon. No
course of dealing between the Company and the holder of any Note nor any
delay in exercising any rights hereunder or under any Note shall operate as a
waiver of any rights of any holder of such Note. As used herein, the term
"this Agreement" and references thereto shall mean this Agreement as it may
from time to time be amended or supplemented.
Section 17.4. Notes Held by Company, etc. Solely for the purpose
of determining whether the holders of the requisite percentage of the
aggregate principal amount of Notes then outstanding approved or consented to
any amendment, waiver or consent to be given under this Agreement or
the Notes, or have directed the taking of any action provided herein or in
the Notes to be taken upon the direction of the holders of a specified
percentage of the aggregate principal amount of Notes then outstanding, Notes
directly or indirectly owned by the Company, any of its Affiliates or any
Restricted Subsidiary shall be deemed not to be outstanding.
Section 18. Notices.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telefacsimile if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery
service (with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address
specified for such communications in Schedule A, or at such other
address as you or it shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at
such address as such other holder shall have specified to the Company in
writing, or
(iii) if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of the Chief Financial
Officer, or at such other address as the Company shall have specified to
the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when actually
received.
Section 19. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications that may
hereafter be executed, (b) documents received by you at the Closing (except
the Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to you, may be reproduced by
you by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and you may destroy any original
document so reproduced. The Company agrees and stipulates that, to the extent
permitted by applicable law, any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by you in the regular course of business) and any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 19 shall not prohibit the
Company or any other holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from introducing
evidence to demonstrate the inaccuracy of any such reproduction.
Section 20. Confidential Information.
For the purposes of this Section 20, "Confidential Information"
means information delivered to you by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when received by you as
being confidential information of the Company or such Subsidiary, provided
that such term does not include information that (a) was publicly known or
otherwise known to you prior to the time of such disclosure, (b) subsequently
becomes publicly known through no act or omission by you or any Person acting
on your behalf, (c) otherwise becomes known to you other than through
disclosure by the Company or any Subsidiary from a Person who is not to your
knowledge subject to a confidentiality agreement, or (d) constitutes
financial statements delivered to you under Section 7.1 that are otherwise
publicly available. You will maintain the confidentiality of such Confidential
Information in accordance with procedures adopted by you in good faith to
protect confidential information of third parties delivered to you, provided
that you may deliver or disclose Confidential Information to (i) your
directors, trustees, officers, employees, agents, attorneys and affiliates (to
the extent such disclosure reasonably relates to the administration of the
investment represented by your Notes), (ii) your financial advisors and other
professional advisors who agree to hold confidential the Confidential
Information in accordance with the terms of this Section 20, (iii) any other
holder of any Note, (iv) any Institutional Investor to which you sell or
offer to sell such Note or any part thereof or any participation therein (if
such Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20), (v) any Person
from which you offer to purchase any security of the Company (if such Person
has agreed in writing prior to its receipt of such Confidential Information
to be bound by the provisions of this Section 20), (vi) any federal or state
regulatory authority having jurisdiction over you, (vii) the National
Association of Insurance Commissioners or any similar organization, or any
nationally recognized rating agency that requires access to information about
your investment portfolio or (viii) any other Person to which such delivery
or disclosure may be necessary or appropriate (w) to effect compliance with
any law, rule, regulation, policy, investigation or order applicable to you,
(x) in connection with or in response to any subpoena or other legal process,
(y) in connection with any litigation to which you are a party involving this
Agreement or the Notes or in connection with the enforcement or for the
protection of your rights and remedies under the Notes and this Agreement or
(z) if an Event of Default has occurred and is continuing, to the extent you
may reasonably determine such delivery and disclosure to be necessary or
appropriate in the enforcement or for the protection of the rights and remedies
under your Notes and this Agreement. Each holder of a Note, by its acceptance
of a Note, will be deemed to have agreed to be bound by and to be entitled to
the benefits of this Section 20 as though it were a party to this Agreement.
On reasonable request by the Company in connection with the delivery to any
holder of a Note of information required to be delivered to such holder under
this Agreement or requested by such holder (other than a holder that is a
party to this Agreement or its nominee), such holder will enter into an
agreement with the Company embodying the provisions of this Section 20.
Section 21. Substitution of Purchaser.
You shall have the right to substitute any one of your Affiliates
as the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both you and
such Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon
receipt of such notice, wherever the word "you" is used in this Agreement
(other than in this Section 21), such word shall be deemed to refer to such
Affiliate in lieu of you. In the event that such Affiliate is so substituted
as a purchaser hereunder and such Affiliate thereafter transfers to you all
of the Notes then held by such Affiliate, upon receipt by the Company of
notice of such transfer, wherever the word "you" is used in this Agreement,
such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original holder of the
Notes under this Agreement.
Section 22. Miscellaneous.
Section 22.1. Successors and Assigns. All covenants and other
agreements contained in this Agreement by or on behalf of any of the parties
hereto bind and inure to the benefit of their respective successors and
assigns (including, without limitation, any subsequent holder of a Note)
whether so expressed or not.
Section 22.2. Payments Due on Non-Business Days. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of
principal of or Make-Whole Amount or interest on any Note that is due on a
date other than a Business Day shall be made on the next succeeding Business
Day without including the additional days elapsed in the computation of the
interest payable on such next succeeding Business Day.
Section 22.3. Severability. Any provision of this Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall (to the
full extent permitted by law) not invalidate or render unenforceable such
provision in any other jurisdiction.
Section 22.4. Construction. Each covenant contained herein shall
be construed (absent express provision to the contrary) as being independent
of each other covenant contained herein, so that compliance with any one
covenant shall not (absent such an express contrary provision) be deemed to
excuse compliance with any other covenant. Where any provision herein
refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether such
action is taken directly or indirectly by such Person.
Section 22.5. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies hereof, each signed by fewer than all, but together signed
by all, of the parties hereto.
Section 22.6. Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed
by, the law of the State of New York excluding choice-of-law principles of
the law of such State that would require the application of the laws of a
jurisdiction other than such State.
* * * * *
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to
the Company, whereupon the foregoing shall become a binding agreement between
you and the Company.
Very truly yours,
Dames & Xxxxx, Inc.
By Xxxx X. Xxxxx
___________________________
Title: Executive Vice President and
Chief Financial Officer
The foregoing is hereby agreed
to as of the date thereof.
Accepted as of December 16, 1996:
Teachers Insurance and Annuity
Association of America
By Xxxxxxx X. XxxXxxxx
_____________________________
Its Director-Private Placements
Principal Amount
of Notes to Be Series
Name and Address Purchased of
of Purchaser at the Closing Notes
Teachers Insurance and Annuity $10,000,000 Series F
Association of America
000 Xxxxx Xxxxxx $10,000,000 Series X
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xx. Xxxxxxx Xxxxxx, Securities Division, Private Placements
Telephone Number: (000) 000-0000 or (000) 000-0000 (general number)
Facsimile Number: (000) 000-0000
Payments
All payments on account of the Series F and Series G Notes shall be made in
immediately available funds at the opening of business on the due date by
electronic funds transfer through the Automated Clearing House System
(identifying each payment as "Dames & Xxxxx, Inc., 7.19% Senior Notes, Series
F, Due December 16, 2004, PPN 235713 B# 0, principal, premium or interest" or
"Dames & Xxxxx, Inc. 7.23% Senior Notes, Series G, Due December 16, 2005, PPN
235713 C* 3, principal, premium or interest", as the case may be) to:
Chase Manhattan Bank (ABA #021-000-021)
Xxx Xxxx, Xxx Xxxx 00000
for credit to: Teachers Insurance and Annuity Association of America
Account Number 000-0-000000
On order of: Dames & Xxxxx, Inc.
Notices
Contemporaneous with the above electronic funds transfer, written confirmation
setting forth: (1) the full name, private placement number, interest rate and
maturity date of the Series F or Series G Notes, as the case may be; (2)
allocation of payment among principal, interest, premium and any special
payment; and (3) the name and address of the bank from which such electronic
funds transfer was sent, shall be mailed or sent by facsimile to:
Teachers Insurance and Annuity Association of America
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Securities Accounting Division
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Schedule A
(to Note Purchase Agreement)
All other notices and communications to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
Defined Terms
As used herein, the following terms have the respective meanings
set forth below or set forth in the Section hereof following such term:
"Affiliate" shall mean, at any time, and with respect to any Person
(other than a Wholly-owned Restricted Subsidiary), (a) any other Person that
at such time directly or indirectly through one or more intermediaries
Controls, or is Controlled by, or is under common Control with, such first
Person, (b) any Person beneficially owning or holding, directly or indirectly,
5% or more of any class of voting or equity interests of the Company or any
Subsidiary or any corporation of which the Company and its Subsidiaries
beneficially own or hold, in the aggregate, directly or indirectly, 5% or
more of any class of voting or equity interests and (c) any other Person that
is an executive officer or director of such first Person. As used in this
definition, "Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise. Unless the context otherwise clearly requires, any reference
to an "Affiliate" is a reference to an Affiliate of the Company.
"Business Day" shall mean (a) for the purposes of Section 8.6 only, any
day other than a Saturday, a Sunday or a day on which commercial banks in New
York, New York are required or authorized to be closed, and (b) for the
purposes of any other provision of this Agreement, any day other than a
Saturday, a Sunday or a day on which commercial banks in New York, New
York or Los Angeles, California are required or authorized to be closed.
"Capital Lease" or "Capitalized Lease" shall mean, at any time, a lease
with respect to which the lessee is required concurrently to recognize the
acquisition of an asset and the incurrence of a liability in accordance with
GAAP.
"Capitalized Rentals" of any Person shall mean as of the date of any
determination thereof the amount at which the aggregate Rentals due and to
become due under all Capitalized Leases under which such Person is a lessee
would be reflected as a liability on a consolidated balance sheet of such
Person.
"Closing" is defined in Section 3.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations promulgated thereunder from time
to time.
"Company" shall mean Dames & Xxxxx, Inc., a Delaware corporation.
"Confidential Information" is defined in Section 20.
"Consolidated Capitalization" shall mean as of the date of any
determination thereof, the sum of (a) Consolidated Funded Debt plus (b)
Consolidated Net Worth.
Schedule B
(to Note Purchase Agreement)
"Consolidated Current Debt" shall mean all Current Debt of the Company
and its Restricted Subsidiaries, determined on a consolidated basis
eliminating intercompany items in accordance with GAAP.
"Consolidated Fixed Charges" for any period shall mean on a consolidated
basis the sum of (a) all Rentals (other than Rentals on Capitalized Leases)
payable during such period by the Company and its Restricted Subsidiaries,
and (b) all Interest Expense on all Indebtedness of the Company and its
Restricted Subsidiaries payable during such period.
"Consolidated Funded Debt" shall mean all Funded Debt of the Company and
its Restricted Subsidiaries, determined on a consolidated basis in accordance
with GAAP eliminating intercompany items.
"Consolidated Indebtedness" shall mean Indebtedness of the Company and
its Restricted Subsidiaries, determined on a consolidated basis in accordance
with GAAP eliminating intercompany items.
"Consolidated Modified EBITDA" for any period shall mean the sum of (a)
Consolidated Net Income during such period plus (to the extent deducted in
determining Consolidated Net Income), (b) all provisions for any Federal,
state or local income taxes or taxes determined by reference to income made
by the Company and its Restricted Subsidiaries during such period, (c)all
provisions for depreciation and amortization (other than amortization of debt
discount) made by the Company and its Restricted Subsidiaries during such
period, and (d) Consolidated Fixed Charges during such period.
"Consolidated Net Income" for any period shall mean the net income or
loss of the Company and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP after eliminating
earnings or losses attributable to outstanding Minority Interests, but
excluding in any event:
(a) any gains or losses (net of any tax effect) on the sale or
other disposition of fixed or capital assets other than in the ordinary
course of business, and any taxes on such excluded gains and any tax
deductions or credits on account of any such excluded losses;
(b) net earnings and losses of any Restricted Subsidiary
accrued prior to the date it became a Restricted Subsidiary;
(c) net earnings and losses of any business entity (other than
a Restricted Subsidiary), substantially all the assets of which have been
acquired in any manner by the Company or any Restricted Subsidiary,
realized by such business entity prior to the date of such acquisition;
(d) net earnings and losses of any business entity (other than
a Restricted Subsidiary) with which the Company or a Restricted Subsidiary
shall have consolidated or which shall have merged into or with the
Company or a Restricted Subsidiary prior to the date of such
consolidation or merger;
(e) net earnings of any business entity (other than a
Restricted Subsidiary) in which the Company or any Restricted Subsidiary
has an ownership interest unless such net earnings shall have actually
been received by the Company or such Restricted Subsidiary in the form
of cash distributions;
(f) any portion of the net earnings of any Restricted
Subsidiary which for any reason is unavailable for payment of dividends
to the Company or any other Restricted Subsidiary;
(g) earnings resulting from any reappraisal, revaluation or
write-up of fixed or capital assets other than in the ordinary course of
business; and
(h) any other extraordinary, unusual or non-recurring gain or
loss (net of any tax effect).
"Consolidated Net Worth" shall mean, as of the date of any determination
thereof, the difference of:
(a)(i) the amount of stockholders' equity as determined in
accordance with GAAP of the Company and its Subsidiaries, minus (ii)
the aggregate amount of all Restricted Investments held by the Company
and its Subsidiaries in Unrestricted Subsidiaries,
minus
(b) the excess, if any, of (1) the aggregate amount of all
Restricted Investments held by the Company or its Restricted
Subsidiaries (other than Restricted Investments held by the Company and
its Restricted Subsidiaries in Unrestricted Subsidiaries) over (2) 10%
of the amount described in clause (a) hereof;
all determined in accordance with GAAP.
"Consolidated Total Assets" shall mean as of the date of any determination
thereof, total assets of the Company and its Restricted Subsidiaries
determined on a consolidated basis in accordance with GAAP.
"Consolidated Total Capitalization" shall mean as of the date of any
determination thereof, the sum of (a) Consolidated Current Debt plus (b)
Consolidated Funded Debt plus (c) Consolidated Net Worth.
"Credit Agreement" is defined in Section 9.6.
"Current Debt" of any Person shall mean all Indebtedness of such Person
other than Funded Debt of such Person.
"Default" shall mean an event or condition the occurrence or existence of
which would,with the lapse of time or the giving of notice or both, become an
Event of Default.
"Default Rate" shall mean, for any series of Notes, that rate of interest
that is 2% perannum above the rate of interest stated in clause (a) of the
first paragraph of such series of Notes.
"Environmental Laws" shall mean any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the rules and regulations promulgated
thereunder from time to time in effect.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under Section 414 of the Code.
"Event of Default" is defined in Section 11.
"Funded Debt" of any Person shall mean all Indebtedness of such Person
deemed to be long-term in accordance with GAAP.
"GAAP" shall mean generally accepted accounting principles as in effect
at the date of the Closing in the United States of America.
"Governmental Authority" shall mean
(a) the government of
(i) the United States of America or any State or other
political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or which
asserts jurisdiction over any properties of the Company or any
Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"Guaranty" shall mean, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments
for deposit or collection) of such Person guaranteeing or in effect
guaranteeing any Indebtedness, dividend or other obligation of any other
Person in any manner, whether directly or indirectly, including (without
limitation) obligations incurred through an agreement, contingent or
otherwise, by such Person:
(a) to purchase such Indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment
of such Indebtedness or obligation, or (ii) to maintain any working
capital or other balance sheet condition or any income statement
condition of any other Person or otherwise to advance or make available
funds for the purchase or payment of such Indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such Indebtedness or
obligation of the ability of any other Person to make payment of the
Indebtedness or obligation; or
(d) otherwise to assure the owner of such Indebtedness or
obligation against loss in respect thereof.
In any computation of the Indebtedness or other liabilities of the
obligor under any Guaranty, the Indebtedness or other obligations that are
the subject of such Guaranty shall be assumed to be direct obligations of
such obligor.
"Hazardous Material" shall mean any and all pollutants, toxic or
hazardous wastes or any other substances that might pose a hazard to health
or safety, the removal of which may be required or the generation,
manufacture, refining, production, processing, treatment, storage, handling,
transportation, transfer, use, disposal, release, discharge, spillage,
seepage, or filtration of which is or shall be restricted, prohibited or
penalized by any applicable law (including, without limitation, asbestos,
urea formaldehyde foam insulation and polychlorinated biphenyls).
"holder" shall mean, with respect to any Note, the Person in whose name
such Note is registered in the register maintained by the Company pursuant to
Section 13.1.
"Indebtedness" of any Person shall mean and include all (a) obligations
of such Person for borrowed money or obligations for the deferred purchase
price of property or assets (other than accounts payable or accrued
liabilities arising in the ordinary course of business), (b) obligations
secured by any Lien upon property or assets owned by such Person, even though
such Person has not assumed or become liable for the payment of such
obligations, (c) obligations created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such
Person, notwithstanding the fact that the rights and remedies of the seller,
lender or lessor under such agreement in the event of default are limited to
repossession or sale of property, (d) Capitalized Rentals, (e) obligations of
such Person in respect of letters of credit or instruments serving a similar
function issued or accepted for its account by banks and other financial
institutions (whether or not representing obligations for borrowed money) to
the extent that any amounts have been drawn by the beneficiary thereunder and
(f) Guaranties of obligations of others of the character referred to in this
definition.
"Institutional Investor" shall mean (a) any original purchaser of a Note,
(b) any holder of a Note holding more than 2% of the aggregate principal
amount of the Notes then outstanding, and (c) any bank, trust company,
savings and loan association or other financial institution, any pension
plan, any investment company, any insurance company, any broker or dealer, or
any other similar financial institution or entity, regardless of legal form.
"Interest Expense" of the Company and its Restricted Subsidiaries for any
period shall mean all interest (including the interest component on Rentals
on Capitalized Leases) and all amortization of debt discount and expense on
any particular Indebtedness (including, without limitation, payment-in-kind,
zero coupon and other like Securities) for which such calculations are
being made, all in accordance with GAAP.
"Investments" shall mean all investments, in cash or by delivery of
property, made directly or indirectly in any property or assets or in any
Person, whether by acquisition of shares of capital stock, Indebtedness or
other obligations or Securities or by loan, advance, Guaranty, capital
contribution or otherwise; provided that "Investments" shall not mean or
include investments in property to be used or consumed in the ordinary course
of business.
"Lien" shall mean any interest in property securing an obligation owed
to, or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute or contract, and including but
not limited to the security interest lien arising from a mortgage,
encumbrance, pledge, conditional sale or trust receipt or a lease,
consignment or bailment for security purposes. The term "Lien" shall include
reservations, exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases and other title exceptions and encumbrances
(including, with respect to stock, stockholder agreements, voting trust
agreements, buy-back agreements and all similar arrangements) affecting
property. For the purposes of this Agreement, the Company or a Subsidiary
shall be deemed to be the owner of any property which it has acquired or
holds subject to a conditional sale agreement, Capitalized Lease or other
arrangement pursuant to which title to the property has been retained
by or vested in some other Person for security purposes and such retention or
vesting shall constitute a Lien.
"Make-Whole Amount" is defined in Section 8.6.
"Material" shall mean material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Company
and its Subsidiaries taken as a whole.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, operations, affairs, financial condition, assets or properties
of the Company and its Subsidiaries taken as a whole, or (b) the ability of
the Company to perform its obligations under this Agreement and the Notes, or
(c) the validity or enforceability of this Agreement or the Notes.
"Minority Interests" shall mean any equity or voting interest of any
class of a Restricted Subsidiary (other than Regulatory Shares) that are not
owned by the Company and/or one or more of its Restricted Subsidiaries.
Minority Interests shall be valued by valuing Minority Interests constituting
preferred shares at the voluntary or involuntary liquidating value of such
preferred shares, whichever is greater, and by valuing Minority Interests
constituting common shares at the book value of capital and surplus
applicable thereto adjusted, if necessary, to reflect any changes from the
book value of such common shares required by the foregoing method of
valuing Minority Interests in preferred shares.
"Multiemployer Plan" shall mean any Plan that is a "multiemployer plan"
(as such term is defined in Section 4001(a)(3) of ERISA).
"Net Worth Reset Date" shall mean the last day of the fiscal quarter in
which the minimum level of Consolidated Net Worth required to be maintained
pursuant to the first sentence of Section 10.3 equals or exceeds $135,000,000.
"Notes" is defined in Section 1.
"Officer's Certificate" shall mean a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend
to the subject matter of such certificate.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA or any successor thereto.
"Person" shall mean an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Plan" shall mean an "employee benefit plan" (as defined in Section 3(3)
of ERISA) that is or, within the preceding five years, has been established
or maintained, or to which contributions are or, within the preceding five
years, have been made or required to be made, by the Company or any ERISA
Affiliate or with respect to which the Company or any ERISA Affiliate may
have any liability.
"property" or "properties" shall mean, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible,
xxxxxx or inchoate.
"QPAM Exemption" shall mean PTE 84-14 issued by the United States
Department of Labor.
"Regulatory Shares" shall mean, with respect to any Person, shares of
such Person required to be issued as qualifying shares to directors or shares
issued to Persons other than the Company or a Wholly-owned Subsidiary in
response to regulatory requirements of foreign jurisdictions pursuant to a
resolution of the Board of Directors of such Person, so long as such
shares do not exceed 1% of the total outstanding shares of equity of such
Person and any owners of such shares irrevocably covenant with the Company to
remit to the Company or waive any dividends or distributions paid or payable
in respect of such shares.
"Rentals" shall mean and include as of the date of any determination
thereof all fixed payments (including as such all payments which the lessee
is obligated to make to the lessor on termination of the lease or surrender
of the property) payable by any Person, as lessee or sublessee under a lease
of real or personal property, but shall be exclusive of any amounts required
to be paid by such Person (whether or not designated as rents or additional
rents) on account of maintenance, repairs, insurance, taxes and similar
charges. Fixed rents under any so-called "percentage leases" shall be
computed solely on the basis of the minimum rents, if any, required to be
paid by the lessee regardless of sales volume or gross revenues.
"Required Holders" shall mean, at any time, the holders of at least 51%
in principal amount of the Notes at the time outstanding (exclusive of Notes
then owned by the Company, any of its Affiliates or any Restricted Subsidiary).
"Reset Net Worth Amount" shall mean the minimum level of Consolidated
Net Worth required to be maintained pursuant to the first sentence of Section
10.3 on the Net Worth Reset Date.
"Responsible Officer" shall mean any Senior Financial Officer and any
other officer of the Company with responsibility for the administration of
the relevant portion of this Agreement.
"Restricted Investments" shall mean all Investments of the Company and
its Restricted Subsidiaries, other than:
(a) Investments by the Company and its Restricted Subsidiaries
in and to Restricted Subsidiaries, including any Investment in a
corporation which, after giving effect to such Investment, will become a
Restricted Subsidiary;
(b) Investments of the Company and its Restricted Subsidiaries
existing as of the Closing and described on Schedule 5.4 hereto;
(c) Investments in commercial paper of corporations organized
under the laws of the United States or any state thereof maturing in 270
days or less from the date of issuance which, at the time of acquisition
by the Company or any Restricted Subsidiary, is accorded either of the
two highest ratings by Standard & Poor's Ratings Group, Xxxxx'x
Investors Service, Inc. or another nationally recognized credit rating
agency of similar standard;
(d) Investments in corporate bonds or corporate notes of
corporations organized under the laws of the United States or any state
thereof maturing in 3 years or less from the date of issuance which, in
the case of such bonds or notes which mature in 1 year or less, at the
time of acquisition by the Company or any Restricted Subsidiary, and in
the case of all other such bonds or notes, at all times, is accorded a
rating of A or better by Standard & Poor's Ratings Group or A2 or better
by Xxxxx'x Investors Service, Inc., or another nationally recognized
credit rating agency of similar standard;
(e) Investments in direct obligations of the United States
of America or any agency or instrumentality of the United States of
America, the payment or guarantee of which constitutes a full faith and
credit obligation of the United States of America, in either case,
maturing within three years from the date of acquisition thereof;
(f) Investments in certificates of deposit, Eurodollar
deposits or banker's acceptances maturing within one year from the date
of issuance thereof, either (i) issued by Bank of America NT & SA or
(ii) issued by a bank or trust company organized under the laws of the
United States or any State thereof, having capital, surplus and undivided
profits aggregating at least $100,000,000, provided that at all times,
(1) the senior unsecured long-term Indebtedness of such bank or trust
company or of the holding company of such bank or trust company is, at
the time of acquisition by the Company or any Restricted Subsidiary,
accorded either of the two highest ratings by Standard & Poor's Ratings
Group, Xxxxx'x Investors Service, Inc. or another nationally recognized
credit rating agency of similar standard or (2) such certificate of
deposit is issued by any bank or trust company organized under the laws
of the United States or any state thereof to the extent that such
Investments are fully insured by the Federal Depository Insurance
Corporation;
(g) Investments in repurchase agreements with respect to
any Security described in clause (e) of this definition entered into
with a depository institution or trust company acting as principal
described in clause (f) of this definition if such repurchase
agreements are by their terms to be performed by the repurchase obligor
and such repurchase agreements are deposited with a bank or trust
company of the type described in clause (f) of this definition;
(h) Investments in any money market fund which is classified
as a current asset in accordance with GAAP, the aggregate asset value of
which "marked to market" is at least $500,000,000 and which is managed
by a fund manager of recognized national standing, and which invests
substantially all of its assets in obligations described in clauses
(c) through (f) above;
(i) Investments in readily-marketable obligations of
Indebtedness of any State of the United States or any municipality
organized under the laws of any State of the United States or any
political subdivision thereof, which mature no later than three years
after the date of acquisition thereof and which, in the case of such
Indebtedness which matures in 1 year or less, at the time of acquisition
by the Company or any Restricted Subsidiary, and in the case of all
other such Indebtedness, at all times, is accorded either of the two
highest ratings by Standard & Poor's Ratings Group, Xxxxx'x Investors
Service, Inc. or another nationally recognized credit rating agency of
similar standard; and
(j) Investments representing loans or advances in the ordinary
course of business to executive officers of the Company, including
reasonable relocation expenses and loans or advances to executive
officers of the Company in connection with the Stock Purchase Programs
of the Company or any Restricted Subsidiary, provided that the aggregate
value of all such Investments does not exceed $5,000,000 in the aggregate
at any one time outstanding.
In valuing any Investments for the purpose of applying the limitations
set forth in the definition of Consolidated Net Worth, Investments shall be
taken at the original cost thereof, without allowance for any subsequent
write-offs or appreciation or depreciation therein, but less any amount
repaid or recovered in cash on account of capital or principal.
"Restricted Subsidiary" shall mean any Subsidiary (a) of which more than
80% (by number of votes) of the Voting Stock is beneficially owned, directly
or indirectly, by the Company or one or more Wholly-owned Restricted
Subsidiaries and (b) which is, subject to compliance with the requirements of
Section 10.7(b), designated as a Restricted Subsidiary on Schedule 5.4
or in accordance with Section 10.8.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Security" shall have the same meaning as in Section 2(1) of the
Securities Act.
"Senior Financial Officer" shall mean the chief financial officer,
principal accounting officer, treasurer or comptroller of the Company.
"Senior Indebtedness" shall mean all Indebtedness for borrowed money of
the Company which is not expressed to be subordinated or junior in rank to
any other Indebtedness for borrowed money of the Company.
"Stock Purchase Programs" shall mean any program under which officers or
other employees of the Company purchase securities of the Company and under
which all or a portion of the consideration may be in the form of promissory
notes given by such employees or borrowed by such employees from financial
institutions and supported by guarantees of the Company, as in existence from
time to time.
"Subsidiary" shall mean, as to any Person, any corporation, association
or other business entity in which such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries owns
sufficient equity or voting interests to enable it or them (as a group)
ordinarily, in the absence of contingencies, to elect a majority of the
directors (or Persons performing similar functions) of such entity, and any
partnership or joint venture if more than a 50% interest in the profits or
capital thereof is owned by such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries (unless such
partnership can and does ordinarily take major business actions without the
prior approval of such Person or one or more of its Subsidiaries). Unless
the context otherwise clearly requires, any reference to a "Subsidiary" is a
reference to a Subsidiary of the Company.
"Unrestricted Subsidiary" shall mean any Subsidiary which is not
designated as a Restricted Subsidiary on Schedule 5.4 or is not designated as
a Restricted Subsidiary in accordance with Section 10.8.
"Voting Stock" shall mean Securities of any class or classes, the holders
of which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions)
of a particular business entity.
"Wholly-owned" when used in connection with any Subsidiary shall mean a
Subsidiary of which all of the issued and outstanding equity Securities,
whether voting or nonvoting (except Regulatory Shares) and all Indebtedness
for borrowed money shall be owned by the Company and/or one or more of its
Wholly-owned Restricted Subsidiaries.
Schedule 5.4
Subsidiaries; Affiliates; Directors and Officers.
See Attached Page
Dames & Xxxxx, Inc.
List of Subsidiaries
The following is a list of subsidiaries of the Company. Unless
otherwise indicated, each of the subsidiaries is Wholly-Owned by the Company,
and each is hereby designated a Restricted Subsidiary, unless otherwise
indicated.
State or Other Jurisdiction
Name of Incorporation or Organization
Domestic Subsidiaries:
Aman Environmental Construction, Inc. California
Xxxxx Northwest, Inc. Washington
X'Xxxxx-Xxxxxxxxxx Inc. California
Seismic Risk Insurance Services, Inc. California
Walk, Xxxxxx & Associates, Inc. Louisiana
Dames & Xxxxx Management Company California
Dames & Xxxxx Servicing Company California
DQ Acquisition Company California
Dames & Xxxxx Ventures California
Dames & Xxxxx America, L.P.* California
BRW Group, Inc. Delaware
BRW, Inc. Wyoming
Dames & Xxxxx Investors, Inc. (Unrestricted) Delaware
Foreign Subsidiaries:
Bureau voor Milieumanagement BV The Netherlands
Dames & Xxxxx (BVI) Ltd. British Virgin Islands
Dames & Xxxxx, Canada Canada
Dames & Xxxxx Chile Ltda. Chile
Dames & Xxxxx GmbH & Co KG Germany
Dames and Xxxxx Iberia SA Spain
Dames & Xxxxx International SRL Italy
Dames & Xxxxx International SRL Venezuela
Dames & Xxxxx (Malaysia) Sdn Bhd Malaysia
Dames & Xxxxx Pty Ltd Australia
Dames & Xxxxx SARL France
Dames & Xxxxx (Singapore) Singapore
Dames & Xxxxx (United Kingdom) United Kingdom
HDML Pty Ltd Australia
Xxxxxxxxxxxxx Dames & Xxxxx (PNG) Pty Ltd Papua New Guinea
Norecol, Dames & Xxxxx, Inc. Canada
Professional Insurance Limited Bermuda
Saudi Arabian Dames & Xxxxx Saudi Arabia
Forestry Technical Services Pty Ltd Australia
The International Agricultural Trust Australia
* Dames & Xxxxx America, L.P. is 92% controlled by Dames & Xxxxx Management
Company, its general partner, and 8% controlled by Professional
Insurance Limited.
Dames & Xxxxx, Inc.
List of Affiliates
The following is a list of entities in which the Company directly or
indirectly controls between 5% and 50% of the equity interest. None is a
Subsidiary.
Name State or other
Jurisdiction of
Incorporation or
Organization
Partially-Owned Affiliates:
Dames & Xxxxx/Brookhill, L.L.C. Delaware
Chiyoda-Dames & Xxxxx Japan
Daines & Xxxxx-Xxxxxxx Y Xxxxxxxx Uruguay
H&R Investments Pty. Ltd. Australia
H&R Xxxx, Xxxx-H&R Australia
HR-KHW, Xxxxxxxxxx & Xxxxxxxx-Kvaerner Xxxx
and Xxxxxx Australia
HR-PCT, Xxxxxxxxxx & Xxxxxxxx-Process Control
Technology Australia
HMA International Australia
PT HMA International Pty. Ltd. Australia
Tailings Engineering and Management Services
(TEAM)
Reverse Engineering Limited United Kingdom
Name
Joint Ventures:
X'Xxxxx-Xxxxxxxxxx-D carne XX
X'Xxxxx-Xxxxxxxxxx-XX Xxxxxxx XX
X'Xxxxx-Xxxxxxxxxx-XX Xxxxxxx XX
X'Xxxxx-Xxxxxxxxxx-XX Xxxxxxx XX
X'Xxxxx-Xxxxxxxxxx-FR Xxxxxx XX
X'Xxxxx-Xxxxxxxxxx-Gannett Xxxxxxx XX
X'Xxxxx-Xxxxxxxxxx/Xxxxxx XX/GKO
X'Xxxxx-Xxxxxxxxxx-Xxx & Xxxxxxx XX
X'Xxxxx-Xxxxxxxxxx-MCC JV
Telecu-OK XX
Xxxx Associates
Urban Engineers, Inc./X'Xxxxx-Xxxxxxxxxx & Associates
Dames & Xxxxx, Inc.
Directors
Xxxxxx X. Xxxx
Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxx
Xxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxx, Xx.
Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx Xxxxxxx
Dames & Xxxxx, Inc.
Officers
Name
Title
Xxxxxx X. Xxxx
Chairman of the Board
Xxxxxx X. Xxxxxx
President
Chief Executive Officer
Xxxx X. Xxxxx
Executive Vice President
Chief Financial Officer
Xxxxx Xxxxx, Xx.
Executive Vice President,
Corporate Development
Xxxxxx X. Xxxxx
Executive Vice President,
Corporate Affairs
Xxxxxx X. Puget
Corporate Controller
Xxxxx X. Xxxxxxx
Senior Vice President/
Division Manager - Western
North America
Xxxxxxx X. Xxxx
Senior Vice President/
Division Manager - Eastern
North America
Xxxxx X. Xxxxxx
Senior Vice President/
Division Manager - Central
Xxxxxxx X. Xxxxxx
Senior Vice President/
Division Manager -
Government Services
Xxxxx X. Xxxxxx
Senior Vice President/
Division Manager -
International
Schedule 5.5
Financial Statements Delivered
1. Audited Financial Statements and Form 10-K of the Company
for the fiscal year ended the last Friday of March 1992, 1993, 1994, 1995 and
1996.
2. Unaudited Financial Statements and Form 10-Q of the
Company for the fiscal quarters ended June 28, 1996 and September 27, 1996.
Schedule 5.14
Use of Proceeds
Proceeds from the Notes will be used to repay the existing loan balance
outstanding to Bank of America set forth on Schedule 5.15 from $27,000,000 to
$7,000,000, without terminating the Credit Agreement.
Schedule 5.15
Existing Indebtedness
As of December 2, 1996
Amount
Maturity
Date
Bank Loans
Bank of America
$27,000,000
5/22/97
Westpac Banking Corp. Austral
1,580,000
7/1/97
Total Loans Outstanding
28,580,000
Letters of Credit
Bank of America
7,029,540
Various
Bank of America (Westpac Guarantee)
5,165,250
8/31/97
First Interstate Bank
4,863,000
Various
Westpac Banking Corp.
113,000
Various
Total Letters of Credit
$17,170,790
Other Obligations
Reverse Engineering Ltd. Not
1,466,000
9/6/98
Company's Officers' Guaranteed Loans
527,000
Various
Xxxxxxx & Erdal/Landmark Asso
615,000
5/31/98
Capitalized Leases (Total)
830,900
Various
Miscellaneous Notes Payable
(under $500,000) (Total)
489,000
Various
Total Obligations
$3,927,000
Senior Notes
$100,000,000
Schedule 5.15
Existing Liens
1. Standard liens on leased office equipment and computer
equipment.
2. Lien in favor of Bank of America with respect to cash on
deposit pursuant to Section 10.6 of the First Amended and Restated Credit
Agreement dated as of May 24, 1996.
Schedule 5.18
Environmental Matters
None
[Form of Note]
Dames & Xxxxx, Inc.
7.19% Senior Note, Series F,
Due December 16, 2004
No. FR- ___________, 1996
$[____________] PPN 235713 B# 0
For Value Received, the undersigned, Dames & Xxxxx, Inc. (herein called
the "Company"), a corporation organized and existing under the laws of the
State of Delaware, hereby promises to pay to [________________], or registered
assigns, the principal sum of [________________] Dollars on December 16, 2004,
with interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) on the unpaid balance thereof at the rate of 7.19% per annum from
the date hereof through and including the date of maturity, payable
semiannually, on the 29th day of March and September in each year, commencing
with the March 29 or September 29 next succeeding the date hereof, until the
principal hereof shall have become due and payable and at maturity, and (b) to
the extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreement
referred to below), payable semiannually and at maturity as aforesaid (or, at
the option of the registered holder hereof, on demand), at the rate of 9.19%
per annum.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America and originated from New York, New York, or at such other place as the
Company shall have designated by written notice to the holder of this Note as
provided in the Note Purchase Agreement referred to below.
This Note is one of the 7.19% Senior Notes, Series F, due December 16,
2004 (the "Series F Notes") of the Company in the aggregate principal amount
of $10,000,000 which, together with the Company's $10,000,000 aggregate
principal amount of 7.23% Senior Notes, Series G, due December 16, 2005 (the
"Series G Notes", said Series G Notes together with the Series F Notes, are
hereinafter referred to collectively as the "Notes") were issued pursuant to the
Note Purchase Agreement, dated as of December 16, 1996 (as from time to time
amended, the "Note Purchase Agreement"), between the Company and the
purchaser named therein, and are entitled to the benefits thereof. Each
holder of this Note will be deemed, by its acceptance hereof, (i) to have
agreed to the confidentiality provisions set forth in Section 20 of the Note
Purchase Agreement and (ii) to have made the representations set forth in
Section 6 of the Note Purchase Agreement.
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed,
by the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment
and for all other purposes, and the Company will not be affected by any notice
to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreement, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note
Purchase Agreement.
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
Dames & Xxxxx, Inc.
By
Title
[Form of Note]
Dames & Xxxxx, Inc.
7.23% Senior Note, Series G,
Due December 16, 2005
No. GR- ___________, 1996
$[____________] PPN 235713 C* 3
For Value Received, the undersigned, Dames & Xxxxx, Inc. (herein called
the "Company"), a corporation organized and existing under the laws of the
State of Delaware, hereby promises to pay to [________________], or registered
assigns, the principal sum of [________________] Dollars on December 16,
2005, with interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) on the unpaid balance thereof at the rate of 7.23% per annum from
the date hereof through and including the date of maturity, payable
semiannually, on the 29th day of March and September in each year, commencing
with the March 29 or September 29 next succeeding the date hereof, until the
principal hereof shall have become due and payable and at maturity, and (b)
to the extent permitted by law on any overdue payment (including any
overdue prepayment) of principal, any overdue payment of interest and any
overdue payment of any Make-Whole Amount (as defined in the Note Purchase
Agreement referred to below), payable semiannually and at maturity as
aforesaid (or, at the option of the registered holder hereof, on demand), at
the rate of 9.23% per annum.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America and originated from New York, New York, or at such other place as the
Company shall have designated by written notice to the holder of this Note as
provided in the Note Purchase Agreement referred to below.
This Note is one of the 7.23% Senior Notes, Series G, due December 16,
2005 (the "Series G Notes") of the Company in the aggregate principal amount
of $10,000,000 which, together with the Company's $10,000,000 aggregate
principal amount of 7.19% Senior Notes, Series F, due December 16, 2004 (the
"Series F Notes", said Series F Notes together with the Series G Notes are
hereinafter referred to collectively as the "Notes") were issued pursuant to
the Note Purchase Agreement, dated as of December 16, 1996 (as from time to
time amended, the "Note Purchase Agreement"), between the Company and the
purchaser named therein, and are entitled to the benefits thereof. Each
holder of this Note will be deemed, by its acceptance hereof, (i) to have
agreed to the confidentiality provisions set forth in Section 20 of the Note
Purchase Agreement and (ii) to have made the representations set forth in
Section 6 of the Note Purchase Agreement.
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed,
by the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment
and for all other purposes, and the Company will not be affected by any notice
to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreement, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note
Purchase Agreement.
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
Dames & Xxxxx, Inc.
By
Title
Form of Opinion of Special Counsel
to the Purchaser
The closing opinion of Xxxxxxx and Xxxxxx, special counsel to you called
for by Section 4.4(b) of the Note Purchase Agreement, shall be dated the date
of the Closing and addressed to you, shall be satisfactory in form and
substance to you and shall be to the effect that:
1. The Company is a corporation, validly existing and in
good standing under the laws of the State of Delaware and has the
corporate power and the corporate authority to execute and deliver the
Note Purchase Agreement and to issue the Notes.
2. The Note Purchase Agreement has been duly authorized by
all necessary corporate action on the part of the Company, has been
duly executed and delivered by the Company and constitutes the legal,
valid and binding contract of the Company enforceable in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent conveyance or
similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
3. The Notes have been duly authorized by all necessary
corporate action on the part of the Company, have been duly executed and
delivered by the Company and constitute the legal, valid and binding
obligations of the Company enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors' rights generally, and general principles of equity
(regardless of whether the application of such principles is considered
in a proceeding in equity or at law).
4. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Purchase Agreement do not, under
existing law, require the registration of the Notes under the Securities
Act of 1933, as amended, or the qualification of an indenture under the
Trust Indenture Act of 1939, as amended.
The opinion of Xxxxxxx and Xxxxxx shall also state that the opinion of
Xxxxxxx & XxXxxxxx is satisfactory in scope and form to Xxxxxxx and Xxxxxx
and that, in their opinion, you are justified in relying thereon.
In rendering the opinion set forth in paragraph 1 above, Xxxxxxx and
Xxxxxx may rely solely upon an examination of the Certificate of Incorporation
certified by, and a certificate of good standing of the Company from, the
Secretary of State of the State of Delaware, the By-laws of the Company and
the general business corporation law of the State of Delaware. The opinion
of Xxxxxxx and Xxxxxx is limited to the laws of the State of New York, the
general business corporation law of the State of Delaware and the Federal
laws of the United States.
With respect to matters of fact upon which such opinion is based,
Xxxxxxx and Xxxxxx may rely on appropriate certificates of public officials
and officers of the Company.
Form of Opinion of Special Counsel
to the Company
The closing opinion of Xxxxxxx & XxXxxxxx, counsel for the Company,
which is called for by Section 4.4(a) of the Note Purchase Agreement, shall
be dated the date of the Closing and addressed to you, shall be satisfactory
in scope and form to you and shall be to the effect that:
1. The Company is a corporation, duly incorporated, validly
existing and in good standing under the laws of the State of Delaware,
has the corporate power and the corporate authority to execute and
perform the Note Purchase Agreement and to issue the Notes and has the
full corporate power and the corporate authority to conduct the
activities in which it is now engaged and is duly licensed or qualified
and is in good standing as a foreign corporation in each jurisdiction
in which the character of the properties owned or leased by it or the
nature of the business transacted by it makes such licensing or
qualification necessary.
2. Each Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and is duly licensed or qualified and is in good standing
in each jurisdiction in which the character of the properties owned or
leased by it or the nature of the business transacted by it makes such
licensing or qualification necessary and all of the issued and
outstanding shares of capital stock of each such Subsidiary have been
duly issued, are fully paid and non-assessable and are owned by the
Company, by one or more Subsidiaries, or by the Company and one or more
Subsidiaries.
3. The Note Purchase Agreement has been duly authorized by
all necessary corporate action on the part of the Company, has been duly
executed and delivered by the Company and constitutes the legal, valid
and binding contract of the Company enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent conveyance or
similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
4. The Notes have been duly authorized by all necessary
corporate action on the part of the Company, have been duly executed and
delivered by the Company and constitute the legal, valid and binding
obligations of the Company enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors' rights generally, and general principles of equity
(regardless of whether the application of such principles is considered
in a proceeding in equity or at law).
5. No approval, consent or withholding of objection on the
part of, or filing, registration or qualification with, any governmental
body, Federal, state or local, is necessary in connection with the
execution, delivery and performance of the Note Purchase Agreement or
the Notes.
6. The issuance and sale of the Notes and the execution,
delivery and performance by the Company of the Note Purchase Agreement
do not conflict with or result in any breach of any of the provisions
of or constitute a default under or result in the creation or imposition
of any Lien upon any of the property of the Company pursuant to
the provisions of the Restated Articles of Incorporation or By-laws of
the Company or any agreement or other instrument known to such counsel
to which the Company is a party or by which the Company may be bound.
7. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Purchase Agreement do not, under
existing law, require the registration of the Notes under the Securities
Act of 1933, as amended, or the qualification of an indenture under the
Trust Indenture Act of 1939, as amended.
8. The issuance of the Notes and the use of the proceeds of
the sale of the Notes in accordance with the provisions of and
contemplated by the Note Purchase Agreement do not violate or conflict
with Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System.
9. There is no litigation pending or, to the best knowledge
of such counsel, threatened which in such counsel's opinion could
reasonably be expected to have a materially adverse effect on the
Company's business or assets or which would impair the ability of the
Company to issue and deliver the Notes or to comply with the provisions
of the Note Purchase Agreement.
10. The Company is not a "investment company," or a company
"controlled" by an "investment company," under the Investment Company
Act of 1940, as amended.
11. The choice of New York as the governing law of the Note
Purchase Agreement and the Notes is valid and will be recognized and
applied by the courts of the State of New York and California.
The opinion of Xxxxxxx & XxXxxxxx shall cover such other matters
relating to the sale of the Notes as you may reasonably request. With
respect to matters of fact on which such opinion is based, such counsel shall
be entitled to rely on appropriate certificates of public officials and
officers of the Company. The opinion of Xxxxxxx & XxXxxxxx shall cover all
applicable laws of the States of California, all applicable Federal laws and
the general business corporation law of the State of Delaware.
