Xxxxxxx Worldwide Associates, Inc.
Note Agreement
Dated as of September 15, 1997
Re: $25,000,000 7.15% Senior Notes
Due October 15, 2007
Table of Contents
Section Heading Page
Section 1. Description of Notes and Commitment . . . . . . . . . . 1
Section 1.1. Description of Notes . . . . . . . . . . . . . . . 1
Section 1.2. Commitment, Closing Date . . . . . . . . . . . . . 1
Section 2. Prepayment of Notes . . . . . . . . . . . . . . . . . . 2
Section 2.1. Required Prepayments . . . . . . . . . . . . . . . 2
Section 2.2. Optional Prepayments of Notes . . . . . . . . . . . 3
Section 2.3. Prepayment of Notes upon Change of Control . . . . 3
Section 2.4. Notice of Optional Prepayments . . . . . . . . . . 4
Section 2.5. Allocation of Prepayments . . . . . . . . . . . . . 5
Section 2.6. Direct Payment . . . . . . . . . . . . . . . . . . 5
Section 3. Representations . . . . . . . . . . . . . . . . . . . . 5
Section 3.1. Representations of the Company . . . . . . . . . . 5
Section 3.2. Representations of the Purchaser . . . . . . . . . 5
Section 4. Closing Conditions . . . . . . . . . . . . . . . . . . . 6
Section 4.1. Closing Certificate . . . . . . . . . . . . . . . . 6
Section 4.2. Legal Opinions . . . . . . . . . . . . . . . . . . 6
Section 4.3. Company's Existence and Authority . . . . . . . . . 6
Section 4.4. Consent of Holders of Other Securities . . . . . . 6
Section 4.5. Legality of Investment . . . . . . . . . . . . . . 7
Section 4.6. Satisfactory Proceedings . . . . . . . . . . . . . 7
Section 4.7. Waiver of Conditions . . . . . . . . . . . . . . . 7
Section 4.8. Private Placement Numbers . . . . . . . . . . . . . 7
Section 4.9. Payment of Closing Costs . . . . . . . . . . . . . 7
Section 5. Company Covenants . . . . . . . . . . . . . . . . . . . 7
Section 5.1. Corporate Existence, Etc . . . . . . . . . . . . . 7
Section 5.2. Insurance . . . . . . . . . . . . . . . . . . . . . 8
Section 5.3. Taxes, Claims for Labor and Materials,
Compliance with Laws . . . . . . . . . . . . . . . 8
Section 5.4. Maintenance, Etc . . . . . . . . . . . . . . . . . 8
Section 5.5. Nature of Business . . . . . . . . . . . . . . . . 8
Section 5.6. Limitations on Indebtedness . . . . . . . . . . . . 9
Section 5.7. Limitation on Liens . . . . . . . . . . . . . . . . 10
Section 5.8. Mergers, Consolidations, Sales of Assets,
Etc . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.9. Consolidated Net Worth . . . . . . . . . . . . . . 16
Section 5.10. Fixed Charge Coverage Ratio . . . . . . . . . . . . 16
Section 5.11. Distributions . . . . . . . . . . . . . . . . . . . 16
Section 5.12. Investments . . . . . . . . . . . . . . . . . . . . 17
Section 5.13. Repurchase of Notes . . . . . . . . . . . . . . . . 19
Section 5.14. Transactions with Affiliates . . . . . . . . . . . 19
Section 5.15. ERISA Complianc . . . . . . . . . . . . . . . . . . 19
Section 5.16. Reports and Rights of Inspection . . . . . . . . . 20
Section 6. Events of Default and Remedies Therefor . . . . . . . . 23
Section 6.1. Events of Default . . . . . . . . . . . . . . . . . 23
Section 6.2. Notice to Holders . . . . . . . . . . . . . . . . . 25
Section 6.3. Acceleration of Maturities . . . . . . . . . . . . 25
Section 6.4. Rescission of Acceleration . . . . . . . . . . . . 26
Section 7. Amendments, Waivers And Consents . . . . . . . . . . . . . 26
Section 7.1. Consent Required . . . . . . . . . . . . . . . . . 26
Section 7.2. Effect of Amendment or Waiver . . . . . . . . . . . 26
Section 7.3. Solicitation of Holders . . . . . . . . . . . . . . 26
Section 8. Interpretation of Agreement; Definitions . . . . . . . . . 27
Section 8.1. Definitions . . . . . . . . . . . . . . . . . . . . 27
Section 8.2. Accounting Principles . . . . . . . . . . . . . . . 35
Section 8.3. Directly or Indirectly . . . . . . . . . . . . . . 35
Section 9. Miscellaneous . . . . . . . . . . . . . . . . . . . . . 35
Section 9.1. Registration of Notes . . . . . . . . . . . . . . . 35
Section 9.2. Exchange of Notes . . . . . . . . . . . . . . . . . 35
Section 9.3. Loss, Theft, Etc. of Notes . . . . . . . . . . . . 36
Section 9.4. Expenses, Stamp Tax Indemnity . . . . . . . . . . . 36
Section 9.5. Powers and Rights Not Waived; Remedies
Cumulative . . . . . . . . . . . . . . . . . . . . 36
Section 9.6. Notices . . . . . . . . . . . . . . . . . . . . . . 37
Section 9.7. Successors and Assigns . . . . . . . . . . . . . . 37
Section 9.8. Survival of Covenants and Representations . . . . . 37
Section 9.9. Severability . . . . . . . . . . . . . . . . . . . 37
Section 9.10. Reproduction of Documents . . . . . . . . . . . . . 37
Section 9.11. Governing Law . . . . . . . . . . . . . . . . . . . 38
Section 9.12. Captions . . . . . . . . . . . . . . . . . . . . . 38
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Attachments to Note Agreement:
Schedule I - Name and Address of Purchaser
Schedule II - Description of Subsidiaries and Indebtedness of the
Company and its Restricted Subsidiaries
Exhibit A - Form of 7.15% Senior Note
Exhibit B - Closing Certificate of the Company
Exhibit C - Description of Closing Opinion of Special Counsel
Exhibit D - Description of Closing Opinion of Independent Counsel
to Company
Xxxxxxx Worldwide Associates, Inc.
0000 Xxxxxx Xxxx
X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Note Agreement
Re: $25,000,000 7.15% Senior Notes
Due October 15, 2007
Dated as of September 15, 1997
The Northwestern Mutual
Life Insurance Company
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
The undersigned, Xxxxxxx Worldwide Associates, Inc., a Wisconsin
corporation, its successors and assigns (the "Company"), agrees with you
(the "Purchaser") as follows:
Section 1. Description of Notes and Commitment.
Section 1.1. Description of Notes. The Company will authorize the
issue and sale of $25,000,000 aggregate principal amount 7.15% Senior
Notes due October 15, 2007 (the "Notes") to be dated the date of issue, to
bear interest from such date at the rate of 7.15% per annum, payable
semiannually on the fifteenth day of October and April in each year
(commencing April 15, 1998) and at maturity and to bear interest on
overdue principal (including any overdue required or optional prepayment
of principal) and Make-Whole Amount, if any, and (to the extent legally
enforceable) on any overdue installment of interest at the Overdue Rate
(as hereinafter defined) after the due date thereof, whether by
acceleration or otherwise, until paid, to be expressed to mature on
October 15, 2007, and to be substantially in the form attached hereto as
Exhibit A.
Interest on the Notes shall be computed on the basis of a 360-day
year of twelve 30-day months. The Notes are not subject to prepayment or
redemption at the option of the Company prior to their express maturity
dates except on the terms and conditions and in the amounts and with the
Make-Whole Amount, if any, set forth in Section 2 of this Agreement. The
terms which are capitalized herein shall have the meanings set forth in
Section 8.l hereof unless the context shall otherwise require.
Section 1.2. Commitment, Closing Date. Subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue and sell to the
Purchaser, and the Purchaser agrees to purchase from the Company, on the
Closing Date mentioned below, Notes in the aggregate principal amount of
$25,000,000 at a price of 100% of the principal amount thereof.
Delivery of the Notes to be purchased by the Purchaser will be made
at the offices of Xxxxxxx and Xxxxxx, 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000, against payment therefor by wire transfer of Federal or other funds
current and immediately available at the principal office of Huntington
National Bank, ABA #000000000 for Account No._0000-000000-0, in the amount
of the purchase price, at or about 10:00 a.m., on October 15, 1997 (the
"Closing Date"). The Notes delivered to the Purchaser on the Closing Date
will be delivered to the Purchaser in the form of a single registered Note
in the form attached hereto as Exhibit A (unless different denominations
are specified by the Purchaser), registered in the Purchaser's name or in
the name of the Purchaser's nominee, all as the Purchaser may specify at
any time prior to the date fixed for delivery.
Section 2. Prepayment of Notes.
No prepayment of the Notes may be made except to the extent and in
the manner expressly provided in this Agreement.
Section 2.1. Required Prepayments.
(a) Required Prepayment of Notes. In addition to paying the entire
remaining outstanding principal amount and the interest due on the Notes
on the maturity date thereof, the Company agrees to prepay and apply and
there shall become due and payable the following sums in respect of the
aggregate principal indebtedness evidenced by the Notes:
Applicable Amount of
Required
Required Payment Date Principal Payment
October 15, 2001 $2,000,000
October 15, 2002 $2,000,000
October 15, 2003 $2,000,000
October 15, 2004 $2,000,000
October 15, 2005 $3,000,000
October 15, 2006 $7,000,000
(b) Effects of Required Prepayments.
No Make-Whole Amount shall be payable in connection with any required
prepayment made pursuant to Section 2.1(a). Except as set forth in the
next succeeding paragraph, any payment of less than all the Notes pursuant
to the provisions of Section 2.2 shall not relieve the Company of the
obligation to make required payments or prepayments on the Notes in
accordance with the terms of Section 2.1(a).
In the event the Company shall prepay less than all of the Notes
pursuant to Section 2.2 or repurchase any Notes in accordance with Section
5.12, the amount of the prepayments required by Section 2.1(a) shall be
reduced by an amount which is the same percentage of such required
prepayment as the percentage that the principal amount of Notes so prepaid
or repurchased is of the aggregate principal amount of outstanding Notes
immediately prior to such prepayment or repurchase.
Section 2.2. Optional Prepayments of Notes. In addition to the
prepayments required by Section 2.1(a) and Section 2.3, the Company shall
have the privilege at any time of prepaying the then outstanding Notes,
either in whole or in part (but if in part then in units of $100,000 in
the aggregate or an integral multiple of $10,000 in the aggregate in
excess thereof) by payment of the principal amount of the Notes and
accrued interest thereon to the date of such prepayment, together with an
amount equal to the then applicable Make-Whole Amount, determined as of
three business days prior to the date of such prepayment pursuant to this
Section 2.2.
Section 2.3. Prepayment of Notes upon Change of Control. In the
event that any Change of Control (as hereinafter defined) shall occur, the
Company will give written notice (the "Company Notice") of such fact in
the manner provided in Section 9.6 of this Agreement to the holders of the
Notes. The Company Notice shall be delivered promptly and in any event no
later than three business days following the occurrence of any Change of
Control. The Company Notice shall (a) describe the facts and
circumstances of such Change of Control in reasonable detail, (b) make
reference to this Section 2.3 and the right of the holders of the Notes to
require payment on the terms and conditions provided for in this Section
2.3, (c) offer in writing to prepay the outstanding Notes, together with
accrued interest to the date of prepayment and an amount equal to the then
applicable Make-Whole Amount and (d) specify the date for such prepayment
(the "Change of Control Prepayment Date") which Change of Control
Prepayment Date shall be no earlier than fifteen (15) days after the
receipt of the Company Notice and no later than thirty (30) days after the
date the Change of Control occurred. The holders of at least 40% in
aggregate principal amount of outstanding Notes shall have the right, by
written notice given to the Company not later than three business days
prior to the Change of Control Prepayment Date, to demand that the Company
prepay all (but not less than all) of the Notes then held by such holders
on such Change of Control Prepayment Date. If no such request shall be
made by a holder, such holder shall be deemed to have declined the
Company's offer of prepayment. The prepayment price of any Notes payable
upon the Change of Control Prepayment Date shall be an amount equal to
100% of the principal amount of the Notes so to be prepaid and accrued
interest thereon to the date of such prepayment, together with an amount
equal to the then applicable Make-Whole Amount, determined as of three
business days prior to the date of such prepayment pursuant to this
Section 2.3.
Without limiting the foregoing, notwithstanding any failure on the
part of the Company to give the Company Notice herein required as a result
of the occurrence of a Change of Control, each holder of the Notes shall
have the right by delivery of written notice to the Company to require the
Company to prepay, and the Company will prepay, such holder's Notes in
full, together with accrued interest thereon to the date of prepayment and
an amount equal to the Make-Whole Amount at any time within ninety days
after such holder has actual knowledge of any such Change of Control.
Notice of any required prepayment pursuant to this Section 2.3 shall be
delivered by any holder of Notes which was entitled to, but did not
receive, such Company Notice to the Company after such holder has actual
knowledge of such Change of Control. On the date (the "Delayed Prepayment
Date") designated in such holder's notice (which shall be not earlier than
10 business days after the date of such holder's notice), the Company
shall prepay in full all Notes held by such holder together with accrued
interest thereon to the date of prepayment and an amount equal to the
Make-Whole Amount, determined as of three business days prior to the date
of such prepayment pursuant to this Section 2.3. If the holder of any
Note gives any notice pursuant to this second paragraph of Section 2.3,
the Company shall give a Company Notice within two business days of
receipt of such notice and identify the Delayed Prepayment Date to all
holders of the Notes and each of such holders shall then and thereupon
have the rights with respect to the prepayment of its Notes as set forth
in this Section 2.3; provided only that any date for prepayment of such
holder's Notes shall be the Delayed Prepayment Date.
As used in this Section 2.3, a "Change of Control" of the Company
shall be deemed to have occurred at such time or times as the Xxxxxxx
Family (as hereinafter defined), shall fail to own, directly or
indirectly, with full power to vote or to direct the voting of, more than
51% of the voting power of the Voting Stock of the Company.
The term "Xxxxxxx Family" shall mean, collectively, (i) Xxxxxx X.
Xxxxxxx, his spouse, their children or grandchildren; (ii) any trust
directly or indirectly controlled by any one or more of such persons
described in (i) or any corporation described in (iii) below or any
present or former officer of any such corporation; (iii) any corporation
or partnership in which voting control as to such entity is held, directly
or indirectly, by any one or more of such persons described in (i) or such
trusts described in (ii) or by the executor or administrator of the estate
or other legal representative of any such person described in (i); and
(iv) the executor or administrator of the estate or other legal
representative of any person described in (i).
Section 2.4. Notice of Optional Prepayments. The Company will give
notice of any prepayment of the Notes pursuant to Section 2.2 to each
holder thereof not less than 30 days nor more than 60 days before the date
fixed for such optional prepayment specifying (a) such date, (b) the
principal amount of the holder's Notes to be prepaid on such date, (c)
that a Make-Whole Amount may be payable, (d) the date when such Make-Whole
Amount will be calculated which shall be the date three business days
prior to the prepayment date, (e) the estimated Make-Whole Amount and (f)
the accrued interest applicable to such prepayment. Notice of prepayment
having been so given, the aggregate principal amount of the Notes
specified in such notice, together with the Make-Whole Amount, if any, and
accrued interest thereon shall become due and payable on the prepayment
date. Not later than two business days prior to the prepayment date
specified in such notice, the Company shall provide each holder of a Note
written notice of the Make-Whole Amount, if any, payable in connection
with such prepayment and, whether or not any Make-Whole Amount is payable,
a reasonably detailed computation thereof.
Section 2.5. Allocation of Prepayments. All partial prepayments of
Notes shall be applied on all outstanding Notes being prepaid ratably in
accordance with the unpaid principal amounts thereof.
Section 2.6. Direct Payment. Notwithstanding anything to the
contrary in this Agreement or the Notes, in the case of any Note owned by
the Purchaser or the Purchaser's nominee or owned by any other
Institutional Holder or its nominee which has given written notice to the
Company requesting that the provisions of this Section 2.6 shall apply,
the Company will promptly and punctually pay when due the principal
thereof and the Make-Whole Amount, if any, and interest thereon, without
any presentment thereof directly to the Purchaser, the Purchaser's nominee
or any such subsequent Institutional Holder or its nominee at its address
or such nominee's address set forth in Schedule I or at such other address
as the Purchaser, the Purchaser's nominee or any such subsequent
Institutional Holder may from time to time designate in writing to the
Company or, if an account with a United States bank is designated for the
Purchaser or the Purchaser's nominee on Schedule I hereto or in any
written notice to the Company from the Purchaser, the Purchaser's nominee
or any such subsequent Institutional Holder, the Company will make such
payments in immediately available funds to such bank account before 10:00
A.M., marked for attention as indicated, or in such other manner or to
such other account in any bank in the United States as the Purchaser, the
Purchaser's nominee or any such subsequent Institutional Holder may from
time to time direct in writing.
Section 3. Representations.
Section 3.1. Representations of the Company. The Company
represents and warrants that all representations set forth in the form of
Closing Certificate attached hereto as Exhibit B are true and correct as
of the date of the execution and delivery hereof by the Company and are
incorporated herein by reference with the same force and effect as though
herein set forth in full.
Section 3.2. Representations of the Purchaser. (a) The Purchaser
represents, and in entering into this Agreement the Company understands,
that the Purchaser is acquiring the Notes for the purpose of investment
and not with a view to the distribution thereof; provided that the
disposition of the Purchaser's property shall at all times be and remain
within its control. The Purchaser acknowledges that the Notes have not
and will not be registered under the Act and hereby agrees that it will
not reoffer, resell, pledge or otherwise transfer the Notes purchased by
it under this Agreement except pursuant to any available exemption from
the requirements of Section 5 of the Act and in accordance with any
applicable state securities laws.
(b) The Purchaser represents that the source of funds to be used by
the Purchaser to pay the purchase price of the Notes to be purchased
hereunder is an "insurance company general account" within the meaning of
Department of Labor Prohibited Transaction Exemption 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 the state of Wisconsin.
As used in this Section 3.2(b), the terms "employee benefit plan" and
"separate account" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.
Section 4. Closing Conditions.
The obligation of the Purchaser to purchase the Notes on the Closing
Date shall be subject to the performance by the Company of its agreements
hereunder which by the terms hereof are to be performed at or prior to the
time of delivery of the Notes and to the following further conditions
precedent:
Section 4.1. Closing Certificate. Concurrently with the delivery
of Notes to the Purchaser on the Closing Date, the Purchaser shall have
received a Closing Certificate dated the Closing Date, signed by the Chief
Financial Officer of the Company, substantially in the form attached
hereto as Exhibit B, the truth and accuracy of which on the Closing Date
shall be a condition to the Purchaser's obligation to purchase the Notes
proposed to be purchased by the Purchaser.
Section 4.2. Legal Opinions. Concurrently with the delivery of
Notes to the Purchaser on the Closing Date, the Purchaser shall have
received from Xxxxxxx and Xxxxxx, who are acting as special counsel to the
Purchaser in this transaction and from Foley_& Lardner, independent
counsel to the Company, their respective opinions dated the Closing Date,
in form and substance satisfactory to the Purchaser, and covering the
matters set forth in Exhibits C and D, attached hereto.
Section 4.3. Company's Existence and Authority. On or prior to the
Closing Date, the Purchaser shall have received, in form and substance
reasonably satisfactory to the Purchaser, such documents and evidence with
respect to the Company as the Purchaser may reasonably request in order to
establish the existence and good standing of the Company and the
authorization of the transactions contemplated by this Agreement.
Section 4.4. Consent of Holders of Other Securities. Any consents
or approvals required to be obtained from any holder or holders of any
outstanding Security of the Company and any amendments of agreements
pursuant to which any Securities may have been issued which will be
necessary to permit the consummation of the transactions contemplated
hereby on the Closing Date shall have been obtained and all such consents
or amendments shall be satisfactory in form and substance to the
Purchaser.
Section 4.5. Legality of Investment. The Notes to be purchased by
the Purchaser shall be a legal investment for the Purchaser under the laws
of each jurisdiction to which the Purchaser may be subject (without resort
to any so-called basket provisions to such laws).
Section 4.6. Satisfactory Proceedings. All proceedings taken in
connection with the transactions contemplated by this Agreement, and all
documents necessary to the consummation thereof, shall be satisfactory in
form and substance to the Purchaser, and the Purchaser shall have received
a copy (executed or certified as may be appropriate) of all legal
documents or proceedings taken in connection with the consummation of such
transactions.
Section 4.7. Waiver of Conditions. If on the Closing Date the
Company fails to tender to the Purchaser the Notes to be issued to the
Purchaser on such date or if the conditions specified in this Section 4
have not been fulfilled, the Purchaser may thereupon elect to be relieved
of all further obligations under this Agreement. Without limiting the
foregoing, if the conditions specified in this Section 4 have not been
fulfilled, the Purchaser may waive compliance by the Company with any such
condition to such extent as the Purchaser may in its sole discretion
determine. Nothing in this Section 4.7 shall operate to relieve the
Company of any of its obligations hereunder or to waive the Purchaser's
rights against the Company.
Section 4.8. Private Placement Numbers. The Company shall have
obtained for the Notes a Private Placement Number issued by Standard &
Poor's CUSIP Bureau (in cooperation with the Securities Valuation office
of the National Association of Insurance Commissioners).
Section 4.9. Payment of Closing Costs. The Company shall have paid
the costs, expenses and disbursements of the Purchaser's special counsel
which are reflected in statements of such counsel rendered prior to the
Closing pursuant to Section 9.4; and thereafter (without limiting the
provisions of Section 9.4) the Company will pay, promptly upon receipt of
any supplemental statements therefor, additional costs or fees, if any,
and expenses and disbursements of the Purchaser's counsel in connection
with the Closing (including disbursements unposted as of the Closing Date)
and attention to post-Closing matters.
Section 5. Company Covenants.
From and after the date of this Agreement and continuing so long as
any amount remains unpaid on any date:
Section 5.1. Corporate Existence, Etc. The Company will preserve
and keep in force and effect, and will cause each Restricted Subsidiary to
preserve and keep in force and effect, its corporate existence. The
Company will preserve and keep in force and effect, and will cause each
Restricted Subsidiary to preserve and keep in force and effect, all
franchises, licenses and permits necessary to the proper conduct of its
business. The foregoing provisions of this Section 5.1 shall not,
however, prevent any transaction not prohibited by Section 5.8.
Section 5.2. Insurance. The Company will maintain, and will cause
each Restricted Subsidiary to maintain, insurance coverage by financially
sound and reputable insurers consistent with such forms and amounts and
against such risks as are presently maintained by the Company and its
Restricted Subsidiaries provided that, notwithstanding the foregoing, the
Company and its Restricted Subsidiaries shall maintain insurance coverage
in such forms and amounts and against such risks as are customary for
business entities of established reputation engaged in the same or a
similar business and owning and operating similar properties.
Section 5.3. Taxes, Claims for Labor and Materials, Compliance with
Laws. (a) The Company will promptly pay and discharge, and will cause
each Restricted Subsidiary promptly to pay and discharge, all lawful
taxes, assessments and governmental charges or levies imposed upon it or
upon or in respect of all or any part of its property or business, all
trade accounts payable in accordance with usual and customary business
terms, and all claims for work, labor or materials, which if unpaid might
become a Lien or charge upon any of its property; provided the Company or
such Restricted Subsidiary shall not be required to pay any such tax,
assessment, charge, levy, account payable or claim if (1) the validity,
applicability or amount thereof is being contested in good faith by
appropriate actions or proceedings which will prevent the forfeiture or
sale of any property of the Company or such Restricted Subsidiary or any
material interference with the use thereof by the Company or such
Restricted Subsidiary, (2) the Company or such Restricted Subsidiary shall
set aside on its books, reserves deemed by the Company to be adequate with
respect thereto and (3) the nonpayment of all such taxes and assessments
in the aggregate could not reasonably be expected to have a material
adverse effect on the Company and its Restricted Subsidiaries.
(b) The Company will promptly comply, and will cause each Restricted
Subsidiary to comply, in all material respects with all laws, ordinances
or governmental rules and regulations to which it is subject, including
without limitation, the Occupational Safety and Health Act of 1970, as
amended, ERISA, and all laws, ordinances, governmental rules and
regulations relating to environmental protection in all applicable
jurisdictions, the violation of which would materially and adversely
affect the properties, business, prospects, profits or condition of the
Company and its Restricted subsidiaries, taken as whole, or would result
in any Lien not permitted under Section 5.7.
Section 5.4. Maintenance, Etc. The Company will maintain, preserve
and keep, and will cause each Restricted Subsidiary to maintain, preserve
and keep, its material properties which are used or useful in the conduct
of its business (whether owned in fee or a leasehold interest) in good
repair and working order, ordinary wear and tear excepted, and from time
to time will make all necessary repairs, replacements, renewals and
additions so that at all times the efficiency thereof shall be maintained.
Section 5.5. Nature of Business. Neither the Company nor any
Restricted Subsidiary will engage in any business if, as a result, the
general nature of the business, taken on a consolidated basis, which would
then be engaged by the Company and its Restricted Subsidiaries would be
substantially changed from the general nature of the business engaged by
the Company and its Restricted Subsidiaries on the date of this Agreement.
Section 5.6. Limitations on Indebtedness. (a) The Company will
not, and will not permit any Restricted Subsidiary to, create, issue,
assume, guarantee or otherwise incur or in any manner become liable in
respect of any additional Current Debt or Funded Debt except:
(1) the Notes;
(2) Current Debt and Funded Debt of the Company and its
Restricted Subsidiaries outstanding as of the date of this Agreement
and described on Schedule II attached hereto;
(3) Current Debt or 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,
Consolidated Funded Debt would not exceed 55% of Consolidated Total
Capitalization, provided that for purposes of any determination of
additional Funded Debt to be issued or incurred within the limitation
of this Section 5.6(a)(3), the Average Outstanding Balance of
Consolidated Current Debt (as defined in Section 5.6(e) below)
computed for the Compliance Period (as defined in Section 5.6(e)
below) preceding the date of any such determination shall be deemed
to constitute outstanding Funded Debt of the Company incurred as of
the last day of such Compliance Period and, except to the extent that
any such Current Debt was refinanced with Funded Debt, in which case
such Current Debt, to the extent it was refinanced with Funded Debt,
will not be deemed to constitute Funded Debt, shall be deemed
outstanding at all times prior to the end of the next Compliance
Period; and
(4) additional Current Debt or Funded Debt of a Restricted
Subsidiary to the Company or to an Eighty Percent-Owned Restricted
Subsidiary.
(b) The Company will not at any time permit the sum of (i) Current
Debt and Funded Debt of Restricted Subsidiaries (other than Current Debt
and Funded Debt owed to the Company or an Eighty Percent-Owned Restricted
Subsidiary), plus (ii) Funded Debt of the Company and Restricted
Subsidiaries secured by Liens permitted by Section 5.7(a)(9) to exceed 25%
of Consolidated Tangible Assets.
(c) Any Person which becomes a Restricted Subsidiary after the date
hereof shall for all purposes of this Section 5.6 be deemed to have
created, assumed or incurred or issued at the time it becomes a Restricted
Subsidiary all Current Debt and Funded Debt of such Person existing
immediately after it becomes a Restricted Subsidiary.
(d) The renewal, extension or refunding of any Current Debt or
Funded Debt issued or incurred in accordance with the limitations of this
Section 5.6 shall constitute the issue of additional Current Debt or
Funded Debt, as the case may be, which is, in turn, subject to the
limitations of the applicable provisions of this Section 5.6.
(e) For the purposes of Section 5.6(a) hereof, the following terms
shall have the meanings ascribed to them below:
"Average Outstanding Balance of Consolidated Current Debt" shall
mean the average of the aggregate unpaid principal amounts of
Consolidated Current Debt outstanding on each of the Company's July
fiscal month-end, August 15, the Company's August fiscal month-end,
September 15 and the Company's September fiscal month-end for each
Compliance Period.
"Compliance Period" shall mean the period beginning on the date
of the Company's July fiscal month-end and ending on the date of the
Company's September fiscal month-end in each calendar year.
Section 5.7. Limitation on Liens. (a) The Company will not, and
will not permit any Restricted Subsidiary 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 Restricted
Subsidiary to acquire any property or assets pursuant to conditional sales
agreements or other title retention devices, except:
(1) 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 5.3;
(2) Liens of or resulting from any judgment or award, the time
for the appeal or petition for rehearing of which shall not have
expired, or in respect of which the Company or a Restricted
Subsidiary shall at any time in good faith be prosecuting an appeal
or proceeding for a review and in respect of which a stay of
execution pending such appeal or proceeding for review shall have
been secured;
(3) Liens incidental to the conduct of business or the
ownership of properties and assets (including, without limitation,
warehousemen's and attorneys' liens, statutory landlords' liens,
workers' compensation liens and ERISA liens) and deposits, pledges or
Liens to secure the performance of bids, tenders or trade contracts,
or to secure statutory obligations, surety or appeal bonds or other
Liens of like general nature incurred in the ordinary course of
business and not in connection with the borrowing of money; provided
that the aggregate amount of the obligations so secured will not
materially impair the value of the assets so secured or the use
thereof in the ordinary course of business and provided, further,
that in each case, the obligation so secured will not exceed
$1,000,000 and is not overdue or, if overdue, is being contested in
good faith by appropriate actions or proceedings;
(4) 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 are necessary for the conduct of the
activities of the Company and its Restricted Subsidiaries or which
customarily exist on properties of Persons engaged in similar
activities and similarly situated and which do not in any event
materially impair their use in the operation of the business of the
Company and its Restricted Subsidiaries;
(5) Liens securing Indebtedness of a Restricted Subsidiary to
the Company or to an Eighty Percent-Owned Restricted Subsidiary;
(6) Liens existing as of the date of this Agreement securing
Indebtedness of the Company or any Restricted Subsidiary outstanding
on such date and described on Schedule II attached to this Agreement;
(7) Liens incurred after the date of this Agreement given to
secure the payment of the cost of the acquisition or construction of
fixed assets useful and intended to be used in carrying on the
business of the Company or a Restricted Subsidiary; provided that (i)
the Lien shall attach solely to the fixed assets acquired or
constructed, (ii) the Lien shall have been created or incurred within
twelve (12) months of the date of acquisition or the date of
completion of construction, as the case may be, of such fixed assets,
(iii) at the time of the acquisition or construction of such fixed
assets the aggregate amount remaining unpaid on all Indebtedness
secured by Liens on such fixed assets whether or not assumed by the
Company or a Restricted Subsidiary shall not exceed an amount equal
to the lesser of the total cost or fair market value at the time of
acquisition or completion of construction of such fixed assets (as
determined in good faith by the Board of Directors of the Company)
and (iv) all such Indebtedness shall have been incurred within the
applicable limitations of Section 5.6;
(8) Liens existing on any assets at the time of acquisition
thereof or at the time of acquisition by the Company or a Restricted
Subsidiary of any business entity then owning such assets, whether or
not such existing Liens were given to secure the payment of the
purchase price of the assets to which they attach, so long as they
were not incurred, extended or renewed in contemplation of such
acquisition; provided that (i) any such Lien shall attach solely to
the assets acquired or the assets of such business entity and (ii) at
the time of the acquisition of the assets or business entity, as the
case may be, the aggregate amount remaining unpaid on all
Indebtedness secured by Liens on such assets (whether or not assumed
by the Company or such Restricted Subsidiary) shall not be in excess
of the fair market value of such assets at the time of such
acquisition (as determined in good faith by the Board of Directors of
the Company);
(9) Liens incurred after the date of this Agreement given to
secure Funded Debt of the Company or any Restricted Subsidiary in
addition to the Liens permitted by the preceding clauses (1) through
(8) hereof; provided that all Indebtedness secured by such Liens
shall have been incurred within the applicable limitations of Section
5.6; and
(10) any extension, renewal or replacement of any Lien permitted
by the preceding clauses (6), (7) and (8) of this Section 5.7 in
respect of the same property theretofore subject to such Lien in
connection with the extension, renewal or refunding of the
Indebtedness secured thereby; provided that (i) such Lien shall
attach solely to the same such property and (ii) such extension,
renewal or refunding of such Indebtedness shall have been incurred
within the applicable limitations of Section 5.6.
(b) In the event any property or assets of the Company or any
Restricted Subsidiary are subjected to a Lien not otherwise permitted by
this Section 5.7, the Company will make or cause to be made provision
whereby the Notes will be secured, to the full extent permitted under
applicable law, equally and ratably with all other obligations secured
thereby, and in any case the Notes shall (but only in such event) have the
benefit, to the full extent that the holders may be entitled thereto under
applicable law, of an equitable Lien on such property or assets equally
and ratably securing the Notes. Compliance with the provisions of this
paragraph shall not be deemed to constitute a waiver of, or consent to,
any Default or Event of Default caused by any violation of the provisions
of this Section 5.7.
Section 5.8. Mergers, Consolidations, Sales of Assets, Etc. (a)
The Company will not, and will not permit any Restricted Subsidiary to,
consolidate with or be a party to a merger with or liquidate into any
other Person; provided, however, that:
(1) any Restricted Subsidiary may merge or consolidate with or
liquidate into the Company, any Wholly-Owned Subsidiary or any
Restricted Subsidiary that is the direct or indirect parent of such
Restricted Subsidiary and any Restricted Subsidiary (other than a
Principal Subsidiary) may merge or consolidate with or liquidate into
any other Restricted Subsidiary so long as (i) in any merger or
consolidation involving the Company, the Company shall be the
surviving corporation and (ii) in any merger, consolidation or
liquidation involving a Domestic Restricted Subsidiary and a non-
Domestic Restricted Subsidiary, the Domestic Restricted Subsidiary
shall be the surviving corporation; and
(2) the Company or any Restricted Subsidiary may consolidate or
merge with any other corporation if (i) (in the case of a merger or
consolidation involving the Company) the surviving or acquiring
corporation (if other than the Company) (A) is organized and existing
under the laws of any State of the United States of America or the
District of Columbia, (B) shall expressly assume in writing the due
and punctual performance of all obligations of the Company under this
Agreement and the due and punctual payment of the principal of and
Make-Whole Amount if any, and interest on all the Notes, according to
their tenor, and (C) the Company or such surviving or 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 surviving or acquiring corporation enforceable in
accordance with its terms, except as enforcement of such terms may be
limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally, and subject, as to
enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law),
or (ii) (in the case of a merger or consolidation involving a
Restricted Subsidiary) such Restricted Subsidiary shall be the
surviving corporation and (iii) in the case of any consolidation or
merger described in either (i) or (ii), at the time of such
consolidation or merger, and after giving effect thereto (A) no
Default or Event of Default shall have occurred and be continuing and
(B) the Company, such surviving or acquiring corporation or such
Restricted Subsidiary, as the case may be, would be permitted to
incur at least $1 of additional Funded Debt under the applicable
provisions of Section 5.6.
(b) The Company will not, and will not permit any Restricted
Subsidiary to, sell, lease, transfer, abandon or otherwise dispose of,
assets (other than (x) sales of goods, products, inventory or services in
the ordinary course of business to customers, (y) the sale, lease,
transfer or disposition of assets to the Company or a Domestic Restricted
Subsidiary if a merger between such transferor and such Domestic
Restricted Subsidiary would be permitted under Section 5.8(a)(1), and (z)
sales or other dispositions of assets, having a fair market value (as
determined in good faith by the chief financial officer of the Company) in
any single sale or disposition of not greater than $250,000 which the
Company determines have become inadequate, obsolete, worn out, unsuitable,
undesirable or unnecessary in the conduct of its business); provided that
the foregoing restrictions do not apply to the sale of assets for cash or
property to a Person or Persons if all of the following conditions are
met:
(1) either (i) the net book value of such assets, when added to
the net book value of all other assets sold, leased, transferred or
otherwise disposed of by the Company and its Restricted Subsidiaries
pursuant to this Section 5.8(b)(1) during the immediately preceding
twelve-month period do not constitute 10% of Consolidated Total
Assets (determined as of the end of the immediately preceding fiscal
quarter) or (ii) the sum of the portions of Consolidated Net Income
contributed for the immediately preceding twelve-month period (each
as determined in good faith by the chief financial officer of the
Company) by (A) such assets, (B) each Restricted Subsidiary (or
portion thereof) disposed of during such period and (C) other assets
of the Company and its Restricted Subsidiaries disposed of during
such period pursuant to this Section 5.8(b)(1) do not constitute 10%
of Consolidated Net Income for such period; and
(2) immediately after the consummation of the transaction and
after giving effect thereto, (i) no Default or Event of Default would
exist and (ii) the Company would be permitted to incur at least $1 of
additional Funded Debt under the provisions of Section 5.6(a)(3).
Computations made pursuant to Section 5.8(b)(1) shall include
dispositions made pursuant to Section Section 5.8(c)(3) and 5.8(c)(4) and
computations pursuant to Section Section 5.8(c)(3) and 5.8(c)(4) shall
include dispositions made pursuant to Section 5.8(b)(1).
(c) The Company will not, and will not permit any Restricted
Subsidiary to, sell, transfer or otherwise dispose of any shares of
capital stock (including as "stock" for the purposes of this Section
5.8(c), any warrants, rights or options to purchase or otherwise acquire
stock or other Securities exchangeable for or convertible into such stock)
of any Restricted Subsidiary, and the Company will not permit any
Restricted Subsidiary to issue any shares of stock of such Restricted
Subsidiary (except for any sale, transfer, issuance or other disposition
of stock to the Company or a Restricted Subsidiary if a merger between
such transferor or issuer and such Restricted Subsidiary would be
permitted under Section 5.8(a)(1); provided that the foregoing
restrictions do not apply to:
(1) the sale, transfer or issuance of directors' qualifying
shares of capital stock;
(2) the sale, transfer or issuance of any de minimis number of
shares of capital stock to foreign domiciliaries as may be required
by law;
(3) the sale, transfer or other disposition of all or any part
of the shares of capital stock of any Restricted Subsidiary (other
than a Principal Subsidiary);
(4) the sale, transfer or other disposition of all shares of
capital stock of a Principal Subsidiary held by the Company and its
Restricted Subsidiaries if all of the following conditions are met:
(i) simultaneously with such sale, transfer, or disposition,
all shares of stock and all Indebtedness of such Principal Subsidiary
at the time owned by the Company and by every other Restricted
Subsidiary shall be sold, transferred or disposed of as an entirety;
(ii) the Board of Directors of the Company shall have
determined, as evidenced by a resolution thereof, that the proposed
sale, transfer or disposition of said shares of stock and
Indebtedness is in the best interests of the Company;
(iii) said shares of stock and Indebtedness are sold,
transferred or otherwise disposed of to a Person or Persons, for cash
and/or tangible assets and on terms reasonably deemed by the Board of
Directors of the Company to be adequate and satisfactory; and
(iv) the Principal Subsidiary being disposed of shall not have
any continuing investment in the Company or any other Restricted
Subsidiary not being simultaneously disposed of;
(5) the sale, transfer or issuance of shares of capital stock
of a Restricted Subsidiary in connection with the purchase or other
acquisition by the Company or a Restricted Subsidiary of all or
substantially all of the capital stock, properties or assets of any
Person or all or substantially all of the properties or assets of any
Person which constitute a distinct product line, division or other
operating segment; provided that:
(i) after giving effect to such sale, transfer or issuance and
such purchase or other acquisition, no Default or Event of Default
would then exist;
(ii) the aggregate fair value of all such capital stock,
properties or assets so acquired attributable to the issuance, sale
or transfer of such shares of capital stock in each sale, transfer or
issuance of such shares shall equal or exceed the fair value of such
shares (in each case as determined in good faith by the Board of
Directors of the Company at the time of such acquisition taking into
consideration the terms of any written agreement described in Section
5.8(c)(5)(iii) below); and
(iii) the shares of capital stock are sold, transferred or
issued pursuant to a written agreement which (A) contemplates the
subsequent purchase or redemption of such shares by the Company or
the Restricted Subsidiary whose shares have been so sold, transferred
or issued or any direct or indirect parent of such Restricted
Subsidiary upon request of the transferee of such shares or upon
demand by the Company or such Restricted Subsidiary or any direct or
indirect parent of such Restricted Subsidiary made pursuant to the
terms of such written agreement at a price or prices computed by
reference to such formulas or indices or other references as are
determined in good faith by the Board of Directors of the Company at
the time of such acquisition to be in the best interests of the
Company and its Restricted Subsidiaries and (B) prohibits the
transfer of such shares to any Person other than the Company or the
Restricted Subsidiary whose shares have been so sold, transferred or
issued or any direct or indirect parent of such Restricted
Subsidiary; and
(6) the sale, transfer or issuance of capital stock to
employees of Restricted Subsidiaries as part of any incentive stock
arrangement other than any incentive stock agreement entered into in
connection with any purchase or acquisition contemplated by Section
5.8(c)(5) provided that:
(i) after giving effect to such issuance no Restricted
Subsidiary shall cease to be a Restricted Subsidiary; and
(ii) the aggregate fair value (in each case determined in good
faith at the time of such issuance by the Board of Directors of the
Company or such person or committee as the Board of Directors of the
Company may authorize to make such determination pursuant to the
terms of any such incentive stock arrangement) of all shares of
capital stock of such Restricted Subsidiaries issued to such
employees shall not exceed $2,000,000;
provided, however, that notwithstanding the foregoing, any sale, transfer,
issuance or other disposition of shares pursuant to Section Section
5.8(c)(3) or 5.8(c)(4) may not be consummated if either (y) the net book
value of the assets of such Restricted Subsidiary attributable to such
sale, transfer, issuance or other disposition of shares when added to the
net book value of all other assets sold, leased, transferred or otherwise
disposed of by the Company and its Restricted Subsidiaries during the
immediately preceding twelve-month period would constitute more than 10%
of Consolidated Total Assets (determined as of the end of the immediately
preceding fiscal quarter) or (z) the portions of Consolidated Net Income
for the immediately preceding twelve-month period contributed (each as
determined in good faith by the chief financial officer of the Company) by
(1) such assets, (2) each Restricted Subsidiary (or portion thereof)
disposed of during such period and (3) other assets of the Company and its
Restricted Subsidiaries sold, leased, transferred or otherwise disposed of
by the Company and its Restricted Subsidiaries during such period would
exceed 10% of Consolidated Net Income for such period.
Computations made with respect to Section Section 5.8(c)(3) and
5.8(c)(4) as contemplated by this Section 5.8(c) shall include
dispositions made within the provisions of Section Section 5.8(b)(1) and
computations made pursuant to Section Section 5.8(b)(1) shall include
dispositions made pursuant to Section Section 5.8(c)(3) and 5.8(c)(4).
(d) Notwithstanding any other provision of this Section 5.8, the
Company may sell stock or assets of Airguide Instrument Co. Sales of
stock or assets permitted by this Section 5.8(d) shall not be taken into
account for purposes of calculating the limitations on permitted sales of
assets and stock set forth in Section 5.8(b)(1) and the proviso at the end
of Section 5.8(c).
Section 5.9. Consolidated Net Worth. The Company will at all times
keep and maintain Consolidated Net Worth at an amount not less than
$90,000,000; provided that Charges for Identified Dispositions shall not
be taken into account for purposes of determining the amount of
Consolidated Net Worth maintained by the Company for purposes of
calculations pursuant to this Section 5.9.
Section 5.10. Fixed Charge Coverage Ratio. The Company will keep
and maintain the Fixed Charge Coverage Ratio at not less than 1.5 to 1;
provided that on not more than four occasions the Fixed Charge Coverage
Ratio can be less than 1.5 to 1 so long as it is greater than 1.2 to 1.
Section 5.11. Distributions. (a) The Company will not, and will not
permit any Restricted Subsidiary to, except as hereinafter provided:
(1) declare or pay any dividends, either in cash or property,
on any shares of its capital stock of any class (except dividends or
other distributions payable solely in shares of capital stock of the
Company and dividends paid by Restricted Subsidiaries to the Company
or other Restricted Subsidiaries in respect of capital stock of
Restricted Subsidiaries owned by the Company or such other Restricted
Subsidiaries); or
(2) directly or indirectly, or through any Subsidiary,
purchase, redeem or retire any shares of its capital stock of any
class or any warrants, rights or options to purchase or acquire any
shares of its capital stock (other than (i) in exchange for or out of
the net cash proceeds to the Company obtained within three months of
such purchase, redemption or retirement from the issue or sale of
other shares of capital stock of the Company or warrants, rights or
options to purchase or acquire any shares of its capital stock, or
(ii) in connection with any purchase or redemption of any shares of
capital stock sold, transferred or issued in accordance with Section
Section 5.8(c)(1), 5.8(c)(2) or 5.8(c)(5)); or
(3) make any other payment or distribution, either directly or
indirectly or through any Subsidiary, in respect of its capital
stock;
(such declarations or payments of dividends, purchases, redemptions or
retirements of capital stock and warrants, rights or options and all such
other payments or distributions being herein collectively called
"Distributions"), unless after giving effect thereto no Default or Event
of Default would exist and the aggregate amount of Distributions made
during the period from and after June 14, 1991 to and including the date
of the making of the Distributions in question would not exceed the sum of
(1) $5,000,000, plus (2) 50% of Consolidated Net Income for such period,
computed on a cumulative basis for said entire period (or if such
Consolidated Net Income is a deficit figure, then minus 100% of such
deficit).
(b) For the purposes of this Section 5.11, the amount of any
Distribution declared, paid or distributed in property shall be deemed to
be the greater of the book value or fair market value (as determined in
good faith by the Board of Directors of the Company) of such property at
the time of the making of the Distribution in question.
(c) The Company will not authorize or make a Distribution on its
capital stock if after giving effect to the proposed Distribution:
(1) a Default or Event of Default would exist, or
(2) the Company could not incur at least $1.00 of additional
Funded Debt pursuant to Section 5.6(a)(3).
Section 5.12. Investments. The Company will not, and will not
permit any Restricted Subsidiary to, make any Investments, other than:
(a) Investments by the Company or a Restricted Subsidiary in
and to Restricted Subsidiaries, including any Investment in a Person
which, after giving effect to such Investment, will become a
Restricted Subsidiary;
(b) Investments in property or assets to be used in the usual
and ordinary course of business of the Company or its Restricted
Subsidiaries; provided that, after giving effect to any such
Investment, the Company remains in compliance with Section 5.5
hereof;
(c) Investments in commercial paper 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 the highest
rating by Standard & Poor's Corporation, Xxxxx'x Investors Service,
Inc. or another credit rating agency of recognized national standing;
(d) Investments in direct obligations of the federal
governments of the United States of America, Canada or England and
Wales or any direct agency or instrumentality of any thereof, the
payment or guarantee of which constitutes a full faith and credit
obligation of the federal governments of the United States of
America, Canada or England and Wales or any direct agency or
instrumentality of any thereof, as the case may be, in each case,
maturing in twelve months or less from the date of acquisition
thereof;
(e) Term Federal funds and banker's acceptances maturing within
180 days from the date of acquisition thereof and issued by a bank
organized under the laws of the United States, Canada, or England and
Wales, having capital, surplus and undivided profits aggregating at
least U.S. $l00,000,000; provided that the issuing institution has a
rating of A- or better by Xxxxx Bank Watch Service;
(f) Investments in certificates of deposit maturing within one
year from the date of acquisition thereof, issued by a bank or trust
company organized under the laws of the United States, having
capital, surplus and undivided profits aggregating at least
$100,000,000 and whose long-term certificates of deposit are, at the
time of acquisition thereof by the Company or a Restricted
Subsidiary, rated A or better by Standard & Poor's Corporation or by
Xxxxx'x Investors Service, Inc.;
(g) loans or advances in the usual and ordinary course of
business to officers, directors, and employees incidental to carrying
on the business of the Company or any Restricted Subsidiary;
(h) receivables arising from the sale of goods and services in
the ordinary course of business of the Company and its Restricted
Subsidiaries; and
(i) other Investments (in addition to those permitted by the
foregoing provisions of this Section 5.12); provided that (1) all
such other Investments shall not exceed in the aggregate 25% of
Consolidated Tangible Net Worth Available for Investments and (2)
after giving effect to such other Investments, no Default or Event of
Default would exist.
In valuing any Investments for the purpose of applying the
limitations set forth in this Section 5.12, such 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 on account of capital or principal.
For purposes of this Section 5.12, at any time when a Person becomes
a Restricted Subsidiary, all Investments of such Person at such time shall
be deemed to have been made by such Person, as a Restricted Subsidiary, at
such time.
Section 5.13. Repurchase of Notes. Neither the Company nor any
Subsidiary or Affiliate, directly or indirectly, may repurchase or make
any offer to repurchase any Notes unless the offer has been made in
writing to repurchase Notes, pro rata, from all holders of the Notes at
the same time and upon the same terms. In case the Company or any
Subsidiary repurchases any Notes, such Notes shall thereafter be canceled
and no Notes shall be issued in substitution therefor.
Section 5.14. Transactions with Affiliates. The Company will not,
and will not permit any Restricted Subsidiary to, enter into or be a party
to any material transaction or arrangement with any Affiliate (including,
without limitation, the purchase from, sale to or exchange of property
with, or the rendering of any service by or for, any Affiliate), except
transactions reasonably deemed by the Company in good faith to be in the
best business interests of the Company or the concerned Restricted
Subsidiary and upon fair and reasonable terms no less favorable to the
Company or such Restricted Subsidiary than would obtain in a comparable
arm's-length transaction with a Person other than an Affiliate.
Section 5.15. ERISA Compliance. The Company will not, and will not
permit any Subsidiary to:
(a) permit any Plans at any time maintained by the Company or
any such Subsidiary to have any Unfunded Vested Pension Liabilities
in excess of $1,000,000 in the aggregate. As used herein, "Unfunded
Vested Pension Liability" shall mean an excess of the actuarial
present value of accumulated vested Plan benefits as at the end of
the immediately preceding Plan year of such Plans (or as of any more
recent valuation date) over the net assets allocated to such Plans
which are available for benefits, all as determined and disclosed in
the most recent actuarial valuation report for such Plans;
(b) cause any Plan which it or any Subsidiary maintains or in
which it or any Subsidiary participates at any time to:
(1) engage in any "prohibited transaction" (as such term is
defined in ERISA);
(2) incur any "accumulated funding deficiency" (as such term is
defined in ERISA) whether or not waived; or
(3) terminate any such Plan in a manner which could result in
the imposition of a lien on any property of the Company or any of its
Subsidiaries pursuant to ERISA;
(c) permit any condition to exist in connection with any Plan
which might constitute grounds for the PBGC to institute proceedings
to have such Plan terminated or a trustee appointed to administer
such Plan; or
(d) withdraw from any Multiemployer Plan if such withdrawal
shall subject the Company or any Subsidiary to withdrawal liability
(as described under Part 1 of Subtitle E of Title IV of ERISA) in
excess of $100,000.
All assumptions and methods used to determine the actuarial valuation
of vested employee benefits under any Plan at any time maintained by the
Company or any Subsidiary and the present value of assets of such Plans
shall be reasonable in the good faith judgment of the Company and shall
comply with all requirements of law.
Section 5.16. Reports and Rights of Inspection. The Company will
keep, and will cause each Restricted Subsidiary to keep, proper books of
record and account in which full and correct entries will be made of all
dealings or transactions of or in relation to its business and affairs, in
accordance with relevant accounting principles consistently applied and in
the case of the Company and any Domestic Restricted Subsidiaries in
accordance with GAAP (except for changes disclosed in the financial
statements furnished to the Holders pursuant to this Section 5.16 and
concurred in by the independent public accountants referred to in Section
5.16(b)), and will furnish to each Institutional Holder of the outstanding
Notes (in duplicate if so specified below or otherwise requested) and, in
the case of the financial statements delivered pursuant to paragraph (b)
of this Section 5.16, to the Securities Valuation Office, National
Association of Insurance Commissioners, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000:
(a) Quarterly Statements. As soon as available and in any
event within 45 days after the end of each quarterly fiscal period
(except the last) of each fiscal year, duplicate copies of:
(1) a consolidated balance sheet of the Company and its
Restricted Subsidiaries as of the close of such quarterly period,
setting forth in comparative form the consolidated figures for the
corresponding period for the preceding fiscal year,
(2) a consolidated statement of income of the Company and its
Restricted Subsidiaries for such quarterly fiscal period and for the
portion of the fiscal year ending with such quarterly fiscal period,
in each case setting forth in comparative form the consolidated
figures for the corresponding periods of the preceding fiscal year,
and
(3) a consolidated statement of cash flows of the Company and
its Restricted Subsidiaries for the portion of the fiscal year ending
with such quarterly fiscal period, setting forth in comparative form
the consolidated figures for the corresponding period of the
preceding fiscal year, all in reasonable detail and certified as
complete and correct by an authorized financial officer of the
Company;
(b) Annual Statements. As soon as available and in any event
within 90 days after the close of each fiscal year of the Company,
duplicate copies of:
(1) consolidated balance sheets of the Company and its
Restricted Subsidiaries as of the close of such fiscal year, and
(2) consolidated statements of income and retained earnings and
cash flows of the Company and its Restricted Subsidiaries for such
fiscal year,
in each case setting forth in comparative form the consolidated figures
for the preceding fiscal year, all in reasonable detail and accompanied by
an opinion thereon of a firm of independent public accountants of
recognized national standing selected by the Company, unqualified as to
scope, to the effect that the consolidated financial statements present
fairly, in all material respects, the consolidated financial position of
the Company and its Restricted Subsidiaries as of the end of the fiscal
year being reported on and the consolidated results of the operations and
cash flows for said year in conformity with GAAP and that the examination
of such accountants in connection with such financial statements has been
conducted in accordance with generally accepted auditing standards and
included such tests of the accounting records and such other auditing
procedures as were considered necessary in the circumstances;
(c) Audit Reports. Promptly upon initiation thereof, written
notice of each interim or special audit to be made by independent
accountants of the books of the Company or any Restricted Subsidiary
and any management letter to be delivered from such accountants in
connection therewith;
(d) SEC and Other Reports. Promptly (and in any event within
30 days) upon their becoming available, one copy of each financial
statement, report, notice, press release or proxy statement sent by
the Company to stockholders generally or made available to the public
and one copy of each regular or periodic report, registration
statement or prospectus filed by the Company or any Restricted
Subsidiary with any securities exchange or the Securities and
Exchange Commission or any successor agency, and, if the Purchaser or
any such Institutional Holder so requests, one copy of any material
order in any proceedings to which the Company or any of its
Restricted Subsidiaries is a party, issued by any governmental
agency, Federal or state, having jurisdiction over the Company or any
of its Restricted Subsidiaries;
(e) Officers' Certificates. Within the periods provided in
paragraphs (a) and (b) above, a certificate of an authorized
financial officer of the Company stating that such officer has
reviewed the provisions of this Agreement and setting forth: (1) the
information and computations (in sufficient detail) required in order
to establish whether the Company was in compliance with the
applicable requirements of Section Section 5.6 through 5.12 hereof at
the end of the period covered by the financial statements then being
furnished and (2) whether, to the best of his knowledge based on such
review, there existed as of the date of such financial statements or
there exists on the date of the certificate or existed at any time
during the period covered by such financial statements any Default or
Event of Default and, if any such condition or event exists on the
date of the certificate or existed during such period, specifying the
nature and extent thereof and the action the Company is taking, has
taken or proposes to take with respect thereto; provided further,
that such certificates as are delivered with respect to the period
provided for in paragraph (b) above, shall include a list of any
changes in Restricted Subsidiaries as at the end of such period;
(f) Accountants Certificates. Within the period provided in
paragraph (b) above, a certificate of the accountants who are
reporting upon such financial statements, stating that they have
reviewed this Agreement and, stating further, whether in making their
audit such accountants (1) have not become aware that the Company and
the Restricted Subsidiaries have failed to comply with the terms,
covenants, provisions, or conditions contained in Section 5 hereof
and (2) have examined the schedules to such reports or other
certificates or documents containing calculations of the financial
covenants required to be performed or observed pursuant to Section
Section 5.6 through 5.12 hereof, and in their opinion, the
information set forth in such schedules or other certificates or
documents is fairly stated in all material respects in relation to
the annual consolidated financial statements taken as a whole;
(g) ERISA Notices. Promptly upon learning of the occurrence of
any of the following, written notice thereof, describing the same and
the steps being taken by the Company or any Subsidiary affected with
respect thereto, and when known, any action taken or threatened by
the Internal Revenue Service, Department of Labor or the PBGC with
respect thereto: (1) a Reportable Event with respect to any Plan; (2)
the institution of any steps by the Company, any ERISA Affiliate, the
PBGC or any other person to terminate any Plan other than a "standard
termination" under Section 4041(b) of ERISA; (3) the institution of
any steps by the Company or any ERISA Affiliate to withdraw from any
Multiemployer Plan; (4) a "prohibited transaction" within the meaning
of Section 406 of ERISA in connection with any Plan; or (5) any
material increase in the contingent liability of the Company or any
subsidiary with respect to any post-retirement welfare liability; and
(h) Requested Information. With reasonable promptness, such
other data and information as the Purchaser or any such Institutional
Holder may reasonably request, including, without limitation, such
financial or other information as any holder of the Notes or any
Person designated by such holder may reasonably determine as required
to permit such holder to comply with requirements of Rule 144A
promulgated under the Act in connection with the resale by it of the
Notes.
Without limiting the foregoing, the Company will permit the Purchaser, so
long as the Purchaser is the holder of a Note, and each Institutional
Holder of the then outstanding Notes (or such agent(s) as either the
Purchaser or such Institutional Holder may designate) to visit and
inspect, under the Company's guidance, any of the properties of the
Company or any Restricted Subsidiary, and to examine all of their 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, employees, and independent public
accountants (and by this provision the Company authorizes such accountants
to discuss with the Purchaser the finances and affairs of the Company and
its Restricted Subsidiaries) all at such reasonable times and as often as
may be reasonably requested. The Company shall be required to pay or
reimburse the Purchaser or any such Institutional Holder for reasonable
expenses which the Purchaser or any such Institutional Holder may incur in
connection with any such visitation or inspection occurring at such time
as any Event of Default shall have occurred and be continuing.
All information which is furnished to or obtained by any holder of
Notes pursuant to this Section 5.16 or otherwise pursuant to this
Agreement shall, if so requested in writing by the Company, be received
and held in confidence unless or until the same has been publicly
disclosed by the Company; provided, however, nothing herein contained
shall limit or impair the right or obligation of any Institutional Holder
of the Notes to disclose such information: (a) to its auditors, trustees,
advisors, attorneys, employees or agents, (b) when required by any law,
ordinance or governmental order, regulation, rule, policy, investigation
or any regulatory authority request, (c) as may be required or appropriate
in any report, statement or testimony submitted to any municipal, state,
provincial or Federal regulatory body having or claiming to have
jurisdiction over such Institutional Holder or to the United States
National Association of Insurance Commissioners or similar organizations
or their successors, (d) which is publicly available or readily
ascertainable from public sources, or which is received by any
Institutional Holder of the Notes from a third Person who or which is not
bound to keep the same confidential, (e) in connection with any
proceeding, case or matter pending (or on its face purported to be
pending) before any court, tribunal, arbitration board or any governmental
agency, commission, authority, board or similar entity, (f) in connection
with the enforcement by an Institutional Holder of its rights under or in
respect of this Agreement or the Notes after the occurrence of a Default
or Event of Default, or (g) to the extent necessary in connection with any
contemplated transfer of any of the Notes by an Institutional Holder
thereof (it being understood and agreed that any such transferee which
purchases such Notes shall itself be bound by the terms and provisions
hereof.)
Section 6. Events of Default and Remedies Therefor.
Section 6.1. Events of Default. Any one or more of the following
shall constitute an "Event of Default" as the term is used herein:
(a) Default shall occur in the payment of interest on any Note
when the same shall have become due and such default shall continue
for more than five days; or
(b) Default shall occur in the making of any required
prepayment on any of the Notes as provided in Section 2; or
(c) Default shall occur in the making of any other payment of
the principal of any Note or the premium thereon at the expressed or
any accelerated maturity date or at any date fixed for prepayment; or
(d) Default shall be made in the payment of the principal of or
interest on Indebtedness for borrowed money of the Company or any
Restricted Subsidiary (other than the Notes) aggregating more than
$3,000,000 as and when the same shall become due and payable by the
lapse of time, by declaration, by call for redemption or otherwise,
and such default shall continue beyond the period of grace, if any,
allowed with respect thereto; or
(e) Default or the happening of any event shall occur under any
indentures, agreements or other instruments (other than the
Agreement) under which any Indebtedness for borrowed money of the
Company or any Restricted Subsidiary aggregating more than $3,000,000
may be issued and such defaults or events shall continue for a period
of time sufficient to permit the acceleration of the maturity of such
Indebtedness of the Company or such Restricted Subsidiaries, as the
case may be, outstanding thereunder; or
(f) Default shall occur in the observance or performance of any
covenant or agreement contained in Section 5.6 through Section 5.12
hereof; or
(g) Default shall occur in the observance or performance of any
other provision of this Agreement which is not remedied or waived
within 30 days after the chief executive officer or the chief
operating officer or the chief financial officer of the Company first
has actual knowledge of such default; or
(h) if any representation or warranty made by the Company
herein, or made by the Company in any statement or certificate
furnished by the Company or any Subsidiary in connection with the
consummation of the issuance and delivery of the Notes or furnished
by the Company or any Subsidiary pursuant hereto, is untrue in any
material respect as of the date of the issuance or making thereof; or
(i) final judgment or judgments for the payment of money
aggregating in excess of $1,000,000 is or are outstanding against the
Company or any Restricted Subsidiary or against any property or
assets of either and any one of such judgments has remained unpaid,
unvacated, unbonded or unstayed by appeal or otherwise for a period
of 60 days from the date of its entry; provided, however, that the
existence of such judgment or judgments shall not constitute an Event
of Default if (1) the aggregate amount of such judgment or judgments
shall be fully covered by insurance issued by financially sound and
reputable insurers and (2) within such 60 day period, the Company
shall have caused such insurers to provide the holders of the Notes
with written confirmation that such coverage (i) equals or exceeds
the amount of such judgment or judgments and (ii) is not being
contested as to amount or coverage by such insurers; or
(j) a custodian, receiver, liquidator or trustee of the Company
or any Principal Subsidiary, or of any of the property of either, is
appointed or takes possession and such appointment or possession
remains uncontested or in effect for more than 60 days; or the
Company or any Principal Subsidiary generally fails to pay its debts
as they become due or admits in writing its inability to pay its
debts as they mature; or the Company or any Principal Subsidiary is
adjudicated bankrupt or insolvent; or an order for relief is entered
under the Federal Bankruptcy Code against the Company or any
Principal Subsidiary; or any of the material property of either is
sequestered by court order and the order remains in effect for more
than 60 days; or a petition is filed against the Company or any
Principal Subsidiary under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, whether now or subsequently in
effect, and is not stayed or dismissed within 60 days after filing;
or
(k) the Company or any Principal Subsidiary files a petition in
voluntary bankruptcy or seeking relief under any provision of any
bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation law of any jurisdiction, whether now
or subsequently in effect; or consents to the filing of any petition
against it under any such law; or consents to the appointment of or
taking possession by a custodian, receiver, trustee or liquidator of
the Company, any Principal Subsidiary, or any of the property of
either.
Section 6.2. Notice to Holders. When any Event of Default
described in Section 6.1 has occurred, or if the holder of any Note or of
any other evidence of Indebtedness of the Company gives any notice or
takes any other action with respect to a claimed default, the Company
agrees to give notice within three business days of such event to all
holders of the Notes then outstanding.
Section 6.3. Acceleration of Maturities. When any Event of Default
described in paragraph (a), (b) or (c) of Section 6.1 has happened and is
continuing, any holder of any Note may, and when any Event of Default
described in paragraphs (d) through (i), inclusive, of Section 6.1 has
happened and is continuing, the holder or holders of 70% or more of the
principal amount of Notes at the time outstanding may, in addition to any
other rights and remedies available at law or in equity, by notice in
writing sent in the manner provided in Section 9.6 hereof to the Company,
declare the entire principal and all interest accrued on all Notes to be,
and all Notes shall thereupon become, forthwith due and payable, without
any presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived. When any Event of Default described in
paragraph (j) or (k) of Section 6.1 has occurred, then all outstanding
Notes shall immediately become due and payable without presentment, demand
or notice of any kind. Upon the Notes becoming due and payable as a
result of any Event of Default as aforesaid, the Company will forthwith
pay to the holders of the Notes the entire principal and interest accrued
on the Notes plus, to the extent not prohibited by law, an amount as
liquidated damages for the loss of the bargain evidenced hereby (and not
as a penalty) equal to the applicable Make-Whole Amount determined as of
the date on which the Notes shall so become due and payable. No course of
dealing on the part of any holder of the Notes nor any delay or failure on
the part of any holder of the Notes to exercise any right shall operate as
a waiver of such right or otherwise prejudice such holder's rights,
powers and remedies. The Company further agrees, to the extent permitted
by law, to pay to the holder or holders of the Notes all reasonable costs
and expenses incurred by them in the collection of any Notes upon any
default hereunder or thereon, including reasonable compensation to such
holder's or holders' attorneys for all services rendered in connection
therewith.
Section 6.4. Rescission of Acceleration. The provisions of Section
6.3 are subject to the condition that if the principal of and accrued
interest on all or any outstanding Notes have been declared immediately
due and payable by reason of the occurrence of any Event of Default
described in paragraphs (a) through (i), inclusive, of Section 6.1, the
holders of not less than 75% in aggregate principal amount of the Notes
then outstanding may, by written instrument filed with the Company,
rescind and annul such declaration and the consequences thereof; provided
that at the time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the payment of
any monies due pursuant to the Notes or the Agreement;
(b) all arrears of interest on all the Notes and all other sums
payable under the Notes and under the Agreement (except any
principal, interest or premium on the Notes which has become due and
payable solely by reason of such declaration under Section 6.3) shall
have been duly paid; and
(c) each and every other Default and Event of Default shall
have been made good, cured or waived pursuant to Section 7.1;
and provided further that no such rescission and annulment shall extend to
or affect any subsequent Default or Event of Default or impair any right
consequent thereto.
Section 7. Amendments, Waivers And Consents
Section 7.1. Consent Required. Any term, covenant, agreement or
condition of this Agreement may, with the consent of the Company, be
amended or compliance therewith may be waived (either generally or in a
particular instance and either retroactively or prospectively), if the
Company shall have obtained the consent in writing of the holders of at
least 70% in aggregate principal amount of outstanding Notes; provided
that without the written consent of the holders of all of the Notes then
outstanding, no such amendment or waiver shall be effective (a) which will
change the time of payment (including any prepayment required by Section
2.1) of the principal of or the interest on any Note or reduce the
principal amount thereof or change the rate of interest thereon, or (b)
which will change any of the provisions with respect to optional
prepayments, or (c) which will change the percentage of holders of the
Notes required to consent to any such amendment or waiver of any of the
provisions of this Section 7 or Section 6.
Section 7.2. Effect of Amendment or Waiver. Any such amendment or
waiver shall apply equally to all of the holders of the Notes and shall be
binding upon them, upon each future holder of any Note and upon the
Company, whether or not such Note shall have been marked to indicate such
amendment or waiver. No such amendment or waiver shall extend to or
affect any obligation not expressly amended or waived or impair any right
consequent thereon.
Section 7.3. Solicitation of Holders. The Company will not
solicit, request or negotiate for or with respect to any proposed waiver
or amendment of any of the provisions of the Agreement or the Notes unless
each holder of the Notes shall be informed thereof by the Company and
shall be afforded the opportunity of considering the same and shall be
supplied by the Company with sufficient information to enable it to make
an informed decision with respect thereto. Executed or true and correct
copies of any waiver or amendment effected pursuant to the provisions of
Section 7.1 shall be delivered by the Company to each registered holder of
outstanding Notes following the date on which the same shall have been
executed and delivered by the holder or holders of the requisite
percentage of outstanding Notes. 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, to any holder of
the Notes as consideration for or as an inducement to the entering into by
any holder of the Notes of any waiver or amendment of any of the terms and
provisions of this Agreement unless such remuneration is concurrently
paid, on the same terms, ratably to the holders of all the Notes then
outstanding.
Section 8. Interpretation of Agreement; Definitions.
Section 8.1. Definitions. Unless the context otherwise requires,
the terms hereinafter set forth when used herein shall have the following
meanings and the following definitions shall be equally applicable to both
the singular and plural forms of any of the terms herein defined:
"Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Affiliate" shall mean any Person (other than a Restricted
Subsidiary) (a) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common
control with, the Company, (b) which beneficially owns or holds 5% or
more of any class of the Voting Stock of the Company or (c) 5% or
more of the Voting Stock (or in the case of a Person which is not a
corporation, 5% or more of the equity interest) of which is
beneficially owned or held by the Company or a Subsidiary. The term
"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 Stock, by contract or
otherwise.
"Agreement" shall mean this Note Agreement.
"Capitalized Lease" shall mean any lease the obligation for
Rentals with respect to which is required to be capitalized on a
balance sheet of the lessee in accordance with GAAP.
"Capitalized Rentals" of any Person shall mean as of the date of
any determination 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 and its subsidiaries prepared in accordance with
GAAP.
"Charges for Identified Dispositions" shall mean charges taken
by the Company on or prior to October 2, 1998 in an aggregate amount
not in excess of $5,000,000 and relating to (i) the closing of
certain distribution centers and other facilities owned or operated
by Uwatec AG and its subsidiaries, and (ii) the disposition of the
Airguide Instrument Company.
"Company" shall mean Xxxxxxx Worldwide Associates, Inc., a
Wisconsin corporation, and any Person who succeeds to all, or
substantially all, of the assets and business of Xxxxxxx Worldwide
Associates, Inc.
"Consolidated Current Debt" shall mean, without duplication,
Current Debt of the Company and its Restricted Subsidiaries
determined on a consolidated basis eliminating intercompany items.
"Consolidated Funded Debt" shall mean, without duplication,
Funded Debt of the Company and its Restricted Subsidiaries determined
on a consolidated basis eliminating intercompany items.
"Consolidated Net Income" for any period shall mean net income
of the Company, and its Restricted Subsidiaries from continuing
operations determined on a consolidated basis in accordance with GAAP
consistently applied, and excluding net earnings and losses of any
Person (other than a Restricted Subsidiary) with which the Company or
a Restricted Subsidiary shall have consolidated or which shall have
merged or liquidated into or with the Company or a Restricted
Subsidiary prior to the date of such consolidation, merger or
liquidation.
"Consolidated Net Worth" shall mean as of the date of any
determination thereof the amount of the par or stated value of all
outstanding capital stock, capital surplus, and retained earnings of
the Company and its Restricted Subsidiaries, net of all cumulative
translation adjustments and contingent compensation adjustments
determined on a consolidated basis in accordance with GAAP.
"Consolidated Tangible Assets" shall mean as of the date of any
determination thereof the total amount of all Tangible Assets of the
Company and its Restricted Subsidiaries on a consolidated basis after
deducting therefrom all Investments incurred pursuant to and within
the limitations of Section 5.12(i).
"Consolidated Tangible Net Worth" shall mean as of the date of
any determination thereof Consolidated Net Worth less (a) all assets
of the Company and its Restricted Subsidiaries that are properly
classified as "intangible assets" all determined in accordance with
GAAP and (b) all Investments incurred pursuant to and within the
limitations of Section 5.12(i).
"Consolidated Tangible Net Worth Available for Investments"
shall mean as of the date of any determination thereof the sum of (a)
Consolidated Tangible Net Worth and (b) all Investments incurred
pursuant to and within the limitations of Section 5.12(i) hereof.
"Consolidated Total Assets" of the Company and its Restricted
Subsidiaries shall mean as of the date of any determination thereof
the total assets of the Company and its Restricted Subsidiaries as of
such date 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 Net Worth and
(b) Consolidated Funded Debt.
"Current Debt" of any Person shall mean as of the date of any
determination thereof (a) all Indebtedness for borrowed money or
which has been incurred in connection with the acquisition of
property or assets other than Funded Debt, provided that any portion
of such obligations incurred in connection with the acquisition of
property or assets specifically including, without limitation,
obligations which have been incurred by such Person in connection
with any sale, transfer or issuance of stock pursuant to and in
compliance with Section 5.8(c)(5) and which are at the date of any
determination of Current Debt contingent as to amount or as to
payment shall not be treated as Current Debt on such date, (b)
Guaranties of Current Debt of others and (c) all obligations of such
Person with respect to receivables sold or otherwise discounted with
recourse which would not constitute Funded Debt pursuant to the terms
of the definition thereof.
"Default" shall mean any event or condition the occurrence of
which would, with the lapse of time or the giving of notice, or both,
constitute an Event of Default.
"Domestic Restricted Subsidiary" shall mean any Restricted
Subsidiary (a) which is organized under the laws of the United States
or any State thereof and (b) which conducts substantially all of its
business and has substantially all of its assets within the United
States.
"Eighty Percent-Owned Restricted Subsidiary" shall mean a
Subsidiary of which 80% or more (by number of votes) of the Voting
Stock shall be beneficially owned, directly or indirectly, by the
Company.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, and any successor statute of similar import,
together with the regulations thereunder, in each case as in effect
from time to time. References to sections of ERISA shall be
construed to also refer to any successor sections.
"ERISA Affiliate" shall mean any corporation, trade or business
that is, along with the Company, a member of a controlled group of
corporations or a controlled group of trades or businesses, as
described in Section 414(b) and 414(c), respectively, of the Internal
Revenue Code of 1986, as amended or Section 4001 of ERISA.
"Event of Default" is defined in Section 6.1.
"Fixed Charges" for any period shall mean on a consolidated
basis the sum of (i) all Rentals (other than Rentals on Capitalized
Leases) payable during such period by the Company and its Restricted
Subsidiaries, and (ii) all Interest Charges on all Indebtedness
(including the interest component of Rentals on Capitalized Leases)
of the Company and its Restricted Subsidiaries.
"Fixed Charge Coverage Ratio" shall mean the ratio of (i) Net
Income Available for Fixed Charges to (ii) Fixed Charges determined
as of the end of each fiscal quarter for the period consisting of the
immediately preceding four fiscal quarters (each such rolling four
fiscal quarter period being treated as a single accounting period).
"Funded Debt" of any Person shall mean (a) all Indebtedness for
or in respect of borrowed money or which has been incurred in
connection with the acquisition of property or assets, in each case
having a final maturity of more than one year from the date of origin
thereof (or which is renewable or extendible at the option of the
obligor for a period or periods of more than one year from the date
of origin), including all payments in respect thereof that are
required to be made within one year from the date of any
determination of Funded Debt, whether or not the obligation to make
such payment shall constitute a current liability of the obligor
under GAAP, provided that any portion of such obligations incurred in
connection with the acquisition of property or assets specifically
including, without limitation, obligations which have been incurred
by such Person in connection with any sale, transfer or issuance of
capital stock pursuant to and in compliance with Section 5.8(c)(5)
and which are at the date of any determination of Funded Debt
contingent as to amount or as to payment shall not be treated as
Funded Debt on such date, (b) all Capitalized Rentals, (c) all
Guaranties by such Person of Funded Debt of others and (d) all
obligations of such Person with respect to receivables sold or
otherwise discounted with recourse.
"GAAP" shall mean United States generally accepted accounting
principles as in effect from time to time. Notwithstanding the
foregoing, in the event that any Accounting Changes (as defined
below) shall occur, all financial covenants, standards and terms in
this Agreement shall continue to be calculated or construed as if
such Accounting Changes had not occurred. "Accounting Changes"
means: changes in accounting principles required by the promulgation
of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board or the American Institute of Certified
Public Accountants or, if applicable, the Securities and Exchange
Commission (or successors thereto or agencies with similar
functions).
"Guaranties" by any Person shall mean all obligations (other
than endorsements 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 (the "primary obligor") in any
manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent
or otherwise, by such Person: (a) to purchase such Indebtedness or
obligation or any property or assets constituting security therefor,
(b) to advance or supply funds (1) for the purchase or payment of
such Indebtedness or obligation, (2) to maintain working capital or
other balance sheet condition or otherwise to advance or make
available funds for the purchase or payment of such Indebtedness or
obligation, or (c) to lease property or to purchase Securities or
other property or services primarily for the purpose of assuring the
owner of such Indebtedness or obligation of the ability of the
primary obligor to make payment of the Indebtedness or obligation, or
(d) otherwise to assure the owner of the Indebtedness or obligation
of the primary obligor against loss in respect thereof. For the
purposes of all computations made under this Agreement, a Guaranty in
respect of any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such Indebtedness for
borrowed money which has been guaranteed, and a Guaranty in respect
of any other obligation or any dividend shall be deemed to be
Indebtedness equal to the maximum aggregate amount of such obligation
or dividend.
"Indebtedness" of any Person shall mean and include (a)
obligations of such Person for borrowed money or which have been
incurred in connection with the acquisition of property or assets
(except for obligations under bona fide employment, consulting, non-
competition, lease and similar agreements), provided that any portion
of such obligations which have been incurred in connection with the
acquisition of property or assets specifically including, without
limitation, obligations which have been incurred by such Person in
connection with any sale, transfer or issuance of stock pursuant to
and in compliance with Section 5.8(c)(5) and which are at the date of
any determination of Indebtedness contingent as to amount or as to
payment shall not be treated as Indebtedness on such date, (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) all Guaranties by such Person of obligations of
others of the character referred to in this definition, (e)
Capitalized Rentals, and (f) all obligations of such Person with
respect to receivables sold or otherwise discounted with recourse.
"Institutional Holder" shall mean any of the following Persons:
(a) any bank or any savings and loan association, savings
institution, trust company or other institution acting for its own
account or in a fiduciary capacity, (b) any insurance company, (c)
any pension, retirement or profit sharing trust or fund within the
meaning of Title I of ERISA or for which any bank, trust company,
national banking association or investment adviser registered under
the Investment Advisers Act of 1940, as amended, is acting as trustee
or agent, (d) any investment company or business development company,
as defined in the Investment Company Act of 1940, as amended, (e) any
broker or dealer registered under the Securities Exchange Act of
1934, as amended, who is a member of a national securities exchange
or any investment adviser registered under the Investment Adviser Act
of 1940, as amended, (f) any government, any public employees'
pension or retirement system, or any other governmental agency
supervising the investment of public funds, (g) any other entity all
of the equity owners of which are Institutional Holders or (h) any
other Person which may be within the definition of "qualified
institutional buyer" as such term is used in Rule 144A, as from time
to time in effect, promulgated under the Act.
"Interest Charges" for any period shall mean all interest and
all amortization of debt discount and expense on any particular
Indebtedness for which such calculations are being made.
"Investments" of any Person shall mean all investments, in cash
or by delivery of property made, directly or indirectly in any
Person, whether by acquisition of shares of capital stock,
indebtedness or any other obligations or Securities or by loan,
advance, capital contributions or otherwise.
"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, including, without limitation, the security
interest arising from a mortgage, encumbrance, pledge, conditional
sale or trust receipt or a lease, consignment or bailment for
security purposes and including any Capitalized Lease. The term
"Lien" shall include reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, lease
and other similar title exceptions and encumbrances affecting real
property. For the purpose of this Agreement, the Company or a
Restricted Subsidiary shall be deemed to be the owner of any property
which it has acquired or holds subject to a conditional sale
agreement or other arrangement pursuant to which title to the
property has been retained by or vested in another Person for
security purposes.
"Make-Whole Amount" shall mean with respect to any amounts to be
paid pursuant to the provisions of Section Section 2.2 or 2.3 hereof
or upon acceleration of the Notes the excess, if any, of (1) the
aggregate present value as of the date of such prepayment or payment
of each dollar of principal being prepaid or paid (taking into
account the application of such prepayment required by Section 2.1)
and the amount of interest (exclusive of interest accrued to the date
of prepayment or payment) that would have been payable in respect of
such dollar if such prepayment or payment had not been made,
determined by discounting such amounts at the Reinvestment Rate from
the respective dates on which they would have been payable, over (2)
100% of the principal amount of the outstanding Notes being prepaid
or paid. If the Reinvestment Rate with respect to prepayment of the
Notes is equal to or higher than 7.15%, the Make-Whole Amount shall
be zero. For purposes of any determination of the Make-Whole Amount:
"Reinvestment Rate" shall mean as of the time of any
determination thereof .50% plus the yield on actively traded U.S.
Treasury Securities with a maturity corresponding to the Weighted
Average Life to Maturity of the principal then being prepaid or paid
(taking into account the application of any such prepayment required
by Section 2.1) as set forth on page Government C4 (or any successor
page) of the Bloomberg screen or, if such page or screen is not
available at the time of any determination hereunder, then such other
reasonably comparable index which shall be designated by the holders
of 66-2/3% in aggregate principal amount of the outstanding Notes.
If no maturity exactly corresponds to such Weighted Average Life to
Maturity, yields for the two published maturities most closely
corresponding to such Weighted Average Life to Maturity shall be
calculated pursuant to the immediately preceding sentence and the
Reinvestment Rate shall be interpolated or extrapolated from such
yields on a straight-line basis, rounding in each of such relevant
periods to the nearest month.
"Weighted Average Life to Maturity" of the principal amount of
the Notes being prepaid or paid shall mean, as of the time of any
determination thereof, the number of years obtained by dividing the
then Remaining Dollar-Years of such principal by the aggregate amount
of such principal. The term "Remaining Dollar-Years" of such
principal shall mean the amount obtained by (a) multiplying (1) the
remainder of (i) the amount of principal that would have become due
on each scheduled prepayment or payment date if such prepayment or
payment had not been made less (ii) the amount of principal on the
Notes scheduled to become due on such date after giving effect to
such prepayment or payment and the application thereof in accordance
with the provisions of Section 2.1, by (2) the number of years
(calculated to the nearest one-twelfth) which will elapse between the
date of determination and such scheduled prepayment or payment date,
and (b) totaling the products obtained in (a).
"Multiemployer Plan" shall have the meaning as in ERISA.
"Net Income Available for Fixed Charges" for any period shall
mean the sum of (i) Consolidated Net Income during such period plus
(to the extent deducted in determining Consolidated Net Income), (ii)
all provisions for any Federal, state or other income taxes made by
the Company and its Restricted Subsidiaries during such period, (iii)
Fixed Charges of the Company and its Restricted Subsidiaries during
such period, and (iv) Charges for Identified Dispositions.
"Overdue Rate" shall mean as of the date of any determination
thereof the lesser of (a) the maximum rate permitted by law and (b)
9.15% per annum.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and
any entity succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, partnership, corporation,
trust or unincorporated organization, and a government or agency or
political subdivision thereof.
"Plan" shall mean a plan that is both a "pension plan," as such
term is defined in Section 3(2) of ERISA, and a "defined benefit
pension plan" as defined in Section 414(j) of the Internal Revenue
Code of 1986 which is established or maintained by the Company or any
ERISA Affiliate or as to which the Company or any ERISA Affiliate
contributed or is a member or otherwise may have any liability.
"Principal Subsidiary" shall mean any Restricted Subsidiary
which had (a) total assets, on a consolidating basis, as of the last
day of the most recently ended fiscal quarter of the Company, of an
amount equal to or greater than 2% of Consolidated Total Assets of
the Company as of the last day of such fiscal quarter, or (b) net
income, on a consolidating basis, for the Company's most recent
fiscal year, equal to or greater than 2% of Consolidated Net Income
of the Company for such year.
"Rentals" of any Person shall mean and include all fixed rents
(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 such 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.
"Reportable Event" shall have the same meaning as in ERISA.
"Restricted Subsidiary" shall mean any Subsidiary of which more
than 50% (by number of votes) of the Voting Stock is beneficially
owned, directly or indirectly, by the Company.
"Security" shall have the same meaning as in Section 2(l) of the
Securities Act of 1933, as amended.
The term "subsidiary" shall mean, as to any particular parent
corporation, any corporation of which more than 50% (by number of
votes) of the Voting Stock shall be owned by such parent corporation
and/or one or more corporations which are themselves subsidiaries of
such parent corporation. The term "Subsidiary" shall mean a
subsidiary of the Company.
"Tangible Assets" of any Person shall mean, as of the date of
any determination thereof, the total amount of all assets of such
Person (less depreciation, depletion, and other properly deductible
valuation reserves) after deducting the following: good will,
patents, trade names, trade marks, copyrights, franchises,
experimental expense, organization expense, unamortized debt discount
and expense, deferred charges, the excess of cost of shares acquired
over book value of related assets, any write up in the book value of
any asset resulting from a revaluation thereof subsequent to March
29, 1991 (except in connection with the acquisition of such assets)
and such other assets as are properly classified as "intangible
assets" in accordance with GAAP.
"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).
"Wholly-owned" when used in connection with any Subsidiary shall
mean a Subsidiary of which all of the issued and outstanding shares
of stock (other than directors' qualifying shares or shares owned by
foreign domiciliaries as required by law) shall be owned by the
Company and/or one or more of its Wholly-Owned Restricted
Subsidiaries.
Section 8.2. Accounting Principles. Where the character or amount
of any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is
required to be made for the purposes of this Agreement, the same shall be
done in accordance with GAAP, to the extent applicable, except where such
principles are inconsistent with the specific provisions of this
Agreement.
Section 8.3. Directly or Indirectly. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person
is prohibited from taking, such provision shall be applicable whether the
action in question is taken directly or indirectly by such Person.
Section 9. Miscellaneous.
Section 9.1. Registration of Notes. The Company shall cause to be
kept at its principal office a register for the registration and transfer
of the Notes (hereinafter called the "Note Register"), and the Company
will register or transfer or cause to be registered or transferred, as
hereinafter provided any Note issued pursuant to this Agreement.
The Person in whose name any registered Note shall be registered
shall be deemed and treated as the owner and holder thereof for all
purposes of this Agreement. Payment of or on account of the principal,
premium, if any, and interest on any registered Note shall be made to or
upon the written order of such registered holder.
Section 9.2. Exchange of Notes. At any time and from time to time,
upon not less than ten days' notice to that effect given by the holder of
any Note initially delivered or of any Note substituted therefor pursuant
to Section 9.1, this Section 9.2 or Section 9.3, and upon surrender of
such Note at its office, the Company will deliver in exchange therefor,
without expense to the holder, except as set forth below, Notes, in
registered form, for the same aggregate principal amount as the then
unpaid principal amount of the Note so surrendered, in the denomination of
$3,000,000 or any multiple of $100,000 in excess thereof as such holder
shall specify, dated as of the date to which interest has been paid on the
Note so surrendered or, if such surrender is prior to the payment of any
interest thereon, then dated as of the date of issue, payable to such
Person or Persons, as may be designated by such holder, and otherwise of
the same form and tenor as the Notes so surrendered for exchange.
Section 9.3. Loss, Theft, Etc. of Notes. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction
of any Note, and in the case of any such loss, theft or destruction upon
delivery of a bond or indemnity in such form and amount as shall be
reasonably satisfactory to the Company, or in the event of such mutilation
upon surrender and cancellation of the Note, the Company will make and
deliver, without expense to the holder thereof, a new Note, of like tenor,
in lieu of such lost, stolen, destroyed or mutilated Note. If the
Purchaser or any subsequent Institutional Holder is the owner of any such
lost, stolen or destroyed Note, then the affidavit of an authorized
officer of such owner, setting forth the fact of loss, theft or
destruction and of its ownership of the Note at the time of such loss,
theft or destruction, shall be accepted as satisfactory evidence thereof
and no further indemnity shall be required as a condition to the execution
and delivery of a new Note other than the written agreement of such owner
to indemnify the Company.
Section 9.4. Expenses, Stamp Tax Indemnity. Whether or not the
transactions herein contemplated shall be consummated, the Company agrees
to pay directly all reasonable costs and expenses in connection with the
preparation, execution and delivery of this Agreement and the transactions
contemplated hereby, including but not limited to all investment banking
and similar fees, the reasonable charges and disbursements of Xxxxxxx and
Xxxxxx, special counsel to the Purchaser, duplicating and printing costs
and charges for shipping the Notes, adequately insured to the Purchaser's
home office or at such other place as the Purchaser may designate, and all
reasonable out-of-pocket costs and expenses relating to any amendments,
waivers or consents pursuant to the provisions hereof (whether or not the
same are actually executed and delivered), including, without limitation,
any amendments, waivers or consents resulting from any work-out,
renegotiation or restructuring relating to the performance by the Company
of its obligations under this Agreement and the Notes. The Company also
agrees that it will pay and save the Purchaser harmless against any and
all liability with respect to obtaining a "private placement number" for
the Notes from Standard & Poor's Corporation in accordance with the
requirements of the National Association of Insurance Commissioners and
with respect to stamp and other taxes, if any, which may be payable or
which may be determined to be payable in connection with the execution and
delivery of this Agreement or the initial issuance of the Notes, whether
or not any Notes are then outstanding. The Company agrees to protect and
indemnify the Purchaser against any liability for any and all brokerage
fees and commissions payable or claimed to be payable to any Person in
connection with the transactions contemplated by this Agreement, other
than any such fees or commissions claimed by any Person engaged by the
Purchaser. The Purchaser hereby represents to the Company that no broker
or finder was employed or retained by it in connection with its purchase
of the Notes.
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative. No
delay or failure on the part of the holder of any Note in the exercise of
any power or right shall operate as a waiver thereof; nor shall any single
or partial exercise of the same preclude any other or further exercise
thereof, or the exercise of any other power or right, and the rights and
remedies of the holder of any Note are cumulative to and are not exclusive
of any rights or remedies any such holder would otherwise have, and no
waiver or consent, given or extended pursuant to Section 7, shall extend
to or affect any obligation or right not expressly waived or consented to.
Section 9.6. Notices. All communications provided for hereunder
shall be in writing and, if to the Purchaser, delivered or mailed by
overnight courier or by facsimile communication, in each case addressed to
the Purchaser at the Purchaser's address appearing on Schedule I to this
Agreement or such other address as the Purchaser or the subsequent holder
of any Note initially issued to the Purchaser may designate to the Company
in writing, and, if to the Company, delivered or mailed by prepaid
overnight courier or by facsimile communication to the Company at the
address specified on page 1 hereof, Attention: Treasurer, or to such other
address as the Company may in writing designate to the Purchaser or to a
subsequent holder of the Note initially issued to the Purchaser; provided,
however, that a notice to you by overnight courier shall only be effective
if delivered to you at a street address designated for such purpose in
Schedule I attached hereto, and a notice to the Purchaser by facsimile
communication shall only be effective if confirmed by prepaid overnight
courier, or, in either case, as the Purchaser or a subsequent holder of
any Note initially issued to the Purchaser may designate to the Company in
writing.
Section 9.7. Successors and Assigns. This Agreement shall be
binding upon the Company and its successors and assigns and shall inure to
the benefit of the Purchaser and to the benefit of its successors and
assigns, including each successive holder or holders of any Notes;
provided, however, that notwithstanding any other provisions of this
Agreement or the Notes, the Notes shall not be transferable to any Person
that is not an Institutional Holder.
Section 9.8. Survival of Covenants and Representations. All
covenants, representations and warranties made by the Company herein and
in any certificates delivered pursuant hereto, whether or not in
connection with the Closing Date, shall survive the closing and the
delivery of this Agreement and the Notes.
Section 9.9. Severability. Should any part of this Agreement for
any reason be declared invalid by a court of competent jurisdiction, such
decision shall not affect the validity of any remaining portion, which
remaining portion shall remain in force and effect as if this Agreement
had been executed with the invalid portion thereof eliminated and it is
hereby declared the intention of the parties hereto that they would have
executed the remaining portion of this Agreement without including therein
any such part which may, for any reason, be declared invalid.
Section 9.10. Reproduction of Documents. This Agreement and all
documents relating thereto, including without limitation, (a) consents,
waivers and modifications which may hereafter be executed, (b) documents
received by the Purchaser at the closing of their respective purchases of
the Notes (except the Notes themselves), and (c) financial statements,
certificates and other information previously or hereafter furnished to
the Purchaser, may be reproduced by the Purchaser by any photographic,
photostatic, microfilm, micro-card, miniature photographic or other
similar process and the Purchaser may destroy any original document so
reproduced. The Company agrees and stipulates that 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 the Purchaser in the regular
course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in
evidence.
Section 9.11. Governing Law; Waiver of Jury Trial. (a) This
Agreement and the Notes issued and sold hereunder shall be governed by and
construed in accordance with Wisconsin law. Notwithstanding the preceding
sentence, nothing in this Agreement shall be construed to subject the
holder of any Notes that is an insurance company to the laws of the State
of Wisconsin.
(b) The Company and the Purchaser each hereby irrevocably and
unconditionally waive trial by jury.
Section 9.12. Captions. The descriptive headings of the various
Sections or parts of this Agreement are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
The execution hereof by the Purchaser shall constitute a contract
between us for the uses and purposes hereinabove set forth, and this
Agreement may be executed in any number of counterparts, each executed
counterpart constituting an original but all together only one agreement.
Xxxxxxx Worldwide Associates, Inc.
By: /s/
Its: Senior Vice President & CFO
Accepted as of the first date written above.
The Northwestern Mutual Life Insurance
Company
By: /s/ Xxxxxxx X. Xxxxxx
Its: Vice President
Name and Address of Purchaser
Principal Amount
Name and Address of Notes
of Purchaser to Be Purchased
The Northwestern Mutual $25,000,000
Life Insurance Company
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Securities Department
Telecopier Number: (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Xxxxxxx Worldwide Associates, Inc., 7.15% Senior Notes Due October 15,
2007, PPN 479254 B @ 2, principal, premium or interest") to:
Bankers Trust Company (ABA #0210-01033)
00 Xxxx Xxxxxx
Insurance Xxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
for credit to: The Northwestern Mutual Life Insurance Company
Account Number 00-000-000
Notices
All notices and communications to be addressed as first provided above,
except notices with respect to payments and written confirmation of each
such payment to be addressed, Attention: Investment Operations.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
Subsidiaries of the Company
The following lists the direct and indirect subsidiaries of Xxxxxxx
Worldwide Associates, Inc. as of August 1, 1997:
Jurisdiction in Which
Name of Subsidiary(1)(2) Incorporated
Airguide Instruments Company Illinois
America Outdoors, Inc.(3) Alabama
Xxxxxxx Fishing, Inc.(3) Delaware
Xxxxxxx Leisure Incentives, Inc.(3) Delaware
Xxxxxxx Worldwide Associates Australia Pty. Ltd. Australia
Xxxxxxx Worldwide Associates Canada Inc. Canada
Xxxxxxxx Sports, S.A. France
Old Town Canoe Company Delaware
Porelon, Inc.(3) Delaware
Microfoam, Inc.(3) New York
Scubapro Sweden AB Sweden
Seaco/Elliot, Inc.(3) Delaware
Under Sea Industries, Inc. Delaware
JWA Holding B.V. Netherlands
Xxxxxxx Beteiligungsgesellschaft GmbH Germany
Xxxx Wolfskin Ausrustung fur Draussen GmbH Germany
Xxxxxxx Outdoors V GmbH Germany
Scubapro Taucherauser GmbH Germany
Uwatec AG Switzerland
Uwatec Instruments Deutschland Germany
Uwatec USA, Inc. Maine
Uwatec Espana, S.A. Spain
Uwatec U.K., Ltd. United Kingdom
Uwatec Asia, Ltd.(4) Hong Kong
Uwatec Batam Indonesia
Uwatec France France
Uwaplast AG Switzerland
Scubapro Asia, Ltd. Japan
Scubapro Espana, S.A.(5) Spain
Scubapro Eu AG Switzerland
Scubapro Europe Benelux, S.A. Belgium
Scubapro Europe S.R.L. Italy
Scubapro Italy S.R.L. Italy
Scubapro Norge AS Norway
Scubapro Taucherausrustungen Gesellschaft Austria
GmbH
Scubapro (UK) Ltd.(6) United Kingdom
(1) Unless otherwise indicated in brackets, each company does business
only under its legal name.
(2) Unless otherwise indicated by footnote, each company is a wholly-
owned subsidiary of Xxxxxxx Worldwide Associates, Inc. (through
direct or indirect ownership).
(3) Inactive
(4) Percentage of stock owned is 60%.
(5) Percentage of stock owned is 98%.
(6) Percentage of stock owned is 99%
Description of Debt and Leases
as of August 1, 1997
($000's omitted, U.S. Dollars)
1. Current Debt for borrowed money of the Company and its Restricted
Subsidiaries is as follows:
Xxxxxxx Worldwide Associates, Inc. $9,482
Xxxx Wolfskin Ausrustung fur Draussen GmbH 2,668
Xxxxxxx Worldwide Associates Canada Inc. 2,150
Xxxxxxxx Sports, S.A. 1,632
Old Town Canoe Company 357
Scubapro Taucherauser GmbH 280
Scubapro Asia, Ltd. 760
Xxxxxxx Worldwide Associates Australia Pty. 15
Ltd.
Scubapro Italy S.R.L. 2,105
Scubapro Sweden AB 187
Scubapro (UK) Ltd. 245
Uwatec AG (and certain subsidiaries) 994
----
Uwatec USA, Inc. 900
----
Other (29)
Total Current Debt for borrowed money 21,746
======
2. Funded Debt for borrowed money (including Capitalized Leases and
Guarantees relating to the obligations of persons other than the
Company and its Restricted Subsidiaries) of the Company and its
Restricted Subsidiaries is as follows:
Xxxxxxx Worldwide Associates, Inc. 92,000*
Xxxxxxxx Sports, S.A. 1,247
Uwatec AG 1,609
Scubapro Europe Benelux 264
Xxxxxxx Beteiligugsquesellscheft GmbH 10,000
-------
Total Funded Debt for borrowed
money $105,120
=======
3. Capitalized Leases of the Company and its Restricted Subsidiaries
outstanding on the Closing Date are as follows:
None
4. Guaranties of the Company and its Restricted Subsidiaries relating to
the obligations of Persons other than the Company and its Restricted
Subsidiaries outstanding on the Closing Date are as follows:
None
5. Liens existing as of the date of this Agreement securing Indebtedness
of the Company or any Restricted Subsidiary outstanding on such date:
None
Xxxxxxx Worldwide Associates, Inc.
7.15% Senior Note
Due October 15, 2007
PPN 479254 B@ 2
No. R-
____________, 1997
$
Xxxxxxx Worldwide Associates, Inc., a Wisconsin corporation (the
"Company"), for value received, hereby promises to pay to
or registered assigns
on the fifteenth day of October, 2007
the principal amount of
Dollars ($_________)
and to pay interest (computed on the basis of a 360-day year of twelve 30-
day months) on the principal amount from time to time remaining unpaid
hereon at the rate of 7.15% per annum from the date hereof until maturity,
payable semiannually on the fifteenth day of each October and April in
each year commencing April 15, 1998, and at maturity. The Company agrees
to pay interest on overdue principal (including any overdue optional
prepayment of principal) and Make-Whole Amount, if any, and (to the extent
legally enforceable) on any overdue installment of interest, at the
Overdue Rate after the due date thereof, whether by acceleration or
otherwise, until paid. "Overdue Rate" means the lesser of (a) the maximum
rate permitted by law or (b) 9.15%.
Except as provided in Section 2.6 of the Note Agreement (as
hereinafter defined), both the principal hereof and interest hereon are
payable at the principal office of the Company in Racine, Wisconsin, in
coin or currency of the United States of America which at the time of
payment shall be legal tender for the payment of public and private debts.
If any amount of principal, Make-Whole Amount, if any, or interest on or
in respect of this Note becomes due and payable on any date which is not a
business day in Xxx Xxxx, Xxx Xxxx, Xxxxxxx, Xxxxxxxx and Racine,
Wisconsin, such amount shall be payable on the next preceding business
day.
This Note is one of the 7.15% Senior Notes due October 15, 2007 (the
"Notes") of the Company in the aggregate principal amount of $25,000,000
issued under and pursuant to the terms and provisions of the Note
Agreement dated as of, September 15, 1997 (the "Note Agreement"), entered
into by the Company with the original purchaser therein referred to, and
this Note and the holder hereof are entitled equally and ratably with all
other Notes outstanding under the Note Agreement and the holders thereof
to all the benefits provided for thereby or referred to therein, to which
Note Agreement reference is hereby made for a statement thereof.
This Note and the other Notes outstanding under the Note Agreement
may be declared due prior to their expressed maturity dates and certain
prepayments are required to be made thereon, all in the events, on the
terms and in the manner and amounts as provided in the Note Agreement.
The Notes are not subject to prepayment or redemption at the option
of the Company prior to their expressed maturity dates except on the terms
and conditions and in the amounts and with the Make-Whole Amount, if any,
set forth in Section 2 of the Note Agreement.
This Note is registered on the books of the Company and is
transferable only by surrender thereof at the principal office of the
Company duly endorsed or accompanied by a written instrument of transfer
duly executed by the registered holder of this Note or its attorney duly
authorized in writing. Payment of or on account of principal, Make-Whole
Amount, if any, and interest on this Note shall be made only to or upon
the order in writing of the registered holder.
This Note and said Note Agreement are governed by and construed in
accordance with the laws of Wisconsin.
Xxxxxxx Worldwide Associates, Inc.
By:
Its
Xxxxxxx Worldwide Associates, Inc.
Closing Certificate
The Northwestern Mutual
Life Insurance Company
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Gentlemen:
This certificate is delivered to you in compliance with the
requirements of the Note Agreement dated as of October 15, 1997 (the
"Agreement"), entered into by the undersigned, Xxxxxxx Worldwide
Associates, Inc., a Wisconsin corporation (the "Company"), with you, and
as an inducement to and as part of the consideration for your purchase on
this date of $25,000,000 aggregate principal amount of its 7.15% Senior
Notes due October 15, 2007 (the "Notes") of the Company, pursuant to the
Agreement.
The terms which are capitalized herein shall have the same meanings
as in the Agreement.
The Company represents and warrants to each of you as follows:
1. Subsidiaries. Schedule II to the Agreement, states the name of
each of the Company's Subsidiaries, its jurisdiction of incorporation and
the percentage of its Voting Stock owned by the Company and/or its
Subsidiaries. Those Subsidiaries listed in Section 1 of said Schedule II
constitute all of the Subsidiaries of the Company. The Company and each
Subsidiary has good and marketable title to all of the shares it purports
to own of the stock of each Subsidiary, free and clear in each case of any
Lien. All such shares have been duly issued and are fully paid and non-
assessable, except (in the case of a Wisconsin corporation) as provided by
Section 180.0622(2)(b) of the Wisconsin Statutes.
2. Corporate Organization and Authority. The Company, and each
Restricted Subsidiary,
(a) is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation;
(b) has all requisite power and authority and all necessary
licenses and permits to own and operate its properties and to carry
on its business as now conducted and as presently proposed to be
conducted except where the failure to obtain such licenses or permits
would not have a material adverse effect on the condition (financial
or otherwise) of the Company and its Restricted Subsidiaries taken as
a whole or on the ability of the Company to perform its obligations
under this Agreement or the Notes; and
(c) is duly licensed or qualified and is in good standing as a
foreign corporation in each jurisdiction wherein the nature of the
business transacted by it or the nature of the property owned or
leased by it makes such licensing or qualification necessary except
where the failure to be so licensed or qualified would not have a
material adverse effect on the condition (financial or otherwise) of
the Company and its Restricted Subsidiaries taken as a whole or on
the ability of the Company to perform its obligations under this
Agreement or the Notes.
3. Business and Property. You have heretofore been furnished with
a copy of the Confidential Offering Memorandum dated July, 1997 (the
"Memorandum") prepared by Xxxxxx Gull Xxxxxxx & XxXxxxxx Inc. which
generally sets forth the business conducted and proposed to be conducted
by the Company and its Subsidiaries and the principal properties of the
Company and its Subsidiaries.
4. Financial Statements. (a) The consolidated balance sheets of
the Company and its consolidated Subsidiaries as of the last day of the
fiscal year in each of the fiscal years ended 1992 through 1996 and the
statements of operations and cash flows for the fiscal years ended on said
dates, each accompanied by a report thereon containing an opinion
unqualified as to scope or limitations imposed by the Company and
otherwise without qualification except as therein noted, by KPMG Peat
Marwick LLP, have been prepared in accordance with GAAP except as therein
noted, and present fairly the financial position of the Company and its
Subsidiaries as of such dates and the results of their operations and cash
flows for such periods, except to the extent modified pursuant to a
restatement thereof in a subsequent financial statement. The unaudited
consolidated balance sheet of the Company and its consolidated
Subsidiaries as of June 27, 1997, and the unaudited statements of
operations and cash flows for the nine-month period ended on said date
prepared by the Company have been prepared in accordance with GAAP, and
present fairly the financial position of the Company and its consolidated
Subsidiaries as of said date and the results of their operations and their
cash flows for such period subject to normal, recurring year-end audit
adjustments
(b) Since June 27, 1997, there has been no change in the condition,
financial or otherwise, of the Company and its consolidated Subsidiaries
as shown on the consolidated balance sheet as of such date except changes
in the ordinary course of business, none of which individually or in the
aggregate has been materially adverse except as disclosed in a footnote in
the Company's third quarter Form 10-Q ended on such date.
5. Indebtedness. Schedule II attached to the Agreement correctly
describes all Current Debt for borrowed money and Funded Debt for borrowed
money (including Capitalized Leases and Guaranties relating to the
obligations of Persons other than the Company and its Restricted
Subsidiaries) of the Company and its Restricted Subsidiaries outstanding
on August 1, 1997 and there have been no material increases in such
Current Debt, Funded Debt and Guarantees since such date.
6. Full Disclosure. The financial statements referred to in
paragraph 4 hereof, the Agreement, the Memorandum and all other written
documents and statements furnished by the Company to you in connection
with the negotiation of the sale of the Notes, taken together, do not
contain any untrue statement of a material fact or omit a material fact
necessary to make the statements contained therein or herein not
misleading.
7. Pending Litigation. There are no proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company or
any Restricted Subsidiary in any court or before any governmental
authority or arbitration board or tribunal which could reasonably be
expected to have a material adverse effect on the condition (financial or
otherwise) of the Company and its Restricted Subsidiaries taken as a whole
or on the ability of the Company to perform its obligations under this
Agreement or the Notes.
8. Title to Property. The Company and each Restricted Subsidiary
has good and marketable title in fee simple (or its equivalent under
applicable law) to all material parcels of real property and has good
title to all the other material items of property it purports to own,
including that reflected in the most recent balance sheet referred to in
paragraph 4 hereof, except as sold or otherwise disposed of in the
ordinary course of business and except for Liens permitted by the
Agreement.
9. Patents and Trademarks. The Company and each Restricted
Subsidiary owns or possesses adequate licenses for the use of all the
patents, trademarks, trade names, service marks, copyright, licenses and
rights with respect to the foregoing necessary for the present conduct of
its business, without any known conflict with the rights of others.
10. Sale is Legal and Authorized. The sale of the Notes and
compliance by the Company with all of the provisions of the Agreement and
the Notes--
(a) are within the corporate powers of the Company;
(b) will not violate any provisions of any law or any order of
any court or governmental authority or agency and will not conflict
with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default under the Articles of
Incorporation or By-laws of the Company or any indenture or other
agreement or instrument to which the Company is a party or by which
it may be bound or result in the imposition of any Liens or
encumbrances on any property of the Company; and
(c) have been duly authorized by proper corporate action on the
part of the Company (no action by the stockholders of the Company
being required by law, by the Articles of Incorporation or By-laws of
the Company or otherwise), executed and delivered by the Company and
the Agreement and the Notes constitute the legal, valid and binding
obligations, contracts and agreements of the Company enforceable in
accordance with their respective terms.
11. No Defaults. No Default or Event of Default has occurred and is
continuing. The Company is not in default in the payment of principal or
interest on any Funded Debt or Current Debt and is not in default under
any instrument or instruments or agreements under and subject to which any
Funded Debt or Current Debt has been issued and no event has occurred and
is continuing under the provisions of any such instrument or agreement
which with the lapse of time or the giving of notice, or both, would
constitute an event of default thereunder.
12. Governmental Consent. No approval, consent or withholding of
objection on the part of any regulatory body, state, Federal or local, is
necessary in connection with the execution and delivery by the Company of
the Agreement or the Notes or compliance by the Company with any of the
provisions of the Agreement or the Notes.
13. Taxes. All tax returns required to be filed by the Company or
any Restricted Subsidiary in any jurisdiction have, in fact, been filed,
and all taxes, assessments, fees and other governmental charges upon the
Company or any Restricted Subsidiary or upon any of their respective
properties, income or franchises, which are shown to be due and payable in
such returns have been paid. For all taxable years ending on or before
September 30, 1994, the Federal income tax liability of the Company and
its Restricted Subsidiaries has been satisfied and either the period of
limitations on assessment of additional Federal income tax has expired or
the Company and its Restricted Subsidiaries have entered into an agreement
with the Internal Revenue Service closing conclusively the total tax
liability for the taxable year. The Company does not know of any proposed
additional tax assessment against it for which adequate provision has not
been made on its accounts, and no material controversy in respect of
additional Federal or state income taxes due since said date is pending or
to the knowledge of the Company threatened. The provisions for taxes on
the books of the Company and each Restricted Subsidiary are adequate for
all open years, and for its current fiscal period.
14. Use of Proceeds. The net proceeds from the sale of the Notes
will be used to refinance existing bank debt and for other corporate
purposes. None of the transactions contemplated in the Agreement
(including, without limitation thereof, the use of proceeds from the
issuance of the Notes) will violate or result in a violation of Section 7
of the Securities Exchange Act of 1934, as amended, or any regulation
issued pursuant thereto, including, without limitation, Regulations G, T
and X of the Board of Governors of the Federal Reserve System, 12 C.F.R.,
Chapter 11. Neither the Company nor any Subsidiary owns or intends to
carry or purchase any "margin stock" within the meaning of said Regulation
G.
15. Private Offering. Neither the Company, directly or indirectly,
nor any agent on its behalf has offered or will offer the Notes or any
similar Security or has solicited or will solicit an offer to acquire the
Notes or any similar Security from or has otherwise approached or
negotiated or will approach or negotiate in respect of the Notes or any
similar Security with any Person other than the Purchaser and not more
than twenty other institutional investors, each of whom was offered a
portion of the Notes at private sale for investment. Neither the Company,
directly or indirectly, nor any agent on its behalf has offered or will
offer the Notes or any similar Security or has solicited or will solicit
an offer to acquire the Notes or any similar Security from any Person so
as to bring the issuance and sale of the Notes within the provisions of
Section 5 of the Securities Act of 1933, as amended.
16. ERISA. The consummation of the transactions provided for in the
Agreement and compliance by the Company with the provisions thereof and
the Notes issued thereunder will not involve any prohibited transaction
within the meaning of ERISA or Section 4975 of the Internal Revenue Code
of 1986, as amended. Each Plan complies in all material respects with all
applicable statutes and governmental rules and regulations, and (a) no
Reportable Event has occurred and is continuing with respect to any Plan,
(b) neither the Company nor any ERISA Affiliate has withdrawn from any
Plan or Multiemployer Plan or instituted steps to do so, and (c) no steps
have been instituted to terminate any Plan. No condition exists or event
or transaction has occurred in connection with any Plan which could result
in the incurrence by the Company or any ERISA Affiliate of any material
liability, fine or penalty. No Plan maintained by the Company or any
ERISA Affiliate, nor any trust created thereunder, has incurred any
"accumulated funding deficiency" as defined in Section 302 of ERISA nor
does the present value of all benefits vested under all Plans exceed, as
of the last annual valuation date, the value of the assets of the Plans
allocable to such vested benefits by an amount greater than $1,000,000 in
the aggregate. Neither the company nor any ERISA Affiliate has any
contingent liability with respect to any post-retirement "welfare benefit
plan" (as such term is defined in ERISA) except as has been disclosed to
the Purchaser.
17. Compliance with Law. Neither the Company nor any Restricted
Subsidiary (a) is in violation of any law, ordinance, franchise,
governmental rule or regulation to which it is subject; or (b) has failed
to obtain any license, permit, franchise or other governmental
authorization necessary to the ownership of its property or to the conduct
of its business, which violation or failure to obtain would materially
adversely affect the business, prospects, profits, properties or condition
(financial or otherwise) of the Company and its Restricted Subsidiaries,
taken as a whole, or impair the ability of the Company to perform its
obligations contained in the Agreement or the Notes. Neither the Company
nor any Restricted Subsidiary is in default with respect to any order of
any court or governmental authority or arbitration board or tribunal.
18. Compliance with Environmental Laws. The Company is not in
violation of any applicable Federal, state, or local laws, statutes,
rules, regulations or ordinances relating to public health, safety or the
environment, including, without limitation, relating to releases,
discharges, emissions or disposals to air, water land or ground water, to
the withdrawal or use of ground water, to the use, handling or disposal of
polychlorinated biphenyls (PCB's), asbestos or urea formaldehyde, to the
treatment, storage, disposal or management of hazardous substances
(including, without limitation, petroleum, crude oil or any fraction
thereof, or other hydrocarbons), pollutants or contaminants, to exposure
to toxic, hazardous or other controlled, prohibited or regulated
substances which violation could have a material adverse effect on the
business, prospects, profits, properties or condition (financial or
otherwise) of the Company and its Restricted Subsidiaries, taken as a
whole. The Company does not know of any liability or class of liability
of the Company or any Restricted Subsidiary under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
(42 U.S.C. Section 9601 et seq.), or the Resource Conservation and
Recovery Act of 1976, as amended (42 U.S.C. Section 6901 et seq.).
Dated:
Xxxxxxx Worldwide Associates, Inc.
By:
Its
Description of Special Counsel's Closing Opinion
The closing opinion of Xxxxxxx and Xxxxxx, special counsel to the
Purchaser, called for by Section 4.1 of the Note Agreement, shall be dated
the Closing Date and addressed to the Purchaser, shall be satisfactory in
form and substance to the Purchaser and shall be to the effect that:
1. The Company is a corporation, validly existing under the
laws of the State of Wisconsin and has the corporate power and the
corporate authority to execute and deliver the Note Agreement and to
issue the Notes.
2. The Note 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 and 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, and the Notes being
delivered on the date hereof 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 and 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 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 Xxxxx & Lardner is satisfactory in scope and form to Xxxxxxx and Xxxxxx
and that, in their opinion, the Purchaser is justified in relying thereon.
In rendering the opinion set forth in paragraph 1 above, Xxxxxxx and
Xxxxxx may rely, as to matters referred to in paragraph 1, solely upon an
examination of the Articles of Incorporation certified by, and a
certificate of good standing of the Company from, the Secretary of State
of the State of Wisconsin, the By-laws of the Company and the general
business corporation law of the State of Wisconsin. The opinion of
Xxxxxxx and Xxxxxx is limited to the laws of the State of Illinois, the
general business corporation law of the State of Wisconsin 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 and upon representations of the
Company and the Purchaser delivered in connection with the issuance and
sale of the Notes.
Description of Closing Opinion of
Independent Counsel to the Company
The closing opinion of Xxxxx & Lardner, independent counsel for the
Company, which is called for by Section 4.2 of the Note Agreement, shall
be dated the Closing Date and addressed to the Purchaser, shall be
satisfactory in scope and form to the Purchaser and shall be to the effect
that:
(1) The Company is a corporation legally existing under the
laws of the State of Wisconsin, has corporate power and authority and
is duly authorized to enter into and perform the Note Agreement and
to issue the Notes and incur the Indebtedness to be evidenced thereby
and has full corporate power and 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) The Note Agreement has been duly authorized by proper
corporate action on the part of the Company, have been duly executed
and delivered by an authorized officer of the Company and constitutes
the legal, valid and binding contract and agreement of the Company
enforceable in accordance with its terms, except as enforceability
thereof may be limited by (a) bankruptcy, insolvency or similar laws,
affecting the enforcement of creditors' rights generally and (b)
equitable principles of general applicability (regardless of whether
such enforceability is considered in a proceeding in equity or at
law);
(3) The Notes have been duly authorized by proper corporate
action on the part of the Company, have been duly executed by an
authorized officer of the Company and delivered and constitute the
legal, valid and binding obligations of the Company enforceable in
accordance with their terms, except as enforceability thereof may be
limited by (a) bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and (b) equitable
principles of general applicability (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
(4) The issuance and sale of the Notes and the execution,
delivery and performance by the Company of the Note 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 or encumbrance upon any of the property of the Company
pursuant to the provisions of the Articles of Incorporation or By-
laws of the Company or any agreement or other instrument known to
such counsel to which the Company or any Subsidiary is a party or by
which the Company or any Subsidiary may be bound;
(5) No approval, consent or withholding of objection of or on
the part of, or filing registration or qualification with, any
governmental body, Federal, state or local, is necessary in
connection with the execution and delivery of the Note Agreement by
the Company or the issuance, sale and delivery of the Notes by the
Company;
(6) The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Agreement is an exempt
transaction under the Securities Act of 1933, as amended, and does
not under existing law require the registration of the Notes under
the Securities Act of 1933, as amended, or the qualification of an
indenture in respect thereof under the Trust Indenture Act of 1939 as
amended;
(7) There are no proceedings pending or threatened, against or
affecting the Company or any Principal Subsidiary in any court or
before any governmental authority or arbitration board or tribunal
which involve the reasonable possibility of materially and adversely
affecting the properties, business, prospects, profits or condition
(financial or otherwise) of the Company and its Subsidiaries; and
(8) None of the transactions contemplated in the Note Agreement
(including, without limitation thereof, the use of the proceeds from
the sale of the Notes) will violate or result in a violation of
Section 7 of the Securities Exchange Act of 1934, as amended, or any
regulations issued pursuant thereto, including, without limitation,
Regulations G, T or X of the Board of Governors of the Federal
Reserve System (12 C.F.R., Chapter II).
The opinion of Xxxxx & Xxxxxxx may also set forth such qualifications
and assumptions which are acceptable to the Purchaser and shall cover such
other matters relating to the sale of the Notes as the Purchaser 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. With
respect to matters of laws of any foreign jurisdiction, such counsel shall
be entitled to rely upon the opinion of local counsel for such
jurisdiction.
