EXHIBIT 4.15
CONFORMED COPY
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ELKCORP
$25,000,000
4.69% Senior Notes
due July 15, 2007
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NOTE PURCHASE AGREEMENT
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Dated as of March 1, 2003
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TABLE OF CONTENTS
Section Page
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1. AUTHORIZATION OF NOTES..................................................................................1
2. SALE AND PURCHASE OF NOTES..............................................................................1
3. CLOSING.................................................................................................2
4. CONDITIONS TO CLOSING...................................................................................2
4.1. Representations and Warranties.................................................................2
4.2. Performance; No Default........................................................................2
4.3. Compliance Certificates........................................................................3
4.4. Opinions of Counsel............................................................................3
4.5. Purchase Permitted By Applicable Law, etc......................................................3
4.6. Sale of Other Notes............................................................................3
4.7. Payment of Special Counsel Fees................................................................3
4.8. Private Placement Number.......................................................................4
4.9. Changes in Corporate Structure.................................................................4
4.10. Subsidiary Guaranty............................................................................4
4.11. Proceedings and Documents......................................................................4
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY...........................................................4
5.1. Organization; Power and Authority..............................................................4
5.2. Authorization, etc.............................................................................4
5.3. Disclosure.....................................................................................5
5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates...............................5
5.5. Financial Statements...........................................................................6
5.6. Compliance with Laws, Other Instruments, etc...................................................6
5.7. Governmental Authorizations, etc...............................................................7
5.8. Litigation; Observance of Agreements, Statutes and Orders......................................7
5.9. Taxes..........................................................................................7
5.10. Title to Property; Leases......................................................................8
5.11. Licenses, Permits, etc.........................................................................8
5.12. Compliance with ERISA..........................................................................8
5.13. Private Offering by the Company................................................................9
5.14. Use of Proceeds; Margin Regulations............................................................9
5.15. Existing Debt; Future Liens...................................................................10
5.16. Foreign Assets Control Regulations, Anti-Terrorism Order, etc.................................10
5.17. Status under Certain Statutes.................................................................10
5.18. Environmental Matters.........................................................................11
5.19. Solvency of Subsidiary Guarantors.............................................................11
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6. REPRESENTATIONS OF THE PURCHASERS......................................................................11
6.1. Purchase for Investment.......................................................................11
6.2. Source of Funds...............................................................................12
7. INFORMATION AS TO COMPANY..............................................................................13
7.1. Financial and Business Information............................................................13
7.2. Officer's Certificate.........................................................................16
7.3. Inspection....................................................................................17
8. PREPAYMENT OF THE NOTES................................................................................17
8.1. No Scheduled Prepayments......................................................................17
8.2. Optional Prepayments with Make-Whole Amount...................................................17
8.3. Allocation of Partial Prepayments.............................................................18
8.4. Maturity; Surrender, etc......................................................................18
8.5. Purchase of Notes.............................................................................18
8.6. Make-Whole Amount.............................................................................18
9. AFFIRMATIVE COVENANTS..................................................................................20
9.1. Compliance with Law...........................................................................20
9.2. Insurance.....................................................................................20
9.3. Maintenance of Properties.....................................................................20
9.4. Payment of Taxes and Claims...................................................................20
9.5. Corporate Existence, etc......................................................................21
10. NEGATIVE COVENANTS.....................................................................................21
10.1. Consolidated Net Debt.........................................................................21
10.2. Interest Coverage.............................................................................21
10.3. Adjusted Consolidated Net Worth...............................................................21
10.4. Debt of Restricted Subsidiaries...............................................................22
10.5. Liens.........................................................................................22
10.6. Sale of Assets................................................................................24
10.7. Mergers, Consolidations, etc..................................................................25
10.8. Disposition of Stock of Restricted Subsidiaries...............................................26
10.9. Designation of Restricted and Unrestricted Subsidiaries.......................................26
10.10. Subsidiary Guaranty...........................................................................27
10.11. Nature of Business............................................................................27
10.12. Transactions with Affiliates..................................................................27
11. EVENTS OF DEFAULT......................................................................................27
12. REMEDIES ON DEFAULT, ETC...............................................................................30
12.1. Acceleration..................................................................................30
12.2. Other Remedies................................................................................30
12.3. Rescission....................................................................................30
12.4. No Waivers or Election of Remedies, Expenses, etc.............................................31
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13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES..........................................................31
13.1. Registration of Notes.........................................................................31
13.2. Transfer and Exchange of Notes................................................................31
13.3. Replacement of Notes..........................................................................32
14. PAYMENTS ON NOTES......................................................................................32
14.1. Place of Payment..............................................................................32
14.2. Home Office Payment...........................................................................33
15. EXPENSES, ETC..........................................................................................33
15.1. Transaction Expenses..........................................................................33
15.2. Survival......................................................................................33
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT...........................................34
17. AMENDMENT AND WAIVER...................................................................................34
17.1. Requirements..................................................................................34
17.2. Solicitation of Holders of Notes..............................................................34
17.3. Binding Effect, etc...........................................................................35
17.4. Notes held by Company, etc....................................................................35
18. NOTICES................................................................................................35
19. REPRODUCTION OF DOCUMENTS..............................................................................36
20. CONFIDENTIAL INFORMATION...............................................................................36
21. SUBSTITUTION OF PURCHASER..............................................................................37
22. RELEASE OF SUBSIDIARY GUARANTOR........................................................................37
23. MISCELLANEOUS..........................................................................................38
23.1. Successors and Assigns........................................................................38
23.2. Payments Due on Non-Business Days.............................................................38
23.3. Severability..................................................................................38
23.4. Construction..................................................................................38
23.5. Counterparts..................................................................................38
23.6. Governing Law.................................................................................38
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SCHEDULE A -- Information Relating to Purchasers
SCHEDULE B -- Defined Terms
SCHEDULE B-1 -- Existing Priority Debt
SCHEDULE B-2 -- Existing Investments
SCHEDULE 4.9 -- Changes in Corporate Structure
SCHEDULE 5.3 -- Disclosure Materials
SCHEDULE 5.4 -- Subsidiaries; Affiliates
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.8 -- Litigation
SCHEDULE 5.11 -- Licenses, Permits, etc.
SCHEDULE 5.15 -- Existing Debt
SCHEDULE 5.18 -- Environmental Matters
SCHEDULE 10.5 -- Liens
EXHIBIT 1(a) -- Form of Senior Note
EXHIBIT 1(b) -- Form of Subsidiary Guaranty
EXHIBIT 4.4(a) -- Form of Opinion of Counsel for the Company
EXHIBIT 4.4(b) -- Form of Opinion of Special Counsel for the Purchasers
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ELKCORP
00000 Xxxxxx Xxxxxxx
Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
(000) 000-0000
Fax: (000) 000-0000
$25,000,000 4.69% Senior Notes due July 15, 2007
Dated as of March 1, 2003
TO EACH OF THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
ELKCORP, a Delaware corporation (the "Company"), agrees with
you as follows:
1. AUTHORIZATION OF NOTES.
The Company has authorized the issue and sale of $25,000,000
aggregate principal amount of its 4.69% Senior Notes due July 15, 2007 (the
"Notes", such term to include any such Notes issued in substitution therefor
pursuant to Section 13 of this Agreement). The Notes shall be substantially in
the form set out in Exhibit 1(a) with such changes therefrom, if any, as may be
approved by you, the Other Purchasers and the Company. Certain capitalized terms
used in this Agreement are defined in Schedule B; references to a "Schedule" or
an "Exhibit" are, unless otherwise specified, to a Schedule or an Exhibit
attached to this Agreement. Subject to Section 22, the Notes will be guaranteed
by each Restricted Subsidiary that is or in the future becomes a signatory to
the Bank Guaranty or a borrower under the Credit Agreement (individually, a
"Subsidiary Guarantor" and collectively, the "Subsidiary Guarantors") pursuant
to a guaranty in substantially the form of Exhibit 1(b) (the "Subsidiary
Guaranty"). The Notes shall be unsecured and shall rank pari passu with the
Company's Debt to Banks under the Credit Agreement and with all other senior
unsecured Debt of the Company.
2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the
Company will issue and sell to you and each of the other purchasers named in
Schedule A (the "Other Purchasers"), and you and the Other Purchasers will
purchase from the Company, at the Closing provided for in Section 3, Notes in
the principal amount specified opposite your names in Schedule A at the
purchase price of 100% of the principal amount thereof. Your obligation
hereunder and the obligations of the Other Purchasers are several and not joint
obligations and you shall have no liability to any Person for the performance or
non-performance by any Other Purchaser hereunder.
3. CLOSING.
The sale and purchase of the Notes to be purchased by you and
the Other Purchasers shall occur at the offices of Xxxxxxx Xxxxxx & Xxxxxxx LLC,
000 X. Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000 at 9:00 a.m., Chicago
time, at a closing (the "Closing") on March 6, 2003 or on such other Business
Day thereafter on or prior to March 14, 2003 as may be agreed upon by the
Company and you and the Other Purchasers. At the Closing the Company will
deliver to you the Notes to be purchased by you in the form of a single Note (or
such greater number of Notes in denominations of at least $100,000 as you may
request) dated the date of the Closing and registered in your name (or in the
name of your nominee), against delivery by you to the Company or its order of
immediately available funds in the amount of the purchase price therefor by wire
transfer of immediately available funds for the account of the Company to
account number 1252603284 at Bank of America, 000 Xxxx Xxxxxx, Xxxxxx, Xxxxx
00000, ABA #000000000. If at the Closing the Company fails to tender such Notes
to you as provided above in this Section 3, or any of the conditions specified
in Section 4 shall not have been fulfilled to your satisfaction, you shall, at
your election, be relieved of all further obligations under this Agreement,
without thereby waiving any rights you may have by reason of such failure or
such nonfulfillment.
4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold
to you at the Closing is subject to the fulfillment to your satisfaction, prior
to or at the Closing, of the following conditions:
4.1. REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Company in this
Agreement shall be correct when made and at the time of the Closing.
4.2. PERFORMANCE; NO DEFAULT.
The Company shall have performed and complied with all
agreements and conditions contained in this Agreement required to be performed
or complied with by it prior to or at the Closing and after giving effect to the
issue and sale of the Notes (and the application of the proceeds thereof as
contemplated by Section 5.14) no Default or Event of Default shall have occurred
and be continuing. Neither the Company nor any Restricted Subsidiary shall have
entered into any transaction since the date of the Existing Note Agreement that
would have been prohibited by Sections 10.1 through 10.12 hereof had such
Sections applied since such date.
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4.3. COMPLIANCE CERTIFICATES.
(a) Officer's Certificate. The Company shall have delivered to
you an Officer's Certificate, dated the date of the Closing, certifying
that the conditions specified in Sections 4.1, 4.2 and 4.9 have been
fulfilled.
(b) Secretary's Certificate. Each of the Company and each
Subsidiary Guarantor shall have delivered to you a certificate
certifying as to the resolutions attached thereto and other corporate
proceedings relating to the authorization, execution and delivery of
the Notes and the Agreement or the Subsidiary Guaranty, as the case may
be.
4.4. OPINIONS OF COUNSEL.
You shall have received opinions in form and substance
satisfactory to you, dated the date of the Closing (a) from Xxxxx & XxXxxxxx,
counsel to the Company, covering the matters set forth in Exhibit 4.4(a) and
covering such other matters incident to the transactions contemplated hereby as
you or your counsel may reasonably request (and the Company instructs its
counsel to deliver such opinion to you) and (b) from Xxxxxxx, Carton & Xxxxxxx,
your special counsel in connection with such transactions, substantially in the
form set forth in Exhibit 4.4(b) and covering such other matters incident to
such transactions as you may reasonably request.
4.5. PURCHASE PERMITTED BY APPLICABLE LAW, ETC.
On the date of the Closing your purchase of Notes shall (i) be
permitted by the laws and regulations of each jurisdiction to which you are
subject, without recourse to provisions (such as Section 1405(a)(8) of the New
York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (ii) not
violate any applicable law or regulation (including, without limitation,
Regulation U, T or X of the Board of Governors of the Federal Reserve System)
and (iii) not subject you to any tax, penalty or liability under or pursuant to
any applicable law or regulation, which law or regulation was not in effect on
the date hereof. If requested by you, you shall have received an Officer's
Certificate certifying as to such matters of fact as you may reasonably specify
to enable you to determine whether such purchase is so permitted.
4.6. SALE OF OTHER NOTES.
Contemporaneously with the Closing the Company shall sell to
the Other Purchasers and the Other Purchasers shall purchase the Notes to be
purchased by them at the Closing as specified in Schedule A.
4.7. PAYMENT OF SPECIAL COUNSEL FEES.
Without limiting the provisions of Section 15.1, the Company
shall have paid on or before the Closing the fees, charges and disbursements of
your special counsel referred to in Section 4.4, to the extent reflected in a
statement of such counsel rendered to the Company at least one Business Day
prior to the Closing.
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4.8. PRIVATE PLACEMENT NUMBER.
A Private Placement Number issued by Standard & Poor's CUSIP
Service Bureau (in cooperation with the Securities Valuation Office of the
National Association of Insurance Commissioners) shall have been obtained by
Xxxxxxx Xxxxxx & Xxxxxxx for the Notes.
4.9. CHANGES IN CORPORATE STRUCTURE.
Except as specified in Schedule 4.9, the Company shall not
have changed its jurisdiction of incorporation or been a party to any merger or
consolidation and shall not have succeeded to all or any substantial part of the
liabilities of any other entity, at any time following the date of the most
recent financial statements referred to in Schedule 5.5.
4.10. SUBSIDIARY GUARANTY.
Each Subsidiary Guarantor shall have executed and delivered
the Subsidiary Guaranty in favor of you and the Other Purchasers.
4.11. PROCEEDINGS AND DOCUMENTS.
All corporate and other proceedings in connection with the
transactions contemplated by this Agreement and all documents and instruments
incident to such transactions shall be satisfactory to you and your special
counsel, and you and your special counsel shall have received all such
counterpart originals or certified or other copies of such documents as you or
they may reasonably request.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
5.1. ORGANIZATION; POWER AND AUTHORITY.
The Company is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation, and is
duly qualified as a foreign corporation and is in good standing in each
jurisdiction in which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The Company has the corporate power and authority to
own or hold under lease the properties it purports to own or hold under lease,
to transact the business it transacts and proposes to transact, to execute and
deliver this Agreement and the Notes and to perform the provisions hereof and
thereof.
5.2. AUTHORIZATION, ETC.
This Agreement and the Notes have been duly authorized by all
necessary corporate action on the part of the Company, and this Agreement
constitutes, and upon execution and delivery thereof each Note will constitute,
a legal, valid and binding obligation of the
4
Company enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
The Subsidiary Guaranty has been duly authorized by all
necessary corporate or partnership action on the part of each Subsidiary
Guarantor and upon execution and delivery thereof will constitute the legal,
valid and binding obligation of each Subsidiary Guarantor, enforceable against
each Subsidiary Guarantor in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
5.3. DISCLOSURE.
The Company, through its agent, Banc of America Securities
LLC, has delivered to you and each Other Purchaser copies of the SEC Reports.
The SEC Reports, taken as a whole, fairly describe, in all material respects,
the general nature of the business and principal properties of the Company and
its Subsidiaries. Except as disclosed in Schedule 5.3, this Agreement, the SEC
Reports, the documents, certificates or other writings delivered to you by or on
behalf of the Company in connection with the transactions contemplated hereby
and the financial statements listed in Schedule 5.5, taken as a whole, do not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading in light of the
circumstances under which they were made. Except as disclosed in the SEC Reports
or as expressly described in Schedule 5.3, or in one of the documents,
certificates or other writings identified therein, or in the financial
statements listed in Schedule 5.5, since June 30, 2002, there has been no change
in the financial condition, operations, business or properties of the Company or
any Subsidiary except changes that individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. There is no fact known
to the Company that could reasonably be expected to have a Material Adverse
Effect that has not been set forth herein or in the SEC Reports or in the other
documents, certificates and other writings delivered to you by or on behalf of
the Company specifically for use in connection with the transactions
contemplated hereby.
5.4. ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES; AFFILIATES.
(a) Schedule 5.4 contains (except as noted therein) complete
and correct lists of: (i) the Company's Subsidiaries, showing, as to
each Subsidiary, the correct name thereof, the jurisdiction of its
organization, and the percentage of shares of each class of its capital
stock or similar equity interests outstanding owned by the Company and
each other Subsidiary, (ii) the Company's Affiliates, other than
Subsidiaries, and (iii) the Company's directors and senior officers.
Each Subsidiary listed in Schedule 5.4 is designated a Restricted
Subsidiary by the Company.
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(b) All of the outstanding shares of capital stock or similar
equity interests of each Subsidiary shown in Schedule 5.4 as being
owned by the Company and its Subsidiaries have been validly issued, are
fully paid and nonassessable and are owned by the Company or another
Subsidiary free and clear of any Lien (except as otherwise disclosed in
Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a
corporation or other legal entity duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization,
and is duly qualified as a foreign corporation or other legal entity
and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to
which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Subsidiary has the corporate or
other power and authority to own or hold under lease the properties it
purports to own or hold under lease and to transact the business it
transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to, any
legal restriction or any agreement (other than this Agreement, the
agreements listed on Schedule 5.4 and customary limitations imposed by
corporate or limited partnership law statutes) restricting the ability
of such Subsidiary to pay dividends out of profits or make any other
similar distributions of profits to the Company or any of its
Subsidiaries that owns outstanding shares of capital stock or similar
equity interests of such Subsidiary.
5.5. FINANCIAL STATEMENTS.
The Company has delivered to you and each Other Purchaser
copies of the financial statements of the Company and its Subsidiaries listed on
Schedule 5.5. All of said financial statements (including in each case the
related schedules and notes) fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as of the
respective dates specified in such Schedule and the consolidated results of
their operations and cash flows for the respective periods so specified and have
been prepared in accordance with GAAP consistently applied throughout the
periods involved except as set forth in the notes thereto (subject, in the case
of any interim financial statements, to normal year-end adjustments).
5.6. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.
The execution, delivery and performance by the Company of this
Agreement and the Notes will not (i) contravene, result in any breach of, or
constitute a default under, or result in the creation of any Lien in respect of
any property of the Company or any Subsidiary under, any indenture, mortgage,
deed of trust, loan, purchase or credit agreement, lease, corporate charter or
by-laws, or any other agreement or instrument to which the Company or any
Subsidiary is bound or by which the Company or any Subsidiary or any of their
respective properties may be bound or affected, (ii) conflict with or result in
a breach of any of the terms, conditions or provisions of any order, judgment,
decree, or ruling of any court, arbitrator or Governmental Authority applicable
to the Company or any Subsidiary or (iii) violate any provision of any statute
or other rule or regulation of any Governmental Authority, including the USA
Patriot Act, applicable to the Company or any Subsidiary.
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The execution, delivery and performance by each Subsidiary
Guarantor of the Subsidiary Guaranty will not (i) contravene, result in any
breach of, or constitute a default under, or result in the creation of any Lien
in respect of any property of such Subsidiary Guarantor under any indenture,
mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate
charter or by-laws, or any other agreement or instrument to which such
Subsidiary Guarantor is bound or by which such Subsidiary Guarantor or any of
its properties may be bound or affected, (ii) conflict with or result in a
breach of any of the terms, conditions or provisions of any order, judgment,
decree, or ruling of any court, arbitrator or Governmental Authority applicable
to such Subsidiary Guarantor or (iii) violate any provision of any statute or
other rule or regulation of any Governmental Authority, including the USA
Patriot Act, applicable to such Subsidiary Guarantor.
5.7. GOVERNMENTAL AUTHORIZATIONS, ETC.
No consent, approval or authorization of, or registration,
filing or declaration with, any Governmental Authority is required in connection
with the execution, delivery or performance by the Company of this Agreement or
the Notes or the execution, delivery or performance by each Subsidiary Guarantor
of the Subsidiary Guaranty.
5.8. LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS.
(a) Except as disclosed in Schedule 5.8, there are no actions,
suits or proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Subsidiary or any
property of the Company or any Subsidiary in any court or before any
arbitrator of any kind or before or by any Governmental Authority that,
individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under
any term of any agreement or instrument to which it is a party or by
which it is bound, or any order, judgment, decree or ruling of any
court, arbitrator or Governmental Authority or is in violation of any
applicable law, ordinance, rule or regulation (including without
limitation Environmental Laws and the USA Patriot Act) of any
Governmental Authority, which default or violation, individually or in
the aggregate, could reasonably be expected to have a Material Adverse
Effect.
5.9. TAXES.
The Company and its Subsidiaries have filed all tax returns
that are required to have been filed in any jurisdiction, and have paid all
taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments (i) the amount
of which is not individually or in the aggregate Material or (ii) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or a Subsidiary,
as the case may be, has established adequate reserves in
7
accordance with GAAP. The Company knows of no basis for any other tax or
assessment that could reasonably be expected to have a Material Adverse Effect.
The charges, accruals and reserves on the books of the Company and its
Subsidiaries in respect of Federal, state or other taxes for all fiscal periods
are adequate. The Federal income tax liabilities of the Company and its
Subsidiaries have been determined by the Internal Revenue Service and paid for
all fiscal years up to and including the fiscal year ended June 30, 1994.
5.10. TITLE TO PROPERTY; LEASES.
The Company and its Subsidiaries have good and sufficient
title to their respective properties that individually or in the aggregate are
Material, including all such properties reflected in the most recent audited
balance sheet referred to in Section 5.5 or purported to have been acquired by
the Company or any Subsidiary after said date (except as sold or otherwise
disposed of in the ordinary course of business), in each case free and clear of
Liens prohibited by this Agreement. All leases that individually or in the
aggregate are Material are valid and subsisting and are in full force and effect
in all material respects.
5.11. LICENSES, PERMITS, ETC.
Except as disclosed in Schedule 5.11,
(a) the Company and its Subsidiaries own or possess all
licenses, permits, franchises, authorizations, patents, copyrights,
service marks, trademarks and trade names, or rights thereto, that
individually or in the aggregate are Material, without known conflict
with the rights of others;
(b) to the best knowledge of the Company, no product of the
Company infringes in any material respect any license, permit,
franchise, authorization, patent, copyright, service xxxx, trademark,
trade name or other right owned by any other Person; and
(c) to the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its
Subsidiaries with respect to any patent, copyright, service xxxx,
trademark, trade name or other right owned or used by the Company or
any of its Subsidiaries.
5.12. COMPLIANCE WITH ERISA.
(a) The Company and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws except
for such instances of noncompliance as have not resulted in and could
not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans (as defined
in Section 3 of ERISA), and no event, transaction or condition has
occurred or exists that could reasonably be expected to result in the
incurrence of any such liability by the Company or any ERISA Affiliate,
or in the imposition of any Lien on any of the rights, properties or
assets of the Company or
8
any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA
or to such penalty or excise tax provisions or to Section 401(a)(29) or
412 of the Code, other than such liabilities or Liens as would not be
individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities
under each of the Plans (other than Multiemployer Plans), determined as
of the end of such Plan's most recently ended plan year on the basis of
the actuarial assumptions specified for funding purposes in such Plan's
most recent actuarial valuation report, did not exceed the aggregate
current value of the assets of such Plan allocable to such benefit
liabilities. The term "benefit liabilities" has the meaning specified
in section 4001 of ERISA and the terms "current value" and "present
value" have the meaning specified in section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that individually or in the aggregate are Material.
(d) The expected postretirement benefit obligation (determined
as of the last day of the Company's most recently ended fiscal year in
accordance with Financial Accounting Standards Board Statement No. 106,
without regard to liabilities attributable to continuation coverage
mandated by section 4980B of the Code) of the Company and its
Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the
issuance and sale of the Notes hereunder will not involve any
transaction that is subject to the prohibitions of section 406 of ERISA
or in connection with which a tax could be imposed pursuant to section
4975(c)(1)(A)-(D) of the Code. The representation by the Company in the
first sentence of this Section 5.12(e) is made in reliance upon and
subject to the accuracy of your representation in Section 6.2 as to the
sources of the funds used to pay the purchase price of the Notes to be
purchased by you.
5.13. PRIVATE OFFERING BY THE COMPANY.
Neither the Company nor anyone acting on its behalf has
offered the Notes or any similar securities for sale to, or solicited any offer
to buy any of the same from, or otherwise approached or negotiated in respect
thereof with, any person other than you and the Other Purchasers, each of which
has been offered the Notes at a private sale for investment. Neither the Company
nor anyone acting on its behalf has taken, or will take, any action that would
subject the issuance or sale of the Notes to the registration requirements of
Section 5 of the Securities Act.
5.14. USE OF PROCEEDS; MARGIN REGULATIONS.
The Company will apply the proceeds of the sale of the Notes
for general corporate purposes. No part of the proceeds from the sale of the
Notes will be used, directly or indirectly, for the purpose of buying or
carrying any margin stock within the meaning of
9
Regulation U of the Board of Governors of the Federal Reserve System (12 CFR
221), or for the purpose of buying or carrying or trading in any securities
under such circumstances as to involve the Company in a violation of Regulation
X of said Board (12 CFR 224) or to involve any broker or dealer in a violation
of Regulation T of said Board (12 CFR 220). Margin stock does not constitute
more than 1% of the value of the consolidated assets of the Company and its
Subsidiaries and the Company does not have any present intention that margin
stock will constitute more than 1% of the value of such assets. As used in this
Section, the terms "margin stock" and "purpose of buying or carrying" shall have
the meanings assigned to them in said Regulation U.
5.15. EXISTING DEBT; FUTURE LIENS.
(a) Except as described therein, Schedule 5.15 sets forth a
complete and correct list of all outstanding Debt of the Company and
its Subsidiaries as of December 31, 2002, since which date there has
been no Material change in the amounts, interest rates, sinking funds,
installment payments or maturities of the Debt of the Company or its
Subsidiaries. Neither the Company nor any Subsidiary is in default and
no waiver of default is currently in effect, in the payment of any
principal or interest on any Debt of the Company or such Subsidiary and
no event or condition exists with respect to any Debt of the Company or
any Subsidiary that would permit (or that with notice or the lapse of
time, or both, would permit) one or more Persons to cause such Debt to
become due and payable before its stated maturity or before its
regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company
nor any Subsidiary has agreed or consented to cause or permit in the
future (upon the happening of a contingency or otherwise) any of its
property, whether now owned or hereafter acquired, to be subject to a
Lien not permitted by Section 10.5.
5.16. FOREIGN ASSETS CONTROL REGULATIONS, ANTI-TERRORISM ORDER, ETC.
Neither the sale of the Notes by the Company hereunder nor its
use of the proceeds thereof will violate (a) the Trading with the Enemy Act, as
amended, (b) any of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto or (c) to the knowledge of the
Company, the Anti-Terrorism Order. Without limiting the foregoing, neither the
Company nor any Subsidiary (i) is a blocked person described in Section 1 of the
Anti-Terrorism Order or (ii) engages in any dealings or transactions, or is
otherwise associated, with any such person.
5.17. STATUS UNDER CERTAIN STATUTES.
Neither the Company nor any Subsidiary is subject to
regulation under the Investment Company Act of 1940, as amended, the Public
Utility Holding Company Act of 1935, as amended, the Interstate Commerce Act, as
amended by the ICC Termination Act, as amended, or the Federal Power Act, as
amended.
10
5.18. ENVIRONMENTAL MATTERS.
Except as disclosed in Schedule 5.18, neither the Company nor
any Subsidiary has knowledge of any claim or has received any notice of any
claim, and no proceeding has been instituted raising any claim against the
Company or any of its Subsidiaries or any of their respective real properties
now or formerly owned, leased or operated by any of them or other assets,
alleging any damage to the environment or violation of any Environmental Laws,
except, in each case, such as could not reasonably be expected to result in a
Material Adverse Effect. Except as disclosed in Schedule 5.18,
(a) neither the Company nor any Subsidiary has knowledge of
any facts which would give rise to any claim, public or private, of
violation of Environmental Laws or damage to the environment emanating
from, occurring on or in any way related to real properties now or
formerly owned, leased or operated by any of them or to other assets or
their use, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has stored
any Hazardous Materials on real properties now or formerly owned,
leased or operated by any of them and has not disposed of any Hazardous
Materials in a manner contrary to any Environmental Laws in each case
in any manner that could reasonably be expected to result in a Material
Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Subsidiaries are in compliance
with applicable Environmental Laws, except where failure to comply
could not reasonably be expected to result in a Material Adverse
Effect.
5.19. SOLVENCY OF SUBSIDIARY GUARANTORS.
After giving effect to the transactions contemplated herein
and after giving due consideration to any rights of contribution (i) each
Subsidiary Guarantor has received fair consideration and reasonably equivalent
value for the incurrence of its obligations under the Subsidiary Guaranty, (ii)
the fair value of the assets of each Subsidiary Guarantor (both at fair
valuation and at present fair saleable value) exceeds its liabilities, (ii) each
Subsidiary Guarantor is able to and expects to be able to pay its debts as they
mature, and (iii) each Subsidiary Guarantor has capital sufficient to carry on
its business as conducted and as proposed to be conducted.
6. REPRESENTATIONS OF THE PURCHASERS.
6.1. PURCHASE FOR INVESTMENT.
You represent that you are purchasing the Notes for your own
account or for one or more separate accounts maintained by you or for the
account of one or more pension or trust funds and not with a view to the
distribution thereof, provided that the disposition of your or their property
shall at all times be within your or their control. You understand that the
Notes
11
have not been registered under the Securities Act and may be resold only if
registered pursuant to the provisions of the Securities Act or if an exemption
from registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to register the Notes. You represent that you are an "accredited
investor" within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501
of Regulation D under the Securities Act and you agree that any resale of Notes
by you will comply with the preceding sentence.
6.2. SOURCE OF FUNDS.
You represent that at least one of the following statements is
an accurate representation as to each source of funds (a "Source") to be used by
you to pay the purchase price of the Notes to be purchased by you hereunder:
(a) the Source is an "insurance company general account" (as
the term is defined in the United States Department of Labor's
Prohibited Transaction Exemption ("PTE") 95-60) in respect of which the
reserves and liabilities (as defined by the annual statement for life
insurance companies approved by the National Association of Insurance
Commissioners (the "NAIC Annual Statement") for the general account
contract(s) held by or on behalf of any employee benefit plan together
with the amount of the reserves and liabilities for the general account
contract(s) held by or on behalf of any other employee benefit plans
maintained by the same employer (or affiliate thereof as defined in PTE
95-60) or by the same employee organization in the general account do
not exceed 10% of the total reserves and liabilities of the general
account (exclusive of separate account liabilities) plus surplus as set
forth in the NAIC Annual Statement filed with such Purchaser's state of
domicile; or
(b) the Source is a separate account that is maintained solely
in connection with such Purchaser's fixed contractual obligations under
which the amounts payable, or credited, to any employee benefit plan
(or its related trust) that has any interest in such separate account
(or to any participant or beneficiary of such plan (including any
annuitant)) are not affected in any manner by the investment
performance of the separate account; or
(c) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
PTE 91-38 (issued July 12, 1991) and, except as you have, prior to the
execution of this Agreement, disclosed to the Company in writing
pursuant to this paragraph (c), no employee benefit plan or group of
plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled
separate account or collective investment fund; or
(d) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of PTE 84-14 (the "QPAM Exemption")
managed by a "qualified professional asset manager" or "QPAM" (within
the meaning of Part V of the QPAM Exemption), no employee benefit
plan's assets that are included in such investment fund, when combined
with the assets of all other employee benefit plans established or
maintained by the same
12
employer or by an affiliate (within the meaning of Section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM, the conditions of Part I(c) and (g) of the
QPAM Exemption are satisfied, neither the QPAM nor a person controlling
or controlled by the QPAM (applying the definition of "control" in
Section V(e) of the QPAM Exemption) owns a 5% or more interest in the
Company and (i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose assets are included in such investment
fund have been disclosed to the Company in writing pursuant to this
clause (d); or
(e) the Source constitutes assets of a "plan(s)" (within the
meaning of Section IV of PTE 96-23 (the "INHAM Exemption")) managed by
an "in-house asset manager" or "INHAM" (within the meaning of Section
IV of the INHAM exemption), the conditions of Section I(a), (g) and (h)
of the INHAM Exemption are satisfied, neither the INHAM nor a person
controlling or controlled by the INHAM (applying the definition of
"control" in Section IV(d) of the INHAM Exemption) owns a 5% or more
interest in the Company and (i) the identity of such INHAM and (ii) the
name(s) of the employee benefit plan(s) whose assets constitute the
Source have been disclosed to the Company in writing pursuant to this
clause (e); or
(f) the Source is a governmental plan; or
(g) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing, prior to the execution of this Agreement, pursuant to this
paragraph (g); or
(h) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms "employee benefit plan", "governmental
plan" and "separate account" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.
7. INFORMATION AS TO COMPANY.
7.1. FINANCIAL AND BUSINESS INFORMATION
The Company will deliver to each holder of Notes that is an
Institutional Investor:
(a) Quarterly Statements -- within 50 days (or such other
shorter period within which Quarterly Reports on Form 10-Q are required
to be timely filed with the Securities and Exchange Commission,
including any extension permitted by Rule 12b-25 of the Exchange Act)
after the end of each quarterly fiscal period in each fiscal year of
the Company (other than the last quarterly fiscal period of each such
fiscal year), duplicate copies of,
13
(i) consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarter,
(ii) consolidated statements of income of the Company
and its Subsidiaries for such quarter and (in the case of the
second and third quarters) for the portion of the fiscal year
ending with such quarter, and
(iii) consolidated statements of cash flows of the
Company and its Subsidiaries for such quarter or (in the case
of the second and third quarters) for the portion of the
fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial
position of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from year-end
adjustments, provided that delivery within the time period specified
above of copies of the Company's Quarterly Report on Form 10-Q prepared
in compliance with the requirements therefor and filed with the
Securities and Exchange Commission shall be deemed to satisfy the
requirements of this Section 7.1(a);
(b) Annual Statements -- within 105 days (or such other
shorter period within which Annual Reports on Form 10-K are required to
be timely filed with the Securities and Exchange Commission, including
any extension permitted by Rule 12b-25 of the Exchange Act) after the
end of each fiscal year of the Company, duplicate copies of,
(i) consolidated balance sheet of the Company and its
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied by an opinion of independent certified
public accountants of recognized national standing, which opinion shall
state that such financial statements present fairly, in all material
respects, the financial position of the companies being reported upon
and their results of operations and cash flows and have been prepared
in conformity with GAAP, and that the examination of such accountants
in connection with such financial statements has been made in
accordance with generally accepted auditing standards, and that such
audit provides a reasonable basis for such opinion in the
circumstances, provided that the delivery within the time period
specified above of the Company's Annual Report on Form 10-K for such
fiscal year (together with the Company's annual report to shareholders,
if any, prepared pursuant to Rule 14a-3 under the Exchange Act)
prepared in accordance with the requirements therefor and filed with
the Securities and Exchange Commission shall be deemed to satisfy the
requirements of this Section 7.1(b);
14
(c) Unrestricted Subsidiaries -- if, at the time of delivery
of any financial statements pursuant to Section 7.1(a) or (b),
Unrestricted Subsidiaries account for more than 10% of (i) the
consolidated total assets of the Company and its Subsidiaries reflected
in the balance sheet included in such financial statements or (ii) the
consolidated revenues of the Company and its Subsidiaries reflected in
the consolidated statement of income included in such financial
statements, an unaudited balance sheet for all Unrestricted
Subsidiaries taken as whole as at the end of the fiscal period included
in such financial statements and the related unaudited statements of
income, stockholders' equity and cash flows for such Unrestricted
Subsidiaries for such period, together with consolidating statements
reflecting all eliminations or adjustments necessary to reconcile such
group financial statements to the consolidated financial statements of
the Company and its Subsidiaries shall be delivered together with the
financial statements required pursuant to Sections 7.1(a) and (b);
(d) SEC and Other Reports -- promptly upon their becoming
available, one copy of (i) each financial statement, report, notice or
proxy statement sent by the Company or any Restricted Subsidiary to
public securities holders generally, and (ii) each regular or periodic
report, each registration statement other than registration statements
on Form S-8 (without exhibits except as expressly requested by such
holder), and each prospectus and all amendments thereto filed by the
Company or any Restricted Subsidiary with the Securities and Exchange
Commission and of all press releases and other statements made
available generally by the Company or any Restricted Subsidiary to the
public concerning developments that are Material;
(e) Notice of Default or Event of Default -- promptly, and in
any event within five days after a Responsible Officer becoming aware
of the existence of any Default or Event of Default or that any Person
has given any notice or taken any action with respect to a claimed
default hereunder or that any Person has given notice or taken any
action with respect to a claimed default of the type referred to in
Section 11(f), a written notice specifying the nature and period of
existence thereof and what action the Company is taking or proposes to
take with respect thereto;
(f) ERISA Matters -- promptly, and in any event within five
Business Days after a Responsible Officer becoming aware of any of the
following, a written notice setting forth the nature thereof and the
action, if any, that the Company or an ERISA Affiliate proposes to take
with respect thereto:
(i) with respect to any Plan, any reportable event,
as defined in section 4043(b) of ERISA and the regulations
thereunder, for which notice thereof has not been waived
pursuant to such regulations as in effect on the date hereof;
or
(ii) the taking by the PBGC of steps to institute, or
the threatening by the PBGC of the institution of, proceedings
under section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from
a Multiemployer
15
Plan that such action has been taken by the PBGC with respect
to such Multiemployer Plan; or
(iii) any event, transaction or condition that could
result in the incurrence of any liability by the Company or
any ERISA Affiliate pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to
employee benefit plans, or in the imposition of any Lien on
any of the rights, properties or assets of the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or such
penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material
Adverse Effect;
(g) Notices from Governmental Authority -- promptly, and in
any event within 30 days of receipt thereof, copies of any notice to
the Company or any Subsidiary from any Federal or state Governmental
Authority relating to any order, ruling, statute or other law or
regulation that could reasonably be expected to have a Material Adverse
Effect; and
(h) Requested Information -- with reasonable promptness, such
other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Company or
any of its Subsidiaries or relating to the ability of the Company to
perform its obligations hereunder and under the Notes as from time to
time may be reasonably requested by any such holder of Notes.
7.2. OFFICER'S CERTIFICATE.
Each set of financial statements delivered to a holder of
Notes pursuant to Section 7.1(a) or (b) shall be accompanied by a certificate of
a Senior Financial Officer setting forth:
(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Section 10.1 through Section 10.12,
inclusive, during the quarterly or annual period covered by the
statements then being furnished (including with respect to each such
Section, where applicable, the calculations of the maximum or minimum
amount, ratio or percentage, as the case may be, permissible under the
terms of such Sections, and the calculation of the amount, ratio or
percentage then in existence); and
(b) Event of Default -- a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and
conditions of the Company and its Subsidiaries from the beginning of
the quarterly or annual period covered by the statements then being
furnished to the date of the certificate and that such review shall not
have disclosed the existence during such period of any condition or
event that constitutes a Default or an Event of Default or, if any such
condition or event existed or exists (including any such event or
condition resulting from the failure of the Company or any Subsidiary
to comply
16
with any Environmental Law), specifying the nature and period of
existence thereof and what action the Company shall have taken or
proposes to take with respect thereto.
7.3. INSPECTION.
The Company will permit the representatives of each holder of
Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable prior notice
to the Company, to visit the principal executive office of the Company,
to discuss the affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and (with the consent of the
Company, which consent will not be unreasonably withheld) its
independent public accountants, and (with the consent of the Company,
which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Restricted Subsidiary,
all at such reasonable times and as often as may be reasonably
requested in writing; and
(b) Default -- if a Default or Event of Default then exists,
at the expense of the Company, to visit and inspect any of the offices
or properties of the Company or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs,
finances, and accounts with their respective officers and independent
public accountants (and by this provision the Company authorizes said
accountants to discuss the affairs, finances and accounts of the
Company and its Subsidiaries), all at such times and as often as may be
requested.
Each holder agrees to treat any information obtained in connection with any
inspection pursuant to this Section 7 as Confidential Information subject to
Section 20 so as to avoid any disclosure obligation on the Company under
Regulation FD under the Exchange Act.
8. PREPAYMENT OF THE NOTES.
8.1. NO SCHEDULED PREPAYMENTS.
No regularly scheduled prepayments are due on the Notes prior
to their stated maturity.
8.2. OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT.
The Company may, at its option, upon notice as provided below,
prepay at any time all, or from time to time any part of, the Notes in an amount
not less than $1,000,000 in the aggregate in the case of a partial prepayment,
at 100% of the principal amount so prepaid, plus the Make-Whole Amount
determined for the prepayment date with respect to such principal amount. The
Company will give each holder of Notes written notice of each optional
prepayment under this Section 8.2 not less than 30 days and not more than 60
days prior to the date fixed for such prepayment. Each such notice shall specify
such date, the aggregate principal
17
amount of the Notes to be prepaid on such date, the principal amount of each
Note held by such holder to be prepaid (determined in accordance with Section
8.3), and the interest to be paid on the prepayment date with respect to such
principal amount being prepaid, and shall be accompanied by a certificate of a
Senior Financial Officer as to the estimated Make-Whole Amount due in connection
with such prepayment (calculated as if the date of such notice were the date of
the prepayment), setting forth the details of such computation. Two Business
Days prior to such prepayment, the Company shall deliver to each holder of Notes
a certificate of a Senior Financial Officer specifying the calculation of such
Make-Whole Amount as of the specified prepayment date.
8.3. ALLOCATION OF PARTIAL PREPAYMENTS.
In the case of each partial prepayment of the Notes pursuant
to this Section 8, the principal amount of the Notes to be prepaid shall be
allocated among all of the Notes at the time outstanding in proportion, as
nearly as practicable, to the respective unpaid principal amounts thereof not
theretofore called for prepayment.
8.4. MATURITY; SURRENDER, ETC.
In the case of each prepayment of Notes pursuant to this
Section 8, the principal amount of each Note to be prepaid shall mature and
become due and payable on the date fixed for such prepayment, together with
interest on such principal amount accrued to such date and the applicable
Make-Whole Amount, if any. From and after such date, unless the Company shall
fail to pay such principal amount when so due and payable, together with the
interest and Make-Whole Amount, if any, as aforesaid, interest on such principal
amount shall cease to accrue. Any Note paid or prepaid in full shall be
surrendered to the Company and canceled and shall not be reissued, and no Note
shall be issued in lieu of any prepaid principal amount of any Note.
8.5. PURCHASE OF NOTES.
The Company will not and will not permit any Affiliate to
purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of
the outstanding Notes except upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement and the Notes. The Company will
promptly cancel all Notes acquired by it or any Affiliate pursuant to any
payment, prepayment or purchase of Notes pursuant to any provision of this
Agreement and no Notes may be issued in substitution or exchange for any such
Notes.
8.6. MAKE-WHOLE AMOUNT.
The term "MAKE-WHOLE AMOUNT" means, with respect to any Note,
an amount equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of such Note over the
amount of such Called Principal, provided that the Make-Whole Amount may in no
event be less than zero. For the purposes of determining the Make-Whole Amount,
the following terms have the following meanings:
18
"CALLED PRINCIPAL" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to Section 8.2 or
has become or is declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"REINVESTMENT YIELD" means, with respect to the Called
Principal of any Note, .50% over the yield to maturity implied by (i)
the yields reported, as of 10:00 A.M. (New York City time) on the
second Business Day preceding the Settlement Date with respect to such
Called Principal, on the display designated as the "PX1 Screen" on the
Bloomberg Financial Market Service (or such other display as may
replace the PX1 Screen on Bloomberg Financial Market Service) for
actively traded U.S. Treasury securities having a maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement
Date, or (ii) if such yields are not reported as of such time or the
yields reported as of such time are not ascertainable, the Treasury
Constant Maturity Series Yields reported, for the latest day for which
such yields have been so reported as of the second Business Day
preceding the Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any comparable
successor publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date. Such implied yield will be
determined, if necessary, by (a) converting U.S. Treasury xxxx
quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between (1) the
actively traded U.S. Treasury security with the maturity closest to and
greater than the Remaining Average Life and (2) the actively traded
U.S. Treasury security with the maturity closest to and less than the
Remaining Average Life.
"REMAINING AVERAGE LIFE" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (b) the number of years (calculated to the nearest one-twelfth year)
that will elapse between the Settlement Date with respect to such
Called Principal and the scheduled due date of such Remaining Scheduled
Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, provided that if such
Settlement Date is not a date on which interest payments are due to be
made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment
19
will be reduced by the amount of interest accrued to such Settlement
Date and required to be paid on such Settlement Date pursuant to
Section 8.2 or 12.1.
"SETTLEMENT DATE" means, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2 or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context requires.
9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
9.1. COMPLIANCE WITH LAW.
The Company will, and will cause each Subsidiary to, comply
with all laws, ordinances or governmental rules or regulations to which each of
them is subject, including, without limitation, Environmental Laws, and will
obtain and maintain in effect all licenses, certificates, permits, franchises
and other governmental authorizations necessary to the ownership of their
respective properties or to the conduct of their respective businesses, in each
case to the extent necessary to ensure that non-compliance with such laws,
ordinances or governmental rules or regulations or failures to obtain or
maintain in effect such licenses, certificates, permits, franchises and other
governmental authorizations could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
9.2. INSURANCE.
The Company will, and will cause each Restricted Subsidiary
to, maintain, with financially sound and reputable insurers, insurance with
respect to their respective properties and businesses against such casualties
and contingencies, of such types, on such terms and in such amounts (including
deductibles, co-insurance and self-insurance, if adequate reserves are
maintained with respect thereto) as is customary in the case of entities of
established reputations engaged in the same or a similar business and similarly
situated.
9.3. MAINTENANCE OF PROPERTIES.
The Company will and will cause each Restricted Subsidiary to
maintain and keep, or cause to be maintained and kept, their respective
properties in good repair, working order and condition (other than ordinary wear
and tear), so that the business carried on in connection therewith may be
properly conducted at all times, provided that this Section shall not prevent
the Company or any Restricted Subsidiary from discontinuing the operation and
the maintenance of any of its properties if such discontinuance is desirable in
the conduct of its business and the Company has concluded that such
discontinuance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
20
9.4. PAYMENT OF TAXES AND CLAIMS.
The Company will, and will cause each Subsidiary to, file all
income tax or similar tax returns required to be filed in any jurisdiction and
to pay and discharge all taxes shown to be due and payable on such returns and
all other taxes, assessments, governmental charges, or levies imposed on them or
any of their properties, assets, income or franchises, to the extent such taxes
and assessments have become due and payable and before they have become
delinquent and all claims for which sums have become due and payable that have
or might become a Lien on properties or assets of the Company or any Subsidiary,
provided that neither the Company nor any Subsidiary need pay any such tax or
assessment or claims if (i) the amount, applicability or validity thereof is
contested by the Company or such Subsidiary on a timely basis in good faith and
in appropriate proceedings, and the Company or a Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books of the Company
or such Subsidiary or (ii) the nonpayment of all such taxes and assessments in
the aggregate could not reasonably be expected to have a Material Adverse
Effect.
9.5. CORPORATE EXISTENCE, ETC.
The Company will at all times preserve and keep in full force
and effect its corporate existence. Subject to Sections 10.6, 10.7 and 10.8, the
Company will at all times preserve and keep in full force and effect the
corporate existence of each of its Restricted Subsidiaries (unless merged into
the Company or a Restricted Subsidiary) and all rights and franchises of the
Company and its Restricted Subsidiaries unless, in the good faith judgment of
the Company, the termination of or failure to preserve and keep in full force
and effect such corporate existence, right or franchise could not, individually
or in the aggregate, have a Material Adverse Effect.
10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
10.1. CONSOLIDATED NET DEBT.
The Company will not incur, and will not permit any Restricted
Subsidiary to incur, any Debt if, after giving effect thereto and to the
application of the proceeds therefrom, Consolidated Net Debt would exceed 55% of
Consolidated Total Capitalization.
10.2. INTEREST COVERAGE.
The Company will not permit the ratio of Consolidated EBITDA
to Consolidated Interest Expense (in each case for the Company's then most
recently completed four fiscal quarters) to be less than 2.0 to 1.0 at any time.
10.3. ADJUSTED CONSOLIDATED NET WORTH.
The Company will not permit at any time its Adjusted
Consolidated Net Worth as of the end of any fiscal year to be less than
$130,000,000 plus the cumulative sum of 50% of
21
Consolidated Net Income (but only if a positive number) for each fiscal year
ending after June 30, 2001.
10.4. DEBT OF RESTRICTED SUBSIDIARIES.
The Company will not permit any Restricted Subsidiary that is
not a Subsidiary Guarantor to create, assume, incur or otherwise become liable
for, directly or indirectly, any Debt, other than:
(a) Debt owed to the Company or another Restricted Subsidiary;
(b) Debt of a Restricted Subsidiary secured by Liens permitted
under Sections 10.5(g) or (h);
(c) Debt of a Subsidiary outstanding at the time of its
acquisition by the Company and initial designation as a Restricted
Subsidiary, provided that (i) such Debt was not incurred in
contemplation of such Subsidiary becoming a Restricted Subsidiary and
(ii) immediately after giving effect to the designation of such
Subsidiary as a Restricted Subsidiary, no Default or Event of Default
would exist; provided, however, that such Debt may not be extended,
renewed or refunded unless such Debt could be incurred under clause (d)
below; and
(d) Additional Debt, provided that after giving effect to the
incurrence thereof and the application of the proceeds thereof,
Priority Debt does not exceed 15% of Adjusted Consolidated Net Worth,
and any renewals or extension of such Debt, provided that (i) there is
no increase in the principal amount or decrease in maturity of such
Debt at the time of such extension or renewal and (ii) immediately
after such extension or renewal no Default or Event of Default would
exist.
10.5. LIENS.
The Company will not, and will not permit any Restricted
Subsidiary to, permit to exist, create, assume or incur, directly or indirectly,
any Lien on its properties or assets, whether now owned or hereafter acquired,
except:
(a) Liens for taxes, assessments or governmental charges not
then due and delinquent or the nonpayment of which is permitted by
Section 9.4;
(b) Liens incidental to the conduct of business or the
ownership of properties and assets (including landlords', lessors',
carriers', warehousemen's, mechanics', materialmen's and other similar
Liens) and Liens to secure the performance of bids, tenders, leases or
trade contracts, or to secure statutory obligations (including
obligations under workers compensation, unemployment insurance and
other social security legislation), 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;
(c) any attachment or judgment Lien, unless the judgment it
secures has not, within 60 days after the entry thereof, been
discharged or execution thereof stayed
22
pending appeal, or has not been discharged within 60 days after the
expiration of any such stay;
(d) Liens securing Debt of a Restricted Subsidiary owed to the
Company or to another Restricted Subsidiary;
(e) Liens securing Debt existing on property or assets of the
Company or any Restricted Subsidiary as of the date of this Agreement
that are described in Schedule 10.5;
(f) encumbrances in the nature of leases, subleases, zoning
restrictions, easements, rights of way, minor survey exceptions and
other rights and restrictions of record on the use of real property and
defects in title arising or incurred in the ordinary course of
business, which, individually and in the aggregate, do not materially
impair the use of the property or assets subject thereto by the Company
or such Restricted Subsidiary in their business or which relate only to
assets that in the aggregate are not Material;
(g) Liens (i) existing on property at the time of its
acquisition by the Company or a Restricted Subsidiary and not created
in contemplation thereof, whether or not the Debt secured by such Lien
is assumed by the Company or a Restricted Subsidiary; or (ii) on
property created contemporaneously with its acquisition or within 180
days of the acquisition or completion of construction or improvements
thereof to secure or provide for all or a portion of the purchase price
or cost of construction or improvements of such property after the date
of Closing; or (iii) existing on property of a Person at the time such
Person is merged or consolidated with, or becomes a Restricted
Subsidiary of, or substantially all of its assets are acquired by, the
Company or a Restricted Subsidiary and not created in contemplation
thereof; provided that in the case of clauses (i), (ii) and (iii) such
Liens do not extend to additional property of the Company or any
Restricted Subsidiary (other than property that is an improvement to or
is acquired for specific use in connection with the subject property)
and, in the case of clause (ii) only, that the aggregate principal
amount of Debt secured by each such Lien does not exceed the lesser of
cost of acquisition or construction or the fair market value
(determined in good faith by one or more officers of the Company to
whom authority to enter into the transaction has been delegated by the
board of directors of the Company) of the property subject thereto;
(h) Liens resulting from extensions, renewals or replacements
of Liens permitted by paragraphs (e) and (g), provided that (i) there
is no increase in the principal amount or decrease in maturity of the
Debt secured thereby at the time of such extension, renewal or
replacement, (ii) any new Lien attaches only to the same property
theretofore subject to such earlier Lien and (iii) immediately after
such extension, renewal or replacement no Default or Event of Default
would exist; and
(i) Liens securing Debt not otherwise permitted by paragraphs
(a) through (h) above, provided that, after giving effect to the
incurrence of the Debt so secured, Priority Debt does not exceed 15% of
Adjusted Consolidated Net Worth, and any renewals or
23
extensions of Liens securing such Debt, provided that (i) there is no
increase in the principal amount or decrease in maturity of the Debt
secured thereby at the time of such renewal or extension, (ii) any new
Lien attaches only to the same property theretofore subject to such
earlier Lien and (iii) immediately after such renewal or extension no
Default or Event of Default would exist.
10.6. SALE OF ASSETS.
Except as permitted by Section 10.7, the Company will not, and
will not permit any Restricted Subsidiary to, sell, lease, transfer or otherwise
dispose of, including by way of merger (collectively a "Disposition"), any
assets, including capital stock of Restricted Subsidiaries, in one or a series
of transactions, to any Person, other than:
(a) Dispositions in the ordinary course of business;
(b) Dispositions by the Company to a Restricted Subsidiary, by
a Subsidiary Guarantor to the Company or to another Subsidiary
Guarantor or by a Restricted Subsidiary that is not a Subsidiary
Guarantor to the Company or a Restricted Subsidiary; or
(c) Dispositions not otherwise permitted by Section 10.6(a) or
(b), provided that:
(i) each such Disposition is made in an arms length
transaction for a consideration at least equal to the fair
market value of the property subject thereto;
(ii) the aggregate net book value of all assets
disposed of in any period of 365 consecutive days pursuant to
this Section 10.6(c) does not exceed 10% of Consolidated Total
Assets as of the end of the immediately preceding fiscal
quarter; and
(iii) at the time of such Disposition and after
giving effect thereto no Default or Event of Default shall
have occurred and be continuing.
Notwithstanding the foregoing, the Company may, or may permit any Restricted
Subsidiary to, make a Disposition and the assets subject to such Disposition
shall not be subject to or included in the foregoing limitation and computation
contained in Section 10.6(c)(ii) of the preceding sentence to the extent that
(i) each such Disposition is for a consideration at least equal to the fair
market value of the property subject thereto, and
(A) such assets are leased back by the Company or any
Restricted Subsidiary, as lessee, within 365 days of the original
acquisition or construction thereof by the Company or such Restricted
Subsidiary; or
(B) the net after tax proceeds from such Disposition are
within 365 days of such Disposition:
24
(i) reinvested in productive assets used or useful in
carrying on the business of the Company and its Restricted
Subsidiaries; or
(ii) applied to the payment or prepayment of any
outstanding Debt of the Company or any Restricted Subsidiary
that is pari passu with or senior to the Notes, including the
Notes.
If any prepayment of the Notes is to be made pursuant to foregoing
clause (ii), the Company may offer to prepay (on a date not less than
30 or more than 60 days following such offer) at a price of 100% of the
principal amount of the Notes to be prepaid (without any Make-Whole
Amount), together with interest accrued to the date of prepayment;
provided that if any holder of the Notes declines such offer, the
proceeds that would have been paid to such holder shall be offered pro
rata to the other holders of the Notes that have accepted the offer. A
failure by a holder of Notes to respond at least 10 days prior to the
proposed prepayment date shall be deemed to constitute a rejection of
such offer by such holder. If at the time of making such offer to
prepay and following such prepayment there is no Debt of the Company or
any Restricted Subsidiary outstanding other than the Notes, any net
proceeds remaining unapplied shall not be subject to or included in the
limitation and computation contained in Section 10.6(c)(ii).
10.7. MERGERS, CONSOLIDATIONS, ETC.
The Company will not, and will not permit any Restricted
Subsidiary to, consolidate with or merge with any other Person or convey,
transfer, sell or lease all or substantially all of its assets in a single
transaction or series of transactions to any Person except that:
(a) the Company may consolidate or merge with any other Person
or convey, transfer, sell or lease all or substantially all of its
assets in a single transaction or series of transactions to any Person,
provided that:
(i) the successor formed by such consolidation or the
survivor of such merger or the Person that acquires by
conveyance, transfer, sale or lease all or substantially all
of the assets of the Company as an entirety, as the case may
be, is a solvent corporation organized and existing under the
laws of the United States or any state thereof (including the
District of Columbia), and, if the Company is not such
corporation, such corporation (y) shall have executed and
delivered to each holder of any Notes its assumption of the
due and punctual performance and observance of each covenant
and condition of this Agreement and the Notes and (z) shall
have caused to be delivered to each holder of any Notes an
opinion of independent counsel reasonably satisfactory to the
Required Holders, to the effect that all agreements or
instruments effecting such assumption are enforceable in
accordance with their terms and comply with the terms hereof;
and
(ii) immediately after giving effect to such
transaction, the successor formed by such consolidation or the
survivor of such merger or the Person that acquires by
conveyance, transfer, sale or lease all or substantially all
of the assets
25
of the Company as an entirety, as the case may be, can incur
$1.00 of additional Debt; and
(iii) immediately before and after giving effect to
such transaction, no Default or Event of Default shall have
occurred and be continuing; and
(b) Any Restricted Subsidiary may (x) merge into the Company
(provided that the Company is the surviving corporation) or a
Restricted Subsidiary or (y) sell, transfer or lease all or any part of
its assets to the Company or a Restricted Subsidiary, or (z) merge or
consolidate with, or sell, transfer or lease all or substantially all
of its assets to, any Person in a transaction that is permitted by
Section 10.6 or, as a result of which, such Person becomes a Restricted
Subsidiary; provided in each instance set forth in clauses (x) through
(z) that, (1) immediately before and after giving effect thereto, there
shall exist no Default or Event of Default and (2) a Subsidiary
Guarantor may engage in any of the foregoing transactions only with the
Company or another Subsidiary Guarantor.
No such conveyance, transfer, sale or lease of all or substantially all of the
assets of the Company shall have the effect of releasing the Company or any
successor corporation that shall theretofore have become such in the manner
prescribed in this Section 10.7 from its liability under this Agreement or the
Notes.
10.8. DISPOSITION OF STOCK OF RESTRICTED SUBSIDIARIES.
(a) The Company will not permit any Restricted Subsidiary to
issue its capital stock, or any warrants, rights or options to
purchase, or securities convertible into or exchangeable for, such
capital stock, to any Person other than the Company or a Restricted
Subsidiary, except in the case of Foreign Restricted Subsidiaries (i)
for directors' qualifying shares or (ii) to satisfy local ownership
requirements.
(b) The Company will not, and will not permit any Restricted
Subsidiary to, sell, transfer or otherwise dispose of any shares of
capital stock of a Restricted Subsidiary if such sale would be
prohibited by Section 10.6, except in the case of Foreign Restricted
Subsidiaries (i) for directors' qualifying shares or (ii) to satisfy
local ownership requirements.
(c) If a Restricted Subsidiary at any time ceases to be such
as a result of a sale or issuance of its capital stock, any Liens on
property of the Company or any other Restricted Subsidiary securing
Debt owed to such Restricted Subsidiary, which is not contemporaneously
repaid, together with such Debt, shall be deemed to have been incurred
by the Company or such other Restricted Subsidiary, as the case may be,
at the time such Restricted Subsidiary ceases to be a Restricted
Subsidiary.
10.9. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.
The Company may designate any Restricted Subsidiary as an
Unrestricted Subsidiary and any Unrestricted Subsidiary as a Restricted
Subsidiary; provided that,
26
(a) if such Subsidiary initially is designated a Restricted
Subsidiary, then such Restricted Subsidiary may be subsequently
designated as an Unrestricted Subsidiary and such Unrestricted
Subsidiary may be subsequently designated as a Restricted Subsidiary,
but no further changes in designation may be made;
(b) if such Subsidiary initially is designated an Unrestricted
Subsidiary, then such Unrestricted Subsidiary may be subsequently
designated as a Restricted Subsidiary and such Restricted Subsidiary
may be subsequently designated as an Unrestricted Subsidiary, but no
further changes in designation may be made;
(c) the Company may not designate a Restricted Subsidiary as
an Unrestricted Subsidiary unless: (i) such Restricted Subsidiary does
not own, directly or indirectly, any Debt or capital stock of the
Company or any other Restricted Subsidiary, (ii) such designation,
considered as a sale of assets, is permitted pursuant to Sections 10.6,
10.7 and 10.8, (iii) immediately before and after such designation
there exists no Default or Event of Default; and
(d) a Subsidiary Guarantor may not be designated an
Unrestricted Subsidiary.
10.10. SUBSIDIARY GUARANTY.
The Company will not permit any Restricted Subsidiary to
become a borrower or a guarantor of Debt owed to banks under the Credit
Agreement unless such Restricted Subsidiary is, or concurrently therewith
becomes, a party to the Subsidiary Guaranty.
10.11. NATURE OF BUSINESS.
The Company will not, and will not permit any Restricted
Subsidiary to, engage in any business if, as a result, the general nature of the
business in which the Company and its Restricted Subsidiaries, taken as a whole,
would then be engaged would be substantially changed from the general nature of
the business in which the Company and its Restricted Subsidiaries, taken as a
whole, are engaged on the date of this Agreement as described in the SEC
Reports.
10.12. TRANSACTIONS WITH AFFILIATES.
The Company will not and will not permit any Restricted
Subsidiary to enter into directly or indirectly any Material transaction or
Material group of related transactions (including without limitation the
purchase, lease, sale or exchange of properties of any kind or the rendering of
any service) with any Affiliate (other than the Company or another Restricted
Subsidiary), except in the ordinary course of the Company's or such Restricted
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Company or such Restricted Subsidiary than would be obtainable in a
comparable arm's-length transaction with a Person not an Affiliate.
11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following
conditions or events shall occur and be continuing:
27
(a) the Company defaults in the payment of any principal or
Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any
Note for more than five Business Days after the same becomes due and
payable; or
(c) the Company defaults in the performance of or compliance
with any term contained in Sections 10.1 through 10.12; or
(d) the Company defaults in the performance of or compliance
with any term contained herein (other than those referred to in
paragraphs (a), (b) and (c) of this Section 11) and such default is not
remedied within 30 days after the earlier of (i) a Responsible Officer
obtaining actual knowledge of such default or (ii) the Company
receiving written notice of such default from any holder of a Note; or
(e) any representation or warranty made in writing by or on
behalf of the Company or any Subsidiary Guarantor or by any officer of
the Company or a Subsidiary Guarantor in this Agreement, the Subsidiary
Guaranty or in any writing furnished in connection with the
transactions contemplated hereby or thereby proves to have been false
or incorrect in any material respect on the date as of which made; or
(f) (i) the Company or any Restricted Subsidiary is in default
(as principal or as guarantor or other surety) in the payment of any
principal of or premium or make-whole amount or interest on any Debt
that is outstanding in an aggregate principal amount of at least
$5,000,000 beyond any period of grace provided with respect thereto, or
(ii) the Company or any Restricted Subsidiary is in default in the
performance of or compliance with any term of any evidence of any Debt
that is outstanding in an aggregate principal amount of at least
$5,000,000 or of any mortgage, indenture or other agreement relating
thereto or any other condition exists, and as a consequence of such
default or condition such Debt has become, or has been declared, due
and payable before its stated maturity or before its regularly
scheduled dates of payment; or
(g) the Company or any Restricted Subsidiary (i) is generally
not paying, or admits in writing its inability to pay, its debts as
they become due, (ii) files, or consents by answer or otherwise to the
filing against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to
take advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction, (iii) makes an
assignment for the benefit of its creditors, (iv) consents to the
appointment of a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial
part of its property, (v) is adjudicated as insolvent or to be
liquidated, or (vi) takes corporate action for the purpose of any of
the foregoing; or
(h) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by the Company
or any Restricted Subsidiary, a custodian,
28
receiver, trustee or other officer with similar powers with respect to
it or with respect to any substantial part of its property, or
constituting an order for relief or approving a petition for relief or
reorganization or any other petition in bankruptcy or for liquidation
or to take advantage of any bankruptcy or insolvency law of any
jurisdiction, or ordering the dissolution, winding-up or liquidation of
the Company or any Restricted Subsidiary, or any such petition shall be
filed against the Company or any Restricted Subsidiary and such
petition shall not be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating at least $5,000,000 are rendered against one or more of the
Company and its Restricted Subsidiaries, which judgments are not,
within 60 days after entry thereof, bonded, discharged or stayed
pending appeal, or are not discharged within 60 days after the
expiration of such stay; or
(j) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is
sought or granted under section 412 of the Code, (ii) a notice of
intent to terminate any Plan shall have been or is reasonably expected
to be filed with the PBGC or the PBGC shall have instituted proceedings
under ERISA section 4042 to terminate or appoint a trustee to
administer any Plan or the PBGC shall have notified the Company or any
ERISA Affiliate that a Plan may become a subject of any such
proceedings, (iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of section 4001(a)(18) of ERISA) under
all Plans determined in accordance with Title IV of ERISA, shall be at
least $5,000,000, (iv) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the
Code relating to employee benefit plans, (v) the Company or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or
any Subsidiary establishes or amends any employee welfare benefit plan
that provides post-employment welfare benefits in a manner that would
increase the liability of the Company or any Subsidiary thereunder; and
any such event or events described in clauses (i) through (vi) above,
either individually or together with any other such event or events,
could reasonably be expected to have a Material Adverse Effect; or
(k) any Subsidiary Guarantor defaults in the performance of or
compliance with any term contained in the Subsidiary Guaranty, and such
default continues beyond any period of grace in respect thereof, or the
Subsidiary Guaranty ceases to be in full force and effect, except as
provided in Section 22, or is declared to be null and void in whole or
in material part by a court or other governmental or regulatory
authority having jurisdiction or the validity or enforceability thereof
shall be contested by any of the Company or any Subsidiary Guarantor or
any of them renounces any of the same or denies that it has any or
further liability thereunder.
As used in Section 11(j), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
29
12. REMEDIES ON DEFAULT, ETC.
12.1. ACCELERATION.
(a) If an Event of Default with respect to the Company
described in paragraph (g) or (h) of Section 11 (other than an Event of
Default described in clause (i) of paragraph (g) or described in clause
(vi) of paragraph (g) by virtue of the fact that such clause
encompasses clause (i) of paragraph (g)) has occurred, all the Notes
then outstanding shall automatically become immediately due and
payable.
(b) If any other Event of Default has occurred and is
continuing, holders of a majority or more in principal amount of the
Notes at the time outstanding may at any time at its or their option,
by notice or notices to the Company, declare all the Notes then
outstanding to be immediately due and payable.
(c) If any Event of Default described in paragraph (a) or (b)
of Section 11 has occurred and is continuing, any holder or holders of
Notes at the time outstanding affected by such Event of Default may at
any time, at its or their option, by notice or notices to the Company,
declare all the Notes held by it or them to be immediately due and
payable.
Upon any Notes becoming due and payable under this Section
12.1, whether automatically or by declaration, such Notes will forthwith mature
and the entire unpaid principal amount of such Notes, plus (x) all accrued and
unpaid interest thereon and (y) the Make-Whole Amount determined in respect of
such principal amount (to the full extent permitted by applicable law), shall
all be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
12.2. OTHER REMEDIES.
If any Default or Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or have been
declared immediately due and payable under Section 12.1, the holder of any Note
at the time outstanding may proceed to protect and enforce the rights of such
holder by an action at law, suit in equity or other appropriate proceeding,
whether for the specific performance of any agreement contained herein or in any
Note, or for an injunction against a violation of any of the terms hereof or
thereof, or in aid of the exercise of any power granted hereby or thereby or by
law or otherwise.
12.3. RESCISSION.
At any time after any Notes have been declared due and payable
pursuant to clause (b) or (c) of Section 12.1, the holders of a majority in
principal amount of the Notes then
30
outstanding, by written notice to the Company, may rescind and annul any such
declaration and its consequences if (a) the Company has paid all overdue
interest on the Notes, all principal of and Make-Whole Amount, if any, on any
Notes that are due and payable and are unpaid other than by reason of such
declaration, and all interest on such overdue principal and Make-Whole Amount,
if any, and (to the extent permitted by applicable law) any overdue interest in
respect of the Notes, at the Default Rate, (b) all Events of Default and
Defaults, other than non-payment of amounts that have become due solely by
reason of such declaration, have been cured or have been waived pursuant to
Section 17, and (c) no judgment or decree has been entered for the payment of
any monies due pursuant hereto or to the Notes. No rescission and annulment
under this Section 12.3 will extend to or affect any subsequent Event of Default
or Default or impair any right consequent thereon.
12.4. NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC.
No course of dealing and no delay on the part of any holder of
any Note in exercising any right, power or remedy shall operate as a waiver
thereof or otherwise prejudice such holder's rights, powers or remedies. No
right, power or remedy conferred by this Agreement or by any Note upon any
holder thereof shall be exclusive of any other right, power or remedy referred
to herein or therein or now or hereafter available at law, in equity, by statute
or otherwise. Without limiting the obligations of the Company under Section 15,
the Company will pay to the holder of each Note on demand such further amount as
shall be sufficient to cover all costs and expenses of such holder incurred in
any enforcement or collection under this Section 12, including, without
limitation, reasonable attorneys' fees, expenses and disbursements.
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
13.1. REGISTRATION OF NOTES.
The Company shall keep at its principal executive office a
register for the registration and registration of transfers of Notes. The name
and address of each holder of one or more Notes, each transfer thereof and the
name and address of each transferee of one or more Notes shall be registered in
such register. Prior to due presentment for registration of transfer, the Person
in whose name any Note shall be registered shall be deemed and treated as the
owner and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall give to
any holder of a Note that is an Institutional Investor, promptly upon request
therefor, a complete and correct copy of the names and addresses of all
registered holders of Notes.
13.2. TRANSFER AND EXCHANGE OF NOTES.
Upon surrender of any Note at the principal executive office
of the Company for registration of transfer or exchange (and in the case of a
surrender for registration of transfer, duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered holder of such
Note or his attorney duly authorized in writing and accompanied by the address
for notices of each transferee of such Note or part thereof), the Company shall
execute and deliver, at the Company's expense (except as provided below), one or
more new Notes (as
31
requested by the holder thereof) in exchange therefor, in an aggregate principal
amount equal to the unpaid principal amount of the surrendered Note. Each such
new Note shall be payable to such Person as such holder may request and shall be
substantially in the form of Exhibit 1(a) or 1(b), as appropriate. Each such new
Note shall be dated and bear interest from the date to which interest shall have
been paid on the surrendered Note or dated the date of the surrendered Note if
no interest shall have been paid thereon. The Company may require payment of a
sum sufficient to cover any stamp tax or governmental charge imposed in respect
of any such transfer of Notes. Notes shall not be transferred in denominations
of less than $500,000, provided that if necessary to enable the registration of
transfer by a holder of its entire holding of Notes, one Note may be in a
denomination of less than $500,000. Any transferee, by its acceptance of a Note
registered in its name (or the name of its nominee), shall be deemed to have
made the representations and agreement set forth in Section 6.
13.3. REPLACEMENT OF NOTES.
Upon receipt by the Company of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of any Note (which evidence shall be, in the case of an Institutional
Investor, notice from such Institutional Investor of such ownership and such
loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note
is, or is a nominee for, an original Purchaser or another Institutional
Investor holder of a Note with a minimum net worth of at least
$50,000,000, such Person's own unsecured agreement of indemnity shall
be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.
14. PAYMENTS ON NOTES.
14.1. PLACE OF PAYMENT.
Subject to Section 14.2, payments of principal, Make-Whole
Amount, if any, and interest becoming due and payable on the Notes shall be made
in Chicago,
Illinois at the principal office of Bank of America in such
jurisdiction. The Company may at any time, by notice to each holder of a Note,
change the place of payment of the Notes so long as such place of payment shall
be either the principal office of the Company in such jurisdiction or the
principal office of a bank or trust company in such jurisdiction.
32
14.2. HOME OFFICE PAYMENT.
So long as you or your nominee shall be the holder of any
Note, and notwithstanding anything contained in Section 14.1 or in such Note to
the contrary, the Company will pay all sums becoming due on such Note for
principal, Make-Whole Amount, if any, and interest by the method and at the
address specified for such purpose below your name in Schedule A, or by such
other method or at such other address as you shall have from time to time
specified to the Company in writing for such purpose, without the presentation
or surrender of such Note or the making of any notation thereon, except that
upon written request of the Company made concurrently with or reasonably
promptly after payment or prepayment in full of any Note, you shall surrender
such Note for cancellation, reasonably promptly after any such request, to the
Company at its principal executive office or at the place of payment most
recently designated by the Company pursuant to Section 14.1. Prior to any sale
or other disposition of any Note held by you or your nominee you will, at your
election, either endorse thereon the amount of principal paid thereon and the
last date to which interest has been paid thereon or surrender such Note to the
Company in exchange for a new Note or Notes pursuant to Section 13.2. The
Company will afford the benefits of this Section 14.2 to any Institutional
Investor that is the direct or indirect transferee of any Note purchased by you
under this Agreement and that has made the same agreement relating to such Note
as you have made in this Section 14.2.
15. EXPENSES, ETC.
15.1. TRANSACTION EXPENSES.
Whether or not the transactions contemplated hereby are
consummated, the Company will pay all costs and expenses (including reasonable
attorneys' fees of one special counsel and, if reasonably required, local or
other counsel) incurred by you and each Other Purchaser or holder of a Note in
connection with such transactions and in connection with any amendments, waivers
or consents under or in respect of this Agreement, the Notes or the Subsidiary
Guaranty (whether or not such amendment, waiver or consent becomes effective),
including: (a) the costs and expenses incurred in enforcing or defending (or
determining whether or how to enforce or defend) any rights under this
Agreement, the Notes or the Subsidiary Guaranty or in responding to any subpoena
or other legal process or informal investigative demand issued in connection
with this Agreement, the Notes or the Subsidiary Guaranty, or by reason of being
a holder of any Note, and (b) the costs and expenses, including financial
advisors' fees, incurred in connection with the insolvency or bankruptcy of the
Company or any Subsidiary or in connection with any work-out or restructuring of
the transactions contemplated hereby and by the Notes. The Company will pay, and
will save you and each other holder of a Note harmless from, all claims in
respect of any fees, costs or expenses if any, of brokers and finders (other
than those retained by you).
15.2. SURVIVAL.
The obligations of the Company under this Section 15 will
survive the payment or transfer of any Note, the enforcement, amendment or
waiver of any provision of this Agreement or the Notes, and the termination of
this Agreement.
33
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall
survive the execution and delivery of this Agreement and the Notes, the purchase
or transfer by you of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any subsequent holder of a Note,
regardless of any investigation made at any time by or on behalf of you or any
other holder of a Note. All statements contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant to this Agreement
shall be deemed representations and warranties of the Company under this
Agreement. Subject to the preceding sentence, this Agreement and the Notes
embody the entire agreement and understanding between you and the Company and
supersede all prior agreements and understandings relating to the subject matter
hereof.
17. AMENDMENT AND WAIVER.
17.1. REQUIREMENTS.
This Agreement, the Notes and the Subsidiary Guaranty may be
amended, and the observance of any term hereof or of the Notes may be waived
(either retroactively or prospectively), with (and only with) the written
consent of the Company and the Required Holders, except that (a) no amendment or
waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any
defined term (as it is used therein), will be effective as to you unless
consented to by you in writing, and (b) no such amendment or waiver may, without
the written consent of the holder of each Note at the time outstanding affected
thereby, (i) subject to the provisions of Section 12 relating to acceleration or
rescission, change the amount or time of any prepayment or payment of principal
of, or reduce the rate or change the time of payment or method of computation of
interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage
of the principal amount of the Notes the holders of which are required to
consent to any such amendment or waiver, or (iii) amend any of Sections 8,
11(a), 11(b), 12, 17 or 20.
17.2. SOLICITATION OF HOLDERS OF NOTES.
(a) Solicitation. The Company will provide each holder of the
Notes (irrespective of the amount of Notes then owned by it) with
sufficient information, sufficiently far in advance of the date a
decision is required, to enable such holder to make an informed and
considered decision with respect to any proposed amendment, waiver or
consent in respect of any of the provisions hereof or of the Notes. The
Company will deliver executed or true and correct copies of each
amendment, waiver or consent effected pursuant to the provisions of
this Section 17 to each holder of outstanding Notes promptly following
the date on which it is executed and delivered by, or receives the
consent or approval of, the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay
or cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, or grant any security, to any
holder of Notes as consideration for or as an inducement to the
entering into by any holder of Notes or any waiver or amendment of
34
any of the terms and provisions hereof unless such remuneration is
concurrently paid, or security is concurrently granted, on the same
terms, ratably to each holder of Notes then outstanding even if such
holder did not consent to such waiver or amendment.
17.3. BINDING EFFECT, ETC.
Any amendment or waiver consented to as provided in this
Section 17 applies equally to all holders of Notes and is binding upon them and
upon each future holder of any Note and upon the Company without regard to
whether such Note has been marked to indicate such amendment or waiver. No such
amendment or waiver will extend to or affect any obligation, covenant,
agreement, Default or Event of Default not expressly amended or waived or impair
any right consequent thereon. No course of dealing between the Company and the
holder of any Note nor any delay in exercising any rights hereunder or under any
Note shall operate as a waiver of any rights of any holder of such Note. As used
herein, the term "this Agreement" or "the Agreement" and references thereto
shall mean this Agreement as it may from time to time be amended or
supplemented.
17.4. NOTES HELD BY COMPANY, ETC.
Solely for the purpose of determining whether the holders of
the requisite percentage of the aggregate principal amount of Notes then
outstanding approved or consented to any amendment, waiver or consent to be
given under this Agreement or the Notes, or have directed the taking of any
action provided herein or in the Notes to be taken upon the direction of the
holders of a specified percentage of the aggregate principal amount of Notes
then outstanding, Notes directly or indirectly owned by the Company or any of
its Affiliates shall be deemed not to be outstanding.
18. NOTICES.
All notices and communications provided for hereunder shall be
in writing and sent (a) by facsimile if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the
address specified for such communications in Schedule A, or at
such other address as you or it shall have specified to the
Company in writing,
(ii) if to any other holder of any Note, to such
holder at such address as such other holder shall have
specified to the Company in writing, or
(iii) if to the Company, to the Company at its
address set forth at the beginning hereof to the attention of
the Chief Financial Officer, or at such other address as the
Company shall have specified to the holder of each Note in
writing.
Notices under this Section 18 will be deemed given only when actually received.
35
19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications that may hereafter
be executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 19
shall not prohibit the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential
Information" means information delivered to you by or on behalf of the Company
or any Subsidiary in connection with the transactions contemplated by or
otherwise pursuant to this Agreement that is proprietary or confidential in
nature and that was clearly marked or labeled or otherwise adequately identified
when received by you as being confidential information of the Company or such
Subsidiary, provided that such term does not include information that (a) was
publicly known or otherwise known to you prior to the time of such disclosure,
(b) subsequently becomes publicly known through no act or omission by you or any
person acting on your behalf, (c) otherwise becomes known to you other than
through disclosure by the Company or any Subsidiary or from a third party that
was not known to you to be prohibited from making such disclosure or (d)
constitutes financial statements delivered to you under Section 7.1 that are
otherwise publicly available. You will maintain the confidentiality of such
Confidential Information in accordance with procedures adopted by you in good
faith to protect confidential information of third parties delivered to you,
provided that you may deliver or disclose Confidential Information to (i) your
directors, trustees, officers, employees, agents, attorneys and affiliates (to
the extent such disclosure reasonably relates to the administration of the
investment represented by your Notes), (ii) your financial advisors and other
professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 20, (iii)
any other holder of any Note, (iv) any Institutional Investor to which you sell
or offer to sell such Note or any part thereof or any participation therein (if
such Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20), (v) any Person
from which you offer to purchase any security of the Company (if such Person has
agreed in writing prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 20), (vi) any federal or state
regulatory authority having jurisdiction over you, (vii) the National
Association of Insurance Commissioners or any similar organization, or any
nationally recognized rating agency that requires access to information about
your investment portfolio or (viii) any other Person to which such delivery or
disclosure may be
36
necessary or appropriate (w) to effect compliance with any law, rule, regulation
or order applicable to you, (x) in response to any subpoena or other legal
process, (y) in connection with any litigation to which you are a party or (z)
if an Event of Default has occurred and is continuing, to the extent you may
reasonably determine such delivery and disclosure to be necessary or appropriate
in the enforcement or for the protection of the rights and remedies under your
Notes and this Agreement. Each holder of a Note, by its acceptance of a Note,
will be deemed to have agreed to be bound by and to be entitled to the benefits
of this Section 20 as though it were a party to this Agreement. On reasonable
request by the Company in connection with the delivery to any holder of a Note
of information required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to this Agreement
or its nominee), such holder will enter into an agreement with the Company
embodying the provisions of this Section 20.
21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your
Affiliates as the purchaser of the Notes that you have agreed to purchase
hereunder, by written notice to the Company, which notice shall be signed by
both you and such Affiliate, shall contain such Affiliate's agreement to be
bound by this Agreement and shall contain a confirmation by such Affiliate of
the accuracy with respect to it of the representations set forth in Section 6.
Upon receipt of such notice, wherever the word "you" is used in this Agreement
(other than in this Section 21), such word shall be deemed to refer to such
Affiliate in lieu of you. In the event that such Affiliate is so substituted as
a purchaser hereunder and such Affiliate thereafter transfers to you all of the
Notes then held by such Affiliate, upon receipt by the Company of notice of such
transfer, wherever the word "you" is used in this Agreement (other than in this
Section 21), such word shall no longer be deemed to refer to such Affiliate, but
shall refer to you, and you shall have all the rights of an original holder of
the Notes under this Agreement.
22. RELEASE OF SUBSIDIARY GUARANTOR.
You and each subsequent holder of a Note agree to release any
Subsidiary Guarantor from the Subsidiary Guaranty (i) if such Subsidiary
Guarantor ceases to be such as a result of a disposition permitted by Sections
10.6, 10.7 or 10.8 or (ii) at such time as the banks party to the Credit
Agreement release such Subsidiary from the Bank Guaranty and any other holders
of Debt guaranteed by such Subsidiary release such Subsidiary from such
Guaranties; provided, however, that you and each subsequent holder will not be
required to release a Subsidiary Guarantor from the Subsidiary Guaranty under
the circumstances contemplated by clause (ii), if (A) a Default or Event of
Default has occurred and is continuing, (B) such Subsidiary Guarantor is to
become a borrower under the Credit Agreement or (C) such release is part of a
plan of financing that contemplates such Subsidiary Guarantor guaranteeing any
other Debt of the Company. Your obligation to release a Subsidiary Guarantor
from the Subsidiary Guaranty is conditioned upon your prior receipt of a
certificate from a Senior Financial Officer of the Company stating that none of
the circumstances described in clauses (A), (B) and (C) above are true.
37
23. MISCELLANEOUS.
23.1. SUCCESSORS AND ASSIGNS.
All covenants and other agreements contained in this Agreement
by or on behalf of any of the parties hereto bind and inure to the benefit of
their respective successors and assigns (including, without limitation, any
subsequent holder of a Note) whether so expressed or not.
23.2. PAYMENTS DUE ON NON-BUSINESS DAYS.
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or Make-Whole Amount or interest on
any Note that is due on a date other than a Business Day shall be made on the
next succeeding Business Day without including the additional days elapsed in
the computation of the interest payable on such next succeeding Business Day.
23.3. SEVERABILITY.
Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
23.4. CONSTRUCTION.
Each covenant contained herein shall be construed (absent
express provision to the contrary) as being independent of each other covenant
contained herein, so that compliance with any one covenant shall not (absent
such an express contrary provision) be deemed to excuse compliance with any
other covenant. Where any provision herein refers to action to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
23.5. COUNTERPARTS.
This Agreement may be executed in any number of counterparts,
each of which shall be an original but all of which together shall constitute
one instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
23.6. GOVERNING LAW.
This Agreement shall be construed and enforced in accordance
with, and the rights of the parties shall be governed by, the law of the State
of
Illinois excluding choice-of-law principles of the law of such State that
would require the application of the laws of a jurisdiction other than such
State.
38
If you are in agreement with the foregoing, please sign the
form of agreement on the accompanying counterpart of this Agreement and return
it to the Company, whereupon the foregoing shall become a binding agreement
between you and the Company.
Very truly yours,
ELKCORP
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
----------------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
--------------------------------------------
Title: Senior Vice President, Chief Financial
Officer and Treasurer
-------------------------------------------
S-1
The foregoing is agreed to as of the date thereof.
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
-----------------------------
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
-----------------------------
Authorized Signatories
AMERICAN HERITAGE LIFE INSURANCE
COMPANY
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
-----------------------------
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
-----------------------------
Authorized Signatories
S-2
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
This information is confidential and is not included.
Schedule A
SCHEDULE B
DEFINED TERMS
As used herein, the following terms have the respective
meanings set forth below or set forth in the Section hereof following such term:
"AFFILIATE" means, at any time, and with respect to any
Person, (a) any other Person that at such time directly or indirectly through
one or more intermediaries Controls, or is Controlled by, or is under common
Control with, such first Person, and (b) any Person beneficially owning or
holding, directly or indirectly, 10% or more of any class of voting or equity
interests of the Company or any Subsidiary or any corporation of which the
Company and its Subsidiaries beneficially own or hold, in the aggregate,
directly or indirectly, 10% or more of any class of voting or equity interests.
As used in this definition, "CONTROL" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. Unless the context otherwise clearly requires, any
reference to an "Affiliate" is a reference to an Affiliate of the Company.
Notwithstanding anything in the foregoing to the contrary, a Person that (i)
would be an Affiliate of the Company solely by virtue of its ownership of voting
or equity interests of the Company and (ii) is eligible pursuant to Rule
13d-1(b) under the Exchange Act to file a statement with the Securities and
Exchange Commission on Schedule 13G, shall not be deemed to be an Affiliate.
"ADJUSTED CONSOLIDATED NET WORTH" means, as of any date,
consolidated stockholders' equity of the Company and its Restricted Subsidiaries
on such date (including, without duplication, minority interests in Restricted
Subsidiaries), less the amount by which outstanding Restricted Investments on
such date exceed 20% of consolidated stockholders' equity of the Company and its
Restricted Subsidiaries on such date; provided, however, that the effects on
shareholders' equity of any changes recorded by the Company and its Restricted
Subsidiaries related to the impairment of goodwill and other intangibles as may
be required under Statement of Financial Accounting Standards No. 142 shall not
be taken into account in determining Adjusted Consolidated Net Worth.
"ANTI-TERRORISM ORDER" means Executive Order 13224 of
September 23, 2001 Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079
(2001)).
"BANK GUARANTY" means each of the Subsidiary Guaranties dated
as of November 30, 2000, August 15, 2002 and September 30, 2002 of the
Subsidiary Guarantors of Debt outstanding under the Credit Agreement, as such
Guaranties may be amended, restated or otherwise modified, and any successor
thereto.
"BANKS" means the banks party to the Credit Agreement,
including Bank of America, N.A., as administrative agent for such banks.
1
Schedule B
"BUSINESS DAY" means (a) for the purposes of Section 8.6 only,
any day other than a Saturday, a Sunday or a day on which commercial banks in
New York City are required or authorized to be closed, and (b) for the purposes
of any other provision of this Agreement, any day other than a Saturday, a
Sunday or a day on which commercial banks in Chicago,
Illinois or New York City
are required or authorized to be closed.
"CAPITAL LEASE" means, at any time, a lease with respect to
which the lessee is required concurrently to recognize the acquisition of an
asset and the incurrence of a liability in accordance with GAAP.
"CLOSING" is defined in Section 3.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time, and the rules and regulations promulgated thereunder from
time to time.
"COMPANY" means
ElkCorp, a Delaware corporation.
"CONFIDENTIAL INFORMATION" is defined in Section 20.
"CONSOLIDATED EBIT" means, for any period, the sum of
Consolidated Net Income for such period, plus, to the extent deducted in
determining such Consolidated Net Income, (i) federal, state, local and foreign
income, value added and similar taxes and (ii) Consolidated Interest Expense.
"CONSOLIDATED EBITDA" means, for any period, the sum of
Consolidated EBIT for such period, (i) plus, to the extent deducted in
determining Consolidated Net Income, any (a) depreciation and amortization
expense, (b) extraordinary expenses or losses, (c) charges recorded by the
Company and its Restricted Subsidiaries related to the impairment of goodwill
and other intangibles as may be required under Statement of Financial Accounting
Standards No. 142, (d) other non-cash charges, (ii) minus, to the extent
included in Consolidated Net Income, any (x) extraordinary income or gains and
(y) other non-cash income. If, during the period for which Consolidated EBITDA
is being calculated, the Company or a Restricted Subsidiary has (i) acquired one
or more Persons (or the assets thereof) or (ii) disposed of one or more
Restricted Subsidiaries (or substantially all of the assets thereof),
Consolidated EBITDA shall be calculated on a pro forma basis as if all of such
acquisitions (other than acquisitions by or resulting in Unrestricted
Subsidiaries) and all such dispositions had occurred on the first day of such
period.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the
consolidated interest expense of the Company and its Restricted Subsidiaries for
such period determined in accordance with GAAP. If, during the period for which
Consolidated Interest Expense is being calculated, the Company or a Restricted
Subsidiary has (i) acquired one or more Persons (or the assets thereof) or (ii)
disposed of one or more Restricted Subsidiaries (or substantially all of the
assets thereof), Consolidated Interest Expense shall be calculated on a pro
forma basis as if (i) all of such acquisitions (other than acquisitions by or
resulting in Unrestricted Subsidiaries) and all such dispositions had occurred
on the first day of such period and (ii) any Debt incurred, assumed,
2
Schedule B
repaid, replaced or refinanced in connection therewith had been so incurred,
assumed, repaid, replaced or refinanced on the first day of such period.
"CONSOLIDATED NET DEBT" means, as of any date, outstanding
Debt of the Company and its Restricted Subsidiaries as determined on a
consolidated basis in accordance with GAAP (excluding valuation effects of FAS
133) less cash in excess of $2,000,000.
"CONSOLIDATED NET INCOME" means, for any period, the net
income or loss of the Company and its Restricted Subsidiaries for such period
(including, without duplication, income attributed to minority interests)
determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED TOTAL ASSETS" means, as of any date, the assets
and properties of the Company and its Restricted Subsidiaries determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED TOTAL CAPITALIZATION" means, as of any date, the
sum of Consolidated Net Debt and Adjusted Consolidated Net Worth as of such
date.
"CREDIT AGREEMENT" means the Credit Agreement dated as of
November 30, 2000, as amended by the First Amendment dated as of March 31, 2001,
the Second Amendment dated as of June 5, 2002 and the Third Amendment dated as
of February 20, 2003, among the Company and Bank of America, N.A., as
Administrative Agent, Swing Line Lender and L/C Issuer, Bank One, Texas, N.A.,
as Documentation Agent, First Union National Bank, as Syndication Agent, and the
other lenders party thereto, as such agreement may be hereafter amended,
modified, restated, supplemented, refinanced, increased or reduced from time to
time, and any successor credit agreement or similar facilities.
"DEBT" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable and other
accrued liabilities arising in the ordinary course of business but
including all liabilities created or arising under any conditional sale
or other title retention agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases; and
(d) all liabilities for borrowed money secured by any Lien
with respect to any property owned by such Person (whether or not it
has assumed or otherwise become liable for such liabilities); and
(e) any Guaranty of such Person with respect to liabilities of
a type described in any of clauses (a) through (d) hereof.
3
Schedule B
"DEFAULT" means an event or condition the occurrence or
existence of which would, with the lapse of time or the giving of notice or
both, become an Event of Default.
"DEFAULT RATE" means that rate of interest that is the greater
of (i) 2% per annum above the rate of interest stated in clause (a) of the first
paragraph of the Notes or (ii) 2% over the rate of interest publicly announced
by Bank of America in Chicago,
Illinois as its "base" or "prime" rate.
"DISPOSITION" is defined in Section 10.6.
"ENVIRONMENTAL LAWS" means any and all Federal, state, local,
and foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the rules and regulations promulgated
thereunder from time to time in effect.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
"EVENT OF DEFAULT" is defined in Section 11.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXISTING NOTE AGREEMENT" means the
Note Purchase Agreement
dated as of June 1, 2002 among the Company and the purchasers named therein.
"FOREIGN RESTRICTED SUBSIDIARY" means any Restricted
Subsidiary organized under the laws of a jurisdiction other than the United
States or any state thereof (including the District of Columbia).
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States of America.
"GOVERNMENTAL AUTHORITY" means
(a) the government of
(i) the United States of America or any State or
other political subdivision thereof, or
4
Schedule B
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or which
asserts jurisdiction over any properties of the Company or any
Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"GUARANTY" means, with respect to any Person, any obligation
(except the endorsement in the ordinary course of business of negotiable
instruments for deposit or collection) of such Person guaranteeing or in effect
guaranteeing any indebtedness, dividend or other obligation of any other Person
in any manner, whether directly or indirectly, including (without limitation)
obligations incurred through an agreement, contingent or otherwise, by such
Person:
(a) to purchase such indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment
of such indebtedness or obligation, or (ii) to maintain any working
capital or other balance sheet condition or any income statement
condition of any other Person or otherwise to advance or make available
funds for the purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or
obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"HAZARDOUS MATERIAL" means any and all pollutants, toxic or
hazardous wastes or any other substances that might pose a hazard to health or
safety, the removal of which may be required or the generation, manufacture,
refining, production, processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage, or filtration of
which is or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polycholorinated biphenyls).
"HOLDER" means, with respect to any Note, the Person in whose
name such Note is registered in the register maintained by the Company pursuant
to Section 13.1.
"INHAM EXEMPTION" is defined in Section 6.2(e).
5
Schedule B
"INSTITUTIONAL INVESTOR" means (a) any original purchaser of a
Note, (b) any holder of more than $2,000,000 in aggregate principal amount of
the Notes at the time outstanding, and (c) any bank, trust company, savings and
loan association or other financial institution, any pension plan, any
investment company, any insurance company, any broker or dealer, or any other
similar financial institution or entity, regardless of legal form.
"INVESTMENTS" means all investments made, in cash or by
delivery of property, directly or indirectly, by any Person, in any other
Person, whether by acquisition of shares of capital stock, indebtedness or other
obligations or securities or by loan, Guaranty, advance, capital contribution or
otherwise.
"LIEN" means, with respect to any Person, any mortgage, lien,
pledge, charge, security interest or other encumbrance, or any interest or title
of any vendor, lessor, lender or other secured party to or of such Person under
any conditional sale or other title retention agreement or Capital Lease, upon
or with respect to any property or asset of such Person (including in the case
of stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"MAKE-WHOLE AMOUNT" is defined in Section 8.6.
"MATERIAL" means material in relation to the business,
operations, affairs, financial condition, assets or properties of the Company
and its Restricted Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the business, operations, affairs, financial condition, assets or properties
of the Company and its Restricted Subsidiaries taken as a whole, or (b) the
ability of the Company to perform its obligations under this Agreement and the
Notes, or (c) the ability of any Subsidiary to perform its obligations under the
Subsidiary Guaranty, or (d) the validity or enforceability of this Agreement,
the Notes or the Subsidiary Guaranty.
"MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).
"NOTES" is defined in Section 1.
"OFFICER'S CERTIFICATE" means a certificate of a Senior
Financial Officer or of any other officer of the Company whose responsibilities
extend to the subject matter of such certificate.
"OTHER PURCHASERS" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA or any successor thereto.
6
Schedule B
"PERSON" means an individual, partnership, corporation,
limited liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"PLAN" means an "employee benefit plan" (as defined in section
3(3) of ERISA) that is or, within the preceding five years, has been established
or maintained, or to which contributions are or, within the preceding five
years, have been made or required to be made, by the Company or any ERISA
Affiliate or with respect to which the Company or any ERISA Affiliate may have
any liability.
"PRIORITY DEBT" means, as of any date, the sum (without
duplication) of (a) outstanding unsecured Debt of Restricted Subsidiaries that
are not Subsidiary Guarantors other than (i) Debt owed to the Company or another
Restricted Subsidiary, (ii) Debt of a Person that is not an Unrestricted
Subsidiary outstanding at the time it becomes a Restricted Subsidiary and (iii)
Debt of Restricted Subsidiaries outstanding on the date of this Agreement that
is described in Schedule B-1 and (b) Debt of the Company and its Restricted
Subsidiaries secured by Liens not otherwise permitted by Sections 10.5(a)
through (h).
"PROPERTY" or "PROPERTIES" means, unless otherwise
specifically limited, real or personal property of any kind, tangible or
intangible, xxxxxx or inchoate.
"PURCHASER" means each purchaser listed in Schedule A.
"QPAM EXEMPTION" means Prohibited Transaction Class Exemption
84-14 issued by the United States Department of Labor.
"REQUIRED HOLDERS" means, at any time, the holders of at least
a majority in principal amount of the Notes at the time outstanding (exclusive
of Notes then owned by the Company or any of its Affiliates).
"RESPONSIBLE OFFICER" means any Senior Financial Officer and
any other officer of the Company with responsibility for the administration of
the relevant portion of this Agreement.
"RESTRICTED INVESTMENTS" means all Investments of the Company
and its Restricted Subsidiaries, other than:
(a) property or assets to be used or consumed in the ordinary
course of business;
(b) current assets arising from the sale of goods or services
in the ordinary course of business;
(c) Investments in Restricted Subsidiaries or in any Person
that, as a result thereof, becomes a Restricted Subsidiary;
7
Schedule B
(d) Investments in common stock of the Company;
(e) Investments existing as of the date of this Agreement that
are listed in the attached Schedule B-2; and
(f) Investments in:
(i) obligations, maturing within one year from the
date of acquisition, of or fully guaranteed by the United
States of America, or an agency thereof, or Canada, or any
province thereof;
(ii) state, or municipal securities having an
effective maturity within one year from the date of
acquisition that are rated in one of the top two rating
classifications by at least one nationally recognized rating
agency;
(iii) certificates of deposit or banker's acceptances
maturing within one year from the date of acquisition of or
issued by commercial banks whose long-term unsecured debt
obligations (or the long-term unsecured debt obligations of
the bank holding company owning all of the capital stock of
such bank) are rated in one of the top two rating
classifications by at least one nationally recognized rating
agency;
(iv) commercial paper maturing within 270 days from
the date of issuance that, at the time of acquisition, is
rated in one of the top two rating classifications by at least
one credit rating agency of recognized national standing;
(v) repurchase agreements; and
(vi) money market instrument programs that are
properly classified as current assets in accordance with GAAP.
"RESTRICTED SUBSIDIARY" means any Subsidiary (a) of which at
least a majority of the voting securities are owned by the Company and/or one or
more Restricted Subsidiaries and (b) that the Company has not designated an
Unrestricted Subsidiary by notice in writing given to the holders of the Notes
pursuant to Section 10.9 hereof.
"SEC REPORTS" means the Company's Annual Report on Form 10-K
for the year ended June 30, 2002 and Quarterly Reports on Form 10-Q for the
periods ending September 30 and December 31, 2002.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time.
"SENIOR FINANCIAL OFFICER" means the chief financial officer,
principal accounting officer, treasurer or comptroller of the Company.
8
Schedule B
"SOURCE" is defined in Section 6.2.
"SUBSIDIARY" means, as to any Person, any corporation,
association or other business entity in which such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries owns sufficient
equity or voting interests to enable it or them (as a group) ordinarily, in the
absence of contingencies, to elect a majority of the directors (or Persons
performing similar functions) of such entity, and any partnership, limited
liability company or joint venture if more than a 50% interest in the profits or
capital thereof is owned by such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries (unless such partnership,
limited liability company or joint venture can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.
"SUBSIDIARY GUARANTOR" is defined in Section 1.
"SUBSIDIARY GUARANTY" is defined in Section 1.
"THIS AGREEMENT" OR "THE AGREEMENT" is defined in Section
17.3.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company
that has been so designated by notice in writing given to the holders of the
Notes.
"USA PATRIOT ACT" means Public Law 107-56 of the United States
of America, United and Strengthening America by Providing Tools Required to
Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001.
9
Schedule B
SCHEDULE B-1
EXISTING PRIORITY DEBT
None.
Schedule B-1
SCHEDULE B-2
EXISTING INVESTMENTS
The Company maintains a Deferred Compensation Plan for certain of its officers
and directors, pursuant to which such persons may defer a portion of their
compensation and direct that such deferred compensation be invested in various
mutual funds and other investment vehicles. To fund the amounts payable to the
participants pursuant to the Deferred Compensation Plan, the Company makes
investments in the applicable mutual funds and other investment vehicles. At
February 24, 2003, the Company had investments of approximately $1,100,000
pursuant to the Deferred Compensation Plan.
Schedule B-2
SCHEDULE 4.9
CHANGES IN CORPORATE STRUCTURE
None.
Schedule 4.9
SCHEDULE 5.3
DISCLOSURE MATERIALS
See Schedule 5.8.
Schedule 5.3
SCHEDULE 5.4
SUBSIDIARIES AND AFFILIATES
(a) SUBSIDIARIES AND AFFILIATES
(i) SUBSIDIARIES
The Company has the Subsidiaries shown on the attached organizational chart
(domicile of organization is shown parenthetically for each Subsidiary). Except
as otherwise indicated on such organizational chart, line relationships indicate
ownership of 100% of the common stock or other voting securities of the
underlying Subsidiary.
(ii) AFFILIATES
Except as shown above in part (a)(i) of this Schedule 5.4 and in Schedule B-2,
the Company has no equity investments in any other corporation or entity.
(iii) DIRECTORS AND SENIOR OFFICERS OF COMPANY
Directors: Xxxxx X. Xxxx* Xxxxxxx X. Xxxxx
Xxxxxx X. Xxxxx Xxxxx X. Xxxxx***
Xxxx X. Xxxxxx** Xxxxxx X. Work
Xxxxxxx X. XxXxxxx
* Chair of Corporate Governance Committee
** Chair of Compensation Committee
*** Chair of Audit Committee
Senior Officers: Xxxxxx X. Xxxxx Chairman of the Board and
Chief Executive Officer
Xxxxxxx X. Xxxxx President and Chief Operating
Officer
Xxxxxx X. Xxxxxxx Xx. Senior Vice President, Chief
Financial Officer and
Treasurer
Xxxxxxx X. Xxxxxx Senior Vice President and
Controller
Matti Kiik Senior Vice President-
Research and Development
Xxxxx X. Xxxxxx Senior Vice President, General
Counsel and Secretary
Xxxxx X. Xxxxxx Senior Vice President-
Administration
Xxxxxxx X. Xxxxxx Vice President and Chief
Accounting Officer
Xxxxxx X. Xxxx Vice President and Assistant
Secretary
Schedule 5.4
The organization chart is confidential and has been omitted.
Schedule 5.4
SCHEDULE 5.5
FINANCIAL STATEMENTS
1. The financial statements and the notes thereto included in the SEC Form
10-K for each of the fiscal years ended June 30, 1998, 1999, 2000, 2001
and 2002.
2. The financial statements and the notes thereto included in the SEC Form
10-Q for the fiscal quarters ended September 30 and December 31, 2002.
Schedule 5.5
SCHEDULE 5.8
CONFIDENTIAL
LITIGATION
This information is confidential and is not included.
Schedule 5.8
SCHEDULE 5.11
LICENSES, PERMITS, ETC.
See the disclosure in Schedule 5.8 titled "Patent Infringement Litigation."
Schedule 5.11
SCHEDULE 5.15
EXISTING DEBT
Debt of the Company and its subsidiaries as of December 31, 2002:
ElkCorp 6.99% Senior Notes, Series A, due June 15, 2009 $60,000,000
ElkCorp 7.49% Senior Notes, Series B, due June 15, 2012 $60,000,000
The Company also maintains the Credit Agreement. At December 31, 2002, no Debt
was outstanding under the Credit Agreement, although certain letters of credit
are outstanding thereunder.
At December 31, 2002, the Company had $2,584,000 of letters of credit
outstanding under the Credit Agreement. Subsequent to December 31, 2002,
outstanding letters of credit under the Credit Agreement were increased by
$813,150.
Effective June 17, 2002, the Company entered into a pay floating (6 month Libor
plus 1.91%), receive fixed (7.49%), interest rate swap with Bank of America,
N.A. through June 15, 2012, covering a notional amount of $60,000,000. This
interest rate swap does not constitute Debt.
The Subsidiaries guarantee the obligations set forth above and any future
obligations that may become outstanding under the Credit Agreement.
Schedule 5.15
SCHEDULE 5.18
ENVIRONMENTAL MATTERS
This information is confidential and is not included.
Schedule 5.18
SCHEDULE 10.5
EXISTING LIENS
Cybershield of Georgia, Inc. The real property comprising Cybershield
of Georgia, Inc.'s Canton, Georgia
facility was conveyed to Cherokee County,
Georgia and leased-back for nominal
consideration in exchange for tax
abatements granted by Cherokee County. At
the conclusion of the tax abatement,
Cybershield of Georgia, Inc. may obtain
title to the property for nominal or no
consideration.
Schedule 10.5
EXHIBIT 1(a)
[FORM OF SENIOR NOTE]
ELKCORP
4.69% SENIOR NOTE
DUE JULY 15, 2007
No. R-[_____] [Date]
$[_______] PPN: [ ]
FOR VALUE RECEIVED, the undersigned,
ELKCORP (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, promises to pay to [ ], or registered assigns, the principal sum of
$[ ] on July 15, 2007, with interest (computed on the basis of a 360-day year of
twelve 30-day months) (a) on the unpaid balance thereof at the rate of 4.69% per
annum from the date hereof, payable semiannually, on January 15 and July 15 in
each year, commencing with the January or July next succeeding the date hereof,
until the principal hereof shall have become due and payable, and (b) to the
extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the
Note Purchase Agreement
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 6.69% or (ii) 2% over the rate of interest publicly
announced by Bank of America, or its successor, from time to time in Chicago,
Illinois as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole
Amount with respect to this Note are to be made in lawful money of the United
States of America at the principal office of Bank of America in Chicago,
Illinois or at such other place as the Company shall have designated by written
notice to the holder of this Note as provided in the
Note Purchase Agreement
referred to below.
This Note is one of a series of Senior Notes (herein called
the "Notes") issued pursuant to a
Note Purchase Agreement dated as of March 1,
2003 (as from time to time amended, the "
Note Purchase Agreement"), between the
Company and the respective Purchasers named therein and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in
Section 20 of the
Note Purchase Agreement and (ii) to have made the
representations and agreement set forth in Section 6 of the
Note Purchase
Agreement.
This Note is a registered Note and, as provided in the
Note
Purchase Agreement, upon surrender of this Note for registration of transfer,
duly endorsed, or accompanied by a
Exhibit 1(a)
written instrument of transfer duly executed, by the registered holder hereof or
such holder's attorney duly authorized in writing, a new Note for a like
principal amount will be issued to, and registered in the name of, the
transferee. Prior to due presentment for registration of transfer, the Company
may treat the person in whose name this Note is registered as the owner hereof
for the purpose of receiving payment and for all other purposes, and the Company
will not be affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from
time to time in part, at the times and on the terms specified in the
Note
Purchase Agreement but not otherwise.
If an Event of Default, as defined in the Note Purchase
Agreement, occurs and is continuing, the principal of this Note may be declared
or otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
Payment of the principal of, and interest and Make-Whole
Amount, if any, on this Note, and all other amounts due under the Note Purchase
Agreement, is guaranteed pursuant to the terms of a Guaranty dated as of March
1, 2003 of certain subsidiaries of the Company.*
This Note shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of
Illinois excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
ELKCORP
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
----------
* This paragraph must be removed at such time as there are no Subsidiary
Guarantors.
2
Exhibit 1(a)
EXHIBIT 1(b)
[FORM OF SUBSIDIARY GUARANTY]
THIS GUARANTY (this "Guaranty") dated as of March 1, 2003 is made by
the undersigned (each, a "Guarantor"), in favor of the holders from time to time
of the Notes hereinafter referred to, including each purchaser named in the Note
Purchase Agreement hereinafter referred to, and their respective successors and
assigns (collectively, the "Holders" and each individually, a "Holder").
WITNESSETH:
WHEREAS, ELKCORP, a Delaware corporation (the "Company"), and the
initial Holders have entered into a Note Purchase Agreement dated as of March 1,
2003 (the Note Purchase Agreement as amended, supplemented, restated or
otherwise modified from time to time in accordance with its terms and in effect,
the "Note Purchase Agreement");
WHEREAS, the Note Purchase Agreement provides for the issuance by the
Company of $25,000,000 aggregate principal amount of Notes (as defined in the
Note Purchase Agreement);
WHEREAS, the Company owns, directly or indirectly, all of the issued
and outstanding capital stock or partnership interests of each Guarantor and, by
virtue of such ownership and otherwise, each Guarantor will derive substantial
benefits from the purchase by the Holders of the Company's Notes;
WHEREAS, it is a condition precedent to the obligation of the Holders
to purchase the Notes that each Guarantor shall have executed and delivered this
Guaranty to the Holders; and
WHEREAS, each Guarantor desires to execute and deliver this Guaranty to
satisfy the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the premises and other benefits to
each Guarantor, and of the purchase of the Company's Notes by the Holders, and
for other good and valuable consideration, the receipt and sufficiency of which
are acknowledged, each Guarantor makes this Guaranty as follows:
SECTION 1. Definitions. Any capitalized terms not otherwise herein
defined shall have the meanings attributed to them in the Note Purchase
Agreement.
SECTION 2. Guaranty. Each Guarantor, jointly and severally with each
other Guarantor, unconditionally and irrevocably guarantees to the Holders the
due, prompt and complete payment by the Company of the principal of, Make-Whole
Amount, if any, and interest on, and each other amount due under, the Notes or
the Note Purchase Agreement, when and as the same shall become due and payable
(whether at stated maturity or by required or optional prepayment or by
declaration or otherwise) in accordance with the terms of the Notes and the Note
Purchase Agreement (the Notes and the Note Purchase Agreement being sometimes
Exhibit 1(b)
hereinafter collectively referred to as the "Note Documents" and the amounts
payable by the Company under the Note Documents, and all other monetary
obligations of the Company thereunder, being sometimes collectively hereinafter
referred to as the "Obligations"). This Guaranty is a guaranty of payment and
not just of collectibility and is in no way conditioned or contingent upon any
attempt to collect from the Company or upon any other event, contingency or
circumstance whatsoever. If for any reason whatsoever the Company shall fail or
be unable duly, punctually and fully to pay such amounts as and when the same
shall become due and payable, each Guarantor, without demand, presentment,
protest or notice of any kind, will forthwith pay or cause to be paid such
amounts to the Holders under the terms of such Note Documents, in lawful money
of the United States, at the place specified in the Note Purchase Agreement, or
perform or comply with the same or cause the same to be performed or complied
with, together with interest (to the extent provided for under such Note
Documents) on any amount due and owing from the Company. Each Guarantor,
promptly after demand, will pay to the Holders the reasonable costs and expenses
of collecting such amounts or otherwise enforcing this Guaranty, including,
without limitation, the reasonable fees and expenses of counsel. Notwithstanding
the foregoing, the right of recovery against each Guarantor under this Guaranty
is limited to the extent it is judicially determined with respect to any
Guarantor that entering into this Guaranty would violate Section 548 of the
United States Bankruptcy Code or any comparable provisions of any state law, in
which case such Guarantor shall be liable under this Guaranty only for amounts
aggregating up to the largest amount that would not render such Guarantor's
obligations hereunder subject to avoidance under Section 548 of the United
States Bankruptcy Code or any comparable provisions of any state law.
SECTION 3. Guarantor's Obligations Unconditional. The obligations of
each Guarantor under this Guaranty shall be primary, absolute and unconditional
obligations of each Guarantor, shall not be subject to any counterclaim,
set-off, deduction, diminution, abatement, recoupment, suspension, deferment,
reduction or defense based upon any claim each Guarantor or any other person may
have against the Company or any other person, and to the full extent permitted
by applicable law shall remain in full force and effect without regard to, and
shall not be released, discharged or in any way affected by, any circumstance or
condition whatsoever (whether or not each Guarantor or the Company shall have
any knowledge or notice thereof), including:
(a) any termination, amendment or modification of or deletion
from or addition or supplement to or other change in any of the Note
Documents or any other instrument or agreement applicable to any of the
parties to any of the Note Documents;
(b) any furnishing or acceptance of any security, or any
release of any security, for the Obligations, or the failure of any
security or the failure of any person to perfect any interest in any
collateral;
(c) any failure, omission or delay on the part of the Company
to conform or comply with any term of any of the Note Documents or any
other instrument or agreement referred to in paragraph (a) above,
including, without limitation, failure to give notice to any Guarantor
of the occurrence of a "Default" or an "Event of Default" under any
Note Document;
2
Exhibit 1(b)
(d) any waiver of the payment, performance or observance of
any of the obligations, conditions, covenants or agreements contained
in any Note Document, or any other waiver, consent, extension,
indulgence, compromise, settlement, release or other action or inaction
under or in respect of any of the Note Documents or any other
instrument or agreement referred to in paragraph (a) above or any
obligation or liability of the Company, or any exercise or non-exercise
of any right, remedy, power or privilege under or in respect of any
such instrument or agreement or any such obligation or liability;
(e) any failure, omission or delay on the part of any of the
Holders to enforce, assert or exercise any right, power or remedy
conferred on such Holder in this Guaranty, or any such failure,
omission or delay on the part of such Holder in connection with any
Note Document, or any other action on the part of such Holder;
(f) any voluntary or involuntary bankruptcy, insolvency,
reorganization, arrangement, readjustment, assignment for the benefit
of creditors, composition, receivership, conservatorship,
custodianship, liquidation, marshaling of assets and liabilities or
similar proceedings with respect to the Company, any Guarantor or to
any other person or any of their respective properties or creditors, or
any action taken by any trustee or receiver or by any court in any such
proceeding;
(g) any discharge, termination, cancellation, frustration,
irregularity, invalidity or unenforceability, in whole or in part, of
any of the Note Documents or any other agreement or instrument referred
to in paragraph (a) above or any term hereof;
(h) any merger or consolidation of the Company or any
Guarantor into or with any other corporation, or any sale, lease or
transfer of any of the assets of the Company or any Guarantor to any
other person;
(i) any change in the ownership of any shares of capital stock
of the Company or any change in the corporate relationship between the
Company and any Guarantor, or any termination of such relationship;
(j) any release or discharge, by operation of law, of any
Guarantor from the performance or observance of any obligation,
covenant or agreement contained in this Guaranty; or
(k) any other occurrence, circumstance, happening or event
whatsoever, whether similar or dissimilar to the foregoing, whether
foreseen or unforeseen, and any other circumstance which might
otherwise constitute a legal or equitable defense or discharge of the
liabilities of a guarantor or surety or which might otherwise limit
recourse against any Guarantor.
3
Exhibit 1(b)
SECTION 4. Full Recourse Obligations. The obligations of each Guarantor
set forth herein constitute the full recourse obligations of such Guarantor
enforceable against it to the full extent of all its assets and properties.
SECTION 5. Waiver. Each Guarantor unconditionally waives, to the extent
permitted by applicable law, (a) notice of any of the matters referred to in
Section 3, (b) notice to such Guarantor of the incurrence of any of the
Obligations, notice to such Guarantor or the Company of any breach or default by
such Company with respect to any of the Obligations or any other notice that may
be required, by statute, rule of law or otherwise, to preserve any rights of the
Holders against such Guarantor, (c) presentment to or demand of payment from the
Company or the Guarantor with respect to any amount due under any Note Document
or protest for nonpayment or dishonor, (d) any right to the enforcement,
assertion or exercise by any of the Holders of any right, power, privilege or
remedy conferred in the Note Purchase Agreement or any other Note Document or
otherwise, (e) any requirement of diligence on the part of any of the Holders,
(f) any requirement to exhaust any remedies or to mitigate the damages resulting
from any default under any Note Document, (g) any notice of any sale, transfer
or other disposition by any of the Holders of any right, title to or interest in
the Note Purchase Agreement or in any other Note Document and (h) any other
circumstance whatsoever which might otherwise constitute a legal or equitable
discharge, release or defense of a guarantor or surety or which might otherwise
limit recourse against such Guarantor.
SECTION 6. Subrogation, Contribution, Reimbursement or Indemnity. Until
one year and one day after all Obligations have been indefeasibly paid in full,
each Guarantor agrees not to take any action pursuant to any rights which may
have arisen in connection with this Guaranty to be subrogated to any of the
rights (whether contractual, under the United States Bankruptcy Code, as
amended, including Section 509 thereof, under common law or otherwise) of any of
the Holders against the Company or against any collateral security or guaranty
or right of offset held by the Holders for the payment of the Obligations. Until
one year and one day after all Obligations have been indefeasibly paid in full,
each Guarantor agrees not to take any action pursuant to any contractual, common
law, statutory or other rights of reimbursement, contribution, exoneration or
indemnity (or any similar right) from or against the Company which may have
arisen in connection with this Guaranty. So long as the Obligations remain, if
any amount shall be paid by or on behalf of the Company to any Guarantor on
account of any of the rights waived in this paragraph, such amount shall be held
by such Guarantor in trust, segregated from other funds of such Guarantor, and
shall, forthwith upon receipt by such Guarantor, be turned over to the Holders
(duly endorsed by such Guarantor to the Holders, if required), to be applied
against the Obligations, whether matured or unmatured, in such order as the
Holders may determine. The provisions of this paragraph shall survive the term
of this Guaranty and the payment in full of the Obligations.
SECTION 7. Effect of Bankruptcy Proceedings, etc. This Guaranty shall
continue to be effective or be automatically reinstated, as the case may be, if
at any time payment, in whole or in part, of any of the sums due to any of the
Holders pursuant to the terms of the Note Purchase Agreement or any other Note
Document is rescinded or must otherwise be restored or returned by such Holder
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the
4
Exhibit 1(b)
Company or any other person, or upon or as a result of the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to the Company or other person or any substantial part of its property, or
otherwise, all as though such payment had not been made. If an event permitting
the acceleration of the maturity of the principal amount of the Notes shall at
any time have occurred and be continuing, and such acceleration shall at such
time be prevented by reason of the pendency against the Company or any other
person of a case or proceeding under a bankruptcy or insolvency law, each
Guarantor agrees that, for purposes of this Guaranty and its obligations
hereunder, the maturity of the principal amount of the Notes and all other
Obligations shall be deemed to have been accelerated with the same effect as if
any Holder had accelerated the same in accordance with the terms of the Note
Purchase Agreement or other applicable Note Document, and such Guarantor shall
forthwith pay such principal amount, Make-Whole Amount, if any, and interest
thereon and any other amounts guaranteed hereunder without further notice or
demand.
SECTION 8. Term of Agreement. This Guaranty and all guaranties,
covenants and agreements of each Guarantor contained herein shall continue in
full force and effect and shall not be discharged until such time as all of the
Obligations shall be paid and performed in full and all of the agreements of
such Guarantor hereunder shall be duly paid and performed in full.
SECTION 9. Representations and Warranties. Each Guarantor represents
and warrants to each Holder that:
(a) such Guarantor is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization and
has the requisite power and authority to own and operate its property,
to lease the property it operates as lessee and to conduct the business
in which it is currently engaged;
(b) such Guarantor has the requisite power and authority and
the legal right to execute and deliver, and to perform its obligations
under, this Guaranty, and has taken all necessary action to authorize
its execution, delivery and performance of this Guaranty;
(c) this Guaranty constitutes a legal, valid and binding
obligation of such Guarantor enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(d) the execution, delivery and performance of this Guaranty
will not (i) contravene, result in any breach of, or constitute a
default under, or result in the creation of any Lien in respect of any
property of such Guarantor under any indenture, mortgage, deed of
trust, loan, credit agreement, corporate charter or by-laws, or any
other agreement evidencing Debt, (ii) contravene, result in any breach
of, or constitute a default under, or result in the creation of any
Lien in respect of any property of such Guarantor under, any other
agreement or instrument to which such Guarantor is bound or by which
5
Exhibit 1(b)
such Guarantor or any of its properties may be bound or affected,
except as could not reasonably be expected to have a Material Adverse
Effect, (iii) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of
any court, arbitrator or Governmental Authority applicable to such
Guarantor, except as could not reasonably be expected to have a
Material Adverse Effect, or (iv) violate any provision of any statute
or other rule or regulation of any Governmental Authority applicable to
such Guarantor, except as could not reasonably be expected to have a
Material Adverse Effect;
(e) no consent, approval or authorization of, or registration,
filing or declaration with, any Governmental Authority is required in
connection with the execution, delivery or performance by such
Guarantor of this Guaranty;
(f) except as disclosed in Section 5.8 of the Note Purchase
Agreement, no litigation, investigation or proceeding of or before any
arbitrator or governmental authority is pending or, to the knowledge of
such Guarantor, threatened by or against such Guarantor or any of its
properties or revenues (i) with respect to this Guaranty or any of the
transactions contemplated hereby or (ii) which could reasonably be
expected to have a Material Adverse Effect;
(g) such Guarantor (after giving due consideration to any
rights of contribution) has received fair consideration and reasonably
equivalent value for the incurrence of its obligations hereunder or as
contemplated hereby and after giving effect to the transactions
contemplated herein, (i) the fair value of the assets of such Guarantor
(both at fair valuation and at present fair saleable value) exceeds its
liabilities, (ii) such Guarantor is able to and expects to be able to
pay its debts as they mature, and (iii) such Guarantor has capital
sufficient to carry on its business as conducted and as proposed to be
conducted.
SECTION 10. Notices. All notices under the terms and provisions hereof
shall be in writing, and shall be delivered or sent by facsimile if the sender
on the same day sends a confirming copy of such notice by a recognized overnight
delivery service (charges prepaid), mailed by registered or certified mail with
return receipt requested (postage prepaid), or sent by a recognized overnight
delivery service, charges prepaid, addressed (a) if to the Company or any Holder
at the address set forth in, the Note Purchase Agreement or (b) if to a
Guarantor, in care of the Company at the Company's address set forth in the Note
Purchase Agreement, or in each case at such other address as the Company, any
Holder or such Guarantor shall from time to time designate in writing to the
other parties. Any notice so addressed shall be deemed to be given when actually
received.
SECTION 11. Survival. All warranties, representations and covenants
made by each Guarantor herein or in any certificate or other instrument
delivered by it or on its behalf hereunder shall be considered to have been
relied upon by the Holders and shall survive the execution and delivery of this
Guaranty, regardless of any investigation made by any of the
6
Exhibit 1(b)
Holders. All statements in any such certificate or other instrument shall
constitute warranties and representations by such Guarantor hereunder.
SECTION 12. Submission to Jurisdiction. Each Guarantor irrevocably
submits to the jurisdiction of the courts of the State of
Illinois and of the
courts of the United States of America having jurisdiction in the State of
Illinois for the purpose of any legal action or proceeding in any such court
with respect to, or arising out of, this Guaranty, the Note Purchase Agreement
or the Notes. Each Guarantor consents to process being served in any suit,
action or proceeding by mailing a copy thereof by registered or certified mail,
postage prepaid, return receipt requested. Each Guarantor agrees that such
service upon receipt (i) shall be deemed in every respect effective service of
process upon it in any such suit, action or proceeding and (ii) shall, to the
fullest extent permitted by law, be taken and held to be valid personal service
upon and personal delivery to such Guarantor.
SECTION 13. Miscellaneous. Any provision of this Guaranty which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, each Guarantor hereby waives any provision of law that
renders any provisions hereof prohibited or unenforceable in any respect. The
terms of this Guaranty shall be binding upon, and inure to the benefit of, each
Guarantor and the Holders and their respective successors and assigns. No term
or provision of this Guaranty may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by each Guarantor and the
Required Holders. The section and paragraph headings in this Guaranty are for
convenience of reference only and shall not modify, define, expand or limit any
of the terms or provisions hereof, and all references herein to numbered
sections, unless otherwise indicated, are to sections in this Guaranty. This
Guaranty shall in all respects be governed by, and construed in accordance with,
the laws of the State of
Illinois, including all matters of construction,
validity and performance.
7
Exhibit 1(b)
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to
be duly executed as of the day and year first above written.
Chromium Corporation
Cybershield, Inc.
Cybershield of Georgia, Inc.
Cybershield International, Inc.
Cybershield of Texas, Inc.
Elk Composite Building Products, Inc.
Elk Corporation of Alabama
Elk Corporation of America
Elk Corporation of Arkansas
Elk Corporation of Texas
Elk Group, Inc.
Elk Performance Nonwoven Fabrics, Inc.
Elk Premium Building Products, Inc.
Elk Technologies, Inc.
Elk Technology Group, Inc.
OEL, Ltd.
----------------------------------------
Xxxxxx X. Xxxxxxx, Xx.
Vice President
Elk Group, L.P.
By: Elk Group, Inc.
Its General Partner
----------------------------------------
Xxxxxx X. Xxxxxxx, Xx.
Vice President
8
Exhibit 1(b)
NELPA, Inc.
----------------------------------------
Xxxxx X. Xxxxxx
President, Secretary and Treasurer
9
Exhibit 1(b)
FORM OF JOINDER TO SUBSIDIARY GUARANTY
The undersigned (the "Guarantor"), joins in the Subsidiary
Guaranty dated as of March 1, 2003 from the Guarantors named therein in favor of
the Holders, as defined therein, and agrees to be bound by all of the terms
thereof and represents and warrants to the Holders that:
(a) the Guarantor is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization and
has the requisite power and authority to own and operate its property,
to lease the property it operates as lessee and to conduct the business
in which it is currently engaged;
(b) the Guarantor has the requisite power and authority and
the legal right to execute and deliver this Joinder to Subsidiary
Guaranty ("Joinder") and to perform its obligations hereunder and under
the Subsidiary Guaranty and has taken all necessary action to authorize
its execution and delivery of this Joinder and its performance of the
Subsidiary Guaranty;
(c) the Subsidiary Guaranty constitutes a legal, valid and
binding obligation of the Guarantor enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law);
(d) the execution, delivery and performance of this Joinder
will not (i) contravene, result in any breach of, or constitute a
default under, or result in the creation of any Lien in respect of any
property of such Guarantor under any indenture, mortgage, deed of
trust, loan, credit agreement, corporate charter or by-laws, or any
other agreement evidencing Debt, (ii) contravene, result in any breach
of, or constitute a default under, or result in the creation of any
Lien in respect of any property of such Guarantor under, any other
agreement or instrument to which such Guarantor is bound or by which
such Guarantor or any of its properties may be bound or affected,
except as could not reasonably be expected to have a Material Adverse
Effect, (iii) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of
any court, arbitrator or Governmental Authority applicable to such
Guarantor, except as could not reasonably be expected to have a
Material Adverse Effect, or (iv) violate any provision of any statute
or other rule or regulation of any Governmental Authority applicable to
such Guarantor, except as could not reasonably be expected to have a
Material Adverse Effect;
(e) no consent, approval or authorization of, or registration,
filing or declaration with, any Governmental Authority is required in
connection with the execution, delivery or performance by such
Guarantor of this Joinder;
10
Exhibit 1(b)
(f) except as disclosed in writing to the Holders, no
litigation, investigation or proceeding of or before any arbitrator or
governmental authority is pending or, to the knowledge of the
Guarantor, threatened by or against the Guarantor or any of its
properties or revenues (i) with respect to this Joinder, the Subsidiary
Guaranty or any of the transactions contemplated hereby or (ii) that
could reasonably be expected to have a Material Adverse Effect;
(g) such Guarantor (after giving due consideration to any
rights of contribution) has received fair consideration and reasonably
equivalent value for the incurrence of its obligations hereunder or as
contemplated hereby and after giving effect to the transactions
contemplated herein, (i) the fair value of the assets of such Guarantor
(both at fair valuation and at present fair saleable value) exceeds its
liabilities, (ii) such Guarantor is able to and expects to be able to
pay its debts as they mature, and (iii) such Guarantor has capital
sufficient to carry on its business as conducted and as proposed to be
conducted.
Capitalized Terms used but not defined herein have the meanings ascribed in the
Subsidiary Guaranty.
IN WITNESS WHEREOF, the undersigned has caused this Joinder to
Subsidiary Guaranty to be duly executed as of __________, ____.
[Name of Guarantor]
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
11
Exhibit 1(b)
EXHIBIT 4.4(a)
FORM OF OPINION OF COUNSEL
TO THE COMPANY
The opinion of Xxxxx & XxXxxxxx, counsel to the Company, shall be to
the effect that:
1. Each of the Company and each Subsidiary Guarantor is a corporation
or limited partnership validly existing and in good standing under the laws of
its jurisdiction of organization, and each has all requisite corporate or
partnership power and authority to own and operate its properties, to carry on
its business as now conducted, and, in the case of the Company, to enter into
and perform the Agreement and to issue and sell the Notes and, in the case of
each Subsidiary Guarantor, to enter into and perform the Subsidiary Guaranty.
2. The Agreement and the Notes have 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 constitute the legal,
valid and binding agreements of the Company, enforceable in accordance with
their terms, except to the extent that enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application relating to or affecting the enforcement of the rights of
creditors or by equitable principles, regardless of whether enforcement is
sought in a proceeding in equity or at law.
3. The Subsidiary Guaranty has been duly authorized by proper corporate
or partnership action on the part of each Subsidiary Guarantor, has been duly
executed and delivered by an authorized officer of each such Subsidiary
Guarantor (or the General Partner thereof) and constitutes the legal, valid and
binding obligation of each Subsidiary Guarantor, enforceable in accordance with
its terms, except to the extent the enforcement thereof may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws of general application relating to or affecting the
enforcement of the rights of creditors or by equitable principles, regardless of
whether enforcement is sought in a proceeding in equity or at law.
4. A Texas court, or a Federal court sitting in Texas, would honor the
choice of Illinois law to govern the Agreement, the Notes and the Subsidiary
Guaranty.
5. Based on the representations set forth in the Agreement, the offer,
sale and delivery of the Notes and delivery of the Subsidiary Guaranty do not
require the registration of the Notes or the Subsidiary Guaranty under the
Securities Act of 1933, as amended, or the qualification of an indenture under
the Trust Indenture Act of 1939, as amended.
6. No authorization, approval or consent of, and no designation,
filing, declaration, registration and/or qualification with, any Governmental
Authority is necessary or required in connection with the execution, delivery
and performance by the Company of the Note Purchase
Exhibit 4.4(a)
Agreement or the offer, issuance and sale by the Company of the Notes, and no
authorization, approval or consent of, and no designation, filing, declaration,
registration and/or qualification with, any Governmental Authority is necessary
or required in connection with the execution, delivery and performance by any
Subsidiary Guarantor of the Subsidiary Guaranty.
7. The issuance and sale of the Notes by the Company, and the
execution, delivery and performance by the Company of the terms and conditions
of the Notes and the Agreement do not result in any breach or violation of any
of the provisions of, or constitute a default under, or result in the creation
or imposition of any Lien on, the property of the Company or any Subsidiary
pursuant to the provisions of (i) the certificate or articles of incorporation
or bylaws of the Company or any Subsidiary, (ii) any loan agreement to which the
Company or any Subsidiary is a party or by which any of them or their property
is bound that is filed (or incorporated by reference) as an exhibit to the
Company's Annual Report on Form 10-K for its fiscal year ended June 30, 2002 or
any other report or registration statement subsequently filed by the Company
with the Securities and Exchange Commission, (iii) any other Material agreement
or instrument to which the Company or any Subsidiary is a party or by which any
of them or their property is bound that is filed (or incorporated by reference)
as an exhibit to the Company's Annual Report on Form 10-K for its fiscal year
ended June 30, 2002 or any other report or registration statement subsequently
filed by the Company with the Securities and Exchange Commission, (iv) any law
(including usury laws) or regulation applicable to the Company, or (v) to the
knowledge of such counsel, any order, writ, injunction or decree of any court or
Governmental Authority applicable to the Company.
8. The execution, delivery and performance of the Subsidiary Guaranty
do not result in any breach or violation of any of the provisions of, or
constitute a default under, or result in the creation or imposition of any Lien
on, the property of any Subsidiary Guarantor pursuant to the provisions of (i)
its certificate or articles of incorporation or by-laws, (ii) any loan agreement
to which any Subsidiary Guarantor is a party or by which it or its property is
bound that is filed (or incorporated by reference) as an exhibit to the
Company's Annual Report on Form 10-K for its fiscal year ended June 30, 2002 or
any other report or registration statement subsequently filed by the Company
with the Securities and Exchange Commission, (iii) any other Material agreement
or instrument to which any Subsidiary Guarantor is a party or by which it or its
property is bound that is filed (or incorporated by reference) as an exhibit to
the Company's Annual Report on Form 10-K for its fiscal year ended June 30, 2002
or any other report or registration statement subsequently filed by the Company
with the Securities and Exchange Commission, (iv) any law or regulation
applicable to any Subsidiary Guarantor, or (v) to the knowledge of such counsel,
any order, writ, injunction or decree of any court or Governmental Authority
applicable to any Subsidiary Guarantor.
9. Except as disclosed in Schedule 5.8 to the Note Purchase Agreement,
to such counsel's knowledge there are no actions, suits or proceedings pending,
or threatened against the Company or any Subsidiary, at law or in equity or
before or by any Governmental Authority, that are likely to result, individually
or in the aggregate, in a Material Adverse Effect.
2
Exhibit 4.4(a)
9. Neither the Company nor any Subsidiary is (i) a "public utility
company" or a "holding company," or a "subsidiary company" of a "holding
company," as such terms are defined in the Public Utility Holding Company Act of
1935, as amended, (ii) a "public utility" as defined in the Federal Power Act,
as amended, or (iii) an "investment company" or a company "controlled" by an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended.
10. The issuance of the Notes and the intended use of the proceeds of
the sale of the Notes do not violate or conflict with Regulation U, T or X of
the Board of Governors of the Federal Reserve System.
The opinion of Xxxxx & XxXxxxxx shall cover such other matters relating to the
sale of the Notes as the Purchasers 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 governed by the laws of any jurisdiction other
than the United States of America and the States of Delaware and Texas, such
counsel may rely upon the opinions of counsel deemed (and stated in their
opinion to be deemed) by them to be competent and reliable; provided that, with
respect to the opinions in numbered paragraphs 2 and 3, such counsel may assume
that the laws of the State of Illinois are the same as the laws of the State of
Texas. Such opinion shall state that subsequent transferees and assignees of the
Notes may rely thereon.
3
Exhibit 4.4(a)
EXHIBIT 4.4(b)
FORM OF OPINION OF SPECIAL COUNSEL
TO THE PURCHASERS
The opinion of Xxxxxxx, Carton & Xxxxxxx, special counsel to the
Purchasers, shall be to the effect that:
1. The Company is a corporation organized and validly existing in good
standing under the laws of the State of Delaware, with requisite corporate power
and authority to enter into the Agreement and to issue and sell the Notes.
2. The Agreement and the Notes have been duly authorized, executed and
delivered by and constitute the legal, valid and binding agreements of the
Company, enforceable in accordance with their terms, except to the extent that
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application relating to or
affecting the enforcement of the rights of creditors or by equitable principles,
regardless of whether enforcement is sought in a proceeding in equity or at law.
3. The Subsidiary Guaranty constitutes the legal, valid and binding
obligation of each Subsidiary Guarantor, enforceable in accordance with their
terms, except to the extent that enforcement thereof may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws of general application relating to or affecting the
enforcement of the rights of creditors or by equitable principles, regardless of
whether enforcement is sought in a proceeding in equity or at law.
4. Based upon the representations set forth in the Agreement, the
offer, sale and delivery of the Notes and delivery of the Subsidiary Guaranty do
not require the registration of the Notes or the Subsidiary Guaranty under the
Securities Act of 1933, as amended, nor the qualification of an indenture under
the Trust Indenture Act of 1939, as amended.
5. The issuance and sale of the Notes and compliance with the terms and
provisions of the Notes and the Agreement do not conflict with or result in any
breach of any of the provisions of the Certificate of Incorporation or By-Laws
of the Company.
6. No approval, consent or withholding of objection on the part of, or
filing, registration or qualification with, any governmental body, Federal or
state, is necessary in connection with the execution and delivery of the Note
Purchase Agreement or the Notes.
The opinion of Xxxxxxx, Carton & Xxxxxxx shall state that the opinion of Xxxxx &
XxXxxxxx delivered to you pursuant to the Agreement, is satisfactory in form and
scope to Xxxxxxx, Carton & Xxxxxxx, and, in its opinion, the Purchasers are
justified in relying thereon. The opinion shall state that subsequent
transferees and assignees of the Notes may rely thereon. The opinion also shall
cover such other matters relating to the sale of the Notes as the Purchasers may
reasonably request.
Exhibit 4.4(b)
