EXHIBIT 10.3
EXECUTION COPY
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THE ST. XXX COMPANY
$25,000,000 4.97% Senior Secured Notes, Series E, due June 8, 2009
$75,000,000 5.31% Senior Secured Notes, Series F, due June 8, 2011
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NOTE PURCHASE AGREEMENT
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Dated as of June 8, 2004
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TABLE OF CONTENTS
(Not a part of the Agreement)
SECTION HEADING PAGE
SECTION 1. AUTHORIZATION OF NOTES................................................................ 1
SECTION 2. XXXX AND PURCHASE OF NOTES; GUARANTY.................................................. 1
Section 2.1. Purchase and Sale of Notes............................................................ 1
Section 2.2. Subsidiary Guaranty, Pledge Agreement and Intercreditor Agreement..................... 2
SECTION 3. CLOSING............................................................................... 3
SECTION 4. CONDITIONS TO CLOSING................................................................. 3
Section 4.1. Representations and Warranties........................................................ 3
Section 4.2. Performance; No Default............................................................... 3
Section 4.3. Compliance Certificates............................................................... 4
Section 4.4. Opinions of Counsel................................................................... 4
Section 4.5. Purchase Permitted by Applicable Law, Etc............................................. 4
Section 4.6. Sale of Other Notes................................................................... 4
Section 4.7. Payment of Special Counsel Fees....................................................... 5
Section 4.8. Private Placement Number.............................................................. 5
Section 4.9. Changes in Corporate Structure........................................................ 5
Section 4.10. Consent............................................................................... 5
Section 4.11. Subsidiary Guaranty, Etc.............................................................. 5
Section 4.12. Funding Instructions.................................................................. 5
Section 4.13. Proceedings and Documents............................................................. 5
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................................... 5
Section 5.1. Organization; Power and Authority..................................................... 5
Section 5.2. Authorization, Etc.................................................................... 6
Section 5.3. Disclosure............................................................................ 6
Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates...................... 7
Section 5.5. Financial Statements.................................................................. 7
Section 5.6. Compliance with Laws, Other Instruments, Etc.......................................... 8
Section 5.7. Governmental Authorizations, Etc...................................................... 8
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders............................. 8
Section 5.9. Taxes................................................................................. 8
Section 5.10. Title to Property; Leases............................................................. 9
Section 5.11. Licenses, Permits, Etc................................................................ 9
Section 5.12. Compliance with ERISA................................................................. 9
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Section 5.13. Private Offering by the Company...................................................... 10
Section 5.14. Use of Proceeds; Margin Regulations................................................... 10
Section 5.15. Existing Indebtedness; Future Liens................................................... 10
Section 5.16. Foreign Assets Control Regulations, Etc............................................... 11
Section 5.17. Status under Certain Statutes......................................................... 11
Section 5.18. Notes Rank Pari Passu................................................................. 11
Section 5.19. Environmental Matters................................................................. 11
SECTION 6. REPRESENTATIONS OF THE PURCHASER...................................................... 12
Section 6.1. Purchase for Investment............................................................... 12
Section 6.2. Source of Funds....................................................................... 12
SECTION 7. INFORMATION AS TO THE COMPANY......................................................... 14
Section 7.1. Financial and Business Information.................................................... 14
Section 7.2. Officer's Certificate................................................................. 17
Section 7.3. Inspection............................................................................ 17
SECTION 8. PREPAYMENT OF THE NOTES............................................................... 18
Section 8.1. Required Prepayments.................................................................. 18
Section 8.2. Optional Prepayments with Make-Whole Amount........................................... 18
Section 8.3. Change in Control..................................................................... 18
Section 8.4. Allocation of Partial Prepayments..................................................... 21
Section 8.5. Maturity; Surrender, Etc.............................................................. 21
Section 8.6. Purchase of Notes..................................................................... 21
Section 8.7. Make-Whole Amount..................................................................... 21
SECTION 9. AFFIRMATIVE COVENANTS................................................................. 23
Section 9.1. Compliance with Law................................................................... 23
Section 9.2. Insurance............................................................................. 23
Section 9.3. Maintenance of Properties............................................................. 23
Section 9.4. Payment of Taxes and Claims........................................................... 23
Section 9.6. [Reserved]............................................................................ 24
Section 9.7. Notes to Rank Pari Passu.............................................................. 24
Section 9.8. Guaranty by Subsidiaries.............................................................. 24
SECTION 10. NEGATIVE COVENANTS.................................................................... 25
Section 10.1. Consolidated Net Worth................................................................ 25
Section 10.2. Leverage Ratio........................................................................ 25
Section 10.3. Unencumbered Assets Ratio............................................................. 25
Section 10.4. Fixed Charges Coverage Ratio.......................................................... 25
Section 10.5. Limitations on Indebtedness........................................................... 25
Section 10.6. Limitation on Liens................................................................... 26
Section 10.7. Mergers, Consolidations, Etc.......................................................... 28
Section 10.8. Sale of Assets, Etc................................................................... 29
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Section 10.9. Transactions with Affiliates.......................................................... 30
Section 10.10. Nature of Business.................................................................... 31
SECTION 11. EVENTS OF DEFAULT..................................................................... 31
SECTION 12. REMEDIES ON DEFAULT, ETC.............................................................. 33
Section 12.1. Acceleration.......................................................................... 33
Section 12.2. Other Remedies........................................................................ 34
Section 12.3. Rescission............................................................................ 34
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc..................................... 34
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES......................................... 35
Section 13.1. Registration of Notes................................................................. 35
Section 13.2. Transfer and Exchange of Notes........................................................ 35
Section 13.3. Replacement of Notes.................................................................. 35
Section 13.4. Legend................................................................................ 36
SECTION 14. PAYMENTS ON NOTES..................................................................... 36
Section 14.1. Place of Payment...................................................................... 36
Section 14.2. Home Office Payment................................................................... 36
SECTION 15. EXPENSES, ETC......................................................................... 37
Section 15.1. Transaction Expenses.................................................................. 37
Section 15.2. Survival.............................................................................. 37
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.......................... 37
SECTION 17. AMENDMENT AND WAIVER.................................................................. 38
Section 17.1. Requirements.......................................................................... 38
Section 17.2. Solicitation of Holders of Notes...................................................... 38
Section 17.3. Binding Effect, Etc................................................................... 38
Section 17.4. Notes Held by Company, Etc............................................................ 39
SECTION 18. NOTICES............................................................................... 39
SECTION 19. REPRODUCTION OF DOCUMENTS............................................................. 39
SECTION 20. CONFIDENTIAL INFORMATION.............................................................. 40
SECTION 21. SUBSTITUTION OF PURCHASER............................................................. 41
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SECTION 22. MISCELLANEOUS......................................................................... 41
Section 22.1. Successors and Assigns................................................................ 41
Section 22.2. Payments Due on Non-Business Days..................................................... 41
Section 22.3. Severability.......................................................................... 41
Section 22.4. Construction.......................................................................... 41
Section 22.5. Counterparts.......................................................................... 42
Section 22.6. Governing Law......................................................................... 42
Signature.................................................................................................... 43
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SCHEDULE A -- INFORMATION RELATING TO PURCHASERS
SCHEDULE B -- DEFINED TERMS
SCHEDULE 2.2(a) -- Subsidiary Guarantors
SCHEDULE 4.9 -- Changes in Corporate Structure
SCHEDULE 5.4 -- Subsidiaries of the Company and Ownership of Subsidiary Stock
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.11 -- Patents, Etc.
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Existing Indebtedness
SCHEDULE 10.6 -- Existing Liens
EXHIBIT 1(a) -- Form of 4.97% Senior Secured Note, Series E, due June 8, 2009
EXHIBIT 1(b) -- Form of 5.31% Senior Secured Note, Series F, due June 8, 2011
EXHIBIT 2.2(a) -- Form of Subsidiary Guaranty
EXHIBIT 2.2(c) -- Form of Intercreditor Agreement
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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THE ST. XXX COMPANY
000 XXXXXXXXX XXXXXX, XXXXX 000
XXXXXXXXXXXX, XXXXXXX 00000
$25,000,000 4.97% Senior Secured Notes, Series E, due June 8, 2009
$75,000,000 5.31% Senior Secured Notes, Series F, due June 8, 2011
Dated as of June 8, 2004
TO THE PURCHASER LISTED IN THE ATTACHED
SCHEDULE A WHO IS A SIGNATORY HERETO:
Ladies and Gentlemen:
THE ST. XXX COMPANY, a Florida corporation (the "Company"), agrees with
you as follows:
SECTION 1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of $25,000,000 aggregate
principal amount of its 4.97% Senior Secured Notes, Series E, due June 8, 2009
(the "Series E Notes") and (b) $75,000,000 aggregate principal amount of its
5.31% Senior Secured Notes, Series F, due June 8, 2011 (the "Series F Notes";
the Series E Notes and the Series F Notes being hereinafter collectively
referred to as the "Notes," such term to include any such notes issued in
substitution therefor pursuant to SECTION 13 of this Agreement or the Other
Agreements (as hereinafter defined)). The Notes shall be substantially in the
form set out in EXHIBIT 1(A) and 1(B), respectively with such changes therefrom,
if any, as may be approved by you and the Company. Certain capitalized terms
used in this Agreement are defined in SCHEDULE B; references to a "Schedule" or
an "Exhibit" are, unless otherwise specified, to a Schedule or an Exhibit
attached to this Agreement.
SECTION 2. SALE AND PURCHASE OF NOTES; GUARANTY.
Section 2.1. Purchase and Sale of Notes. Subject to the terms and
conditions of this Agreement, the Company will issue and sell to you and you
will purchase from the Company, at the Closing provided for in SECTION 3, Notes
in the principal amount and of the series specified opposite your name in
SCHEDULE A at the purchase price of 100% of the principal amount thereof.
Contemporaneously with entering into this Agreement, the Company is entering
into separate Note Purchase Agreements (the "Other Agreements") identical with
this Agreement with each of the other purchasers named in SCHEDULE A (the "Other
Purchasers"), providing for the sale at such Closing to each of the Other
Purchasers of Notes in the principal amount and of the series specified opposite
its name in SCHEDULE A. Your obligation hereunder, and the obligations of the
Other Purchasers under the Other Agreements, are several and not joint
obligations, and you shall have no obligation under any Other Agreement and no
liability to any Person for the performance or nonperformance by any Other
Purchaser thereunder.
Section 2.2. Subsidiary Guaranty, Pledge Agreement and Intercreditor
Agreement. (a) The payment by the Company of all amounts due with respect to the
Notes and the performance by the Company of its obligations under this Agreement
and the Other Agreements will be absolutely and unconditionally guaranteed by
the entities identified on SCHEDULE 2.2(A) (together with any additional
Subsidiary who delivers a guaranty pursuant to SECTION 9.8, the "Subsidiary
Guarantors") pursuant to the guaranty agreement substantially in the form of
EXHIBIT 2.2(A) attached hereto and made a part hereof (as the same may be
amended, modified, extended or renewed, the "Subsidiary Guaranty").
(b) The Notes will be entitled to the benefit of and will be secured by
the Second Amended and Restated Pledge Agreement dated as of June 8, 2004 (as
the same may be further amended, supplemented, restated or otherwise modified
from time to time, the "Pledge Agreement") by and between St. Xxx Finance
Company, a Florida corporation (the "Pledgor"), and Wachovia Bank, National
Association, as collateral agent.
(c) The enforcement of the rights and benefits in respect of the
Subsidiary Guaranty and the Pledge Agreement and the allocation of proceeds
thereof shall be subject to an intercreditor agreement substantially in the form
of EXHIBIT 2.2(C) attached hereto and made a part hereof (as the same may be
amended, modified, extended or renewed, the "Intercreditor Agreement").
(d) The holders of the Notes acknowledge and agree that such holders will
discharge and release any Subsidiary Guarantor from the Subsidiary Guaranty to
which it is a party pursuant to the written request of the Company, provided
that (i) such Subsidiary Guarantor has been released and discharged as an
obligor and guarantor under and in respect of all Indebtedness of the Company
pursuant to the Bank Credit Agreement and the Company so certifies to the
holders of the Notes in a certificate which accompanies such request for release
and discharge, (ii) any such release and discharge shall be expressly
conditioned upon receipt by the holders of the Notes of a written agreement
executed by the Subsidiary Guarantor to be released pursuant to which such
Subsidiary Guarantor shall agree that if, for any reason whatsoever, it
thereafter becomes an obligor or guarantor under and in respect of any
Indebtedness of the Company pursuant to the Bank Credit Agreement, then such
Subsidiary Guarantor shall contemporaneously provide written notice thereof to
the holders of the Notes accompanied by an executed Subsidiary Guaranty of such
Subsidiary Guarantor, and (iii) at the time of such release and discharge, the
Company shall deliver a certificate of a Responsible Officer to the holders of
the Notes to the effect that no Default or Event of Default exists.
(e) The Company agrees that it will not, nor will it permit any Subsidiary
or any Affiliate which the Company controls to, directly or indirectly, pay or
cause to be paid any consideration or remuneration, whether by way of
supplemental or additional interest, fee or otherwise, to any creditor of the
Company or of any Subsidiary Guarantor as consideration for or as an inducement
to the entering into by any such creditor of any release or discharge of any
Subsidiary Guarantor with respect to any liability of such Subsidiary Guarantor
as an obligor or guarantor under or in respect of Indebtedness of the Company,
unless such consideration or remuneration is concurrently paid, on the same
terms, ratably to the holders of all of the Notes then outstanding.
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SECTION 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 and Xxxxxx LLP, 000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, at 10:00 a.m. Chicago time, at a closing (the
"Closing") on June 8, 2004. At the Closing the Company will deliver to you the
Notes of the series to be purchased by you in the form of a single Note (or such
greater number of Notes in denominations of at least $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 2112620925448 at Wachovia Bank, National Association,
Jacksonville, Florida, ABA #000000000. If at the Closing the Company shall fail
to tender such Notes to you as provided above in this SECTION 3, or any of the
conditions specified in SECTION 4 shall not have been fulfilled to your
satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.
SECTION 4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold to you at the
Closing is subject to the fulfillment to your satisfaction, prior to or at the
Closing, of the following conditions:
Section 4.1. Representations and Warranties. (a) The representations and
warranties of the Company in this Agreement shall be correct when made and at
the time of the Closing.
(b) The representations and warranties of each Subsidiary Guarantor in the
Subsidiary Guaranty shall be correct when made and at the time of Closing.
Section 4.2. Performance; No Default. (a) The Company shall have performed
and complied with all agreements and conditions contained in this Agreement
required to be performed or complied with by it prior to or at the Closing, and
after giving effect to the issue and sale of the Notes (and the application of
the proceeds thereof as contemplated by SCHEDULE 5.14), no Default or Event of
Default shall have occurred and be continuing. Neither the Company nor any
Subsidiary shall have entered into any transaction since the date of the
Memorandum that would have been prohibited by SECTION 10 hereof had such Section
applied since such date.
(b) Each Subsidiary Guarantor shall have performed and complied with all
agreements and conditions contained in the Subsidiary Guaranty required to be
performed and complied with by it prior to or at the Closing, and after giving
effect to the issue and sale of Notes (and the application of the proceeds
thereof as contemplated by SCHEDULE 5.14), no Default or Event of Default shall
have occurred and be continuing.
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Section 4.3. Compliance Certificates.
(a) Officer's Certificate. The Company shall have delivered to you an
Officer's Certificate, dated the date of the Closing, certifying that the
conditions specified in SECTIONS 4.1(A), 4.2(A) and 4.9 have been fulfilled.
(b) Subsidiary Guarantor Officer's Certificate. Each Subsidiary Guarantor
shall have delivered to you a certificate of an authorized officer, dated the
date of the Closing, certifying that the conditions set forth in SECTION 4.1(B),
4.2(B) and 4.9 have been fulfilled.
(c) Secretary's Certificate. The Company shall have delivered to you a
certificate certifying as to the true, correct and complete resolutions attached
thereto and to other corporate proceedings relating to the authorization,
execution and delivery of the Notes and the Agreements.
(d) Xxxxxxxxxx Xxxxxxxxx Secretary's Certificate. Each Subsidiary
Guarantor shall have delivered to you a certificate certifying as to the true,
correct and complete resolutions attached thereto and to other corporate
proceedings relating to the authorization, execution and delivery of the
Subsidiary Guaranty.
Section 4.4. Opinions of Counsel. You shall have received opinions in form
and substance satisfactory to you, dated the date of the Closing (a) from Xxxxxx
Xxxxxxxx, Esq., counsel for the Company and the Subsidiary Guarantors, 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 and Subsidiary Guarantors hereby instruct its counsel
to deliver such opinion to you) and (b) from Xxxxxxx and Xxxxxx LLP, 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.
Section 4.5. Purchase Permitted by Applicable Law, Etc. On the date of the
Closing your purchase of Notes shall (a) be permitted by the laws and
regulations of each jurisdiction to which you are subject, without recourse to
provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting
limited investments by insurance companies without restriction as to the
character of the particular investment, (b) not violate any applicable law or
regulation (including, without limitation, Regulation T, U or X of the Board of
Governors of the Federal Reserve System) and (c) not subject you to any tax,
penalty or liability under or pursuant to any applicable law or regulation,
which law or regulation was not in effect on the date hereof. If requested by
you, you shall have received an Officer's Certificate certifying as to such
matters of fact as you may reasonably specify to enable you to determine whether
such purchase is so permitted.
Section 4.6. 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.
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Section 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.
Section 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 for each series of the Notes.
Section 4.9. Changes in Corporate Structure. Except as specified in
SCHEDULE 4.9, the Company and the Subsidiary Guarantors shall not have changed
their respective jurisdiction of incorporation or been a party to any merger or
consolidation and shall not have succeeded to all or any substantial part of the
liabilities of any other entity, at any time following the date of the most
recent financial statements referred to in SCHEDULE 5.5.
Section 4.10. Consent. You shall have received true, correct and complete
copies, certified by a Responsible Officer of the Company of: (a) the Bank
Credit Agreement, (b) the Pledge Agreement and (c) any necessary amendments,
consents or waivers to each of the Bank Credit Agreement, the Pledge Agreement
and the Intercreditor Agreement to permit the issuance and sale of the Notes.
Section 4.11. Subsidiary Guaranty, Etc. The Subsidiary Guaranty, the
Pledge Agreement and the Intercreditor Agreement shall be in full force and
effect and shall constitute the legal, valid and binding obligations of all of
the parties thereto.
Section 4.12. Funding Instructions. At least three Business Days prior to
the date of the Closing, you shall have received written instructions executed
by a Responsible Officer of the Company directing the manner of the payment of
funds and setting forth (a) the name and address of the transferee bank, (b)
such transferee bank's ABA number, (c) the account name and number into which
the purchase price for the Notes is to be deposited, and (d) the name and
telephone number of the account representative responsible for verifying receipt
of such funds.
Section 4.13. 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.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
Section 5.1. Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of
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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 Other Agreements and the
Notes and to perform the provisions hereof and thereof.
Section 5.2. Authorization, Etc. This Agreement, the Other Agreements and
the Notes have been duly authorized by all necessary corporate action on the
part of the Company, and this Agreement constitutes, and upon execution and
delivery thereof each Note will constitute, a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (b) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
Section 5.3. Disclosure. The Company, through its agent, Wachovia
Securities, has, except in the case of Teachers Insurance and Annuity
Association of America, delivered to you and each Other Purchaser a copy of a
Private Placement Memorandum dated April 28, 2004 (the "Memorandum"), as
supplemented by the Company's Quarterly Report on Form 10-Q for the quarter
ending March 31, 2004 delivered to you and the Other Purchasers prior to the
date hereof, relating to the transactions contemplated hereby. The Memorandum
fairly describes, in all material respects, the general nature of the business
and principal properties of the Company and its Subsidiaries. In the case of
original purchasers of the Notes other than Teachers Insurance and Annuity
Association of America, this Agreement, the Memorandum, 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. In the case of Teachers Insurance and Annuity Association
of America, this Agreement, the documents, certificates or other writings
delivered to Teachers Insurance and Annuity Association of America by or on
behalf of the Company in connection with the transactions contemplated hereby,
the financial statements listed in SCHEDULE 5.5, and the financial statements
and other information made available generally to the public by the Company,
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. Since
December 31, 2003, there has been no change in the financial condition,
operations, business, properties or prospects 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. In the case of original purchasers
of the Notes other than Teachers Insurance and Annuity Association of America,
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
Memorandum 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
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transactions contemplated hereby. In the case of Teachers Insurance and Annuity
Association of America, there is no fact known to the Company that could
reasonably be expected to have a Material Adverse Effect that has not been set
forth herein or in the other documents, certificates and other writings
delivered to Teachers Insurance and Annuity Association of America by or on
behalf of the Company specifically for use in connection with the transactions
contemplated hereby or in the financial statements and other statements made
available generally to the public by the Company.
Section 5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates. (a) SCHEDULE 5.4 contains (except as noted therein) complete and
correct lists (i) of the Company's Subsidiaries, showing, as to each Subsidiary,
the correct name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary, (ii) of
the Company's Affiliates, other than Subsidiaries, and (iii) of the Company's
directors and senior officers.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in SCHEDULE 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except as 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 law statutes)
restricting the ability of such Subsidiary to pay dividends out of profits or
make any other similar distributions of profits to the Company or any of its
Subsidiaries that owns outstanding shares of capital stock or similar equity
interests of such Subsidiary.
Section 5.5. Financial Statements. The Company has delivered to each
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 financial statements and the consolidated
results of their operations and cash flows for the respective periods so
specified and have been prepared in accordance with GAAP consistently applied
throughout the periods involved except as set forth in the notes thereto
(subject, in the case of any interim financial statements, to normal year-end
adjustments).
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Section 5.6. Compliance with Laws, Other Instruments, Etc. The execution,
delivery and performance by the Company of this Agreement and the Notes will not
(a) contravene, result in any breach of, or constitute a default under, or
result in the creation of any Lien in respect of any property of the Company or
any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or
credit agreement, lease, corporate charter or by-laws, or any other agreement or
instrument to which the Company or any Subsidiary is bound or by which the
Company or any Subsidiary or any of their respective properties may be bound or
affected, (b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or any Subsidiary
or (c) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary.
Section 5.7. Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement or the Notes.
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) There are no actions, suits or proceedings pending or, to the knowledge of
the Company, threatened against or affecting the Company or any Subsidiary or
any property of the Company or any Subsidiary in any court or before any
arbitrator of any kind or before or by any Governmental Authority that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any term of
any agreement or instrument to which it is a party or by which it is bound, or
any order, judgment, decree or ruling of any court, arbitrator or Governmental
Authority or is in violation of any applicable law, ordinance, rule or
regulation (including without limitation Environmental Laws) of any Governmental
Authority, which default or violation, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
Section 5.9. Taxes. The Company and its Subsidiaries have filed all tax
returns that are required to have been filed in any jurisdiction, and have paid
all taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments (a) the amount
of which is not individually or in the aggregate Material or (b) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or a Subsidiary,
as the case may be, has established adequate reserves in accordance with GAAP.
The Company knows of no 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 which join in the
filing of the Company's federal income tax return have been determined by the
Internal Revenue Service and paid for all fiscal years up to and including the
fiscal year ended December 31, 1999. The Federal tax returns of the Company
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and its Subsidiaries for the fiscal years ended December 31, 2000, 2001 and 2002
have been submitted to the Internal Revenue Service though their audits have not
been completed.
Section 5.10. Title to Property; Leases. The Company and its Subsidiaries
have good and sufficient title to their respective properties that individually
or in the aggregate are Material, including all such properties reflected in the
most recent audited balance sheet referred to in SECTION 5.5 or purported to
have been acquired by the Company or any Subsidiary after said date (except as
sold or otherwise disposed of in the ordinary course of business), in each case
free and clear of Liens prohibited by this Agreement. All leases that
individually or in the aggregate are Material are valid and subsisting and are
in full force and effect in all material respects.
Section 5.11. Licenses, Permits, Etc. 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
or any of its Subsidiaries infringes any license, permit, franchise,
authorization, patent, copyright, service mark, trademark, trade name or
other right owned by any other Person where the infringement would be
likely to result in a Material Adverse Effect; and
(c) to the best knowledge of the Company, there is no violation by
any Person of any right of the Company or any of its Subsidiaries with
respect to any patent, copyright, service mark, trademark, trade name or
other right owned or used by the Company or any of its Subsidiaries where
the violation would be likely to result in a Material Adverse Effect.
Section 5.12. Compliance with ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA), and no
event, transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company or any
ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to Section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not be individually or in the aggregate Material.
(b) The 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
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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 post-retirement benefit obligation (determined as of the
last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by Section 4980B of
the Code) of the Company and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the issuance and sale
of the Notes hereunder will not involve any transaction that is subject to the
prohibitions of Section 406 of ERISA or in connection with which a tax could be
imposed pursuant to Section 4975(c)(1)(A)-(D) of the Code. The representation by
the Company in the first sentence of this SECTION 5.12(E) is made in reliance
upon and subject to the accuracy of your representation in SECTION 6.2 as to the
sources of the funds used to pay the purchase price of the Notes to be purchased
by you.
Section 5.13. Private Offering by the Company. Neither the Company nor
anyone acting on its behalf has offered the Notes, the Subsidiary Guaranty 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, the Other Purchasers and not more than 20 other
Institutional Investors, 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 or the Subsidiary Guaranty to the registration requirements of Section 5
of the Securities Act.
Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply
the proceeds of the sale of the Notes as set forth in SCHEDULE 5.14. No part of
the proceeds from the sale of the Notes hereunder will be used, directly or
indirectly, for the purpose of buying or carrying any margin stock within the
meaning of 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 2% 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 2% 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.
Section 5.15. Existing Indebtedness; Future Liens. (a) SCHEDULE 5.15 sets
forth a complete and correct list of all outstanding Indebtedness of the Company
and its Subsidiaries as of March 31, 2004, since which date there have been no
Material changes in the amounts,
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interest rates, sinking funds, installment payments or maturities of the
Indebtedness of the Company or any Subsidiary. Neither the Company nor any
Subsidiary is in default and no waiver of default is currently in effect, in the
payment of any principal or interest on any Indebtedness of the Company or such
Subsidiary and no event or condition exists with respect to any Indebtedness of
the Company or any Subsidiary that would permit (or that with notice or the
lapse of time, or both, would permit) one or more Persons to cause such
Indebtedness to become due and payable before its stated maturity or before its
regularly scheduled dates of payment.
(b) Except as disclosed in SCHEDULE 5.15, neither the Company nor any
Subsidiary has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien not permitted by SECTION 10.6.
Section 5.16. Foreign Assets Control Regulations, Etc. (a) Neither the
sale of the Notes by the Company hereunder nor its use of the proceeds thereof
will violate the Trading with the Enemy Act, as amended, or any of the foreign
assets control regulations of the United States Treasury Department (31 CFR,
Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto.
(b) Neither the Company nor any Subsidiary (i) is, or will become, a
Person described or designated in the Specially Designated Nationals and Blocked
Persons List of the Office of Foreign Assets Control or in Section 1 of the
Anti-Terrorism Order or (ii) engages or will engage in any dealings or
transactions, or is or will be otherwise associated, with any such Person. The
Company and its Subsidiaries are in compliance, in all material respects, with
the USA Patriot Act.
(c) No part of the proceeds from the sale of the Notes hereunder will be
used, directly or indirectly, for any payments to any governmental official or
employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended, assuming
in all cases that such Act applies to the Company.
Section 5.17. Status under Certain Statutes. Neither the Company nor any
Subsidiary is an "investment company" registered or required to be registered or
subject to regulation under the Investment Company Act of 1940, as amended, or
is subject to regulation under the Public Utility Holding Company Act of 1935,
as amended, the ICC Termination Act of 1995, as amended, or the Federal Power
Act, as amended.
Section 5.18. Notes Rank Pari Passu. The obligations of the Company under
this Agreement and the Notes rank at least pari passu in right of payment with
all other Senior Indebtedness (actual or contingent) of the Company, including,
without limitation, all senior Indebtedness of the Company described in SCHEDULE
5.15 hereto.
Section 5.19. Environmental Matters. Neither the Company nor any
Subsidiary has knowledge of any claim or has received any notice of any claim,
and no proceeding has been
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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
otherwise disclosed to you in writing:
(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 or has disposed of any Hazardous Materials in a
manner contrary to any Environmental Laws in each case in any manner that
could reasonably be expected to result in a Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Subsidiaries are in compliance with
applicable Environmental Laws, except where failure to comply could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 6. REPRESENTATIONS OF THE PURCHASER.
Section 6.1. Purchase for Investment. (a) 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. In
addition, you represent that you are an institutional accredited investor within
the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act. You
understand that the Notes have not been registered under the Securities Act and
may be resold only if registered pursuant to the provisions of the Securities
Act or if an exemption from registration is available, except under
circumstances where neither such registration nor such an exemption is required
by law, and that the Company is not required to register the Notes.
(b) You acknowledge that you have received such information concerning the
Company and the Notes and have been given the opportunity to ask such questions
of and receive answers from representatives of the Company as you deem
sufficient, based on information provided by the Company to you, to make an
informed investment decision with respect to the Notes.
Section 6.2. Source of Funds. You represent that at least one of the
following statements is an accurate representation as to each source of funds (a
"Source") to be used by you to pay the purchase price of the Notes to be
purchased by you hereunder:
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(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 your 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 or (ii) a bank collective
investment fund, within the meaning of the PTE 91-38 and, except as
disclosed by you to the Company in writing pursuant to this clause (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
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 Part IV of the
INHAM exemption), the conditions of Part I(a), (g) and (h) of the INHAM
Exemption are satisfied, neither the INHAM nor a
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person controlling or controlled by the INHAM (applying the definition of
"control" in Section IV(h) 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 pursuant to
this clause (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", "party in interest" and "separate account" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.
SECTION 7. INFORMATION AS TO THE COMPANY.
Section 7.1. Financial and Business Information. The Company shall deliver
to each holder of Notes that is an Institutional Investor:
(a) Quarterly Statements -- within 60 days after the end of each
quarterly fiscal period in each fiscal year of the Company (other than the
last quarterly fiscal period of each such fiscal year), duplicate copies
of:
(i) a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries for such quarter and (in the case of the second and
third quarters) for the portion of the fiscal year ending with such
quarter,
setting forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial statements generally, and
certified by a Senior Financial Officer as fairly presenting, in all material
respects, the financial position of the companies being reported on and their
results of operations and cash flows, subject to changes resulting from year-end
adjustments; provided that 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);
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(b) Annual Statements-- within 105 days after the end of each fiscal
year of the Company, duplicate copies of,
(i) a 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:
(1) an opinion thereon of independent certified public
accountants of recognized national standing, which opinion
shall state that such financial statements present fairly, in
all material respects, the financial position of the companies
being reported upon and their results of operations and cash
flows and have been prepared in conformity with GAAP, and that
the examination of such accountants in connection with such
financial statements has been made in accordance with
generally accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the
circumstances, and
(2) a certificate of such accountants stating that they
have reviewed this Agreement and stating further whether, in
making their audit, they have become aware of any condition or
event that then constitutes a Default or an Event of Default,
and, if they are aware that any such condition or event then
exists, specifying the nature and period of the existence
thereof (it being understood that such accountants shall not
be liable, directly or indirectly, for any failure to obtain
knowledge of any Default or Event of Default unless such
accountants should have obtained knowledge thereof in making
an audit in accordance with generally accepted auditing
standards or did not make such an audit),
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, together with the accountant's certificate described in clause
(2) above, shall be deemed to satisfy the requirements of this SECTION
7.1(B);
(c) 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 Subsidiary to public securities
holders generally, and (ii) each regular or periodic report, each
registration statement (without exhibits except as expressly requested by
such holder), and each prospectus and all amendments thereto filed by the
Company or any Subsidiary with the Securities and Exchange Commission and
of all
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press releases and other statements made available generally by the
Company or any Subsidiary to the public concerning developments that are
Material;
(d) Notice of Default 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 any notice or taken any action with respect
to a claimed default of the type referred to in SECTION 11(F), a written
notice specifying the nature and period of existence thereof and what
action the Company is taking or proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within five days
after a Responsible Officer becoming aware of any of the following, a
written notice setting forth the nature thereof and the action, if any,
that the Company or an XXXXX Xxxxxxxxx proposes to take with respect
thereto:
(i) with respect to any Plan, any reportable event, as defined
in Section 4043(c) of ERISA and the regulations thereunder, for
which notice thereof has not been waived pursuant to such
regulations as in effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings under
Section 4042 of ERISA for the termination of, or the appointment of
a trustee to administer, any Plan, or the receipt by the Company or
any ERISA Affiliate of a notice from a Multiemployer Plan that such
action has been taken by the PBGC with respect to such Multiemployer
Plan; or
(iii) any event, transaction or condition that could result in
the incurrence of any liability by the Company or any ERISA
Affiliate pursuant to Title I or IV of ERISA or the penalty or
excise tax provisions of the Code relating to employee benefit
plans, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate pursuant
to Title I or IV of ERISA or such penalty or excise tax provisions,
if such liability or Lien, taken together with any other such
liabilities or Liens then existing, could reasonably be expected to
have a Material Adverse Effect;
(f) Notices from Governmental Authority -- promptly, and in any
event within 30 days of receipt thereof, copies of any notice to the
Company or any Subsidiary from any Federal or state Governmental Authority
relating to any order, ruling, statute or other law or regulation that
could reasonably be expected to have a Material Adverse Effect; and
(g) 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
-16-
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,
including without limitation, such information as is required by Rule 144A
under the Securities Act to be delivered to the prospective transferee of
the Notes.
Section 7.2. Officer's Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to SECTION 7.1(A) or SECTION 7.1(B)
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth:
(a) Covenant Compliance -- (1) 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 10.8
hereof, inclusive, during the quarterly or annual period covered by the
statements then being furnished (including with respect to each such
Section, where applicable, the calculations of the maximum or minimum
amount, ratio or percentage, as the case may be, permissible under the
terms of such Sections, and the calculation of the amount, ratio or
percentage then in existence) and (2) the information required in order to
establish whether the Company was in compliance with the requirements of
SECTION 9.8 hereof during the quarterly or annual period covered by the
statements then being furnished (including with respect to such Section, a
list of each of the existing Subsidiary Guarantors and their respective
jurisdictions of organization); and
(b) Event of Default -- a statement that such officer has reviewed
the relevant terms hereof and has made, or caused to be made, under his or
her supervision, a review of the transactions and conditions of the
Company and its Subsidiaries from the beginning of the quarterly or annual
period covered by the statements then being furnished to the date of the
certificate and that such review shall not have disclosed the existence
during such period of any condition or event that constitutes a Default or
an Event of Default or, if any such condition or event existed or exists
(including, without limitation, any such event or condition resulting from
the failure of the Company or any Subsidiary to comply with any
Environmental Law), specifying the nature and period of existence thereof
and what action the Company shall have taken or proposes to take with
respect thereto.
Section 7.3. Inspection. The Company shall permit the representatives of
each holder of Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then exists, at
the expense of such holder and upon reasonable prior notice to the
Company, to visit the principal executive office of the Company, to
discuss the affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and (with the consent of the
Company, which consent will not be unreasonably withheld) its independent
public accountants, and (with the consent of the Company, which consent
will not be unreasonably withheld) to visit the other offices and
properties of the Company and each Subsidiary, all at such reasonable
times and as often as may be reasonably requested in writing; and
-17-
(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.
SECTION 8. PREPAYMENT OF THE NOTES.
Section 8.1. Required Prepayments. No regularly scheduled prepayment of
the principal of any series of the Notes is required prior to the final maturity
date thereof.
Section 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 10% of the
aggregate principal amount of the Notes then outstanding in the case of a
partial prepayment (but if in the case of a partial prepayment, then against
each series of Notes in proportion to the aggregate principal amount outstanding
on each series), at 100% of the principal amount so prepaid, together with
interest accrued thereon to the date of such prepayment, plus the Make-Whole
Amount determined for the prepayment date with respect to such principal amount.
The Company will give each holder of Notes written notice of each optional
prepayment under this SECTION 8.2 not less than 30 days and not more than 60
days prior to the date fixed for such prepayment. Each such notice shall specify
such date, the aggregate principal amount of each series 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 8.4), 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.
Section 8.3. Change in Control.
(a) Notice of Change in Control or Control Event. The Company will, within
five Business Days after any Responsible Officer has knowledge of the occurrence
of any Change in Control or Control Event, give written notice of such Change in
Control or Control Event to each holder of Notes unless notice in respect of
such Change in Control (or the Change in Control contemplated by such Control
Event) shall have been given pursuant to subparagraph (B) of this SECTION 8.3.
If a Change in Control has occurred, such notice shall contain and constitute an
offer to prepay Notes as described in subparagraph (C) of this SECTION 8.3 and
shall be accompanied by the certificate described in subparagraph (G) of this
SECTION 8.3.
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(b) Condition to Company Action. The Company will not take any action that
consummates or finalizes a Change in Control unless (i) at least 30 days prior
to such action it shall have given to each holder of Notes written notice
containing and constituting an offer to prepay Notes as described in
subparagraph (C) of this SECTION 8.3, accompanied by the certificate described
in subparagraph (G) of this SECTION 8.3, and (ii) contemporaneously with such
action, it prepays all Notes required to be prepaid in accordance with this
SECTION 8.3. It is understood that the Company does not control the Xxxxxx X.
xxXxxx Testamentary Trust.
(c) Offer to Prepay Notes. The offer to prepay Notes contemplated by
subparagraphs (A) and (B) of this SECTION 8.3 shall be an offer to prepay, in
accordance with and subject to this SECTION 8.3, all, but not less than all, the
Notes held by each holder (in this case only, "holder" in respect of any Note
registered in the name of a nominee for a disclosed beneficial owner shall mean
such beneficial owner) on a date specified in such offer (the "Proposed
Prepayment Date"). If such Proposed Prepayment Date is in connection with an
offer contemplated by subparagraph (A) of this SECTION 8.3, such date shall be
not less than 30 days and not more than 120 days after the date of such offer
(if the Proposed Prepayment Date shall not be specified in such offer, the
Proposed Prepayment Date shall be the first Business Day after the 45th day
after the date of such offer).
(d) Rejection. A holder of Notes may accept the offer to prepay made
pursuant to this SECTION 8.3 by causing a notice of such acceptance to be
delivered to the Company not later than 15 Business Days after receipt by such
holder of the most recent offer of prepayment. A failure by a holder of Notes to
respond to an offer to prepay made pursuant to this SECTION 8.3 shall be deemed
to constitute a rejection of such offer by such holder.
(e) Prepayment. Prepayment of the Notes to be prepaid pursuant to this
SECTION 8.3 shall be at 100% of the principal amount of such Notes, together
with interest on such Notes accrued to the date of prepayment, but without
Make-Whole Amount or other premium. The prepayment shall be made on the Proposed
Prepayment Date except as provided in subparagraph (F) of this SECTION 8.3.
(f) Deferral Pending Change in Control. The obligation of the Company to
prepay Notes pursuant to the offers required by subparagraph (C) and accepted in
accordance with subparagraph (D) of this SECTION 8.3 is subject to the
occurrence of the Change in Control in respect of which such offers and
acceptances shall have been made. In the event that such Change in Control has
not occurred on the Proposed Prepayment Date in respect thereof, the prepayment
shall be deferred until, and shall be made on, the date on which such Change in
Control occurs. The Company shall keep each holder of Notes reasonably and
timely informed of (i) any such deferral of the date of prepayment, (ii) the
date on which such Change in Control and the prepayment are expected to occur,
and (iii) any determination by the Company that efforts to effect such Change in
Control have ceased or been abandoned (in which case the offers and acceptances
made pursuant to this SECTION 8.3 in respect of such Change in Control shall be
deemed rescinded).
(g) Officer's Certificate. Each offer to prepay the Notes pursuant to this
SECTION 8.3 shall be accompanied by a certificate, executed by a Senior
Financial Officer of the Company
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and dated the date of such offer, specifying: (i) the Proposed Prepayment Date;
(ii) that such offer is made pursuant to this SECTION 8.3; (iii) the principal
amount of each Note offered to be prepaid; (iv) the interest that would be due
on each Note offered to be prepaid, accrued to the Proposed Prepayment Date; (v)
that the conditions of this Section have been fulfilled; and (vi) in reasonable
detail, the nature and date or proposed date of the Change in Control.
(h) [Reserved].
(i) Certain Definitions. "Change in Control" shall be deemed to have
occurred if any person (as such term is used in Section 13(d) and Section
14(d)(2) of the Exchange Act as in effect on the date of the Closing) or related
persons constituting a group (as such term is used in Rule 13d-5 under the
Exchange Act),
(i) become the "beneficial owners" (as such term is used in Rule
13d-3 under the Exchange Act as in effect on the date of the Closing),
directly or indirectly, of more than 50% of the total voting power of all
classes then outstanding of the Company's Voting Stock, or
(ii) acquire after the date of the Closing (x) the power to elect,
appoint or cause the election or appointment of at least a majority of the
members of the board of directors of the Company or (y) all or
substantially all of the properties and assets of the Company.
In making any numerical calculation under clause (i) of this definition of
"Change in Control", Voting Stock beneficially owned by the Current Management
Group shall not be included in the numerator of such calculation, but shall be
included as outstanding Voting Stock in the determining the denominator of such
calculation.
"Control Event" means:
(i) the execution by the Company or any of its Subsidiaries or
Affiliates of any agreement or letter of intent with respect to any
proposed transaction or event or series of transactions or events which,
individually or in the aggregate, may reasonably be expected to result in
a Change in Control,
(ii) the execution of any written agreement which, when fully
performed by the parties thereto, would result in a Change in Control, or
(iii) the making of any written offer by any person (as such term is
used in Section 13(d) and Section 14(d)(2) of the Exchange Act as in
effect on the date of the Closing) or related persons constituting a group
(as such term is used in Rule 13d-5 under the Exchange Act as in effect on
the date of the Closing) to the holders of the stock of the Company, which
offer, if accepted by the requisite number of holders, would result in a
Change in Control.
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(j) All calculations contemplated in this SECTION 8.3 involving the
capital stock of any Person shall be made with the assumption that all
convertible Securities of such Person then outstanding and all convertible
Securities issuable upon the exercise of any warrants, options and other rights
outstanding at such time were converted at such time and that all options,
warrants and similar rights to acquire shares of capital stock of such Person
were exercised at such time.
Section 8.4. Allocation of Partial Prepayments. In the case of each
partial prepayment of the Notes pursuant to SECTION 8.2, the principal amount of
the Notes to be prepaid shall be (a) allocated among each series of Notes in
proportion to the aggregate unpaid principal amount of each such series of Notes
and (b) allocated pro rata among all of the holders of each series of Notes at
the time outstanding in proportion, as nearly as practicable, to the respective
unpaid principal amounts thereof not theretofore called for prepayment. All
partial prepayments made pursuant to SECTION 8.3 shall be applied only to the
Notes of the holders who have elected to participate in such prepayment.
Section 8.5. Maturity; Surrender, Etc. In the case of each prepayment of
Notes pursuant to this SECTION 8 and subject to any deferral pursuant to SECTION
8.3(F), the principal amount of each Note to be prepaid shall mature and become
due and payable on the date fixed for such prepayment, together with interest on
such principal amount accrued to such date and the applicable Make-Whole Amount,
if any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.
Section 8.6. Purchase of Notes. The Company will not, and will not permit
any Affiliate to, purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any series of the outstanding Notes or any part or portion of any
series thereof except upon the payment or prepayment of each series 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.
Section 8.7. Make-Whole Amount. The term "Make-Whole Amount" means, with
respect to any Note, an amount equal to the excess, if any, of the Discounted
Value of the Remaining Scheduled Payments with respect to the Called Principal
of such Note over the amount of such Called Principal; provided that the
Make-Whole Amount may in no event be less than zero. For the purposes of
determining the Make-Whole Amount, the following terms have the following
meanings:
"Called Principal" means, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to SECTION 8.2 or has become or
is declared to be immediately due and payable pursuant to SECTION 12.1, as
the context requires.
"Discounted Value" means, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such
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Called Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Notes is payable) equal to
the Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called Principal of
any Note, 0.50% over the yield to maturity implied by (a) 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 "Page PX-1" of the Bloomberg Financial Markets
Services Screen (or, if not available, any other national recognized
trading screen reporting on-line intraday trading in the U.S. Treasury
securities) for actively traded on-the-run U.S. Treasury securities having
a maturity equal to the Remaining Average Life of such Called Principal as
of such Settlement Date, or (b) 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 on-the-run 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 (i) converting U.S. Treasury bill
quotations to bond-equivalent yields in accordance with accepted financial
practice and (ii) interpolating linearly between (1) the actively traded
on-the-run U.S. Treasury security with the maturity closest to and greater
than the Remaining Average Life and (2) the actively traded on-the-run
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 (a) such Called Principal into (b) the sum of
the products obtained by multiplying (i) the principal component of each
Remaining Scheduled Payment with respect to such Called Principal by (ii)
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
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
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become or is declared to be immediately due and payable pursuant to SECTION
12.1, as the context requires.
SECTION 9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
Section 9.1. Compliance with Law. The Company will, and will cause each of
its Subsidiaries to, comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without limitation,
ERISA and all Environmental Laws, and will obtain and maintain in effect all
licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of their respective properties or to
the conduct of their respective businesses, in each case to the extent necessary
to ensure that non-compliance with such laws, ordinances or governmental rules
or regulations or failures to obtain or maintain in effect such licenses,
certificates, permits, franchises and other governmental authorizations could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
Section 9.2. Insurance. The Company will, and will cause each of its
Subsidiaries 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.
Section 9.3. Maintenance of Properties. The Company will, and will cause
each of its Subsidiaries to, maintain and keep, or cause to be maintained and
kept, their respective properties in good repair, working order and condition
(other than ordinary wear and tear), so that the business carried on in
connection therewith may be properly conducted at all times; provided that this
Section shall not prevent the Company or any Subsidiary from discontinuing the
operation and the maintenance of any of its properties if such discontinuance is
desirable in the conduct of its business and the Company has concluded that such
discontinuance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
Section 9.4. Payment of Taxes and Claims. The Company will, and will cause
each of its Subsidiaries to, file all tax returns required to be filed in any
jurisdiction and to pay and discharge all taxes shown to be due and payable on
such returns and all other taxes, assessments, governmental charges, or levies
imposed on them or any of their properties, assets, income or franchises, to the
extent such taxes, assessments, charges or levies 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, assessment, charge, levy or claim if (a) 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 (b) the nonpayment
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of all such taxes, assessments, charges, levies and claims in the aggregate
could not reasonably be expected to have a Material Adverse Effect.
Section 9.5. Corporate Existence, Etc. Subject to SECTION 10.7, the
Company will at all times preserve and keep in full force and effect its
corporate existence. Subject to SECTION 10.7, the Company will at all times
preserve and keep in full force and effect the corporate existence of each of
its Subsidiaries (unless merged into the Company or a Subsidiary) and all rights
and franchises of the Company and its Subsidiaries unless, in the good faith
judgment of the Company, the termination of or failure to preserve and keep in
full force and effect such corporate existence, right or franchise could not,
individually or in the aggregate, have a Material Adverse Effect.
Section 9.6. [Reserved].
Section 9.7. Notes to Rank Pari Passu. The Notes and all other obligations
under this Agreement of the Company are and at all times shall rank at least
pari passu in right of payment with all other present and future Senior
Indebtedness (actual or contingent) of the Company.
Section 9.8. Guaranty by Subsidiaries. The Company will cause each
Subsidiary which delivers a Guaranty to the Agent or any other lender which is a
party to the Bank Credit Agreement concurrently to enter into a Subsidiary
Guaranty, and within three Business Days thereafter will deliver to each of the
holders of the Notes the following items:
(a) an executed counterpart of such Subsidiary Guaranty or joinder
agreement in respect of an existing Subsidiary Guaranty, as appropriate;
(b) a certificate signed by the President, a Vice President or
another authorized Responsible Officer of such Subsidiary making
representations and warranties to the effect of those contained in
SECTIONS 5.1, 5.2, 5.6 and 5.7, but with respect to such Subsidiary and
such Subsidiary Guaranty, as applicable;
(c) such documents and evidence with respect to such Subsidiary as
any holder of the Notes may reasonably request in order to establish the
existence and good standing of such Subsidiary and the authorization of
the transactions contemplated by such Subsidiary Guaranty;
(d) an opinion of counsel satisfactory to the Required Holders to
the effect that such Subsidiary Guaranty has been duly authorized,
executed and delivered and constitutes the legal, valid and binding
contract and agreement of such Subsidiary enforceable in accordance with
its terms, except as an enforcement of such terms may be limited by
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles; and
(e) an executed counterpart of an intercreditor agreement or joinder
agreement in respect of the Intercreditor Agreement among the holders of
the Notes and each such Person to which a Subsidiary is then delivering a
Guaranty giving rise the
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requirements of this SECTION 9.8, which agreement or joinder agreement, as
the case may be, shall provide that the proceeds from the enforcement of
any such Guaranty shall be shared on an equal and ratable basis with the
holders of the Notes.
SECTION 10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
Section 10.1. Consolidated Net Worth. The Company and its Subsidiaries
will at all times keep and maintain Consolidated Net Worth at an amount not less
than the sum of (a) $425,000,000 plus (b) an amount equal to one hundred percent
(100%) of net proceeds from any issuance by the Company of shares of its Capital
Stock or other equity interest occurring after the Closing. Without limiting the
foregoing, the exercise by a present or former employee, officer or director of
any stock option or equity based compensation issued pursuant to a stock
incentive plan, stock option plan or other equity based compensation plan or
arrangement shall in no event be deemed or construed to constitute the issuance
of shares of the Capital Stock of the Company.
Section 10.2. Leverage Ratio. The Company and its Subsidiaries will not as
at the end of each fiscal quarter permit the ratio of Consolidated Indebtedness
to Consolidated Total Assets to exceed 0.45 to 1.00.
Section 10.3. Unencumbered Assets Ratio. The Company and its Subsidiaries
will not permit as at the end of each fiscal quarter the ratio of Unsecured
Indebtedness to Unencumbered Assets to exceed 0.50 to 1.00.
Section 10.4. Fixed Charges Coverage Ratio. The Company and its
Subsidiaries will not permit as at the end of each fiscal quarter the ratio of
Consolidated Net Earnings Available for Fixed Charges for the two immediately
preceding fiscal quarters (taken as a single accounting period) to Consolidated
Fixed Charges for such two fiscal quarter periods to be less than 2.5 to 1.0.
Section 10.5. Limitations on Indebtedness. (a) The Company will not, and
will not permit any Subsidiary to, create, issue, assume, guarantee or otherwise
incur or in any manner be or become liable in respect of any Indebtedness,
except:
(i) Indebtedness evidenced by the Notes and the Subsidiary Guaranty;
(ii) Indebtedness of a Subsidiary Guarantor evidenced by the
Guaranty delivered pursuant to the Bank Credit Agreement; provided that
the Indebtedness evidenced by any such Guaranty constitutes Qualified
Subsidiary Indebtedness;
(iii) Indebtedness of the Company and its Subsidiaries outstanding
as of the date of this Agreement and described on SCHEDULE 5.15 hereto;
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(iv) additional Indebtedness of the Company and its Subsidiaries;
provided that at the time of creation, issuance, assumption, guarantee or
incurrence thereof and after giving effect thereto and to the application
of the proceeds thereof:
(1) the ratio of Consolidated Indebtedness to Consolidated
Total Assets as at such date shall not exceed 0.45 to 1.00; and
(2) in the case of the issuance of any Indebtedness of the
Company or its Subsidiaries secured by Liens permitted by SECTION
10.6(I) and any Indebtedness of a Subsidiary (other than (A)
Qualified Subsidiary Indebtedness and (B) Indebtedness of any
Subsidiary described on SCHEDULE 5.15 and any renewal, extension,
refinancing, replacement or refunding of such Indebtedness), the sum
of (A) the aggregate amount of all Indebtedness secured by Liens
permitted by SECTION 10.6(I) plus (B) the aggregate amount of all
Indebtedness of Subsidiaries (other than (A) Qualified Subsidiary
Indebtedness and (B) Indebtedness of any Subsidiary described on
SCHEDULE 5.15 and any renewal, extension, refinancing, replacement
or refunding of such Indebtedness), shall not exceed 33% of
Consolidated Total Assets as at such date;
(v) Indebtedness of a Subsidiary to the Company or to a Wholly-owned
Subsidiary and Indebtedness of the Company to a Wholly-owned Subsidiary;
and
(vi) Indebtedness evidenced by the 2002 Notes and the 2002
Subsidiary Guaranty.
(b) Indebtedness existing within the limitations of SECTION 10.5(A)(III)
may be renewed, extended, refinanced, replaced or refunded (without increase in
principal amount) without regard to the limitations of SECTION 10.5(A)(IV).
(c) Any Person which becomes a Subsidiary after the date hereof shall for
all purposes of this SECTION 10.5 be deemed to have created, issued, assumed or
incurred at the time it becomes a Subsidiary all Indebtedness of such Person
existing immediately after it becomes a Subsidiary.
Section 10.6. Limitation on Liens. The Company will not, and will not
permit any Subsidiary to, create or incur, or suffer to be incurred or to exist,
any Lien on its or their property or assets, whether now owned or hereafter
acquired, or upon any income or profits therefrom, or transfer any property for
the purpose of subjecting the same to the payment of obligations in priority to
the payment of its or their general creditors, or acquire or agree to acquire,
or permit any Subsidiary to acquire, any property or assets upon conditional
sales agreements or other title retention devices, except:
(a) Liens for taxes and assessments or governmental charges or
levies; provided that payment thereof is not at the time required by
SECTION 9.4;
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(b) Liens of or resulting from any judgment or award (i) the time
for the appeal or petition for rehearing of which shall not have expired
or (ii) in respect of which the Company or a Subsidiary shall at any time
in good faith be prosecuting an appeal or proceeding for a review and in
respect of which a stay of execution pending such appeal or proceeding for
review shall have been secured; provided that the Company or such
Subsidiary (i) is contesting such judgment or award on a timely basis, in
good faith and in appropriate proceedings, and (ii) has established
adequate reserves therefor in accordance with GAAP on the books of the
Company or such Subsidiary;
(c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens imposed
by law or pursuant to customary reservations or retentions of title
arising in the ordinary course of business, provided that (i) such Liens
secure only amounts not yet due and payable or the payment of which is
being contested in good faith by appropriate actions or proceedings and
(ii) such Liens do not materially impair the business of the Company and
its Subsidiaries;
(d) minor survey exceptions or minor encumbrances, leases or
subleases granted to others, easements or reservations, or rights of
others for rights-of-way, utilities and other similar purposes, or zoning
or other restrictions as to the use of real properties, (i) which are
necessary for the conduct of the activities of the Company and its
Subsidiaries or which customarily exist on properties of Persons engaged
in similar activities and similarly situated and (ii) which do not in any
event in the aggregate Materially impair the use of such properties in the
operation of the business of the Company and its Subsidiaries, taken as a
whole, or the value of such properties;
(e) Liens incidental to the conduct of business or the ownership of
properties and assets (including pledges, deposits or Liens in connection
with worker's compensation, unemployment insurance and other like social
security laws, attorneys' liens and statutory landlords' liens) and Liens
to secure the performance of bids, tenders or trade contracts, or to
secure statutory obligations, supersedeas, surety or appeal bonds or other
Liens of like general nature, in any such case incurred in the ordinary
course of business and not in connection with the borrowing of money;
provided in each case, the obligation secured is not overdue or, if
overdue, is being contested in good faith by appropriate actions or
proceedings and any Lien securing such obligation does not in any event
materially impair the operation of the business of the Company and its
Subsidiaries;
(f) Liens securing Indebtedness of the Company or a Subsidiary to a
Wholly-owned Subsidiary or the Company or of the Company to a Wholly-owned
Subsidiary;
(g) (i) Liens of the Company and its Subsidiaries existing as of the
date of Closing and described on SCHEDULE 10.6 hereto and (ii) the Lien of
the Pledge Agreement;
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(h) Liens created or incurred after the date of the Closing on an
Installment Sale Note given to secure a Company Promissory Note; provided
that (i) Indebtedness secured by any such Lien shall have been incurred
within the limitations provided in SECTION 10.5(A)(IV) (1) and (ii) at the
time of creation, issuance, assumption, guarantee or incurrence of the
Indebtedness secured by such Lien and after giving effect thereto and to
the application of the proceeds thereof, no Default or Event of Default
would exist; and
(i) Liens created or incurred after the date of the Closing given to
secure Indebtedness of the Company or any Subsidiary in addition to the
Liens permitted by the preceding clauses (A) through (H) hereof; provided
that (i) all Indebtedness secured by such Liens shall have been incurred
within the limitations provided in SECTIONS 10.5(A)(IV)(1) and (2) and
(ii) at the time of creation, issuance, assumption, guarantee or
incurrence of the Indebtedness secured by such Xxxx and after giving
effect thereto and to the application of the proceeds thereof, no Default
or Event of Default would exist.
Section 10.7. Mergers, Consolidations, Etc. The Company will not, and will
not permit any Subsidiary to, consolidate with or be a party to a merger with
any other Person, or sell, lease or otherwise dispose of all or substantially
all of its assets; provided that:
(a) any Subsidiary may merge or consolidate with or into the Company
or any Wholly-owned Subsidiary so long as in (i) any merger or
consolidation involving the Company, the Company shall be the surviving or
continuing corporation and (ii) in any merger or consolidation involving a
Wholly-owned Subsidiary (and not the Company), a Wholly-owned Subsidiary
shall be the surviving or continuing corporation, so long as in the case
of any merger or consolidation involving a Subsidiary Guarantor, the
surviving or continuing corporation shall have affirmed in writing its
obligations under the Subsidiary Guaranty;
(b) the Company may consolidate or merge with or into any other
Person if (i) the Person which results from such consolidation or merger
(the "Surviving Corporation") is a solvent corporation organized under the
laws of any state of the United States or the District of Columbia, (ii)
the due and punctual payment of the principal of and premium, if any, and
interest on all of the Notes, according to their tenor, and the due and
punctual performance and observation of all of the covenants in the Notes
and this Agreement to be performed or observed by the Company are
expressly assumed in writing by the Surviving Corporation and the
Surviving Corporation shall furnish to the holders of the Notes an opinion
of counsel satisfactory to such holders to the effect that the instrument
of assumption has been duly authorized, executed and delivered and
constitutes the legal, valid and binding contract and agreement of the
Surviving Corporation enforceable in accordance with its terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles, (iii)
each Subsidiary Guarantor shall have affirmed in writing its obligations
under the Subsidiary Guaranty to which it is a party, and (iv) at the time
of such consolidation or merger and immediately after giving effect
thereto, (1) no Default
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or Event of Default would exist and (2) the Surviving Corporation would be
permitted by the provisions of SECTION 10.5(A)(IV)(1) to incur at least
$1.00 of additional Indebtedness;
(c) the Company may sell or otherwise dispose of all or
substantially all of its assets (other than as provided in SECTIONS
10.7(A) and (B) and SECTION 10.8) to any Person for consideration which
represents the fair market value of such assets (as determined in good
faith by the Board of Directors of the Company) at the time of such sale
or other disposition if (i) the acquiring Person is a corporation
organized under the laws of any state of the United States or the District
of Columbia, (ii) the due and punctual payment of the principal of and
premium, if any, and interest on all the Notes, according to their tenor,
and the due and punctual performance and observance of all of the
covenants in the Notes and in this Agreement to be performed or observed
by the Company are expressly assumed in writing by the acquiring
corporation and the acquiring corporation shall furnish to the holders of
the Notes an opinion of counsel satisfactory to such holders to the effect
that the instrument of assumption has been duly authorized, executed and
delivered and constitutes the legal, valid and binding contract and
agreement of such acquiring corporation enforceable in accordance with its
terms, except as enforcement of such terms may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles, (iii) each Subsidiary Guarantor shall have affirmed in writing
its obligations under the Subsidiary Guaranty to which it is a party, and
(iv) at the time of such sale or disposition and immediately after giving
effect thereto, (1) no Default or Event of Default would exist and (2) the
acquiring Person would be permitted by the provisions of SECTION
10.5(A)(IV)(1) to incur at least $1.00 of additional Indebtedness;
(d) any Subsidiary may merge or consolidate with or into any Person
so long as (i) the Person which results from such consolidation or merger
is a solvent corporation, (ii) the disposition of any of assets of the
Company or any Subsidiary (including the stock of such merging Subsidiary)
in connection with such merger is permitted by the limitations of SECTION
10.8(B) and (iii) at the time of such merger and after giving effect
thereto, no Default or Event of Default would exist; and
(e) any Subsidiary may sell or otherwise dispose of all or
substantially all of its assets so long as (i) the acquiring Person is a
solvent corporation, (ii) the disposition of any of assets of the Company
or any Subsidiary in connection with such sale or disposition is permitted
by the limitations of SECTION 10.8(B) and (iii) at the time of such sale
or disposition and after giving effect thereto, no Default or Event of
Default would exist.
Nothing contained in this SECTION 10.7 shall be deemed or construed to qualify,
amend or otherwise modify the rights of the holders of the Notes under SECTION
8.3 of this Agreement.
Section 10.8. Sale of Assets, Etc. The Company will not, and will not
permit any Subsidiary to, sell, lease, transfer, abandon or otherwise dispose of
assets (except assets sold in
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the ordinary course of business for fair market value or pursuant to SECTION
10.7(A), (B) or (C)); provided that the foregoing restrictions do not apply to:
(a) the sale, lease, transfer or other disposition of assets of a
Subsidiary to a Wholly-owned Subsidiary or the Company, as the case may
be; or
(b) the sale of assets for cash or other property (including without
limitation any disposition of assets as contemplated by SECTION 10.7(D)
and (E)), to a Person or Persons if all of the following conditions are
met:
(i) such assets (valued , in the case of Timberland, at $750
per acre or, otherwise, at net book value) do not, together with all
other assets of the Company and its Subsidiaries previously disposed
of during the same fiscal year (other than (A) any sale in the
ordinary course of business and (B) any sale within the limitations
of clause (A) of this SECTION 10.8), exceed 15% of Consolidated
Total Assets, determined as of the end of the immediately preceding
fiscal quarter;
(ii) in the opinion of the Company's Board of Directors, the
sale is for fair value and is in the best interests of the Company;
and
(iii) immediately after the consummation of the transaction
and after giving effect thereto, (A) no Default or Event of Default
would exist, and (B) the Company would be permitted by the
provisions of SECTION 10.5(A)(IV)(1) to incur at least $1.00 of
additional Indebtedness;
provided, however, that for purposes of the foregoing calculation, there
shall not be included any assets the net cash proceeds of which are
applied within twelve months of the date of sale of such assets to either
(A) the acquisition of assets useful and intended to be used in the
operation of the business of the Company and its Subsidiaries as described
in SECTION 10.10 and having a fair market value (as determined in good
faith by the Board of Directors of the Company) at least equal to that of
the assets so disposed of or (B) the prepayment at any applicable
prepayment premium, on a pro rata basis, of Senior Indebtedness of the
Company, in an amount equal to such net cash proceeds less those amounts
used to purchase other assets pursuant to clause (A) above. It is
understood and agreed by the Company that any such proceeds paid and
applied to the prepayment of the Notes as hereinabove provided shall be
prepaid as and to the extent provided in SECTION 8.2.
Section 10.9. Transactions with Affiliates. The Company will not, and will
not permit any Subsidiary to, enter into or be a party to any transaction or
arrangement with any Affiliate (including, without limitation, the purchase
from, sale to or exchange of property with, or the rendering of any service by
or for, any Affiliate), except in the ordinary course of and pursuant to the
reasonable requirements of the Company's or such Subsidiary's business and upon
fair and reasonable terms no less favorable to the Company or such Subsidiary
than would be obtainable in a comparable arm's-length transaction with a Person
other than an Affiliate.
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Section 10.10. Nature of Business. Neither the Company nor any Subsidiary
will engage in any business if, as a result, the general nature of the business,
taken on a consolidated basis, which would then be engaged in by the Company and
its Subsidiaries, would be substantially changed from the general nature of the
business engaged in by the Company and its Subsidiaries on the date of this
Agreement.
SECTION 11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or
Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any Note
for more than five Business Days after the same becomes due and payable;
or
(c) the Company defaults in the performance of or compliance with
any term contained in SECTIONS 10.1 through 10.9; or
(d) the Company defaults in the performance of or compliance with
any term contained herein (other than those referred to in paragraphs (A),
(B) and (C) of this SECTION 11) and such default is not remedied within 30
days after the earlier of (i) a Responsible Officer obtaining actual
knowledge of such default and (ii) the Company receiving written notice of
such default from any holder of a Note (any such written notice to be
identified as a "notice of default" and to refer specifically to this
paragraph (D) of SECTION 11); or
(e) any representation or warranty made in writing by or on behalf
of the Company, a Subsidiary Guarantor or the Pledgor or by any officer of
the Company, a Subsidiary Guarantor or the Pledgor in this Agreement, the
Subsidiary Guaranty or the Pledge Agreement 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 Subsidiary is in default (as principal or
as guarantor or other surety) in the payment of any principal of or
premium or make-whole amount or interest on any Indebtedness that is
outstanding in an aggregate principal amount of at least $10,000,000
beyond any period of grace provided with respect thereto, or (ii) the
Company is in default in the performance of or compliance with any term of
the 2002 Notes, the 2002 Note Purchase Agreements or any Additional Note
Purchase Agreement and as a consequence of such default or condition such
Indebtedness has become, or has been declared (or one or more Persons are
entitled to declare such Indebtedness to be), due and payable before its
stated maturity or before its regularly scheduled dates of payment, or
(iii) the Company or any Subsidiary is in default in the
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performance of or compliance with any term of any evidence of any
Indebtedness in an aggregate outstanding principal amount of at least
$10,000,000 or of any mortgage, indenture or other agreement relating
thereto or any other condition exists, and as a consequence of such
default or condition such Indebtedness has become, or has been declared,
due and payable before its stated maturity or before its regularly
scheduled dates of payment, or (iv) as a consequence of the occurrence or
continuation of any event or condition (other than the passage of time or
the right of the holder of Indebtedness to convert such Indebtedness into
equity interests), (1) the Company or any Subsidiary has become obligated
to purchase or repay Indebtedness before its regular maturity or before
its regularly scheduled dates of payment in an aggregate outstanding
principal amount of at least $10,000,000, or (2) one or more Persons have
the right to require the Company or any Subsidiary so to purchase or repay
such Indebtedness; or
(g) the Company or any Significant Subsidiary (i) is generally not
paying, or admits in writing its inability to pay, its debts as they
become due, (ii) files, or consents by answer or otherwise to the filing
against it of, a petition for relief or reorganization or arrangement or
any other petition in bankruptcy, for liquidation or to take advantage of
any bankruptcy, insolvency, reorganization, moratorium or other similar
law of any jurisdiction, (iii) makes an assignment for the benefit of its
creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with
respect to any substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes corporate action for the
purpose of any of the foregoing; or
(h) a court or Governmental Authority of competent jurisdiction
enters an order appointing, without consent by the Company or any of its
Significant Subsidiaries, a custodian, receiver, trustee or other officer
with similar powers with respect to it or with respect to any substantial
part of its property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in bankruptcy
or for liquidation or to take advantage of any bankruptcy or insolvency
law of any jurisdiction, or ordering the dissolution, winding-up or
liquidation of the Company or any of its Significant Subsidiaries, or any
such petition shall be filed against the Company or any of its Significant
Subsidiaries and such petition shall not be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $10,000,000 are rendered against one or more of
the Company and its Subsidiaries and which judgments are not, within 45
days after entry thereof, bonded, discharged or stayed pending appeal, or
are not discharged within 45 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
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have instituted proceedings under ERISA Section 4042 to terminate or
appoint a trustee to administer any Plan or the PBGC shall have notified
the Company or any ERISA Affiliate that a Plan may become a subject of any
such proceedings, (iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of Section 4001(a)(18) of ERISA) under
all Plans, determined in accordance with Title IV of ERISA, shall exceed
$10,000,000, (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 Guaranty or the Pledge Agreement shall cease to
be in full force and effect for any reason whatsoever, including, without
limitation, a determination by any Governmental Authority that such
Subsidiary Guaranty or Pledge Agreement is invalid, void or unenforceable
or any Subsidiary Guarantor which is a party to such Subsidiary Guaranty
or the Pledgor, as applicable, shall contest or deny in writing the
validity or enforceability of any of its obligations under such Subsidiary
Guaranty or the Pledge Agreement, but excluding any Subsidiary Guaranty
which ceases to be in full force and effect in accordance with and by
reason of the express provisions of SECTION 2.2(D); or
(l) any event of default shall have occurred and be continuing under
the Pledge Agreement.
As used in SECTION 11(J), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
SECTION 12. REMEDIES ON DEFAULT, ETC.
Section 12.1. Acceleration. (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, any
holder or holders of more than 51% 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
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of Default may at any time, at its or their option, by notice or notices to the
Company, declare all the Notes held by it or them to be immediately due and
payable.
Upon any Note becoming due and payable under this SECTION 12.1, whether
automatically or by declaration, such Note will forthwith mature and the entire
unpaid principal amount of such Note, plus (i) all accrued and unpaid interest
thereon and (ii) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for), and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
Section 12.2. Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under SECTION 12.1, the holder of
any Note at the time outstanding may proceed to protect and enforce the rights
of such holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or in any Note, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.
Section 12.3. Rescission. At any time after any Notes have been declared
due and payable pursuant to clause (B) or (C) of SECTION 12.1, the holders of
not less than 66 2/3% in principal amount of the Notes then outstanding, by
written notice to the Company, may rescind and annul any such declaration and
its consequences if (a) the Company has paid all overdue interest on the Notes,
all principal of and Make-Whole Amount, if any, on any Notes that are due and
payable and are unpaid other than by reason of such declaration, and all
interest on such overdue principal and Make-Whole Amount, if any, and (to the
extent permitted by applicable law) any overdue interest in respect of the
Notes, at the Default Rate, (b) all Events of Default and Defaults, other than
non-payment of amounts that have become due solely by reason of such
declaration, have been cured or have been waived pursuant to SECTION 17, and (c)
no judgment or decree has been entered for the payment of any monies due
pursuant hereto or to the Notes. No rescission and annulment under this SECTION
12.3 will extend to or affect any subsequent Event of Default or Default or
impair any right consequent thereon.
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No course
of dealing and no delay on the part of any holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such holder's rights, powers or remedies. No right, power or remedy conferred by
this Agreement or by any Note upon any holder thereof shall be exclusive of any
other right, power or remedy referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise. Without limiting the
obligations of the Company under SECTION 15, the Company will pay to the holder
of each Note on demand such further amount as shall be sufficient to cover all
costs and expenses of such holder incurred
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in any enforcement or collection under this SECTION 12, including, without
limitation, reasonable attorneys' fees, expenses and disbursements.
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
Section 13.1. Registration of Notes. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of Notes.
Section 13.2. Transfer and Exchange of Notes. Upon surrender of any Note
at the principal executive office of the Company for registration of transfer or
exchange (and in the case of a surrender for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer duly executed by the
registered holder of such Note or its attorney duly authorized in writing and
accompanied by the address for notices of each transferee of such Note or part
thereof), the Company shall execute and deliver, at the Company's expense
(except as provided below), one or more new Notes (as requested by the holder
thereof) in exchange therefor, of the same series and in an aggregate principal
amount equal to the unpaid principal amount of the surrendered Note. Each such
new Note shall be payable to such Person as such holder may request and shall be
substantially in the form of EXHIBIT 1(A) or EXHIBIT 1(B), as applicable. Each
such new Note shall be dated and bear interest from the date to which interest
shall have been paid on the surrendered Note or dated the date of the
surrendered Note if no interest shall have been paid thereon. The Company may
require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of Notes. Notes shall not be
transferred in denominations of less than $1,000,000; provided that if necessary
to enable the registration of transfer by a holder of its entire holding of
Notes, one Note may be in a denomination of less than $1,000,000. Any
transferee, by its acceptance of a Note registered in its name (or the name of
its nominee), shall be deemed to have made the representation set forth in
SECTION 6.2.
Section 13.3. Replacement of Notes. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note
is, or is a nominee for, an original purchaser or another holder of a Note
with a minimum net worth of at least $25,000,000, such Person's own
unsecured agreement of indemnity shall be deemed to be satisfactory), or
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(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note of the same series, dated and bearing interest from the date to which
interest shall have been paid on such lost, stolen, destroyed or mutilated Note
or dated the date of such lost, stolen, destroyed or mutilated Note if no
interest shall have been paid thereon.
Section 13.4. Legend. Upon issuance of the Notes and until such time, if
any, as the same is no longer required under applicable securities laws, the
Notes shall bear the following legend:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED, OR ANY OTHER APPLICABLE SECURITIES LAWS
AND, ACCORDINGLY, MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNLESS
REGISTERED OR EXEMPT FROM REGISTRATION UNDER SAID ACT OR SUCH OTHER
LAWS.
Any holder of a Note may, upon surrender of its Notes to the Company together
with an opinion of counsel (which counsel may be internal counsel to such
holder) to the effect that the foregoing legend is no longer required under
applicable securities laws, obtain a like Note in exchange for its Note without
such legend.
SECTION 14. PAYMENTS ON NOTES.
Section 14.1. Place of Payment. Subject to SECTION 14.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in New York, New York at the principal office of a bank
or trust company in such jurisdiction which the Company agrees to designate at
any time when there is any holder of any Note not entitled to the benefits of
SECTION 14.2 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.
Section 14.2. Home Office Payment. So long as you or your nominee shall be
the holder of any Note, and notwithstanding anything contained in SECTION 14.1
or in such Note to the contrary, the Company will pay all sums becoming due on
such Note for principal, Make-Whole Amount, if any, and interest by the method
and at the address specified for such purpose below your name in SCHEDULE A, or
by such other method or at such other address as you shall have from time to
time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Company made concurrently with or
reasonably promptly after payment or prepayment in full of any Note, you shall
surrender such Note for cancellation, reasonably promptly after any such
request, to the Company at its principal executive office or at the place of
payment most recently designated by the Company pursuant to SECTION 14.1. 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 of the same
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series pursuant to SECTION 13.2. The Company will afford the benefits of this
SECTION 14.2 to any Institutional Investor that is the direct or indirect
transferee of any Note purchased by you under this Agreement and that has made
the same agreement relating to such Note as you have made in this SECTION 14.2.
SECTION 15. EXPENSES, ETC.
Section 15.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all costs and expenses
(including reasonable attorneys' fees of a 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, the Subsidiary Guaranty, the Pledge Agreement or the Intercreditor
Agreement (whether or not such amendment, waiver or consent becomes effective),
including, without limitation: (a) the costs and expenses incurred in enforcing
or defending (or determining whether or how to enforce or defend) any rights
under this Agreement, the Notes, the Subsidiary Guaranty, the Pledge Agreement
or the Intercreditor Agreement, or in responding to any subpoena or other legal
process or informal investigative demand issued in connection with this
Agreement, the Notes, the Subsidiary Guaranty, the Pledge Agreement or the
Intercreditor Agreement, or by reason of being a holder of any Note, (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, by the Notes, the Subsidiary Guaranty, the Pledge Agreement and the
Intercreditor Agreement, and (c) the fees and costs incurred in connection with
the initial filing of this Agreement and all related documents and financial
information and all subsequent annual and interim filings of documents and
financial information related to this Agreement, with the Securities Valuation
Office of the National Association of Insurance Commissioners or any successor
organization acceding to the authority thereof. The Company will pay, and will
save you and each other holder of a Note harmless from, all claims in respect of
any fees, costs or expenses, if any, of brokers and finders (other than those
retained by you).
Section 15.2. Survival. The obligations of the Company under this SECTION
15 will survive the payment or transfer of any Note, the enforcement, amendment
or waiver of any provision of this Agreement, the Notes, the Subsidiary Guaranty
or the Pledge Agreement, and the termination of this Agreement.
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein or in the Subsidiary
Guaranty or the Pledge Agreement 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, any Subsidiary Guarantor or the Pledgor pursuant to this
Agreement, the Subsidiary Guaranty or the Pledge Agreement shall be deemed
representations and warranties of the
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Company, the Subsidiary Guarantors or the Pledgor under this Agreement, the
Subsidiary Guaranty or the Pledge Agreement. Subject to the preceding sentence,
this Agreement, the Notes, the Subsidiary Guaranty and the Pledge Agreement
embody the entire agreement and understanding between you, the Company, the
Subsidiary Guarantors and the Pledgor and supersede all prior agreements and
understandings relating to the subject matter hereof.
SECTION 17. AMENDMENT AND WAIVER.
Section 17.1. Requirements. This Agreement and the Notes, may be amended,
and the observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Company and the Required Holders, except that (a) no amendment or waiver of any
of the provisions of SECTION 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term
(as it is used therein), will be effective as to you unless consented to by you
in writing, and (b) no such amendment or waiver may, without the written consent
of the holder of each Note at the time outstanding affected thereby, (i) subject
to the provisions of SECTION 12 relating to acceleration or rescission, change
the amount or time of any prepayment or payment of principal of, or reduce the
rate or change the time of payment or method of computation of interest or of
the Make-Whole Amount on, the Notes, (ii) change the percentage of the principal
amount of the Notes the holders of which are required to consent to any such
amendment or waiver, or (iii) amend any of SECTIONS 8, 11(A), 11(B), 12, 17 or
20. The Subsidiary Guaranty, the Pledge Agreement and the Intercreditor
Agreement may be amended in accordance with the terms thereof.
Section 17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with 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 of any
waiver or amendment of 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.
Section 17.3. Binding Effect, Etc. Any amendment or waiver consented to as
provided in this SECTION 17 applies equally to all holders of each series of
Notes and is binding upon them and upon each future holder of any Note of any
series and upon the Company without regard to whether such Note has been marked
to indicate such amendment or waiver. No such amendment
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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 of any series nor any delay in exercising any rights hereunder or under
any Note of any series shall operate as a waiver of any rights of any holder of
such Note. As used herein, the term "this Agreement" and references thereto
shall mean this Agreement as it may from time to time be amended or
supplemented.
Section 17.4. Notes Held by Company, Etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes of any series
directly or indirectly owned by the Company or any of its Affiliates shall be
deemed not to be outstanding.
SECTION 18. NOTICES.
All notices and communications provided for hereunder shall be in writing
and sent (a) by telefacsimile if the sender on the same day sends a confirming
copy of such notice by a recognized overnight delivery service (charges
prepaid), or (b) by registered or certified mail with return receipt requested
(postage prepaid), or (c) by a recognized overnight delivery service (with
charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address specified
for such communications in SCHEDULE A, or at such other address as you or
it shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at such
address as such other holder shall have specified to the Company in
writing, or
(iii) if to the Company, to the Company at its address set forth at
the beginning hereof to the attention of the Chief Financial Officer (with
a copy to the General Counsel), or at such other address as the Company
shall have specified to the holder of each Note in writing.
Notices under this SECTION 18 will be deemed given only when actually received.
SECTION 19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in
-39-
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by you in the regular course of business) and any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This SECTION 19 shall not prohibit the
Company or any other holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from introducing evidence
to demonstrate the inaccuracy of any such reproduction.
SECTION 20. CONFIDENTIAL INFORMATION.
For the purposes of this SECTION 20, "Confidential Information" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified in writing 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 (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 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 (provided that you shall, unless
prohibited by applicable law or regulation, use commercially reasonable efforts
to notify the Company of any disclosure pursuant to this clause (x) as far in
advance as is reasonably practicable under such circumstances to enable the
Company to seek an appropriate protective order), (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, this Agreement, the
Subsidiary Guaranty, the Pledge Agreement and the Intercreditor Agreement. Each
holder of a Note, by its acceptance of a Note, will be deemed to
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have agreed to be bound by and to be entitled to the benefits of this SECTION 20
as though it were a party to this Agreement. On reasonable request by the
Company in connection with the delivery to any holder of a Note of information
required to be delivered to such holder under this Agreement or requested by
such holder (other than a holder that is a party to this Agreement or its
nominee), such holder will enter into an agreement with the Company embodying
the provisions of this SECTION 20.
SECTION 21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your affiliates as the
purchaser of the Notes that you have agreed to purchase hereunder, by written
notice to the Company, which notice shall be signed by both you and such
affiliate, shall contain such affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such affiliate of the accuracy
with respect to it of the representations set forth in SECTION 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this SECTION 21), such word shall be deemed to refer to such affiliate in lieu
of you. In the event that such affiliate is so substituted as a purchaser
hereunder and such affiliate thereafter transfers to you all of the Notes then
held by such affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (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.
SECTION 22. MISCELLANEOUS.
Section 22.1. Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not.
Section 22.2. Payments Due on Non-Business Days. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of principal
of or Make-Whole Amount or interest on any Note that is due on a date other than
a Business Day shall be made on the next succeeding Business Day without
including the additional days elapsed in the computation of the interest payable
on such next succeeding Business Day.
Section 22.3. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
Section 22.4. Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to
-41-
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.
Where the character or amount of any asset or liability or item of income
or expense is required to be discussed or any consolidation or other accounting
computation is required to be made by the Company for the purposes of this
Agreement, the same shall be done by the Company in accordance with GAAP, to the
extent applicable, except where such principles are inconsistent with the
requirements of this Agreement.
Section 22.5. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original but all of which together
shall constitute one instrument. Each counterpart may consist of a number of
copies hereof, each signed by less than all, but together signed by all, of the
parties hereto.
SECTION 22.6. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE LAW OF THE STATE OF NEW YORK, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW
OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION
OTHER THAN SUCH STATE.
* * * * *
-42-
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,
THE ST. XXX COMPANY
By _________________________________
Title
Accepted as of ______________.
[VARIATION]
By _________________________________
Its
-43-
SCHEDULE A
(to Note Purchase Agreement)
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:
"Additional Note Purchase Agreement" means a note purchase agreement
substantially similar to this Agreement, with the notes issued thereunder, in
each case, ranking pari passu with the Notes issued hereunder.
"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 Person 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.
"Agent" means Wachovia Bank, National Association, as Administrative Agent
under the Bank Credit Agreement.
"Anti-Terrorism Order" means Executive Order No. 13,244 of September 24,
2001, Blocking Property and Prohibiting Transactions with Persons Who Commit,
Threaten to Commit or Support Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001), as
amended.
"Bank Credit Agreement" means that certain Second Amended and Restated
Credit Agreement dated February 7, 2002 among the Company, the lenders named
therein and Wachovia Bank, National Association as Administrative Agent, as
amended by the First Amendment to Second Amended and Restated Credit Agreement
dated as of May 7, 2003 and the Second Amendment to Second Amended and Restated
Credit Agreement dated as of July 10, 2003, and as further amended, modified,
refinanced or supplemented.
"Bulk Timberland Sales Transactions" means a transaction or series of
transactions by which the Company or its Subsidiaries: (i) sells a timber parcel
or parcels to an unrelated third party; (ii) such unrelated third party delivers
an installment note (an "Installment Sale Note") to the Company or its
Subsidiaries in exchange therefor; (iii) the Company or its Subsidiaries receive
cash or other consideration from a lender, person or other entity in exchange
for a note from the Company or its Subsidiaries (a "Company Promissory Note")
secured by the Installment Sale Note; and (iv) the sole recourse for the payment
of the Company Promissory Note is the principal and income generated by the
Installment Sale Note. A Bulk Timberland Sales Transaction shall also include
any other transaction or series of transactions utilizing a substantially
similar structure.
SCHEDULE B
(to Note Purchase Agreement)
"Business Day" means (a) for the purposes of SECTION 8.7 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 New York, New York or Jacksonville, Florida 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.
"Capital Stock" means (a) in the case of a corporation, capital stock, (b)
in the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of capital
stock, (c) in the case of a partnership, partnership interests (whether general
or limited), (d) in the case of a limited liability company, membership
interests and (e) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"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 The St. Xxx Company, a Florida corporation, and any Person
who succeeds to all, or substantially all, of the assets and business of The St.
Xxx Company.
"Company Promissory Note" is defined in the definition of "Bulk Timberland
Sales Transactions."
"Confidential Information" is defined in SECTION 20.
"Consolidated Fixed Charges" for any period means on a consolidated basis
the sum of (a) all Rentals (other than Rentals on Capital Leases) payable during
such period by the Company and its Subsidiaries, and (b) all Interest Expense on
all Indebtedness of the Company and its Subsidiaries payable during such period.
"Consolidated Indebtedness" means, without duplication, the sum of all
Indebtedness of the Company and its Subsidiaries, determined on a consolidated
basis eliminating intercompany items less Indebtedness attributable to any
Company Promissory Note issued pursuant to a Bulk Timberland Sales Transaction
to the extent neither the Company nor any Subsidiary is liable therefor.
"Consolidated Net Earnings" means, with reference to any period and
without duplication, the net earnings (or loss) of the Company and its
Subsidiaries for such period (taken as a cumulative whole), as determined in
accordance with GAAP, after eliminating extraordinary gains and losses.
B-2
"Consolidated Net Earnings Available for Fixed Charges" for any period
means without duplication, the Consolidated Net Earnings for the Company and its
Subsidiaries, plus: (a) provisions for federal, state, local, and foreign income
taxes for the Company and its Subsidiaries; (b) Consolidated Fixed Charges for
the Company and its Subsidiaries; and (c) consolidated depreciation, depletion
and amortization for the Company and its Subsidiaries.
"Consolidated Net Worth" means, as of the date of any determination
thereof the net worth of the Company and its Subsidiaries as determined in
accordance with GAAP.
"Consolidated Total Assets" means as of the date of any determination
thereof and without duplication, the sum of total assets of the Company and its
Subsidiaries determined on a consolidated basis in accordance with GAAP less any
Installment Sale Note received by the Company to the extent the Company or any
Subsidiary receives cash or other consideration in exchange for a Company
Promissory Note secured by such Installment Sale Note; provided, that for
purposes of any determination of Consolidated Total Assets, Timberland shall be
valued at $750 per acre.
"Current Management Group" means (a) Xxxxx X. Xxxxxxx, Xxxxx X. Xxxxxx,
Xxxxxx X. Xxxxxx, X. Xxxxxxx Xxxx, Xxxxx X. Xxxxxxx, Xx., Xxxx Xxxxxxxxx,
Xxxxxxx X. Xxxxx, Xxxxxxx X. Xxxxxxx; (b) the heirs, lineal descendants or blood
relatives to the third degree of consanguinity of any of the Persons named in
clause (a); (c) trusts for the benefit of the Persons named in clauses (a) and
(b); and (d) any trust which has as its principal income beneficiaries or
remaindermen any combination of any of the Persons described in clauses (a)
through (c).
"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, for any series of Notes, 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 of such series or (ii) 2% over the rate
of interest publicly announced by Wachovia Bank, National Association in New
York, New York as its "base" or "prime" rate.
"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.
B-3
"Event of Default" is defined in SECTION 11.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"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
(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.
B-4
"Hazardous Material" means any and all pollutants, toxic or hazardous
wastes or any other substances, including all substances listed in or regulated
in any Environmental Law 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, regulated, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"holder" or "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.
"Indebtedness" 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 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;
(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);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its account
by banks and other financial institutions (whether or not representing
obligations for borrowed money); and
(f) any Guaranty of such Person with respect to liabilities of a
type described in any of clauses (a) through (e) hereof.
Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (f) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
"Installment Sale Note" is defined in the definition of "Bulk Timberland
Sales Transactions."
"Institutional Investor" means (a) any original purchaser of a Note, (b)
any holder of a Note holding more than 5% of the aggregate principal amount of
the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
B-5
"Intercreditor Agreement" is defined in SECTION 2.2(C).
"Interest Expense" means all amounts which would, in accordance with GAAP,
be deducted in computing net income on account of interest on Indebtedness,
including imputed interest in respect of Capital Lease obligations, amortization
of debt discounts and expenses, fees and commissions for letters of credit and
bankers' acceptance financing and the net interest costs of interest rate swaps
and xxxxxx.
"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 8.7.
"Material" means material in relation to the business, operations,
affairs, financial condition, assets or properties of the Company and its
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 Subsidiaries taken as a whole, or (b) the ability of the Company
to perform its obligations under this Agreement and the Notes, or (c) the
validity or enforceability of this Agreement or the Notes.
"Memorandum" is defined in SECTION 5.3.
"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 Agreements" is defined in SECTION 2.1.
"Other Purchasers" is defined in SECTION 2.1.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Person" means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, or a government or
agency or political subdivision thereof.
B-6
"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.
"Pledge Agreement" is defined in SECTION 2.2(B).
"Pledgor" is defined in SECTION 2.2(B).
"property" or "properties" means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, xxxxxx or
inchoate.
"Qualified Subsidiary Indebtedness" means Indebtedness of a Subsidiary
Guarantor, provided that the obligee of such Indebtedness shall have entered
into the Intercreditor Agreement.
"Rentals" means and includes as of the date of any determination thereof,
without duplication, all fixed payments (including as such all payments which
the lessee is obligated to make to the lessor on termination of the lease or
surrender of the property) payable by the Company or a Subsidiary, as lessee or
sublessee under a lease of real or personal property, but shall be exclusive of
any amounts required to be paid by the Company or a Subsidiary (whether or not
designated as rents or additional rents) on account of maintenance, repairs,
insurance, taxes and similar charges. Fixed rents under any so-called
"percentage leases" shall be computed solely on the basis of the minimum rents,
if any, required to be paid by the lessee regardless of sales volume or gross
revenues.
"Required Holders" means, at any time, the holders of at least 51% in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by the Company 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.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Senior Indebtedness" means, without duplication, all Indebtedness of the
Company which is not expressed to be subordinate or junior in rank to any other
Indebtedness of the Company.
"Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
"Series E Notes" is defined in SECTION 1.
"Series F Notes" is defined in SECTION 1.
B-7
"Significant Subsidiary" means, at any time, any Subsidiary which (i) is a
Subsidiary Guarantor, (ii) constitutes more than 1% of Consolidated Total Assets
or (iii)(1) contributed more than 1% of Consolidated Net Earnings for any period
of four consecutive fiscal quarters at any time in the three previous fiscal
years or (2) contributed on an aggregate basis more than 2% of the cumulative
Consolidated Net Earnings for the preceding five year period.
"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 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 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 2.2(A) and shall include any
Subsidiary which becomes a Subsidiary Guarantor pursuant to SECTION 9.8.
"Subsidiary Guaranty" is defined in SECTION 2.2(A) and shall include any
Subsidiary Guaranty delivered pursuant to SECTION 9.8.
"Timberland" means undeveloped real estate on which the Company conducts
active silvicultural operations.
"2002 Notes" means notes of the Company issued pursuant to the 2002 Note
Purchase Agreements.
"2002 Note Purchase Agreements" means those certain note purchase
agreements dated as of February 7, 2002 between the Company and the purchasers
named in Schedule A thereto, respectively.
"2002 Subsidiary Guaranty" means that certain subsidiary guaranty
agreement dated as of February 7, 2002 in favor of the holders of the 2002
Notes.
"Unencumbered Assets" means all assets (valued at $750 per acre in the
case of Timberland) of the Company or its Subsidiaries which are not subject to
a Lien securing any Indebtedness of the Company or any of its Subsidiaries.
"Unsecured Indebtedness" means all Indebtedness of the Company or its
Subsidiaries which is not secured by a Lien on any asset of the Company or any
of its Subsidiaries other than the Lien of the Pledge Agreement.
"USA Patriot Act" means United States Public Law 107-56, Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA
B-8
PATRIOT ACT) Act of 2001, as amended from time to time, and the rules and
regulations promulgated thereunder from time to time in effect.
"Voting Stock" means Capital Stock or interests of any class or classes,
the holders of which are ordinarily, in the absence of contingencies, entitled
to elect the directors (or Persons performing similar functions) of a Person.
"Wholly-owned Subsidiary" means, at any time, any Subsidiary one hundred
percent (100%) of all of the equity interests (except directors' qualifying
shares) and voting interests of which are owned by any one or more of the
Company and the Company's other Wholly-owned Subsidiaries at such time.
B-9
SCHEDULE 10.6
(to Note Purchase Agreement)
[FORM OF NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED, OR ANY OTHER APPLICABLE SECURITIES LAWS AND, ACCORDINGLY,
MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED OR EXEMPT FROM
REGISTRATION UNDER SAID ACT OR SUCH OTHER LAWS.
THE ST. XXX COMPANY
4.97% SENIOR SECURED NOTE, SERIES E, DUE JUNE 8, 2009
No. [_________] [Date]
$[____________] PPN 790148 B@8
FOR VALUE RECEIVED, the undersigned, THE ST. XXX COMPANY (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Florida, hereby promises to pay to [________________], or registered assigns,
the principal sum of [________________] DOLLARS on June 8, 2009, 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 4.97% per annum from the date hereof,
payable semiannually, on the 8th day of June and December in each year,
commencing with the June 8 or December 8 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 Agreements 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) 6.97% or (ii) 2% over the rate of interest publicly announced by
Wachovia Bank, National Association from time to time in New York, New York 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 Wachovia Bank, National Association in New York, New York or at such
other place as the Company shall have designated by written notice to the holder
of this Note as provided in the Note Purchase Agreements referred to below.
This Note is one of a series of the 4.97% Senior Secured Notes, Series E,
due June 8, 2009 (the "Series E Notes") of the Company in the aggregate
principal amount of $25,000,000, together with the Company's $75,000,000
aggregate principal amount 5.31% Senior Secured Notes, Series F, due June 8,
2011 (the "Series F Notes"; said Series F Notes together with the Series E Notes
being hereinafter referred to collectively as the "Notes"), issued pursuant to
separate Note Purchase Agreements, dated as of June 8, 2004 (as from time to
time amended, the "Note Purchase Agreements"), 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 Agreements and (ii) to have made the representation set forth in
SECTION 6.2 of the Note Purchase Agreements.
EXHIBIT 1(a)
(to Note Purchase Agreement)
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
This Note is subject to optional prepayment, in whole or from time to time
in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements, 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 Agreements.
E-1(a)-2
THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE
RIGHTS AND PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK,
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE WHICH WOULD REQUIRE
APPLICATION OF THE LAWS OF THE JURISDICTION OTHER THAN SUCH STATE.
THE ST. XXX COMPANY
By _________________________________
Title
E-1(a)-3
[FORM OF NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED, OR ANY OTHER APPLICABLE SECURITIES LAWS AND, ACCORDINGLY,
MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNLESS REGISTERED OR EXEMPT FROM
REGISTRATION UNDER SAID ACT OR SUCH OTHER LAWS.
THE ST. XXX COMPANY
5.31% SENIOR SECURED NOTE, SERIES F, DUE JUNE 8, 2011
No. [_________] [Date]
$[____________] PPN 790148 B#6
FOR VALUE RECEIVED, the undersigned, THE ST. XXX COMPANY (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Florida, hereby promises to pay to [________________], or registered assigns,
the principal sum of [________________] DOLLARS on June 8, 2011, 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 5.31% per annum from the date hereof,
payable semiannually, on the 8th day of June and December in each year,
commencing with the June 8 or December 8 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 Agreements 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) 7.31% or (ii) 2% over the rate of interest publicly announced by
Wachovia Bank, National Association from time to time in New York, New York 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 Wachovia Bank, National Association in New York, New York or at such
other place as the Company shall have designated by written notice to the holder
of this Note as provided in the Note Purchase Agreements referred to below.
This Note is one of a series of the 5.31% Senior Secured Notes, Series F,
due June 8, 2011 (the "Series F Notes") of the Company in the aggregate
principal amount of $75,000,000, together with the Company's $25,000,000
aggregate principal amount 4.97% Senior Secured Notes, Series E, due June 8,
2009 (the "Series E Notes"; said Series E Notes, together with the Series F
Notes, being hereinafter referred to collectively as the "Notes"), issued
pursuant to separate Note Purchase Agreements, dated as of June 8, 2004 (as from
time to time amended, the "Note Purchase Agreements"), 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 Agreements and (ii) to have made the representation set forth in
SECTION 6.2 of the Note Purchase Agreements.
EXHIBIT 1(b)
(to Note Purchase Agreement)
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
This Note is subject to optional prepayment, in whole or from time to time
in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements, 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 Agreements.
E-1(b)-2
THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE
RIGHTS AND PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK,
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE WHICH WOULD REQUIRE
APPLICATION OF THE LAWS OF THE JURISDICTION OTHER THAN SUCH STATE.
THE ST. XXX COMPANY
By __________________________________
Title
E-1(b)-3
EXHIBIT 2.2(c)
(to Note Purchase Agreement)
FORM OF OPINION OF SPECIAL COUNSEL
TO THE COMPANY
EXHIBIT 4.4(a)
(to Note Purchase Agreement)
FORM OF OPINION OF SPECIAL COUNSEL
TO THE PURCHASERS
EXHIBIT 4.4(b)
(to Note Purchase Agreement)
