NIAGARA CORPORATION
(THE "PARENT")
NIAGARA COLD DRAWN CORP.
(THE "COMPANY")
LASALLE STEEL COMPANY
("LASALLE")
______________________________________
NOTE AND STOCK PURCHASE AGREEMENT
______________________________________
DATED AS OF APRIL 18, 1997
$20,000,000
12.5% SENIOR SUBORDINATED NOTES DUE APRIL 18, 2005
(ISSUED BY THE COMPANY)
285,715 SHARES OF COMMON STOCK
(ISSUED BY THE PARENT)
TABLE OF CONTENTS
(NOT A PART OF THE AGREEMENT)
PAGE
1. SALE AND PURCHASE OF NOTES AND PURCHASER
SHARES . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Authorization of Notes . . . . . . . . . . 1
1.2 Authorization of Purchaser Shares . . . . . 2
1.3 The Closing . . . . . . . . . . . . . . . . 2
2. WARRANTIES AND REPRESENTATIONS OF THE OBLIGORS . 3
3. CLOSING CONDITIONS . . . . . . . . . . . . . . . 3
4. PAYMENTS ON NOTES . . . . . . . . . . . . . . . 3
4.1 Interest Payments on Notes . . . . . . . . 3
4.2 Payments on Notes at Maturity . . . . . . . 4
4.3 Optional Prepayment . . . . . . . . . . . . 4
4.4 Mandatory Prepayment with Proceeds of
Exercise of 1993 Warrants, etc. . . . . . 4
4.5 Allocation of Partial Prepayments . . . . . 6
4.6 Change in Control, Offer to Prepay, etc. . 6
4.7 Maturity, Surrender, etc. . . . . . . . . . 9
4.8 Purchase of Notes . . . . . . . . . . . . . 9
4.9 Place of Payment . . . . . . . . . . . . . 9
4.10 Home Office Payment . . . . . . . . . . . 9
5. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES . 10
5.1 Registration of Notes . . . . . . . . . . . 10
5.2 Transfer and Exchange of Notes . . . . . . 10
5.3 Replacement of Notes . . . . . . . . . . . 11
6. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . 11
6.1 Ownership Structure . . . . . . . . . . . . 11
6.2 Maintenance of Properties, Conduct of
Business . . . . . . . . . . . . . . . . . 12
6.3 Compliance with Law . . . . . . . . . . . . 12
6.4 Books and Records . . . . . . . . . . . . . 12
6.5 Corporate Existence, etc. . . . . . . . . . 13
6.6 Payment of Taxes and Claims . . . . . . . . 13
6.7 Insurance . . . . . . . . . . . . . . . . . 13
6.8 Guaranties by Subsidiaries . . . . . . . . 13
7. NEGATIVE COVENANTS . . . . . . . . . . . . . . . 14
7.1 No Amendments, etc. re 1993 Warrants . . . 14
7.2 Amendment of Senior Credit Agreement . . . 14
7.3 Indebtedness . . . . . . . . . . . . . . . 15
7.4 Liens . . . . . . . . . . . . . . . . . . . 17
7.5 Net Worth . . . . . . . . . . . . . . . . . 19
7.6 Interest Coverage . . . . . . . . . . . . . 19
7.7 Prohibition on Fundamental Changes . . . . 19
7.8 Asset Dispositions . . . . . . . . . . . . 20
7.9 Loans, Advances and Investments . . . . . . 22
7.10 Dividends, etc. . . . . . . . . . . . . . 23
7.11 Affiliate Transactions . . . . . . . . . . 23
7.12 Parent Holding Company . . . . . . . . . . 23
7.13 Indebtedness, etc. of the Parent . . . . . 24
8. INFORMATION COVENANTS . . . . . . . . . . . . . 25
8.1 Financial and Business Information . . . . 25
8.2 Officer's Certificate . . . . . . . . . . . 29
8.3 Inspection . . . . . . . . . . . . . . . . 29
9. EVENTS OF DEFAULT . . . . . . . . . . . . . . . 30
10. REMEDIES ON DEFAULT, ETC. . . . . . . . . . . . 33
10.1 Acceleration . . . . . . . . . . . . . . . 33
10.2 Other Remedies . . . . . . . . . . . . . . 34
10.3 Rescission . . . . . . . . . . . . . . . . 34
10.4 No Waivers or Election of Remedies,
Expenses, etc. . . . . . . . . . . . . . . 35
11. SUBORDINATION . . . . . . . . . . . . . . . . . 35
11.1 General . . . . . . . . . . . . . . . . . 35
11.2 Insolvency, etc. . . . . . . . . . . . . . 35
11.3 Blockage of Payments on Subordinated
Debt . . . . . . . . . . . . . . . . . . . 36
11.4 Subordinated Debt Payments and Remedies . 39
11.5 Turnover of Payments . . . . . . . . . . . 40
11.6 Obligations Not Impaired . . . . . . . . . 40
11.7 Payment of Senior Debt; Subrogation . . . 41
11.8 Reliance of Holders of Senior Debt . . . . 41
11.9 Security . . . . . . . . . . . . . . . . . 41
11.10 Changes in Holders of Senior Debt . . . . 41
12. INTERPRETATION OF AGREEMENT . . . . . . . . . . 42
12.1 Terms Defined . . . . . . . . . . . . . . 42
12.2 Accounting Principles . . . . . . . . . . 63
13. PURCHASER REPRESENTATIONS, ETC. . . . . . . . . 63
13.1 Purchase for Investment . . . . . . . . . 63
13.2 Source of Funds . . . . . . . . . . . . . 64
14. EXPENSES, ETC. . . . . . . . . . . . . . . . . . 65
14.1 Transaction Expenses . . . . . . . . . . . 65
14.2 Survival . . . . . . . . . . . . . . . . . 66
15. SURVIVAL OF REPRESENTATIONS AND WARRANTIES . . . 66
16. AMENDMENT AND WAIVER . . . . . . . . . . . . . . 66
16.1 Requirements . . . . . . . . . . . . . . . 66
16.2 Solicitation of Holders of Notes . . . . . 67
16.3 Binding Effect, etc. . . . . . . . . . . . 67
16.4 Notes held by Obligors, etc. . . . . . . . 68
17. NOTICES . . . . . . . . . . . . . . . . . . . . 68
18. REPRODUCTION OF DOCUMENTS . . . . . . . . . . . 69
19. MISCELLANEOUS . . . . . . . . . . . . . . . . . 69
19.1 Successors and Assigns . . . . . . . . . . 69
19.2 Payments, Miscellaneous . . . . . . . . . 69
19.3 Severability . . . . . . . . . . . . . . . 70
19.4 Directly or Indirectly . . . . . . . . . . 70
19.5 Section Headings and Table of Contents,
etc. . . . . . . . . . . . . . . . . . . . 70
19.6 Construction . . . . . . . . . . . . . . . 70
19.7 Counterparts . . . . . . . . . . . . . . . 71
19.8 Governing Law . . . . . . . . . . . . . . 71
19.9 Certain Changes in GAAP . . . . . . . . . 71
Annex 1 -- Information as to Purchasers
Annex 2 -- Payment Instructions at Closing
Annex 3 -- Information as to Obligors, etc.
Attachment A -- Warranties and Representations of the
Obligors
Attachment B -- Closing Conditions
Exhibit A -- Form of 12.5% Senior Subordinated Note
due April 18, 2005
Exhibit B1 -- Form of Closing Opinion of Counsel for
the Obligors
Exhibit B2 -- Form of Closing Opinion of Special
Counsel for the Purchasers
Exhibit C1 -- Form of Parent Guaranty Agreement
Exhibit C2 -- Form of LaSalle Guaranty Agreement
Exhibit D -- Form of Stockholders Agreement
Exhibit E -- Originally Scheduled Senior Term Loan
Principal Payments
NIAGARA CORPORATION
NIAGARA COLD DRAWN CORP.
LASALLE STEEL COMPANY
_______________________________
NOTE AND STOCK PURCHASE AGREEMENT
_________________________________
$20,000,000
12.5% SENIOR SUBORDINATED NOTES DUE APRIL 18, 2005
(ISSUED BY THE COMPANY)
285,715 SHARES OF COMMON STOCK
(ISSUED BY THE PARENT)
Dated as of April 18, 1997
[SEPARATELY ADDRESSED TO EACH OF THE
PURCHASERS LISTED IN ANNEX 1]
Ladies and Gentlemen:
NIAGARA CORPORATION a Delaware corporation (together
with its successors and assigns, the "PARENT"), NIAGARA
COLD DRAWN CORP., a Delaware corporation (together with
its successors and assigns, the "COMPANY"), and LASALLE
STEEL COMPANY, a Delaware corporation (together with its
successors and assigns, "LASALLE"), hereby agree with you
as follows:
1. SALE AND PURCHASE OF NOTES AND PURCHASER SHARES
1.1 AUTHORIZATION OF NOTES.
The Company will authorize the issuance and sale
pursuant to the Note and Stock Purchase Agreements of
$20,000,000 in aggregate principal amount of its 12.5%
Senior Subordinated Notes due April 18, 2005 (all such
notes, whether initially issued, or issued in exchange or
substitution for, any such note, in each case in
accordance with the Note and Stock Purchase Agreements,
and as amended, restated or otherwise modified from time
to time, the "NOTES"). The Notes shall be substantially
in the form of Exhibit A and shall have the terms as
herein and therein provided.
1.2 AUTHORIZATION OF PURCHASER SHARES.
The Parent will authorize the issuance of 285,715
shares of Parent Common Stock to be sold pursuant to the
Note and Stock Purchase Agreements (such shares of Parent
Common Stock being referred to herein as the "PURCHASER
SHARES").
1.3 THE CLOSING.
(i) SALE AND PURCHASE OF NOTES. The Company
hereby agrees to sell to you and you hereby agree to
purchase from the Company, in accordance with the
provisions hereof, the aggregate principal amount of
Notes set forth below your name in Annex 1 at a purchase
price of 93.39284065% of the principal amount thereof.
(ii) SALE AND PURCHASE OF PURCHASER SHARES.
The Parent hereby agrees to sell to you and you hereby
agree to purchase from the Parent, in accordance with the
provisions hereof, the aggregate number of Purchaser
Shares set forth below your name in Annex 1 at a purchase
price of $4-5/8 per share.
(iii) THE CLOSING. The closing (the
"CLOSING") of the Company's sale of Notes and the
Parent's sale of Purchaser Shares will occur on April 18,
1997 (the "CLOSING DATE"). The Closing will be held at
10:00 a.m., local time, at the offices of Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000. At the Closing,
(A) the Company will deliver to you one
or more Notes (as indicated below your name in
Annex 1), in the denominations indicated in Annex 1,
in the aggregate principal amount of your purchase
of Notes, dated the Closing Date and registered as
indicated in Annex 1, and
(B) the Parent will deliver to you one or
more certificates evidencing the number of Purchaser
Shares to be purchased by you, as indicated in Annex
1, and registered as indicated in Annex 1,
against payment by federal funds wire transfer in
immediately available funds of the aggregate purchase
price of the Notes and Purchaser Shares being purchased
by you, as directed by the Parent and the Company in
Annex 2.
(iv) OTHER PURCHASERS. Contemporaneously with
the execution and delivery hereof, the Parent, the
Company and LaSalle are entering into a separate Note and
Stock Purchase Agreement identical (except for the name
and signature of the purchaser) hereto (as they may be
amended, restated or otherwise modified from time to
time, this Agreement and such other separate Note and
Stock Purchase Agreements, collectively, the "NOTE AND
STOCK PURCHASE AGREEMENTS") with each other purchaser
(collectively, the "OTHER PURCHASERS") listed in Annex 1,
providing for the sale to each Other Purchaser of Notes
in the aggregate principal amount, and the number of
shares of Purchaser Shares, set forth below such
Purchaser's name in such Annex. The sales of the Notes
and Purchaser Shares to you and to each Other Purchaser
are to be separate sales.
2. WARRANTIES AND REPRESENTATIONS OF THE OBLIGORS
To induce you to enter into this Agreement and to
purchase and pay for the Notes and the Purchaser Shares
to be delivered to you at the Closing, each of the
Parent, the Company and LaSalle makes the warranties and
representations set forth in Attachment A, effective as
of the date of the Parent's, the Company's and LaSalle's
execution of this Agreement and as of the Closing Date,
which are incorporated herein by reference with the same
force and effect as though set forth herein in full.
3. CLOSING CONDITIONS
Your obligations under this Agreement, including,
without limitation, the obligation to purchase and pay
for the Notes and the Purchaser Shares to be delivered to
you at the Closing, are subject to the conditions
precedent set forth in Attachment B, which are
incorporated herein by reference with the same force and
effect as though set forth herein in full, and the
failure of any one or more of such conditions to be
satisfied shall, at your election, relieve you of all
such obligations. The failure of any one or more of such
conditions to be satisfied shall not operate to relieve
the Parent, the Company or LaSalle of their respective
obligations hereunder or to waive any of your rights
against the Parent, the Company or LaSalle.
4. PAYMENTS ON NOTES
4.1 INTEREST PAYMENTS ON NOTES.
The Company shall pay interest (computed on the
basis of a 360-day year of twelve 30-day months) on the
unpaid principal balance of each Note from the date of
such Note at the rate of 12.5% per annum, semi-annually
on April 18 and October 18 in each year, commencing on
the payment date next succeeding the date of such Note,
until the principal amount of such Note in respect of
which such interest shall have accrued shall become due
and payable; and shall pay on demand interest on any
overdue principal (including any overdue prepayment of
principal) and Prepayment Compensation, if any, and (to
the extent permitted by applicable law) on any overdue
installment of interest, at a rate equal to the Default
Rate.
4.2 PAYMENTS ON NOTES AT MATURITY.
The entire outstanding principal amount of, and the
interest then due on, the Notes shall become due and
payable on April 18, 2005.
4.3 OPTIONAL PREPAYMENT.
The Company may, at its option, upon notice as
provided below, prepay at any time on or after August 13,
2000 (or, if a 1993 Warrant Call Option Event shall have
occurred and a prepayment of Notes pursuant to Section
4.4(b) shall have been effected, the Company may, at its
option, upon notice as provided below, prepay at any
time, whether or not on or after August 13, 2000) all, or
from time to time on or after such date any part of, the
Notes (in an amount not less than $1,000,000 in the case
of a partial prepayment), at 100% of the principal amount
so prepaid, plus the Prepayment Compensation determined
for the prepayment date with respect to such principal
amount, together with interest on such Notes accrued to
the date of prepayment. The Company will give each
holder of Notes written notice of each optional
prepayment under this Section 4.3 not less than 30 days
and not more than 60 days prior to the date fixed for
such prepayment. Each such notice shall specify such
date, the aggregate principal amount of the Notes to be
prepaid on such date, the principal amount of each Note
held by such holder to be prepaid (determined in
accordance with Section 4.5), and the interest to be paid
on the prepayment date with respect to such principal
amount being prepaid.
4.4 MANDATORY PREPAYMENT WITH PROCEEDS OF EXERCISE
OF 1993 WARRANTS, ETC.
(i) 1993 WARRANT CALL OPTION EVENT, EXERCISE.
Upon the occurrence of a 1993 Warrant Call Option Event,
the Parent will, at the earliest time permitted under the
terms of the 1993 Warrant Agreement, exercise its option
thereunder to call all of the issued and then outstanding
1993 Warrants for redemption. The Parent will, within
three Business Days of the occurrence of a 1993 Warrant
Call Option Event, give written notice of such
occurrence, and of the exercise required by the preceding
sentence, to each holder of Notes, specifying in such
notice the date fixed for such redemption pursuant to the
terms of the 1993 Warrant Agreement (which redemption
date shall be not earlier than 30 days, and not later
than 90 days, after the occurrence of such 1993 Warrant
Call Option Event).
(ii) PREPAYMENT FOLLOWING 1993 WARRANT CALL
OPTION EVENT. Following the occurrence of any 1993
Warrant Call Option Event, the Company shall, upon notice
as provided in Section 4.4(d), prepay a principal amount
of the Notes equal to 93.457944% of the 1993 Warrant
Forced Exercise Net Proceeds Amount determined as of the
Business Day immediately following the date fixed for
redemption of 1993 Warrants referred to in Section
4.4(a), plus the Prepayment Compensation with respect to
such principal amount (the effect of the foregoing
provisions of this sentence being that the total of such
principal amount of Notes and the Prepayment Compensation
with respect to such principal amount shall be equal to
such 1993 Warrant Forced Exercise Net Proceeds Amount),
together with interest on such Notes accrued to the date
of prepayment.
(iii) PREPAYMENT WITH OTHER NET PROCEEDS OF
EXERCISE OF 1993 WARRANTS. If at any time prior to the
occurrence of a 1993 Warrant Call Option Event the 1993
Warrant Exercise Adjusted Net Proceeds Amount shall
exceed $1,000,000, the Company shall, upon notice as
provided in Section 4.4(d), prepay a principal amount of
the Notes equal to 93.457944% of the 1993 Warrant
Exercise Adjusted Net Proceeds Amount determined as of
the date of such notice, plus the Prepayment Compensation
with respect to such principal amount (the effect of the
foregoing provisions of this sentence being that the
total of such principal amount of Notes and the
Prepayment Compensation with respect to such principal
amount shall be equal to such 1993 Warrant Exercise
Adjusted Net Proceeds Amount), together with interest on
such Notes accrued to the date of prepayment. It is
understood and agreed that the foregoing provisions of
Section 4.4(b) and this Section 4.4(c) may require more
than one prepayment of the Notes under such Sections, and
may require more than one prepayment of the Notes under
this Section 4.4(c) alone.
(iv) NOTICE OF PREPAYMENT. The Company will
give each holder of Notes written notice of each
prepayment under this Section 4.4 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, a calculation of the related 1993 Warrant Forced
Exercise Net Proceeds Amount or the related 1993 Warrant
Exercise Adjusted Net Proceeds Amount, as the case may
be, in reasonable detail, the aggregate principal amount
of the Notes to be prepaid on such date, the principal
amount of each Note held by such holder to be prepaid
(determined in accordance with Section 4.5), and the
interest to be paid on the prepayment date with respect
to such principal amount being prepaid.
(v) PARENT UNDERTAKING TO MAKE PROCEEDS
AVAILABLE. The Parent will cause all amounts
representing each 1993 Warrant Forced Exercise Net
Proceeds Amount and each 1993 Warrant Exercise Adjusted
Net Proceeds Amount to be made available to the Company
for prepayment of Notes as provided in the foregoing
provisions of this Section 4.4.
(vi) BEST EFFORTS TO PREPAY ANY REMAINING
NOTES. If, following a prepayment of Notes pursuant to
Section 4.4(b), any of the Notes are still outstanding
and the aggregate principal amount of such Notes is
$5,000,000 or less, the Company will use its best efforts
to prepay all of the remaining Notes pursuant to Section
4.3 within 365 days after the occurrence of the 1993
Warrant Call Option Event that led to such prepayment
pursuant to Section 4.4(b) (and, if it is unable to so
prepay all of the remaining Notes by such date, will
continue after such date to use its best efforts to
prepay all of the Notes until such time as the Notes
shall have been paid in full), provided that nothing in
this Section 4.4(f) shall require the Company to borrow
any amount under the Senior Credit Agreement in order to
enable the Company to make a prepayment of Notes
contemplated by this Section 4.4(f).
4.5 ALLOCATION OF PARTIAL PREPAYMENTS.
In the case of each partial prepayment of the Notes
pursuant to Section 4.3 or Section 4.4, the principal
amount of the Notes to be prepaid shall be allocated
among all of the Notes at the time outstanding in
proportion, as nearly as practicable, to the respective
unpaid principal amounts thereof not theretofore prepaid.
4.6 CHANGE IN CONTROL, OFFER TO PREPAY, ETC.
(i) NOTICE OF CHANGE IN CONTROL OR CONTROL
EVENT. The Company will, within three Business Days
after any Responsible Officer of the Parent or the
Company 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 (by telecopy transmission and, simultaneously with
the sending of such telecopied notice, by sending a copy
of such notice to each such holder via an overnight
courier of national reputation) 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 clause (b) of this Section 4.6. If the
Company shall not have received a written response to
such first notice from each holder of Notes within ten
days after the transmission of such telecopy thereof,
then the Company will immediately send a second written
notice via an overnight courier of national reputation to
each holder of Notes who shall have not previously
responded to the Company. If a Change in Control has
occurred, such notices shall contain and constitute an
offer to prepay Notes as described in clause (c) of this
Section 4.6 and shall be accompanied by the certificate
described in clause (g) of this Section 4.6.
(ii) CONDITION TO COMPANY ACTION. Neither the
Parent nor the Company will 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
clause (c) of this Section 4.6, accompanied by the
certificate described in clause (g) of this Section 4.6,
and (ii) contemporaneously with such action, it prepays
all Notes required to be prepaid in accordance with this
Section 4.6.
(iii) OFFER TO PREPAY NOTES. The offer to
prepay Notes contemplated by clauses (a) and (b) of this
Section 4.6 shall be a written offer to prepay, in
accordance with and subject to this Section 4.6, all, but
not less than all, the Notes held by each holder on a
date specified in such offer (the "PROPOSED PREPAYMENT
DATE"). If such Proposed Prepayment Date is in
connection with an offer contemplated by clause (a) of
this Section 4.6, such date shall be not less than 30
days and not more than 60 days after the date of the
first notice referred to in clause (a) of this Section
4.6 (if the Proposed Prepayment Date shall not be
specified in such first notice, the Proposed Prepayment
Date shall be the 30th day after the date of such
notice).
(iv) ACCEPTANCE, REJECTION. A holder of Notes
may accept the offer to prepay made pursuant to this
Section 4.6 by causing a notice of such acceptance to be
delivered to the Company at least ten days prior to the
Proposed Prepayment Date. A failure by a holder of Notes
to respond (by such time) to an offer to prepay made
pursuant to this Section 4.6 shall be deemed to
constitute an acceptance of such offer by such holder.
(v) PREPAYMENT. Prepayment of the Notes to be
prepaid pursuant to this Section 4.6 shall be at 100% of
the principal amount of such Notes, plus the Prepayment
Compensation for the date of prepayment with respect to
such principal amount, together with interest on such
Notes accrued to the date of prepayment. The prepayment
shall be made on the Proposed Prepayment Date except as
provided in clause (f) of this Section 4.6.
(vi) DEFERRAL PENDING CHANGE IN CONTROL. The
obligation of the Company to prepay Notes pursuant to the
offers required by clause (b) and accepted in accordance
with clause (d) of this Section 4.6 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 does not occur 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
Parent and 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 Parent or 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 4.6 in
respect of such Change in Control shall be deemed
rescinded).
(vii) OFFICER'S CERTIFICATE. Each offer to
prepay the Notes pursuant to this Section 4.6 shall be
accompanied by a certificate, executed by a Senior
Financial Officer of the Company and dated the date of
such offer, specifying: (i) the Proposed Prepayment Date;
(ii) that such offer is made pursuant to this
Section 4.6; (iii) the principal amount of each Note
offered to be prepaid; (iv) the Prepayment Compensation,
as of the Proposed Prepayment Date, with respect to the
principal amount of each Note offered to be prepaid; (v)
the interest that would be due on each Note offered to be
prepaid, accrued to the Proposed Prepayment Date;
(vi) that the conditions of this Section 4.6 have been
fulfilled; and (vii) in reasonable detail, the nature and
date or proposed date of the Change in Control.
(viii) COMPANY'S OPTION TO FORCE ACCEPTANCE.
Notwithstanding the foregoing provisions of this Section
4.6, in the case of a Change in Control pursuant to
clause (a) of the definition of Change in Control in
connection with which Xx. Xxxxxx has disposed of all of
his Capital Stock, 1993 Warrants and other equity
interests in the Parent (but not less than all of such
Capital Stock, 1993 Warrants and other equity interests),
if each notice to holders of Notes contemplated by clause
(a) of this Section 4.6 that (pursuant to such clause
(a)) contains and constitutes an offer to prepay Notes
contains the following written statement, then each
holder of Notes shall be required to accept, and, upon
delivery of all (but not fewer than all) such notices
containing such express written statement, all of the
holders of Notes shall be deemed to have accepted, for
all purposes of this Section 4.6, the offer to prepay
Notes referred to in the foregoing provisions of this
Section 4.6:
"THE COMPANY HEREBY EXERCISES ITS OPTION,
PURSUANT TO SECTION 4.6(H) OF THE NOTE AND
STOCK PURCHASE AGREEMENTS, TO REQUIRE EACH
HOLDER OF NOTES TO ACCEPT, AND UPON DELIVERY OF
ALL REQUISITE NOTICES CONTAINING THIS EXPRESS
WRITTEN STATEMENT OF EXERCISE OF SUCH OPTION
ALL OF THE HOLDERS OF NOTES SHALL BE DEEMED TO
HAVE ACCEPTED, FOR ALL PURPOSES OF SECTION 4.6
OF THE NOTE AND STOCK PURCHASE AGREEMENTS, THE
OFFER TO PREPAY NOTES REFERRED TO IN THE
PROVISIONS OF SECTION 4.6 OF THE NOTE AND STOCK
PURCHASE AGREEMENTS AND CONTAINED IN AND
CONSTITUTED BY THIS NOTICE."
4.7 MATURITY, SURRENDER, ETC.
In the case of each prepayment of Notes pursuant to
this Section 4, 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 Prepayment Compensation, 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 Prepayment Compensation, 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.
4.8 PURCHASE OF NOTES.
Neither the Parent, the Company nor LaSalle will,
nor will they permit any Affiliate to, purchase, redeem,
prepay or otherwise acquire, directly or indirectly, any
of the outstanding Notes except upon the payment or
prepayment of the Notes in accordance with the terms of
the Note and Stock Purchase Agreements and the Notes.
The Company will promptly cancel all Notes acquired by
any Obligor pursuant to any payment, prepayment or
purchase of Notes pursuant to any provision of the Note
and Stock Purchase Agreements, and no Notes may be issued
in substitution or exchange for any such Notes.
4.9 PLACE OF PAYMENT.
Subject to Section 4.10, payments of principal,
Prepayment Compensation, if any, and interest becoming
due and payable on the Notes shall be made in Buffalo,
New York at the principal office of the Company 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 the State of New
York or the principal office of a bank or trust company
in the State of New York.
4.10 HOME OFFICE PAYMENT.
So long as you or your nominee shall be the holder
of any Note, and notwithstanding anything contained in
Section 4.9 or in such Note to the contrary, the Company
will pay all sums becoming due on such Note for
principal, Prepayment Compensation, if any, and interest
by the method and at the address specified for such
purpose below your name in Annex 1, 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 4.9. Prior to any sale or
other disposition of any Note held by you or your nominee
you will, at your election, either endorse thereon the
amount of principal paid thereon and the last date to
which interest has been paid thereon or surrender such
Note to the Company in exchange for a new Note or Notes
pursuant to Section 5.2. The Company will afford the
benefits of this Section 4.10 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 4.10.
5. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
5.1 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 or cause to be given 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.
5.2 TRANSFER AND EXCHANGE OF NOTES.
Upon surrender of any Note at the principal
executive office of (or other place designated by the
Company in a written notice delivered to all holders of
Notes, so long as such place is an office of the Company
or the Parent located in the State of New York) the
Company for registration of transfer or exchange (and in
the case of a surrender for registration of transfer,
duly endorsed or accompanied by a written instrument of
transfer duly executed by the registered holder of such
Note or his attorney duly authorized in writing and
accompanied by the address for notices of each transferee
of such Note or part thereof), the Company shall execute
and deliver, at the Company's expense (except as provided
below), one or more new Notes (as requested by the holder
thereof) in exchange therefor, in an aggregate principal
amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to
such Person as such holder may request and shall be
substantially in the form of Exhibit A. 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 $250,000, 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 $250,000.
5.3 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
(i) in the case of loss, theft or destruction,
of indemnity reasonably satisfactory to the Company
(provided that if the holder of such Note is, or is a
nominee for, an original Purchaser or another beneficial
owner of a Note with a minimum net worth of at least
$100,000,000, such beneficial owner's own unsecured
agreement of indemnity shall be deemed to be
satisfactory), or
(ii) in the case of mutilation, upon surrender
and cancellation thereof,
the Company at its own expense shall execute and deliver,
in lieu thereof, a new Note, dated and bearing interest
from the date to which interest shall have been paid on
such lost, stolen, destroyed or mutilated Note or dated
the date of such lost, stolen, destroyed or mutilated
Note if no interest shall have been paid thereon.
6. AFFIRMATIVE COVENANTS
The Parent, the Company and LaSalle covenant and
agree (provided that the Company and LaSalle covenant and
agree only as to themselves and their respective
Subsidiaries, if any) that on and after the Closing Date
and thereafter for so long as any of the Company's
obligations under the Note and Stock Purchase Agreements
and the Notes shall be outstanding:
6.1 OWNERSHIP STRUCTURE.
(i) The Parent will at all times maintain the
Company as a Wholly-Owned Subsidiary of the Parent.
(ii) Subject to Section 7.7(b), the Company
will at all times maintain LaSalle as a Wholly-Owned
Subsidiary of the Company.
6.2 MAINTENANCE OF PROPERTIES, CONDUCT OF BUSINESS.
The Obligors will, and will cause each of their
respective Subsidiaries to, in a manner consistent with
their respective past practices, 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 (a) this Section
shall not prevent the Obligors or any of their respective
Subsidiaries from discontinuing the operation and the
maintenance of any of their respective Properties if such
discontinuance is desirable in the conduct of such
Person's business and such Person has concluded that such
discontinuance could not, individually or in the
aggregate, reasonably be expected to have a Material
Adverse Effect and (b) nothing in this Section shall be
construed to adversely affect the rights of any holders
of Senior Debt with respect to any Property constituting
collateral securing such Senior Debt. The Company and
LaSalle will, and will cause each of their respective
Subsidiaries to, continue to engage in businesses of the
same general types as conducted as of the Closing Date
(as disclosed in the Memorandum) by the Company and
LaSalle.
6.3 COMPLIANCE WITH LAW.
The Obligors will, and will cause each of their
respective Subsidiaries to, comply with all laws,
ordinances or governmental rules or regulations to which
each of them is subject, including, without limitation,
Environmental Laws and the Fair Labor Standards Act of
1938, as amended, 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.
6.4 BOOKS AND RECORDS.
The Obligors will, and will cause each of their
respective Subsidiaries to, keep proper books of record
and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to the
Obligors' and such Subsidiaries' businesses and activities.
6.5 CORPORATE EXISTENCE, ETC.
The Obligors will at all times preserve and keep in
full force and effect their respective corporate
existences. Subject to Sections 7.7 and 7.8, the
Obligors will at all times preserve and keep in full
force and effect the corporate existence of each of their
respective Subsidiaries and all rights and franchises of
the Obligors and their respective Subsidiaries unless, in
the good faith judgment of any such Obligor, 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.
6.6 PAYMENT OF TAXES AND CLAIMS.
The Obligors will, and will cause each of their
respective 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 an
Obligor or any Subsidiary of an Obligor, provided that no
Obligor and no Subsidiary of an Obligor need pay any such
tax or assessment or claims if (a) the amount,
applicability or validity thereof is contested by such
Obligor or such Subsidiary on a timely basis in good
faith and in appropriate proceedings, and such Obligor or
such Subsidiary has established adequate reserves
therefor in accordance with GAAP on the books of such
Obligor or such Subsidiary or (b) the nonpayment of all
such taxes, assessments, charges and levies in the
aggregate could not reasonably be expected to have a
Material Adverse Effect.
6.7 INSURANCE.
The Obligors will, and will cause each of their
respective 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.
6.8 GUARANTIES BY SUBSIDIARIES.
If the Company or LaSalle at any time forms or
acquires a Subsidiary, or in any other manner commences
to have a Subsidiary that is not at such time already a
Guarantor under a Subsidiary Guaranty Agreement, the
Company or LaSalle, as the case may be, will cause such
Subsidiary to execute and deliver to each holder of one
or more Notes (not later than the earlier of (x) 30 days
after such formation, acquisition or other commencing to
have or (y) the date on which such Subsidiary becomes a
guarantor of, or otherwise becomes contingently or
otherwise directly or indirectly in respect of, any
Senior Debt) an original guaranty agreement (the LaSalle
Guaranty Agreement and any such other guaranty agreement,
as the same may be amended, restated or otherwise
modified from time to time, being referred to herein
collectively as the "SUBSIDIARY GUARANTY AGREEMENTS"),
substantially in the form of the LaSalle Guaranty
Agreement, and such other resolutions, agreements,
documents and instruments as the Required Holders may
reasonably request in connection with such Subsidiary
Guaranty Agreement. If any Senior Debt is outstanding at
such time, then, except as may be otherwise approved in
writing by the Company or LaSalle, as the case may be,
and the appropriate majority of holders of Senior Debt
(as may be required under the Senior Credit Agreement, or
as otherwise provided for in the Senior Credit
Agreement), each such Subsidiary Guaranty Agreement shall
contain subordination provisions in the form set out in
Section 5 of the LaSalle Guaranty Agreement as in effect
on the Closing Date.
7. NEGATIVE COVENANTS
The Parent, the Company and LaSalle covenant and
agree (provided that the Company and LaSalle covenant and
agree only as to themselves and their respective
Subsidiaries, if any) that on and after the Closing Date
and thereafter for so long as any of the Company's
obligations under the Note and Stock Purchase Agreements
and the Notes shall be outstanding:
7.1 NO AMENDMENTS, ETC. RE 1993 WARRANTS.
Except with the prior written consent of the holders
of at least 80% in principal amount of the Notes at the
time outstanding (exclusive of Notes then owned by the
Parent, the Company, LaSalle or any of their respective
Subsidiaries or Affiliates), the Parent will not agree to
extend the expiration date of the 1993 Warrants beyond
August 13, 2000 or otherwise permit any amendment,
restatement or other modification of the terms of the
1993 Warrant Agreement or the 1993 Warrants.
7.2 AMENDMENT OF SENIOR CREDIT AGREEMENT.
Neither the Parent, the Company nor LaSalle will
enter into any agreement amending or modifying any
provision of the Senior Credit Agreement that would:
(i) accelerate the amount or the time of any
prepayment or payment of the principal amount of
Indebtedness outstanding under the Senior Credit
Agreement;
(ii) provide for per annum interest rates
payable on the Indebtedness outstanding under the Senior
Credit Agreement (except for the Chattanooga Mortgage
Loan Agreement) at any time in excess of 1.00% over the
per annum interest rates that would otherwise be payable
on such Indebtedness at such time in accordance with the
applicable provisions of the Senior Credit Agreement as
in effect on the Closing Date; or
(iii) (A) result in the event of default
provisions and covenant provisions (including,
without limitation, any definitions relating to the
foregoing), taken as a whole, being materially less
favorable to the Company or LaSalle than the event
of default provisions and covenant provisions
(including, without limitation, any definitions
relating to the foregoing), taken as a whole, set
forth in the Senior Credit Agreement on the Closing
Date; or
(B) reduce the commitment of the lenders
under the Senior Credit Agreement to provide
revolving credit loans to the Company or LaSalle; or
(C) provide for conditions precedent to
the obligation of the lenders under the Senior
Credit Agreement to provide revolving credit loans
to the Company or LaSalle from time to time
(including, without limitation, any definitions
relating to the foregoing), which conditions, taken
as a whole, are materially less favorable to the
Company or LaSalle than the conditions precedent
(including, without limitation, any definitions
relating to the foregoing), taken as a whole, set
forth in the Senior Credit Agreement as in effect on
the Closing Date;
without, in each case, obtaining the prior written
consent of the Required Holders to such amendment or
change; provided that nothing in this Section 7.2 shall
be construed to restrict any amendment or modification of
the Senior Credit Agreement that has the purpose of
permitting Incurrences of Senior Debt in excess of the
amount of such Incurrences permitted by Section 7.3(a)
but not in excess of the additional amount of such
Incurrences permitted by Section 7.3(b).
7.3 INDEBTEDNESS.
Neither the Company nor LaSalle will, nor will they
permit any of their respective Subsidiaries to, directly
or indirectly create, incur, assume or otherwise become
liable for, any Indebtedness (collectively,
"INCURRENCES") except:
(i) Senior Debt, provided that, immediately
after giving effect to any Incurrence of Senior Debt
under this clause (a), the outstanding aggregate
principal amount of Senior Debt under this clause (a)
shall not exceed the Adjusted Base Senior Debt Cap;
(ii) Senior Debt in addition to the Senior
Debt permitted under the foregoing clause (a), provided
that:
(A) the outstanding aggregate principal
amount of all Senior Debt Incurred under this clause
(b) shall at no time exceed $101,500,000 minus the
Base Senior Debt Cap; and
(B) immediately after giving effect to
any Incurrence of Senior Debt under this clause (b),
the outstanding aggregate principal amount of all
Senior Debt (whether or not Incurred under this
clause (b)) shall not exceed the lesser of
(I) $101,500,000 minus the Senior
Debt Reduction Amount at such time, or
(II) the product of (1) four
multiplied by (2) Consolidated EBITDA
(calculated giving effect to Pro Forma
Adjustments, if any) for the then most recently
ended period of four consecutive fiscal
quarters of the Company;
(iii) the Indebtedness evidenced by the Notes,
the LaSalle Guaranty Agreement and any other Subsidiary
Guaranty Agreement;
(iv) Indebtedness of the Company to LaSalle or
of LaSalle to the Company;
(v) Indebtedness in existence on the Closing
Date that is described in Part A.16 of Annex 3;
(vi) Indebtedness in addition to the
Indebtedness permitted under the foregoing clauses (a)
through (e), inclusive, provided that, immediately after
giving effect to any Incurrence of Indebtedness under
this clause (f), the outstanding aggregate principal
amount of Indebtedness under this clause (f) shall not
exceed $5,000,000;
(vii) Indebtedness in addition to the
Indebtedness permitted under the foregoing clauses (a)
through (f), inclusive, provided that, immediately after
giving effect to any Incurrence of Indebtedness under
this clause (g), Consolidated Indebtedness shall not
exceed the product of (A) five multiplied by (B)
Consolidated EBITDA (calculated giving effect to Pro
Forma Adjustments, if any) for the then most recently
ended period of four consecutive fiscal quarters of the
Company; and
(viii) Indebtedness as to which 100% of the
proceeds of the Incurrence thereof is used by the Company
or any Subsidiary of the Company concurrently with such
Incurrence to extend (as to time of maturity), refund,
refinance or replace Indebtedness that was previously
Incurred by such Person pursuant to clause (b) or clause
(g) of this Section 7.3, provided that (i) the principal
amount of any Indebtedness that is Incurred under this
clause (h) shall not exceed the principal amount of the
Indebtedness being so extended, refunded, refinanced or
replaced with the proceeds thereof, and (ii) the terms
and provisions of all instruments, agreements and other
documents governing or otherwise relating to any
Indebtedness that is Incurred under this clause (h) shall
not be more onerous to the Company or any of its
Subsidiaries than the terms and provisions of the
instruments, agreements and other documents governing or
otherwise relating to the Indebtedness being so extended,
refunded, refinanced or replaced.
For the purpose of any determination of compliance with
clause (b) or clause (g) of this Section 7.3, it shall be
assumed that (whether or not it is actually the case
that) the maximum permissible principal amount of
Indebtedness under clause (a) and clause (f) of this
Section 7.3 is outstanding at the time of such
determination.
7.4 LIENS.
Neither the Company nor LaSalle will, nor will they
permit any of their respective Subsidiaries to, create,
incur, assume or suffer to exist, any Lien upon any of
their respective Properties, whether now owned or
hereafter acquired, except:
(i) Liens for taxes not yet due or that are
being contested in good faith and by appropriate
proceedings if adequate reserves with respect thereto in
accordance with GAAP are maintained on the books of the
Person contesting such taxes;
(ii) carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in
the ordinary course of business in connection with
payments that are not overdue for a period of more than
30 days or that are being contested in good faith and by
appropriate proceedings;
(iii) pledges or deposits in connection with
workmen's compensation, unemployment insurance and other
social security legislation;
(iv) deposits to secure the performance of
bids, trade contracts (other than for borrowed money),
leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(v) Liens arising from judgments described
under Section 9(i) that do not constitute an Event of
Default;
(vi) Liens securing Senior Debt created under
the terms of the Senior Security Documents;
(vii) leases or subleases granted to others,
easements, rights-of-way, restrictions and other similar
charges or encumbrances affecting real Property, in each
case incidental to, and not interfering with, the
ordinary conduct of the business of the Company, LaSalle
or any such Subsidiary, provided that such Liens do not,
in the aggregate, materially detract from the value of
such Property;
(viii) any Lien created to secure all or any
part of the purchase price, or to secure Indebtedness
incurred or assumed to pay all or any part of the
purchase price or cost of construction, of Property (or
any improvement thereon) acquired or constructed by the
Company or any of its Subsidiaries after the Closing
Date, provided that
(A) any such Lien shall extend solely to
the item or items of such Property (or improvement
thereon) so acquired or constructed and, if required
by the terms of the instrument originally creating
such Lien, other Property (or improvement thereon)
which is an improvement to or is acquired for
specific use in connection with such acquired or
constructed Property (or improvement thereon) or
which is real Property being improved by such
acquired or constructed Property (or improvement
thereon),
(B) the principal amount of the
Indebtedness secured by any such Lien shall at no
time exceed an amount equal to the lesser of (A) the
cost to the Company or such Subsidiary of the
Property (or improvement thereon) so acquired or
constructed and (B) the Fair Market Value (as
determined in good faith by the Company) of such
Property (or improvement thereon) at the time of
such acquisition or construction, and
(C) any such Lien shall be created
contemporaneously with, or within 60 days after, the
acquisition or construction of such Property; and
(ix) Liens, not otherwise permitted by clauses
(a) through (h), inclusive, of this Section 7.4, provided
that the aggregate amount of Indebtedness secured by all
such other Liens under this clause (i) shall not at any
time exceed $5,000,000.
7.5 NET WORTH.
The Company will not permit the Consolidated Net
Worth of the Company and its Subsidiaries, as of the last
day of any calendar month, to be less than the sum of the
following: (a) $8,000,000, plus (b) 50% of the positive
Consolidated Net Income of the Company and its
Subsidiaries from the Closing Date through the then most
recently concluded calendar month, plus (c) all of the
cumulative net proceeds realized by the Company or
LaSalle from the issuance or sale of any Capital Stock or
other equity interests in the Company or LaSalle from the
Closing Date through the then most recently concluded
calendar month (provided that nothing in this clause (c)
shall be construed to permit non-compliance with Section
6.1 without the prior written consent of the Required
Holders).
7.6 INTEREST COVERAGE.
The Company will not permit, as of the last day of
any calendar quarter, the Consolidated Interest Coverage
Ratio of the Company and its Subsidiaries measured for
the four consecutive calendar quarters (or for the number
of consecutive calendar quarters following the Closing
Date to the date of such determination, if during the
period commencing with the Closing Date and ending on the
one year anniversary thereof) ending on the last day of
such calendar quarter to be less than
(i) for any period ending before or on
December 31, 1998, 1.35 to 1.0, or
(ii) for any period ending after December 31,
1998, 1.5 to 1.0.
7.7 PROHIBITION ON FUNDAMENTAL CHANGES.
Neither the Company nor LaSalle will, nor will they
permit any of their respective Subsidiaries to, make or
permit to be made any material change in the character or
conduct of the business or operations of the Company,
LaSalle or any such Subsidiary, including any merger or
consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or
dissolution), convey, sell, lease, transfer or otherwise
dispose of, in one transaction or a series of
transactions, all or substantially all of the business or
assets of the Company, LaSalle or any such Subsidiary or
acquire by purchase or otherwise all or substantially all
the business or assets of, or capital stock or other
evidences of beneficial ownership of, any Person, or make
any material change in the Company's, LaSalle's or any
such Subsidiary's present method of conducting business,
except:
(i) any Subsidiary of the Company (other than
LaSalle) or any Subsidiary of LaSalle may merge into any
other Subsidiary of the Company or of LaSalle or with any
parent of such Subsidiary (so long as the parent is the
survivor of such merger);
(ii) LaSalle may merge into the Company so
long as the Company is the survivor of such merger; and
(iii) the Company, LaSalle or any of their
respective Subsidiaries may acquire the assets or Capital
Stock of any Subsidiary of the Company or LaSalle,
provided that immediately after giving effect to such
acquisition no Default or Event of Default exists or
would exist.
Nothing in this Section 7.7 shall be construed to
prohibit a conveyance, sale, lease, transfer or other
disposition of all or any portion of the Property of any
Subsidiary of the Company, or of all or any portion of
the Capital Stock issued by any Subsidiary of the
Company, so long as such conveyance, sale, lease,
transfer or other disposition is effected in full
compliance with Section 7.8.
7.8 ASSET DISPOSITIONS.
Except as permitted under Section 7.7(c), the
Company will not, and will not permit any of its
Subsidiaries to, make any Asset Disposition unless:
(i) in the good faith opinion of the Company,
such Asset Disposition is in exchange for consideration
having a Fair Market Value not less than that of the
Property exchanged and is in the best interest of the
Company or such Subsidiary; and
(ii) immediately before, and immediately after
giving effect to, such Asset Disposition, no Default or
Event of Default exists or would exist.
In addition, if after giving effect to any Asset
Disposition,
(A) the Disposition Value of all Property
that was the subject of any Asset Disposition
occurring in the fiscal year of the Company then
next ending exceeds 10% of Consolidated Total
Assets, determined as of the end of the then most
recently completed fiscal quarter of the Company,
(B) the Disposition Value of all Property
that was the subject of any Asset Disposition
occurring during the period commencing on the
Closing Date and ending on and including the date of
such Asset Disposition exceeds 30% of Consolidated
Total Assets, determined as of the end of the then
most recently completed fiscal quarter of the
Company,
(C) the sum of the EBITDA Contribution
Percentages of all Property that was the subject of
any Asset Disposition occurring in the fiscal year
of the Company then next ending exceeds 10%, or
(D) the sum of the EBITDA Contribution
Percentages of all Property that was the subject of
any Asset Disposition occurring during the period
commencing on the Closing Date and ending on and
including the date of such Asset Disposition exceeds
30%,
then the Company and its Subsidiaries shall be required
to apply the Net Proceeds Amount with respect to such
Asset Disposition to (y) a Senior Debt Payment
Application or (z) a Property Reinvestment Application,
in each case within six months after such Asset
Disposition; provided that in no event shall the Company
or any of its Subsidiaries make any Asset Disposition if,
immediately after giving effect to such Asset
Disposition,
(I) the Disposition Value of all
Property that was the subject of any Asset
Disposition occurring in the fiscal year of the
Company then next ending would exceed 20% of
Consolidated Total Assets, determined as of the
end of the then most recently completed fiscal
quarter of the Company,
(II) the Disposition Value of all
Property that was the subject of any Asset
Disposition occurring during the period
commencing on the Closing Date and ending on
and including the date of such Asset
Disposition would exceed 40% of Consolidated
Total Assets, determined as of the end of the
then most recently completed fiscal quarter of
the Company,
(III) the sum of the EBITDA
Contribution Percentages of all Property that
was the subject of any Asset Disposition
occurring in the fiscal year of the Company
then next ending would exceed 20%, or
(IV) the sum of the EBITDA
Contribution Percentages of all Property that
was the subject of any Asset Disposition
occurring during the period commencing on the
Closing Date and ending on and including the
date of such Asset Disposition would exceed
40%.
7.9 LOANS, ADVANCES AND INVESTMENTS.
Neither the Company nor LaSalle will, nor will they
permit any of their respective Subsidiaries to, make, or
commit to make, any advance, loan, extension of credit or
capital contribution to, or purchase of any Capital
Stock, bonds, notes, debentures or other securities of,
or make any other investment in (by way of transfers of
Property, acquisitions of evidences of Indebtedness or
otherwise), any Person (all such transactions being
herein called "INVESTMENTS"), except:
(i) advance payments or deposits against
purchases made in the ordinary course of business of the
Company, LaSalle or any such Subsidiary;
(ii) (i) direct obligations of the United
States of America or any agency thereof with maturities
of one year or less from the date of acquisition, (ii)
commercial paper of a domestic issuer rated at least
"A-1" by Standard & Poor's Ratings Group or "P-1" by
Xxxxx'x Investors Services, Inc., (iii) time deposits and
certificates of deposit with maturities of one year or
less from the date of acquisition issued by any
commercial bank having capital and surplus in excess of
$250,000,000, and (iv) repurchase obligations within a
term of not more than 30 days for underlying securities
of the types described in clauses (i), (ii) and (iii),
above and entered into with any commercial bank meeting
the qualifications specified in clause (iii) above;
(iii) Investments existing on the Closing Date
that are disclosed in Part 7.9(c) of Annex 3;
(iv) advances outstanding to employees of the
Company, LaSalle and their respective Subsidiaries that
do not exceed, in the aggregate, $350,000 at any time;
(v) advances by the Company to LaSalle and
advances by LaSalle to the Company;
(vi) Investments in any Person that
concurrently with such Investment becomes a Subsidiary of
the Company or LaSalle; and
(vii) other Investments, not otherwise
permitted by clause (a) through (f), inclusive, of this
Section 7.9, provided that the aggregate amount of all
such other Investments (valued at cost less any net
return of capital through the sale or liquidation thereof
or other return of capital thereon) shall not at any time
exceed $2,500,000.
7.10 DIVIDENDS, ETC.
Neither the Company nor LaSalle will, nor will they
permit any of their respective Subsidiaries to, declare
or pay Dividends to any Person that is not the Company,
LaSalle or any of their respective Subsidiaries; provided
that nothing in this Section 7.10 shall be deemed to
prohibit any one or more of the Company, LaSalle and
their respective Subsidiaries from at any time declaring
or paying any Dividend or from at any time making any
payment (in the form of a Dividend or otherwise) in
respect of operating charges or management fees assessed
by the Parent to the extent the aggregate amount of all
such payments of Dividends or for operating charges
and/or management fees made or declared during the period
commencing January 1, 1997 and ending immediately after
giving effect to such payment or declaration does not
exceed 50% of Consolidated Net Income for such period;
provided, further, that nothing in this Section 7.10
(including the limitation expressed in the immediately
preceding proviso) shall be deemed to prohibit any one or
more of the Company, LaSalle and their respective
Subsidiaries from at any time declaring or paying any
Dividend or from at any time making any payment (in the
form of a Dividend or otherwise) in respect of operating
charges or management fees assessed by the Parent to the
extent the aggregate amount of all such payments of
Dividends or for operating charges and/or management fees
made or declared does not exceed, in any Fiscal Year,
$1,350,000.
7.11 AFFILIATE TRANSACTIONS.
Neither the Company nor LaSalle will, nor will they
permit any of their respective Subsidiaries to, directly
or indirectly, enter into, renew or extend any
transaction (including, without limitation, the purchase,
sale, lease or exchange of Property or assets, or the
rendering of any service) with any Affiliate (other than
Wholly-Owned Subsidiaries of the Company), except upon
fair and reasonable terms no less favorable to the
Company, LaSalle or such Subsidiary than could be
obtained, at the time of such transaction or, if such
transaction is pursuant to a written agreement, at the
time of the execution of the agreement providing
therefor, in a comparable arms'-length transaction with a
Person that is not an Affiliate.
7.12 PARENT HOLDING COMPANY.
The Parent will not at any time before the 1993
Warrant Provisions Termination Date own any Property or
assets other than:
(i) the Capital Stock of the Company;
(ii) Capital Stock of any other Person that at
such time is a direct or indirect Subsidiary of the
Parent;
(iii) Property or assets in the form of cash,
cash equivalents or any Investments in intangibles (other
than intangibles constituted by Capital Stock or other
equity interests in any Person if such Person is a
general partnership or other entity the holders of such
Capital Stock or other equity interests of which are not,
pursuant to applicable law, ordinarily protected from
being liable in respect of the liabilities of such
Person); and
(iv) Property or assets in the form of
tangibles (excluding the Property or assets referred to
in the immediately preceding clause (c)) held by the
Parent, provided that the aggregate amount of all such
Property and assets (valued at book value in accordance
with GAAP) does not at any time exceed $2,500,000.
7.13 INDEBTEDNESS, ETC. OF THE PARENT.
The Parent will not at any time before the 1993
Warrant Provisions Termination Date create, incur, assume
or suffer to exist any Indebtedness of the Parent for
borrowed money (including, without, limitation, any
Guaranty by the Parent of Indebtedness for borrowed
money), if the principal amount of such Indebtedness for
borrowed money equals or exceeds $1,000,000, unless the
terms of such Indebtedness expressly provide, for the
third-party benefit of the holders of the Notes, that any
and all 1993 Warrant Exercise Net Proceeds Amounts
realized by or on behalf of the Parent as a result of any
exercise of 1993 Warrants shall be available exclusively
for purposes of prepayment of the Notes pursuant to
Section 4.4 of the Note and Stock Purchase Agreements.
In no event will the Parent at any time before the 1993
Warrant Provisions Termination Date enter into any
agreement, or otherwise become bound by the provisions of
any agreement, instrument or other document, that
restricts the ability of the Parent to satisfy its
obligation, pursuant to Section 4.4, to make any 1993
Warrant Exercise Net Proceeds Amount available solely for
the purpose of the prepayment of Notes by the Company in
accordance with Section 4.4. For the purposes of the
foregoing, the Senior Credit Agreement as in effect on
the Closing Date and as the Senior Credit Agreement
(other than Section 6.5 of the Senior Credit Agreement,
as in effect on the Closing Date) may be amended in
accordance with Section 7.2, and the Parent's Guaranty of
the Company's Indebtedness under the Senior Credit
Agreement as such Guaranty is in effect on the Closing
Date, shall not be deemed to breach this Section 7.13;
the Chattanooga Mortgage shall not be deemed to breach
this Section 7.13 so long as it does not restrict the
ability of the Parent to satisfy its obligation, pursuant
to Section 4.4, to make any 1993 Warrant Exercise Net
Proceeds Amount available solely for the purpose of the
prepayment of Notes by the Company in accordance with
Section 4.4.
8. INFORMATION COVENANTS
The Parent, the Company and LaSalle covenant and
agree that on and after the Closing Date and thereafter
for so long as any of the Company's obligations under the
Note and Stock Purchase Agreements and the Notes shall be
outstanding:
8.1 FINANCIAL AND BUSINESS INFORMATION.
The Company and the Parent shall deliver to each
holder of Notes that is an Institutional Investor:
(i) QUARTERLY STATEMENTS -- within 45 days
after the end of each quarterly fiscal period in each
fiscal year (other than the last quarterly fiscal period
of each such fiscal year) of the Parent or the Company,
as the case may be, duplicate copies of,
(A) (I) a consolidated balance sheet of
the Parent and its Subsidiaries and
(II) consolidated and consolidating
balance sheets of the Company and its
Subsidiaries,
in each case as at the end of such quarter, and
(B) (I) consolidated statements of
income, changes in shareholders' equity and
cash flows of the Parent and its Subsidiaries
and
(II) consolidated and consolidating
statements of income, changes in shareholders'
equity and cash flows of the Company and its
Subsidiaries,
in each case 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 of the Parent or the Company, as the case may be,
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;
(ii) ANNUAL STATEMENTS -- within 90 days after
the end of each fiscal year of the Company or the Parent,
as the case may be, duplicate copies of,
(A) (I) a consolidated balance sheet of
the Parent and its Subsidiaries and
(II) consolidated and consolidating
balance sheets of the Company and its
Subsidiaries,
in each case as at the end of such fiscal year, and
(B) (I) consolidated statements of
income, changes in shareholders' equity and
cash flows of the Parent and its Subsidiaries
and
(II) consolidated and consolidating
statements of income, changes in shareholders'
equity and cash flows of the Company and its
Subsidiaries,
in each case for such year,
setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP, and accompanied
by
(A) in the case of such consolidated
statements, 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
(B) a certificate of such
accountants stating that they have reviewed
this Agreement and stating further whether, in
making their audit, they have become aware of
any condition or event that then constitutes a
Default or an Event of Default, and, if they
are aware that any such condition or event then
exists, specifying the nature and period of the
existence thereof (it being understood that
such accountants shall not be liable, directly
or indirectly, for any failure to obtain
knowledge of any Default or Event of Default
unless such accountants should have obtained
knowledge thereof in making an audit in
accordance with generally accepted auditing
standards or did not make such an audit);
(c) SEC AND OTHER REPORTS -- promptly upon
their becoming available, one copy of (i) each financial
statement, report (including, without limitation, the
Company's annual report to shareholders, if any, prepared
pursuant to Rule 14a-3 under the Exchange Act), notice or
proxy statement sent by the Parent 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 Parent or any Subsidiary with the Securities
and Exchange Commission or any successor thereto and of
all press releases and other statements made available
generally by the Parent 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 Business Days
after a Responsible Officer of the Parent or the Company
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 under
any Financing Document 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 9.1(f), a
written notice specifying the nature and period of
existence thereof and what action the Parent or the
Company is taking or proposes to take with respect
thereto;
(e) ERISA MATTERS -- promptly, and in any
event within five Business Days after a Responsible
Officer of the Company or the Parent becoming aware of
any of the following, a written notice setting forth the
nature thereof and the action, if any, that the Parent or
an ERISA Affiliate 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 Closing Date; 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 Parent 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 Parent 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 15 days of receipt
thereof, copies of any notice to the Parent or any
Subsidiary from any federal or state Governmental
Authority relating to any order, ruling, statute or other
law or regulation that could reasonably be expected to
have a Material Adverse Effect;
(g) ACTIONS, PROCEEDINGS -- promptly after a
Responsible Officer of the Parent or the Company becomes
aware of the commencement thereof, notice of any action
or proceeding relating to the Parent or any Subsidiary in
any court or before any Governmental Authority or
arbitration board or tribunal as to which there is a
reasonable possibility of an adverse determination and
that, if adversely determined, could reasonably be
expected to have a Material Adverse Effect;
(h) CHANGES IN MANAGEMENT, OWNERSHIP AND
CONTROL -- promptly, and in any event within five
Business Days after a Responsible Officer of the Company
or the Parent becoming aware of any substantial change in
the employment status, duties or responsibilities of Xx.
Xxxxxx, Xx. Xxxxxxx Xxxxxxxx or Mr. Xxxxx Xxxxxx with
respect to their employment with any Obligor, such
Obligor shall provide to each holder of Notes a
certificate executed by a Responsible Officer of such
Obligor specifying such changes;
(i) RULE 144A -- promptly upon request, to any
holder of Notes and any "qualified institutional buyer"
(as defined in Rule 144A) to whom any Note may be offered
or sold by such holder, the information required under
paragraph (d)(4) of Rule 144A (or any similar successor
provision of Rule 144A) to permit compliance with Rule
144A in connection with a resale of such Note;
(j) REQUESTED INFORMATION DELIVERED TO SENIOR
LENDERS -- promptly upon request, to any holder of Notes,
copies of any financial statements or other data and
information as may from time to time be provided (or that
is required to be provided) to any of the lenders, or the
agent therefor, under the Senior Credit Agreement; and
(k) OTHER REQUESTED INFORMATION -- with
reasonable promptness, such other data and information
relating to the business, operations, affairs, financial
condition or Properties of the Parent, the Company,
LaSalle or any of their respective Subsidiaries or
relating to the ability of the Obligors to perform their
obligations under the Financing Documents as from time to
time may be reasonably requested by any such holder of
Notes.
8.2 OFFICER'S CERTIFICATE.
Each set of financial statements delivered to a
holder of Notes pursuant to Section 8.1(a) or Section
8.1(b) shall be accompanied by a certificate of a Senior
Financial Officer of the Parent or the Company, as the
case may be, setting forth:
(a) COVENANT COMPLIANCE -- the information
(including detailed calculations) required in order to
establish whether the Parent and the Company were in
compliance with the requirements of Sections 7.3 through
7.10, inclusive, and Section 7.12 during the quarterly or
annual period covered by the statements then being
furnished (including with respect to each such Section,
where applicable, the calculations of the maximum or
minimum amount, ratio or percentage, as the case may be,
permissible under the terms of such Sections, and the
calculation of the amount, ratio or percentage then in
existence); and
(b) EVENT OF DEFAULT -- a statement that such
officer has reviewed the relevant terms hereof and has
made, or caused to be made, under his or her supervision,
a review of the transactions and conditions of the
Parent, the Company, LaSalle and their respective
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 has not 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
Parent, the Company, LaSalle or any of their respective
Subsidiaries to comply with any Environmental Law),
specifying the nature and period of existence thereof and
what action the Parent or the Company shall have taken or
proposes to take with respect thereto.
8.3 INSPECTION.
The Parent, the Company and LaSalle 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 Parent, to visit the
principal executive office of the Parent, the Company or
LaSalle, to discuss the affairs, finances and accounts of
the Parent, the Company, LaSalle and their respective
Subsidiaries with the Parent's, the Company's or
LaSalle's officers, and (with the consent of the Parent,
the Company or LaSalle, which consent will not be
unreasonably withheld) their respective independent
public accountants, and (with the consent of the Parent,
the Company or LaSalle, which consent will not be
unreasonably withheld) to visit the other offices and
Properties of the Parent, the Company, LaSalle and each
Subsidiary, all at such reasonable times during normal
business hours and as often as may be reasonably
requested in writing and in a manner so as not to
materially interfere with the conduct of the business of
the Parent, the Company, LaSalle and such Subsidiaries;
and
(b) DEFAULT -- if a Default or Event of
Default then exists, at the expense of the Parent, the
Company and LaSalle, to visit and inspect any of the
offices or Properties of the Parent, the Company, LaSalle
or any of their respective Subsidiaries, 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 Parent, the
Company and LaSalle authorize said accountants to discuss
the affairs, finances and accounts of the Parent, the
Company, LaSalle and their respective Subsidiaries), all
at such times and as often as may be requested.
9. 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 Prepayment Compensation, 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 days after the
same becomes due and payable; or
(c) any Obligor defaults in the performance of
or compliance with any term contained in any of Sections
7.1 through 7.13, inclusive, or Section 8.1(d); or
(d) any Obligor defaults in the performance of
or compliance with any term contained in any Financing
Document (other than those terms referred to in
paragraphs (a), (b) and (c) of this Section 9) and such
default is not remedied within 30 days after the earlier
of (i) a Responsible Officer of an Obligor obtaining
actual knowledge of such default and (ii) any Obligor
receiving written notice of such default from any holder
of a Note; or
(e) any representation or warranty made in
writing by or on behalf of any Obligor or by any officer
of any Obligor in any Financing Document or in any
writing furnished in connection with the transactions
contemplated by any Financing Document proves to have
been false or incorrect in any material respect on the
date as of which made or deemed made; or
(f) (i) any Obligor or any Subsidiary thereof
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 (other than Indebtedness under the
Financing Documents) beyond any period of grace
provided with respect thereto, or
(ii) any Obligor or any Subsidiary
thereof is in default in the performance of or
compliance with any term of any evidence of any
Indebtedness (other than Indebtedness under the
Financing Documents), 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
(iii) as a consequence of the occurrence
or continuation of any event or condition, any
Obligor or any Subsidiary thereof has become
obligated to purchase or repay Indebtedness before
its regular maturity or before its regularly
scheduled dates of payment;
provided that the aggregate amount of Indebtedness with
respect to which one or more of the conditions or events
referred to in one or more of clauses (i), (ii) and
(iii) of this Section 9(f) exceeds $5,000,000; or
(g) any Obligor or any Significant Subsidiary
thereof (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 any of the Obligors or any of their
respective 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 any Obligor or any Significant Subsidiary
thereof, or any such petition shall be filed against any
Obligor or any Significant Subsidiary thereof 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 $100,000 are
rendered against one or more of the Obligors and their
respective Subsidiaries and which judgments are not,
within 60 days after entry thereof, bonded, discharged or
stayed pending appeal, or are not discharged within 60
days after the expiration of such stay; or
(j) if
(i) any Plan shall fail to satisfy the
minimum funding standards of ERISA or the Code for
any plan year or part thereof or a waiver of such
standards or extension of any amortization period is
sought or granted under section 412 of the Code, or
(ii) a notice of intent to terminate any
Plan shall have been or is reasonably expected to be
filed with the PBGC or the PBGC shall have
instituted proceedings under ERISA section 4042 to
terminate or appoint a trustee to administer any
Plan or the PBGC shall have notified any Obligor or
any ERISA Affiliate that a Plan may become a subject
of any such proceedings, or
(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
$100,000, or
(iv) any Obligor 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, or
(v) any Obligor or any ERISA Affiliate
withdraws from any Multiemployer Plan, or
(vi) any Obligor or any Subsidiary
thereof establishes or amends any employee welfare
benefit plan that provides post-employment welfare
benefits in a manner that would increase the
liability of such Obligor or such Subsidiary
thereunder,
and any such event or events described in clauses (i)
through (vi) above, either individually or together with
any other such event or events, could reasonably be
expected to have a Material Adverse Effect (as used in
this Section 9(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);
or
(k) any Financing Document shall cease to be
in full force and effect (other than in accordance with
its terms) or shall be declared by a court or
Governmental Authority of competent jurisdiction to be
void, voidable or unenforceable against any one or more
Obligors party thereto, or any Obligor asserts any of the
foregoing in writing or before any court or Governmental
Authority.
10. REMEDIES ON DEFAULT, ETC.
10.1 ACCELERATION.
(a) If an Event of Default with respect to the
Company described in paragraph (g) or (h) of Section 9
(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 9 has occurred and is
continuing, any holder or holders of Notes at the time
outstanding affected by such Event of Default may at any
time, at its or their option, by notice or notices to the
Company, declare all the Notes held by it or them to be
immediately due and payable.
Subject to the provisions of Section 11, upon any Notes
becoming due and payable under this Section 10.1, whether
automatically or by declaration, such Notes will
forthwith mature and the entire unpaid principal amount
of such Notes, plus (x) all accrued and unpaid interest
thereon and (y) the Prepayment Compensation 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 Prepayment Compensation 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.
10.2 OTHER REMEDIES.
Subject to the provisions of Section 11, 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 10.1, 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 in any Financing
Document, or for an injunction against a violation of any
of the terms of any Financing Document, or in aid of the
exercise of any power granted by any Financing Document
or by law or otherwise.
10.3 RESCISSION.
At any time after any Notes have been declared due
and payable pursuant to clause (b) or (c) of Section
10.1, the holders of not less than 51% 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 Prepayment Compensation, 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 Prepayment Compensation, 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 16, 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 10.3 will extend to or affect any
subsequent Event of Default or Default or impair any
right consequent thereon.
10.4 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 any Financing
Document 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 14, the Company
will pay to the holder of each Note on demand such
further amount as shall be sufficient to cover all costs
and expenses of such holder incurred in any enforcement
or collection under this Section 10, including, without
limitation, reasonable attorneys' fees, expenses and
disbursements.
11. SUBORDINATION
11.1 GENERAL.
The Subordinated Debt is subordinate and junior in
right of payment to all Senior Debt to the extent
provided in this Section 11.
11.2 INSOLVENCY, ETC.
In the event of:
(a) any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition or
other similar proceeding relating to the Company, its
creditors or its Property,
(b) any proceeding for the liquidation,
dissolution or other winding-up of the Company, voluntary
or involuntary, whether or not involving insolvency or
bankruptcy proceedings,
(c) any assignment by the Company for the
benefit of creditors, or
(d) any other marshalling of the assets of the Company,
all Senior Debt shall first be paid in full before any
payment or distribution, whether in cash, Securities or
other Property, shall be made to any holder of any
Subordinated Debt on account of any Subordinated Debt.
Any payment or distribution, whether in cash, Securities
or other Property (other than Securities of the Company
or any other corporation provided for by a plan or
reorganization or readjustment the payment of which is
subordinated, at least to the extent provided in this
Section 11 with respect to Subordinated Debt, to the
payment in full of all Senior Debt at the time
outstanding and to any Securities issued in respect
thereof under any such plan or reorganization or
readjustment), that would otherwise (but for this Section
11) be payable or deliverable in respect of Subordinated
Debt shall be paid or delivered directly to the holders
of Senior Debt in accordance with the priorities then
existing among such holders until all Senior Debt
(including any interest thereon accruing at the contract
rate after the commencement of any such proceedings)
shall have been paid in full.
Each holder of Subordinated Debt shall duly and
promptly take such action as is reasonably necessary to
file appropriate claims or proofs of claims in any of the
proceedings referred to above in this Section 11.2 and to
execute and deliver such other instruments and take such
other actions as may be reasonably necessary to prove or
realize upon such claims and to have the proceeds of such
claims paid as provided in this Section 11.2, and, in the
event any holder of Subordinated Debt shall not have made
any such filing on or prior to the date 10 days before
the expiration of the time for such filing or shall not
have timely executed or delivered any such other
instruments and taken such other actions, the holders of
Senior Debt, acting through an agent or otherwise, are
hereby irrevocably authorized and empowered (but shall
have no obligation) to, as the agent and attorney-in-fact
for such holder for the specific and limited purpose set
forth in this paragraph, file such proof of claim for or
on behalf of such holder, execute and deliver such other
instrument for or on behalf of such holder and take such
other action necessary under applicable law to collect
any amounts due in respect of such claim in such
proceeding. Anything contained in this paragraph
notwithstanding, the right to vote any claim or claims in
respect of any Subordinated Debt in connection with any
proceedings referred to above in this Section 11.2 is
exclusively reserved to the holder of such Subordinated
Debt.
11.3 BLOCKAGE OF PAYMENTS ON SUBORDINATED DEBT.
(a) SENIOR DEBT PAYMENT DEFAULT. In the event
that the Company shall default in the payment of any
principal of, premium, if any, or interest on, or any
fees in respect of, any Senior Debt when the same shall
have become due and payable, whether at maturity, at a
date fixed for prepayment or otherwise, then, unless and
until such default shall have been cured or waived in a
writing received by the Company or shall have ceased to
exist or all such payments shall have been made in full
or the stated maturity of the Senior Debt shall have been
accelerated, no direct or indirect payment or
distribution of any kind or character (in cash,
Securities or other Property or otherwise) shall be made
or agreed to be made on or in respect of any Subordinated
Debt. All payments in respect of the Subordinated Debt
postponed under this Section 11.3(a) shall be immediately
due and payable upon the termination of such postponement
(together with such additional interest as is provided
herein and in the Notes for late payment of principal,
Prepayment Compensation and/or interest); the remittance
in full of such payments by the Company in accordance
with the terms of the Financing Documents and the
acceptance thereof by the holders of the Notes shall be
deemed to constitute a cure by the Company and/or a
waiver by the holders of the Notes of any Event of
Default that existed immediately prior to such remittance
and acceptance to the extent that such Event of Default
existed solely as a consequence of the previous non-
payment of such postponed payments during such period of
postponement.
(b) ACCELERATION OF SENIOR DEBT. In the event
that the holders of any Senior Debt shall declare such
Senior Debt to be due and payable prior to its stated
maturity in accordance with the Senior Credit Agreement,
no payment or distribution of any kind or character
(whether in cash, Securities or other Property) shall be
made on or in respect of any Subordinated Debt, and no
holder of Subordinated Debt shall take or receive from
the Company, directly or indirectly, in cash, Securities
or other Property or by way of set-off or in any other
manner, payment of all or any of the Subordinated Debt
until the earlier of (i) the payment in full of such
Senior Debt or (ii) the rescission or termination of such
declaration by the appropriate majority of holders of
Senior Debt, as required under the Senior Credit
Agreement, or as otherwise provided for in the Senior
Credit Agreement or effected by operation of applicable
law. All payments in respect of the Subordinated Debt
postponed under this Section 11.3(b) shall be immediately
due and payable upon the termination of such postponement
(together with such additional interest as is provided
herein and in the Notes for late payment of principal,
Prepayment Compensation and/or interest); the remittance
in full of such payments by the Company in accordance
with the terms of the Financing Documents and the
acceptance thereof by the holders of the Notes shall be
deemed to constitute a cure by the Company and/or a
waiver by the holders of the Notes of any Event of
Default that existed immediately prior to such remittance
and acceptance to the extent that such Event of Default
existed solely as a consequence of the previous non-
payment of such postponed payments during such period of
postponement.
(c) SENIOR DEBT EVENT OF DEFAULT. In the
event and during the continuance of any "Event of
Default" (after the expiration of any grace period in
respect thereof and the giving of any notice with respect
thereto) under, and as defined in, the Senior Credit
Agreement (a "SENIOR DEBT EVENT OF DEFAULT") and before
the declaration of the Senior Debt to be due and payable
prior to its stated maturity, the holders of such Senior
Debt acting through an agent or otherwise may give to the
Company written notice referring to the Notes and this
Agreement and specifying that it is a notice of a Senior
Debt Event of Default (a "SENIOR DEBT EVENT OF DEFAULT
NOTICE") and, thereafter, no payment or distribution of
any kind or character (whether in cash, Securities or
other Property) shall be made on or in respect of any
Subordinated Debt, and no holder of Subordinated Debt
shall take or receive from the Company, directly or
indirectly, in cash, Securities or other Property or by
way of set-off or in any other manner, payment of all or
any of the Subordinated Debt during the period (a "SENIOR
DEBT EVENT OF DEFAULT BLOCKAGE PERIOD") commencing on the
date of receipt by the Company of such notice and ending
on the earliest of (i) the date of the repayment in full
of such Senior Debt, (ii) the date on which such Senior
Debt shall have been declared due and payable prior to
its stated maturity, (iii) the date on which such Senior
Debt Event of Default shall have been cured or waived and
written notice thereof received by the Company from the
holders of the Senior Debt acting through an agent or
otherwise, (iv) the date on which such holders of such
Senior Debt, acting through an agent or otherwise, shall
have delivered to the Company and each holder of
Subordinated Debt a notice referring to the Notes and the
immediately preceding Senior Debt Event of Default Notice
and stating that such Senior Debt Event of Default Notice
has been withdrawn, or (v) the 180th day following the
giving of such Senior Debt Event of Default Notice
pursuant to this Section 11.3(c). Any number of Senior
Debt Event of Default Notices may be given, provided that
(A) only one Senior Debt Event of Default Notice may be
given with respect to any single occurrence of a Senior
Debt Event of Default, (B) no Senior Debt Event of
Default Notice may be given in respect of any Senior Debt
Event of Default that was continuing during a previous
Senior Debt Event of Default Blockage Period, (C) no
Senior Debt Event of Default Notice shall be effective at
any time to prevent any payment from being made by or on
behalf of the Company for or on account of any
Subordinated Debt (and any such Senior Debt Event of
Default Notice shall be or become null and void ab
initio) if, within the 360-day period ending immediately
prior to the date on which such Senior Default Notice
shall have been delivered to the Company and each holder
of Subordinated Debt, a Senior Debt Event of Default
Blockage Period was in effect for all or part of such
period and (D) not more than five Senior Debt Event of
Default Blockage periods may be imposed under this
Section 11.3(c) during the term of the Notes. All
payments in respect of the Subordinated Debt postponed
during any Senior Debt Event of Default Blockage Period
shall be immediately due and payable upon the termination
thereof (together with such additional interest at the
Default Rate as is provided herein and in the Notes); the
remittance in full of such payments by the Company in
accordance with the terms of the Financing Documents and
the acceptance thereof by the holders of the Notes shall
be deemed to constitute a cure by the Company and/or a
waiver by the holders of the Notes of any Event of
Default that existed immediately prior to such remittance
and acceptance to the extent that such Event of Default
existed solely as a consequence of the previous non-
payment of such postponed payments during such period of
postponement.
(d) ACCELERATION OF SUBORDINATED DEBT. In the
event that any Subordinated Debt is declared due and
payable before its stated maturity, then and in such
event the holders of Senior Debt outstanding at the time
such Subordinated Debt so becomes due and payable shall
be entitled to receive payment in full on all amounts due
or to become due on or in respect of such Senior Debt,
before the Company may make, and before any holder of
Subordinated Debt is entitled to receive, any payment or
distribution of assets of the Company of any kind or
character, whether in cash, Securities or other Property
on account of any Subordinated Debt. All payments in
respect of the Subordinated Debt postponed under this
Section 11.3(d) shall be immediately due and payable upon
the termination of such postponement (together with such
additional interest as is provided herein and in the
Notes for late payment of principal, Prepayment
Compensation and/or interest); the remittance in full of
such payments by the Company in accordance with the terms
of the Financing Documents and the acceptance thereof by
the holders of the Notes shall be deemed to constitute a
cure by the Company and/or a waiver by the holders of the
Notes of any Event of Default that existed immediately
prior to such remittance and acceptance to the extent
that such Event of Default existed solely as a
consequence of the previous non-payment of such postponed
payments during such period of postponement.
(e) NOTICE BY COMPANY. The Company shall give
prompt written notice to each holder of Subordinated Debt
of its receipt of any notice received by it from any
holder of Senior Debt (or any agent acting on its behalf)
under this Section 11.3. The Company shall include with
each notice being given to a holder of Subordinated Debt
under this clause (e) a copy of the applicable notice
received by the Company from any holder or holders of
Senior Debt (or any agent acting on its or their behalf).
All such notices and copies shall be delivered by the
Company as provided for in Section 17.
11.4 SUBORDINATED DEBT PAYMENTS AND REMEDIES.
Nothing contained in this Section 11 shall prevent
the Company from making, or any holder of Subordinated
Debt from accepting, at any time except as expressly
provided in Section 11.2 and Section 11.3, payments of
principal of (and Prepayment Compensation, if any) or
interest on the Notes and other payments in respect
thereof in accordance with the terms thereof. Nothing
contained in this Section 11 is intended to or shall
prevent any holder of Subordinated Debt from exercising
any rights or remedies provided by applicable law, at
equity, hereunder or under the Notes upon a Default or
Event of Default, subject to the rights under the
provisions of Section 11.2 and Section 11.3 of the
holders of Senior Debt to receive cash, Securities or
other Property otherwise payable or deliverable to the
holders of Subordinated Debt, provided that, the
foregoing notwithstanding, no holder of Subordinated Debt
may declare, or join in the declaration of, any
Subordinated Debt to be due and payable prior to its
stated maturity or to otherwise accelerate the maturity
of the principal of its Notes, accrued interest thereon
or Prepayment Compensation or other amounts due
thereunder, or commence, or join in any commencement of,
any administrative, legal or equitable action against the
Company, at any time during any period not in excess of
180 days in respect of which payment on the Subordinated
Debt shall have been suspended pursuant to Section
11.3(a) or Section 11.3(c); for the avoidance of doubt,
the holders of Subordinated Debt may take the actions
referred to in the immediately preceding proviso at any
time when any suspension period in respect of Section
11.3(a) or Section 11.3(c) shall exceed 180 days (or at
any time when any such suspension period shall have ended
if it shall have continued for less than 180 days).
11.5 TURNOVER OF PAYMENTS.
If:
(a) any payment or distribution shall be
collected or received by any holders of Subordinated Debt
in contravention of any of the terms of this Section 11
and prior to the payment in full of the Senior Debt at
the time outstanding; and
(b) any holder of such Senior Debt shall have
notified such holders of Subordinated Debt, within 180
days of any such payment or distribution, of the facts by
reason of which such collection or receipt so contravenes
this Section 11;
then such holders of Subordinated Debt will deliver such
payment or distribution, to the extent necessary to pay
all such Senior Debt in full, to the holders of such
Senior Debt and, until so delivered, the same shall be
held in trust by such holders of Subordinated Debt as the
Property of the holders of such Senior Debt. If after
any amount is delivered to the holders of Senior Debt
pursuant to this Section 11.5, whether or not such amount
has been applied to the payment of Senior Debt, the
outstanding Senior Debt shall thereafter be paid in full
by the Company or otherwise other than pursuant to this
Section 11.5, the holders of Senior Debt shall return to
such holders of Subordinated Debt an amount equal to the
amount delivered to such holders of Senior Debt pursuant
to this Section 11.5 (net of the amount, if any, so
applied to the payment of such Senior Debt).
11.6 OBLIGATIONS NOT IMPAIRED.
No present or future holder of any Senior Debt shall
be prejudiced in the right to enforce the subordination
of the Subordinated Debt by any act or failure to act on
the part of the Company. Nothing contained in this
Section 11 shall impair, as between the Company and any
holder of Subordinated Debt, the obligation of the
Company, which is absolute and unconditional, to pay to
such holder the principal thereof and Prepayment
Compensation, if any, and interest thereon as and when
the same shall become due and payable in accordance with
the terms of this Agreement, or prevent any holder of any
Subordinated Debt from exercising all rights, powers and
remedies otherwise permitted by applicable law or under
this Agreement, all subject to the rights of the holders
of the Senior Debt to receive cash, Securities or other
Property otherwise payable or deliverable to the holders
of Subordinated Debt.
11.7 PAYMENT OF SENIOR DEBT; SUBROGATION.
Upon the payment in full of all Senior Debt, the
holders of Subordinated Debt shall be subrogated to all
rights of any holder of Senior Debt to receive any
further payments or distributions applicable to the
Senior Debt until the Subordinated Debt shall have been
paid in full, and such payments or distributions received
by the holders of Subordinated Debt by reason of such
subrogation, of cash, Securities or other Property that
otherwise would be paid or distributed to the holders of
Senior Debt shall, as between the Company and its
creditors other than the holders of Senior Debt, on the
one hand, and the holders of Subordinated Debt, on the
other hand, be deemed to be a payment by the Company on
account of Senior Debt and not on account of Subordinated
Debt.
11.8 RELIANCE OF HOLDERS OF SENIOR DEBT.
Each holder of Subordinated Debt by its acceptance
thereof shall be deemed to acknowledge and agree that the
foregoing subordination provisions are, and are intended
to be, an inducement to and a consideration of each
holder of any Senior Debt, whether such Senior Debt was
created or acquired before or after the creation of
Subordinated Debt, to acquire and hold, or to continue to
hold, such Senior Debt, and such holder of Senior Debt
shall be deemed conclusively to have relied on such
subordination provisions in acquiring and holding, or in
continuing to hold, such Senior Debt.
11.9 SECURITY.
Each holder of Subordinated Debt agrees with and for
the benefit of each holder of Senior Debt, but not with
or for the benefit of the Company, that until the Senior
Debt is paid in full, it will not take any actions to
obtain or accept, without the consent of the holders of
Senior Debt, any Lien upon any assets of the Company or
any of its Subsidiaries.
11.10 CHANGES IN HOLDERS OF SENIOR DEBT.
Upon the Company's being informed of any new holder
of Senior Debt, the Company shall promptly inform the
holders of Subordinated Debt of the names and addresses
of such new holders. Upon the Company's being informed
of the change in the addresses of any holder or holders
of Senior Debt, the Company shall promptly inform the
holders of Subordinated Debt of the same.
12. INTERPRETATION OF AGREEMENT
12.1 TERMS DEFINED.
As used herein, the following terms have the
respective meanings set forth below or set forth in the
Section hereof following such term:
ACQUISITION -- means the acquisition by the Company
of the outstanding Capital Stock of LaSalle pursuant to
the Acquisition Documents.
ACQUISITION AGREEMENT -- means the Stock Purchase
Agreement, dated April 18, 1997, by and among the Parent,
the Company and Quanex, as the same may be modified from
time to time.
ACQUISITION DOCUMENTS -- is defined in Section B.6.
ADJUSTED BASE SENIOR DEBT CAP -- means, at any time,
the result of (a) the Base Senior Debt Cap, minus (b) the
Senior Debt Reduction Amount at such time.
AFFILIATE -- means at any time, and with respect to
any Person (other than a Purchaser),
(a) any other Person that at such time
directly or indirectly through one or more intermediaries
Controls, or is Controlled by, or is under common Control
with, such first Person,
(b) any Person beneficially owning or holding,
directly or indirectly, 10% or more of any class of
voting or equity interests of the Parent, the Company or
any of their respective Subsidiaries or any corporation
of which the Parent, the Company and their respective
Subsidiaries beneficially own or hold, in the aggregate,
directly or indirectly, 10% or more of any class of
voting or equity interests, and
(c) any Person who is an officer or director
of such Person, or any member of the immediate family of
such officer of director.
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 Parent.
AGREEMENT, THIS -- is defined in Section 16.
ASSET DISPOSITION -- means any Transfer except:
(a) any Transfer from a Subsidiary of the
Company to the Company or to a Wholly-Owned Subsidiary of
the Company, so long as immediately before and
immediately after the consummation of any such Transfer
and after giving effect thereto, no Default or Event of
Default exists or would exist; and
(b) any Transfer made in the ordinary course
of business (or, in the case of subclause (ii), as would
generally be considered customary or prudent in the case
of an entity of established reputation engaged in the
same or a similar business and similarly situated) and
involving only Property that is either (i) inventory held
for sale or (ii) equipment, fixtures, supplies or
materials no longer required in the operation of the
business of the Company or any of its Subsidiaries or
that is obsolete.
BASE SENIOR DEBT CAP -- means, at any time,
$91,500,000.
BUSINESS DAY -- means 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.
CAPITALIZED LEASE -- of any Person means any lease
the obligations under which have been, or in accordance
with GAAP are required to be, recorded on the books of
such Person as a capital lease liability.
CAPITAL STOCK -- means any class of capital stock,
share capital or similar equity interest of a Person.
CHANGE IN CONTROL -- means the occurrence of any one
or more of the following events or circumstances:
(a) a Tag-Along Trigger Event (as defined in
the Stockholders Agreement) shall have occurred,
provided, that in the event of the death of Xx. Xxxxxx,
this clause (a) shall not be effective, and shall cease
to be of any further force or effect thereafter;
(b) any "person," as such term is used in
sections 13(d) and 14(d) of the Exchange Act (other than
(i) the Parent, (ii) any trustee or other fiduciary
holding securities under an employee benefit plan of the
Parent, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities,
(iv) any corporation owned, directly or indirectly, by
the stockholders of the Parent in substantially the same
proportions as their ownership of Parent Common Stock,
(v) Xxxxxxx Xxxxxx, (vi) the Xxxxxx Family Trusts, or
(vii) Xx. Xxxxxx (each an "excluded person")), is or
becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of
securities of the Parent representing 20% or more of the
combined voting power of the Parent's then outstanding
voting securities;
(c) during any period of not more than two
consecutive years, individuals who at the beginning of
such period constitute the board of directors of the
Parent, and any new director (other than a director
designated by a person who has entered into an agreement
with the Parent to effect a transaction described in
clause (b), (c), or (e) of this definition) whose
election by such board of nomination for election by the
Parent's stockholders was approved by a vote of at least
two-thirds of the directors then still in office who
either were directors at the beginning of such period or
whose election or nomination for election was previously
so approved (other than approval given in connection with
an actual or threatened proxy or election contest), cease
for any reason to constitute at least a majority of such
board;
(d) the stockholders of the Parent approve a
merger or consolidation of the Parent with any other
corporation or other Person, other than (i) a merger or
consolidation that would result in the voting securities
of the Parent outstanding immediately prior thereto
continuing to represent (either by remaining outstanding
or by being converted into voting securities of the
surviving or parent entity) 80% or more of the combined
voting power of the voting securities of the Parent or
such surviving or parent entity outstanding immediately
after such merger or consolidation or (ii) a merger or
consolidation effected to implement a recapitalization of
the Parent (or similar transaction) in which no "person"
(as defined in clause (b) of this definition) other than
an "excluded person" (as defined in clause (b) of this
definition) acquired 20% or more of the combined voting
power of the Parent's then outstanding securities;
(e) the stockholders of the Parent approve a
plan of complete liquidation of the Parent or an
agreement for the sale or disposition by the Parent of
all or substantially all of the Parent's assets (or any
other transaction having a similar effect); or
(f) the Company ceases to be a Wholly-Owned
Subsidiary of the Parent.
CHATTANOOGA MORTGAGE LOAN AGREEMENT -- means a
mortgage loan agreement or deed of trust and any related
agreements, guarantees, documents and instruments to be
executed and delivered by either one or both of the
Company and the Parent in favor of M&T providing for a
term loan in an aggregate principal amount not in excess
of $1,500,000 to be secured by, among other collateral, a
first Lien on real Property located in Chattanooga,
Tennessee.
CLOSING -- is defined in Section 1.3.
CLOSING DATE -- is defined in Section 1.3.
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 -- is defined in the introductory paragraph.
COMPANY SUBSIDIARY STOCK -- means the Capital Stock
(or any options or warrants to purchase Capital Stock or
other Securities exchangeable for or convertible into any
Capital Stock) of any Subsidiary of the Company.
CONSOLIDATED, CONSOLIDATING or CONSOLIDATED BASIS --
for any Persons, means the consolidation of the accounts
of such Persons in accordance with GAAP, including
principles of consolidation.
CONSOLIDATED CURRENT ASSETS -- means Current Assets
that would be reflected on the Consolidated balance sheet
of the Company and its Subsidiaries in accordance with
GAAP.
CONSOLIDATED CURRENT LIABILITIES -- means Current
Liabilities that would be reflected on the Consolidated
balance sheet of the Company and its Subsidiaries in
accordance with GAAP.
CONSOLIDATED EBITDA -- means, for any period, the
sum for such period of:
(a) Consolidated Net Income of the Company and
its Subsidiaries, plus
(b) the aggregate amount deducted in
determining such Consolidated Net Income representing (i)
all Federal, state and local income taxes of such
Persons, (ii) depreciation and amortization and (iii)
Interest Expense, in each case as determined in
accordance with GAAP.
CONSOLIDATED INDEBTEDNESS -- means Indebtedness that
would be reflected on the Consolidated balance sheet of
the Company and its Subsidiaries in accordance with GAAP.
CONSOLIDATED LIABILITIES -- means Liabilities that
would be reflected on the Consolidated balance sheet of
the Company and its Subsidiaries in accordance with GAAP.
CONSOLIDATED NET INCOME -- means Net Income that
would be reflected on the Consolidated income statement
of the Company and its Subsidiaries in accordance with
GAAP.
CONSOLIDATED NET WORTH -- means Net Worth that would
be reflected on the Consolidated balance sheet of the
Company and its Subsidiaries in accordance with GAAP.
CONSOLIDATED TOTAL ASSETS -- means the total assets
that would be reflected on the Consolidated balance sheet
of the Company and its Subsidiaries in accordance with
GAAP.
CONTROL EVENT -- means:
(a) the execution by Xx. Xxxxxx or any Obligor
or any Subsidiary or Affiliate of any agreement or letter
of intent with respect to any proposed transaction or
event or series of transactions or events that,
individually or in the aggregate, may reasonably be
expected to result in a Change in Control;
(b) the execution of any written agreement
that, when fully performed by the parties thereto, would
result in a Change in Control; or
(c) the making of any written offer to the
holders of any of the Capital Stock of the Parent, which
offer, if, and only if, accepted by the requisite number
of holders, would result in a Change in Control.
CURRENT ASSETS -- means all assets treated as
current assets in accordance with GAAP consistent with
those used in the preparation of the financial statements
referred to in Section 8.1(a) and Section 8.1(b).
CURRENT LIABILITIES -- means all liabilities treated
as current in accordance with GAAP consistent with those
used in the preparation of the financial statements
referred to in Section 8.1(a) and Section 8.1(b).
DEFAULT -- means an event or condition the
occurrence or existence of which would, with the lapse of
time or the giving of notice or both, become an Event of
Default.
DEFAULT RATE -- means a rate of interest per annum
that is the lesser of (a) the highest rate allowed by
applicable law or (b) the greater of (i) 14.5% per annum
or (ii) 2% over the rate of interest publicly announced
by Xxxxxx Guaranty Trust Company of New York (or its
successor) from time to time in New York City as its
"base" or "prime" rate.
DISPOSITION VALUE -- means, at any time, with
respect to any Property,
(a) in the case of Property that does not
constitute Company Subsidiary Stock, the book value
thereof, valued at the time of such disposition in good
faith by the Company, and
(b) in the case of Property that constitutes
Company Subsidiary Stock, an amount equal to that
percentage of book value of the assets of the Subsidiary
of the Company that issued such stock as is equal to the
percentage that the book value of such Company Subsidiary
Stock represents of the book value of all of the
outstanding Capital Stock of such Subsidiary of the
Company (assuming, in making such calculations, that all
securities convertible into such Capital Stock are so
converted and giving full effect to all transactions that
would occur or be required in connection with such
conversion) determined at the time of the disposition
thereof, in good faith by the Company.
DIVIDEND -- with respect to any Person means (a) any
declaration of payment, or payment, of cash, Property,
securities or obligations, to any holder of an equity or
capital interest in such Person (other than a payment
solely in the form of Capital Stock of such Person), or
(b) any payment on account of, or action to set apart
assets for, or action to create a sinking or other
analogous fund for, the purchase, redemption, retirement
or other acquisition of any shares of any class of
Capital Stock of such Person.
DOLLARS and the symbol $ each mean United States of
America dollars.
EBITDA CONTRIBUTION PERCENTAGE -- means, with
respect of any Property that is, or is proposed to be,
the subject of an Asset Disposition, the percentage of
Consolidated EBITDA contributed by such Property during
the period of four consecutive fiscal quarters of the
Company most recently ended prior to the time of such
Asset Disposition.
ENVIRONMENTAL LAW -- 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, with respect to any
Person, any trade or business (whether or not
incorporated) that is treated as a single employer
together with such Person under section 414 of the Code.
EVENT OF DEFAULT -- is defined in Section 9.
EXCHANGE ACT -- means the Securities Exchange Act of
1934, as amended from time to time.
FAIR MARKET VALUE -- means, at any time and with
respect to any Property, the sale value of such Property
that would be realized in an arm's-length sale at such
time between an informed and willing buyer and an
informed and willing seller (neither being under a
compulsion to buy or sell).
FINANCING DOCUMENT -- means each of the Note and
Stock Purchase Agreements, the Notes, the Guaranty
Agreements, and the Stockholders Agreement.
FISCAL YEAR -- any period of 12 consecutive calendar
months ending on the last day of December, or, upon the
prior consent of the Required Holders, any period of 12
consecutive calendar months ending on another date.
GAAP -- the generally accepted accounting principles
applied in the preparation of the audited financial
statements of the Parent, the Company, LaSalle and their
respective Subsidiaries as (a) shall be consistent with
the then-effective principles promulgated or adopted by
the Financial Accounting Standards Board ("FASB") and/or
the American Institute of Certified Public Accountants
("AICPA") and any predecessors and successors thereof, so
as to properly reflect the financial condition, and the
results of operations and changes in financial position
of the Parent, the Company, LaSalle and their respective
Subsidiaries, except that any accounting principle or
practice required to be changed by FASB or AICPA in order
to continue as a generally accepted accounting principle
or practice may be so changed, and (b) shall be concurred
in by the Independent Public Accountants.
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
Parent, the Company, any of their respective
Subsidiaries or any other relevant Person conducts
all or any part of its business, or that asserts
jurisdiction over any Properties of the Parent, the
Company, any of their respective Subsidiaries or any
such other Person, or
(b) any entity exercising executive,
legislative, judicial, regulatory or administrative
functions of, or pertaining to, any such government.
GUARANTOR -- means, at any time, the Parent, LaSalle
or any other Person that at such time is a guarantor with
respect to any of the Indebtedness of the Company under
the Note and Stock Purchase Agreement and the Notes.
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.
GUARANTY AGREEMENTS -- means the Parent Guaranty
Agreement, the LaSalle Guaranty Agreement and, if any,
each other Subsidiary Guaranty Agreement.
HAZARDOUS MATERIALS -- means any and all pollutants,
toxic or hazardous wastes or any other substances that
might pose a hazard to health or safety, the removal of
which may be required or the generation, manufacture,
refining, production, processing, treatment, storage,
handling, transportation, transfer, use, disposal,
release, discharge, spillage, seepage, or filtration of
which is or shall be restricted, prohibited or penalized
by any applicable law (including, without limitation,
asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
HOLDER -- means, with respect to any Note, the
Person in whose name such Note is registered in the
register maintained by the Company pursuant to Section
5.1.
INCURRENCES -- is defined in Section 7.3. The verb
"INCUR" shall have the meaning correlative to the
definition of Incurrences.
INDEBTEDNESS -- of any Person, at a particular time,
means all items that, in conformity with GAAP, would be
classified as liabilities on a balance sheet of such
Person as at such time and that constitute (a)
indebtedness for borrowed money or for the deferred
purchase price of Property or services in respect of
which such Person is liable, contingently or otherwise,
as obligor, guarantor or otherwise, or any commitment by
which such Person assures a credit against loss,
(including, without limitation, all notes payable and
drafts accepted representing extensions of credit and all
obligations evidenced by bonds, debentures, notes or
other similar instruments, including, without limitation,
the Notes and the Senior Debt, but excluding trade
payables incurred in the ordinary course of business
payable within 90 days of the date thereof), (b)
obligations with respect to any conditional sale
agreement or title retention agreement, (c) indebtedness
arising under acceptance facilities, in connection with
surety or other similar bonds, and the outstanding amount
of all letters of credit issued for the account of such
Person and, without duplication, all drafts drawn
thereunder, (d) all liabilities secured by any security
interest in any Property owned by such Person even though
it has not assumed or otherwise become liable for the
payment thereof, (e) obligations under Capitalized Leases
in respect of which such Person is liable, contingently
or otherwise, as obligor, guarantor or otherwise, or in
respect of which obligations such Person assures a
creditor against loss, (f) obligations with respect to
interest rate protection agreements, (g) any asserted
withdrawal liability of any Person or a commonly
controlled entity under a Multiemployer Plan, and (h) any
Guaranty by such Person of any liabilities of any other
Person of the types referred to in the foregoing clauses
(a) through (g). Notwithstanding anything else in this
definition, Indebtedness of any Person shall not include
its liabilities in respect of unsecured trade accounts
payable arising in the ordinary course of business.
INDEPENDENT PUBLIC ACCOUNTANT -- refers to BDO
Xxxxxxx LLP or any other nationally-recognized public
accounting firm selected by the Obligors and consented to
by the Required Holders, such consent not to be
unreasonably withheld.
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.
INTEREST COVERAGE RATIO -- for any period with
respect to any Person, means, the ratio of:
(a) the sum for such period of: (i) Net Income
plus (ii) the aggregate amount deducted in determining
such Net Income representing (x) all Federal, state and
local income taxes of such Person, (y) depreciation and
amortization and (z) Interest Expense, in each case as
determined in accordance with GAAP,
to
(b) Interest Expense for such period.
INTEREST EXPENSE -- for a Person, means, for any
period, the sum of the aggregate interest expense of such
Person for such period in respect of Indebtedness of such
Person, as determined in accordance with GAAP.
INVESTMENTS -- is defined in Section 7.9.
LASALLE -- is defined in the introductory paragraph.
LASALLE GUARANTY AGREEMENT -- is defined in
Attachment A.
LIABILITIES -- of any Person, means, at any time,
all amounts which, in accordance with GAAP, would be
included as liabilities on a balance sheet of such Person
at such time.
LICENSE, LICENSES -- means, individually and
collectively, with respect to a Person, each license,
permit, consent, certificate, certification,
registration, declaration, approval, and filing with any
Governmental Authority or body, or other person or entity
required for or in connection with such Person's
business.
LIEN -- any mortgage, deed of trust, security
interest, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or
preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or
other title retention agreement, any financing lease
having substantially the same economic effect as any of
the foregoing, and the filing of any financing statement
under the Uniform Commercial Code or comparable law of
any jurisdiction other than any financing statement filed
in connection with consignments or leases not intended as
security).
MATERIAL -- means material in relation to the
business, operations, affairs, financial condition,
assets or Properties of the Parent 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 Parent
and its Subsidiaries taken as a whole, or (b) the ability
of any Obligor to perform its obligations under any
Financing Document, or (c) the validity or enforceability
of any Financing Document.
MEMORANDUM -- is defined in Attachment A.
M&T -- means Manufacturers and Traders Trust
Company.
MULTIEMPLOYER PLAN -- means any Plan that is a
"multiemployer plan" (as such term is defined in section
4001(a)(3) of ERISA).
NET INCOME -- of any Person, means, with respect to
any period, all amounts that, in conformity with GAAP,
would be included under net income on an income statement
of such Person for such period.
NET PROCEEDS AMOUNT -- means, with respect to any
Transfer of any Property by any Person, an amount equal
to the difference of
(a) the aggregate amount of the consideration
(valued at the Fair Market Value of such consideration at
the time of the consummation of such Transfer) received
by such Person in respect of such Transfer, minus
(b) all ordinary and reasonable out-of-pocket
costs and expenses actually incurred by such Person in
connection with such Transfer.
NET WORTH -- for any Person, means, at any time, the
amounts that would, in accordance with GAAP, be shown as
shareholders' equity on a balance sheet of such Person at
such time, excluding any positive amount attributable to
(a) any deferred charge or prepaid expense of such
Person, except for any prepaid interest, tax or insurance
premium, (b) any treasury stock of such Person, (c) any
unamortized debt discount or expense of such Person, (d)
any write-up in the value of any asset on the records of
such Person subsequent to the Closing Date, (e) any
Investment of such Person, except for Investments
permitted by Section 7.9, or (f) any Investment of such
Person in any security in a Subsidiary of such Person in
excess of the lesser of the cost or fair market value of
such Security.
1993 WARRANT AGREEMENT -- means the Warrant
Agreement, made as of August 13, 1993, between the Parent
(under its former name, International Metals Acquisition
Corporation) and Continental Stock Transfer & Trust
Company, as warrant agent, as such agreement may be
amended, restated or otherwise modified from time to time
(but subject to Section 7.1).
1993 WARRANT CALL OPTION EVENT -- means any event or
circumstance (including, without limitation, that, as of
any date, the last sales price of the Parent Common Stock
has been at least 181.81% of the then effective exercise
price of the 1993 Warrants on each of 20 consecutive
trading days ending on the third business day prior to
such date) that, pursuant to the terms of the 1993
Warrant Agreement, permits the Parent to exercise its
option under the 1993 Warrant Agreement to call all or a
portion of the 1993 Warrants for redemption.
1993 WARRANT EXERCISE ADJUSTED NET PROCEEDS AMOUNT
-- means, as of any date of determination (whether
before, on or after the occurrence of a 1993 Warrant Call
Option Event), an amount equal to
(a) the aggregate amount of the proceeds paid
to the Parent in respect of the exercise of 1993 Warrants
exercised by or on behalf of the holders of 1993 Warrants
at any time prior to such date of determination, minus
(b) the sum of (i) the aggregate principal
amount of Notes that as of such date of determination
have been prepaid pursuant to Section 4.4(b) or Section
4.4(c), plus (ii) if as of such date of determination any
principal amount of Notes shall have been called for
prepayment pursuant to Section 4.4(b) or Section 4.4(c)
but shall have not yet been prepaid, such principal
amount of Notes called for prepayment but not yet
prepaid, plus (iii) the aggregate amount of the
redemption price required by the terms of the 1993
Warrant Agreement to be paid by the Parent in respect of
any 1993 Warrants called for redemption, and actually
redeemed, by the Parent prior to such date of
determination.
1993 WARRANT FORCED EXERCISE NET PROCEEDS AMOUNT --
means, as of any date of determination after the
occurrence of a 1993 Warrant Call Option Event, an amount
equal to
(a) the aggregate amount of the proceeds
payable to the Parent in respect of the exercise of 1993
Warrants exercised by or on behalf of the holders of 1993
Warrants during the period commencing with the occurrence
of such 1993 Warrant Call Option Event and ending
immediately prior to such date of determination, minus
(b) the aggregate amount of the redemption
price required by the terms of the 1993 Warrant Agreement
to be paid by the Parent in respect of any 1993 Warrants
called for redemption, and actually redeemed, by the
Parent during such period.
1993 WARRANT PROVISIONS TERMINATION DATE -- means
the first date with respect to which both of the
following conditions shall have been satisfied:
(a) on such date no 1993 Warrants (other than
any 1993 Warrants that shall have expired on or before
such date without being exercised and shall not be
subject to exercise in the future) shall remain
outstanding; and
(b) the Company shall have satisfied in full
all of its prepayment obligations pursuant to Sections
4.4(b) and 4.4(c).
1993 WARRANTS -- means the Redeemable Common Stock
Purchase Warrants issued by the Parent pursuant to the
1993 Warrant Agreement.
NOTE AND STOCK PURCHASE AGREEMENTS -- is defined in
Section 1.3.
NOTES -- is defined in Section 1.1.
OBLIGOR -- means any one or more of the Parent, the
Company and LaSalle.
OFFICER'S CERTIFICATE -- means, with respect to any
Person, a certificate of a Senior Financial Officer or of
any other officer of such Person whose responsibilities
extend to the subject matter of such certificate.
OTHER PURCHASERS -- is defined in Section 1.3.
PARENT -- is defined in the introductory paragraph.
PARENT COMMON STOCK -- means
(a) the common stock, stated value $.001 per
share, of the Parent as constituted on the Closing Date,
and
(b) on any date after the Closing Date, any
stock into which such Parent Common Stock shall have been
changed or any stock resulting from any reclassification
of such Parent Common Stock, and all other stock of any
class or classes (however designated) of the Parent the
holders of which have the right, without limitation as to
amount, either to all or to a share of the balance of
current dividends and liquidating dividends after the
payment of dividends and distributions of any shares
entitled to preference.
PARENT GUARANTY AGREEMENT -- is defined in
Attachment A.
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.
PLAN -- means, with respect to any Person, 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 such Person or any ERISA
Affiliate of such Person or with respect to which such
Person or any such ERISA Affiliate may have any
liability.
PREFERRED STOCK -- means any class of Capital Stock
of a Person that is preferred over any other class of
Capital Stock of such Person as to the payment of
dividends or other equity distributions or the payment of
any amount upon liquidation or dissolution of such
Person.
PREPAYMENT COMPENSATION -- means, with respect to
any principal amount of Notes that is to be prepaid on
any date or that has become or is declared to be
immediately due and payable on any date pursuant to
Section 10, as the context requires, an amount equal to
the Applicable Percentage of such principal amount of
Notes. As used in this definition, "APPLICABLE
PERCENTAGE" means:
(a) in the case of any prepayment of Notes
pursuant to Section 4.3, or in the case of any Notes that
have become or been declared to be immediately due and
payable pursuant to Section 10, as the context requires,
the Table Percentage determined as of such date (provided
that nothing in this definition or elsewhere in this
Agreement shall be construed to permit a prepayment of
Notes pursuant to Section 4.3 prior to August 13, 2000,
unless a 1993 Warrant Call Option Event shall have
occurred and a prepayment of Notes pursuant to Section
4.4(b) shall have been effected);
(b) in the case of any prepayment of Notes
pursuant to Section 4.4, 7.0%; and
(c) in the case of any prepayment of Notes
pursuant to Section 4.6, the greater of (i) the Table
Percentage determined as of such date or (ii) 7.0%.
As used in this definition, "TABLE PERCENTAGE" means, as
of any date, the applicable percentage set forth with
respect to such date in the following table:
IF SUCH DATE IS THEN THE APPLICABLE
PERCENTAGE IS
before or on August 13, 12.5%
2001
after August 13, 2001 9.375%
but before or on August
13, 2002
after August 13, 2002 6.25%
but before or on August
13, 2003
after August 13, 2003 3.125%
but before or on April 18,
2004
after April 18, 2004 0.0%
PRO FORMA ADJUSTMENTS -- means, as applicable, and
in connection with any determination at any time under
Section 7.3(b)(ii) or Section 7.3(g) of Consolidated
EBITDA for the then most recently ended period of four
consecutive fiscal quarters of the Company, adjustments
on a pro forma basis to Consolidated EBITDA for such
period of four consecutive fiscal quarters, as follows:
if an Acquisition (as defined below) shall have been
completed during such period (or after the end of such
period but at or before such time of determination), the
results of operations of the Person that was the subject
of an Acquisition shall be included in the determination
of such Consolidated EBITDA; provided that, for the
purposes of this definition, any such Acquisition shall
be deemed to have occurred immediately prior to the
beginning of such period of four consecutive fiscal
quarters, and any Indebtedness Incurred to finance any
such Acquisition shall be deemed to have been incurred
immediately prior to the beginning of such period. For
purposes of this definition, "ACQUISITION" means any
acquisition, directly or indirectly, by the Company or
any of its Subsidiaries, after the Closing Date, of any
Capital Stock or other equity interests of a Person that
concurrently with such acquisition becomes a Subsidiary
of the Company, or all or substantially all of the assets
of a Person.
PROPERTY -- means, unless otherwise specifically
limited, real or personal property of any kind, tangible
or intangible, xxxxxx or inchoate.
PROPERTY REINVESTMENT APPLICATION -- means, with
respect to any Transfer of Property, the application of
an amount equal to the Net Proceeds Amount with respect
to such Transfer to the acquisition by the Company or any
of its Subsidiaries of other Property to be used in the
lines of business of the Company and its Subsidiaries
permitted by this Agreement (including, without
limitation, Property constituted by Capital Stock of any
Person that with such application becomes a Subsidiary of
the Company and engages in such lines of business).
PROPOSED PREPAYMENT DATE -- is defined in Section
4.6(c).
PTCE 95-60 -- is defined in Section 13.2.
PURCHASER -- means each Person identified in Annex
as a purchaser of one or more Notes and shares of
Purchaser Shares.
PURCHASER SHARES -- is defined in Section 1.2.
QPAM EXEMPTION -- means Prohibited Transaction Class
Exemption 84-14 issued by the United States Department of
Labor.
QUANEX -- means Quanex Corporation, a Delaware
corporation.
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
Parent, the Company or any of their respective
Subsidiaries or Affiliates).
REQUIREMENT OF LAW -- with respect to any matter or
Person means any law, rule, regulation, order, decree or
other requirement having the force of law relating to
such matter or Person, and, where applicable, any
interpretation thereof by any authority having
jurisdiction with respect thereto or charged with the
administration thereof.
RESPONSIBLE OFFICER -- means, with respect to any
Person, any Senior Financial Officer and any other
officer of such Person with responsibility for the
administration of the relevant portion of this Agreement.
RULE 144A -- means Rule 144A promulgated under the
Securities Act, as such rule may be amended from time to
time.
XXXXXX FAMILY TRUSTS -- means the Xxxxxxx X. Xxxxxx
1987 Grantor Income Trust, the Xxxxxx Family 1989 Trust
or any other trust, so long as, in each case, more than
50% of the beneficial interests in each such trust are
held for the benefit of one or more of Xx. Xxxxxx,
Xxxxxxx Xxxxxx and individuals who are members, by blood
or by marriage, of the respective families of Xx. Xxxxxx
and Xxxxxxx Xxxxxx.
XXXXXX, MR. -- means Xxxxxxx X. Xxxxxx.
SECURITIES ACT -- means the Securities Act of 1933,
as amended from time to time.
SECURITY -- means "security" as defined in section
2(1) of the Securities Act.
SENIOR CREDIT AGREEMENT -- has the meaning assigned
to such term in the definition of Senior Credit Agreement
Debt in this Section 12.1.
SENIOR CREDIT AGREEMENT DEBT -- means Indebtedness
(including, without limitation, revolving Indebtedness)
of the Company (a) to M&T, the other financial
institutions for which M&T acts as facility agent and any
Successor Lenders incurred or arising under the Revolving
Credit and Term Loan Agreement, dated as of April 18,
1997 among the Company, LaSalle, M&T and any other
financial institutions listed on the signature pages
thereof, as heretofore and hereafter amended,
supplemented or otherwise modified from time to time and
under or in relation to any other agreements or documents
executed in connection with, and as contemplated by, such
Revolving Credit and Term Loan Agreement, as heretofore
and hereafter amended, supplemented or otherwise modified
from time to time and (b) to M&T incurred or arising
under the Chattanooga Mortgage Loan Agreement (such
agreement and such other agreements and documents
referred to in the foregoing clauses (a) and (b) being
referred to collectively as the "SENIOR CREDIT
AGREEMENT"). Any direct or successive modification,
extension, renewal, refunding or refinancing, including,
without limitation, any reborrowing or reutilizing, of
such Indebtedness shall continue to be deemed to be
Senior Credit Agreement Debt for purposes of this
Agreement (whether the lenders in respect thereof are
M&T, the other financial institutions for which M&T acts
as facility agent and/or one or more Successor Lenders).
Any written agreement entered into between the Company
and one or more of M&T, the other financial institutions
for which M&T acts as facility agent or any Successor
Lender in connection with the direct or successive
extension, renewal, refunding or refinancing of Senior
Credit Agreement Debt shall be deemed included within the
defined term "Senior Credit Agreement".
SENIOR DEBT -- means all of the payment obligations
of the Company in respect of:
(a) the outstanding principal amount of the
Senior Credit Agreement Debt, provided that (i) if any
portion of such Senior Credit Agreement Debt shall not
have been Incurred under and in compliance with clause
(a) or clause (b) of Section 7.3, then such portion of
such principal amount shall not constitute Senior Debt,
and (ii) in no event shall the aggregate outstanding
principal amount of Senior Debt at any time exceed
$101,500,000 minus the Senior Debt Reduction Amount at
such time;
(b) (i) interest, if any, and premium, if
any, on or in respect of the Indebtedness referred to in
clause (a) above, provided that any such interest
accruing subsequent to the commencement of a proceeding
under the Bankruptcy Code in respect of Company shall be
included in this clause (b) only to the extent that it is
at the contract rate of interest (and not the default
rate of interest) under the Senior Credit Agreement and
only to the extent such interest is otherwise allowed in
such proceeding;
(c) the fees, if any (including, without
limitation, commitment fees, agency fees and letter of
credit fees), payable pursuant to the Senior Credit
Agreement in respect of the Indebtedness referred to in
clause (a) above;
(d) any other undertaking of the Company under
the Senior Credit Agreement or any other Senior Security
Document with respect to the payment of costs of
collection, attorneys' fees and any other out-of-pocket
expenses incurred by any holder of Indebtedness (or any
agent in respect thereof) of the type referred to in
clause (a) of this definition in connection with the
enforcement of its rights and remedies with respect to
such Indebtedness, any collateral securing the same or
any guaranties provided therefor; and
(e) any other out-of-pocket fees, costs and
expenses of any holder of Indebtedness (or any agent in
respect thereof) under the Senior Credit Agreement in
respect of the Indebtedness referred to in clause (a)
above.
SENIOR DEBT EVENT OF DEFAULT -- is defined in
Section 11.3(c).
SENIOR DEBT EVENT OF DEFAULT BLOCKAGE PERIOD -- is
defined in Section 11.3(c).
SENIOR DEBT EVENT OF DEFAULT NOTICE -- is defined in
Section 11.3(c).
SENIOR DEBT PAYMENT APPLICATION -- means, with
respect to any Transfer of Property that constitutes an
Asset Disposition, the application by the Company or any
of its Subsidiaries of cash in an amount equal to the Net
Proceeds Amount with respect to such Transfer to pay
principal of Senior Debt, so long as the maximum
permitted principal amount of Senior Debt is, by
operation of clause (b) of the definition of Senior Debt
Reduction Amount, permanently reduced as a result of such
payment of principal, provided that the Company shall
deliver to each holder of Notes, within five Business
Days after any Senior Debt Prepayment Application, a
written notice describing such Transfer, specifying such
Net Proceeds Amount and the principal amount of Senior
Debt so paid, and stating that such application
constitutes a Senior Debt Payment Application within the
meaning of the Note and Stock Purchase Agreements.
SENIOR DEBT REDUCTION AMOUNT -- means, at any time,
the sum of the following amounts:
(a) the Senior Term Loan Reduction Amount at
such time; plus
(b) the aggregate amount of payments, made at
or prior to such time, of principal of Senior Debt
pursuant to any one or more Senior Debt Payment
Applications.
SENIOR FINANCIAL OFFICER -- means, with respect to
any Person, the chief financial officer, the comptroller
or the treasurer of such Person (or another officer
having substantially similar responsibilities).
SENIOR SECURITY DOCUMENTS -- means the Senior Credit
Agreement and all other documents and instruments in
connection therewith, and, for purposes of avoidance of
doubt, all documents and instruments evidencing or
relating to any Indebtedness that shall have extended,
renewed, refunded or refinanced (either directly or
successively) the original Senior Credit Agreement Debt.
SENIOR TERM LOAN -- means the "Term Loan" as such
term is defined in Section 2.2(a) of the Senior Credit
Agreement as in effect on the Closing Date, and any
subsequent term loan or term loans under the Senior
Credit Agreement as in effect from time to time.
SENIOR TERM LOAN REDUCTION AMOUNT -- means, at any
time, an amount equal to the aggregate amount of the
payments of principal of the Senior Term Loan scheduled,
pursuant to Section 2.2(b) of the Senior Credit Agreement
as in effect on the Closing Date, to have been made at or
before such time, whether or not such scheduled payments
of principal have in fact been made at or before such
time (each such scheduled payment of principal is
sometimes referred to herein as a "SCHEDULED PRINCIPAL
PAYMENT") (a copy of Section 2.2(b) of the Senior Credit
Agreement as in effect on the Closing Date is attached to
this Agreement as Exhibit E; such Exhibit shall be
determinative for the purposes of this definition of
Senior Term Loan Reduction Amount), provided that:
(a) the Senior Term Loan Reduction Amount
shall in no event be less than $0 or greater than
$40,000,000;
(b) all or a portion of any one or more
Scheduled Principal Payments may, pursuant to an
amendment, waiver or other modification effected pursuant
to the applicable provisions of the Senior Credit
Agreement, be deferred as to scheduled time of payment,
and for purposes of the first paragraph of this
definition the schedule of Scheduled Principal Payments
referred to in such paragraph and set forth in Exhibit E
shall be deemed to have been changed to give effect to
such amendment, waiver or other modification and such
deferral as to scheduled time of payment, so long as:
(i) in no event shall the scheduled time
of payment of any Scheduled Principal Payment be
changed to a date that is later than April 1, 2005;
(ii) in no event may more than 12
Scheduled Principal Payments be so deferred in whole
or in part (whether pursuant to one or more
amendment, waiver or other modifications) during the
period commencing immediately after giving effect to
the Closing and ending at the first time at which
none of the Company's obligations under the Note and
Stock Purchase Agreements and the Notes shall remain
outstanding; and
(iii) within five Business Days after the
effective date of any such amendment, waiver or
other modification the Company shall deliver to each
holder of Notes a copy of such amendment, waiver or
other modification and a copy of the new schedule of
Scheduled Principal Payments as so amended, waived
or otherwise modified;
(c) in the event that a Scheduled Principal
Payment shall not have been made before or on the
scheduled date therefor set forth in the schedule of
Scheduled Principal Payments (as may be so amended,
waived or otherwise modified), then the increase in the
Senior Term Loan Reduction Amount (in the amount of such
Scheduled Principal Payment) to be effected pursuant to
the first paragraph of this definition shall not be
deemed to be effective until the earlier of (i) the date
that is 15 days after the scheduled date of payment of
such Scheduled Principal Payment and (ii) the date of
actual payment of such Scheduled Principal Payment.
SIGNIFICANT SUBSIDIARY -- means, at any time, any
Subsidiary of any Obligor that satisfies at least one of
the following conditions:
(a) the portion of Consolidated Total Assets
(determined with the assets of such Subsidiary being
valued, for purposes of this clause (a), at the greater
of (i) the book value thereof and (ii) the Fair Market
Value thereof), determined as of the end of the then most
recently ended fiscal year of such Obligor, attributable
to such Subsidiary pursuant to GAAP is at least 10%,
determined at such time, of Consolidated Total Assets; or
(b) the portion of Consolidated Net Income,
determined for the then most recently ended fiscal year
of such Obligor, attributable to such Subsidiary in
accordance with GAAP is at least 10%, determined for such
period, of such Consolidated Net Income.
Solely for the purpose of this definition of Significant
Subsidiary, Consolidated Total Assets and Consolidated
Net Income shall be determined by reference to such
Obligor and its Subsidiaries, rather than by reference to
the Company and its Subsidiaries.
SOURCE -- is defined in Section 13.2.
STOCKHOLDERS AGREEMENT -- is defined in Attachment
A.
SUBORDINATED DEBT -- means all obligations,
liabilities and indebtedness of the Company now or
hereafter existing, whether for principal, Prepayment
Compensation, if any, interest, fees, expenses or
otherwise, under or arising out of the Note and Stock
Purchase Agreements or the Notes.
SUBSIDIARY -- means, with respect 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
Parent.
SUBSIDIARY GUARANTY AGREEMENTS -- is defined in
Section 6.8.
SUCCESSOR LENDER -- means any original or successor
lender to the Company in respect of the Senior Credit
Agreement Debt.
TRANSFER -- means, with respect to any Person, any
transaction in which such Person sells, conveys,
transfers, leases (as lessor) or otherwise disposes of
any of its Property, including, without limitation,
Company Subsidiary Stock, and including, without
limitation, any consolidation, merger or other
transaction the direct or indirect result of which is a
disposition of all or a portion of any equity or other
interest in any Person.
WHOLLY-OWNED SUBSIDIARY -- means, with respect to
any Person, at any time, any Subsidiary of such Person
100% of all of the equity interests (except directors'
qualifying shares) and voting interests of which are
owned by any one or more of such Person and such Person's
other Wholly-Owned Subsidiaries at such time.
12.2 ACCOUNTING PRINCIPLES.
Where the character or amount of any asset or
liability or item of income or expense, or any
consolidation or other accounting computation is required
to be made for any purpose hereunder, it shall be done in
accordance with GAAP as in effect on the date of, or at
the end of the period covered by, the financial
statements from which such asset, liability, item of
income, or item of expense, is derived, or, in the case
of any such computation, as in effect on the date as of
which such computation is required to be determined,
provided, that if any term defined herein includes or
excludes amounts, items or concepts that would not be
included in or excluded from such term if such term was
defined with reference solely to GAAP, such term will be
deemed to include or exclude such amounts, items or
concepts as set forth herein.
13. PURCHASER REPRESENTATIONS, ETC.
13.1 PURCHASE FOR INVESTMENT.
You represent that you are purchasing the Notes and
the Purchaser Shares for your own account or for one or
more separate accounts maintained by you or for the
account of one or more pension or trust funds and not
with a view to the distribution thereof, provided that
the disposition of your or their Property shall at all
times be within your or their control. You understand
that the Notes and the Purchaser Shares have not been
registered under the Securities Act and may be resold
only in compliance with applicable federal and state
securities laws and, with respect to the federal
securities laws, 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, that the Company is not required to
register the Notes and that the Parent is not required to
register the Purchaser Shares except as provided in the
Stockholders Agreement. You agree that each Note will
bear a legend substantially in the form set forth at the
beginning of the form of Note in Exhibit A, provided that
the requirement that each Note bear such a legend shall
terminate as to any Note (and as to any other Note issued
in substitution or exchange therefor) when such Note
shall have been effectively registered under the
Securities Act and disposed of in accordance with the
registration statement covering such Note or transferred
pursuant to Rule 144 (or any successor provision) under
the Securities Act.
13.2 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 and the Purchaser Shares to
be purchased by you hereunder:
(a) GENERAL ACCOUNT -- you are an insurance
company and the Source is an "insurance company general
account," as such term is defined in Department of Labor
Prohibited Transaction Class Exemption 95-60 (issued July
12, 1995) ("PTCE 95-60"), and there is no employee
benefit plan, treating as a single plan all plans
maintained by the same employer (and affiliates thereof
as defined in section V(a)(1) of PTCE 95-60) or by the
same employee organization, with respect to which the
amount of the general account reserves and liabilities
for all contracts held by or on behalf of such plan,
exceeds 10% of the total reserves and liabilities of such
general account as determined under PTCE 95-60 (exclusive
of separate account liabilities) plus surplus, as set
forth in the National Association of Insurance
Commissioners Annual Statement filed with your state of
domicile; or
(b) SEPARATE ACCOUNT -- the Source is a
separate account:
(i) 10% POOLED SEPARATE ACCOUNT -- that
is an insurance company pooled separate account,
within the meaning of Department of Labor Prohibited
Transaction Class Exemption 90-1 (issued January 29,
1990), and to the extent that there are any plans
whose assets in such separate account exceed 10% of
the assets of such separate account, you have
disclosed the names of such plans to the Company in
writing; or
(ii) IDENTIFIED PLAN ASSETS -- that is
comprised of employee benefit plans identified by
you in writing and with respect to which the Company
and the Parent hereby warrant and represent that, as
of the Closing Date, neither the Obligors nor any
ERISA Affiliate is a "party in interest" (as defined
in section 3 of ERISA) or a "disqualified person"
(as defined in section 4975 of the Code) with
respect to any plan so identified; or
(iii) GUARANTIED SEPARATE ACCOUNT -- that
is maintained solely in connection with fixed
contractual obligations of an insurance company,
under which any amounts payable, or credited, to any
employee benefit plan having an interest in such
account and to any participant or beneficiary of
such plan (including an annuitant) are not affected
in any manner by the investment performance of the
separate account (as provided by 29 CFR SECTION2510.3-
101(h)(1)(iii)); or
(c) QPAM -- the Source constitutes assets of
an "investment fund" (within the meaning of Part V of the
QPAM Exemption) managed by a "qualified professional
asset manager" or "QPAM" (within the meaning of Part V of
the QPAM Exemption), no employee benefit plan's assets
that are included in such investment fund, when combined
with the assets of all other employee benefit plans
established or maintained by the same employer or by an
affiliate (within the meaning of section V(c)(1) of the
QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the
total client assets managed by such QPAM, the conditions
of Part 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 any Obligor 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
Section 13.2(c); or
(d) GOVERNMENTAL PLAN -- the Source is a
governmental plan; or
(e) IDENTIFIED PLANS, ETC. -- 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 Section 13.2(e); or
(f) EXEMPT, ETC. -- 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 13.2, 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.
14. EXPENSES, ETC.
14.1 TRANSACTION EXPENSES.
Whether or not the transactions contemplated hereby
are consummated, the Parent, the Company and LaSalle 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 (provided that such costs and
expenses in connection with the transactions through and
including the contemplated Closing, but not in connection
with any amendments, waivers or consents, shall be
limited to reasonable out-of-pocket costs and expenses)
and in connection with any amendments, waivers or
consents under or in respect of any Financing Document
(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 the Financing Documents or in responding to
any subpoena or other legal process or informal
investigative demand issued in connection with any of the
Financing Documents, or by reason of being a holder of
any Note, and (b) the costs and expenses, including,
without limitation, financial advisors' fees, incurred in
connection with the insolvency or bankruptcy of any
Obligor or in connection with any work-out or
restructuring of the transactions contemplated by any of
the Financing Documents. The Parent, the Company and
LaSalle 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).
14.2 SURVIVAL.
The obligations of the Parent, the Company and
LaSalle under this Section 14 will survive the payment or
transfer of any Note, the enforcement, amendment or
waiver of any provision of the Financing Documents, and
the termination of the Financing Documents.
15. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All representations and warranties contained herein
shall survive the execution and delivery of the Financing
Documents, 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 any Obligor
pursuant to any of the Financing Documents shall be
deemed representations and warranties of the Parent, the
Company and LaSalle under this Agreement.
16. AMENDMENT AND WAIVER
16.1 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 Parent, the
Company, LaSalle and the Required Holders, except that
(a) no amendment or waiver of any of the provisions of
Sections 1, 2, 3 or 13, 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 10.3 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 Prepayment Compensation
on, the Notes, (ii) change the definition of Required
Holders or 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
4, 9(a), 9(b), 10 and 16.
16.2 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 16 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. Neither the Parent, the Company
nor LaSalle will 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 of any of the Financing Documents 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.
16.3 BINDING EFFECT, ETC.
Any amendment or waiver consented to as provided in
this Section 16 applies equally to all holders of Notes
and is binding upon them and upon each future holder of
any Note and upon the Parent, the Company and LaSalle
without regard to whether such Note has been marked to
indicate such amendment or waiver. No such amendment or
waiver will extend to or affect any obligation, covenant,
agreement, Default or Event of Default not expressly
amended or waived or impair any right consequent thereon.
No course of dealing between any Obligor and the holder
of any Note nor any delay in exercising any rights
hereunder, under any Note or under any other Financing
Document 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.
16.4 NOTES HELD BY OBLIGORS, 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 any Financing Document, or have directed the taking
of any action provided in any Financing Document to be
taken upon the direction of the holders of a specified
percentage of the aggregate principal amount of Notes
then outstanding, Notes directly or indirectly owned by
the Parent, the Company, LaSalle, any of their respective
Subsidiaries or any of their respective other Affiliates
shall be deemed not to be outstanding.
17. NOTICES
All notices and communications provided for
hereunder shall be in writing and sent (a) by telecopy 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 Annex 1, 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,
(iii) if to the Parent, to the Parent at
000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention:
President, telephone (000) 000-0000, telecopier
(000) 000-0000, or at such other address or
telecopier as the Parent shall have specified to the
holder of each Note in writing,
(iv) if to the Company, to the Company
(with a courtesy copy to the Parent) at 000 Xxxxxxx
Xxxxxx, X.X. Xxx 000, Xxxxxxx, XX 00000, Attention:
President, telephone (000) 000-0000, telecopier
(000) 000-0000, or at such other address or
telecopier as the Company shall have specified to
the holder of each Note in writing, or
(v) if to LaSalle, to LaSalle (with
courtesy copies to the Parent and the Company) at
0000 - 000xx Xxxxxx, Xxxxxxx, XX 00000, Attention:
President, telephone (000) 000-0000, telecopier
(000) 000-0000, or at such other address or
telecopier as LaSalle shall have specified to the
holder of each Note in writing.
Notices under this Section 17 will be deemed given only
when actually received.
18. 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 and the certificates evidencing the Purchaser
Shares 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
Parent, the Company and LaSalle agree and stipulate that,
to the extent permitted by applicable law, any such
reproduction shall be admissible in evidence as the
original itself in any judicial or administrative
proceeding (whether or not the original is in existence
and whether or not such reproduction was made by you in
the regular course of business) and any enlargement,
facsimile or further reproduction of such reproduction
shall likewise be admissible in evidence. This Section
18 shall not prohibit the Parent, the Company, LaSalle or
any holder of Notes or Purchaser Shares 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.
19. MISCELLANEOUS
19.1 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.
19.2 PAYMENTS, MISCELLANEOUS.
(a) PAYMENTS DUE ON NON-BUSINESS DAYS.
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or
Prepayment Compensation 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.
(b) PAYMENTS, WHEN RECEIVED. Any payment to
be made to the holders of Notes hereunder or under the
Notes shall be deemed to have been made on the Business
Day such payment actually becomes available to such
holder at such holder's bank prior to 11:00 a.m. (local
time of such bank).
19.3 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.
19.4 DIRECTLY OR INDIRECTLY.
Where any provision herein refers to action to be
taken by any Person, or that such Person is prohibited
from taking, such provision shall be applicable whether
such action is taken directly or indirectly by such
Person, including, without limitation, actions taken by
or on behalf of any partnership in which such Person is a
general partner.
19.5 SECTION HEADINGS AND TABLE OF CONTENTS, ETC.
The titles of the Sections of this Agreement and the
Table of Contents of this Agreement appear as a matter of
convenience only, do not constitute a part hereof and
shall not affect the construction hereof. The words
"herein," "hereof," "hereunder" and "hereto" refer to
this Agreement as a whole and not to any particular
Section or other subdivision. Unless otherwise
specified, references to Sections are to Sections of this
Agreement, references to Annexes are to Annexes to this
Agreement, references to Attachments are to Attachments
to this Agreement and references to Exhibits are to
Exhibits to this Agreement.
19.6 CONSTRUCTION.
Each covenant contained herein shall be construed
(absent express provision to the contrary) as being
independent of each other covenant contained herein, so
that compliance with any one covenant shall not (absent
such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision
herein refers to action to be taken by any Person, or
which such Person is prohibited from taking, such
provision shall be applicable whether such action is
taken directly or indirectly by such Person.
19.7 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.
19.8 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.
19.9 CERTAIN CHANGES IN GAAP.
If at any time any Obligor shall, in its reasonable
judgment and after consulting with its independent
certified accountants, determine that a change in GAAP
shall have occurred after the Closing Date and that such
change will have a material adverse effect on the ability
of such Obligor to comply with any one or more of the
covenants in this Agreement, each holder of Notes will,
upon the written request of such Obligor, negotiate in
good faith with such Obligor, and such Obligor will
negotiate in good faith with each holder of Notes, to
attempt to reach agreement within a reasonable period of
time as to the terms of one or more mutually agreeable
amendments or waivers, in accordance with Section 16,
with respect to such covenants (or the definitions
utilized therein) such that the material adverse effect
of such change in GAAP on the ability of such Obligor to
comply with such covenants is fairly and equitably
adjusted for, taking into account the nature of such
change and the original purpose of such covenants (or the
definitions utilized therein). Each written request by
an Obligor pursuant to the first sentence of this Section
19.9 shall be accompanied by (i) a statement from the
independent certified public accountants of such Obligor
describing the applicable change in GAAP and
demonstrating, on a pro forma basis and in reasonable
detail, the effect that such change would have in respect
of the computations or statements, as the case may be,
required by the applicable covenants herein if such
change had been effective throughout the Fiscal Year then
most recently ended and (ii) a statement of one or more
specific amendment or waiver provisions then proposed by
such Obligor in connection with such change in GAAP.
Unless and until such mutually agreeable amendments or
waivers shall have become effective in accordance with
Section 16, such covenants (and the definitions used
therein) shall remain unchanged and in full force and
effect.
[REMAINDER OF PAGE INTENTIONALLY BLANK; NEXT PAGE IS
SIGNATURE PAGE.]
If this Agreement is satisfactory to you, please so
indicate by signing the acceptance at the foot of a
counterpart hereof and returning such counterpart to the
Company, whereupon this Agreement shall become binding
among us in accordance with its terms.
Very truly yours,
NIAGARA CORPORATION
By_________________________
Name:
Title:
NIAGARA COLD DRAWN CORP.
By_________________________
Name:
Title:
LASALLE STEEL COMPANY
By_________________________
Name:
Title:
[SIGNATURE PAGE FOR NOTE AND STOCK PURCHASE AGREEMENT IN
CONNECTION WITH THE ISSUANCE BY NIAGARA COLD DRAWN CORP.
OF 12.5% SENIOR SUBORDINATED NOTES DUE 2005 AND THE
ISSUANCE BY NIAGARA CORPORATION OF COMMON STOCK]
Accepted:
[PURCHASER]
By________________________________
Name:
Title:
[SIGNATURE PAGE FOR NOTE AND STOCK PURCHASE AGREEMENT IN
CONNECTION WITH THE ISSUANCE BY NIAGARA COLD DRAWN CORP.
OF 12.5% SENIOR SUBORDINATED NOTES DUE 2005 AND THE
ISSUANCE BY NIAGARA CORPORATION OF COMMON STOCK]
ANNEX 1
INFORMATION AS TO PURCHASERS
Purchaser Name THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA
Name in which to THE PRUDENTIAL INSURANCE COMPANY OF
register Note(s) AMERICA
Note registration R-1; $8,500,000
number(s);
Principal amount(s)
Stock Certificate No. IMAC 0216; 121,429 shares
No.; Number of
Purchaser Shares
Payment on account
of Note(s)
Method Federal Funds Wire Transfer
Account Bank of New York
information New York, New York
ABA No.: 000-000-000
Account No.: 000-0000-000, Prudential
Managed Account
Accompanying Name of Company: Niagara Cold Drawn
information with Corp.
respect to payment
on the Notes Description of
Security: 12.5% Senior Subordinated
Notes due April 18, 2005
PPN: 00000# XX 4
Ref: !INV _________!
Due date and application (as among
principal, Prepayment Compensation and
interest) of the payment being made:
Address for notices The Prudential Insurance Company of
and communications America
related to payments Three Gateway Center
on the Notes 000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Manager, Xxxxxxxx and
Collections
Tel: (000) 000-0000
Fax: (000) 000-0000
Address for all The Prudential Insurance Company of
other notices and America
communications c/o The Prudential Capital Group
One Gateway Center, 11th Floor
0-00 Xxxxxxx Xxxxxxxxx Xxxx
Xxxxxx, XX 00000-0000
Attention: Managing Director
Tel: (000) 000-0000
Fax: (000) 000-0000
ANNEX 1
INFORMATION AS TO PURCHASERS (cont.)
Purchaser Name THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA
Receipt of Manager, Trade Management
telephonic Tel: (000) 000-0000
prepayment notices Fax: (000) 000-0000
Tax identification 00-0000000
number
ANNEX 1
INFORMATION AS TO PURCHASERS (cont.)
Purchaser Name THE EQUITABLE LIFE ASSURANCE SOCIETY OF
THE UNITED STATES
Name in which to THE EQUITABLE LIFE ASSURANCE SOCIETY OF
register Note(s) THE UNITED STATES
Note registration R-2; $8,500,000
number(s);
Principal amount(s)
Stock Certificate No. IMAC 0217; 121,429 shares
No.; Number of
Purchaser Shares
Payment on account
of Note(s)
Method Federal Funds Wire Transfer
Account The Chase Manhattan Bank, N.A.
information 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ABA No.: 021-00-0021
For the Account of: The Equitable Life
Assurance Society of the
United States
Account No.: 000-0-000000
Accompanying Name of Company: Niagara Cold Drawn
information with Corp.
respect to payment
on the Notes Description of
Security: 12.5% Senior Subordinated
Notes due April 18, 2005
PPN: 65334# AA 4
Due date and application (as among
principal, Prepayment Compensation and
interest) of the payment being made:
Address for notices The Equitable Life Assurance Society of
and communications the United States
related to payments x/x Xxxxxxxx Xxxxxxx Xxxxxxxxxx, X.X.
on the Notes 000 Xxxx 00xx Xxxxxx 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Treasury Services
Address for all The Equitable Life Assurance Society of
other notices and the United States
communications c/o Alliance Capital Management, L.P.
1345 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Alliance Corporate Finance
Group Inc.
(000) 000-0000 - Phone
(000) 000-0000 - Fax
Tax identification 00-0000000
number
ANNEX 1
INFORMATION AS TO PURCHASERS (cont.)
Purchaser Name UNITED STATES FIDELITY AND GUARANTY
COMPANY
Name in which to UNITED STATES FIDELITY AND GUARANTY
register Note(s) COMPANY
Note registration R-3; $3,000,000
number(s);
Principal amount(s)
Stock Certificate No. IMAC 0218; 42,857 shares
No.; Number of
Purchaser Shares
Payment on account
of Note(s)
Method Federal Funds Wire Transfer
Account The Bank of New York
information ABA No.: 000000000
USF&G/IMG, # 368934
IOC 565
Attention: Xxxxxx Soi'Emr
Accompanying Name of Company: Niagara Cold Drawn
information with Corp.
respect to payment
on the Notes Description of
Security: 12.5% Senior Subordinated
Notes due April 18, 2005
PPN: 65334# AA 4
Due date and application (as among
principal, Prepayment Compensation and
interest) of the payment being made:
Address for notices Falcon Asset Management, Inc.
and communications F/A United States Fidelity and Guaranty
related to payments Company
on the Notes Attn: Investment Operations
X.X. Xxx 0000
Xxxxxxxxx, XX 00000-0000
LB 0102
Address for all Falcon Asset Management, Inc.
other notices and F/A United States Fidelity and Guaranty
communications Company
Attn: Investment Operations
X.X. Xxx 0000
Xxxxxxxxx, XX 00000-0000
LB 0102
Address for The Bank of New York
delivery of One Xxxx Xxxxxx - 0xx Xxxxx, Window A
securities Xxx Xxxx, XX 00000
A/C # 368934
Attn: Xxxxxx Soi'Emr
ANNEX 1
INFORMATION AS TO PURCHASERS (cont.)
Purchaser Name UNITED STATES FIDELITY AND GUARANTY
COMPANY
Tax identification 00-0000000
number
ANNEX 2
PAYMENT INSTRUCTIONS AT CLOSING
RE: $20,000,000 12.5% SENIOR SUBORDINATED NOTES DUE 2005
ISSUED BY NIAGARA COLD DRAWN CORP.; 285,715 SHARES
OF COMMON STOCK ISSUED BY NIAGARA CORPORATION
In accordance with Section 1.2(b) of the Note and
Stock Purchase Agreement, the Parent and the Company
direct you to make payment for the Note or Notes and the
Purchaser Shares being purchased by you by payment by
federal funds wire transfer in immediately available
funds of the purchase price thereof to:
Manufacturers and Traders Trust Company
Buffalo, NY
ABA no.: 000000000
Account no.: 0000000
Account name: Niagara Cold Drawn Corp.
Contact person at bank:
Name: Xxxxxx Xxxx
Phone no.: (000) 000-0000
ATTACHMENT A
A. WARRANTIES AND REPRESENTATIONS OF THE OBLIGORS
To induce you to enter into this Agreement and to
purchase and pay for the Notes and Purchaser Shares to be
delivered to you at the Closing, each of the Parent, the
Company and LaSalle makes the following warranties and
representations, effective as of the date of the
Parent's, the Company's and LaSalle's execution of this
Agreement, as of the Closing Date immediately prior to
the Closing and as of the Closing Date immediately after
giving effect to the Acquisition:
A.1 ORGANIZATION; POWER AND AUTHORITY.
Each Obligor is a corporation duly organized,
validly existing and in good standing under the laws of
its jurisdiction of incorporation, and is duly qualified
as a foreign corporation and is in good standing (or,
with respect to the State of Indiana, is duly authorized
to transact business in such State) in each jurisdiction
in which Property is owned, leased or operated or in
which the business it currently transacts makes such
qualification necessary, 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 Obligor 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 currently
transacts, to execute and deliver each Financing Document
to which it is or is to be a party and to perform the
provisions hereof and thereof.
A.2 AUTHORIZATION, ETC.
The Financing Documents have been duly authorized by
all necessary corporate action on the part of each
Obligor that is a party thereto, and each of the
Financing Documents (other than the Notes) constitutes,
and upon execution and delivery thereof each Note will
constitute, a legal, valid and binding obligation of each
Obligor party thereto enforceable against such Obligor 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). The Purchaser Shares have been
duly authorized by all necessary corporate action on the
part of the Parent, and such Purchaser Shares when issued
will be validly issued, fully paid, non-assessable and
free and clear of any Lien.
A.3 DISCLOSURE.
The Company, through its agent, CIBC Wood Gundy
Securities Corp., has delivered to you a copy of an
Information Memorandum (including, without limitation,
all appendices thereto and the accompanying Supplemental
Information Volume, collectively, the "MEMORANDUM"),
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 Parent and the Subsidiaries. Except as
disclosed in Part A.3 of Annex 3 (or, with respect to the
Parent and the Company, in the Parent's Form 10-K for the
fiscal year ended December 31, 1996 of the Parent filed
with the Securities and Exchange Commission, and, with
respect to LaSalle, in the Disclosure Schedule to the
Acquisition Agreement), the Financing Documents, the
Memorandum, the documents, certificates or other writings
delivered to you by or on behalf of the Company or the
Parent in connection with the transactions contemplated
by the Financing Documents and the financial statements
listed in Part A.5 of Annex 3, taken as a whole, do not
contain any untrue statement of a material fact or omit
to state any material fact necessary to make the
statements therein not misleading in light of the
circumstances under which they were made. Except as
disclosed in the Memorandum or as expressly described in
Part A.3 of Annex 3, or in one of the documents,
certificates or other writings identified therein, or in
the financial statements listed in Part A.5 of Annex 3,
since December 31, 1996 with respect to the Parent and
the Company and since October 31, 1996 with respect to
LaSalle, there has been no change in the business,
operations, affairs, financial condition, assets or
Properties of the Parent or any of the Subsidiaries
except changes that individually or in the aggregate
could not reasonably be expected to have a Material
Adverse Effect. There is no fact known to the Parent or
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 Parent or the Company specifically for use
in connection with the transactions contemplated hereby.
Without limiting any of the Company's and the Parent's
representations and warranties in this Section A.3, it is
understood that neither you, the Parent, nor the Company
has intended that the scope of disclosure made to you in
the materials referred to in this Section A.3 would be
the same as that in, or would address all the matters
customarily addressed in, a registration statement filed
in connection with a public offering under the Securities
Act.
A.4 ORGANIZATION AND OWNERSHIP OF SHARES OF
SUBSIDIARIES; AFFILIATES.
(a) Part A.4 of Annex 3 contains (except as
noted therein) complete and correct lists of (i) the
Subsidiaries, showing, as to each such 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 Parent and each other
Subsidiary, (ii) the Parent's Affiliates (to the
knowledge of the Parent), other than Subsidiaries of the
Parent (provided, that the Parent expresses no
representation or warranty as to whether or not any
Purchaser may be an Affiliate), (iii) the Parent's
directors and senior officers, and (iv) the Company's
directors and senior officers. The Company is a Wholly-
Owned Subsidiary of the Parent. After giving effect to
the Acquisition, LaSalle will be a Wholly-Owned
Subsidiary of the Company.
(b) All of the outstanding shares of Capital
Stock or similar equity interests of each Subsidiary have
been validly issued, are fully paid and nonassessable and
are owned by the Parent or another Wholly-Owned
Subsidiary of the Parent free and clear of any Lien
(except as otherwise disclosed in Part A.4 of Annex 3).
(c) Each Subsidiary 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
(or, with respect to the State of Indiana, is duly
authorized to transact business in such State) in each
jurisdiction in which Property is owned, leased or
operated or in which the business it currently transacts
makes such qualification necessary, 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 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 currently transacts.
(d) No Subsidiary is a party to, or otherwise
subject to any legal restriction or any agreement (other
than the Note and Stock Purchase Agreements, the
agreements listed in Part A.4 of Annex 3 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 Parent or the Company or
any of the Subsidiaries that owns outstanding shares of
Capital Stock or similar equity interests of such
Subsidiary.
A.5 FINANCIAL STATEMENTS.
The Parent has delivered to each Purchaser copies of
the financial statements of the Parent and the
Subsidiaries listed in Part A.5 of Annex 3. 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
Parent and the 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).
A.6 COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.
The execution, delivery and performance by the
Obligors of the Financing Documents 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 Parent or any
of the Subsidiaries 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 Parent or any of the Subsidiaries
is bound or by which the Parent or any of the
Subsidiaries 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 Parent or any of
the Subsidiaries, or
(c) violate any provision of any statute or
other rule or regulation of any Governmental Authority
applicable to the Parent or any of the Subsidiaries.
A.7 GOVERNMENTAL AUTHORIZATIONS, ETC.
Except as disclosed in Part A.7 of Annex 3, 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 Obligors of the Financing Documents.
A.8 LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES
AND ORDERS.
(a) Except as disclosed in Part A.8 of Annex
3, there are no actions, suits or proceedings pending or,
to the knowledge of the Company or the Parent, threatened
against or affecting the Parent or any of the
Subsidiaries or any Property of the Parent or any of the
Subsidiaries 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 Parent nor any of the
Subsidiaries 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.
A.9 TAXES.
Each of the Obligors has filed all tax returns that
are required to have been filed in any jurisdiction, and
has 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 such Obligor has
established adequate reserves in accordance with GAAP.
Neither the Parent nor the Company knows of any basis for
any other tax or assessment that could reasonably be
expected to have a Material Adverse Effect.
A.10 TITLE TO PROPERTY; LEASES.
The Parent and the Subsidiaries have good and
sufficient title to, or valid leasehold interests in,
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 A.5 or purported to have been
acquired by the Parent or any of the Subsidiaries after
the date of such balance sheet date (except as sold or
otherwise disposed of in the ordinary course of
business), in each case free and clear of Liens
prohibited by the Financing Documents. 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.
A.11 LICENSES, PERMITS, ETC.
Except as disclosed in Part A.11 of Annex 3,
(a) the Parent and the 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 Parent and
the Company, no product or practice of the Parent or any
of the Subsidiaries infringes in any material respect any
license, permit, franchise, authorization, patent,
copyright, service xxxx, trademark, trade name or other
right owned by any other Person; and
(c) to the best knowledge of the Parent and
the Company, there is no Material violation by any Person
of any right of the Parent or any of the Subsidiaries
with respect to any patent, copyright, service xxxx,
trademark, trade name or other right owned or used by the
Parent or any of the Subsidiaries.
A.12 COMPLIANCE WITH ERISA.
(a) The Parent 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 Parent nor any ERISA Affiliate has
incurred any liability pursuant to Title I or IV of ERISA
other than liability for premiums payable to the PBGC or
the penalty or excise tax provisions of the Code relating
to employee benefit plans (as defined in section 3 of
ERISA) that has not been satisfied in full, 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 Parent or any ERISA
Affiliate, or in the imposition of any Lien on any of the
rights, Properties or assets of the Parent 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) Except as set forth in Part A.12 of Annex
3, the present value of the aggregate benefit liabilities
under each of the Plans (other than Multiemployer Plans),
determined as of the end of such Plan's most recently
ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent
actuarial valuation report, did not exceed the aggregate
current value of the assets of such Plan allocable to
such benefit liabilities. The term "benefit liabilities"
has the meaning specified in section 4001 of ERISA and
the terms "current value" and "present value" have the
meaning specified in section 3 of ERISA.
(c) The Parent and the 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) Except as set forth in Part A.12 of Annex
3, the accumulated postretirement benefit obligation
(determined as of the last day of the Parent'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
Parent and the Subsidiaries is not Material.
(e) Part A.12 of Annex 3 sets forth all ERISA
Affiliates of the Parent and all "employee benefit plans"
maintained by the Parent or the Company (or any
"affiliate" thereof) or in respect of which the Notes or
the Purchaser Shares could constitute an "employer
security" ("employee benefit plan" has the meaning
specified in section 3 of ERISA, "affiliate" has the
meaning specified in section 407(d) of ERISA and section
V of PTCE 95-60 and "employer security" has the meaning
specified in section 407(d) of ERISA).
(f) The execution and delivery of the
Financing Documents and the issuance and sale of the
Notes and the Purchaser Shares 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 Parent and the
Company in the first sentence of this Section A.12(f) is
made in reliance upon and subject to the accuracy of your
representation in Section 13.2 as to the sources of the
funds used to pay the purchase price of the Notes and the
Purchaser Shares to be purchased by you.
A.13 PRIVATE OFFERING BY THE PARENT AND THE
COMPANY.
Neither any Obligor, nor any Person acting on behalf
of any Obligor, has offered the Notes, the Purchaser
Shares or any similar securities for sale to, or
solicited any offer to buy any of the same from, or
otherwise approached or negotiated in respect thereof
with, any Person other than you and not more than 75
other Institutional Investors, each of which has been
offered the Notes and the Purchaser Shares at a private
sale for investment. None of the Company, the Parent or
anyone acting on behalf of either one or both of them has
taken, or will take, any action that would subject the
issuance or sale of the Notes and the Purchaser Shares to
the registration requirements of section 5 of the
Securities Act. For purposes of this Section A.13 only,
each reference to the Notes shall be deemed to include a
reference to the Guaranty Agreements.
A.14 USE OF PROCEEDS; MARGIN REGULATIONS.
The Parent and the Company will apply the proceeds
of the sale of the Notes and the Purchaser Shares as set
forth in Part A.14 of Annex 3. No part of the proceeds
from the sale of the Notes and the Purchaser Shares
hereunder will be used, directly or indirectly, for the
purpose of buying or carrying any margin stock within the
meaning of Regulation G of the Board of Governors of the
Federal Reserve System (12 CFR 207), or for the purpose
of buying or carrying or trading in any securities under
such circumstances as to involve any Obligor 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 Parent and the Subsidiaries
and the Parent 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 G.
A.15 CAPITALIZATION.
(a) CAPITALIZATION. Part A.15 of Annex 3
correctly sets forth, after giving effect to the issuance
of Notes and the Purchaser Shares and all other
contemporaneous transactions contemplated hereby on the
Closing Date:
(i) the authorized and outstanding shares
of Capital Stock of the Parent;
(ii) all options, warrants and other
rights to purchase from the Parent any Capital Stock
of the Parent, together with descriptions of the
terms thereof; and
(iii) the number of shares of each class
of Capital Stock of the Parent into which such
options, warrants and rights are exercisable, the
price at which such exercise or conversion may be
made and the percentage of the shares of each class,
on a fully diluted basis, so represented by such
options, warrants or other rights.
All such outstanding shares of Capital Stock of the
Parent have been duly authorized and validly issued and
are fully paid and non-assessable. Immediately upon
issuance in accordance with the provisions of the
Financing Documents, and prior to the imposition of any
Lien upon the Purchaser Shares created by or through any
Purchaser, such Purchaser Shares will be fully paid, non-
assessable and free and clear of any Lien other than
those set forth in the Stockholders Agreement. There are
no obligations (contingent or otherwise) of the Parent to
repurchase or otherwise acquire or retire any shares of
capital stock (or options to purchase the same) of the
Parent, and there are no preemptive rights, subscription
rights, or other contractual rights similar in nature to
preemptive rights with respect to any such Capital Stock,
other than in each case as set forth in the certificate
of incorporation of the Parent as in effect on the
Closing Date and the Stockholders Agreement.
(b) STOCKHOLDERS' AGREEMENTS. Other than the
Stockholders Agreement, there is no other agreement or
understanding between or among the holders of the Capital
Stock of the Parent regarding the Capital Stock of the
Parent or any other matter covered by the Stockholders
Agreement.
A.16 EXISTING INDEBTEDNESS; FUTURE LIENS.
(a) Except as described therein, Part A.16 of
Annex 3 sets forth a complete and correct list of all
outstanding Indebtedness of the Parent and the
Subsidiaries as of March 31, 1997, since which date there
has been no Material change in the amounts, interest
rates, sinking funds, instalment payments or maturities
of the Indebtedness of the Parent or the Subsidiaries.
Neither the Parent nor any of the Subsidiaries 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 Parent or any such Subsidiary and no
event or condition exists with respect to any
Indebtedness of the Parent or any such 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 Part A.16 of Annex
3, neither the Parent nor any of the Subsidiaries 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 7.4.
A.17 FOREIGN ASSETS CONTROL REGULATIONS, ETC.
None of the sale of the Notes by the Company
hereunder, the sale of the Purchaser Shares by the Parent
hereunder, or their 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.
A.18 STATUS UNDER CERTAIN STATUTES.
Neither the Parent nor any of the Subsidiaries is
subject to regulation (a) as an "investment company"
under the Investment Company Act of 1940, as amended, (b)
as a "holding company" under the Public Utility Holding
Company Act of 1935, as amended, (c) under the
Transportation Acts, as amended, or (d) as a "regulated
utility" under the Federal Power Act, as amended.
A.19 ENVIRONMENTAL MATTERS.
Neither the Parent nor any of the Subsidiaries has
knowledge of any claim or has received any notice of any
claim, and no proceeding has been instituted raising any
claim against the Parent or any of the Subsidiaries or
any of their respective real Properties now or formerly
owned, leased or operated by any of them or other assets,
alleging any damage to the environment or violation of
any Environmental Laws, except, in each case, such as
could not reasonably be expected to result in a Material
Adverse Effect. Except as disclosed in reports by
Xxxxxxx & Xxxx entitled Environmental Assessment, Final
Report, LaSalle Steel Company; and Sampling Report, Final
Submittal; each dated November 8, 1996 or as disclosed in
Part A.19 of Annex 3, or as otherwise disclosed to you in
writing:
(a) neither the Parent nor any of the
Subsidiaries has knowledge of any facts that 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 Parent nor any of the
Subsidiaries has stored any Hazardous Materials on real
Properties now or formerly owned, leased or operated by
any of them or 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 Parent or any of the
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.
A.20 SOLVENCY.
Immediately prior to the consummation of the
Acquisition and the Closing and after giving effect
thereto, the Obligors, both individually and on a
Consolidated basis, shall be, and are, Solvent. For the
purposes of this representation, "SOLVENT" means, as to
any Person or Persons, both that such Person or Persons
have (i) the ability to pay their debts as they mature in
the ordinary course of business, and (ii) an excess of
assets over liabilities.
A.21 REPRESENTATIONS AND WARRANTIES OF OBLIGORS IN
OTHER FINANCING DOCUMENTS.
Each of the representations and warranties of each
Obligor contained in the other Financing Documents is
true and correct.
A.22 BUSINESS COMBINATION.
A "Business Combination" (as such term is defined in
Article SIXTH of the Restated Certificate of
Incorporation of the Parent, as in effect on the Closing
Date) has occurred.
A.23 ALL DOCUMENTS PROVIDED.
The Company has provided to you true, correct and
complete copies of each of the following, in each case,
as are in effect on the Closing Date and as are to take
effect upon the consummation of the Acquisition:
(a) the Acquisition Agreement, together with
all exhibits and schedules thereto, and of each document
required under the Acquisition Agreement to be delivered
or filed in connection with the consummation of the
Acquisition Agreement;
(b) the Senior Credit Agreement, together with
all exhibits and schedules thereto, and of each document
required under the Senior Credit Agreement to be
delivered or filed in connection with the consummation of
the Senior Credit Agreement;
(c) the 1993 Warrant Agreement, together with
all exhibits and schedules thereto; and
(d) all agreements or other documents that
evidence or otherwise set forth rights with respect to
the capital stock or other equity securities of the
Parent (other than the Note and Stock Purchase Agreements
and the Stockholders Agreement).
ATTACHMENT B
B. CLOSING CONDITIONS
Your obligations under this Agreement, including,
without limitation, the obligation to purchase and pay
for the Notes and the Purchaser Shares to be delivered to
you at the Closing, are subject to the following
conditions precedent:
B.1 OPINIONS OF COUNSEL.
You shall have received from
(a) Skadden, Arps, Slate, Xxxxxxx & Xxxx,
special counsel for the Obligors and Xx. Xxxxxx, and
(b) Xxxx & Xxxxxx, your special counsel,
closing opinions, each dated as of the Closing Date,
substantially in the respective forms set forth in
Exhibit B1 and Exhibit B2 and as to such other matters as
you may reasonably request. This Section B.1 shall
constitute direction by the Parent, the Company and
LaSalle to such counsel named in the immediately
preceding clause (a) to deliver such closing opinion to
you. In addition, you shall have received copies of the
opinions delivered in connection with the consummation of
the Acquisition Agreement, accompanied by letters from
counsel rendering such opinions stating that you are
entitled to rely on such opinions as if they were
addressed to you.
B.2 WARRANTIES AND REPRESENTATIONS TRUE.
The warranties and representations of each of the
Obligors in Attachment A and elsewhere in the Financing
Documents shall be true on the Closing Date with the same
effect as though made on and as of that date.
B.3 COMPLIANCE WITH FINANCING DOCUMENTS AND
STOCKHOLDERS AGREEMENT.
Each of the Obligors shall have performed and
complied with all agreements and conditions contained in
the Financing Documents that are required to be performed
or complied with by each such Obligor on or prior to the
Closing Date, and such performance and compliance shall
remain in effect on the Closing Date. Each Other
Stockholder (as such term is defined in the Stockholders
Agreement) shall have performed and complied with all
agreements and conditions contained in the Stockholders
Agreement that are required to be performed or complied
with by each such Person on or prior to the Closing Date,
and such performance shall remain in effect on the
Closing Date.
B.4 OBLIGORS' CERTIFICATES.
(a) OFFICERS' CERTIFICATES. Each of the
Company and LaSalle shall have delivered to you a
certificate signed by two Senior Financial Officers of
such Obligor and the Parent shall have delivered to you a
certificate signed by one Senior Financial Officer of the
Parent, in each case dated the Closing Date, certifying
that the conditions specified in Section B.2 and Section
B.3 have been fulfilled and as to such other matters as
you may reasonably request.
(b) SECRETARIES' CERTIFICATES. Each Obligor
shall have delivered to you a certificate signed by the
Secretary or an Assistant Secretary of such Obligor
certifying as to true and correct copies attached thereto
of the charter documents and bylaws of such Obligor and
the resolutions attached thereto and other corporate
proceedings relating to the authorization, execution and
delivery of the Financing Documents.
B.5 LEGALITY.
The Notes and the Purchaser Shares shall on the
Closing Date qualify as a legal investment for you under
applicable insurance law (without regard to any "basket"
or "leeway" provisions), and the acquisition thereof
shall not subject you to any penalty or other onerous
condition pursuant to any such law or regulation, and you
shall have received such evidence as you may reasonably
request to establish compliance with this condition.
B.6 ACQUISITION AGREEMENT AND RELATED DOCUMENTS.
You shall have received a copy of the Acquisition
Agreement as executed (including any amendment or
modification thereto), together with all exhibits and
schedules thereto, and of each document required under
the Acquisition Agreement to be delivered or filed in
connection with the consummation of the Acquisition
Agreement (collectively, the "ACQUISITION DOCUMENTS"),
certified as true, correct and complete by a Senior
Financial Officer of the Company. All conditions
precedent to the consummation of the Acquisition
Agreement shall have occurred, all governmental
authorizations, consents, approvals, exemptions or other
actions required in connection with the Acquisition
Agreement shall have been duly received or taken, and the
transactions contemplated by the Acquisition Agreement
shall have been duly consummated (or you shall have
received evidence to your satisfaction that such
transactions are closing contemporaneously with the
Closing) substantially in accordance with the terms of
the Acquisition Agreement.
B.7 SENIOR CREDIT AGREEMENT AND RELATED DOCUMENTS.
You shall have received a copy of the Senior Credit
Agreement as executed, together with all exhibits and
schedules thereto, and of each document required under
the Senior Credit Agreement to be delivered or filed in
connection with the consummation of the Senior Credit
Agreement, certified as true, correct and complete by a
Senior Financial Officer of the Company. All conditions
precedent to the consummation of the initial borrowing
under the Senior Credit Agreement shall have occurred,
all governmental authorizations, consents, approvals,
exemptions or other actions required in connection with
the Senior Credit Agreement shall have been duly received
or taken, and the transactions contemplated by the Senior
Credit Agreement shall have been duly consummated (or
shall simultaneously be occurring) substantially in
accordance with the terms of the Senior Credit Agreement.
B.8 STOCKHOLDERS AGREEMENT.
A Stockholders Agreement, in the form of Exhibit D
(the "STOCKHOLDERS AGREEMENT"), shall have been duly
executed and delivered by the Parent, Xx. Xxxxxx and each
Purchaser, and shall be in full force and effect.
B.9 GUARANTY AGREEMENTS.
A Guaranty Agreement, in the form of Exhibit C1 with
respect to the Parent (the "PARENT GUARANTY AGREEMENT"),
and in the form of Exhibit C2 with respect to LaSalle
(the "LASALLE GUARANTY AGREEMENT"), shall have been duly
executed and delivered by the Parent or LaSalle, as the
case may be, and shall be in full force and effect.
B.10 PRIVATE PLACEMENT NUMBER.
The Obligors shall have obtained for the Notes a
Private Placement Number issued by the CUSIP Service
Bureau of Standard & Poor's, a division of XxXxxx-Xxxx,
Inc.
B.11 SALE OF OTHER NOTES AND PURCHASER SHARES.
Contemporaneously with the Closing,
(a) the Company shall sell to the Other
Purchasers the Notes, and
(b) the Parent shall sell to the Other
Purchasers the Purchaser Shares
to be purchased by each such Other Purchaser at the
Closing pursuant to the Note and Stock Purchase Agreement
to which it is a party as specified in Annex 1.
B.12 EXPENSES.
All fees and disbursements required to be paid
pursuant to Section 14 shall have been paid in full.
B.13 ENVIRONMENTAL MATTERS.
You shall have received copies of all environmental
reports and other similar information as you shall
request with respect to the Properties of the Obligors.
B.14 PROCEEDINGS SATISFACTORY.
All proceedings taken in connection with the
issuance and sale of the Notes and the Purchaser Shares
and all documents and papers relating thereto shall be
satisfactory to you and your special counsel. You and
your special counsel shall have received copies of such
documents and papers as you or they may reasonably
request in connection therewith or in connection with
your special counsel's closing opinion, all in form and
substance satisfactory to you and your special counsel.
