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XXXX-XXXXX COMPANY
NOTE AGREEMENT
Dated as of March 22, 1996
Re:
$30,000,000 7.13% Senior Notes
Due October 1, 2011
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TABLE OF CONTENTS
(NOT A PART OF THE AGREEMENT)
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT . . . . . . . . . . .1
Section 1.1. Description of Notes. . . . . . . . . . . . . . . . .1
Section 1.2. Commitment: Closing Date. . . . . . . . . . . . . . .2
Section 1.3. Other Agreements. . . . . . . . . . . . . . . . . . .2
SECTION 2. PREPAYMENT OF NOTES . . . . . . . . . . . . . . . . . . .2
Section 2.1. Required Principal Prepayments. . . . . . . . . . . .2
Section 2.2. Optional Prepayments. . . . . . . . . . . . . . . . .2
Section 2.3. Notice of Optional Prepayments. . . . . . . . . . . .3
Section 2.4. Allocation of Prepayments . . . . . . . . . . . . . .3
Section 2.5. Method and Place of Payment of Principal
and Interest. . . . . . . . . . . . . . . . . . . . .3
SECTION 3. REPRESENTATIONS . . . . . . . . . . . . . . . . . . . . .4
Section 3.1. Representations of the Company. . . . . . . . . . . .4
Section 3.2. Representations of the Purchaser. . . . . . . . . . .4
SECTION 4. CLOSING CONDITIONS. . . . . . . . . . . . . . . . . . . .5
Section 4.1. Closing Certificate . . . . . . . . . . . . . . . . .5
Section 4.2. Legal Opinions. . . . . . . . . . . . . . . . . . . .5
Section 4.3. Company's Existence and Authority . . . . . . . . . .6
Section 4.4. Related Transactions. . . . . . . . . . . . . . . . .6
Section 4.5. Consent of Holders of Other Securities. . . . . . . .6
Section 4.6. Private Placement Number. . . . . . . . . . . . . . .6
Section 4.7. Funding Instructions. . . . . . . . . . . . . . . . .6
Section 4.8. Legality of Investment. . . . . . . . . . . . . . . .6
Section 4.9. Proceedings and Documents . . . . . . . . . . . . . .6
Section 4.10. Waiver of Conditions. . . . . . . . . . . . . . . . .7
SECTION 5. INTERPRETATION OF AGREEMENT . . . . . . . . . . . . . . .7
Section 5.1. Definitions . . . . . . . . . . . . . . . . . . . . .7
Section 5.2. Accounting Principles . . . . . . . . . . . . . . . 13
Section 5.3. Directly or Indirectly. . . . . . . . . . . . . . . 13
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SECTION 6. COMPANY COVENANTS . . . . . . . . . . . . . . . . . . . 13
Section 6.1. Corporate Existence, Etc. . . . . . . . . . . . . . 14
Section 6.2. Insurance . . . . . . . . . . . . . . . . . . . . . 14
Section 6.3. Taxes, Claims for Labor and Materials, Compliance
with Laws . . . . . . . . . . . . . . . . . . . . . 14
Section 6.4. Maintenance, Etc. . . . . . . . . . . . . . . . . . 14
Section 6.5. Nature of Business. . . . . . . . . . . . . . . . . 14
Section 6.6. Current Ratio; Fixed Charge Coverage. . . . . . . . 15
Section 6.7. Stockholders' Equity. . . . . . . . . . . . . . . . 15
Section 6.8. Incurrence of Funded Debt . . . . . . . . . . . . . 15
Section 6.9. Liens and Encumbrances. . . . . . . . . . . . . . . 16
Section 6.10. Dividends, Stock Purchases. . . . . . . . . . . . . 18
Section 6.11. Mergers, Consolidations and Sales of Assets . . . . 18
Section 6.12. Reports and Rights of Inspection. . . . . . . . . . 20
Section 6.13. Repurchase of Notes . . . . . . . . . . . . . . . . 22
Section 6.14. Termination of Pension Plans. . . . . . . . . . . . 22
Section 6.15. Transactions with Affiliates. . . . . . . . . . . . 22
SECTION 7. EVENTS OF DEFAULT AND REMEDIES THEREFOR . . . . . . . . 23
Section 7.1. Events of Default . . . . . . . . . . . . . . . . . 23
Section 7.2. Notice to Holders . . . . . . . . . . . . . . . . . 24
Section 7.3. Default Remedies. . . . . . . . . . . . . . . . . . 24
Section 7.4. Rescission of Acceleration. . . . . . . . . . . . . 25
SECTION 8. AMENDMENTS, WAIVERS AND CONSENTS. . . . . . . . . . . . 25
Section 8.1. Amendments and Waivers. . . . . . . . . . . . . . . 25
Section 8.2. Solicitation of Holders . . . . . . . . . . . . . . 26
Section 8.3. Binding Effect. . . . . . . . . . . . . . . . . . . 26
SECTION 9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 26
Section 9.1. Registered Notes. . . . . . . . . . . . . . . . . . 26
Section 9.2. Exchange for Different Denominations. . . . . . . . 26
Section 9.3. Loss, Theft, etc. of Notes. . . . . . . . . . . . . 27
Section 9.4. Expenses, Stamp Tax Indemnity . . . . . . . . . . . 27
Section 9.5. Powers and Rights Not Waived. . . . . . . . . . . . 27
Section 9.6. Notices . . . . . . . . . . . . . . . . . . . . . . 28
Section 9.7. Successors and Assigns. . . . . . . . . . . . . . . 28
Section 9.8. Survival of Covenants and Representations . . . . . 28
Section 9.9. Severability. . . . . . . . . . . . . . . . . . . . 28
Section 9.10. Governing Law . . . . . . . . . . . . . . . . . . . 28
Section 9.11. Captions. . . . . . . . . . . . . . . . . . . . . . 29
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ATTACHMENTS TO NOTE AGREEMENT:
Schedule I -- Names and Addresses of Purchasers and Amounts of
Commitments
Exhibit A -- Form of 7.13% Senior Note due October 1, 2011
Exhibit B -- Form of Closing Certificate
Exhibit C -- Description of Special Counsel's Closing Opinion
Exhibit D -- Description of Closing Opinion of Counsel to the Company
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XXXX-XXXXX COMPANY
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
NOTE AGREEMENT
Re:
$30,000,000 7.13% Senior Notes
Due October 1, 2011
Dated as of
March 22, 1996
To the Purchaser named in Schedule I
hereto which is a
signatory to this Agreement
Ladies and Gentlemen:
The undersigned, XXXX-XXXXX COMPANY, a Delaware corporation (the
"COMPANY"), agrees with you as follows:
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT
SECTION 1.1. DESCRIPTION OF NOTES. The Company will authorize the
issue and sale of its 7.13% Senior Notes due October 1, 2011 (the "NOTES") in an
aggregate principal amount not exceeding $30,000,000 to be dated the date of
issue, to bear interest from the date thereof until maturity at the rate of
7.13% per annum on the principal amount from time to time outstanding, such
interest to be payable semi-annually on the first day of April and October in
each year (commencing on October 1, 1996), until the principal amount thereof
shall be due and payable, to mature on October 1, 2011 and to be otherwise
substantially in the form attached hereto as Exhibit A. Overdue principal
(including any overdue required or optional prepayment of principal) and
premium, if any, and (to the extent legally enforceable) overdue installments of
interest shall bear interest at the rate of 8.13% per annum from and after the
maturity thereof, whether by acceleration or otherwise, until paid. Interest on
the Notes will be computed on the basis of a 360-day year of twelve 30-day
months. The Notes are not subject to prepayment or redemption at the option of
the Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in Section
2 of this Agreement. The term "NOTES" as used herein shall include each Note
delivered pursuant to this Agreement and the separate agreements with the other
purchasers named in Schedule I hereto.
You and the other purchasers named in Schedule I hereto are hereinafter
sometimes referred to as the "PURCHASERS". The terms which are capitalized
herein shall have the meanings specified in Section 5 unless the context shall
otherwise require.
SECTION 1.2. COMMITMENT: CLOSING DATE. Subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue and sell to you, and you
agree to purchase from the Company, Notes of the Company at a price equal to
100% of the principal amount thereof set forth opposite your name in Schedule 1.
The sale and purchase of the Notes shall take place on such date not later than
March 22, 1996 as shall be mutually agreed upon by the Company and the
Purchasers (the "CLOSING DATE"). On the Closing Date, delivery of the Notes
will be made against payment therefor in funds current and immediately available
at First Bank National Association, First Xxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx
00000, ABA #000000000, account number: 150250050179, account name: Xxxx-Xxxxx
Company, at 10:00 A.M. Minneapolis, Minnesota time for credit to the account of
the Company upon advice to do so from special counsel to the Purchasers. Unless
you notify the Company at least three days prior to the Closing Date, the Notes
delivered to you will be delivered to you in the form of a single registered
Note, registered in your name or in the name of such nominee as you may specify.
SECTION 1.3. OTHER AGREEMENTS. Simultaneously with the execution and
delivery of this Agreement, the Company is entering into similar agreements with
the other Purchasers under which such other Purchasers agree to purchase from
the Company the principal amount of Notes set opposite such Purchasers' names in
Schedule I, and your obligations and the obligations of the Company hereunder
are subject to the execution and delivery of the similar agreements by the other
Purchasers. The obligations of each Purchaser shall be several and not joint
and no Purchaser shall be liable or responsible for the acts of any other
Purchaser.
SECTION 2. PREPAYMENT OF NOTES.
SECTION 2.1. REQUIRED PRINCIPAL PREPAYMENTS. The Company agrees that
it will prepay and apply, and there shall become due and payable $2,500,000
principal amount on October 1 in each year beginning October 1, 2000 up to and
including October 1, 2010 (each such payment and the payment on October 1, 2011
being hereinafter referred to collectively as the "PRINCIPAL PAYMENT DATES") in
respect of the aggregate principal indebtedness evidenced by the Notes. The
remaining unpaid principal amount of the Notes and accrued and unpaid interest
thereon shall be due and payable on October 1, 2011.
No premium shall be payable in connection with any required prepayment
made pursuant to this Section 2.1. In the event of any repurchase of less than
all of the outstanding Notes pursuant to Section 6.13, each scheduled prepayment
pursuant to the provisions of this Section 2.1 coming due
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concurrently therewith or thereafter shall be reduced to the amount determined
by dividing the aggregate principal amount of Notes outstanding immediately
after any such repurchase pursuant to said Section 6.13 by the sum of the number
of the remaining Principal Payment Dates, including, if on a Principal Payment
Date, the date of such purchase.
SECTION 2.2. OPTIONAL PREPAYMENTS. In addition to the prepayments
required by Section 2.1, and upon compliance with Section 2.3, the Company shall
have the privilege, on the first day of April and October in each year
commencing on April 1, 1997, of prepaying the outstanding Notes, either in whole
or in part (but if in part then in units of $500,000 or an integral multiple of
$100,000 in excess thereof) by payment of the principal amount of the Notes or
portion thereof to be prepaid and accrued interest thereon to the date of such
prepayment, together with a premium equal to the then applicable Make Whole
Premium.
SECTION 2.3. NOTICE OF OPTIONAL PREPAYMENTS. The Company will give
notice of any optional prepayment of the Notes to be made pursuant to Section
2.2 hereof to each holder thereof not less than 30 days nor more than 60 days
before the date fixed for such optional prepayment specifying (a) such date, (b)
the principal amount of the holder's Notes to be prepaid on such date, (c) that
a premium may be payable, (d) the date when such premium will be calculated, (e)
a description of the calculation of the premium, if any, and (f) accrued
interest applicable to the prepayment. Such notice of prepayment shall also
certify compliance with all requirements, if any, which are conditions precedent
to any such prepayment. Notice of prepayment having been so given, the
aggregate principal amount of the Notes specified in such notice, together with
the premium, if any, and accrued interest shall become due and payable on the
prepayment date. Two business days prior to the prepayment date, the Company
shall provide each holder of a Note (by facsimile transmission) written notice
of the premium, if any, payable in connection with such prepayment and, whether
or not any premium is payable, a reasonably detailed computation of the Make
Whole Premium.
SECTION 2.4. ALLOCATION OF PREPAYMENTS. All partial prepayments shall
be applied on all outstanding Notes ratably in accordance with the unpaid
principal amounts thereof but only in units of $1,000, and to the extent that
such ratable application shall not result in an even multiple of $1,000,
adjustment may be made by the Company to the end that successive optional
prepayments shall result in substantially ratable payments. Partial prepayments
made pursuant to Section 2.2 shall be credited in each case first, against the
final maturities of the Notes being prepaid and then, against the required
prepayments provided for by Section 2.1 hereof in the inverse order of the due
dates of such prepayments.
SECTION 2.5. METHOD AND PLACE OF PAYMENT OF PRINCIPAL AND INTEREST.
Anything in the Notes or this Agreement to the contrary notwithstanding, at the
time of any payment, the Company will promptly and punctually pay the principal
thereof, if any, and premium, if any,
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and interest due thereon, without any presentment thereof, directly to the
Purchaser or any subsequent holder at the address of the Purchaser set forth in
Schedule I or at such other address as the Purchaser or such subsequent holder
may from time to time designate in writing to the Company or, if a bank account
is designated for a Purchaser on Schedule I hereto or in any written notice to
the Company from the Purchaser or any such subsequent holder, the Company will
make such payments in immediately available funds or in such manner indicated on
Schedule I hereto to such bank account before 12:00 noon, Minneapolis, Minnesota
time, marked for attention as indicated, or in such other manner or to such
other account of the Purchaser or such holder in any bank in the United States
as the Purchaser or any such subsequent holder may from time to time direct in
writing. If you shall sell or transfer any Note, you will notify the Company of
such action and of the name and address of the transferee of such Note and you
will, prior to the delivery of such Note, make a notation on such Note of the
date to which interest has been paid on such Note and, if not previously made, a
notation on such Note of the extent to which any payment has been made on
account of the principal of such Note.
SECTION 3. REPRESENTATIONS.
SECTION 3.1. REPRESENTATIONS OF THE COMPANY. The Company represents
and warrants that all representations set forth in the form of the certificate
annexed hereto as Exhibit B are true and correct as of the date hereof and are
hereby incorporated herein by reference with the same force and effect as though
herein set forth in full.
SECTION 3.2. REPRESENTATIONS OF THE PURCHASER. (a) You represent, and
in entering into this Agreement the Company understands, that you are acquiring
the Notes for the purpose of investment and not with a view to the distribution
thereof, and that you have no present intention of selling, negotiating or
otherwise disposing of the Notes; PROVIDED that the disposition of your property
shall at all times be and remain within your control.
(b) You further represent that at least one of the following
statements concerning each source of funds to be used by you to purchase the
Notes is accurate as of the Closing Date:
(1) the source of funds to be used by you to pay the purchase
price of the Notes is an "INSURANCE COMPANY GENERAL ACCOUNT" within the
meaning of Department of Labor Prohibited Transaction Exemption ("PTE")
95-60 (issued July 12, 1995) and there is no employee benefit plan,
treating as a single plan, all plans maintained by the same employer or
employee organization, with respect to which the amount of the general
account reserves and liabilities for all contracts held by or on behalf
of such plan, exceed ten percent (10%) of the total reserves and
liabilities of such general account (exclusive of separate account
liabilities) plus surplus, as set forth in the NAIC Annual Statement
filed with your state of domicile;
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(2) all or a part of such funds constitute assets of one or
more separate accounts, trusts or a commingled pension trust maintained
by you, and you have disclosed to the Company the names of such employee
benefit plans whose assets in such separate account or accounts or
pension trusts exceed 10% of the total assets or are expected to exceed
10% of the total assets of such account or accounts or trusts as of the
date of such purchase (for the purpose of this clause (2), all employee
benefit plans maintained by the same employer or employee organization
are deemed to be a single plan);
(3) all or part of such funds constitute assets of a bank
collective investment fund maintained by you, and you have disclosed to
the Company the names of such employee benefit plans whose assets in
such collective investment fund exceed 10% of the total assets or are
expected to exceed 10% of the total assets of such fund as of the date
of such purchase (for the purpose of this clause (3), all employee
benefit plans maintained by the same employer or employee organization
are deemed to be a single plan);
(4) all or part of such funds constitute assets of one or more
employee benefit plans, each of which has been identified to the Company
in writing;
(5) you are acquiring the Notes for the account of one or more
pension funds, trust funds or agency accounts, each of which is a
"GOVERNMENTAL PLAN" as defined in Section 3(32) of ERISA;
(6) the source of funds is an "investment fund" managed by a
"qualified professional asset manager" or "QPAM" (as defined in Part V
of PTE 84-14, issued March 13, 1984), provided that no other party to
the transactions described in this Agreement and no "affiliate" of such
other party (as defined in Section V(c) of PTE 84-14) has at this time,
and during the immediately preceding one year has exercised the
authority to appoint or terminate said QPAM as manager of the assets of
any plan identified in writing pursuant to this clause (6) or to
negotiate the terms of said QPAM's management agreement on behalf of any
such identified plans; or
(7) if you are other than an insurance company, all or a
portion of such funds consists of funds which do not constitute "plan
assets".
The Company shall deliver a certificate on the Closing Date which
certificate shall either state that (i) it is neither a "party in interest" (as
defined in Title I, Section 3(14) of ERISA) nor a "disqualified person" (as
defined in Section 4975(e)(2) of the Internal Revenue Code of 1986, as amended),
with respect to any plan identified pursuant to paragraphs (2), (3) or (4)
above, or (ii)
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with respect to any plan identified pursuant to paragraph (6) above, neither it
nor any "affiliate" (as defined in Section V(c) of PTE 84-14) is described in
the proviso to said paragraph (6). As used in this Section 3.2(b), the terms
"SEPARATE ACCOUNT", "EMPLOYER SECURITIES", and "EMPLOYEE BENEFIT PLAN" shall
have the respective meanings assigned to them in ERISA and the term "PLAN
ASSETS" shall have the meaning assigned to it in Department of Labor Regulation
29 C.F.R. Section 2510.3-101.
SECTION 4. CLOSING CONDITIONS.
Your obligation to purchase and pay for the Notes to be issued on the
Closing Date shall be subject to the performance by the Company of its
agreements hereunder which by the terms hereof are to be performed at or prior
to the time of delivery of the Notes and to the following conditions precedent:
SECTION 4.1. CLOSING CERTIFICATE. On the Closing Date you shall
receive from the Company a certificate dated such Closing Date, executed by the
President or a Vice President of the Company substantially in the form attached
hereto as Exhibit B, the truth and accuracy of which shall be a condition to
your obligation to accept and pay for the Notes.
SECTION 4.2. LEGAL OPINIONS. On the Closing Date you shall receive
from Xxxxxxx and Xxxxxx, who are acting as your special counsel in this
transaction, and from Xxxxxx X. Xxxxxx, Esq., General Counsel for the Company,
their respective opinions, dated the Closing Date, in form and substance
satisfactory to you and covering substantially the matters set forth or provided
in Exhibits C and D, respectively, hereto.
SECTION 4.3. COMPANY'S EXISTENCE AND AUTHORITY. On or prior to the
Closing Date, you shall have received in form and substance satisfactory to you
and your special counsel, such documents and evidence with respect to the
Company as you may reasonably request to establish the existence and good
standing of the Company and the authorization of the transactions contemplated
by this Agreement.
SECTION 4.4. RELATED TRANSACTIONS. Prior to or concurrently with the
issuance and sale of the Notes to you, the Company shall have consummated the
sale of the entire principal amount of the Notes scheduled to be sold on the
Closing Date pursuant to this Agreement and the other agreements referred to in
Section 1.3.
SECTION 4.5. CONSENT OF HOLDERS OF OTHER SECURITIES. On or prior to
the Closing Date, any consents or approvals required to be obtained from any
holder or holders of any outstanding Security of the Company and any amendments
of agreements pursuant to which any Securities may have been issued which shall
be necessary to permit the consummation of the transactions
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contemplated hereby shall have been obtained and all such consents or amendments
shall be satisfactory in form and substance to you and your special counsel.
SECTION 4.6. PRIVATE PLACEMENT NUMBER. On or prior to the Closing
Date, special counsel to the Purchasers of the Notes shall have duly made the
appropriate filings with Standard & Poor's CUSIP Service Bureau, as agent for
the National Association of Insurance Commissioners, in order to obtain a
private placement number for the Notes.
SECTION 4.7. FUNDING INSTRUCTIONS. At least three business days prior
to the Closing Date, you shall have received written instructions executed by
the President or any Vice President of the Company directing the manner of the
payment of funds and setting forth (1) the name and address of the transferee
bank, (2) such transferee bank's ABA number, (3) the account name and number
into which the purchase price for the Notes is to be deposited, and (4) the name
and telephone number of the account representative responsible for verifying
receipt of such funds.
Section 4.8. LEGALITY OF INVESTMENT. The Notes to be purchased by you
shall be a legal investment for you under the laws of each jurisdiction to which
you may be subject (without resort to any so-called "BASKET PROVISIONS" to such
laws).
SECTION 4.9. PROCEEDINGS AND DOCUMENTS. All proceedings taken in
connection with the transactions contemplated by this Agreement, and all
documents necessary to the consummation thereof, shall be satisfactory in form
and substance to you and your special counsel and you and your special counsel
shall have received copies (executed or certified as may be appropriate) of all
legal documents or proceedings which you and they may reasonably request in
connection with consummation of said transactions.
SECTION 4.10. WAIVER OF CONDITIONS. If on the Closing Date the Company
fails to tender to you the Notes to be issued to you on such date or if the
conditions specified in this Section 4 have not been fulfilled, you may
thereupon elect to be relieved of all further obligations under this Agreement.
Without limiting the foregoing, if the conditions specified in this Section 4
have not been fulfilled, you may waive compliance by the Company with any such
condition to such extent as you may in your sole discretion determine. Nothing
in this Section 4.10 shall operate to relieve the Company of any of its
obligations hereunder or to waive any of your rights against the Company.
SECTION 5. INTERPRETATION OF AGREEMENT.
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SECTION 5.1. DEFINITIONS. Unless the context otherwise requires, the
terms hereinafter set forth when used herein shall have the following meanings
and the following definitions shall be equally applicable to both the singular
and plural forms of any of the terms herein defined:
"AFFILIATE" shall mean any Person (other than a Subsidiary) (a) which,
directly or indirectly, through one or more intermediaries controls, or is
controlled by, or is under common control with, the Company, (b) which
beneficially owns or holds 10% or more of any class of the Voting Stock of the
Company, or (c) 10% or more of the Voting Stock (or in the case of a Person
which is not a corporation, 10% or more of the Securities of such Person which
shall have any rights or interests similar to the Voting Stock of a corporation)
of which is beneficially owned or held by the Company or a Subsidiary. The term
"CONTROL" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of Voting Stock, by contract or otherwise.
"CAPITALIZED LEASE" shall mean any lease which is required to be
capitalized on the consolidated balance sheet of the Company and its
Subsidiaries in accordance with generally accepted accounting principles.
"CAPITALIZED RENTALS" shall mean at any date as of which the amount
thereof is to be determined, the amount at which the aggregate rentals due under
or to become due under all Capitalized Leases under which the Company or any
Subsidiary is a lessee will be reflected as a liability on a consolidated
balance sheet of the Company and its Subsidiaries in accordance with generally
accepted accounting principles.
"CLOSING DATE" is defined in Section 1.2 hereof.
"CONSOLIDATED CURRENT ASSETS" and "CONSOLIDATED CURRENT LIABILITIES"
shall mean such assets and liabilities of the Company and its Subsidiaries on a
consolidated basis as shall be determined in accordance with generally accepted
accounting principles to constitute current assets and current liabilities,
respectively.
"CONSOLIDATED NET INCOME" for any period shall mean net earnings after
income taxes of the Company and its Subsidiaries determined on a consolidated
basis in accordance with generally accepted accounting principles, but
excluding:
(a) earnings of any Subsidiary accrued prior to the date it
became a Subsidiary;
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(b) earnings of any Person, substantially all the assets of
which have been acquired in any manner by the Company or its
Subsidiaries, realized by such Person prior to the date of acquisition
by the Company or its Subsidiaries;
(c) net earnings of any Person (other than a Subsidiary) in
which the Company or any Subsidiary has an ownership interest unless
such net earnings shall have actually been received by the Company or
such Subsidiary in the form of cash distributions; and
(d) the earnings of any Person to which assets of the Company
shall have been sold, transferred or disposed of, or into which the
Company shall have merged, prior to the date of such transaction.
"DEBT" with respect to any Person shall mean, without duplication, the
sum of:
(a) the obligations of such Person for borrowed money or which
have been incurred in connection with the acquisition of assets;
(b) liabilities secured by any Lien existing on Property owned
by such Person (whether or not such liabilities have been assumed);
(c) Capitalized Rentals under any Capitalized Lease; and
(d) all Guarantees of Debt of others, whether or not reflected
in the balance sheet of such Person.
"DEFAULT" shall mean any event or condition, the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute an
Event of Default.
"ENVIRONMENTAL LEGAL REQUIREMENT" shall mean any current or future
statute, law, regulation, ordinance, order, consent decree, judgment, permit,
license or other requirement of any international, foreign, federal, state,
regional, county, local or other governmental body which pertains to protection
of the environment, health or safety of persons, natural resource use,
conservation, wildlife, waste management, hazardous materials or pollution
(including regulation of releases to air, land, water and groundwater), and
includes, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 U.S.C. Sections 9601 ET SEQ., Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976
and Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. Sections 6901 ET
SEQ., Federal Water Pollution Control Act, as amended by the Clean Water Act of
1977, 33 U.S.C. Sections 1251 ET SEQ.,
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Clean Air Act of 1966, as amended, 42 U.S.C. Sections 7401 ET SEQ., Toxic
Substances Control Act of 1976, 15 U.S.C. Sections 2601 ET SEQ., Hazardous
Materials Transportation Act, 49 U.S.C. Sections 1801 ET SEQ., Occupational
Safety and Health Act of 1970, as amended, 29 U.S.C. Sections 651 ET SEQ., Oil
Pollution Act of 1990, 33 U.S.C. Sections 2701 ET SEQ., Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. Sections 11001 ET SEQ., National
Environmental Policy Act of 1975, 42 U.S.C. Sections 4321 ET SEQ., Safe Drinking
Water Act of 1974, as amended, 42 U.S.C. Sections 300(f) ET SEQ., any similar or
implementing state law, and all amendments, rules, regulations and guidance
documents promulgated thereunder.
"EVENT OF DEFAULT" is defined in Section 7.1 hereof.
"FIXED CHARGES" for any period shall mean on a consolidated basis the
sum of (i) all Rentals (other than Rentals on Capitalized Leases) payable during
such period by the Company and its Subsidiaries, and (ii) all Interest Charges
on all Debt (including the interest component of Rentals on Capitalized Leases)
of the Company and its Subsidiaries.
"FUNDED DEBT" with respect to any Person shall mean, without
duplication, the sum of (i) all Debt of such Person (including obligations of
such Person which are classified as Long-Term Liabilities in accordance with
generally accepted accounting principles) in each case having a final maturity
of one or more than one year from the date of origin thereof (or which, by the
terms of the agreement creating the obligation, is renewable or extendable at
the option of the Obligor for a period or periods more than one year from the
date of origin), including all payments in respect thereof that are required to
be made within one year from the date of any determination of Funded Debt
whether or not included in Consolidated Current Liabilities, and (ii) all
guarantees of Funded Debt of others, whether or not reflected in the balance
sheet of such Person.
"GUARANTY" shall mean for any Person all obligations of such Person
guaranteeing or in effect guaranteeing any indebtedness, dividend or other
obligation of any other Person (the "PRIMARY OBLIGOR") in any manner, whether
directly or indirectly, including obligations incurred through an agreement,
contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any
Property or assets constituting security therefor;
(b) to advance or supply funds:
(1) for the purchase or payment of such
indebtedness or obligation; or
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(2) to maintain working capital or other
balance sheet condition or any income statement condition or
otherwise to advance or make available funds for the purchase or
payment of such indebtedness or obligation;
(c) to lease Property or to purchase Securities or other
Property or services primarily for the purpose of assuring the owner of
such indebtedness or obligation of the ability of the primary obligor to
make payment of the indebtedness or obligation; or
(d) otherwise to assure the owner of the indebtedness or
obligation of the primary obligor against loss in respect thereof.
For the purposes of all computations made under this Agreement, a
Guaranty in respect of any indebtedness for borrowed money shall be deemed to be
an amount of indebtedness equal to the portion of the principal amount of such
indebtedness for borrowed money which has been guaranteed, and a Guaranty in
respect of any other obligation or liability or any dividend shall be deemed to
be indebtedness equal to the maximum aggregate amount of such obligation,
liability or dividend.
"HAZARDOUS SUBSTANCE" shall mean any hazardous or toxic chemical, waste,
byproduct, pollutant, contaminant, compound, product or substance, including,
without limitation, asbestos, polychlorinated biphenyls, petroleum (including
crude oil or any fraction thereof) and any material designated as hazardous or
toxic pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. Sections 9601 ET SEQ., Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976
and Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. Sections 6901 ET
SEQ., Federal Water Pollution Control Act, as amended by the Clean Water Act of
1977, 33 U.S.C. Sections 1251 ET SEQ., Clean Air Act of 1966, as amended, 42
U.S.C. Sections 7401 ET SEQ., Toxic Substances Control Act of 1976, 15 U.S.C.
Sections 2601 ET SEQ., or Hazardous Materials Transportation Act, 49 U.S.C.
Sections 1801 ET SEQ.
"INTEREST CHARGES" for any period shall mean all interest and all
amortization of debt, discount and expense for all Debt of a Person for which
such calculations are being made.
"LIEN" shall mean any interest in Property securing an obligation owed
to, or a claim by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract, and including but not
limited to the pledge or deposit of Property, the security interest lien arising
from a mortgage, encumbrance, pledge, conditional sale or trust receipt or a
lease, consignment or bailment for security purposes. The term "LIEN" shall
include reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances affecting Property. For the
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purposes of this Agreement, the Company or a Subsidiary shall be deemed to be
the owner of any Property which it has acquired or holds subject to a
conditional sale agreement, financing lease or other arrangement pursuant to
which title to the Property has been retained by or vested in some other Person
for security purposes and such retention or vesting shall be deemed to be a
Lien.
"MAKE WHOLE PREMIUM" shall mean in connection with any prepayment or
acceleration of the Notes the excess, if any, of (a) the aggregate present
values as of the date of such prepayment of each dollar of principal being
prepaid (taking into account the application of such prepayment required by
Section 2.1, if any,) and the amount of interest (exclusive of interest accrued
to the date of prepayment) that would have been payable in respect of such
dollar if such prepayment had not been made, determined by discounting such
amounts at the Reinvestment Rate from the respective dates on which they would
have been payable, over (b) 100% of the principal amount of the Notes being
prepaid at the date such Notes are to be prepaid. If the Reinvestment Rate at
the time of determination of the Make Whole Premium is equal to or higher than
7.13%, the Make Whole Premium shall be zero. For purposes of any determination
of the Make Whole Premium:
"REINVESTMENT RATE" means (1) .50% plus the yield to maturity of
the United States Treasury obligations having a maturity (as compiled by
and published on Telerate Page 500 or its successor ("TELERATE") more
than three (3) Business Days immediately preceding the payment date at
11:00 A.M. New York City time) (rounded to the nearest month)
corresponding to the Weighted Average Life to Maturity of the Notes
being prepaid or paid (taking into account the application of any
prepayment required by Section 2.1) or (2) if such rate shall not have
been so published by Telerate and Telerate does not publish the Collar
Yields referred to in clause (b) of the next following sentence, the
Reinvestment Rate in respect of such payment date shall mean .50% plus
the yield to maturity of the United States Treasury obligations having a
maturity (as compiled by and published on page "USD" of the Bloomberg
Financial Market Services ("BLOOMBERG") three (3) Business Days
immediately preceding the payment date at 11:00 A.M. New York City time)
(rounded to the nearest month) corresponding to the Weighted Average
Life to Maturity of the Notes being prepaid or paid (taking into account
the application of any prepayment required by Section 2.1), or (3) if
such rate shall not have been so published by either Telerate or
Bloomberg and Telerate and Bloomberg do not publish the Collar Yields
referred to in clause (b) of the next following sentence, the
Reinvestment Rate in respect of such payment date shall mean .50% plus
the arithmetic mean of the yields for the two columns under the heading
"WEEK ENDING" published in the Statistical Release under the caption
"TREASURY CONSTANT MATURITIES" for the maturity (rounded to the nearest
month) corresponding to the Weighted Average Life to Maturity of the
Notes being prepaid or paid (taking into account the application of any
prepayment required by
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Section 2.1). If no maturity exactly corresponding to Weighted Average
Life to Maturity of the Notes shall appear in either Telerate, Bloomberg
or the Statistical Release, as the case may be, (a) if necessary, U.S.
Treasury xxxx quotations shall be converted to bond-equivalent yields in
accordance with accepted financial practice and (b) yields for the
published maturity next longer than the Weighted Average Life to
Maturity and the published maturity next shorter than the Weighted
Average Life to Maturity (such yields described in this clause (b) being
referred to as "COLLAR YIELDS") shall be calculated pursuant to the
foregoing sentence and the Reinvestment Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding in each
of the relevant periods to the nearest month. For purposes of
calculating the Reinvestment Rate pursuant to clause (3) above, the most
recent Statistical Release published prior to the date of determination
of the Make Whole Premium shall be used.
"STATISTICAL RELEASE" shall mean the then most recently published
statistical release designated "H.15(519)" or any successor publication
which is published weekly by the Federal Reserve System and which
establishes yields on actively traded U.S. Government Securities
adjusted to constant maturities or, if such statistical release is not
published at the time of any determination hereunder, then such other
reasonably comparable index which shall be designated by the holders of
66-2/3% in aggregate principal amount of the outstanding Notes.
"WEIGHTED AVERAGE LIFE TO MATURITY" of the principal amount of
the Notes being prepaid shall mean, as of the time of any determination
thereof, the number of years obtained by dividing the then Remaining
Dollar-Years of such principal by the aggregate amount of such
principal. The term "REMAINING DOLLAR-YEARS" of such principal shall
mean the amount obtained by (1) multiplying (i) the remainder of (A) the
amount of principal that would have become due on each scheduled payment
date if such prepayment had not been made, LESS (B) the amount of
principal on the Notes scheduled to become due on such date after giving
effect to such prepayment and the application thereof in accordance with
the provisions of Section 2.1, if any, by (ii) the number of years
(calculated to the nearest one-twelfth) which will elapse between the
date of determination and such scheduled payment date, and (2) totaling
the products obtained in (1).
"MULTIEMPLOYER PLAN" shall have the same meaning as in the Employee
Retirement Income Security Act of 1974, as amended.
"NET INCOME AVAILABLE FOR FIXED CHARGES" for any period shall mean the
sum of (i) Consolidated Net Income during such period PLUS (to the extent
deducted in determining Consolidated Net Income), (ii) all provisions for any
federal, state or other income taxes paid by
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the Company and its Subsidiaries during such period and (iii) Fixed Charges of
the Company and its Subsidiaries during such period.
"NOTES" is defined in Section 1.1 hereof.
"PERSON" shall mean an individual, partnership, corporation, trust or
unincorporated organization, and a government or agency or political subdivision
thereof.
"PROPERTY" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"PURCHASERS" is defined in Section 1.1 hereof.
"RENTALS" shall mean and include as of the date of any determination
thereof all fixed payments (including as such all payments which the lessee is
obligated to make to the lessor on termination of the lease or surrender of the
property) payable by the Company or a Subsidiary, as lessee or sublessee under a
lease of real or personal property, but shall be exclusive of any amounts
required to be paid by the Company or a Subsidiary (whether or not designated as
rents or additional rents) on account of maintenance, repairs, insurance, taxes
and similar charges. Fixed rents under any so-called "percentage leases" shall
be computed solely on the basis of the minimum rents, if any, required to be
paid by the lessee regardless of sales volume or gross revenues.
"RESTRICTED PAYMENTS" is defined in Section 6.10 hereof.
"SECURITY" shall have the same meaning as in Section 2(l) of the
Securities Act of 1933, as amended.
"STOCKHOLDERS' EQUITY" shall mean the amount of the capital stock
accounts (LESS treasury stock) PLUS the surplus and retained earnings of the
Company determined in accordance with generally accepted accounting principles.
"SUBSIDIARY" shall mean any corporation of which more than 50% (by
number of votes) of the Voting Stock is owned and controlled by the Company
and/or one or more corporations which are Subsidiaries.
"TOTAL CAPITALIZATION" shall mean the sum of (a) Funded Debt of the
Company and its Subsidiaries, (b) deferred income taxes of the Company and its
Subsidiaries classified as long-term liabilities in accordance with generally
accepted accounting principles, and (c) Stockholders' Equity.
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"VOTING STOCK" shall mean Securities of any class or classes of a
corporation, the holders of which are ordinarily, in the absence of
contingencies, entitled to elect the corporate directors (or Persons performing
similar functions).
"WHOLLY-OWNED SUBSIDIARY" shall mean any Subsidiary, all of the equity
Securities (except directors' qualifying shares) of which are owned by the
Company and/or the Company's other Wholly-Owned Subsidiaries.
SECTION 5.2. ACCOUNTING PRINCIPLES. Where the character or amount of
any asset or liability or item of income or expense is required to be determined
or any consolidation or other accounting computation is required to be made for
the purposes of this Agreement, the same shall be done in accordance with
generally accepted accounting principles, to the extent applicable.
SECTION 5.3. DIRECTLY OR INDIRECTLY. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether the action in
question is taken directly or indirectly by such Person.
SECTION 6. COMPANY COVENANTS.
From and after the Closing Date and continuing so long as any amount
remains unpaid on any Note:
SECTION 6.1. CORPORATE EXISTENCE, ETC. The Company will preserve and
keep in force and effect, and will cause each Subsidiary to preserve and keep in
force and effect, its corporate existence and all licenses and permits necessary
to the proper conduct of its business, PROVIDED, HOWEVER, that the foregoing
shall not prevent any transaction permitted by Section 6.11.
SECTION 6.2. INSURANCE. The Company will maintain or cause to be
maintained, and will cause each Subsidiary to maintain or cause to be
maintained, insurance coverage by financially sound and reputable insurers in
such forms and amounts, including such deductibles and such provisions for self-
insurance, and against such risks as are customary for corporations of
established reputation engaged in the same or a similar business and owning and
operating similar Properties.
SECTION 6.3. TAXES, CLAIMS FOR LABOR AND MATERIALS, COMPLIANCE WITH
LAWS. The Company will promptly pay and discharge, and will cause each
Subsidiary promptly to pay and discharge, all lawful taxes, assessments and
governmental charges or levies imposed upon the Company or such Subsidiary,
respectively, or upon or in respect of all or any part of the Property or
business of the Company or such Subsidiary, all trade accounts payable in
accordance with
-20-
usual and customary business terms, and all claims for work, labor or materials,
which if unpaid might become a Lien or charge upon any Property of the Company
or such Subsidiary; PROVIDED the Company or such Subsidiary shall not be
required to pay any such tax, assessment, charge, levy, account payable or claim
if (a) the validity, applicability or amount thereof is being contested in good
faith by appropriate actions or proceedings which will prevent the forfeiture or
sale of any Property of the Company or such Subsidiary or any material
interference with the use thereof by the Company or such Subsidiary or (b) such
nonpayment would not materially and adversely affect the Properties, business,
prospects, profits or condition of the Company and its Subsidiaries, and (c) the
Company or such Subsidiary shall set aside on its books, reserves, if any,
required by generally accepted accounting principles with respect thereto. The
Company will promptly comply and will cause each Subsidiary to promptly comply
with all laws, ordinances or governmental rules and regulations to which it is
subject, including without limitation, the Occupational Safety and Health Act of
1970, as amended, the Employee Retirement Income Security Act of 1974, as
amended, and all Environmental Legal Requirements, the violation of any of which
would materially and adversely affect the Properties, business, prospects,
profits or condition of the Company and its Subsidiaries or would result in any
Lien or charge upon any Property of the Company or such Subsidiary.
SECTION 6.4. MAINTENANCE, ETC. The Company will maintain, preserve and
keep, and will cause each Subsidiary to maintain, preserve and keep, its
Properties which are used or useful in the conduct of its business (whether
owned in fee or a leasehold interest) in good repair and working order and from
time to time will make all necessary repairs, replacements, renewals and
additions so that at all times the efficiency thereof shall be maintained.
SECTION 6.5. NATURE OF BUSINESS. Neither the Company nor any
Subsidiary will engage in any business if, as a result, the general nature of
the business which would then be engaged in by the Company and its Subsidiaries
would be substantially changed from the general nature of the business engaged
in by the Company and its Subsidiaries on the date of this Agreement.
SECTION 6.6. CURRENT RATIO; FIXED CHARGE Coverage. (a) The Company
will at all times keep and maintain the ratio of Consolidated Current Assets to
Consolidated Current Liabilities at not less than 1.10 to 1.0.
(b) The Company will keep and maintain the ratio of Net Income
Available for Fixed Charges to Fixed Charges (determined as of the end of each
fiscal quarter) for the immediately preceding 12-month period (taken as a single
accounting period ending at the end of such fiscal quarter) at an amount not
less than 1.25 to 1.00.
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SECTION 6.7. STOCKHOLDERS' EQUITY. The Company will at all times keep
and maintain Stockholders' Equity at an amount not less than $100,000,000.
SECTION 6.8. INCURRENCE OF FUNDED DEBT. (a) Neither the Company nor
any Subsidiary will create, issue, assume, guarantee or otherwise incur or
become liable in respect of any Funded Debt, except:
(1) the Notes;
(2) Funded Debt of the Company and its Subsidiaries
outstanding as of the date of this Agreement and reflected on the
consolidated balance sheet of the Company and its Subsidiaries as of
December 30, 1995;
(3) additional unsecured Funded Debt of the Company; PROVIDED
that at the time of issuance thereof and after giving effect thereto and
to the application of the proceeds thereof Funded Debt of the Company
and its Subsidiaries shall not exceed 60% of Total Capitalization; and
(4) additional Funded Debt of the Company and its Subsidiaries
secured by Liens permitted by and incurred within the limitations of
Section 6.9(a)(8), Section 6.9(a)(9) or Section 6.9(a)(10); PROVIDED
that at the time of issuance thereof and after giving effect thereto and
to the application of the proceeds thereof Funded Debt of the Company
and its Subsidiaries shall not exceed 60% of Total Capitalization; and
(5) Funded Debt of a Subsidiary to the Company or to a Wholly-
Owned Subsidiary.
(b) Any corporation which becomes a Subsidiary after the date hereof
shall for all purposes of this Section 6.8 be deemed to have created, assumed or
incurred at the time it becomes a Subsidiary all Funded Debt of such corporation
existing immediately after it becomes a Subsidiary.
(c) The renewal, extension or refunding of any Funded Debt issued or
incurred in accordance with the limitations of Section 6.8(a) shall constitute
the issuance of additional Funded Debt, which is, in turn, subject to the
limitations of the applicable provisions of this Section 6.8.
SECTION 6.9. LIENS AND ENCUMBRANCES.
(a) NEGATIVE PLEDGE. Neither the Company nor any Subsidiary will
create or incur, or suffer to be incurred or to exist, any Lien on its or their
Property or assets, whether now owned
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or hereafter acquired, or upon any income or profits therefrom, or transfer any
Property for the purpose of subjecting the same to the payment of obligations in
priority to the payment of its or their general creditors, or acquire or agree
to acquire, or permit any Subsidiary to acquire, any Property or assets upon
conditional sales agreements or other title retention devices, except:
(1) Liens securing taxes, assessments or governmental charges
or levies or the claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons, PROVIDED the payment
thereof is not at the time required by Section 6.3;
(2) Liens incurred or deposits made in the ordinary course of
business (i) in connection with workmen's compensation, unemployment
insurance, social security and other like laws, or (ii) to secure the
performance of letters of credit, bids, tenders, sales contracts,
leases, statutory obligations, surety, appeal and performance bonds and
other similar obligations not incurred in connection with the borrowing
of money, the obtaining of advances or the payment of the deferred
purchase price of Property, PROVIDED in each case, the obligation
secured is not overdue or, if overdue, is being contested in good faith
by appropriate actions or proceedings;
(3) attachment, judgment and other similar Liens arising in
connection with court proceedings, PROVIDED the execution or other
enforcement of such Liens is effectively stayed and the claims secured
thereby are being actively contested in good faith and by appropriate
proceedings PROVIDED FURTHER, the aggregate amount of all pledges or
deposits made to stay the execution or enforcement of such Liens of the
Company and its Subsidiaries does not exceed $1,000,000;
(4) Liens on Property of a Subsidiary, PROVIDED such Liens
secure only obligations owing to the Company or a Wholly-Owned
Subsidiary;
(5) reservations, exceptions, encroachments, easements, rights
of way, covenants, conditions, restrictions, leases and other similar
title exceptions or encumbrances affecting real Property, which are
necessary for the conduct of the activities of the Company and its
Subsidiaries or which customarily exist on Properties of corporations
engaged in similar activities and similarly situated, PROVIDED they do
not in the aggregate materially detract from the value of said
Properties or materially interfere with their use in the ordinary
conduct of the owning company's business;
(6) leases of Property other than Capitalized Leases;
(7) the Lien of mortgages, conditional sale contracts,
security interests or other arrangements for the retention of title
(including Capitalized Leases) existing as of
-23-
the date of this Agreement, securing Funded Debt of the Company or any
Subsidiary outstanding on such date;
(8) the Lien of mortgages, conditional sale contracts,
security interests or other arrangements for the retention of title
(including Capitalized Leases) given to secure the payment of the
purchase price or the costs of construction or improvement of fixed
assets useful and intended to be used in carrying on the business of the
Company or such Subsidiary, as the case may be, including Liens existing
on such fixed assets at the time of acquisition thereof or at the time
of acquisition by the Company or a Subsidiary of any business entity
then owning such fixed assets, whether or not such existing Liens were
given to secure the payment of the purchase price of the fixed assets to
which they attach; PROVIDED that (i) the Lien or charge shall attach
solely to the fixed assets acquired, constructed or improved, (ii) at
the time of acquisition, construction or improvement of such fixed
assets, the aggregate amount remaining unpaid on all indebtedness
secured by Liens on such fixed assets (whether or not assumed by the
Company or such Subsidiary), shall not be in excess of the lesser of the
total purchase price or fair market value thereof at the time of
acquisition, construction or improvement of such fixed assets (as
determined in good faith by the chief financial officer of the Company),
(iii) the indebtedness secured by such Liens is payable in equal
monthly, quarterly, semi-annual or annual installments and is not
callable or subject to acceleration prior to its stated maturity at the
option of the lender for reasons unrelated to the creditworthiness of
the obligor or destruction of the collateral thereof, and (iv) the
indebtedness secured by such Liens shall have been incurred within the
applicable limitations of Section 6.8(A)(4);
(9) Liens of mortgages, conditional sale contracts, security
interests or other arrangements for the retention of title (including
Capitalized Leases) in addition to the Liens permitted by preceding
clauses (1) through (8) hereof; PROVIDED that the indebtedness secured
by such Liens permitted by this Section 6.9(a)(9) at any one time
outstanding shall not exceed 25% of Total Capitalization; and
(10) any extension, renewal or replacement of any Lien
permitted by the foregoing clauses (7), (8) and (9) in respect of the
same Property theretofore subject to such Lien in connection with the
extension, renewal or refunding (without increases in principal amount)
of the indebtedness secured thereby which is permitted by the provisions
of Section 6.8(a)(4).
(b) EQUAL AND RATABLE LIEN; EQUITABLE LIEN. In case any Property is
subjected to a Lien in violation of this Section 6.9, the Company will make or
cause to be made provision whereby the Notes will be secured equally and ratably
with all other obligations secured thereby and in any case the Notes shall have
the benefit, to the full extent that, and with such priority as, the holders
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may be entitled thereto under applicable law, of an equitable Lien on such
Property so equally and ratably securing the Notes. Such violation of Section
6.9 shall constitute an Event of Default hereunder, whether or not any such
provision is made pursuant to this Section 6.9(b).
SECTION 6.10. DIVIDENDS, STOCK PURCHASES. The Company will not except
as hereinafter provided:
(a) declare or pay any dividends, either in cash or Property,
on any shares of its capital stock of any class (except dividends or
other distributions payable solely in shares of capital stock of the
Company); or
(b) directly or indirectly, or through any Subsidiary,
purchase, redeem or retire any shares of its capital stock of any class
or any warrants, rights or options to purchase or acquire any shares of
its capital stock (other than in exchange for or out of the net proceeds
to the Company from the substantially concurrent issue or sale of other
shares of capital stock of the Company or warrants, rights or options to
purchase or acquire any shares of its capital stock); or
(c) make any other payment or distribution, either directly or
indirectly or through any Subsidiary, in respect of its capital stock;
(such declarations or payments of dividends, purchases, redemptions or
retirements of capital stock and warrants, rights or options, and all such other
distributions being herein collectively called "RESTRICTED PAYMENTS"), if after
giving effect thereto the aggregate amount of Restricted Payments made during
the period from and after December 30, 1995 to and including the date of the
making of the Restricted Payment in question, would exceed the sum of (1)
$35,000,000, (2) 75% of Consolidated Net Income for such period, computed on a
cumulative basis for said entire period (or if such Consolidated Net Income is a
deficit figure, then minus 100% of such deficit), and (3) the aggregate net cash
proceeds received by the Company from the issuance and sale of capital stock for
such period (but without duplication of any net proceeds to the Company referred
to in clause (b) above).
The Company will not declare any dividend which constitutes a Restricted
Payment payable more than 90 days after the date of declaration thereof.
For the purposes of this Section 6.10, the amount of any Restricted
Payment declared, paid or distributed in Property of the Company shall be deemed
to be the greater of the book value or fair market value (as determined in good
faith by the chief financial officer of the Company) of such Property at the
time of the making of the Restricted Payment in question.
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SECTION 6.11. MERGERS, CONSOLIDATIONS AND SALES OF ASSETS. (a) The
Company will not (1) consolidate with or be a party to a merger with any other
corporation or (2) sell, lease or otherwise dispose of all or any substantial
part (as hereinafter defined) of the assets of the Company, unless:
(i) the successor formed by or resulting from such
consolidation or merger or the transferee to which such sale, lease or
other disposition shall have been made shall be a solvent corporation
organized under the laws of the United States of America or a State
thereof or the District of Columbia, and after giving effect to such
transaction, no Default or Event of Default shall exist;
(ii) such successor or transferee corporation shall expressly
assume in writing the due and punctual payment of the principal of and
interest and premium, if any, on the Notes, according to their tenor,
and the due and punctual performance and observance of all the terms,
covenants, agreements and conditions of the Notes and this Agreement and
shall furnish the holders of the Notes an opinion of counsel
satisfactory to such holders to the effect that the instrument has been
duly authorized, executed and delivered and constitutes the legal, valid
and binding contract and agreement of the surviving corporation
enforceable in accordance with its terms; and
(iii) after giving effect to such consolidation or merger the
Company would be permitted to incur at least $1.00 of additional Funded
Debt under the provisions of Section 6.8(a)(3).
(b) No Subsidiary will (1) consolidate with or be a party to any
merger with any other corporation or (2) sell, lease or otherwise dispose of all
or any substantial part of its assets, except in each case, that a Subsidiary
may consolidate with, merge into or sell, lease or otherwise dispose of all or
any substantial part of its assets to the Company or any Wholly-owned Subsidiary
or, in the case of a merger, any other corporation, PROVIDED that, the surviving
corporation in such merger is a Wholly-owned Subsidiary.
(c) The Company will not sell, transfer or otherwise dispose of any
shares of stock of any Subsidiary (except to qualify directors) or any
indebtedness of any Subsidiary, and will not permit any Subsidiary to sell,
transfer or otherwise dispose of (except to the Company or a Wholly-owned
Subsidiary) any shares of stock or any indebtedness of any other Subsidiary,
unless:
(1) simultaneously with such sale, transfer, or disposition,
all shares of stock and all indebtedness of such Subsidiary at the time
owned by the Company and by every other Subsidiary shall be sold,
transferred or disposed of as an entirety;
-26-
(2) the Board of Directors of the Company shall have
determined, as evidenced by a resolution thereof, that the proposed
sale, transfer or disposition of said shares of stock and indebtedness
is in the best interests of the Company;
(3) said shares of stock and indebtedness are sold,
transferred or otherwise disposed of to a Person, for a cash
consideration and on terms reasonably deemed by the Board of Directors
to be adequate and satisfactory;
(4) the Subsidiary being disposed of shall not have any
continuing investment in the Company or any other Subsidiary not being
simultaneously disposed of; and
(5) such sale or other disposition does not involve a
substantial part (as hereinafter defined) of the assets of the Company
and its Subsidiaries.
(d) As used in this Section 6.11, a sale, lease or other disposition
of assets shall be deemed to be a "SUBSTANTIAL PART" of the assets of the
Company and its Subsidiaries only if the book value of such assets, when added
to the book value of all other assets sold, leased or otherwise disposed of by
the Company and its Subsidiaries (other than in the ordinary course of business)
during the twelve month period ending on the date of such sale, lease or other
disposition, exceeds 10% of Total Capitalization, determined as of the end of
the immediately preceding fiscal year.
SECTION 6.12. REPORTS AND RIGHTS OF INSPECTION. The Company will keep
or cause to be kept, and will cause each Subsidiary to keep or cause to be kept,
proper books of record and account in which full and correct entries will be
made of all dealings or transactions of or in relation to the business and
affairs of the Company or such Subsidiary in accordance with generally accepted
accounting principles consistently applied (except for changes disclosed in the
financial statements furnished to you pursuant to this Section 6.12 and
concurred in by the independent public accountants referred to in Section
6.12(b) hereof), and will furnish to you so long as you are the holder of any
Note and to each holder of then outstanding Notes (in duplicate if so
requested):
(a) QUARTERLY STATEMENTS. As soon as available and in any
event within 60 days after the end of each quarterly fiscal period
(except the last) of each fiscal year of the Company, copies of:
(1) a consolidated balance sheet of the Company and its
consolidated Subsidiaries as of the close of such period, setting
forth in comparative form the consolidated figures for the fiscal
year then most recently ended,
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(2) consolidated statements of income and retained
earnings of the Company and its consolidated Subsidiaries for the
portion of the fiscal year ending with such quarterly fiscal
period; in each case setting forth in comparative form the
consolidated figures for the corresponding period of the
preceding fiscal year, all in reasonable detail and certified by
the chief financial officer of the Company as complete and
correct, subject to changes resulting from year-end and audit
adjustments, and
(3) consolidated statements of cash flows of the
Company and its consolidated Subsidiaries for the portion of the
fiscal year ending with such quarterly fiscal period, setting
forth in comparative form the consolidated figures for the
corresponding period of the preceding fiscal year;
(b) ANNUAL STATEMENTS. As soon as available and in any event
within 120 days after the close of each fiscal year of the Company,
copies of:
(1) a consolidated balance sheet of the Company and its
consolidated Subsidiaries as of the close of such fiscal year,
and
(2) consolidated statements of income and retained
earnings and cash flows of the Company and its consolidated
Subsidiaries for such fiscal year,
in each case setting forth in comparative form the consolidated figures
for the preceding fiscal year, all in reasonable detail and accompanied
by a report thereon by Ernst & Young LLP or of other independent
accountants of recognized national standing selected by the Company to
the effect that such consolidated financial statements present fairly,
in all material respects, the consolidated financial position of the
Company and its Subsidiaries as of the end of the fiscal year being
reported on and on the consolidated results of the operations and cash
flows for said year in conformity with generally accepted accounting
principles and that the examination of such accountants in connection
with such financial statements has been conducted in accordance with
generally accepted auditing standards and included such tests of the
accounting records and such other auditing procedures as said
accountants deemed necessary in the circumstances;
(c) SEC AND OTHER REPORTS. Promptly upon their becoming
available, one copy of each regular financial statement or report, as
the Company shall send to its stockholders and of each regular and
periodic report, registration statement or prospectus filed by the
Company with any Securities exchange or the Securities and Exchange
Commission (the "SEC") or any successor agency, it being understood that
if and to the
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extent that the Company's SEC Form 10Q and Form 10K or successor forms
are provided within the time periods prescribed by clauses (a) and (b)
above, the requirements of supplying the quarterly and annual statements
provided for in said clauses (a) and (b) shall be deemed to have been
met;
(d) NOTICE OF DEFAULT. Immediately upon becoming aware of the
existence of any condition or event which constitutes an Event of
Default, or event which with the lapse of time or giving of notice, or
both, would constitute an Event of Default, under this Agreement, a
written notice specifying the nature and period of existence thereof and
what action the Company is taking or proposes to take with respect
thereto;
(e) OFFICER'S CERTIFICATE. Within the period provided in
paragraph (b) above, a certificate of an authorized financial officer of
the Company stating: (1) that the signer thereof has reexamined the
terms and provisions of this Agreement (which statement shall be
accompanied by the information and computations (in reasonable detail)
required in order to establish whether the Company was in compliance
with the requirements of Sections 6.6 through 6.11, inclusive, at the
end of the period being covered by the financial statements then being
furnished) and (2) whether, to the best knowledge of such officer (after
due inquiry), there exists on the date of the certificate any Default or
Event of Default under this Agreement and, if any such condition or
event exists, specifying the nature and period of existence thereof and
the action the Company is taking and proposes to take with respect
thereto; and
(f) REQUESTED INFORMATION. Such additional information as you
or any such holder may reasonably request concerning the Company.
Without limiting the foregoing, the Company will permit you, so long as
you are the holder of any Note, and each institutional holder of the then
outstanding Notes (or such Persons as either you or such holder may designate),
under the Company's guidance, to visit the Company at its corporate headquarters
and to examine all the books of account, records, reports and other papers of
the Company, to make copies and extracts therefrom as is reasonably necessary
for the purposes hereof, and to discuss its affairs, finances and accounts with
its officers and independent public accountants (and by this provision the
Company authorizes said accountants to discuss with you the finances and affairs
of the Company) all at such reasonable times and as often as may be reasonably
requested. Any information obtained by you or such other holder from such
examination or discussion will be treated as confidential unless and until such
information has been publicly disclosed by the Company; PROVIDED, HOWEVER, that
nothing herein contained shall limit or impair the right or obligation of
yourself or such other holder to disclose such information when required by law
or to appropriate regulatory authorities having jurisdiction over your or its
affairs (including, in all events, to proposed transferees of the Notes
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and to proposed purchasers of the assets of a holder of Notes) or to use the
same in connection with the enforcement of the terms and conditions of this
Agreement. Any visitation shall be at your sole expense or the sole expense of
such institutional holder unless an Event of Default or an event which with the
lapse of time or giving of notice and lapse of time would become an Event of
Default shall have occurred and be continuing, in which case, any such
visitation or inspection shall be at the sole expense of the Company.
SECTION 6.13. REPURCHASE OF NOTES. Neither the Company nor any
Subsidiary, directly or indirectly through an Affiliate or otherwise, may
repurchase or make any offer to repurchase any Notes unless the offer has been
made to repurchase Notes, pro rata, from all holders of the Notes at the same
time and upon the same terms. In case the Company repurchases any Notes such
Notes shall thereafter be cancelled and no Notes shall be issued in substitution
therefor. Without limiting the foregoing, upon the purchase or other
acquisition of any Notes by the Company, any Subsidiary or any Affiliate, such
Notes shall no longer be outstanding for purposes of any section of this
Agreement relating to the taking by the holders of the Notes of any actions with
respect hereto, including, without limitation, Section 7.3, Section 7.4 and
Section 8.1.
SECTION 6.14. TERMINATION OF PENSION PLANS. The Company will not and
will not permit any Subsidiary to withdraw from any Multiemployer Plan or permit
any employee benefit plan maintained by it to be terminated if such withdrawal
or termination could result in withdrawal liability (as described in Part 1 of
Subtitle E of Title IV of the Employee Retirement Income Security Act of 1974,
as amended) or the imposition of a Lien on any Property of the Company or any
Subsidiary pursuant to Section 4068 of the Employee Retirement Income Security
Act of 1974, as amended.
SECTION 6.15. TRANSACTIONS WITH AFFILIATES. The Company will not, and
will not permit any Subsidiary to, enter into or be a party to, any transaction
or arrangement with any Affiliate (including without limitation, the purchase
from, sale to or exchange of Property with, or the rendering of any service by
or for, any Affiliate), except in the ordinary course of and pursuant to the
reasonable requirements of the Company's or such Subsidiary's business and upon
fair and reasonable terms no less favorable to the Company or such Subsidiary
than would obtain in a comparable arm's-length transaction with a Person other
than an Affiliate.
SECTION 7. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
SECTION 7.1. EVENTS OF DEFAULT. Any one or more of the following shall
constitute an "EVENT OF DEFAULT" as the term is used herein:
(a) default in the payment of interest on any Note when the
same shall have become due and such default shall continue for more than
five days; or
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(b) default in the payment of principal or premium, if any, on
any Note when the same shall have become due; or
(c) default shall occur in the observance or performance of
the covenants or agreements contained in Sections 6.6 through 6.11; or
(d) default shall occur in the observance or performance of
any other provision of this Agreement which is not remedied within 30
days after the earlier of (1) such default shall first become known to
any executive officer of the Company or the chief financial officer of
the Company, or (2) notice of such default shall have been given by any
holder of the Notes to any executive officer or the chief financial
officer of the Company; or
(e) any representation or warranty made by the Company herein,
or made by the Company in any statement or certificate furnished by the
Company in connection with the consummation of the issuance and sale of
the Notes or furnished by the Company pursuant hereto proves untrue or
misleading in any material respect as of the date of the issuance or
making thereof; or
(f) the Company or any Subsidiary fails to make any payment of
principal and/or interest in respect of any indebtedness for borrowed
money aggregating more than $15,000,000 in original principal amount or
any event shall occur (other than the mere passage of time) or any
condition shall exist in respect of any indebtedness for borrowed money
aggregating more than $15,000,000 in original principal amount of the
Company or any Subsidiary, or under any agreement securing or relating
to such indebtedness, the effect of which is to cause such indebtedness
to become due prior to its stated maturity or prior to its regularly
scheduled dates of payment; or
(g) the Company becomes insolvent or bankrupt, is generally
not paying its debts as they become due or makes an assignment for the
benefit of creditors, or the Company causes or suffers an order for
relief to be entered with respect to it under applicable Federal
bankruptcy law or applies for or consents to the appointment of a
custodian, trustee or receiver for the Company or for the major part of
the Property of either; or
(h) a custodian, trustee or receiver is appointed for the
Company or for the major part of the Property of the Company and is not
discharged within 90 days after such appointment; or
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(i) final judgment or judgments for the payment of money
aggregating in excess of $500,000 is or are outstanding against the
Company or against any of the Property or assets of the Company and any
one of such judgments has remained unpaid, unvacated, unbonded or
unstayed by appeal or otherwise for a period of 30 days or such longer
period, not to exceed 60 days, as is permitted by applicable law or
judicial rule from the date of its entry; or
(j) bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any bankruptcy or
similar law or laws for the relief of debtors, are instituted by or
against the Company and, if instituted against the Company, are
consented to or are not dismissed within 60 days after such institution.
SECTION 7.2. NOTICE TO HOLDERS. When any Event of Default described in
the foregoing Section 7.L has occurred, or if the holder of any Note or any
other evidence of indebtedness for borrowed money of the Company gives any
notice or takes any other action with respect to a claimed default, the Company
agrees to give notice within seven business days of such event to all holders of
the Notes then outstanding, such notice to be in writing and sent by registered
or certified mail or by telegram.
SECTION 7.3. DEFAULT REMEDIES. When any Event of Default described in
subparagraphs (a) or (b) of Section 7.1 has occurred and is continuing, any
holder of any Note may, and when any Event of Default described in subparagraphs
(c) through (f) and (i) of Section 7.1 has happened and is continuing, the
holder or holders of 35% or more of the principal amount of Notes at the time
outstanding may exercise any right, power or remedy permitted to such holder or
holders at law or in equity and shall have, in particular, without limiting the
generality of the foregoing, the right, by notice in writing sent by registered
or certified mail to the Company, to declare the entire principal and all
interest accrued on all Notes to be, and all Notes shall thereupon become,
forthwith due and payable without any presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived. When any Event of
Default described in subparagraphs (g), (h) or (j) of Section 7.1 has occurred,
then all outstanding Notes shall immediately become due and payable without
presentment, demand or notice of any kind. Upon the Notes becoming due and
payable as a result of any Event of Default as aforesaid, the Company will
forthwith pay to the holders of the Notes the entire principal and interest
accrued on the Notes and to the extent permitted by law, an amount as liquidated
damages for the loss of the bargain evidenced hereby (and not as a penalty)
equal to the then applicable Make Whole Premium, determined as of the date on
which the Notes shall so become due and payable. No course of dealing on the
part of any holder of the Notes nor any delay or failure on the part of any such
holder to exercise any right shall operate as a waiver of such right or
otherwise prejudice such holder's rights, powers and remedies. The Company
further agrees, to the extent permitted by law, to pay to the holder or holders
of the Notes all costs and expenses incurred by them in the
-32-
collection of any Notes upon any default hereunder or thereon, including
reasonable compensation to such holder's or holders' attorneys for all services
rendered in connection therewith.
SECTION 7.4. RESCISSION OF ACCELERATION. The provisions of Section 7.3
are subject to the condition that if the principal of and accrued interest on
all or any outstanding Notes have been declared immediately due and payable by
reason of the occurrence of any Event of Default described in paragraphs (a)
through (i), inclusive, of Section 7.1, the holders of 66-2/3% in aggregate
principal amount of the Notes then outstanding may, by written instrument filed
with the Company, rescind and annul such declaration and the consequences
thereof, PROVIDED that at the time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the payment of
any monies due pursuant to the Notes or this Agreement;
(b) all arrears of interest upon all the Notes and all other
sums payable under the Notes and under this Agreement (except any
principal, interest or premium on the Notes which has become due and
payable solely by reason of such declaration under Section 7.3) shall
have been duly paid; and
(c) each and every other Default and Event of Default shall
have been made good, cured or waived pursuant to Section 8.1;
and PROVIDED FURTHER, that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereto.
SECTION 8. AMENDMENTS, WAIVERS AND CONSENTS.
SECTION 8.1. AMENDMENTS AND WAIVERS. Any term, covenant, agreement or
condition of this Agreement may, with the consent of the Company, be amended or
compliance therewith may be waived (either generally or in a particular instance
and either retroactively or prospectively), if the Company shall have obtained
the consent in writing of the holders of at least 66-2/3% in aggregate principal
amount of outstanding Notes; PROVIDED, HOWEVER, that without the written consent
of the holders of all the Notes then outstanding no such waiver, modification,
alteration or amendment shall be effective (a) which will change the time of
payment (including any prepayment required by Section 2.1) of the principal of,
the interest on or premium on, if any, any Note or change the principal amount
thereof or change the rate of interest thereon, or (b) which will change any of
the provisions of Section 2 in respect of optional prepayments or (c) which will
change the percentage of holders of the Notes required to consent
-33-
to any such amendment, waiver, alteration or modification or any of the
provisions of this Section 8 or Section 7.
SECTION 8.2. SOLICITATION OF HOLDERS. So long as there are any Notes
outstanding, the Company will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of this
Agreement or the Notes unless each holder of Notes (irrespective of the amount
of Notes then owned by it) shall be informed thereof by the Company and shall be
afforded the opportunity of considering the same and shall be supplied by the
Company with sufficient information to enable it to make an informed decision
with respect thereto. The Company will not, directly or indirectly, pay or
cause to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, to any holder of Notes as consideration for or as an
inducement to entering into by any holder of Notes of any waiver or amendment of
any of the terms and provisions of this Agreement or the Notes unless such
remuneration is concurrently offered and paid, on the same terms, ratably to the
holders of all Notes then outstanding.
SECTION 8.3. BINDING EFFECT. Any such amendment or waiver shall apply
equally to all the holders of the Notes and shall be binding upon them, upon
each future holder of any Note and upon the Company, whether or not such Note
shall have been marked to indicate such amendment or waiver. No such amendment
or waiver shall extend to or affect any obligation not expressly amended or
waived or impair any right consequent thereon.
SECTION 9. MISCELLANEOUS.
SECTION 9.1. REGISTERED NOTES. The Company shall cause to be kept at
its principal office a register for the registration and transfer of the Notes
(hereinafter called the "NOTE REGISTER"), and the Company will register or
transfer or cause to be registered or transferred, as hereinafter provided and
under such reasonable regulations as it may prescribe, any Note issued pursuant
to this Agreement.
At any time and from time to time the registered holder of any Note
which has been duly registered as hereinabove provided may transfer such Note,
upon surrender thereof at the principal office of the Company duly endorsed or
accompanied by a written instrument of transfer duly executed by such registered
holder or its attorney authorized in writing.
The Person in whose name any Note shall be registered shall be deemed
and treated as the owner and holder thereof for all purposes of this Agreement
and the Company shall not be affected by any notice or knowledge to the
contrary. Payment of or on account of the principal, premium, if any, and
interest on any such Note shall be made to or upon the written order of such
registered holder.
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SECTION 9.2. EXCHANGE FOR DIFFERENT DENOMINATIONS. The Company will,
at any time and from time to time, upon not less than 30 days notice to that
effect given by the holder of any Note initially delivered or of any Note
substituted therefor pursuant to Section 9.1, this Section 9.2 or to Section
9.3, and, upon surrender of such Note at its office, deliver in exchange
therefor, without expense to the holder, except as set forth below, Notes for
the same aggregate principal amount as the then unpaid principal amount of the
Note so surrendered and, as nearly as possible, in the denomination of $100,000
or any amount in excess thereof as such holder shall specify, dated as of the
date to which interest has been paid on the Note so surrendered or, if such
surrender is prior to the payment of any interest thereon, then dated the date
of original issuance of Notes hereunder, registered in the name of such Person
or Persons as may be designated by such holder, and otherwise of the same form
and tenor as the Notes so surrendered for exchange. The Company may require the
payment of a sum sufficient to cover any stamp tax or governmental charge
imposed upon such exchange or transfer.
SECTION 9.3. LOSS, THEFT, ETC. OF NOTES. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of any
Note, and in the case of any such loss, theft or destruction upon delivery of a
bond of indemnity in such form and amount as shall be reasonably satisfactory to
the Company, or in the event of such mutilation upon surrender and cancellation
of the Note, the Company will make and deliver a new Note, of like tenor, in
lieu of such lost, stolen, destroyed or mutilated Note. The Company may require
the payment of a sum sufficient to cover any stamp tax or governmental charge
imposed upon such reissuance. If a Purchaser or any subsequent institutional
holder is the owner of any such lost, stolen or destroyed Note, then the
affidavit of the President, a Vice President or other responsible officer of
such owner, setting forth the fact of loss, theft or destruction and of its
ownership of the Note at the time of such loss, theft or destruction shall be
accepted as satisfactory evidence thereof and no indemnity shall be required as
a condition to execution and delivery of a new Note other than the written
agreement of such owner to indemnify and hold the Company harmless.
SECTION 9.4. EXPENSES, STAMP TAX INDEMNITY. The Company agrees to pay
all expenses in connection with the issuance, sale and delivery to you of the
Notes, including the cost of shipping the same to you at your home office or
such other place as you may specify. Whether or not the purchase herein
contemplated shall be consummated, the Company agrees to reimburse you for all
of your out-of-pocket expenses, including, but not limited to, the reasonable
charges and disbursements of Xxxxxxx and Xxxxxx, your special counsel in
connection with the transaction contemplated by this Agreement and all of your
out-of-pocket expenses relating to any proposed or actual amendments of this
Agreement or waivers or consents pursuant to the provisions hereof or thereof,
including, without limitation, any proposed or actual amendments, waivers or
consents resulting from any work-out, restructuring or similar proceedings
relating to the performance by the Company of its obligations under this
Agreement and the Notes. The Company agrees to indemnify and hold you harmless
from any liability on
-35-
account of stamp and other taxes, if any, which may be payable or which may be
determined to be payable in connection with the execution and delivery of this
Agreement or the Notes. The Company further agrees to protect and indemnify you
against any liability for any and all brokerage fees and commissions payable or
claimed to be payable to any Person in connection with the transactions
contemplated by this Agreement. Without limiting the foregoing, the Company
agrees to pay the cost of obtaining a private placement number for the Notes and
authorizes the submission of such information as may be required by Standard &
Poor's Corporation for the purpose of obtaining such number.
SECTION 9.5. POWERS AND RIGHTS NOT WAIVED; Remedies Cumulative. No
delay or failure on the part of the holder of any Note in the exercise of any
power or right shall operate as a waiver thereof; nor shall any single or
partial exercise of the same preclude any other or further exercise thereof, or
the exercise of any other power or right, and the rights and remedies of the
holder of any Note are cumulative to and are not exclusive of any rights or
remedies any such holder would otherwise have, and no waiver or consent, given
or extended pursuant to Section 8 hereof shall extend to or affect any
obligation or right not expressly waived or consented to.
SECTION 9.6. NOTICES. All communications provided for hereunder shall
be in writing and sent by confirmed facsimile transmission (with hard copy sent
concurrently by nationally recognized overnight carrier) or by nationally
recognized overnight carrier in each case prepaid and if to you, addressed to
you at your address appearing on Schedule I to this Agreement or such other
address as you or the subsequent holder of any Note initially issued to you, may
designate to the Company in writing, or if to the Company, addressed to the
Company, at 0000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention:
Treasurer, or to such other address as you or the Company shall designate by
written notice to the other. Notice properly sent under this Section 9.6 will
be deemed given only when actually received by the Company or you, as the case
may be, and without regard to receipt by the actual individual to whose
attention such notice is sent.
SECTION 9.7. SUCCESSORS AND ASSIGNS. This Agreement and all covenants
herein contained shall be binding upon and inure to the benefit of the
respective successors and assigns of the parties hereunder.
SECTION 9.8. SURVIVAL OF COVENANTS AND REPRESENTATIONS. All covenants,
representations and warranties made by the Company herein and in any
certificates delivered pursuant hereto, whether or not in connection with the
closing, shall survive the closing and the delivery of this Agreement and the
Notes.
-36-
SECTION 9.9. SEVERABILITY. Should any part of this Agreement for any
reason be declared invalid, such decision shall not affect the validity of any
remaining portion, which remaining portion shall remain in force and effect as
if this Agreement had been executed with the invalid portion thereof eliminated
and it is hereby declared the intention of the parties hereto that they would
have executed the remaining portion of this Agreement without including therein
any such part, parts, or portion which may, for any reason, be hereafter
declared invalid.
SECTION 9.10. GOVERNING LAW. THIS AGREEMENT AND THE NOTES ISSUED AND
SOLD HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH MINNESOTA
LAW.
SECTION 9.11. CAPTIONS. The descriptive headings of the various
Sections or parts of this Agreement are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
-37-
The execution hereof by you shall constitute a contract between us for
the uses and purposes hereinabove set forth, and this Agreement may be executed
in any number of counterparts, each executed counterpart constituting an
original but all together only one Agreement.
XXXX-XXXXX COMPANY
BY
-------------------------------
Its
-38-
Accepted as of March 22, 1996:
THE VARIABLE ANNUITY LIFE INSURANCE
COMPANY
By
Its
-31-
Accepted as of March 22, 1996:
INDEPENDENT LIFE AND ACCIDENT
INSURANCE COMPANY
By
Its
-31-
Accepted as of March 22, 1996:
NORTHERN LIFE INSURANCE COMPANY
By
Its
-31-
Accepted as of March 22, 1996:
NORTHWESTERN NATIONAL LIFE
INSURANCE COMPANY
By
Its
-31-
NAMES AND ADDRESSES OF PURCHASERS
AND AMOUNTS OF COMMITMENTS
NAME AND ADDRESS PRINCIPAL
OF PURCHASER AMOUNT
THE VARIABLE ANNUITY LIFE $17,000,000
INSURANCE COMPANY
c/o American General Corporation
0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Investment Xxxxxxxx Xxxxxxxxxx, X00-00
Facsimile Number: (000) 000-0000
REGULAR MAIL:
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Xxxx-Xxxxx Company, 7.13% Senior Notes due 2011, PPN 631158 D@ 8, principal,
premium or interest) to:
State Street Bank and Trust Company (ABA #000000000)
Xxxxxx, Xxxxxxxxxxxxx 00000
Re: The Variable Annuity Life Insurance Company
AC-0125-821-9
OBI=PPN Number and description of payment
Fund Number PA 54
Notices
All notices of payment on or in respect of the Notes and written confirmation of
each such payment to:
The Variable Annuity Life Insurance Company and PA 54
c/o State Street Bank and Trust Company
SCHEDULE I
(to Note Agreement)
Insurance Services Custody (AH2)
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile Number: (000) 000-0000
Duplicate payment notices and all other correspondences to be addressed as first
provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
Deliver securities by overnight courier to:
State Street Bank and Trust Company
Securities Services
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxx--Receive and Deliver
with a transmittal letter requesting that State Street confirm receipt of the
securities to Xxxxxxxx Xxx and transmit by regular mail a photocopy of such
securities to her attention at American General Corporation, P. O. Xxx 0000,
Xxxxxxx, Xxxxx 00000-0000.
I-44
NAME AND ADDRESS PRINCIPAL
OF PURCHASER AMOUNT
INDEPENDENT LIFE AND ACCIDENT $3,000,000
INSURANCE COMPANY
c/o American General Corporation
0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000-0000
Attention: Investment Xxxxxxxx Xxxxxxxxxx, X00-00
Facsimile Number: (000) 000-0000
REGULAR MAIL:
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Xxxx-Xxxxx Company, 7.13% Senior Notes due 2011, PPN 631158 D@ 8, principal,
premium or interest) to:
State Street Bank and Trust Company (ABA #000000000)
Xxxxxx, Xxxxxxxxxxxxx 00000
Re: Independent Life and Accident Insurance Company
AC-34817924
OBI=PPN Number and description of payment
Fund Number PA 88
Notices
All notices of payment on or in respect of the Notes and written confirmation of
each such payment to:
Independent Life and Accident Insurance Company
x/x Xxxxx Xxxxxx Xxxx and Trust Company
Insurance Services Custody (AH2)
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
I-45
Facsimile Number: (000) 000-0000
Duplicate payment notices and all other correspondences to be addressed as first
provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
Deliver securities by overnight courier to:
State Street Bank and Trust Company
Securities Services
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxx--Receive and Deliver
with a transmittal letter requesting that State Street confirm receipt of the
securities to Xxxxxxxx Xxx and transmit by regular mail a photocopy of such
securities to her attention at American General Corporation, P. O. Xxx 0000,
Xxxxxxx, Xxxxx 00000-0000.
I-46
NAME AND ADDRESS PRINCIPAL
OF PURCHASER AMOUNT
NORTHERN LIFE INSURANCE COMPANY $6,000,000
c/o ReliaStar Investment Research, Inc.
000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Securities Department
Telecopier Number: (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Xxxx-Xxxxx Company, 7.13% Senior Notes due 2011, PPN 631158 D@ 8, principal,
premium or interest) to:
First National Bank N.A./Mpls. (ABA #000000000)
000 0xx Xxxxxx Xxxxx
Xxxxxxxxx: Securities Accounting
for credit to: Northern Life Insurance Company
Account Number 1602-3237-6105
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: Var & Co.
Taxpayer I.D. Number: 00-0000000
Deliver securities by overnight courier to:
ReliaStar Investment Research, Inc.
000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxxx
I-47
NAME AND ADDRESS PRINCIPAL
OF PURCHASER AMOUNT
NORTHWESTERN NATIONAL LIFE INSURANCE $4,000,000
COMPANY
c/o ReliaStar Investment Research
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Securities Department
Telecopier Number: (000) 000-0000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Xxxx-Xxxxx Company, 7.13% Senior Notes due 2011, PPN 631158 D@ 8, principal,
premium or interest) to:
First National Bank N.A./Mpls. (ABA #000000000)
000 0xx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Securities Accounting
for credit to: Northwestern National Life Insurance Company
Account Number 1102-4001-4461
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: Var & Co.
Taxpayer I.D. Number: 00-0000000
Deliver securities by overnight courier to:
ReliaStar Investment Research
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
I-48
Attention: Xxxxxxx Xxxxxxx
I-49
XXXX-XXXXX COMPANY
7.13% Senior Note Due October 1, 2011
PPN: 631158 D@ 8
No. R- [Date of Issue]
$
XXXX-XXXXX COMPANY, a Delaware corporation (the "COMPANY"), for value
received, hereby promises to pay to
or registered assigns the principal amount of
DOLLARS
($ ) on October 1, 2011 together with interest on the principal amount
from time to time remaining unpaid hereon at the rate of 7.13% per annum from
the date hereof until maturity (computed on the basis of a 360-day year of 12
consecutive 30-day months) in installments payable on October 1, 1996 and on the
first day of each April and October thereafter to and including the date of
maturity hereof. The Company further promises to pay interest on each overdue
installment of principal, premium, if any, and (to the extent legally
enforceable) upon each overdue installment of interest at the rate of 8.13% per
annum in each case from and after the maturity of each such installment, whether
by acceleration or otherwise, until paid. Subject only to SECTION 2.5 of the
Note Agreements hereinafter referred to, both the principal hereof, premium, if
any, and interest hereon are payable at the principal office of the Company in
Minneapolis, Minnesota, in coin or currency of the United States of America
which at the time of payment shall be legal tender for the payment of public and
private debts.
This Note is one of the 7.13% Senior Notes due October 1, 2011 of the
Company in the aggregate principal amount of $30,000,000 issued or to be issued
under and pursuant to the terms and provisions of separate and several Note
Agreements each dated as of March 22, 1996 (collectively, the "NOTE AGREEMENTS")
entered into by the Company with the institutional investors named in Schedule I
thereto. This Note and the holder hereof are entitled equally and ratably with
the holders of all other Notes outstanding under the Note Agreements to all the
benefits provided for thereby or referred to therein, to which Note Agreements
reference is hereby made for the statement thereof.
EXHIBIT A
(to Note Agreement)
This Note and the other Notes outstanding under the Note Agreements may
be declared due prior to their expressed maturity date and certain prepayments
are required to be made thereon by the Company, all in the events, on the terms
and in the manner and amounts as provided in the Note Agreements.
The Notes are not subject to prepayment or redemption at the option of
the Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in the
Note Agreements.
This Note is registered on the books of the Company and is transferable
only by surrender thereof at the principal office of the Company duly endorsed
or accompanied by a written statement of transfer duly executed by the
registered holder of this Note or his attorney duly authorized in writing.
Payment of or on account of principal, premium, if any, and interest on this
Note shall be made only to or upon the order in writing of the registered
holder.
XXXX-XXXXX COMPANY
By
Its
A-51
XXXX-XXXXX COMPANY
CLOSING CERTIFICATE
To the Purchasers of the 7.13%
Senior Notes due October 1, 2011
of Xxxx-Xxxxx Company
Re:
$30,000,000 7.13% SENIOR NOTES
DUE OCTOBER 1, 2011 OF XXXX-XXXXX COMPANY
Ladies and Gentlemen:
This certificate is delivered to you in compliance with the requirements
of the separate and several Note Agreements each dated as of March 22, 1996
(collectively, the "NOTE AGREEMENTS") entered into by the undersigned, XXXX-
XXXXX COMPANY, a Delaware corporation (the "COMPANY") with each of you, and as
an inducement to and as part of the consideration for your purchase on this date
of $30,000,000 aggregate principal amount of the 7.13% Senior Notes due October
1, 2011 (the "NOTES") of the Company pursuant to the Note Agreements. The terms
which are capitalized herein shall have the same meanings as in the Note
Agreements.
The Company represents and warrants to each of you as follows:
1. SUBSIDIARIES. Annex A attached hereto states the name of
each of the Company's Subsidiaries, its jurisdiction of incorporation and
the percentage of its Voting Stock owned by the Company and/or its
Subsidiaries. The Company has good and marketable title to all of the
shares it purports to own of the capital stock of each Subsidiary, free
and clear in each case of any Lien. All such shares have been duly
issued and are fully paid and non-assessable.
2. CORPORATE ORGANIZATION AND AUTHORITY. The Company and each
Subsidiary,
(a) is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation;
EXHIBIT B
(to Note Agreement)
(b) has all requisite power and authority and all necessary
licenses and permits to own and operate its Properties and to carry
on its business as now conducted and as presently proposed to be
conducted; and
(c) is duly licensed or qualified and in good standing as a
foreign corporation in each jurisdiction wherein the nature of the
business transacted by it or the nature of the Property owned or
leased by it makes such licensing or qualification necessary and in
which the failure to so qualify could have a material adverse effect
on the Properties, business prospects, profits or condition
(financial or otherwise) of the Company and its Subsidiaries taken as
a whole.
3. BUSINESS AND PROPERTY. You have heretofore been furnished
with a copy of the Private Placement Memorandum dated January 28, 1996
(the "MEMORANDUM") prepared by Norwest Bank Minnesota, National
Association, which generally sets forth the business conducted and
proposed to be conducted by the Company and its Subsidiaries.
4. FINANCIAL STATEMENTS. (a) The consolidated balance sheets
of the Company and its Subsidiaries as of December 28, 1991, January 2,
1993, January 1, 1994, December 31, 1994 and December 30, 1995 each
inclusive, and the consolidated statements of stockholders' equity and
changes in financial position or cash flows, as the case may be, for the
fiscal years ended on said dates, each accompanied by a report thereon
containing an opinion unqualified as to scope limitations imposed by the
Company and otherwise without qualification, except as noted therein, by
KPMG Peat Marwick LLP and, in the case of December 30, 1995, Ernst &
Young LLP, have been prepared in accordance with generally accepted
accounting principles consistently applied, except as therein noted, are
correct and complete and present fairly, in all material respects, the
financial position of the Company and its Subsidiaries as of such dates
and the results of its operations and changes in financial position or
and cash flows, as the case may be, for such periods.
(b) Since December 30, 1995, there has been no change in the
condition, financial or otherwise, of the Company and its Subsidiaries
including, without limitation, any change in Liens securing Funded Debt
of the Company or any Subsidiary, as shown on the balance sheet as of
such date except changes in the ordinary course of business, none of
which individually or in the aggregate has been materially adverse.
5. FULL DISCLOSURE. Neither the financial statements referred
to in paragraph 4 hereof, nor the Note Agreements, the Memorandum as
modified by subsequent information provided by the Company, or any other
written statement furnished by the
B-53
Company to you, contain any untrue statement of a material fact or omit a
material fact necessary to make the statements contained therein or
herein not misleading. There is no fact peculiar to the Company which
the Company has not disclosed to you in writing which materially affects
adversely nor, so far as the Company can now foresee, will materially
affect adversely the Properties, business prospects, profits or condition
(financial or otherwise) of the Company and its Subsidiaries taken as a
whole or the ability of the Company to perform the terms and conditions
of the Note Agreements and the Notes.
6. PENDING LITIGATION. There are no proceedings pending or, to
the knowledge of the Company threatened, against or affecting the Company
or any Subsidiary in any court or before any governmental authority or
arbitration board or tribunal which if adversely determined would
materially and adversely affect the Properties, business, prospects,
profits or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole. Neither the Company nor any Subsidiary is
in default with respect to any order of any court or governmental
authority or arbitration board or tribunal.
7. TITLE TO PROPERTIES. The Company and each Subsidiary has
good and marketable title in fee simple (or its equivalent under
applicable law) to all the real Property and has good title to all the
other Property it purports to own, including that reflected in the most
recent balance sheet referred to in paragraph 4 except as sold or
otherwise disposed of in the ordinary course of business and except for
Liens disclosed in notes to the financial statements referred to in
paragraph 4 hereof or such Liens which are not material in the aggregate
and do not materially and adversely affect the value of such Property or
interfere with the conduct of the business of the Company and its
Subsidiaries.
8. PATENTS AND TRADEMARKS. The Company and each Subsidiary owns
or possesses adequate rights to use all material patents, trademarks,
trade names, service marks, copyright, licenses and rights with respect
to the foregoing necessary for the present and planned future conduct of
its business, without any known material conflict with the rights of
others.
9. SALE IS LEGAL AND AUTHORIZED. The sale of the Notes and
compliance by the Company with all of the provisions of the Note
Agreements and the Notes:
(a) are within the corporate powers of the Company and have
been duly authorized by proper corporate action on the part of the
Company; and
B-54
(b) will not violate any provisions of any law or any order
of any court or governmental authority or agency and will not
conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute a default under the
Restated Certificate of Incorporation or By-laws of the Company or
any indenture or other agreement or instrument to which the
Company is a party or by which it may be bound or result in the
imposition of any Liens or encumbrances on any Property of the
Company.
10. NO DEFAULTS. No Default or Event of Default has occurred and
is continuing. The Company is not in default in the payment of principal
or interest on any indebtedness for borrowed money and is not in default
under any instrument or agreement under and subject to which any
indebtedness for borrowed money has been issued and no event has occurred
and is continuing under the provisions of any such instrument or
agreement which with the lapse of time or the giving of notice, or both,
would constitute an event of default thereunder.
11. GOVERNMENTAL CONSENT. No approval, consent or withholding of
objection on the part of any regulatory body, state, Federal or local, is
necessary in connection with the execution and delivery by the Company of
the Note Agreements or the Notes or compliance by the Company with any of
the provisions of the Note Agreements or the Notes.
12. TAXES. All tax returns required to be filed by the Company
or any Subsidiary in any jurisdiction have, in fact, been filed, and all
taxes, assessments, fees and other governmental charges upon the Company
or any Subsidiary or upon any of their respective Properties, income or
franchises which are shown to be due and payable in such returns have
been paid. For all taxable years ending on or before December 31, 1991,
the Federal income tax liability of the Company and its Subsidiaries has
been satisfied and either the period of limitations on assessment of
additional Federal Income Tax has expired or the Company and its
Subsidiaries have entered into an agreement with the Internal Revenue
Service closing conclusively the total tax liability for the taxable
year. The Company does not know of any proposed additional tax
assessment against it for which added provision has not been made in its
accounts, and no material controversy in respect of additional Federal or
state income taxes is pending or is to the knowledge of the Company
threatened. The provisions for taxes on the books of the Company and
each Subsidiary are adequate for all open years and for its current
fiscal period.
13. USE OF PROCEEDS. The proceeds from the sale of the Notes
will be used to repay bank borrowings incurred to fund the acquisition
and other expenses related thereto of the Military Distributors of
Virginia. None of the transactions contemplated in the
B-55
Note Agreements (including, without limitation thereof, the use of the
proceeds from the sale of the Notes) will violate or result in a
violation of Section 7 of the Securities Exchange Act of 1934, as
amended, or any regulations issued pursuant thereto, including, without
limitation, Regulations G, T and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R., Chapter II. The Company does not own
or intend to carry or purchase any "MARGIN SECURITY" within the meaning
of said Regulation G. None of the proceeds from the sale of the Notes
will be used to purchase, or refinance any borrowing, the proceeds of
which were used to purchase any "SECURITY" within the meaning of the
Securities Exchange Act of 1934, as amended.
14. COMPLIANCE WITH LAW. The Company and each Subsidiary is in
compliance with all laws, ordinances, governmental rules or regulations
to which it is subject, including without limitation, the Occupational
Safety and Health Act of 1970, as amended, the Employee Retirement Income
Security Act of 1974, as amended, and all Environmental Legal
Requirements, the violation of which would materially and adversely
affect the Properties, business, prospects, profits or condition
(financial or otherwise) of the Company and its Subsidiaries taken as a
whole. Neither the Company nor any Subsidiary is the owner or operator
of property, nor has the Company or any Subsidiary arranged for the
disposal of Hazardous Substances at a property, where there has been a
release or threat of release of Hazardous Substances, the response or
corrective action for which could have a material adverse effect on the
Properties, business prospects, profits or condition (financial or
otherwise) of the Company and its Subsidiaries, taken as a whole.
15. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. The
consummation of the transactions provided for in the Note Agreements and
compliance by the Company with the provisions of the Note Agreements and
the Notes will not involve any prohibited transaction within the meaning
of the Employee Retirement Income Security Act of 1974, as amended, or
Section 4975 of the Internal Revenue Code of 1986, as amended.
16. PRIVATE OFFERING. Neither the Company, directly or
indirectly, nor Norwest Bank Minnesota, National Association (the only
Person authorized or employed by the Company as agent, broker, dealer or
otherwise in connection with the offering or sale of the Notes or any
similar Security of the Company related to this transaction) has offered
or will offer the Notes or any similar Security related to this
transaction or has solicited or will solicit an offer to acquire the
Notes or any similar Security related to this transaction from or has
otherwise approached or negotiated or will approach or negotiate in
respect of the Notes or any similar Security related to this transaction
with any Person other than you and not more than ten (10) other
institutional investors, each of whom was offered a portion of the Notes
at private sale for investment. Neither the Company,
B-56
directly or indirectly, nor any agent on its behalf has offered or will
offer the Notes or any similar Security related to this transaction or
has solicited or will solicit an offer to acquire the Notes or any
similar Security related to this transaction from any Person so as to
bring the issuance and sale of the Notes within the provisions of Section
5 of the Securities Act of 1933, as amended.
Dated March ____, 1996
XXXX-XXXXX COMPANY
By
Its
B-57
SUBSIDIARIES OF THE COMPANY AS OF MARCH 22, 1996
PERCENTAGE OF VOTING STOCK
JURISDICTION OF OWNED BY COMPANY AND EACH
INCORPORATION OTHER SUBSIDIARY
NAME OF SUBSIDIARY
Xxxx-XxXxxx Company California 100%
Subsidiaries:
Agricola Nadco Chile 99%
Limitada
Xxxxxxx Transportation California 100%
Service, Inc.
Piggly Wiggly Northland Minnesota 100%
Corporation
GTL Truck Lines, Inc. Nebraska 100%
Nebraska Dairies, Inc. Nebraska 66-2/3%
Xxxxxxxx Dairy of the Black South Dakota 66-2/3%
Hills, Inc.
ANNEX A
(to Closing Certificate)
DESCRIPTION OF SPECIAL COUNSEL'S CLOSING OPINION
The closing opinion of Xxxxxxx and Xxxxxx, special counsel to the
Purchasers, called for by SECTION 4.2 of the Note Agreements, shall be dated as
of the Closing Date and addressed to the Purchasers, shall be satisfactory in
form and substance to the Purchasers and shall be to the effect that:
(1) The Company is a corporation validly existing and in good
standing under the laws of the State of Delaware, has the corporate power
and the corporate authority to execute and deliver the Note Agreements
and to issue the Notes;
(2) The Note Agreements have been duly authorized by all
necessary corporate action on the part of the Company, have been duly
executed and delivered by the Company and constitute the legal, valid and
binding contracts of the Company enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent conveyance or
similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law);
(3) The Notes have been duly authorized by all necessary
corporate action on the part of the Company, have been duly executed and
delivered by the Company and constitute the legal, valid and binding
obligations of the Company enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors' rights generally, and general principles of equity
(regardless of whether the application of such principles is considered
in a proceeding in equity or at law); and
(4) The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Agreements do not under existing
law require the registration of such Notes under the Securities Act of
1933, as amended, or the qualification of an indenture in respect thereof
under the Trust Indenture Act of 1939.
In rendering the opinion set forth in paragraph 1 above, Xxxxxxx and
Xxxxxx may rely solely upon an examination of the Restated Certificate of
Incorporation certified by, and a Certificate of good standing of the Company
from, the Secretary of State of the State of Delaware, and the By-laws of the
Company. Xxxxxxx and Cutler's opinion shall be limited to the laws of the State
of Illinois, the Delaware General Corporate Law, the general corporate law of
the State of Minnesota and the Federal law of the United States.
EXHIBIT C
(to Note Agreement)
With respect to matters of fact upon which such opinion is based, Xxxxxxx
and Xxxxxx may rely on appropriate certificates of public officials and officers
of the Company.
C-60
DESCRIPTION OF CLOSING OPINION OF
COUNSEL TO THE COMPANY
The closing opinion of Xxxxxx X. Xxxxxx, Esq., General Counsel for the
Company, which is called for by SECTION 4.2 of the Agreements, shall be dated
the Closing Date and addressed to the Purchasers, shall be satisfactory in form
and substance to the Purchasers and shall also be to the effect that:
(1) The Company is a corporation, duly incorporated, validity
existing and in good standing under the laws of the State of Delaware,
has the corporate power and the corporate authority to execute and
perform the Note Agreements and to issue the Notes and incur the
indebtedness to be evidenced thereby;
(2) The Company has full corporate power and corporate authority
to conduct the activities in which it is now engaged and is duly licensed
or qualified and is in good standing as a foreign corporation in each
jurisdiction in which the character of the Properties owned or leased by
it or the nature of the business transacted by it makes such licensing or
qualification necessary;
(3) Each Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and is duly licensed or qualified and is in good standing
in each jurisdiction in which the character of the properties owned or
leased by it or the nature of the business transacted by it makes such
licensing or qualification necessary and all of the issued and
outstanding shares of capital stock of each such Subsidiary have been
duly issued, are fully paid and non-assessable and those shares
represented to be owned by the Company pursuant to the Company's Closing
Certificate delivered concurrently herewith are owned by the Company, by
one or more Subsidiaries, or by the Company and one or more Subsidiaries;
(4) The Note Agreements have been duly authorized by all
necessary corporate action on the part of the Company, have been duly
executed and delivered by the Company and constitute the legal, valid and
binding contracts of the Company enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent conveyance or
similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law);
(5) The Notes have been duly authorized by all necessary
corporate action on the part of the Company, have been duly executed and
delivered by the Company and constitute the legal, valid and binding
obligations of the Company enforceable in
EXHIBIT D
(to Note Agreement)
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent conveyance or similar laws affecting creditors' rights
generally, and general principles of equity (regardless of whether the
application of such principles is considered in a proceeding in equity or
at law);
(6) No approval, consent or withholding of objection on the part
of, or filing, registration or qualification with, any governmental body,
Federal, state or local, is necessary in connection with the lawful
execution, delivery and performance of the Agreements or the Notes;
(7) The issuance and sale of the Notes and the execution,
delivery and performance by the Company of the Note Agreements do not
conflict with applicable laws, rules or regulations or result in any
breach of the provisions of or constitute a default under or result in
the creation or imposition of any Lien or encumbrance upon any of the
Property of the Company pursuant to the provisions of the Restated
Certificate of Incorporation or By-laws of the Company or any agreement
or other instrument known to such counsel to which the Company is a party
or by which the Company may be bound; and
(8) The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Agreements do not, under existing
law, require the registration of the Notes under the Securities Act of
1933, as amended, or the qualification of an indenture in respect thereof
under the Trust Indenture Act of 1939 as amended.
(9) Neither the issuance and sale of the Notes or the application
of the proceeds thereof will violate or result in a violation of Section
7 of the Securities Exchange Act of 1934, as amended, or any regulations
issued pursuant thereto, including, without limitation, Regulations G, T
and X of the Board of Governors of the Federal Reserve System.
(10) There are no proceedings pending or, to the knowledge of such
counsel, threatened, against or affecting the Company or any Subsidiary
in any court or before any governmental authority or arbitration board or
tribunal which could reasonably be expected to materially and adversely
affect the Properties, business, prospects, profits or condition
(financial or otherwise) of the Company and its Subsidiaries taken as a
whole.
The opinion of Xxxxxx X. Xxxxxx, Esq., General Counsel to the Company
shall cover such other matters relating to the sale of the Notes as the
Purchasers may reasonably request. With respect to matters of fact on which
such opinion is based, such counsel shall be entitled to rely on appropriate
certificates of public officials and officers of the Company. The opinion of
D-62
Xxxxxx X. Xxxxxx, Esq., General Counsel to the Company, shall state that it may
be relied upon by permitted successors and assigns of the Purchasers.
D-63
