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EXHIBIT (4b)
NOTE AGREEMENT DATED AS OF AUGUST 28, 1997 RELATING TO THE
COMPANY'S 6.6% SENIOR NOTES DUE AUGUST 28, 2007
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▇▇▇▇▇▇▇ CORPORATION
NOTE AGREEMENT
Dated as of August 28, 1997
$125,000,000
6.65% Senior Notes due August 28, 2007
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TABLE OF CONTENTS
(Not a part of the Agreement)
SECTION HEADING PAGE
Section 1. DESCRIPTION OF NOTES AND COMMITMENT............................................................1
Section 1.1 Description of Notes........................................................................1
Section 1.2 Commitment, Closing Date....................................................................2
Section 2. PREPAYMENT OF NOTES............................................................................2
Section 2.1 Required Prepayments........................................................................2
Section 2.2 Optional Prepayment with Premium............................................................2
Section 2.3 Prepayment of Notes upon a Change of Control................................................3
Section 2.4 Notice of Optional Prepayments..............................................................5
Section 2.5 Application of Prepayments..................................................................5
Section 2.6 Direct Payment..............................................................................5
Section 3. REPRESENTATIONS................................................................................6
Section 3.1 Representations of the Company..............................................................6
Section 3.2 Representations of the Purchaser............................................................6
Section 4. CLOSING CONDITIONS.............................................................................7
Section 4.1 Conditions..................................................................................7
Section 4.2 Waiver of Conditions........................................................................8
Section 5. COMPANY COVENANTS..............................................................................8
Section 5.1 Corporate Existence, Etc....................................................................8
Section 5.2 Insurance...................................................................................8
Section 5.3 Taxes, Claims for Labor and Materials; Compliance with Laws.................................8
Section 5.4 Maintenance, Etc............................................................................9
Section 5.5 Nature of Business..........................................................................9
Section 5.6 Interest Charges Coverage Ratio.............................................................9
Section 5.7 Limitations on Debt.........................................................................9
Section 5.8 Limitation on Liens........................................................................10
Section 5.9 Limitation on Long-Term Leases.............................................................12
Section 5.10 Restricted Payments........................................................................12
Section 5.11 Investments................................................................................13
Section 5.12 Mergers, Consolidations and Sales of Assets................................................14
Section 5.13 Guaranties.................................................................................18
Section 5.14 Repurchase of Notes........................................................................18
Section 5.15 Transactions with Affiliates...............................................................18
Section 5.16 Multiemployer Plan Liability and Termination of Pension Plans..............................18
Section 5.17 Reports and Rights of Inspection...........................................................19
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.......................................................22
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Section 6.1 Events of Default..........................................................................22
Section 6.2 Notice to Holders..........................................................................23
Section 6.3 Acceleration of Maturities.................................................................23
Section 6.4 Rescission of Acceleration.................................................................24
Section 7. AMENDMENTS, WAIVERS AND CONSENTS..............................................................24
Section 7.1 Consent Required...........................................................................24
Section 7.2 Solicitation of Holders....................................................................25
Section 7.3 Effect of Amendment or Waiver..............................................................25
Section 8. INTERPRETATION OF AGREEMENT; DEFINITIONS......................................................25
Section 8.1 Definitions................................................................................25
Section 8.2 Accounting Principles......................................................................35
Section 8.3 Directly or Indirectly.....................................................................35
Section 9. MISCELLANEOUS 35
Section 9.1 Registered Notes...........................................................................35
Section 9.2 Exchange of Notes..........................................................................35
Section 9.3 Loss, Theft, Etc. of Notes.................................................................36
Section 9.4 Expenses, Stamp Tax Indemnity..............................................................36
Section 9.5 Powers and Rights Not Waived; Remedies Cumulative..........................................36
Section 9.6 Notices....................................................................................36
Section 9.7 Reproduction of Documents..................................................................37
Section 9.8 Successors and Assigns.....................................................................37
Section 9.9 Survival of Covenants and Representations..................................................37
Section 9.10 Severability...............................................................................37
Section 9.11 Governing Law..............................................................................38
Section 9.12 Captions...................................................................................38
Signature Page...............................................................................................37
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ATTACHMENTS TO NOTE AGREEMENT:
Schedule I - Purchaser Schedule
Schedule II - Description of Current Debt, Funded Debt, Long-Term Leases, Liens and
Investments
Schedule III - Subsidiaries of the Company
Exhibit A - Form of 6.65% Senior Note due August 28, 2007
Exhibit B - Representations and Warranties of the Company
Exhibit C - Description of Closing Opinion of Independent Counsel for the Company
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▇▇▇▇▇▇▇ CORPORATION
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
NOTE AGREEMENT
$125,000,000
6.65% Senior Notes due August 28, 2007
Dated as of
August 28, 1997
To the Purchaser named in Schedule I
hereto which is a signatory of this
Agreement
Ladies and Gentlemen:
The undersigned, ▇▇▇▇▇▇▇ CORPORATION, an Alabama 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 $125,000,000 aggregate principal amount of its 6.65% Senior
Notes (the "Notes") to be dated the date of issue, to bear interest from such
date at the rate of 6.65% per annum, payable quarterly on November 28, February
28, May 28 and August 28 in each year (commencing November 28, 1997) and at
maturity and to bear interest on overdue principal (including any overdue
required or optional prepayment of principal) and premium, if any, and (to the
extent legally enforceable) on any overdue installment of interest at the
Overdue Rate after the date due, whether by acceleration or otherwise, until
paid, to be expressed to mature on August 28, 2007, and to be substantially in
the form attached hereto as Exhibit A. Interest on the Notes shall be computed
on the basis of a 360-day year of twelve 30-day months. If any amount of
principal, premium, if any, or interest on or in respect of any Note becomes due
and payable on any date which is not a Business Day, such amount shall be
payable on the next succeeding Business Day and the period of extension shall be
included in the computation of interest payable on such Business Day. 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 ss. 2 of this Agreement. The
term "Notes" as used herein shall include each Note delivered pursuant to this
Agreement. You are hereinafter sometimes referred to as the
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"Purchaser". The terms which are capitalized herein shall have the meanings set
forth in ss. 8.1 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 in the principal amount set forth
opposite your name on Schedule I hereto at a price of 100% of the principal
amount thereof on the Closing Date hereafter mentioned.
Delivery of the Notes will be made at the offices of Prudential
Capital Group, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇ against
payment therefor in Federal Reserve or other funds current and immediately
available at the principal office of Aliant Bank, Alexander City, AL in the
amount of the purchase price on August 28, 1997 (the "Closing Date"). The Notes
delivered to you on the Closing Date will be delivered to you in the form of a
single registered Note for the full amount of your purchase (unless different
denominations (of not less than $1,000,000) are specified by you), registered in
your name or in the name of such nominee, as may be specified in Schedule I
attached hereto and in substantially the form attached hereto as Exhibit A.
SECTION 2. PREPAYMENT OF NOTES.
No prepayment of the Notes may be made except to the extent and
in the manner expressly provided in this Agreement.
Section 2.1 Required Prepayments. In addition to paying the
entire outstanding principal amount and the interest due on the Notes on the
maturity date thereof, the Company agrees that on August 28th in each of the
years 2001 through 2006, inclusive, it will prepay and apply and there shall
become due and payable on the principal indebtedness evidenced by the Notes an
amount equal to the lesser of (a) $17,857,143.00 or (b) the principal amount of
the Notes then outstanding. The entire remaining principal amount of the Notes
shall become due and payable on August 28, 2007. No premium shall be payable in
connection with any required prepayment made pursuant to this ss. 2.1.
In the event that the Company shall prepay less than all of the
Notes pursuant to ss. 2.2 hereof, such payments shall be credited in each case
first, against the final maturities of the Notes being prepaid and then, against
the amounts of the prepayments required by this ss. 2.l on such Notes in the
inverse order of the maturities thereof.
Section 2.2 Optional Prepayment with Premium. In addition to the
payments required by ss. 2.1, upon compliance with ss. 2.4 the Company shall
have the privilege, at any time and from time to time, of prepaying the
outstanding Notes, either in whole or in part (but if in part then in a minimum
principal amount of $1,000,000) 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 Make-Whole Amount.
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Section 2.3 Prepayment of Notes upon a Change of Control. (a) In
the event that any Change of Control shall occur or the Company shall have
actual knowledge of any proposed Change of Control, the Company will give
written notice (the "Company Notice") of such fact by overnight courier in the
manner provided in ss. 9.6 hereof to the holders of the Notes. The Company
Notice shall be sent promptly upon receipt of such knowledge by the Company and
in any event no later than three days following the occurrence of a Change of
Control. The Company Notice shall (1) describe the facts and circumstances of
such Change of Control in reasonable detail, (2) make reference to this ss.
2.3(a) and the right of the holders of the Notes to require payment on the terms
and conditions provided for in this ss. 2.3(a), (3) offer in writing to prepay
the outstanding Notes, together with accrued interest to the date of prepayment
and a premium equal to the then applicable Make-Whole Amount, and (4) specify a
date for such prepayment (the "Change of Control Prepayment Date") which Change
of Control Prepayment Date shall be the later of (i) the date of such Change of
Control or (ii) a date not more than 60 days nor less than 30 days following the
date of such Company Notice. Each holder of the then outstanding Notes shall
have the right to accept such offer and require prepayment of the Notes held by
such holder by written notice to the Company (a "Noteholder Notice") sent by
overnight courier in the manner provided in ss. 9.6 hereof not later than 25
days after the date of the Company Notice. The Company shall on the Change of
Control Prepayment Date prepay all, but not less than all, Notes held by holders
which have so accepted such offer of prepayment. The prepayment price of the
Notes payable upon the occurrence of a Change of Control shall be an amount
equal to 100% of the outstanding principal amount of the Notes so to be prepaid
and accrued interest thereon to the date of such prepayment, together with a
premium equal to the then applicable Make-Whole Amount determined as of the
Change of Control Prepayment Date.
(b) In the event that the holder of any Note shall have delivered
to the Company a Noteholder Notice pursuant to ss. 2.3(a), then the Company
shall promptly, and in any event within five days after receipt of such
Noteholder Notice, deliver by overnight courier in the manner provided in ss.
9.6 hereof written notice of such Noteholder Notice to each other holder of the
Notes and, notwithstanding the provisions of ss. 2.3(a), the right of each such
other holder to accept the offer of prepayment and require prepayment of the
Notes shall remain in effect until the later to occur of (1) 30 days after the
date of the Company Notice and (2) 15 days after the date of the notice required
to be delivered pursuant to this ss. 2.3(b); provided, however, that the
provisions of this clause (2) shall only apply with respect to notices required
to be delivered pursuant to this ss. 2.3(b) to the extent that such notices
relate to Noteholder Notices made prior to the expiration of the period
specified in ss. 2.3(a).
(c) Without limiting the foregoing, if the Company fails to give
the Company Notice required pursuant to ss. 2.3(a) as a result of the occurrence
of a Change of Control, each holder of the Notes shall have the right to require
the Company to prepay, and the Company will prepay, such holder's Notes in full,
together with accrued interest thereon to the date of prepayment and a premium
equal to the then applicable Make-Whole Amount; provided that each holder of the
Notes shall so notify the Company of its election to require the Company to
prepay its Notes in accordance with this ss. 2.3(c) within 365 days after such
holder has actual knowledge of any such Change of Control by overnight courier
in the manner provided in ss. 9.6 hereof. Notice of any required prepayment
pursuant to this ss. 2.3(c) shall be delivered by a holder of the Notes which
was entitled to, but did not receive, such Company Notice to the Company after
such holder has
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actual knowledge of such Change of Control. On the date (the "Change of Control
Delayed Prepayment Date") designated in such holder's notice (which shall be not
more than 60 days nor less than 30 days following the date of such holder's
notice), the Company shall prepay in full all the Notes held by such holder,
together with accrued interest thereon to the date of prepayment and a premium
equal to the then applicable Make-Whole Amount. If the holder of any Note gives
any notice pursuant to this ss. 2.3(c), the Company shall give a Company Notice
within three days of receipt of such notice and identify the Change of Control
Delayed Prepayment Date to all other holders of the Notes and each of such
holders shall then and thereupon have the right to accept the Company's offer to
prepay the Notes held by such holder and require prepayment of such Notes by
delivery of a Noteholder Notice within 21 days of the date of such Company
Notice; provided only that any date for prepayment of such Notes shall be the
Change of Control Delayed Prepayment Date. On the Change of Control Delayed
Prepayment Date, the Company shall prepay in full the Notes of each holder
thereof which has accepted such offer of prepayment at a prepayment price of
100% of the outstanding principal amount of the Notes so to be prepaid and
accrued interest thereon to the date of such prepayment, together with a premium
equal to the applicable Make-Whole Amount determined as of the Change of Control
Delayed Prepayment Date.
(d) For purposes of this ss. 2.3:
"Acquiring Person" shall mean a "person" or "group of persons"
within the meaning of Sections 13(d) and 14(d) of the Securities and Exchange
Act of 1934, as amended.
"Change of Control" of the Company shall mean that an Acquiring
Person (other than the ▇▇▇▇▇▇▇ Family) directly or indirectly becomes the
beneficial owner of more than 50% of the total voting power of the Voting Stock
of the Company then outstanding.
"▇▇▇▇▇▇▇ Family" shall mean, collectively:
(a) the lineal descendants (including Persons who
have been legally adopted by a lineal descendant) and the spouses
of lineal descendants of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (founder of the
Company), and
(b) the ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Foundation,
Incorporated, and
(c) any trust directly or indirectly controlled by,
or for the benefit of, one or more of such Persons described in
clause (a) above or directly or indirectly controlled by any
corporation or partnership described in clause (d) below, and
(d) any corporation or partnership in which voting
control as to such entity is held, directly or indirectly, by
any one or more of the Persons described in clause (a) above
or by such trusts described in clause (c) above, and
(e) any Person acting as the executor or
administrator of the estate or other legal representative of
any Person described in clause (a) above.
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Section 2.4 Notice of Optional Prepayments. The Company will give
notice of any prepayment of the Notes pursuant to ss. 2.2 to each holder thereof
not less than 30 days nor more than 60 days before the date fixed for such
optional prepayment specifying (a) such date, (b) the principal amount of the
holder's Notes to be prepaid on such date, (c) that a premium may be payable,
(d) the date when such premium will be calculated, (e) the estimated premium,
and (f) the 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 accrued interest thereon and the premium, if any, payable
with respect thereto shall become due and payable on the prepayment date
specified in said notice. Two Business Days prior to the prepayment date
specified in such notice, the Company shall provide each holder of a Note
written notice of the 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 Amount.
Section 2.5 Application of Prepayments. All partial
prepayments shall be applied on all outstanding Notes ratably in accordance with
the unpaid principal amounts thereof.
Section 2.6 Direct Payment. Notwithstanding anything to the
contrary contained in this Agreement or the Notes, in the case of any Note owned
by you or your nominee or owned by any subsequent Institutional Holder which has
given written notice to the Company requesting that the provisions of this ss.
2.6 shall apply, the Company will punctually pay, and in any event not later
than 12:00 p.m. New York, New York time, when due the principal thereof,
interest thereon and premium, if any, due with respect to said principal,
without any presentment thereof, directly to you, to your nominee or to such
subsequent Institutional Holder at your address or your nominee's address set
forth in Schedule I hereto or such other address as you, your nominee or such
subsequent Institutional Holder may from time to time designate in writing to
the Company or, if a bank account with a United States bank is designated for
you or your nominee on Schedule I hereto or in any written notice to the Company
from you, from your nominee or from any such subsequent Institutional Holder,
the Company will make such payments in immediately available funds to such bank
account, marked for attention as indicated, or in such other manner or to such
other account in any United States bank as you, your nominee or any such
subsequent Institutional Holder may from time to time direct in writing. In the
event any payment is received after 12:00 p.m. New York, New York time on any
payment date, such payment shall be deemed to have been received on the Business
Day next succeeding the date of such payment.
Upon the payment in full of any Note held by you, your nominee or
any subsequent Institutional Holder; you, your nominee or any such subsequent
Institutional Holder hereby agrees to use your or its reasonable best efforts to
return said Note to the Company at the address set forth in ss. 9.6 hereof.
SECTION 3. REPRESENTATIONS.
Section 3.1 Representations of the Company. The Company
represents and warrants that all representations and warranties set forth in
Exhibit B attached hereto are true and correct as of the date hereof and are
incorporated herein by reference with the same force and effect as though herein
set forth in full.
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Section 3.2 Representations of the Purchaser. (a) You represent
as of the Closing Date, 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; it being
understood, however, that the disposition of your Property shall at all times be
and remain within your control.
(b) You further represent, as of the Closing Date, at least
one of the following statements is an accurate representation as to each source
of funds (a "Source") to be used to pay the purchase price of the Notes to be
purchased hereunder:
(i) if an insurance company, the Source does not
include assets allocated to any separate account maintained by it
in which any employee benefit plan (or its related trust) has any
interest, other than a separate account that is maintained solely
in connection with its fixed contractual obligations under which
the amounts payable, or credited, to such plan and to any
participant or beneficiary of such plan (including any annuitant)
are not affected in any manner by the investment performance of
the separate account; or
(ii) the Source is either (x) an insurance company
pooled separate account, within the meaning of Prohibited
Transaction Exemption ("PTE") 90-1 (issued January 29, 1990), (y)
a bank collective investment fund, within the meaning of the PTE
91-38 (issued July 12, 1991) and, except as such Purchaser shall
have disclosed to the Company in writing pursuant to this clause
(b), no employee benefit plan or group of plans maintained by the
same employee organization beneficially owns more than 10% of all
assets allocated to such pooled separate account or collective
investment fund or (z) the Source is an insurance company general
account of which the assets are such that if any of them are, or
are deemed to be, assets of any Plan, the acquisition of the
Notes by such Purchaser pursuant hereto is eligible for and
satisfies the requirements of PTE 95-60 (issued July 12, 1995);
or
(iii) the Source constitutes assets of an
"investment fund" (within the meaning of Part V of PTE 84-14
managed by a "qualified professional asset manager" or "QPAM"
(within the meaning of Part V of PTE 84-14), no employee benefit
plan's assets that are included in such investment fund, when
combined with the assets of all other employee benefit plans
established or maintained by the same employer or by an affiliate
(within the meaning of Section V(c)(1) of PTE 84-14) of such
employer or by the same employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total
client assets managed by such QPAM, the conditions of Part I(c)
and (g) of PTE 84-14 are satisfied, neither the QPAM nor a person
controlling or controlled by the QPAM (applying the definition of
"control" in Section V(e) of the PTE 84-14) owns a 5% or more
interest in the Company and (x) the identity of such QPAM and (y)
the names of all employee benefit plans whose assets are included
in such investment fund have been disclosed to the Company in
writing pursuant to this paragraph (iii); or
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(iv) the Source is a governmental plan;
or
(v) the Source is one or more employee
benefit plans, or a separate account or trust fund comprised of
one or more employee benefit plans, each of which has been
identified to the Company in writing pursuant to this paragraph
(v); or
(vi) the Source does not include assets
of any employee benefit plan, other than a plan exempt from the
coverage of ERISA.
As used in this paragraph, the terms "EMPLOYEE BENEFIT PLAN", "GOVERNMENTAL
PLAN", "PARTY IN INTEREST" and "SEPARATE ACCOUNT" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
SECTION 4. CLOSING CONDITIONS.
Section 4.1 Conditions. Your obligation to purchase the Notes on
the Closing Date shall be subject to the performance by the Company of its
agreements hereunder which by the terms hereof are to be performed at or prior
to the time of delivery of the Notes and to the following further conditions
precedent:
(a) Closing Certificate. You shall have received a
certificate dated the Closing Date, signed by the President or a
Vice President of the Company, the truth and accuracy of which
shall be a condition to your obligation to purchase the Notes
proposed to be sold to you and to the effect that (1) the
representations and warranties of the Company set forth in
Exhibit B attached hereto are true and correct on and with
respect to the Closing Date, (2) the Company has performed all of
its obligations hereunder which are to be performed on or prior
to the Closing Date, and (3) no Default or Event of Default has
occurred and is continuing.
(b) Legal Opinions. You shall have received from
▇▇▇▇▇▇▇ ▇▇▇▇▇ Rose & White LLP independent counsel for the
Company, an opinion dated the Closing Date, in form and substance
satisfactory to you, and covering the matters set forth in
Exhibit C , attached hereto.
(c) Company's Existence and Authority. On or prior
to the Closing Date, you shall have received, in form and
substance reasonably satisfactory to you, such documents and
evidence with respect to the Company as you may reasonably
request in order to establish the existence and good standing of
the Company and the authorization of the transactions
contemplated by this Agreement.
(d) 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).
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(e) Structuring Fee. The Company shall have
paid you by wire transfer to such account as you designate on
or prior to the Closing Date a structuring fee of $25,000.
(f) Satisfactory Proceedings. All proceedings taken
in connection with the transactions contemplated by this
Agreement, and all documents necessary to the consummation
thereof, shall be satisfactory in form and substance to you, and
you shall have received a copy (executed or certified as may be
appropriate) of all legal documents or proceedings taken in
connection with the consummation of said transactions.
Section 4.2 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 ss. 4.1 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 ss. 4.1 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 ss.
4.2 shall operate to relieve the Company of any of its obligations hereunder or
to waive any of your rights against the Company.
SECTION 5. COMPANY COVENANTS.
From and after the Closing Date and continuing so long as any
amount remains unpaid on any Note:
Section 5.1 Corporate Existence, Etc. The Company will preserve
and keep in full force and effect, and will cause each Subsidiary to preserve
and keep in full force and effect, its corporate existence and all licenses and
permits which, individually or in the aggregate, are material to the proper
conduct of its business, provided that the foregoing shall not prevent any
transaction permitted by ss. 5.12.
Section 5.2 Insurance. The Company will maintain, and will cause
each Subsidiary to maintain, insurance coverage by financially sound and
reputable insurers and in such forms and amounts 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 5.3 Taxes, Claims for Labor and Materials; Compliance
with Laws. (a) 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 usual and customary business terms, and all claims for work,
labor or materials, which if unpaid might become a Lien 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 (1) the validity, applicability or amount thereof is being contested in good
faith by appropriate actions or proceedings which will prevent the forfeiture or
sale of any Property of the Company or such Subsidiary or any material
interference with the use thereof by the Company or such Subsidiary, and (2) the
Company or such Subsidiary shall set aside on its books, reserves deemed by it
to be adequate with respect thereto.
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(b) The Company will promptly comply and will cause each
Subsidiary to 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, ERISA and all
Environmental Laws, the violation of which could materially and adversely affect
the properties, business, prospects, profits or condition (financial or
otherwise) of the Company and its Subsidiaries or would result in any Lien not
permitted under ss. 5.8.
Section 5.4 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 5.5 Nature of Business. Neither the Company nor any
Subsidiary will engage in any business if, as a result, the general nature of
the business, taken on a consolidated basis, which would then be engaged in by
the Company and its Subsidiaries would be changed from the general nature of the
business engaged in by the Company and its Subsidiaries on the date of this
Agreement.
Section 5.6 Interest Charges Coverage Ratio. The Company will
keep and maintain at all times the ratio of Net Income Available for Interest
Charges to Consolidated Interest Charges at not less than 2.0 to 1.0 for each
elapsed Rolling Four Quarters Period.
Section 5.7 Limitations on Debt. (a) The Company will not, and
will not permit any Subsidiary to, create, assume, guarantee or otherwise incur
or in any manner be or become liable in respect of any Debt, except:
(1) Funded Debt evidenced by the Notes;
(2) Funded Debt of the Company and its
Subsidiaries outstanding as of the Closing Date and described on
Schedule II attached hereto;
(3) additional Funded Debt of the Company and Debt
of its Subsidiaries, provided that at the time of creation,
issuance, assumption, guarantee or incurrence thereof and after
giving effect thereto and to the application of the proceeds
thereof:
(i) Consolidated Funded Debt would not
exceed 50% of Consolidated Total Capitalization,
and
(ii) the sum of (A) Debt secured by Liens
permitted and incurred within the limitations of
ss. 5.8(h) and, without duplication, (B) the
aggregate amount of all Debt of Subsidiaries (other
than Debt of Subsidiaries permitted by ss.
5.7(a)(5)) and (C) the aggregate amount of
Attributable Debt of the Company and its
Subsidiaries, would not exceed 15% of Consolidated
Net Worth;
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(4) Current Debt of the Company, provided that
during the twelve-month period immediately preceding the date of
any determination hereunder, there shall have been a period of 60
consecutive days during which (i) the Company shall have been
free of all Current Debt or (ii) the largest aggregate principal
amount of all Current Debt outstanding on each day of such 60-day
period did not exceed the amount of additional Funded Debt which
could have been issued or incurred by the Company within the
limitations of ss. 5.7(a)(3) on each day of such period and which
Current Debt shall during each day of such 60-day period be
deemed to constitute outstanding Funded Debt for purposes of any
determination of additional Funded Debt to be issued or incurred
within the limitations of said ss. 5.7(a)(3); and
(5) Debt of a Subsidiary to the Company or to a
Wholly-owned Subsidiary which is the parent corporation of such
Subsidiary.
(b) The renewal, extension or refunding of any Funded
Debt, issued, incurred or outstanding pursuant toss. 5.7(a) shall
constitute the issuance of additional Funded Debt which is, in turn,
subject to the limitations of the applicable provisions of this ss.
5.7.
(c) Any corporation which becomes a Subsidiary after
the date hereof shall for all purposes of this ss. 5.7 be deemed to
have created, assumed or incurred at the time it becomes a Subsidiary
all Debt of such corporation existing immediately after it becomes a
Subsidiary.
Section 5.8 Limitation on Liens. The Company will not, and will
not permit any Subsidiary to, create or incur, or suffer to be incurred or to
exist, any Lien on its or their Property or assets, whether now owned or
hereafter acquired, or upon any income or profits therefrom, or transfer any
Property for the purpose of subjecting the same to the payment of obligations in
priority to the payment of its or their general creditors, or acquire or agree
to acquire, or permit any Subsidiary to acquire, any Property or assets upon
conditional sales agreements or other title retention devices, except:
(a) Liens for Property taxes and assessments or
governmental charges or levies and Liens securing claims or
demands of mechanics and materialmen, provided that payment
thereof is not at the time required by ss. 5.3;
(b) Liens of or resulting from any judgment or
award not to exceed $10,000,000 in the aggregate, the time for
the appeal or petition for rehearing of which shall not have
expired, or in respect of which the Company or a Subsidiary shall
at any time in good faith be prosecuting an appeal or proceeding
for a review and in respect of which a stay of execution pending
such appeal or proceeding for review shall have been secured;
(c) Liens incidental to the conduct of business or
the ownership of properties and assets (including Liens in
connection with worker's compensation, unemployment insurance and
other like laws, warehousemen's and attorneys' liens and
statutory landlords' liens) and Liens to secure the performance
of bids, tenders or trade contracts, or to secure statutory
obligations, surety or appeal bonds or other Liens of like
general nature incurred in the ordinary course of business and
not in connection with the borrowing of money,
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provided in each case, the obligation secured is not overdue or,
if overdue, is being contested in good faith by appropriate
actions or proceedings;
(d) minor survey exceptions or minor encumbrances,
easements or reservations, or rights of others for rights-of-way,
utilities and other similar purposes, or zoning or other
restrictions as to the use of real properties, which are
necessary for the conduct of the activities of the Company and
its Subsidiaries or which customarily exist on properties of
corporations engaged in similar activities and similarly situated
and which do not in any event materially impair their use in the
operation of the business of the Company and its Subsidiaries;
(e) Liens securing Indebtedness of a Subsidiary to
the Company or to a Wholly-owned Subsidiary which is the parent
corporation of such Subsidiary;
(f) Liens existing as of the Closing Date and
described on Schedule II attached hereto;
(g) Liens created or incurred after the Closing
Date given to secure the payment of the purchase price incurred
in connection with the acquisition or construction of fixed
assets useful and intended to be used in carrying on the business
of the Company or a Subsidiary, 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 so long as they were not
incurred, extended or renewed in contemplation of such
acquisition, provided that (1) the Lien shall attach solely to
the fixed assets acquired or constructed, (2) such Lien shall
have been created or incurred within twelve months of the date of
acquisition or the date of completion of construction, (3) at the
time of acquisition or construction of such fixed assets, the
aggregate amount remaining unpaid on all Indebtedness secured by
Liens on such fixed assets whether or not assumed by the Company
or a Subsidiary shall not exceed an amount equal to the lesser of
the total acquisition price or fair market value at the time of
acquisition or construction of such fixed assets (as determined
in good faith by the Board of Directors of the Company), (4) in
the case of the creation or incurrence of any Capitalized Lease,
the fixed asset which is the subject thereof if previously owned
by the Company shall have been sold or otherwise disposed of
within the limitations provided in ss. 5.12(b)(2), and (5) all
such Debt shall have been incurred within the applicable
limitations provided in ss. 5.7(a)(3) and ss. 5.7(a)(4);
(h) Liens created or incurred after the Closing
Date given to secure Debt of the Company or any Subsidiary in
addition to Liens permitted by the preceding clauses (a) through
(g), inclusive, hereof, provided that all Debt secured by Liens
incurred pursuant to this ss. 5.8(h) shall have been incurred
within the limitations of ss. 5.7(a)(3) and ss. 5.7(a)(4); and
(i) any extension, renewal or replacement of any
Lien permitted by the preceding clause (f) hereof in respect of
the same Property theretofore subject to such Lien in
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connection with the extension, renewal or refunding of the
Indebtedness secured thereby; provided that (1) such Lien shall
attach solely to the same such Property, and (2) such extension,
renewal or refunding of such Indebtedness shall be without
increase in the principal remaining unpaid as of the date of such
extension, renewal or refunding.
Section 5.9 Limitation on Long-Term Leases. The Company will not,
and will not permit any Subsidiary to, become obligated, as lessee, under any
Long-Term Lease if, at the time of entering into such Long-Term Lease and after
giving effect thereto, the maximum aggregate Rentals payable by the Company and
all of its Subsidiaries on a consolidated basis in any fiscal year thereafter
under all Long-Term Leases then outstanding would exceed 1% of Consolidated Net
Worth for the immediately preceding fiscal year.
Section 5.10 Restricted Payments. (a) The Company will not,
except as hereinafter provided:
(1) Declare or pay any dividends, either in cash or
Property, on any shares of its capital stock of any class (except
dividends or other distributions resulting from stock splits or
dividends payable solely in shares of common stock of the
Company);
(2) Directly or indirectly, or through any
Subsidiary, purchase, redeem or retire any shares of its capital
stock of any class or any warrants, rights or options to purchase
or acquire any shares of its capital stock;
(3) Make any other payment or distribution, either
directly or indirectly or through any Subsidiary, in respect of
its capital stock; or
(4) Make any payment of or in respect of the
principal amount (including, without limitation, any prepayment
premium) of any Subordinated Funded Debt of the Company or any
Subsidiary, except a payment at final maturity, payments of
required sinking fund or required periodic prepayments, all as
established by the original terms of such Subordinated Funded
Debt;
(such declarations or payments of dividends, purchases, redemptions or
retirements of capital stock and warrants, rights or options and all such other
payments, prepayments, redemptions, purchases or distributions being herein
collectively called "Restricted Payments"), if after giving effect thereto the
sum of (i) the aggregate amount of Restricted Payments made during the period
from and after July 4, 1992 to and including the date of the making of the
Restricted Payment in question, plus (ii) the aggregate amount of all Restricted
Investments made by the Company or any Subsidiary during said period would
exceed the sum of (A) $150,000,000 plus (B) 50% of Consolidated Net Income for
each of the elapsed fiscal quarters computed on a cumulative basis for said
entire period (or if Consolidated Net Income for any such fiscal quarter is a
deficit figure, then minus 100% of such deficit) plus (C) the aggregate net cash
proceeds received by the Company from the issuance and sale of shares of capital
stock of the Company, whether original issuances or from treasury, during such
period.
(b) The Company will not declare any dividend which constitutes a
Restricted
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Payment payable more than 60 days after the date of declaration thereof.
(c) For the purposes of this ss. 5.10, the amount of any
Restricted Payment declared, paid or distributed in Property shall be deemed to
be the greater of the book value or fair market value (as determined in good
faith by the Board of Directors of the Company) of such Property at the time of
the making of the Restricted Payment in question.
(d) The Company will not authorize or make a Restricted Payment
if after giving effect to the proposed Restricted Payment: (1) a Default or
Event of Default would exist or (2) the Company could not incur at least $1.00
of additional Funded Debt pursuant toss. 5.7(a)(3).
Section 5.11 Investments. The Company will not, and will not
permit any Subsidiary to, make any Investments, other than:
(a) Investments by the Company and its
Subsidiaries existing as of the Closing Date and described on
Schedule II attached hereto;
(b) Investments by the Company and its Subsidiaries
in and to Subsidiaries 80% or more (by number of votes) of the
Voting Stock of which is beneficially owned, directly or
indirectly, by the Company, including any Investment in a
corporation which, after giving effect to such Investment, will
become a Subsidiary 80% or more (by number of votes) of the
Voting Stock of which is beneficially owned, directly or
indirectly, by the Company;
(c) Investments in commercial paper maturing in 270
days or less from the date of issuance which, at the time of
acquisition by the Company or any Subsidiary, is rated not lower
than "A-1" by Standard & Poor's Corporation and not lower than
"P-1" by ▇▇▇▇▇'▇ Investors Service, Inc.;
(d) Investments in direct obligations of the United
States of America or any agency or instrumentality of the United
States of America, the payment or guarantee of which constitutes
a full faith and credit obligation of the United States of
America, in either case, maturing in twelve months or less from
the date of acquisition thereof;
(e) Investments in certificates of deposit maturing
within one year from the date of issuance thereof, issued by (1)
a bank or trust company organized under the laws of the United
States or any state thereof, having, at the time of acquisition
thereof by the Company or a Subsidiary, capital, surplus and
undivided profits aggregating at least $100,000,000 and whose
long-term certificates of deposit are, at the time of acquisition
thereof by the Company or a Subsidiary, rated AA or better by
Standard & Poor's Corporation and Aa or better by ▇▇▇▇▇'▇
Investors Service, Inc. or (2) any banking subsidiary of Wachovia
Corporation, AmSouth Bancorporation, SunTrust Banks, Inc.,
SouthTrust Corporation, Regions Financial Corporation, The Chase
Manhattan Bank, Synovus Financial Corporation, and Aliant
National Corporation or any Person who succeeds to all, or
substantially all, of the assets and business of any thereof;
(f) Investments in variable rate demand bonds
maturing or with optional puts
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within one year or less from the date of acquisition thereof,
which, at the time of acquisition by the Company or any
Subsidiary, are rated not lower than "A" or "A-1" by Standard &
Poor's Corporation and not lower than "A2" or "P-1" by ▇▇▇▇▇'▇
Investors Service, Inc.;
(g) loans or advances in the usual and ordinary
course of business to officers, directors and employees for
expenses (including moving expenses related to a transfer)
incidental to carrying on the business of the Company or any
Subsidiary; provided that the amount of all such loans or
advances permitted pursuant to this ss. 5.11(g) shall not at any
one time exceed $3,000,000 in the aggregate; and
(h) other Investments (in addition to those
permitted by the foregoing provisions of this ss. 5.11), provided
that (1) all such other Investments shall have been made out of
funds available for Restricted Payments which the Company or any
Subsidiary would then be permitted to make in accordance with the
provisions of ss. 5.10, (2) after giving effect to such other
Investments, no Default or Event of Default would exist and (3)
the Company would be permitted by the provisions of ss. 5.7(a)(3)
to incur at least $1.00 of additional Funded Debt.
In valuing any Investments for the purpose of applying the
limitations set forth in this ss. 5.11, such Investments shall be taken at the
original cost thereof, without allowance for any subsequent write-offs or
appreciation or depreciation therein, but less any amount repaid, recovered or
received on account of capital or principal.
For purposes of this ss. 5.11, at any time when a corporation
becomes a Subsidiary, all Investments of such corporation at such time shall be
deemed to have been made by such corporation, as a Subsidiary, at such time.
Section 5.12 Mergers, Consolidations and Sales of Assets. (a) The
Company will not, and will not permit any Subsidiary to, consolidate with or be
a party to a merger with any other corporation, or sell, lease or otherwise
dispose of all or substantially all of its assets; provided that:
(1) any Subsidiary may merge or consolidate with or
into, or sell, lease or otherwise dispose of all or substantially
all of its assets to, the Company or any other Subsidiary the
percentage ownership by the Company of which shall be greater
than or equal to the percentage ownership by the Company of the
Subsidiary being merged or consolidated or all or substantially
all of the assets of which are being sold, leased or otherwise
disposed of, so long as (i) in any merger or consolidation
involving the Company, the Company shall be the surviving or
continuing corporation and (ii) in any sale, lease or other
disposition, after giving effect to such sale, lease or other
disposition, (A) no Default or Event of Default would exist and
(B) the Company would be permitted by the provisions of ss.
5.7(a)(3) to incur at least $1.00 of additional Funded Debt;
(2) the Company may consolidate with or merge into
any other corporation if (i) the Company is the surviving
corporation or (ii)(A) the corporation which results from such
consolidation or merger (the "surviving corporation") is
organized under the laws of
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any State of the United States or the District of Columbia and
(B) the due and punctual payment of the principal of and premium,
if any, and interest on all of the Notes, according to their
tenor, and the due and punctual performance and observation of
all of the covenants in the Notes and this Agreement to be
performed or observed by the Company are expressly assumed in
writing by the surviving corporation and the surviving
corporation shall furnish the holders of the Notes an opinion of
counsel satisfactory to the holders of at least 66-2/3% in
aggregate principal amount of the Notes then outstanding to the
effect that the instrument of assumption has been duly
authorized, executed and delivered and constitutes the legal,
valid and binding contract and agreement of the surviving
corporation enforceable in accordance with its terms and which
opinion may contain exceptions and qualifications as are
customary in similar transactions and (iii) at the time of such
consolidation or merger and immediately after giving effect
thereto, (A) no Default or Event of Default would exist and (B)
the surviving corporation would be permitted by the provisions of
ss. 5.7(a)(3) to incur at least $1.00 of additional Funded Debt;
(3) any corporation may merge into the Company if
at the time of such merger and immediately after giving effect
thereto, (i) no Default or Event of Default would exist and (ii)
the Company would be permitted by the provisions of ss. 5.7(a)(3)
to incur at least $1.00 of additional Funded Debt; and
(4) the Company may sell or otherwise dispose of
all or substantially all of its assets (other than stock and
Indebtedness of a Subsidiary, which may only be sold or otherwise
disposed of pursuant to ss. 5.12(c)) to any Person for
consideration which represents the fair market value (as
determined in good faith by the Board of Directors of the
Company, a copy of which determination certified by the Secretary
or an Assistant Secretary of the Company shall have been
furnished to the holders of the Notes) at the time of such sale
or other disposition if (i) the acquiring Person is a corporation
organized under the laws of any State of the United States or
District of Columbia, (ii) the due and punctual payment of the
principal of and premium, if any, and interest on all the Notes,
according to their tenor, and the due and punctual performance
and observance of all of the covenants in the Notes and in this
Agreement to be performed or observed by the Company are
expressly assumed in writing by the acquiring corporation and the
acquiring corporation shall furnish the holders of the Notes an
opinion of counsel satisfactory to the holders of at least
66-2/3% in aggregate principal amount of the Notes then
outstanding to the effect that the instrument of assumption has
been duly authorized, executed and delivered and constitutes the
legal, valid and binding contract and agreement of such acquiring
corporation enforceable in accordance with its terms and which
opinion may contain exceptions and qualifications as are
customary in similar transactions, and (iii) at the time of such
sale or disposition and immediately after giving effect thereto,
(A) no Default or Event of Default would exist and (B) the
acquiring corporation would be permitted by the provisions of ss.
5.7(a)(3) to incur at least $1.00 of additional Funded Debt.
(b) The Company will not, and will not permit any Subsidiary to,
sell, lease, transfer, abandon or
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otherwise dispose of, assets (except assets sold, leased, transferred, abandoned
or otherwise disposed of in the ordinary course of business and, except with
respect to inventory sold in the ordinary course of business, for fair market
value or as provided in ss. 5.12(a)(4)); provided that the foregoing
restrictions do not apply to:
(1) the sale, lease, transfer or other disposition
of assets of a Subsidiary to the Company or a Wholly-owned
Subsidiary; or
(2) the sale, lease, transfer or other disposition
of such assets for cash or other Property to a Person or Persons
other than an Affiliate (which Affiliate is not a Subsidiary) if
all of the following conditions are met:
(i) such assets (valued at the greater of
fair market value or net book value) do not,
together with all other assets of the Company and
its Subsidiaries previously disposed of during the
same fiscal year, exceed 10% of Consolidated Total
Assets;
(ii) the determination to sell, lease,
transfer or otherwise dispose of such assets was
made in accordance with policies approved by the
Board of Directors of the Company or such
Subsidiary; and
(iii) immediately after the consummation
of the transaction and after giving effect thereto,
(A) no Default or Event of Default would exist, and
(B) the Company would be permitted by the
provisions of ss. 5.7(a)(3) to incur at least $1.00
of additional Funded Debt.
Computations pursuant to this ss. 5.12(b) shall include
dispositions made pursuant to ss. 5.12(c) and computations pursuant to
ss. 5.12(c) shall include dispositions made pursuant to this ss. 5.12(b).
(c) The Company will not, and will not permit any Subsidiary to,
sell, pledge or otherwise dispose of any shares of the stock (including as
"stock" for the purposes of this Section any options or warrants to purchase
stock or other Securities exchangeable for or convertible into stock) of a
Subsidiary (said stock, options, warrants and other Securities herein called
"Subsidiary Stock") or sell, pledge or otherwise dispose of any Indebtedness of
any Subsidiary, nor will any Subsidiary issue, sell, pledge or otherwise dispose
of any shares of its own Subsidiary Stock, provided that the foregoing
restrictions do not apply to:
(1) the issue of directors qualifying shares; or
(2) the issue of Subsidiary Stock to the Company
or a Wholly-owned Subsidiary; and
(3) the sale or other disposition to a Person
(other than directly or indirectly to an Affiliate) of any shares
of Subsidiary Stock or Indebtedness of any Subsidiary if all of
the following conditions are met:
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(i) such assets (valued at the greater of
fair market value or net book value) of the
Subsidiary do not, together with all other assets
of the Company and its Subsidiaries previously
disposed of during the same fiscal year (other than
in the ordinary course of business), exceed 10% of
Consolidated Total Assets;
(ii) the determination to sell or
otherwise dispose of such assets was made in
accordance with policies approved by the Board of
Directors of the Company or such Subsidiaries;
(iii) in the case of a sale of any
Subsidiary Stock of a Wholly-owned Subsidiary to a
Person other than the Company or another
Wholly-owned Subsidiary, immediately after the
consummation of the transaction and after giving
effect thereto, all Debt of any other Subsidiary
(of which such previously Wholly-owned Subsidiary
is the parent corporation) then held by such
previously Wholly-owned Subsidiary shall be deemed
to be Debt to be created or incurred by the Company
and its other Subsidiaries within the limitations
of ss. 5.7(a)(3);
(iv) in the case of a sale of any
Indebtedness of any Subsidiary, immediately after
the consummation of the transaction and after
giving effect thereto, all Debt of such Subsidiary
then held by Persons other than the Company or any
Wholly-owned Subsidiary which is the parent
corporation of such Subsidiary shall be deemed to
be Debt to be created or incurred by such
Subsidiary within the limitations of ss. 5.7(a)(3);
(v) in the case of a sale of Indebtedness
or other Investments in a Subsidiary, immediately
after the consummation of the transaction and after
giving effect thereto, all Indebtedness and other
Investments in such Subsidiary held by the Company
and its other Subsidiaries shall be deemed to be
Investments to be made or created within the
limitations of ss. 5.11; and
(vi) immediately after the consummation of
the transaction and after giving effect thereto,
(A) no Default or Event of Default would exist, and
(B) the Company would be permitted by the
provisions of ss. 5.7(a)(3) to incur at least $1.00
of additional Funded Debt.
Computations pursuant to this ss. 5.12(c) shall include
dispositions made pursuant to ss. 5.12(b) and computations pursuant to
ss. 5.12(b) shall include dispositions made pursuant to this ss. 5.12(c).
Section 5.13 Guaranties. The Company will not, and will not
permit any Subsidiary to, become or be liable in respect of any Guaranty except
Guaranties by the Company or any Subsidiary incurred in compliance with the
provisions ss. 5.7(a)(3) and ss. 5.7(a)(4) which are limited in amount to a
stated maximum dollar exposure or Guaranties by the Company which constitute
Guaranties of obligations incurred by any Subsidiary in compliance with the
provisions of ss. 5.7(a)(3).
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Section 5.14 Repurchase of Notes. Neither the Company nor any
Subsidiary or Affiliate, directly or indirectly, may repurchase or make any
offer to repurchase any Notes unless an 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 or any Subsidiary or Affiliate repurchases or
otherwise acquires any Notes, such Notes shall immediately 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, ss. 6.3, ss. 6.4 and ss. 7.1.
Section 5.15 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) which transaction or arrangement is material
to the Company or such Subsidiary, 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 5.16 Multiemployer Plan Liability and Termination of
Pension Plans. The Company will not and will not permit any ERISA Affiliate to
withdraw from any Multiemployer Plan if such withdrawal could result in
withdrawal liability (as described in Part l of Subtitle E of Title W of ERISA)
which could materially and adversely affect the properties, business, prospects,
profits or condition (financial or otherwise) of the Company. The Company and
any ERISA Affiliate will not permit any employee benefit plan maintained by it
to be terminated if such termination could result in the imposition of a Lien on
any property of the Company or any ERISA Affiliate pursuant to Section 4068 of
ERISA.
Section 5.17 Reports and Rights of Inspection. The Company will
keep, and will cause each Subsidiary to keep, proper books of record and account
in which full and correct entries will be made of all dealings or transactions
of, or in relation to, the business and affairs of the Company or such
Subsidiary, in accordance with GAAP consistently applied (except for changes
disclosed in the financial statements furnished to you pursuant to this ss. 5.17
and concurred in by the independent public accountants referred to in ss.
5.17(b) hereof), and will furnish to you so long as you are the holder of any
Note and to each other Institutional Holder of the then outstanding Notes (in
duplicate if so specified below or otherwise requested):
(a) Quarterly Statements. As soon as available and
in any event within 45 days after the end of each quarterly
fiscal period (except the last) of each fiscal year, copies of:
(1) a consolidated balance sheet of the
Company and its Subsidiaries as of the close of
such quarterly fiscal period, setting forth in
comparative form the consolidated figures for the
corresponding period of the preceding fiscal year,
(2) a consolidated statement of income of
the Company and its
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Subsidiaries for such quarterly fiscal period and
for the portion of the fiscal year ending with
such quarterly fiscal period, in each case setting
forth in comparative form the consolidated figures
for the corresponding periods of the preceding
fiscal year,
(3) a consolidated statement of cash flows
of the Company and its 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, and
(4) a consolidated statement of
stockholders' equity of the Company and its
Subsidiaries for the portion of the fiscal year
ending with such quarterly fiscal period, setting
forth in comparative form the consolidated figures
for the corresponding period of the preceding
fiscal year,
all in reasonable detail and certified as complete and correct by an authorized
financial officer of the Company;
(b) Annual Statements. As soon as available and in any event
within 90 days after the close of each fiscal year of the Company, copies of:
(1) a consolidated balance sheet of the
Company and its Subsidiaries as of the close of such fiscal year,
(2) a consolidated statement of income of
the Company and its Subsidiaries for such fiscal year,
(3) a consolidated statement of cash
flows of the Company and its Subsidiaries for such fiscal year,
and
(4) a consolidated statement of
stockholders' equity of the Company and its 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 of a firm of independent
public accountants of recognized national standing selected by
the Company, containing an opinion unqualified as to scope
limitations imposed by the Company, unqualified as to the Company
being a going concern and otherwise without qualification except
as therein noted, to the effect that the 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 the consolidated results of the operations and cash flows for
said year in conformity with GAAP and that the examination of
such accountants in connection with such financial statements has
been conducted in accordance with generally accepted auditing
standards and included such tests of the accounting records and
such other auditing procedures as said accountants deemed
necessary in the circumstances;
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(c) Audit Reports. Promptly upon receipt thereof,
one copy of each interim or special audit made by independent
accountants of the books of the Company or any Subsidiary and any
management letter received from such accountants in connection
with such interim or special audits;
(d) SEC and Other Reports. Promptly upon their
becoming available, one copy of each financial statement, report,
notice or proxy statement sent by the Company to stockholders
generally and of each regular or periodic report, and any
registration statement or prospectus filed by the Company or any
Subsidiary with any securities exchange or the Securities and
Exchange Commission or any successor agency (other than
Registration Statements on Form S-8 relating to employee benefit
plans);
(e) ERISA Reports. Promptly upon the occurrence
thereof, written notice of (1) a Reportable Event with respect to
any Plan; (2) the institution of any steps by the Company, any
ERISA Affiliate, the PBGC or any other Person to terminate any
Plan; (3) the institution of any steps by the Company or any
ERISA Affiliate to withdraw from any Plan; (4) a non-exempt
"prohibited transaction" within the meaning of Section 406 of
ERISA in connection with any Plan; (5) any material increase in
the contingent liability of the Company or any Subsidiary with
respect to any post-retirement welfare liability; or (6) the
taking of any action by, or the threatening of the taking of any
action by, the Internal Revenue Service, the Department of Labor
or the PBGC with respect to any of the foregoing;
(f) Officer's Certificates. Within the periods
provided in paragraphs (a) and (b) above, a certificate of the
chief financial officer of the Company stating that such officer
has reviewed the provisions of this Agreement and setting forth:
(1) the information and computations (in sufficient detail)
required in order to establish whether the Company was in
compliance with the requirements of ss. 5.6 through ss. 5.13 at
the end of the period covered by the financial statements then
being furnished, and (2) whether there existed as of the date of
such financial statements and whether, to the best of such
officer's knowledge, there exists on the date of the certificate
or existed at any time during the period covered by such
financial statements any Default or Event of Default and, if any
such condition or event exists on the date of the certificate,
specifying the nature and period of existence thereof and the
action the Company is taking and proposes to take with respect
thereto;
(g) Accountant's Certificates. Within the period
provided in paragraph (b) above, a certificate of the accountants
who render an opinion with respect to such financial statements,
stating that they have reviewed this Agreement, stating that they
have reviewed the computations made by the Company in connection
with the requirements of ss. 5.17(f) and whether or not they
concur with the results of such computations, and stating further
whether, in making their audit, such accountants have become
aware of any Default or Event of Default under any of the terms
or provisions of this Agreement insofar as any such terms or
provisions pertain to or involve accounting matters or
determinations, and if any such condition or event then exists,
specifying the nature and period of existence thereof;
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(h) Material Litigation. Promptly after the Company
shall have knowledge thereof, written notice of any proceedings
pending against the Company or any Subsidiary in any court or
before any governmental authority or arbitration board or
tribunal which involve the possibility of materially affecting
adversely the properties, business, prospects, profits or
condition (financial or otherwise) of the Company and its
Subsidiaries; and
(i) Requested Information. With reasonable
promptness, such other financial data and information or other
information necessary to demonstrate compliance with the terms
and provisions of this Agreement as you or any such Institutional
Holder may reasonably request.
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 Institutional Holder may
designate), to visit and inspect, under the Company's guidance, any of the
properties of the Company or any Subsidiary, to examine all of their books of
account, records, reports and other papers, to make copies and extracts
therefrom and to discuss their respective affairs, finances and accounts with
their respective officers, employees, and independent public accountants (and by
this provision the Company authorizes said accountants to discuss with you the
finances and affairs of the Company and its Subsidiaries) all at such reasonable
times and as often as may be reasonably requested. Any visitation shall be at
the sole expense of you or such Institutional Holder unless a Default or Event
of Default shall have occurred and be continuing, or if the holder of any Note
or of any other evidence of Indebtedness of the Company or any Subsidiary gives
any written notice or takes any other action with respect to a claimed default,
in which case, any such visitation or inspection shall be at the sole expense of
the Company.
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
Section 6.1 Events of Default. Any one or more of the
following shall constitute an "Event of Default" as such term is used herein:
(a) Default shall occur in the payment of interest
on any Note when the same shall have become due and such default
shall continue for more than five days; or
(b) Default shall occur in the making of any
required prepayment on any of the Notes as provided in ss. 2.1;
or
(c) Default shall occur in the making of any other
payment of the principal of any Note or premium, if any, thereon
at the expressed or any accelerated maturity date or at any date
fixed for prepayment; or
(d) Default shall occur in the observance or
performance of any covenant or agreement contained in ss. 5.7
through ss. 5.13; or
(e) Default shall occur in the observance or
performance of any covenant or
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agreement contained in ss. 5.6 and such default shall continue
for more than ten days; or
(f) 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) the day on which
a Responsible Officer of the Company first obtains knowledge of
such default, or (2) the day on which written notice thereof is
given to the Company by the holder of any Note; or
(g) Default shall be made in the payment when due
(whether by lapse of time, by declaration, by call for redemption
or otherwise) of the principal of or interest on any Indebtedness
for borrowed money (other than the Notes) of the Company or any
Subsidiary aggregating $10,000,000 or more or of any amount due
pursuant to any Interest Rate Protection Agreement the
termination amount of which is equal to $3,000,000 or more and
such default shall continue beyond the period of grace, if any,
allowed with respect thereto; or
(h) Default or the happening of any event shall
occur under any indenture, agreement or other instrument under
which any Indebtedness for borrowed money (other than the Notes)
of the Company or any Subsidiary aggregating $10,000,000 or more
may be issued or under any Interest Rate Protection Agreement the
termination amount of which is equal to $3,000,000 or more and
such default or event shall continue for a period of time
sufficient to permit the acceleration of the maturity of any
Indebtedness for borrowed money of the Company or any Subsidiary
outstanding thereunder; or
(i) 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 delivery of the Notes or
furnished by the Company pursuant hereto, is untrue in any
material respect as of the date of the issuance or making
thereof; or
(j) Final judgment or judgments for the payment of
money aggregating in excess of $10,000,000 is or are outstanding
against the Company or any Subsidiary or against any Property or
assets of either and any one of such judgments has remained
unpaid, unvacated, unbonded or unstayed for a period of 10 days
from the expiration of all appeals; or
(k) A custodian, liquidator, trustee or receiver
is appointed for the Company or any Subsidiary or for the major
part of the Property of either and is not discharged within 60
days after such appointment; or
(l) The Company or any Subsidiary 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 or any Subsidiary applies for or consents to the
appointment of a custodian, liquidator, trustee or receiver for
the Company or such Subsidiary or for the major part of the
Property of either; or
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(m) 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 or any Subsidiary and, if
instituted against the Company or any Subsidiary, are consented
to or are not dismissed within 60 days after such institution.
Section 6.2 Notice to Holders. When any Event of Default
described in the foregoing ss. 6.1 has occurred, or if the holder of any Note or
of 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 three Business Days of such event to all
holders of the Notes then outstanding.
Section 6.3 Acceleration of Maturities. When any Event of Default
described in paragraph (a), (b) or (c) of ss. 6.1 has happened and is
continuing, any holder of any Note may, by notice in writing sent in the manner
provided in ss. 9.6 hereof to the Company, declare the entire principal and all
interest accrued on such Note to be, and such Note 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 paragraphs (a) through (j), inclusive, of said ss. 6.1 has
happened and is continuing, the holder or holders of more than 50% of the
principal amount of Notes at the time outstanding may, by notice in writing in
the manner provided in ss. 9.6 to the Company, declare the entire principal and
all interest accrued on all Notes to be, and all Notes shall thereupon become,
forthwith due and payable, without any presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived. When any Event of
Default described in paragraph (k), (l) or (m) of ss. 6.1 has occurred, then all
outstanding Notes shall immediately become due and payable without presentment,
demand or notice of any kind. Upon the Notes becoming due and payable as a
result of any Event of Default as aforesaid, the Company will forthwith pay to
the holders of the Notes the entire principal and interest accrued on the Notes
and, to the extent not prohibited by applicable law, an amount as liquidated
damages for the loss of the bargain evidenced hereby (and not as a penalty)
equal to the Make-Whole Amount, determined as of the date on which the Notes
shall so become due and payable. No course of dealing on the part of the holder
or holders of any Notes nor any delay or failure on the part of any holder of
Notes to exercise any right shall operate as a waiver of such right or otherwise
prejudice such holder's rights, powers and remedies. The Company further agrees,
to the extent permitted by law, to pay to the holder or holders of the Notes all
costs and expenses incurred by them in the collection of any Notes upon any
Default hereunder or thereon, including reasonable compensation to such holder's
or holders' attorneys for all services rendered in connection therewith.
Section 6.4 Rescission of Acceleration. The provisions of ss. 6.3
are subject to the condition that if the principal of and accrued interest on
all or any outstanding Notes have been declared immediately due and payable by
reason of the occurrence of any Event of Default described in paragraphs (a)
through (l), inclusive, of ss. 6.1, 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:
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(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 Make-Whole Amount on the Notes
which has become due and payable solely by reason of such
declaration under ss. 6.3) shall have been duly paid; and
(c) each and every Default and Event of Default
shall have been made good, cured or waived pursuant to ss. 7.1;
and provided further, that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereto.
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.
Section 7.1 Consent Required. Any term, covenant, agreement or
condition of this Agreement may, with the consent of the Company, be amended or
compliance therewith may be waived (either generally or in a particular instance
and either retroactively or prospectively), if the Company shall have obtained
the consent in writing of the holders of at least 66-2/3% in aggregate principal
amount of the Notes then outstanding; provided that without the written consent
of the holders of all of the Notes then outstanding, no such amendment or waiver
shall be effective (a) which will change the time of payment (including any
prepayment required by ss. 2.1) of the principal of or the interest on any Note
or change the principal amount thereof or change the rate of interest thereon,
or (b) which will change the time of payment or method of calculation of the
premium, if any, on any Note, or (c) which will change any of the provisions
with respect to optional prepayments, or (d) which will change the percentage of
holders of the Notes required to consent to any such amendment or waiver of any
of the provisions of this ss. 7 or ss. 6 or (e) which will change any of the
provisions of ss. 5.14 or ss. 7.2.
Section 7.2 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 such information as the Company reasonably believes would be
necessary to enable each holder 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, on the same terms, ratably to the holders of all Notes
then outstanding. Promptly and in any event within 30 days of the date of
execution and delivery of any such waiver or amendment, the Company shall
provide a true, correct and complete copy thereof to each of the holders of the
Notes.
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Section 7.3 Effect of Amendment or Waiver. Any such amendment or
waiver shall apply equally to all of the holders of the Notes and shall be
binding upon them, upon each future holder of any Note and upon the Company,
whether or not such Note shall have been marked to indicate such amendment or
waiver. No such amendment or waiver shall extend to or affect any obligation not
expressly amended or waived or impair any right consequent thereon.
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS.
Section 8.1 Definitions. Unless the context otherwise requires,
the terms hereinafter set forth when used herein shall have the following
meanings and the following definitions shall be equally applicable to both the
singular and plural forms of any of the terms herein defined:
"Acquiring Person" shall have the meaning set forth in ss.
2.3(d).
"Affiliate" shall mean (a) the executive officers and directors
of the Company and (b) any Person (other than a Wholly-owned Subsidiary) (1)
which directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Company, (2) which
beneficially owns or holds 5% or more of any class of the Voting Stock of the
Company or (3) 5% or more of the Voting Stock (or in the case of a Person which
is not a corporation, 5% or more of the equity interest) of which is
beneficially owned or held by the Company or a Subsidiary. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of Voting Stock, by contract or otherwise.
"Attributable Debt" shall mean the face amount of accounts or
notes receivable sold, pledged or otherwise transferred by the Company or any
Subsidiary in respect of any Receivables Financing.
"Board of Directors" of any Person shall mean the board of
directors of such Person and any executive committee of such board to the
extent, but only to the extent, such executive committee shall be authorized by
the board of directors of such Person to take any action in lieu of such board.
"Business Day" shall mean any day other than a Saturday, Sunday
or other day on which banks in Birmingham, Alabama or New York, New York are
required by law to close.
"Called Principal" shall mean, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to ss. 2.2 or ss. 2.3 or
is declared to be immediately due and payable pursuant to ss. 6.3, as the
context requires.
"Capitalized Lease" shall mean any lease the obligation for
Rentals with respect to which is required to be capitalized on a consolidated
balance sheet of the lessee and its subsidiaries in accordance with GAAP or, if
not so capitalized, for which the amounts of the asset and liability (had such
lease been capitalized) would at such time be so required to be disclosed in a
note to such a balance sheet.
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"Capitalized Rentals" of any Person shall mean as of the date of
any determination thereof the amount at which the aggregate Rentals due and to
become due under all Capitalized Leases under which such Person is a lessee
would be reflected as a liability on a consolidated balance sheet or disclosed
in a note to such consolidated balance sheet of such Person.
"Change of Control" shall have the meaning set forth in ss.
2.3(d).
"Closing Date" shall have the meaning set forth in ss. 1.2.
"Code" shall mean the Internal Revenue Code of 1986, as amended,
and the regulations from time to time promulgated thereunder.
"Company" shall mean ▇▇▇▇▇▇▇ Corporation, an Alabama corporation,
and any Person who succeeds to all, or substantially all, of the assets and
business of ▇▇▇▇▇▇▇ Corporation.
"Competitor" shall mean the ▇▇▇▇ ▇▇▇ Corporation, or any
subsidiary or affiliate thereof, or a corporation or entity primarily engaged in
the textile or apparel manufacturing business or which is a member of an
affiliated group that derives more than 20% of its total revenues from the
textile or apparel manufacturing business or any Plan of any thereof.
"Consolidated Funded Debt" shall mean as of the date of any
determination thereof all Funded Debt of the Company and its Subsidiaries,
determined on a consolidated basis after eliminating intercompany items.
"Consolidated Interest Charges" shall mean all Interest Charges
on all Indebtedness of the Company and its Subsidiaries, determined on a
consolidated basis after eliminating intercompany items.
"Consolidated Net Income" for any period shall mean the gross
revenues of the Company and its Subsidiaries for such period less all expenses
and other proper charges (including taxes on income), determined on a
consolidated basis after eliminating earnings or losses attributable to
outstanding Minority Interests, but excluding in any event:
(a) net earnings and losses of any Subsidiary
accrued prior to the date it became a Subsidiary;
(b) net earnings and losses of any corporation
(other than a Subsidiary), substantially all the assets of which
have been acquired in any manner by the Company or any
Subsidiary, realized by such corporation prior to the date of
such acquisition;
(c) net earnings and losses of any corporation
(other than a Subsidiary) with which the Company or a Subsidiary
shall have consolidated or which shall have merged into or with
the Company or a Subsidiary prior to the date of such
consolidation or merger;
(d) net earnings of any business entity (other than
a Subsidiary) in which the
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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;
(e) any portion of the net earnings of any
Subsidiary which for any reason is unavailable for payment of
dividends to the Company or any other Subsidiary; and
(f) any other extraordinary gain (net of the
related tax expense).
"Consolidated Net Worth" shall mean as of the date of any
determination thereof the amount of the capital stock accounts (net of treasury
stock at cost and Redeemable Preferred Stock) plus (or minus, in the case of a
deficit) the surplus and retained earnings of the Company and its Subsidiaries,
consolidated in accordance with GAAP and after deducting any Minority Interests
in such Subsidiaries.
"Consolidated Total Assets" shall mean as of the date of any
determination thereof the total amount of all assets of the Company and its
Subsidiaries consolidated in accordance with GAAP and after deducting any
Minority Interests in such Subsidiaries.
"Consolidated Total Capitalization" shall mean as of the date of
any determination thereof the sum of (a) Consolidated Funded Debt and (b)
Consolidated Net Worth.
"Current Debt" of any Person shall mean as of the date of any
determination thereof (a) all Indebtedness of such Person for borrowed money
other than Funded Debt of such Person and (b) Guaranties by such Person of
Current Debt of others.
"Debt" of any Person shall mean as of the date of any
determination thereof the sum of all (a) Current Debt and (b) Funded Debt 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.
"Discounted Value" shall mean, with respect to the Called
Principal of any Note, the amount obtained by discounting all Remaining
Scheduled Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a discount
factor (as converted to reflect the periodic basis on which interest on such
Note is payable, if payable other than on a semi-annual basis) equal to the
Reinvestment Yield with respect to such Called Principal.
"Environmental Law" shall mean any international, Federal, state
or local statute, law, regulation, order, consent decree, judgment, permit,
license, code, covenant, deed restriction, common law, treaty, convention,
ordinance or other requirement relating to public health, safety or the
environment, including, without limitation, those relating to releases,
discharges or emissions to air, water, land or groundwater, to the withdrawal or
use of groundwater, to the use and handling of polychlorinated biphenyls or
asbestos, to the disposal, treatment, storage or
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management of hazardous or solid waste, or Hazardous Substances or crude oil, or
any fraction thereof, or to exposure to toxic or hazardous materials, to the
handling, transportation, discharge or release of gaseous or liquid Hazardous
Substances and any regulation, order, notice or demand issued pursuant to such
law, statute or ordinance, in each case applicable to the Property of the
Company and its Subsidiaries or the operation, construction or modification of
any thereof, including without limitation the following: the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, the Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976
and the Hazardous and Solid Waste Amendments of 1984, the Hazardous Materials
Transportation Act, as amended, the Federal Water Pollution Control Act, as
amended by the Clean Water Act of 1976, the Safe Drinking Water Control Act, the
Clean Air Act of 1966, as amended, the Toxic Substances Control Act of 1976, the
Occupational Safety and Health Act of 1977, as amended, the Emergency Planning
and Community Right-to-Know Act of 1986, the National Environmental Policy Act
of 1975, the Oil Pollution Act of 1990 and any similar or implementing state
law, and any state statute and any further amendments to these laws providing
for financial responsibility for cleanup or other actions with respect to the
release or threatened release of Hazardous Substances or crude oil, or any
fraction thereof and all rules, regulations, guidance documents and publications
promulgated thereunder.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA shall be construed to also refer to any successor sections.
"ERISA Affiliate" shall mean any corporation, trade or business
that is, along with the Company, a member of a controlled group of corporations
or a controlled group of trades or businesses, as described in section 414(b)
and 414(c), respectively, of the Code or Section 4001 of ERISA.
"Event of Default" shall have the meaning set forth in ss. 6.1.
"Funded Debt" of any Person shall mean, without duplication, (a)
all Indebtedness of such Person for borrowed money or which has been incurred in
connection with the acquisition of assets in each case having a final maturity
of one or more than one year from the date of origin thereof (or which is
renewable or extendible at the option of the obligor for a period or periods
more than one year from the date of origin), including all payments in respect
thereof that are required to be made within one year from the date of any
determination of Funded Debt, whether or not the obligation to make such
payments shall constitute a current liability of the obligor under GAAP, (b) all
Capitalized Rentals of such Person, (c) all Guaranties by such Person of Funded
Debt of others and (d) all Redeemable Preferred Stock of such Person.
"Funding Subsidiary" shall have the meaning set forth in ss. 9.7.
"GAAP" shall mean United States generally accepted accounting
principles as in effect at the time.
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"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing, or in effect guaranteeing,
any Indebtedness, dividend or other obligation of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent or
otherwise, by such Person: (a) to purchase such Indebtedness or obligation or
any Property or assets constituting security therefor, (b) to advance or supply
funds (1) for the purchase or payment of such Indebtedness or obligation, (2) to
maintain working capital or other balance sheet condition or otherwise to
advance or make available funds for the purchase or payment of such Indebtedness
or obligation, (c) to lease Property or to purchase Securities or other Property
or services primarily for the purpose of assuring the owner of such Indebtedness
or obligation of the ability of the primary obligor to make payment of the
Indebtedness or obligation, or (d) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purposes of all computations made under this Agreement, a
Guaranty in respect of any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such Indebtedness for borrowed
money which has been guaranteed, and in 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 material,
substance or waste, pollutant or contaminant which is regulated under any
statute, law, ordinance, rule or regulation of any local, state, regional or
Federal authority having jurisdiction over the Property of the Company and its
Subsidiaries or its use, including but not limited to any material, substance or
waste which is: (a) defined as a hazardous substance under Section 311 of the
Federal Water Pollution Control Act (33 U.S.C. ss. 1317) as amended; (b)
regulated as a hazardous waste under Section 1004 or Section 3001 of the Federal
Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery
Act (42 U.S.C. ss. 6901 et seq.), as amended; (c) defined as a hazardous
substance under Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. ss. 9601 et seq.), as amended, or (d)
defined or regulated as a hazardous substance or hazardous waste under any rules
or regulations promulgated under any of the foregoing statutes.
"Indebtedness" of any Person shall mean and include all
obligations of such Person which in accordance with GAAP shall be classified
upon a balance sheet of such Person as liabilities of such Person, and in any
event shall include, without limitation, all (a) obligations of such Person for
borrowed money or which has been incurred in connection with the acquisition of
Property or assets, (b) obligations secured by any Lien upon Property or assets
owned by such Person, even though such Person has not assumed or become liable
for the payment of such obligations, (c) obligations created or arising under
any conditional sale or other title retention agreement with respect to Property
acquired by such Person, notwithstanding the fact that the rights and remedies
of the seller, lender or lessor under such agreement in the event of default are
limited to repossession or sale of such Property, (d) Capitalized Rentals, (e)
Guaranties of obligations of others of the character referred to in this
definition and (f) Redeemable Preferred Stock.
"Institutional Holder" shall mean any of the following Persons:
(a) any bank, savings and
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loan association, savings institution, trust company or national banking
association, acting for its own account or in a fiduciary capacity, (b) any
charitable foundation, (c) any insurance company, (d) any fraternal benefit
society, (e) any pension, retirement or profit sharing trust or fund within the
meaning of Title I of ERISA or for which any bank, trust company, national
banking association or investment adviser registered under the Investment
Advisers Act of 1940, as amended, is acting as trustee or agent, (f) any
investment company or business development company, as defined in the Investment
Company Act of 1940, as amended, (g) any small business investment company
licensed under the Small Business Investment Act of 1958, as amended, (h) any
broker or dealer registered under the Securities Exchange Act of 1934, as
amended, or any investment adviser registered under the Investment Adviser Act
of 1940, as amended, (i) any government, any public employees' pension or
retirement system, or any other government agency supervising the investment of
public funds, (j) any other entity all of the equity owners of which are
Institutional Holders or (k) any other Person which may be within the definition
of "qualified institutional buyer" as such term is used in Rule 144A, as from
time to time in effect, promulgated under the Securities Act of 1933, as
amended.
"Interest Charges" for any period shall mean all interest and all
amortization of debt discount and expense on any particular Indebtedness for
which such calculations are being made (including, without limitation,
payment-in-kind, zero coupon and other like Securities and the interest
component of Rentals on Capitalized Leases).
"Investments" shall mean all investments, in cash or by delivery
of Property made, directly or indirectly in any Person, whether by acquisition
of shares of capital stock, Indebtedness or other obligations or Securities or
by loan, advance, capital contribution or otherwise; provided that "Investments"
shall not mean or include (a) routine investments in Property to be used or
consumed in the ordinary course of business or (b) receivables arising from the
sale of goods and services in the ordinary course of business.
"Interest Rate Protection Agreement" shall mean any agreement,
device or arrangement designed to protect at least one of the parties thereto
from the fluctuations of interest rates, exchange rates or forward rates
applicable to such party's assets, liabilities or exchange transactions,
including, without limitation, dollar-denominated or cross-currency interest
rate exchange agreements, forward currency exchange agreements, dollar
protection agreements, interest rate cap agreements, interest rate collar
agreements, forward rate currency or interest rate options, puts or warrants.
"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 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 (including, with respect to
stock, stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements) affecting property. For the 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,
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36
Capitalized 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 constitute a Lien.
"Long-Term Lease" shall mean any lease of real or personal
Property (other than a lease relating to data processing equipment not to exceed
$5,000,000 in aggregate total cost and a Capitalized Lease) having an original
term, including any period for which the lease may be renewed or extended at the
option of the lessor, of more than three years.
"Make-Whole Amount" shall mean, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Called
Principal of such Note over the sum of (i) such Called Principal plus (ii)
interest accrued thereon as of (including interest due on) the Settlement Date
with respect to such Called Principal. The Make-Whole Amount shall in no event
be less than zero.
"Minority Interests" shall mean any shares of stock of any class
of a Subsidiary (other than directors' qualifying shares as required by law)
that are not owned by the Company and/or one or more of its Subsidiaries.
Minority Interests shall be valued by valuing Minority Interests constituting
preferred stock at the voluntary or involuntary liquidating value of such
preferred stock, whichever is greater, and by valuing Minority Interests
constituting common stock at the book value of capital and surplus applicable
thereto adjusted, if necessary, to reflect any changes from the book value of
such common stock required by the foregoing method of valuing Minority Interests
in preferred stock.
"Multiemployer Plan" shall have the same meaning as in ERISA.
"Net Income Available for Interest Charges" for any period shall
mean the sum of (a) Consolidated Net Income during such period plus (to the
extent deducted in determining Consolidated Net Income), (b) all provisions for
any Federal, state or other income taxes made by the Company and its
Subsidiaries during such period and (c) Consolidated Interest Charges during
such period.
"Notes" shall have the meaning set forth in ss. 1.1.
"Overdue Rate" shall mean the lesser of (a) the maximum rate
permitted by applicable law and (b) the greater of (1) 8.65% per annum or (2) 2%
plus the rate which The Bank of New York, New York, New York announces from time
to time as its prime lending rate, as in effect from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and
any entity succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, partnership, corporation,
trust or unincorporated organization, and a government or agency or political
subdivision thereof.
"Plan" shall mean a "pension plan," as such term is defined in
ERISA, established or
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37
maintained by the Company or any ERISA Affiliate or as to which the Company or
any ERISA Affiliate contributed or is a member or otherwise may have any
liability.
"Property" shall mean any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Receivables Financing" shall mean any transaction pursuant to
which funds are advanced to the Company or any Subsidiary in exchange for which
the Company or any of its Subsidiaries sell, pledge or otherwise dispose of any
notes or accounts receivable other than such a transaction (i) between the
Company and a Subsidiary pursuant to which funds are advanced to the Subsidiary
by the Company or (ii) between a Subsidiary and a Wholly-owned Subsidiary which
is the parent of such Subsidiary pursuant to which funds are advanced to the
Subsidiary by such parent.
"Redeemable Preferred Stock" shall mean any class or series of
capital stock of a Person which class or series of capital stock is entitled to
preference or priority over other classes or series of capital stock of such
Person in respect of voting rights, the payment of dividends or the distribution
of assets upon liquidation and which preferred stock is redeemable by such
Person.
"Reinvestment Yield" shall mean, with respect to the Called
Principal of any Note, the yield to maturity implied by (i) the yields reported,
as of 10:00 A.M. (New York City local time) on the Business Day next preceding
the Settlement Date with respect to such Called Principal, on the display
designated as "Page 678" on the Telerate Service (or such other display as may
replace page 678 on the Telerate Service) for actively traded U.S. Treasury
securities having a maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date, or if such yields shall not be reported as
of such time or the yields reported as of such time shall not be ascertainable,
(ii) the Treasury Constant Maturity Series yields reported, for the latest day
for which such yields shall have been so reported as of the Business Day next
preceding the Settlement Date with respect to such Called Principal, in Federal
Reserve Statistical Release H.15 (519) (or any comparable successor publication)
for actively traded U.S. Treasury securities having a constant maturity equal to
the Remaining Average Life of such Called Principal as of such Settlement Date.
Such implied yield shall be determined, if necessary, by (a) converting U.S.
Treasury ▇▇▇▇ quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between yields reported for
various maturities.
"Remaining Average Life" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the
sum of the products obtained by multiplying (a) each Remaining Scheduled Payment
of such Called Principal (but not of interest thereon) by (b) the number of
years (calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, with respect to the
Called Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were
32
38
made prior to its scheduled due date.
"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 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.
"Reportable Event" shall have the same meaning as in ERISA.
"Responsible Officer" shall mean the Chief Executive Officer,
the Chief Financial Officer, the Chief Operating Officer, if any, the President
or the Treasurer of the Company.
"Restricted Investments" shall mean all Investments, other than
Investments described in clauses (a) through (h) of ss. 5.11.
"Restricted Payments" shall have the meaning set forth in ss.
5.10.
"Rolling Four Quarters Period" shall mean a period of four
consecutive fiscal quarters treated as a single accounting period.
"▇▇▇▇▇▇▇ Family" shall have the meaning set forth in ss. 2.3(d).
"Security" shall have the same meaning as in Section 2(l) of the
Securities Act of 1933, as amended.
"Settlement Date" shall mean, with respect to the Called
Principal of any Note, the date on which such Called Principal is to be prepaid
pursuant to ss. 2.2 or ss. 2.3 or is declared to be immediately due and payable
pursuant to ss. 6.3, as the context requires.
"Subordinated Funded Debt" shall mean all Funded Debt of the
Company (a) which has a final maturity later than August 28, 2007, (b) which is
not subject to repayment prior to August 28, 2007 whether by means of a sinking
fund, periodic maturities, required prepayments or other analogous payments or
otherwise, (c) which by its express terms prohibits optional prepayments in
whole and in part on or prior to August 28, 2007 and (d) which is at all times
evidenced by a written instrument or instruments containing subordination
provisions acceptable to the holders of 66-2/3% in aggregate principal amount of
the Notes then outstanding, providing for the subordination thereof to other
Funded Debt of the Company, including, without limitation, to the Notes.
The term "subsidiary" shall mean as to any particular parent
corporation any corporation of which more than 50% (by number of votes) of the
Voting Stock shall be beneficially owned, directly or indirectly, by such parent
corporation. The term "Subsidiary" shall mean a subsidiary of the Company.
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39
"Subsidiary Stock" shall have the meaning set forth in ss.
5.12(c).
"Voting Stock" shall mean Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or Persons performing similar
functions).
"Wholly-owned" when used in connection with any Subsidiary shall
mean a Subsidiary of which all of the issued and outstanding shares of stock
(including as "stock" for purposes of this definition any options or warrants to
purchase stock or other Securities exchangeable for or convertible into stock)
(except shares required as directors' qualifying shares) shall be owned by the
Company and/or one or more of its Wholly-owned Subsidiaries.
Section 8.2 Accounting Principles. Where the character or amount
of any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is required to
be made for the purposes of this Agreement, the same shall be done in accordance
with GAAP, to the extent applicable, except where such principles are
inconsistent with the requirements of this Agreement.
Section 8.3 Directly or Indirectly. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether the action in
question is taken directly or indirectly by such Person.
SECTION 9. MISCELLANEOUS.
Section 9.1 Registered Notes. The Company shall cause to be kept
at its principal office a register for the registration and transfer of the
Notes, and the Company will register or transfer or cause to be registered or
transferred, as hereinafter provided any Note issued pursuant to this Agreement
At any time and from time to time the holder of any Note which
has been duly registered as hereinabove provided may transfer such Note to any
Person other than a Competitor upon surrender thereof at the principal office of
the Company duly endorsed or accompanied by a written instrument of transfer
duly executed by the registered holder of such Note or its attorney duly
authorized in writing and containing a notation on such Note of the date to
which interest has been paid thereon and of the amount of any prepayments made
on account of the principal thereof.
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. Payment of or on account of the principal, premium, if any, and
interest on any Note shall be made to or upon the written order of such
registered holder.
Section 9.2 Exchange of Notes. At any time and from time to time,
upon not less than
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ten days' notice to that effect given by the holder of any Note initially
delivered or of any Note substituted therefor pursuant to ss. 9.1, this ss. 9.2
or ss. 9.3, and, upon surrender of such Note at its office, the Company will
deliver in exchange therefor, without expense to such holder, except as set
forth below, a Note for the same aggregate principal amount as the then unpaid
principal amount of the Note so surrendered, or Notes in the minimum
denomination of $1,000,000 (or such lesser amount as shall constitute 100% of
the Notes of such holder) 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 as of the date of issue, 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 without expense to the holder
thereof, a new Note, of like tenor, in lieu of such lost, stolen, destroyed or
mutilated Note. If the Purchaser or any subsequent Institutional Holder having a
net worth of $50,000,000 or more is the owner of any such lost, stolen or
destroyed Note, then the affidavit of an authorized officer of such owner,
setting forth the fact of loss, theft or destruction and of its ownership of
such Note at the time of such loss, theft or destruction shall be accepted as
satisfactory evidence thereof and no further indemnity shall be required as a
condition to the execution and delivery of a new Note other than the written
agreement of such owner to indemnify the Company.
Section 9.4 Expenses, Stamp Tax Indemnity. Whether or not the
transactions herein contemplated shall be consummated, the Company agrees to pay
directly all of your out-of-pocket expenses in connection with the preparation,
execution and delivery of this Agreement and the transactions contemplated
hereby, and all such expenses relating to any amendment, waivers or consents
pursuant to the provisions hereof (whether or not the same are actually executed
and delivered), including, without limitation, any amendments, waivers, or
consents resulting from any work-out, renegotiation or restructuring relating to
the performance by the Company of its obligations under this Agreement and the
Notes. The Company also agrees that it will pay and save you harmless against
any and all liability with respect to stamp and other taxes, if any, which may
be payable or which may be determined to be payable in connection with the
execution and delivery of this Agreement or the Notes, whether or not any Notes
are then outstanding. The Company 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 authorized by the Company in connection with the
transactions contemplated by this Agreement.
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.
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Section 9.6 Notices. All communications provided for hereunder
shall be in writing and, if to you, delivered or mailed prepaid by registered or
certified mail or overnight air courier, or by facsimile communication, in each
case 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, and if to the Company,
delivered or mailed by registered or certified mail or overnight air courier, or
by facsimile communication, to the Company at ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Chief Financial Officer or to
such other address as the Company may in writing designate to you or to a
subsequent holder of the Note initially issued to you; provided, however, that a
notice to you by overnight air courier shall only be effective if delivered to
you at a street address designated for such purpose in Schedule I, and a notice
to you by facsimile communication shall only be effective if made by confirmed
transmission to you at a telephone number designated for such purpose in
Schedule I and a copy of such facsimile communication is delivered to you by
overnight air courier on the next succeeding Business Day, or, in either case,
as you or a subsequent holder of any Note initially issued to you may designate
to the Company in writing.
Section 9.7 Reproduction of Documents. This Agreement and all
documents relating hereto, including, without limitation, (a) consents, waivers,
and modifications which may hereafter be executed, (b) documents received by you
at the closing of your purchase of the Notes (except the Notes themselves), and
(c) financial statements, certificates and other information previously or
hereafter furnished to you, may be reproduced by you by any photographic,
photostatic, microfilm, micro-card, miniature photographic or other similar
process and you may destroy any original documents so reproduced. The Company
agrees and stipulates that any such reproduction shall be admissible in evidence
as the original itself in any judicial or administrative proceeding (whether or
not the original is in existence and whether or not such reproduction was made
by you in the regular course of business) and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
Section 9.8 Successors and Assigns. This Agreement shall be
binding upon the Company and its successors and assigns and shall inure to your
benefit and to the benefit of your successors and assigns, including each
successive holder or holders of any Notes and this Agreement shall be binding
upon you and your successors and assigns and it shall inure to the benefit of
the Company and its successors and assigns.
Section 9.9 Survival of Covenants and Representations. All
covenants, representations and warranties made by the Company herein and in any
certificates delivered pursuant hereto, whether or not in connection with the
Closing Date, shall survive the closing and the delivery of this Agreement and
the Notes and all representations and warranties made by you herein shall
survive the Closing Date and delivery of this Agreement and the Notes.
All covenants, representations and warranties made by the Company
in connection herewith shall be deemed to have been relied upon by you
notwithstanding any investigation heretofore or hereafter made by you or on your
behalf.
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Section 9.10 Severability. Should any part of this Agreement for
any reason be declared invalid or unenforceable, such decision shall not affect
the validity or enforceability of any remaining portion, which remaining portion
shall remain in force and effect as if this Agreement had been executed with the
invalid or unenforceable 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 or
unenforceable.
Section 9.11 Governing Law. This Agreement and the Notes issued
and sold hereunder shall be governed by and construed in accordance with the
laws of the State of New Jersey.
Section 9.12 Captions. The descriptive headings of the various
Sections or parts of this Agreement are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
[Signature Page Follows]
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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.
▇▇▇▇▇▇▇ CORPORATION
By:
----------------------------------
Its:
----------------------------------
Accepted as of August 28, 1997.
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:
----------------------------------
Vice President
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SCHEDULE I
PURCHASER SCHEDULE
Aggregate
Principal
Amount of
Notes to be Note
Purchased Denomination(s)
------------ ---------------
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA $125,000,000 $125,000,000
(1) All payments on account of Notes held by such purchaser shall be made
by wire transfer of immediately available funds for credit to:
Account No. ▇▇▇-▇▇▇▇-▇▇▇
The Bank of New York
New York, New York
(ABA No.: 021-000-018)
Each such wire transfer shall set forth the name of the Company, a
reference to "6.65% Senior Notes due 2007, Security No. !Inv. 5705!,
and the due date and application (as among principal, interest and
Make-Whole Amount) of the payment being made.
(2) Address for all notices relating to payments:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Three Gateway Center, 12th Floor
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Manager, Investment Operations Group
(3) Address for all other communications and notices:
The Prudential Insurance Company of America
c/o Prudential Capital Group
▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Managing Director
45
SCHEDULE I
(to Note Agreement)
(4) Recipient of telephone prepayment notices:
Manager, Investment Structure and Pricing
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (facsimile)
(5) Tax Identification No.: ▇▇-▇▇▇▇▇▇▇
I-2
46
DESCRIPTION OF CURRENT DEBT, FUNDED DEBT,
LONG-TERM LEASES, LIENS AND INVESTMENTS
1. Current Debt of the Company and its Subsidiaries outstanding as of
July 6, 1997 is as follows:
DEBT HOLDER AMOUNT
AmSouth Bank $ 44,700,000
Aliant Bank 4,150,000
Wachovia Bank & Trust 75,000,000
SunTrust Bank, Atlanta(1) 45,283,600
Chase Manhattan Bank 49,300,000
------------
Total Current Debt $218,433,600
============
(1) $20,283,600 of the amount outstanding represents debt for ▇▇▇▇▇▇▇ Corp.
U.K., Ltd. which is denominated in (pound) (pound) 12,000,000 @ 1.6903
(pound)/$ = $20,283,600.
2. Funded Debt (other than Capitalized Rentals) of the Company and its
Subsidiaries outstanding on the Closing Date is as follows:
DEBT HOLDER AMOUNT
Prudential Insurance Co. (6.78%) $100,000,000
Prudential Insurance Co. (8.83%) 32,200,000
Allstate Life Insurance (6.72%) 25,714,285
Connecticut General Life Insurance (6.72%) 21,428,571
Teachers Insurance & Annuity (6.72%) 17,142,858
Trust Company Bank 75,000,000
Compass Bank - DeSoto ▇▇▇▇▇ (6.95%) 103,886
------------
Total Funded Debt $271,589,600
============
SCHEDULE II
(to Note Agreement)
47
3. Long-Term Leases of the Company and its Subsidiaries outstanding on the
Closing Date are as follows:
LESSOR DESCRIPTION
Central Plaza Properties ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Cross Creek Hillsville, VA plant
The Venture Properties Development, Inc. Cross Creek North Wilkesboro, VA plant
Stone/▇▇▇▇▇▇ General Partnership Baltimore, MD sales office
Westerville Center Westerville, OH sales office
Certified, Inc. Snellville, GA sales office
▇▇▇▇▇▇▇ Industrial Group Sparks, NV warehouse*
The Rebiero Corporation Reno, NV sales office
▇▇▇ ▇▇▇▇ Santa Ana, CA sales office
City of Alexander City Alexander City, AL hangar
Mid-Georgia Landholdings, Inc. Atlanta, GA sourcing office
Montgomery Warehouses, LLC Montgomery, AL warehouse
Parkway Tower Associates Dallas, TX sales office
▇▇▇▇▇▇▇▇ Properties Acquisition Partners, L.P. Dallas, TX sales office
Helmsley-Spear, Inc. New York, NY sales office
Emerald Real Estate Investments, LLC Atlanta, GA sales office
The Irvine Company Irvine, CA sales office*
Pelmad Corporation Miami, FL sales office and warehouse
▇▇▇▇▇▇▇▇▇▇▇ Family Partners, Ltd. Montgomery, AL plant
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ apartment
L.A.W. (▇▇▇▇ Engineering) Ft. ▇▇▇▇▇, AL warehouse
▇▇▇▇ ▇. ▇▇▇▇▇▇ Ft. ▇▇▇▇▇, AL warehouse
SH & S Partnership Bentonville, AR sales office
Town of Columbia ▇▇▇▇▇▇▇▇, ▇▇ plant
Town of Slocomb Slocomb, AL plant
Charter Oaks Valdosta, GA outlet store
Foley, AL outlet store
Horizon Outlet Center Traverse City, MI outlet store
▇.▇. ▇▇▇▇ ▇▇▇▇, ▇▇▇. ▇▇▇▇ ▇▇▇▇, ▇▇ outlet store
Marco Island Partners Marco Island, FL outlet store
SOS Associates, Ltd. Sarasota, FL outlet store
Castle Rock Factory Shops
Limited Partnership Castle Rock, CO outlet store
Colonial Realty Limited Partnership Columbus, GA outlet store
▇▇▇▇▇▇ Factory Stores Dalton, GA outlet store
Wigwam Outlet Stores, L.L.C Goodyear, AZ outlet store
Retail Developers Ltd. Boaz, AL outlet store
Slidell Factory Outlets, Ltd. Slidell, LA outlet store
Ohio Factory Shops Partnership Jeffersonville, OH outlet store
New Plan Factory Malls, Inc. Branson, MO outlet store
II-2
48
Tanger Properties Limited Partnership Pigeon Forge, TN outlet store
Riverhead, NY outlet store
Locust Grove, GA outlet store
Branson MO outlet store
Commerce, GA outlet store
San Marcos, TX outlet store
Orlando Outlet World, Ltd. Orlando, FL outlet store
New Plan Realty Trust St. Augustine, FL outlet store
Osage Beach, MO outlet store
Benderson 85-1 Trust Sedona, AZ outlet store
Nags Head Associates Limited Partnership Nags Head, NC outlet store
Waccamaw Factory Stores Myrtle Beach SC outlet store
Factory Stores of America, Inc. Nashville, TN outlet store
▇▇▇▇▇▇▇▇ Investment Company Adel, GA outlet store
The Cordish Company Ocean City, MD outlet store
Flatwoods Factory Outlet Stores, Inc. Flatwoods, WV outlet store
USA Factory Stores, Inc. Opelika, AL outlet store
Inmobiliaria Hondurena
del ▇▇▇▇▇, ▇.▇. de C.V Choloma, Honduras plant
Dica Comercio Adminsitacao
e Empreendimentos Ltda. Sao Paulo, Brazil sales office
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ Nogueira ▇▇▇▇▇▇ Sao Paulo, Brazil apartment
Jet Forward Development Limited Kowloon, Hong Kong sales office
Dazooby Investments Pty. Ltd. Melbourne, Australia sales office and warehouse
▇▇▇▇▇ ▇▇▇▇▇ Packaging West Lothian, Scotland warehouse
West Lothian Council West Lothian, Scotland warehouse
Urbanizadora Alicante, Spain sales office
Denical, S.A Alicante, Spain apartment
Novotel Corporation Krefeld, Germany sales office
Eurobail Company Paris, France sales office
Elettomeccanica Lampredi Srl Scandicci, Italy sales office
MS-Medox Prague, Czech Republic sales office
Europaint Ternat, Belgium sales office and warehouse#
London, England sales office*
Orbit Investments Wilmslow, England sales office#
Nestle Company Richmond-Surrey, England sales office#
Inmobiliaria Mirabel Sa De Mexico City, Mexico sales office
▇▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇ San ▇▇▇▇ del Rio, Mexico distribution center
Arrendadora ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ warehouse
▇▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Galva San ▇▇▇▇ del Rio, Mexico warehouse
▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇ warehouse
* Property subleased to third party.
# Currently negotiating termination.
4. Capitalized Leases of the Company and its Subsidiaries outstanding on
the Closing Date are
II-3
49
as follows:
DEBT HOLDER AMOUNT
Industrial Development Board of Geneva, AL $2,575,000
Industrial Development Board of ▇▇▇▇▇▇▇▇, ▇▇ 2,575,000
Industrial Development Board of Ashland, AL 1,800,000
----------
Total Capital Leases $6,950,000
==========
5. Liens securing Indebtedness of the Company and its Subsidiaries
existing on the Closing Date are as follows:
DEBT HOLDER AMOUNT
Industrial Development Board of Geneva, AL $2,575,000
Industrial Development Board of ▇▇▇▇▇▇▇▇, ▇▇ 2,575,000
Industrial Development Board of Ashland, AL 1,800,000
----------
Total Liens $6,950,000
==========
II-4
50
6. Investments of the Company in the Subsidiaries outstanding on the
Closing Date are as follows:
INVESTMENTS IN SUBSIDIARIES: AMOUNT
Cross Creek Apparel, Inc. $ 40,832,622.20
▇▇▇▇▇▇▇ Corp, U.K., Ltd. 53,215,329.02
▇▇▇▇▇▇▇ Athletic, Inc. 7,545,200.06
▇▇▇▇▇▇▇ Development Corporation 3,916,384.06
▇▇▇▇▇▇▇ Athletic West 3,315,936.77
Habersham ▇▇▇▇▇ 3,325,465.00
▇▇▇▇▇▇▇ Mill Stores, Inc. 86,634.33
Alexander City Flying Service, Inc. 62,486.28
DeSoto ▇▇▇▇▇, Inc. 10,145,437.99
▇▇▇▇▇▇▇ Mexico S.A. de C.V 5,039,011.22
▇▇▇▇▇▇▇ CZ s.r.o 15,237.50
▇▇▇▇▇▇▇ Foreign Sales, Ltd. -0-
▇▇▇▇▇▇▇ Spain, S.L 4,404.24
▇▇▇▇▇▇▇ Corp. Australia ▇▇▇.▇▇▇ 4,997,066.39
▇▇▇▇▇▇▇ Germany 17,717.93
▇▇▇▇▇▇▇ Far East 1,294.00
▇▇▇▇▇▇▇ Brazil 1,939,000.00
▇▇▇▇▇▇▇ Honduras 5,101.00
▇▇▇▇▇▇▇ Japan 95,075.12
---------------
Total Investments $134,559,402.80
===============
II-5
51
SCHEDULE III
SUBSIDIARIES OF THE COMPANY
PERCENTAGE OF VOTING
STOCK OWNED BY COMPANY
JURISDICTION OF AND EACH OTHER
NAME OF SUBSIDIARY INCORPORATION SUBSIDIARY
-------------------- --------------- ----------------------
Cross Creek Apparel, Inc. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇%
▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 100%
▇▇▇▇▇▇▇ Corp. UK, Ltd. United Kingdom 100%
Citygate Textiles Limited United Kingdom 100%
▇▇▇▇▇▇▇ Athletic, Inc. Georgia 100%
▇▇▇▇▇▇▇ ▇▇▇▇▇ Stores, Inc. Delaware 100%
▇▇▇▇▇▇▇ Athletic West, Inc. Nevada 100%
Habersham ▇▇▇▇▇ Georgia 100%
Alexander City Flying Alabama 100%
Service, Inc.
▇▇▇▇▇▇▇ Development Georgia 100%
Corporation
DeSoto ▇▇▇▇▇, Inc. Georgia 100%
▇▇▇▇▇▇▇ Germany, GmbH Germany 100%
▇▇▇▇▇▇▇ France SARL France 100%
▇▇▇▇▇▇▇ Spain, ▇.▇. ▇▇▇▇▇ ▇▇▇%
▇▇▇▇▇▇▇ ▇▇▇▇▇ Srl Italy 100%
▇▇▇▇▇▇▇ Corp. Canada Ltd. Canada 100%
▇▇▇▇▇▇▇ CZ s.r.o Czech Republic 100%
▇▇▇▇▇▇▇ Corp. Far East, Ltd. Hong Kong 100%
SCHEDULE III
(to Note Agreement)
52
▇▇▇▇▇▇▇ Mexico, S.A. de C.V. Mexico 100%
▇▇▇▇▇▇▇ Corp. Australia PTY. LTD. Australia 100%
▇▇▇▇▇▇▇ Foreign Sales, Ltd. Barbados 100%
▇▇▇▇▇▇▇ Corp. Bangladesh Limited Bangladesh 100%
▇▇▇▇▇▇▇ de Honduras S.A. de C.V. Honduras 100%
▇▇▇▇▇▇▇ do Brasil Ltda. Brazil 100%
▇▇▇▇▇▇▇ Yucatan S.A. de C.V.*. Mexico 100%
* Incorporation in process.
SCHEDULE III
(to Note Agreement)
53
EXHIBIT A
▇▇▇▇▇▇▇ CORPORATION
6.65% Senior Note
Due August 28, 2007
No. R-1 August 28, 1997
PPN 782352\A
INV !5705!
$125,000,000
▇▇▇▇▇▇▇ CORPORATION, an Alabama corporation (the "Company"), for value
received, hereby promises to pay to THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
or registered assigns on the twenty-eighth day of August, 2007 the principal
amount of ONE HUNDRED TWENTY-FIVE MILLION DOLLARS ($125,000,000) and to pay
interest (computed on the basis of a 360-day year of twelve 30-day months) on
the principal amount from time to time remaining unpaid hereon at the rate of
6.65% per annum from the date hereof until maturity, payable quarterly on
November 28, February 28, May 28, and August 28 in each year (commencing on
November 28, 1997) and at maturity. The Company agrees to pay interest on
overdue principal (including any overdue required or optional prepayment of
principal) and premium, if any, and (to the extent legally enforceable) on any
overdue installment of interest, at the Overdue Rate after the due date, whether
by acceleration or otherwise, until paid. "Overdue Rate" shall mean the lesser
of (a) the maximum rate permitted by applicable law and (b) the greater of (1)
8.65% per annum or (2) 2% plus the rate which The Bank of New York, New York,
New York announces from time to time as its prime lending rate, as in effect
from time to time.
Both the principal hereof and interest hereon are payable at the home
office of the registered holder of this Note in coin or currency of the United
States of America which at the time of payment shall be legal tender for the
payment of public and private debts. If any amount of principal, premium, if
any, or interest on or in respect of this Note becomes due and payable on any
date which is not a Business Day, such amount shall be payable on the next
succeeding Business Day and the period of extension shall be included in the
computation of interest payable on such Business Day. "Business Day" means any
day other than a Saturday, Sunday or other day on which banks in Birmingham,
Alabama or New York, New York are required by law to close.
This Note is one of the 6.65% Senior Notes Due August 28, 2007 (the
"Notes") of the Company in the aggregate principal amount of $125,000,000 issued
under and pursuant to the terms and provisions of the Note Agreement, dated as
of August 28, 1997 (the "Note Agreement"), entered into by the Company with the
original Purchaser therein referred to and this Note and the holder hereof are
entitled equally and ratably with the holders of all other Notes
54
outstanding under the Note Agreement to all the benefits provided for thereby or
referred to therein. Reference is hereby made to the Note Agreement for a
statement of such rights and benefits.
This Note and the other Notes outstanding under the Note Agreement may
be declared due prior to their expressed maturity dates and certain prepayments
are required to be made thereon, all in the events, on the terms and in the
manner and amounts as provided in the Note Agreement.
The Notes are not subject to prepayment or redemption at the option of
the Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in the
Note Agreement.
This Note is registered on the books of the Company and is transferable
only by surrender thereof at the principal office of the Company duly endorsed
or accompanied by a written instrument of transfer duly executed by the
registered holder of this Note or its attorney duly authorized in writing.
Payment of or on account of principal, premium, if any, and interest on this
Note shall be made only to or upon the order in writing of the registered
holder.
THIS NOTE AND SAID NOTE AGREEMENT ARE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY.
▇▇▇▇▇▇▇ CORPORATION
By:
-------------------------
Title
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE LAWS OF ANY STATE AND MAY BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF ONLY IF REGISTERED OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT AVAILABLE UNDER SUCH ACT AND APPLICABLE STATE LAW.
2
55
EXHIBIT B
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to you as follows:
1. Subsidiaries. (a) Schedule III attached to the Agreements 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 and each Subsidiary has good and marketable title to
all of the shares it purports to own of the stock of each Subsidiary, free and
clear in each case of any Lien. All such shares have been duly issued and are
fully paid and non-assessable.
(b) The Company, Cross Creek Apparel, Inc., Habersham ▇▇▇▇▇,
DeSoto ▇▇▇▇▇, Inc. and Alexander City Flying Service, Inc. when consolidated in
accordance with GAAP constitute 89% or more of the consolidated assets, earnings
and revenues of the Company and its Subsidiaries.
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;
(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 is in good standing
as a foreign corporation in each jurisdiction wherein the nature of the
business transacted by it or the nature of the Property owned or leased
by it makes such licensing or qualification necessary except where the
failure to be so licensed or qualified would not materially affect
adversely the properties, business, prospects, profits or condition
(financial or otherwise) of the Company and its Subsidiaries.
3. Financial Statements. (a) The consolidated balance sheets of
the Company and its consolidated Subsidiaries as of December 31, 1994, December
30, 1995, and January 4, 1997 and the statements of income, stockholders' equity
and cash flows 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 therein noted, by
Ernst & Young LLP (or their appropriate predecessor), have been prepared in
accordance with GAAP 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
their operations and changes in their cash flows for such periods. The unaudited
consolidated balance sheets of the Company and its consolidated Subsidiaries as
of July 6, 1997
56
and the unaudited statements of income and cash flows for the 13-week period and
the 26-week period ended on said date prepared by the Company have been prepared
in accordance with GAAP consistently applied, are correct and complete and
present fairly, in all material respects, the financial position of the Company
and its consolidated Subsidiaries as of said date and the results of their
operations and changes in their financial position or cash flows for such period
subject to year-end audit adjustments.
(b) Since January 4, 1997, there has been no change in the
condition, financial or otherwise, of the Company and its consolidated
Subsidiaries as shown on the consolidated balance sheet as of such date except
changes in the ordinary course of business, none of which individually or in the
aggregate has been materially adverse.
4. Indebtedness. (a) Schedule II attached to the Agreement
correctly describes all Current Debt, Funded Debt, Capitalized Leases, Long-Term
Leases, Liens securing Indebtedness and Investments of the Company and its
Subsidiaries outstanding on the Closing Date.
(b) The Company has furnished to the Purchaser true, correct and
complete copies of each instrument under which any Indebtedness of the Company
is or will be issued or by which it is or may be secured and any other
instrument in respect of Indebtedness of the Company if such instrument contains
covenants or other provisions that have or could have the effect of (1)
restricting the types of provisions that any other agreement to which the
Company may become a party, may contain or (2) restricting the conduct of the
Company's business or the incurrence by the Company of Indebtedness.
5. Full Disclosure. Neither the financial statements referred to
in paragraph 4 hereof nor the Agreements, or any other written statement
furnished by or on behalf of the Company to you in connection with the
negotiation of the sale of the Notes, contains any untrue statement of a
material fact or omits a material fact necessary to make the statements
contained therein or herein not misleading. There is no fact peculiar to the
Company or its Subsidiaries 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.
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 involve the possibility of materially affecting
adversely the properties, business, prospects, profits or condition (financial
or otherwise) of the Company and its Subsidiaries.
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 material parcels of real Property and has good title to all the other
material items of Property it purports to own, including that reflected in the
most recent balance sheet referred to in paragraph 3 hereof, except as sold or
otherwise disposed of in the ordinary course of business and except for Liens
permitted by the Agreement.
57
8. Leases. The Company and each Subsidiary has complied with all
obligations under all leases to which it is a party except where the failure to
comply with such leases would not materially affect adversely the properties,
business, prospects, profits or condition (financial or otherwise) of the
Company and its Subsidiaries.
9. Patents and Trademarks. The Company and each Subsidiary owns
or possesses all the patents, trademarks, trade names, service marks,
copyrights, licenses and rights with respect to the foregoing necessary for the
present and planned future conduct of its business, without any known conflict
with the rights of others.
10. Sale is Legal and Authorized. The sale of the Notes and
compliance by the Company with all of the provisions of the Agreement and the
Notes;
(a) are within the corporate powers of the Company;
(b) will not violate any provisions of any law or any
order of any court or governmental authority or agency and will not
conflict with or result in any breach of any of the terms, conditions
or provisions of, or constitute a default under the Articles of
Incorporation or By-laws of the Company or any indenture or other
agreement or instrument to which the Company is a party or by which it
may be bound or result in the imposition of any Liens or encumbrances
on any property of the Company; and
(c) have been duly authorized by proper corporate action
on the part of the Company and its stockholders, executed and delivered
by the Company and the Agreement and the Notes constitute the legal,
valid and binding obligations, contracts and agreements of the Company
enforceable in accordance with their respective terms.
The obligations of the Company under the Agreement and the Notes rank
at least pari passu in right of payment with all other unsecured Indebtedness
(actual or contingent) of the Company.
11. No Defaults. No Default or Event of Default has occurred and
is continuing. The Company is not in default in the payment of principal,
premium, if any, or interest on any Indebtedness for borrowed money and is not
in default under any instrument or instruments or agreements 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.
12. Governmental Consent. No approval, consent or withholding of
objection on the part of any regulatory body, state, Federal or local, is
necessary in connection with the execution and delivery by the Company of the
Agreement or the Notes or compliance by the Company with any of the provisions
of the Agreement or the Notes.
13. Taxes. All tax returns required to be filed by the Company or
any Subsidiary in any jurisdiction have, in fact, been filed, and all taxes,
assessments, fees and other governmental
58
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 January 4,
1992, 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 adequate provision has
not been made on its accounts, and no material controversy in respect of
additional Federal or state income taxes due since said date is pending or to
the knowledge of the Company threatened. The provisions for taxes on the books
of the Company and each Subsidiary are adequate for all open years, and for its
current fiscal period.
14. Use of Proceeds. The net proceeds from the sale of the Notes
will be used to refinance short-term debt and for other corporate purposes. None
of the transactions contemplated in the Agreements (including, without
limitation thereof, the use of proceeds from the issuance of the Notes) will
violate or result in a violation of Section 7 of the Securities Exchange Act of
1934, as amended, or any regulation issued pursuant thereto, including, without
limitation, Regulations G, T and X of the Board of Governors of the Federal
Reserve System, 12 C.F.R., Chapter II. 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.
15. Private Offering. Neither the Company, directly or indirectly,
nor any agent on its behalf has offered or will offer the Notes or any similar
Security or has solicited or will solicit an offer to acquire the Notes or any
similar Security from or has otherwise approached or negotiated or will approach
or negotiate in respect of the Notes or any similar Security with any Person
other than the Purchasers. Neither the Company, directly or indirectly, nor any
agent on its behalf has offered or will offer the Notes or any similar Security
or has solicited or will solicit an offer to acquire the Notes or any similar
Security from any Person so as to bring the issuance and sale of the Notes
within the provisions of Section 5 of the Securities Act of 1933, as amended.
16. ERISA. The consummation of the transactions provided for in
the Agreements and compliance by the Company with the provisions thereof and the
Notes issued thereunder will not involve any prohibited transaction within the
meaning of ERISA or Section 4975 of the Internal Revenue Code of 1986, as
amended. Each Plan complies in all material respects with all applicable
statutes and governmental rules and regulations, and (a) no Reportable Event
(other than a merger of Plans of the Company) has occurred and is continuing
with respect to any Plan, (b) neither the Company nor any ERISA Affiliate has
withdrawn from any Plan or Multiemployer Plan that is subject to Title IV of
ERISA or instituted steps to do so, and (c) no steps have been instituted to
terminate any Plan that is subject to Title IV or ERISA. No condition exists or
event or transaction has occurred in connection with any Plan which could result
in the incurrence by the Company or any ERISA Affiliate of any material
liability, fine or penalty. No Plan maintained by the Company or any ERISA
Affiliate, nor any trust created thereunder, has incurred any "accumulated
funding deficiency" as defined in Section 302 of ERISA nor does the present
value of all benefits vested under all Plans exceed, as of the last annual
valuation date, the value of the assets of the Plans allocable to such vested
benefits. Neither the Company nor any ERISA
59
Affiliate has any contingent liability with respect to any post-retirement
"welfare benefit plan" (as such term is defined in ERISA) except as follows: (i)
retirees and covered dependents may be entitled to continuation coverage under
the Company's medical benefits plans as required by Part 6 of Subtitle B of
Title I of ERISA and (ii) the Company maintains a plan under which a death
benefit of $2,000 is payable with respect to (A) employees and (B) retired
employees who have completed 20 years of continuous service as of the date of
their retirement.
17. Compliance with Law. Neither the Company nor any Subsidiary
(a) is in violation of any law, ordinance, franchise, governmental rule or
regulation to which it is subject (including, without limitation, any
Environmental Law) or (b) has failed to obtain any license, permit, franchise or
other governmental authorization necessary to the ownership of its property or
to the conduct of its business; which violation or failure to obtain would
materially affect adversely the business, prospects, profits, properties or
condition (financial or otherwise) of the Company and its Subsidiaries, taken as
a whole, or materially impair the ability of the Company to perform its
obligations contained in the Agreements or the Notes. 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.
18. Investment Company Act Status. Neither the Company nor any
Subsidiary is an "investment company," or a company "controlled" by an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended.
19. No Violation. Neither the Company nor any Subsidiary is in
violation of (a) its charter documents or By-laws or (b) any provision of any
agreement, indenture or other instrument to which the Company or any such
Subsidiary is a party or by which it may be bound, except where such violation
would not materially affect adversely the properties, business, profits,
prospects or condition (financial or otherwise) of the Company and its
Subsidiaries, and neither the Company nor any Subsidiary is a party to, or bound
by, any agreement, indenture or other instrument whereby performance in
accordance with the terms and provisions thereof could materially affect
adversely the business, prospects, profits or condition (financial or otherwise)
of the Company and its Subsidiaries.
60
EXHIBIT C
DESCRIPTION OF CLOSING OPINION OF
INDEPENDENT COUNSEL TO THE COMPANY
The closing opinion of Bradley, Arant, Rose & White, independent
counsel for the Company, which is called for by ss. 4.1 of the Agreements, shall
be dated the Closing Date and addressed to the Purchaser, shall bE satisfactory
in scope and form to the Purchaser and shall be to the effect that:
1. The Company is a corporation, duly incorporated, validly
existing and in good standing under the laws of the State of Alabama,
has the corporate power and the corporate authority to execute and
perform the Agreements and to issue the Notes and has the full
corporate power and the corporate authority to conduct the activities
in which it is now engaged.
2. Each of Alexander City Flying Service, Inc., DeSoto ▇▇▇▇▇,
Inc., Habersham ▇▇▇▇▇ and Cross Creek Apparel, Inc. (collectively, the
"Specified Subsidiaries") is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and all of the issued and outstanding shares of capital
stock of each Specified Subsidiary have been duly issued, are fully
paid and non-assessable and are owned by the Company.
3. The Agreement has been duly authorized by all necessary
corporate action on the part of the Company, have been duly executed
and delivered by the Company and constitutes the legal, valid and
binding contract 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).
4. 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).
5. No approval, consent or withholding of objection on the
part of, or filing, registration or qualification with, any
governmental body, Federal or state, is necessary in connection with
the execution and delivery of the Agreement or the Notes.
6. The issuance and sale of the Notes and the execution,
delivery and performance by the Company of the Agreement do not
conflict with or result in any breach of any of the provisions of or
constitute a default under or result in the creation or imposition of
any Lien upon any of the Property of the Company pursuant to the
61
provisions of the Articles of Incorporation or By-laws of the Company
or any agreement or other instrument known to such counsel to which the
Company is a party or by which the Company may be bound.
7. There are no proceedings pending, or to the knowledge of
such counsel threatened against the Company or any Subsidiary, in any
court or before any arbitration board or tribunal which could
materially affect adversely the properties, business, prospects,
profits or condition (financial or otherwise) of the Company and its
Subsidiaries.
8. The issuance of the Notes and the use of the proceeds of
the sale of the Notes in accordance with the provisions of and as
contemplated by the Agreement does not violate or conflict with
regulations, G, T or X of the Board of Governors of the Federal Reserve
System, 12 C.F.R. Chapter II.
9. The courts of the State of Alabama will give effect to
those provisions of the Agreement and the Notes which stipulate that
such documents shall be governed by, and construed in accordance with,
the laws of the State of New Jersey.
10. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Agreement does not, under existing
law, require the registration of the Notes under the Securities Act of
1933, as amended, or the qualification of an indenture under the Trust
Indenture Act of 1939, as amended.
The opinion of Bradley, Arant, Rose & White shall cover such other
matters relating to the sale of the Notes as the Purchaser may reasonably
request With respect to matters of fact on which such opinion is based, such
counsel shall be entitled to rely on appropriate certificates of public
officials and officers of the Company. The opinion of Bradley, Arant, Rose &
White, independent counsel for the Company, shall state that it may be relied
upon by permitted successors and assigns of the Purchaser.
