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EXHIBIT 10(e)
EXECUTION COPY
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CROWN CRAFTS, INC.
NOTE PURCHASE AND PRIVATE SHELF FACILITY
$25,000,000
7.27% SENIOR SERIES A NOTES DUE OCTOBER 12, 2005
$25,000,000
PRIVATE SHELF FACILITY
DATED AS OF OCTOBER 12, 1995
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TABLE OF CONTENTS
(Not Part of Agreement)
PAGE
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1. AUTHORIZATION OF ISSUE OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1A. Authorization of Issue of Series A Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1B. Authorization of Issue of Shelf Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. PURCHASE AND SALE OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2A. Purchase and Sale of Series A Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2B. Xxxxxxxx and Sale of Shelf Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2B(1). Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2B(2). Issuance Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2B(3). Periodic Spread Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2B(4). Request for Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2B(5). Rate Quotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2B(6). Acceptance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2B(7). Market Disruption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2B(8). Facility Closings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2B(9). Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2B(9)(i). Facility Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2B(9)(ii). Issuance Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2B(9)(iii). Delayed Delivery Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2B(9)(iv). Cancellation Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3. CONDITIONS OF CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3A. Certain Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3B. Representations and Warranties; No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3C. Purchase Permitted by Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3D. Payment of Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4. PREPAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4A. Required Prepayments of Series A Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4B. Required Prepayments of Shelf Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4C. Optional Prepayment with Yield-Maintenance Amount . . . . . . . . . . . . . . . . . . . . . . . . 9
4D. Notice of Optional Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4E. Prepayment Upon Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4F. Application of Required Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4G. Retirement of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5A. Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5A(1). Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5A(2). Officer's Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5A(3). Accountant's Letter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5A(4). Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5A(5). Rule 144A Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5B. Inspection of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5C. Covenant to Secure Notes Equally. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5D. Maintenance of Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5E. Guaranteed Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6A. Financial Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6B. Liens, and Other Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6B(1). Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6B(2). Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6B(3). Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6B(4). Xxxxxx and Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6B(5). Sale or Discount of Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6B(6). Certain Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6B(7). Transactions with Related Parties . . . . . . . . . . . . . . . . . . . . . . . . . 17
6C. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6D. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7A. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7B. Rescission of Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7C. Notice of Acceleration or Rescission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7D. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8. REPRESENTATIONS, COVENANTS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8A. Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8B. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8C. Actions Pending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8D. Outstanding Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8E. Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8F. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8G. Conflicting Agreements and Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8H. Offering of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8I. Regulation G, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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8J. Compliance with Laws and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8K. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8L. Governmental Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8M. Holding Company and Investment Company Status . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8N. Possession of Franchises, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8O. Patents, Etc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8P. Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8Q. Hostile Tender Offers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9. REPRESENTATIONS OF THE PURCHASERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10. DEFINITIONS; ACCOUNTING MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10A. Yield-Maintenance Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10B. Other Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10C. Accounting Principles, Xxxxx and Determinations . . . . . . . . . . . . . . . . . . . . . . . . . 37
11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11A. Note Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11B. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11C. Consent to Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11D. Form, Registration, Transfer and Exchange of Notes;
Lost Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11E. Persons Deemed Owners; Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11F. Survival of Representations and Warranties;
Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11G. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11H. Independence of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11I. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11J. Payments Due on Non-Business Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11K. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11L. Satisfaction Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11M. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11N. Severability of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
110. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11P. Binding Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
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EXHIBITS AND SCHEDULES
Purchaser Schedule
Information Schedule
EXHIBIT A-1 -- Form of Series A Note
EXHIBIT A-2 -- Form of Shelf Note
EXHIBIT B -- Form of Request for Purchase
EXHIBIT C -- Form of Confirmation of Acceptance
EXHIBIT D-1 -- Form of Opinion of Counsel, Series A Note Closing
EXHIBIT D-2 -- Form of Opinion of Counsel, Shelf Note Closing
SCHEDULE 8A -- Subsidiaries
SCHEDULE 8G -- Agreements Restricting Debt
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CROWN CRAFTS, INC.
0000 Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
October 12, 1995
The Prudential Insurance Company
of America ("PRUDENTIAL")
Each Prudential Affiliate (as hereinafter
defined) which becomes bound by certain
provisions of this Agreement as hereinafter
provided (together with Prudential, the "PURCHASERS")
c/o Prudential Capital Group
Four Gateway Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, X.X. 07102
Ladies and Gentlemen:
The undersigned, CROWN CRAFTS, INC. (herein called the
"Company"), hereby agrees with you as follows:
1. AUTHORIZATION OF ISSUE OF NOTES.
1A. AUTHORIZATION OF ISSUE OF SERIES A NOTES. The
Company will authorize the issue of its senior promissory notes (the "SERIES A
NOTES") in the aggregate principal amount of $25,000,000, to be dated the date
of issue thereof, to mature October 12, 2005, to bear interest on the unpaid
balance thereof from the date thereof until the principal thereof shall have
become due and payable at the rate of 7.27% per annum and on overdue principal,
Yield- Maintenance Amount and interest at the rate specified therein, and to be
substantially in the form of Exhibit A-1 attached hereto. The terms "SERIES A
NOTE" and "SERIES A NOTES" as used herein shall include each Series A Note
delivered pursuant to any provision of this Agreement and each Series A Note
delivered in substitution or exchange for any such Series A Note pursuant to
any such provision.
1B. AUTHORIZATION OF ISSUE OF SHELF NOTES. The Company
will authorize the issue of its additional senior promissory notes (the "SHELF
NOTES") in the aggregate principal amount of $25,000,000, to be dated the date
of issue thereof, to mature, in the case of each Shelf Note so issued, no more
than 10 years after the date of original issuance thereof, to have an average
life, in the case of each Shelf Note so issued, of no more than 8 years after
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the date of original issuance thereof, to bear interest on the unpaid balance
thereof from the date thereof at the rate per annum, and to have such other
particular terms, as shall be set forth, in the case of each Shelf Note so
issued, in the Confirmation of Acceptance with respect to such Shelf Note
delivered pursuant to paragraph 2B(6), and to be substantially in the form of
Exhibit A-2 attached hereto. The terms "SHELF NOTE" and "SHELF NOTES" as used
herein shall include each Shelf Note delivered pursuant to any provision of
this Agreement and each Shelf Note delivered in substitution or exchange for
any such Shelf Note pursuant to any such provision. The terms "NOTE" and
"NOTES" as used herein shall include each Series A Note and each Shelf Note
delivered pursuant to any provision of this Agreement and each Note delivered
in substitution or exchange for any such Note pursuant to any such provision.
Notes which have (i) the same final maturity, (ii) the same principal
prepayment dates, (iii) the same principal prepayment amounts (as a percentage
of the original principal amount of each Note), (iv) the same interest rate,
(v) the same interest payment periods and (vi) the same date of issuance
(which, in the case of a Note issued in exchange for another Note, shall be
deemed for these purposes the date on which such Note's ultimate predecessor
Note was issued), are herein called a "SERIES" of Notes.
2. PURCHASE AND SALE OF NOTES.
2A. PURCHASE AND SALE OF SERIES A NOTES. The Company
hereby agrees to sell to each Purchaser, and, subject to the terms and
conditions herein set forth, each Purchaser agrees to purchase from the Company
the aggregate principal amount of Series A Notes set forth opposite its name on
the Purchaser Schedule attached hereto at 100% of such aggregate principal
amount. On October 12, 1995 (herein called the "SERIES A CLOSING DAY"), the
Company will deliver to each Purchaser at the offices of Prudential Capital
Group, Four Gateway Center, 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000, one
or more Series A Notes registered in its name, evidencing the aggregate
principal amount of Series A Notes to be purchased by such Purchaser and in the
denomination or denominations specified with respect to such Purchaser in the
Purchaser Schedule attached hereto, against payment of the purchase price
thereof by transfer of immediately available funds for credit to the Company's
account #00-000-000 at Wachovia Bank of Georgia, ABA Routing Number
000-000-000.
2B. PURCHASE AND SALE OF SHELF NOTES.
2B(1). FACILITY. Prudential is willing to consider, in
its sole discretion and within limits which may be authorized for purchase by
Prudential and Prudential Affiliates from time to time, the purchase of Shelf
Notes pursuant to this Agreement. The willingness of Prudential to consider
such purchase of Shelf Notes is herein called the "FACILITY". At any time, the
aggregate principal amount of Shelf Notes stated in paragraph 1B, minus the
aggregate principal amount of Shelf Notes purchased and sold pursuant to this
Agreement prior to such time, minus the aggregate principal amount of Accepted
Notes (as hereinafter defined) which have not yet been purchased and sold
hereunder prior to such time, plus the aggregate principal amount of Shelf
Notes purchased and sold pursuant to this Agreement and thereafter retired
prior to such time is herein called the "AVAILABLE FACILITY AMOUNT" at such
time. NOTWITHSTANDING THE WILLINGNESS OF PRUDENTIAL TO CONSIDER PURCHASES OF
SHELF NOTES, THIS AGREEMENT IS ENTERED
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INTO ON THE EXPRESS UNDERSTANDING THAT NEITHER PRUDENTIAL NOR ANY PRUDENTIAL
AFFILIATE SHALL BE OBLIGATED TO MAKE OR ACCEPT OFFERS TO PURCHASE SHELF NOTES,
OR TO QUOTE RATES, SPREADS OR OTHER TERMS WITH RESPECT TO SPECIFIC PURCHASES OF
SHELF NOTES, AND THE FACILITY SHALL IN NO WAY BE CONSTRUED AS A COMMITMENT BY
PRUDENTIAL OR ANY PRUDENTIAL AFFILIATE.
2B(2). ISSUANCE PERIOD. Shelf Notes may be issued and
sold pursuant to this Agreement until the earlier of (i) the second anniversary
of the date of this Agreement (ii) the thirtieth day after Prudential shall
have given to the Company, or the Company shall have given to Prudential, a
notice stating that it elects to terminate the issuance and sale of Shelf Notes
pursuant to this Agreement (or if such thirtieth day is not a Business Day, the
Business Day next preceding such thirtieth day), (iii) termination of the
Facility pursuant to paragraph 7 of this Agreement, and (iv) acceleration of
any Note pursuant to paragraph 7 of this Agreement. The period during which
Shelf Notes may be issued and sold pursuant to this Agreement is herein called
the "ISSUANCE PERIOD".
2B(3). PERIODIC SPREAD INFORMATION. Not later than 9:30
A.M. (New York City local time) on a Business Day during the Issuance Period if
there is an Available Facility Amount on such Business Day, the Company may
request by telecopier or telephone, and Prudential will, to the extent
reasonably practicable, provide to the Company on such Business Day (or, if
such request is received after 9:30 A.M. (New York City local time) on such
Business Day, on the following Business Day), information (by telecopier or
telephone) with respect to various spreads at which Prudential or Prudential
Affiliates might be interested in purchasing Shelf Notes of different average
lives; provided, however, that the Company may not make such requests more
frequently than once in every five Business Days or such other period as shall
be mutually agreed to by the Company and Prudential. The amount and content of
information so provided shall be in the sole discretion of Prudential but it is
the intent of Prudential to provide information which will be of use to the
Company in determining whether to initiate procedures for use of the Facility.
Information so provided shall not constitute an offer to purchase Shelf Notes,
and neither Prudential nor any Prudential Affiliate shall be obligated to
purchase Shelf Notes at the spreads specified. Information so provided shall
be representative of potential interest only for the period commencing on the
day such information is provided and ending on the earlier of the fifth
Business Day after such day or the first day after such day on which further
spread information is provided. Prudential may suspend or terminate providing
information pursuant to this paragraph 2B(3) for any reason, including its
determination that the credit quality of the Company has declined since the
date of this Agreement.
2B(4). REQUEST FOR PURCHASE. The Company may from time to
time during the Issuance Period make requests for purchases of Shelf Notes
(each such request being herein called a "REQUEST FOR PURCHASE"). Each Request
for Purchase shall be made to Prudential by telecopier or overnight delivery
service, and shall (i) specify the aggregate principal amount of Shelf Notes
covered thereby, which shall not be less than $5,000,000 and not be greater
than the Available Facility Amount at the time such Request for Purchase is
made, (ii) specify the principal amounts, final maturities, principal
prepayment dates and
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amounts and interest payment periods (quarterly or semi-annual in arrears) of
the Shelf Notes covered thereby, (iii) specify the use of proceeds of such
Shelf Notes, (iv) specify the proposed day for the closing of the purchase and
sale of such Shelf Notes, which shall be a Business Day during the Issuance
Period not less than 10 days and not more than 25 days after the making of such
Request for Purchase, (v) specify the number of the account and the name and
address of the depository institution to which the purchase prices of such
Shelf Notes are to be transferred on the Closing Day for such purchase and
sale, (vi) certify that the representations and warranties contained in
paragraph 8 are true on and as of the date of such Request for Purchase and
that there exists on the date of such Request for Purchase no Event of Default
or Default, and (viii) be substantially in the form of Exhibit B attached
hereto. Each Request for Purchase shall be in writing and shall be deemed made
when received by Prudential.
2B(5). RATE QUOTES. Not later than five Business Days
after the Company shall have given Prudential a Request for Purchase pursuant
to paragraph 2B(4), Prudential may, but shall be under no obligation to,
provide to the Company by telephone or telecopier, in each case between 9:30
A.M. and 1:30 P.M. New York City local time (or such later time as Prudential
may elect) interest rate quotes for the several principal amounts, maturities,
principal prepayment schedules, and interest payment periods of Shelf Notes
specified in such Request for Purchase. Each quote shall represent the
interest rate per annum payable on the outstanding principal balance of such
Shelf Notes at which Prudential or a Prudential Affiliate would be willing to
purchase such Shelf Notes at 100% of the principal amount thereof.
2B(6). ACCEPTANCE. Within 30 minutes after Prudential
shall have provided any interest rate quotes pursuant to paragraph 2B(5) or
such shorter period as Prudential may specify to the Company (such period
herein called the "ACCEPTANCE WINDOW"), the Company may, subject to paragraph
2B(7), elect to accept such interest rate quotes as to not less than $5,000,000
aggregate principal amount of the Shelf Notes specified in the related Request
for Purchase. Such election shall be made by an Authorized Officer of the
Company notifying Prudential by telephone or telecopier within the Acceptance
Window that the Company elects to accept such interest rate quotes, specifying
the Shelf Notes (each such Shelf Note being herein called an "ACCEPTED NOTE")
as to which such acceptance (herein called an "ACCEPTANCE") relates. The day
the Company notifies an Acceptance with respect to any Accepted Notes is herein
called the "ACCEPTANCE DAY" for such Accepted Notes. Any interest rate quotes
as to which Prudential does not receive an Acceptance within the Acceptance
Window shall expire, and no purchase or sale of Shelf Notes hereunder shall be
made based on such expired interest rate quotes. Subject to paragraph 2B(7)
and the other terms and conditions hereof, the Company agrees to sell to
Prudential or a Prudential Affiliate, and Prudential agrees to purchase, or to
cause the purchase by a Prudential Affiliate of, the Accepted Notes at 100% of
the principal amount of such Notes. As soon as practicable following the
Acceptance Day, the Company, Prudential and each Prudential Affiliate which is
to purchase any such Accepted Notes will execute a confirmation of such
Acceptance substantially in the form of Exhibit C attached hereto (herein
called a "CONFIRMATION OF ACCEPTANCE"). If the Company should fail to execute
and return to Prudential within three Business Days following receipt thereof a
Confirmation of Acceptance with respect to any Accepted Notes, Prudential may
at its election at any time prior to its receipt thereof cancel the closing
with respect to such Accepted Notes by so notifying the Company in writing.
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2B(7). MARKET DISRUPTION. Notwithstanding the provisions
of paragraph 2B(5), if Prudential shall have provided interest rate quotes
pursuant to paragraph 2B(5) and thereafter prior to the time an Acceptance with
respect to such quotes shall have been notified to Prudential in accordance
with paragraph 2B(6) the domestic market for U.S. Treasury securities or
derivatives shall have closed or there shall have occurred a general
suspension, material limitation, or significant disruption of trading in
securities generally on the New York Stock Exchange or in the domestic market
for U.S. Treasury securities or derivatives, then such interest rate quotes
shall expire, and no purchase or sale of Shelf Notes hereunder shall be made
based on such expired interest rate quotes. If the Company thereafter notifies
Prudential of the Acceptance of any such interest rate quotes, such Acceptance
shall be ineffective for all purposes of this Agreement, and Prudential shall
promptly notify the Company that the provisions of this paragraph 2B(7) are
applicable with respect to such Acceptance.
2B(8). FACILITY CLOSINGS. Not later than 11:30 A.M. (New
York City local time) on the Closing Day for any Accepted Notes, the Company
will deliver to each Purchaser listed in the Confirmation of Acceptance
relating thereto at the offices of the Prudential Capital Group, Four Gateway
Center, 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000, Attention: Law
Department, the Accepted Notes to be purchased by such Purchaser in the form of
one or more Notes in authorized denominations as such Purchaser may request for
each Series of Accepted Notes to be purchased on the Closing Day, dated the
Closing Day and registered in such Purchaser's name (or in the name of its
nominee), against payment of the purchase price thereof by transfer of
immediately available funds for credit to the Company's account specified in
the Request for Purchase of such Notes. If the Company fails to tender to any
Purchaser the Accepted Notes to be purchased by such Purchaser on the scheduled
Closing Day for such Accepted Notes as provided above in this paragraph 2B(8),
or any of the conditions specified in paragraph 3 shall not have been fulfilled
by the time required on such scheduled Closing Day, the Company shall, prior to
1:00 P.M., New York City local time, on such scheduled Closing Day notify
Prudential (which notification shall be deemed received by each Purchaser) in
writing whether (i) such closing is to be rescheduled (such rescheduled date to
be a Business Day during the Issuance Period not less than one Business Day and
not more than 10 Business Days after such scheduled Closing Day (the
"RESCHEDULED CLOSING DAY") and certify to Prudential (which certification shall
be for the benefit of each Purchaser) that the Company reasonably believes that
it will be able to comply with the conditions set forth in paragraph 3 on such
Rescheduled Closing Day and that the Company will pay the Delayed Delivery Fee
in accordance with paragraph 2B(9)(iii) or (ii) such closing is to be canceled.
In the event that the Company shall fail to give such notice referred to in the
preceding sentence, Prudential (on behalf of each Purchaser) may at its
election, at any time after 1:00 P.M., New York City local time, on such
scheduled Closing Day, notify the Company in writing that such closing is to be
canceled. Notwithstanding anything to the contrary appearing in this
Agreement, the Company may elect to reschedule a closing with respect to any
given Accepted Notes on not more than one occasion, unless Prudential shall
have otherwise consented in writing.
2B(9). FEES.
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2B(9)(i). FACILITY FEE. In consideration for the time,
effort and expense involved in the preparation, negotiation and execution of
this Agreement, at the time of the execution and delivery of this Agreement,
the Company will pay to Prudential in immediately available funds a fee (herein
called the "FACILITY FEE") in the amount of $20,000. Payment of the Facility
Fee, or any Issuance Fee, Delayed Delivery Fee or Cancellation Fee pursuant to
this Agreement shall be made in immediately available funds to Prudential's
account #000-00-000 at Xxxxxx Guaranty Trust Company of New York, ABA
#000-000-000.
2B(9)(ii). ISSUANCE FEE. The Company will pay to Prudential
in immediately available funds a fee (herein called the "ISSUANCE FEE") on each
Closing Day (other than the Series A Closing Day or any Closing Day that occurs
prior to April 12, 1996) in an amount equal to 0.15% of the aggregate principal
amount of Notes sold on such Closing Day,
2B(9)(iii). DELAYED DELIVERY FEE. If the closing of the
purchase and sale of any Accepted Note is delayed for any reason beyond the
original Closing Day for such Accepted Note, the Company will pay to Prudential
(a) on the Cancellation Date or actual closing date of such purchase and sale
and (b) if earlier, the next Business Day following 90 days after the
Acceptance Day for such Accepted Note and on each Business Day following 90
days after the prior payment hereunder, a fee (herein called the "DELAYED
DELIVERY FEE") calculated as follows:
(BEY - MMY) X DTS/360 X PA
where "BEY" means Bond Equivalent Yield, i.e., the bond equivalent yield per
annum of such Accepted Note, "MMY" means Money Market Yield, i.e., the yield
per annum on a commercial paper investment of the highest quality selected by
Prudential on the date Prudential receives notice of the delay in the closing
for such Accepted Note having a maturity date or dates the same as, or closest
to, the Rescheduled Closing Day or Rescheduled Closing Days (a new alternative
investment being selected by Prudential each time such closing is delayed);
"DTS" means Days to Settlement, i.e., the number of actual days elapsed from
and including the original Closing Day with respect to such Accepted Note (in
the case of the first such payment with respect to such Accepted Note) or from
and including the date of the next preceding payment (in the case of any
subsequent delayed delivery fee payment with respect to such Accepted Note) to
but excluding the date of such payment; and "PA" means Principal Amount, i.e.,
the principal amount of the Accepted Note for which such calculation is being
made. In no case shall the Delayed Delivery Fee be less than zero. Nothing
contained herein shall obligate any Purchaser to purchase any Accepted Note on
any day other than the Closing Day for such Accepted Note, as the same may be
rescheduled from time to time in compliance with paragraph 2B(8).
2B(9)(iv). CANCELLATION FEE. If the Company at any time
notifies Prudential in writing that the Company is canceling the closing of the
purchase and sale of any Accepted Note, or if Prudential notifies the Company
in writing under the circumstances set forth in the last sentence of paragraph
2B(7) or the penultimate sentence of paragraph 2B(8) that the closing of the
purchase and sale of such Accepted Note is to be canceled, or if the closing of
the purchase and sale of such Accepted Note is not consummated on or prior to
the last day
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of the Issuance Period (the date of any such notification, or the last day of
the Issuance Period, as the case may be, being herein called the "CANCELLATION
DATE"), the Company will pay the Purchasers in immediately available funds an
amount (the "CANCELLATION FEE") calculated as follows:
PI X PA
where "PI" means Price Increase, i.e., the quotient (expressed in decimals)
obtained by dividing (a) the excess of the ask price (as determined by
Prudential) of the Hedge Treasury Note(s) on the Cancellation Date over the bid
price (as determined by Prudential) of the Hedge Treasury Notes(s) on the
Acceptance Day for such Accepted Note by (b) such bid price; and "PA" has the
meaning ascribed to it in paragraph 2B(9)(iii). The foregoing bid and ask
prices shall be as reported by Telerate Systems, Inc. (or, if such data for any
reason ceases to be available through Telerate Systems, Inc., any publicly
available source of similar market data). Each price shall be based on a U.S.
Treasury security having a par value of $100.00 and shall be rounded to the
second decimal place. In no case shall the Cancellation Fee be less than zero.
3. CONDITIONS OF CLOSING. The obligation of any
Purchaser to purchase and pay for any Notes is subject to the satisfaction, on
or before the Closing Day for such Notes, of the following conditions:
3A. CERTAIN DOCUMENTS. Such Purchaser shall have
received the following, each dated the date of the applicable Closing Day:
(i) the Note(s) to be purchased by such Purchaser;
(ii) certified copies of the resolutions of the Board of
Directors of the Company authorizing the execution and delivery of
this Agreement and the issuance of the Notes, and of all documents
evidencing other necessary corporate action and governmental
approvals, if any, with respect to this Agreement and the Notes;
(iii) a certificate of the Secretary or an Assistant
Secretary and one other officer of the Company certifying the names
and true signatures of the officers of the Company authorized to sign
this Agreement and the Notes and the other documents to be delivered
hereunder;
(iv) certified copies of the Certificate of
Incorporation and By-laws of the Company;
(v) a favorable opinion of Xxxxxx Xxxxxx, Esq., Staff
Counsel of the Company (or such other counsel designated by the
Company and acceptable to the Purchaser(s)) satisfactory to such
Purchaser and substantially in the form of Exhibit D-1 (in the case of
the Series A Notes) or D-2 (in the case of any Shelf Notes) attached
hereto and as to such other matters as such Purchaser may reasonably
request. The Company hereby directs each such counsel to deliver such
opinion, agrees that the issuance and sale of any Notes will
constitute a reconfirmation of such direction, and
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understands and agrees that each Purchaser receiving such an opinion
will and is hereby authorized to rely on such opinion;
(vi) a good standing certificate for the Company from
the Secretary of State of Georgia dated of a recent date and
certificates of qualification to do business as a foreign corporation
for the Company in North Carolina dated a recent date and such other
evidence of the status of the Company as such Purchaser may reasonably
request;
(vii) good standing certificates for each Material
Subsidiary of the Company from the Secretary of State of such
Subsidiary's respective state of incorporation dated a recent date and
certificates of qualification to do business as a foreign corporation
for each Material Subsidiary in each jurisdiction in which the nature
of the business conducted by such Subsidiary makes such qualification
necessary; and
(viii) additional documents or certificates with respect
to legal matters or corporate or other proceedings related to the
transactions contemplated hereby as may be reasonably requested by
such Purchaser.
3B. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The
representations and warranties contained in paragraph 8 shall be true on and as
of such Closing Day, except to the extent of changes caused by the transactions
herein contemplated; there shall exist on such Closing Day no Event of Default
or Default; and the Company shall have delivered to such Purchaser an Officer's
Certificate, dated such Closing Day, to both such effects.
3C. PURCHASE PERMITTED BY APPLICABLE LAWS. Assuming
the accuracy of the representation contained in paragraph 9 hereof, the
purchase of and payment for the Notes to be purchased by such Purchaser on the
terms and conditions herein provided (including the use of the proceeds of such
Notes by the Company) shall not violate any applicable law or governmental
regulation (including, without limitation, Section 5 of the Securities Act or
Regulation G, T or X of the Board of Governors of the Federal Reserve System)
and shall not subject such Purchaser to any tax, penalty, liability or other
onerous condition under or pursuant to any applicable law or governmental
regulation, and such Purchaser shall have received such certificates or other
evidence as it may request to establish compliance with this condition.
3D. PAYMENT OF FEES. The Company shall have paid to
Prudential any fees due it pursuant to or in connection with this Agreement,
including any Facility Fee due pursuant to paragraph 2B(9)(i), any Issuance Fee
due pursuant to paragraph 2B(9)(ii) and any Delayed Delivery Fee due pursuant
to paragraph 2B(9)(iii).
4. PREPAYMENTS. The Series A Notes and any Shelf
Notes shall be subject to required prepayment as and to the extent provided in
paragraphs 4A and 4B, respectively. The Series A Notes and any Shelf Notes
shall also be subject to prepayment under the circumstances set forth in
paragraphs 4C and 4E. Any prepayment made by the
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Company pursuant to any other provision of this paragraph 4 shall not reduce or
otherwise affect its obligation to make any required prepayment as specified in
paragraph 4A or 4B.
4A. REQUIRED PREPAYMENTS OF SERIES A NOTES. Until the
Series A Notes shall be paid in full, the Company shall apply to the prepayment
of the Series A Notes, without Yield-Maintenance Amount, the sum of
$3,571,428.57 on October 12 in each of the years 1999 through 2004, inclusive,
and such principal amounts of the Series A Notes, together with interest
thereon to the payment dates, shall become due on such payment dates. The
remaining unpaid principal amount of the Series A Notes, together with interest
accrued thereon, shall become due on the maturity date of the Series A Notes.
4B. REQUIRED PREPAYMENTS OF SHELF NOTES. Each Series
of Shelf Notes shall be subject to required prepayments, if any, set forth in
the Notes of such Series.
4C. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT.
The Notes of each Series shall be subject to prepayment, in whole at any time
or from time to time in part (in integral multiples of $100,000 and in a
minimum amount of $1,000,000), at the option of the Company, at 100% of the
principal amount so prepaid plus interest thereon to the prepayment date and
the Yield-Maintenance Amount, if any, with respect to each such Note. Any
partial prepayment of a Series of the Notes pursuant to this paragraph 4C shall
be applied in satisfaction of required payments of principal in inverse order
of their scheduled due dates.
4D. NOTICE OF OPTIONAL PREPAYMENT. The Company shall
give the holder of each Note of a Series to be prepaid pursuant to paragraph 4C
irrevocable written notice of such prepayment not less than 10 Business Days
prior to the prepayment date, specifying such prepayment date, the aggregate
principal amount of the Notes of such Series to be prepaid on such date, the
principal amount of the Notes of such Series held by such holder to be prepaid
on that date and that such prepayment is to be made pursuant to paragraph 4C.
Notice of prepayment having been given as aforesaid, the principal amount of
the Notes specified in such notice, together with interest thereon to the
prepayment date and together with the Yield-Maintenance Amount, if any, herein
provided, shall become due and payable on such prepayment date. The Company
shall, on or before the day on which it gives written notice of any prepayment
pursuant to paragraph 4C, give telephonic notice of the principal amount of the
Notes to be prepaid and the prepayment date to each Significant Holder which
shall have designated a recipient for such notices in the Purchaser Schedule
attached hereto or the applicable Confirmation of Acceptance or by notice in
writing to the Company.
4E. PREPAYMENT OF NOTES UPON CHANGE OF CONTROL. The
Company shall give written notice to each holder of a Note of the occurrence of
any Change of Control after the Series A Closing Day within 10 days after such
occurrence (which notice is herein referred to as the "CONTROL CHANGE NOTICE").
A Control Change Notice shall be given by facsimile communication confirmed by
overnight courier sent on the same day of such facsimile transmission and
contain reasonable detail describing the Change of Control and an offer by the
Company to prepay 100% of such holder's Notes on a closing date designated in
such Control Change Notice, which closing date shall be not less than 30 days
or more than
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60 days after the date of such notice (such closing date being hereinafter
referred to as the "CONTROL CHANGE PREPAYMENT DATE"). Such Control Change
Notice shall also provide that each holder of a Note may accept such offer of
prepayment by notice to the Company not more than 25 days after the date of
such Control Change Notice. Failure of any holder of Notes to respond to any
offer to prepay pursuant to this paragraph 4E shall constitute an acceptance of
such offer. The Company shall prepay all of the Notes on the Control Change
Prepayment Date of any holder which has timely accepted (or which has been
deemed to have accepted) the offer of prepayment at a price equal to 100% of
the principal amount of the Notes to be prepaid, plus accrued interest thereon
to the Control Change Prepayment Date plus the Yield-Maintenance Amount, if
any, in respect of each Note to be prepaid.
4F. APPLICATION OF REQUIRED PREPAYMENTS. In the case
of each prepayment of less than the entire unpaid principal amount of all
outstanding Notes of any Series pursuant to paragraphs 4A, 4B, or 4E, the
amount to be prepaid shall be applied pro rata to all outstanding Notes of such
Series (including, for the purpose of this paragraph 4F only, all Notes prepaid
or otherwise retired or purchased or otherwise acquired by the Company or any
of its Subsidiaries or Affiliates other than by prepayment pursuant to
paragraph 4A, 4B, or 4E) according to the respective unpaid principal amounts
thereof.
4G. RETIREMENT OF NOTES. The Company shall not, and
shall not permit any of its Subsidiaries or Affiliates to, prepay or otherwise
retire in whole or in part prior to their stated final maturity (other than by
prepayment pursuant to paragraphs 4A, 4B, or 4E or upon acceleration of such
final maturity pursuant to paragraph 7A), or purchase or otherwise acquire,
directly or indirectly, Notes of any Series held by any holder unless the
Company or such Subsidiary or Affiliate shall have offered to prepay or
otherwise retire or purchase or otherwise acquire, as the case may be, the same
proportion of the aggregate principal amount of Notes of such Series held by
each other holder of Notes of such Series at the time outstanding upon the same
terms and conditions. Any Notes so prepaid or otherwise retired or purchased
or otherwise acquired by the Company or any of its Subsidiaries or Affiliates
shall not be deemed to be outstanding for any purpose under this Agreement,
except as provided in paragraph 4F.
5. AFFIRMATIVE COVENANTS.
5A. REPORTING REQUIREMENTS.
5A(1). FINANCIAL STATEMENTS. The Company covenants that
it will deliver to each Significant Holder:
(i) as soon as practicable and in any event within 45
days after the end of each quarterly period (other than the last
quarterly period in each fiscal year), consolidated statements of
earnings and cash flows of the Company and its Subsidiaries for the
period from the beginning of the current fiscal year to the end of
such quarterly period, and a consolidated statement of earnings from
the beginning of such quarterly period to the end of such quarterly
period, and a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarterly period, setting
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forth in each case in comparative form figures for the corresponding
period in the preceding fiscal year (except as to the consolidated
balance sheet for which the comparable balance sheet date shall be the
end of the preceding fiscal year) all in reasonable detail and
satisfactory to the Required Holders and certified by an authorized
financial officer of the Company as fairly presenting, in all material
respects, the financial condition of the Company and its Subsidiaries
as of the end of such period and the results of their operations for
the period then ended in accordance with generally accepted accounting
principles, subject to changes resulting from normal year-end
adjustments;
(ii) as soon as practicable and in any event within 90
days after the end of each fiscal year, consolidated statements of
earnings, changes in shareholders' equity and cash flows of the
Company and its Subsidiaries for such year, and a consolidated balance
sheet of the Company and its Subsidiaries as at the end of such year,
setting forth in each case in comparative form corresponding
consolidated figures from the preceding annual audit, all in
reasonable detail and satisfactory in scope to the Required Holders
and reported on by independent public accountants of recognized
standing selected by the Company whose opinion shall be in scope and
substance satisfactory to the Required Holders;
(iii) promptly upon transmission thereof, copies of all
such financial statements, proxy statements, notices and reports as it
shall send to its stockholders and copies of registration statements
(without exhibits) and all reports which it files with the Securities
and Exchange Commission (or any governmental body or agency succeeding
to the functions of the Securities and Exchange Commission);
(iv) promptly upon receipt thereof, a copy of each other
report submitted to the Company or any Subsidiary by independent
accountants in connection with any annual, interim or special audit
made by them of the books of the Company or any Subsidiary (except
that letters to management regarding matters not deemed by such
accountants to be material weaknesses in the Company's system of
internal controls need not be delivered except upon written request);
and
(v) with reasonable promptness, such other information
relating to business, operations, affairs, financial condition, assets
or properties of the Company or any of its Subsidiaries (including,
but not limited to consolidating financial statements) as such
Significant Holder may reasonably request.
5A(2). OFFICER'S CERTIFICATE. Together with each delivery
of financial statements required by clauses (i) and (ii) of paragraph 5A(1)
hereof, the Company will deliver to each Significant Holder an Officer's
Certificate demonstrating (with computations in reasonable detail) compliance
by the Company and its Subsidiaries with the provisions of paragraphs 6A,
6B(2), 6B(3) and 6B(5) hereof, and stating that there exists no Event of
Default or Default, or, if any such Event of Default or Default exists,
specifying the nature thereof, the period of existence thereof and what action
the Company proposes to take, has taken or is taking with respect thereto.
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5A(3). ACCOUNTANTS' LETTER. Together with each delivery
of financial statements required by paragraph 5A(1)(ii) above, the Company will
deliver to each Significant Holder a certificate of the independent public
accountants giving the report on such financial statements stating that, in
performing that audit necessary for their report with respect to such financial
statements, they have obtained no knowledge of any Event of Default or Default,
or, if, they shall have obtained knowledge of any such Event of Default or
Default, specifying the nature and period of existence thereof. Such
accountants, however, shall not be liable to anyone by reason of their failure
to obtain knowledge of such Event of Default or Default which would not be
disclosed in the course of any audit conducted in accordance with generally
accepted auditing standards.
5A(4). NOTICE OF DEFAULT. The Company also covenants
that forthwith upon the Responsible Officer of the Company obtaining knowledge
of an Event of Default or Default, it will deliver to each Significant Holder
an Officer's Certificate specifying the nature thereof, the period of existence
thereof, and what action the Company proposes to take, has taken or is taking
with respect thereto.
5A(5). RULE 144A INFORMATION. The Company covenants that,
upon request of the holder of any Note, it will provide such holder, and any
qualified institutional buyer designated by such holder, such financial and
other information as such holder may reasonably determine to be necessary to
order to permit compliance with the information requirement Rule 144A under the
Securities Act in connection with the resale of Notes, except at such times as
the Company is subject to the reporting requirements of section 13 or 15(d) of
the Exchange Act. For the purpose of this paragraph 5A(5), the term "qualified
institutional buyer" shall have the meaning specified in Rule 144A under the
Securities Act.
5B. INSPECTION OF PROPERTY. The Company covenants that
it will permit any Person designated by any Significant Holder in writing, at
such Significant Holder's expense, to visit and inspect any of the properties
of the Company and its Subsidiaries, to examine the corporate books and
financial records of the Company and its Subsidiaries and make copies thereof
or extracts therefrom and to discuss the affairs, finances and accounts of any
of such corporations with the principal officers of the Company and its
independent public accountants, all at such reasonable times and as often as
such Significant Holder may reasonably request.
5C. COVENANT TO SECURE NOTE EQUALLY. The Company
covenants that if it or any Subsidiary shall create or assume any Lien upon any
of its property or assets, whether now owned or hereafter acquired, other than
Liens excepted by the provisions of paragraph 6B(1) (unless prior written
consent to the creation or assumption thereof shall have been obtained pursuant
to paragraph 11C), it will make or cause to be made effective provision whereby
the Notes will be secured by such Lien equally and ratably with any and all
other Debt thereby secured as long as any such other Debt shall be so secured.
5D. MAINTENANCE OF INSURANCE. The Company covenants
that it and each Subsidiary will maintain, with responsible insurers, insurance
with respect to its properties and business against such casualties and
contingencies (including public liability, larceny,
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embezzlement or other criminal misappropriation) and in such amounts as is
customary in the case of similarly situated corporations engaged in the same or
similar businesses. Notwithstanding the foregoing, the Company and its
Subsidiaries may, to the extent permitted by law, establish and responsibly
maintain a sound system of self-insurance against liabilities for workmen's
compensation, employee health benefits and personal injuries and property
damage arising from the operation of motor vehicles, provided that the Company
will maintain adequate reserves with respect thereto and, at all times, the
Company will maintain excess insurance to cover casualties and contingencies
greater than such reserves in such amounts as is customary in such systems of
self-insurance. Together with each delivery of financial statements under
clause (ii) of paragraph 5A(1) the Company, at the option of the Required
Holders, will deliver an Officer's Certificate specifying the details of the
insurance and the system of self-insurance then in effect.
5E. GUARANTEED OBLIGATIONS. The Company covenants that
if, at any time, it or any of its Subsidiaries incurs or permits to exist any
Debt or other obligations guaranteed or collateralized in any other manner by
any Person, it will simultaneously cause such Person to execute and deliver to
each holder of a Note a guaranty agreement in form and substance satisfactory
to the Required Holders guaranteeing payment of a principal amount of the Notes
and interest thereon which bears the same ratio to the total unpaid principal
amount of the Notes as the amount of such other obligation which is guaranteed
bears to the total unpaid principal amount of such other obligation, or if such
other obligation is collateralized, to collateralize each such Note equally and
ratably with such other obligation.
6. NEGATIVE COVENANTS. During the Issuance Period and
so long thereafter as any Note is outstanding or other amount due hereunder is
unpaid, the Company covenants as follows:
6A. FINANCIAL RATIOS. The Company covenants that it
will not at any time permit:
(i) Consolidated Debt to exceed 65% of Total
Capitalization;
(ii) Consolidated Debt to exceed 60% of Total
Capitalization during any Clean-Down Period;
(iii) Priority Debt to exceed 10% of Total Capitalization
during any four month period following any acquisition of the stock or
assets of another Person in which Debt which, after giving effect to
such transaction, would constitute Priority Debt is assumed by the
Company or any Subsidiary and, at all other times, Priority Debt to
exceed 5% of Total Capitalization; and
(iv) Consolidated EBIT to be less than 175% of Fixed
Charges.
6B. LIENS AND OTHER RESTRICTIONS. The Company
covenants that it will not and will not permit any Subsidiary to:
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6B(1). LIENS. Create, assume or suffer to exist any Lien
upon any of its property or assets, whether now owned or hereafter acquired
(whether or not provision is made for the equal and ratable securing of the
Note in accordance with the provisions of paragraph 5C), except
(i) Liens for taxes not yet due or which are being
actively contested in good faith by appropriate proceedings,
(ii) other Liens incidental to the conduct of its
business or the ownership of its property and assets which were not
incurred in connection with the borrowing of money or the obtaining of
advances of credit, and which do not in the aggregate materially
detract from the value of its property or assets or materially impair
the use thereof in the operation of its business,
(iii) Liens on property or assets of a Subsidiary to
secure obligations of such Subsidiary to the Company or another
Subsidiary,
(iv) Liens on assets other than receivables securing
Debt permitted by paragraph 6A, and
(v) Liens on stock of the Company held by it as
treasury stock;
6B(2). INVESTMENTS. Make or permit to remain outstanding
any Investment, except that the Company or any Subsidiary may
(i) make or permit to remain outstanding any Investment
in a Subsidiary or any entity that will become a Subsidiary
immediately after such Investment;
(ii) make or permit to remain outstanding Investments
received in settlement of debts (created in the ordinary course of
business) owing to the Company or any Subsidiary,
(iii) own, purchase or acquire (a) prime commercial paper
and certificates of deposit in United States commercial banks (having
capital reserves in excess of $100,000,000), in each case due within
one year from the date of purchase and payable in the United States in
United States dollars, (b) direct obligations of the United States
Government or any agency thereof, (c) obligations guaranteed by the
United States Government, and (d) repurchase agreements of such banks
for terms of less than one year in respect to the foregoing
certificates and obligations,
(iv) endorse negotiable instruments for collection in
the ordinary course of business,
(v) make or permit to remain outstanding travel and
other like advances to officers and employees in the ordinary course
of business, and
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(vi) make or permit to remain outstanding Investments
other than Investments permitted in clauses (i) through (v) above (but
not any Investment by a Subsidiary in the Company) in an aggregate
amount that does not exceed at any time 10% of Consolidated Net Worth.
For purposes of this paragraph, an Investment shall be valued
at the lesser of cost and the value at which such Investment is to be shown on
the books of the Company and its Subsidiaries in accordance with generally
accepted accounting principles.
6B(3). SALE OF ASSETS. The Company will not, and will not
permit any Subsidiary to, Dispose of any property or assets (including stock of
any Subsidiary), except:
(i) The Company or any Subsidiary may sell inventory in
the ordinary course of business for fair market value;
(ii) any Subsidiary may Dispose of its assets to the
Company or another Subsidiary;
(iii) the Company or any Subsidiary may dispose of its
assets (whether or not leased back) so long as, immediately after
giving effect to such proposed Disposition:
(A) the consideration for such assets
represents the fair market value of such assets (as determined
in good faith by the Company's Board of Directors) at the time
of such Disposition; and
(B) the net book value of all assets so
Disposed of by the Company and its Subsidiaries during the
prior 12 months, does not exceed 10% of consolidated assets of
the Company and its Subsidiaries; and
(C) no Default or Event of Default shall exist.
For purposes of this paragraph 6B(3):
(i) "DISPOSITION" means the sale, lease, transfer or
other disposition of property, and "DISPOSED OF" has a corresponding
meaning to Disposition.
(ii) CALCULATION OF NET BOOK VALUE. The net book value
of any assets shall be determined as of the respective date of
Disposition of those assets; and
(iii) SALE OF LESS THAN ALL THE STOCK OF A SUBSIDIARY.
In the case of the sale or issuance of the stock of a Subsidiary, the
amount of consolidated assets, as the case may be, contributed by the
stock Disposed of shall be assumed to be the percentage of outstanding
stock sold or to be sold.
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6B(4). MERGER AND CONSOLIDATION. Consolidate with or
merge into any other Person or permit any other Person to consolidate with or
merge into it (except that a Subsidiary may consolidate with or merge into the
Company or another Subsidiary or a Person which becomes a Subsidiary in such
merger or consolidation); provided that the restrictions of this paragraph
6B(4) do not apply to the merger or consolidation of the Company or a
Subsidiary with another corporation, if;
(1) the Company or such Subsidiary shall be the
continuing or surviving corporation;
(2) the acquired corporation shall be engaged in a line
of business related to that of the Company or any Subsidiary; and
(3) immediately after the consummation of the
transaction, and after giving effect thereto, no Default or Event of
Default shall have occurred or exist;
6B(5). SALE OR DISCOUNT OF RECEIVABLES. Sell with
recourse, or discount or otherwise sell for less than the face value thereof,
notes or accounts receivable ("Receivables") (other than Receivables that are
more than 90 days past due) in excess of $1,000,000 except that the Company or
any Subsidiary may enter into factoring arrangements with respect to its
Receivables with any Person provided that such arrangements are without
recourse to the Company or any Subsidiary and neither the Company nor any
Subsidiary shall have outstanding at any time Debt owing to any such Person or
any Affiliate of any such Person.
6B(6). CERTAIN CONTRACTS. Enter into or be a party to
(i) any contract providing for the making of loans,
advances or capital contributions to any Person other than a
Subsidiary (except to the extent permitted pursuant to paragraph 6A or
6B(2)), or for the purchase of the property from any Person, in each
case in order to enable such Person to maintain working capital, net
worth or any other balance sheet condition or to pay debts, dividends
or expenses, or
(ii) any contract for the purchase of materials,
supplies or other property or services if such contract (or any
related document) requires that payment for such materials, supplies
or other property or services shall be made regardless of whether or
not delivery of such materials, supplies or other property or services
is ever made or tendered, or
(iii) any contract to rent or lease (as lessee) any real
or personal property if such contract (or any related document)
provides that the obligation to make payments thereunder is absolute
and unconditional under conditions not customarily found in
commercial leases then in general use or requires that the lessee
purchase or otherwise acquire securities or obligations of the lessor,
or
(iv) any contract for the sale or use of materials,
supplies or other property, or the rendering of services, if such
contract (or any related document) requires that payment for such
materials, supplies or other property, or the use thereof, or payment
for such services, shall be subordinated to any indebtedness (of
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the purchaser or user of such materials, supplies or other property or
the Person entitled to the benefit of such services) owed or to be
owed to any Person, or
(v) any other contract which, in economic effect, is
substantially equivalent to a guarantee, except as permitted by
paragraphs 6B(2) or 6A;
6B(7). TRANSACTION WITH RELATED PARTIES. Directly or
indirectly purchase, acquire or lease any property from, or sell, transfer or
lease any property to, or otherwise deal with, in the ordinary course of
business or otherwise (i) any Affiliate, or (ii) any Substantial Stockholder,
provided that the Company may sell to, or purchase from any such Person shares
of the Company's stock, and provided that (a) any such Substantial Stockholder
may be a director, officer or employee of the Company and may be paid
reasonable compensation in connection therewith, (b) the Company may pay
reasonable expenses of any employee stock ownership plan and may otherwise
engage in transactions with any such plan if the cost to the Company thereof is
deductible by the Company for federal income tax purposes, and (c) such acts
and transactions prohibited by this paragraph 6B(7) may be performed or engaged
in if made upon terms not less favorable to the Company than if no such
relationship described in clauses (i) and (ii) above existed.
6C. ERISA. The Company covenants that it will not nor
permit any Subsidiary to:
(i) terminate or withdraw from any Plan resulting in
the incurrence of any material liability to the Pension Benefit
Guaranty Corporation;
(ii) engage in or permit any Person to engage in any
prohibited transaction (as defined in Section 4975 of the Code)
involving any Plan (other than a Multiemployer Plan) which would
subject the Company or any Subsidiary to any material tax, penalty or
other liability;
(iii) incur or suffer to exist any material accumulated
funding deficiency (as defined in section 302 of ERISA and section 412
of the Code), whether or not waived, involving any Plan (other than a
Multiemployer Plan); or
(iv) allow to suffer to exist any risk or condition
which presents a risk of incurring a material liability to the Pension
Benefit Guaranty Corporation.
6D. ENVIRONMENTAL MATTERS. The Company covenants that
it will not, and will not permit any Third Party to, use, produce, manufacture,
process, generate, store, dispose of, manage at, or ship or transport to or
from the Properties any Hazardous Materials except for Hazardous Materials
used, produced, released or managed in the ordinary course of business in
compliance with all applicable Environmental Requirements except where the
failure to do so could not reasonably be expected to have a material adverse
effect on the business, operations or financial condition of the Company and
its Subsidiaries taken as a whole and except for Hazardous Materials released
in amounts which do not require remediation pursuant to applicable
Environmental Requirements or if remediation is required, such remediation
could not reasonably be expected to have a
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material adverse effect on the business, operations or financial condition of
the Company and its Subsidiaries taken as a whole.
7. EVENTS OF DEFAULT.
7A. ACCELERATION. If any of the following events shall
occur and be continuing for any reason whatsoever (and whether such occurrence
shall be voluntary or involuntary or come about or be effected by operation of
law or otherwise):
(i) the Company defaults in the payment of any
principal of or Yield-Maintenance Amount on any Note when the
same become due, either by the terms thereof or otherwise as
herein provided; or
(ii) the Company defaults in the payment of any
interest on any Note for more than ten days after the date
due; or
(iii) the Company or any Subsidiary (x) defaults
in any payment of principal of or interest on any other
obligation for money borrowed (or any Capitalized Lease
Obligation, any obligation under conditional sale or other
title retention agreement or any obligation issued or assumed
as full or partial payment for property whether or not secured
by a purchase money mortgage or any obligation under notes
payable or drafts accepted representing extensions of credit)
beyond any period of grace provided with respect thereto, or
(y) fails to perform or observe any other agreement, term or
condition contained in any agreement under which any such
obligation is created (or if any other event or default
thereunder or under any such agreement shall occur and be
continuing) and the effect of such default, event or failure
is to cause, the holder or holders of such obligation (or a
trustee on behalf of such holder or holders) to cause, such
obligation to become due, redeemed, purchased or defeased
prior to any stated maturity, or (z) fails to perform or
observe any other agreement, term or condition contained in
any agreement under which any such obligation is created (or
if any other event or default thereunder or under any such
agreement shall occur and be continuing) and the effect of
such default, event or failure is to permit the holder or
holders of such obligation (or a trustee on behalf of such
holder or holders) to cause, such obligation to become due,
redeemed, purchased or defeased prior to any stated maturity
and such default, event or failure shall not have been
remedied within five days after the date of occurrence,
provided that the aggregate amount of all obligations as to
which such a default, event or failure causing or permitting
acceleration, redemption, purchase or defeasance exceeds
$1,000,000;
(iv) any representation or warranty made by the
Company herein or in any writing furnished in connection with
or pursuant to this Agreement shall be false in any material
respect on the date as of which made; or
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(v) the Company defaults in the performance or
observance of any agreement contained in paragraph 5E or
paragraph 6 hereof; or
(vi) the Company defaults in the performance or
observance of any other agreement, term or condition contained
herein and such default shall not have been remedied within 30
days after any officer of the Company obtains actual knowledge
thereof; or
(vii) the Company or any Subsidiary makes an
assignment for the benefit of creditors or is generally not
paying its debts as such debts become due; or
(viii) any order for relief in respect of the
Company or any Subsidiary is entered under any bankruptcy,
reorganization, compromise, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar
law, whether now or hereafter in effect (herein called the
"Bankruptcy Law") of any jurisdiction; or
(ix) the Company or any Subsidiary petitions or
applies to any tribunal for, or consents to, the appointment
of, or taking possession by, a trustee, receiver, custodian,
liquidator or similar official of the Company or any
Subsidiary, or of any substantial part of the assets of the
Company or any Subsidiary, or commences a voluntary case under
the Bankruptcy Law of the United States or any proceedings
(other than proceedings for the voluntary liquidation and
dissolution of a Subsidiary) relating to the Company or any
Subsidiary under the Bankruptcy Law of any other jurisdiction;
or
(x) any such petition or application is filed,
or any such proceedings are commenced, against the Company or
any Subsidiary and the Company or such Subsidiary by any act
indicates its approval thereof, consent thereto or
acquiescence therein, or an order, judgment or decree is
entered appointing any such trustee, receiver, custodian,
liquidator or similar official, or approving the petition in
any such proceedings, and such order, judgment or decree
remains unstayed and in effect for more than 30 days; or
(xi) any order, judgment or decree is entered
in any proceedings against the Company decreeing the
dissolution of the Company and such order, judgment or decree
remains unstayed and in effect for more than 60 days; or
(xii) any order, judgment or decree is entered
in any proceedings against the Company or any Subsidiary
decreeing a split-up of the Company or such Subsidiary which
requires the divestiture of more than 10%, or the divestiture
of the stock of a Subsidiary whose assets constitute more than
10%, of the consolidated assets of the Company and its
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Subsidiaries (determined in accordance with generally accepted
accounting principles) or which requires the divestiture of
assets, or stock of a Subsidiary, which shall have contributed
more than 10% of Consolidated Net Earnings for any of the
three fiscal years then most recently ended, and such order,
judgment or decree remains unstayed and in effect for more
than 60 days;
(xiii) a final judgment in an amount in excess of
$500,000 is rendered against the Company or any Subsidiary
and, within 60 days after entry thereof, such judgment is not
discharged or execution thereof stayed pending appeal, or
within 60 days after the expiration of any such stay, such
judgment is not discharged;
then: (a) if such event is an Event of Default
specified in clause (i) or (ii) of this paragraph
7A, the holder of any Note (other than the Company
or any Subsidiary or Affiliate) may at its option,
by written notice to the Company, declare such Note
to be, and such Note shall thereupon be and become,
immediately due and payable at par together with
interest accrued and unpaid thereon, without
presentment, demand, protest or other notice of any
kind (including, without limitation, notice of
intent to accelerate) all of which are hereby
waived by the Company,
(b) if such event is an Event of Default
specified in any of clauses (vii), (viii), (ix) or
(x) of this paragraph 7A with respect to the
Company, the Facility shall automatically terminate
and all of the Notes at the time outstanding shall
automatically become immediately due and payable at
par together with interest accrued and unpaid
thereon, and to the extent permitted by applicable
law, the Yield-Maintenance Amount, if any, without
presentment, demand, protest or notice of any kind
(including, without limitation, notice of intent to
accelerate and notice of acceleration of maturity),
all of which are hereby waived by the Company, and
(c) if such event is any Event of
Default other than specified in clauses (vii),
(viii), (ix) or (x) of this paragraph 7A with
respect to the Company, the Required Holder(s) may,
at its or their option, by written notice to the
Company, terminate the Facility and declare all of
the Notes to be, and all of the Notes shall
thereupon be and become, immediately due and
payable together with interest accrued and unpaid
thereon and, to the extent permitted by applicable
law, the Yield Maintenance Amount, if any, with
respect to each Note, without presentment, demand,
protest or other notice of any kind (including,
without limitation, notice of intent to
accelerate), all of which are hereby waived by the
Company.
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7B. RESCISSION OF ACCELERATION. At any time after any
or all of the Notes shall have been declared immediately due and payable
pursuant to paragraph 7A, the Required Holder(s) may, by notice in writing to
the Company, rescind and annul such declaration and its consequences if;
(i) the Company shall have paid all accrued and unpaid
overdue interest on the Notes, the principal of and Yield-Maintenance
Amount, if any, payable with respect to any Notes which have become
due otherwise than by reason of such declaration, and accrued and
unpaid interest on such overdue interest and overdue principal and
Yield Maintenance Amount at the rate specified in the Notes,
(ii) the Company shall not have paid any amounts which
have become due solely by reason of such declaration,
(iii) all Events of Default and Defaults, other than
non-payment of amounts which have become due solely by reason of such
declaration, shall have been cured or waived pursuant to paragraph
11C, and
(iv) no judgment or decree shall have been entered for
the payment of any amounts due pursuant to the Notes or this
Agreement.
No such rescission or annulment shall extend to or affect any subsequent Event
of Default or Default or impair any right arising therefrom.
7C. NOTICE OF ACCELERATION OR RESCISSION. Whenever
any Note shall be declared immediately due and payable pursuant to paragraph 7A
or any such declaration shall be rescinded and annulled pursuant to paragraph
7B, the Company shall forthwith give written notice thereof to the holder of
each Note at the time outstanding.
7D. OTHER REMEDIES. If any Event of Default or Default
shall occur and be continuing, the holder of any Note may proceed to protect
and enforce its rights under this Agreement and such Note by exercising such
remedies as are available to such holder in respect thereof under applicable
law, either by suit in equity or by action at law, or both, whether for
specific performance of any covenant or other agreement contained in this
Agreement or in aid of the exercise of any power granted in this Agreement. No
remedy conferred in this Agreement upon the holder of any Note is intended to
be exclusive of any other remedy, and each and every such remedy shall be
cumulative and shall be in addition to every other remedy conferred herein or
now or hereafter existing at law or in equity or by statute or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The
Company represents, covenants and warrants:
8A. ORGANIZATION AND QUALIFICATION. The Company is a
corporation duly organized and existing in good standing under the laws of the
State of Georgia, each Subsidiary is duly organized and existing in good
standing under the laws of the jurisdiction in which incorporated, and the
Company and each Subsidiary has the corporate power to own
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its respective property and to carry on its respective business as now being
conducted, and the Company and each Subsidiary is duly qualified as a foreign
corporation to do business and in good standing in every jurisdiction in which
the nature of the respective business conducted by it makes such qualification
necessary and where the failure to be so qualified could reasonably be expected
to have a material adverse effect upon the business, condition (financial or
otherwise), or operations of the Company and its Subsidiaries, taken as a
whole. The name of each Subsidiary in existence on the date hereof and the
jurisdiction of incorporation of each such Subsidiary are set forth on Schedule
8A attached hereto.
8B. FINANCIAL STATEMENTS. The Company has furnished
each Purchaser of any Notes with the following financial statements, identified
by a principal financial officer of the Company: (i) consolidated balance
sheets of the Company and its Subsidiaries as at the end of the three fiscal
years of the Company most recently completed prior to the date as of which this
representation is made or repeated to such Purchaser (other than fiscal years
completed within 90 days prior to such date for which audited financial
statements have not been released) and consolidated statements of earnings,
changes in shareholder's equity and cash flows of the Company and its
Subsidiaries for each such year, all reported on by Deloitte & Touche, L.L.P.
and (ii) a consolidated balance sheet of the Company and its Subsidiaries as
at the end of the quarterly period (if any) most recently completed prior to
such date and after the end of such fiscal year (other than quarterly periods
completed within 60 days prior to such date for which financial statements have
not been released) and the comparable quarterly period in the preceding fiscal
year and consolidated statements of earnings, changes in shareholder's equity
and cash flows for the periods from the beginning of the fiscal years in which
such quarterly periods are included to the end of such quarterly periods,
prepared by the Company. Such financial statements (including any related
schedules and/or notes) are true and correct in all material respects (subject,
as to interim statements, to changes resulting from audits and year-end
adjustments), have been prepared in accordance with generally accepted
accounting principles consistently followed throughout the periods involved and
show all liabilities, direct and contingent, of the Company and its
Subsidiaries required to be shown in accordance with such principles. The
balance sheets fairly present the condition of the Company and its Subsidiaries
as at the dates thereof, and the statements of income, stockholders' equity and
cash flows fairly present the results of the operations of the Company and its
Subsidiaries and their cash flows for the periods indicated. There has been no
material adverse change in the business, property or assets, condition
(financial or otherwise), operations or prospects of the Company and its
Subsidiaries taken as a whole since the end of the most recent fiscal year for
which such audited financial statements have been furnished.
8C. ACTIONS PENDING. There is no action, suit,
investigation or proceeding pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries, or any properties or
rights of the Company or any of its Subsidiaries, by or before any court,
arbitrator or administrative or governmental body which might result in any
material adverse change in the business, condition or operations of the Company
and its Subsidiaries taken as a whole.
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8D. OUTSTANDING DEBT. Neither the Company nor any of
its Subsidiaries has outstanding any Funded or Current Debt, on a consolidated
basis, except Debt permitted by paragraph 6A. There exists no default under
the provisions of any instrument evidencing such Debt or of any agreement
relating thereto.
8E. TITLE TO PROPERTIES. The Company and each of its
Subsidiaries has good and marketable title to its respective real properties
(other than properties which it leases) and good title to all of its other
respective properties and assets, including the properties and assets reflected
in the balance sheet most recently delivered pursuant to paragraph 8B (other
than properties and assets disposed of in the ordinary course of business),
subject to no Lien of any kind except Liens permitted by paragraph 6B(l). The
Company and its Subsidiaries enjoy peaceful and undisturbed possession under
all leases necessary in any material respect for the operation of their
respective properties and assets, none of which contains any unusual or
burdensome provisions which might materially affect or impair the operation of
such properties and assets. All such leases are valid and subsisting and are
in full force and effect.
8F. TAXES. The Company has and each of its
Subsidiaries has filed all federal, state and other income tax returns which
are required to be filed, and each has paid all taxes as shown on said returns
and on all assessments received by it to the extent that such taxes have become
due, except such taxes as are being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance
with generally accepted accounting principles. Federal income tax returns of
the Company and its Subsidiaries have been examined and reported on by the
taxing authorities or closed by applicable statutes and satisfied for all
fiscal years prior to and including the fiscal year ended on April 3, 1994.
8G. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither
the Company nor any of its Subsidiaries is a party to any contract or agreement
or subject to any charter or other corporate restriction which materially and
adversely affects its business, property or assets, or financial condition.
Neither the execution nor delivery of this Agreement or Note, nor the offering,
issuance and sale of any Note, nor fulfillment of or compliance with the terms
and provisions hereof and of any Note will conflict with, or result in a breach
of the terms, conditions or provisions of, or constitute a default under, or
result in any violation of, or result in the creation of any Lien upon any of
the properties or assets of the Company or any Subsidiary pursuant to, the
charter or by-laws of the Company or any of its Subsidiaries, any award of any
arbitrator or any agreement (including any agreement with stockholders),
instrument, order, judgment, decree, statute, law, rule or regulation to which
the Company or any of its Subsidiaries is subject. Neither the Company nor any
Subsidiary is a party to, or otherwise subject to any provision contained in,
any instrument evidencing indebtedness of the Company or such Subsidiary, any
agreement relating thereto or any other contract or agreement (including its
charter) which limits the amount of, or otherwise imposes restrictions on the
incurring of, Funded Debt of the type to be evidenced by the Notes, except the
Agreements listed in Schedule 8G.
8H. OFFERING OF NOTES. Neither the Company nor any
agent acting on its behalf has, directly or indirectly, offered the Notes or
any similar security of the Company for sale to, or solicited any offers to buy
the Notes or any similar security of the Company from,
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or otherwise approached or negotiated with respect thereto with any Person
other than institutional investors, and neither the Company nor any agent
acting on its behalf has taken or will take any action which would subject the
issuance or sale of the Notes to the provisions of Section 5 of the Securities
Act or to the provisions of any securities or Blue Sky law of any applicable
jurisdiction.
8I. REGULATION G, ETC. Neither the Company nor any
Subsidiary owns or has any present intention of acquiring any "margin stock" as
defined in Regulation G (12 CFR Part 207) of the Board of Governors of the
Federal Reserve System (herein called a "margin stock"). None of the proceeds
of the Notes will be used, directly, or indirectly, for the purpose, whether
immediate, incidental or ultimate, of purchasing or carrying any margin stock
or for the purpose of reducing or retiring any indebtedness which was
originally incurred to purchase or carry a margin stock or for any other
purpose which might constitute this transaction a "purpose credit" within the
meaning of said Regulation G. Neither the Company nor any agent acting on its
behalf has taken or will take any action which might cause this Agreement or
the Notes to violate Regulation G, Regulation T, Regulation X or any other
regulation of the Board of Governors of the Federal Reserve System or to
violate the Securities Exchange Act of 1934 as amended, in each case as in
effect now or as the same may hereafter be in effect.
8J. COMPLIANCE WITH LAWS AND REGULATIONS. The Company
and each of its Subsidiaries complies in all material respects with all
federal, state, local, and other laws, ordinances and other governmental rules
or regulations to which any of them is subject, including without limitation,
laws and regulations relating to pollution and environmental control, equal
employment opportunity and employee safety and the Company will promptly comply
and will cause each of its Subsidiaries promptly to comply with all such laws
and regulations which may be legally imposed on the Company, or any Subsidiary,
or any of their respective properties, businesses, and operations, in the
future in jurisdictions in which the Company or any Subsidiary may then be
doing business.
8K. ERISA. No accumulated funding deficiency (as
defined in section 302 of ERISA and section 412 of the Code), whether or not
waived, exists with respect to any plan (other than a Multiemployer Plan). No
liability to the Pension Benefit Guaranty Corporation has been incurred with
respect to any plan (other than a Multiemployer Plan) by the Company or any of
its Subsidiaries which is materially adverse to the Company and its
Subsidiaries taken as a whole. Neither the Company nor any of its Subsidiaries
has incurred any withdrawal liability under Title IV of ERISA with respect to
any Multiemployer Plan which is materially adverse to the Company and its
Subsidiaries taken as a whole and no facts currently exist which would
reasonably be expected to cause any such liability to be incurred. The
execution and delivery of this Agreement and the issuance and sale of the Notes
are not transactions which are subject to the prohibitions of section 406 of
ERISA or in connection with which a tax could be imposed pursuant to section
4975 of the Code. The representation by the Company in the next preceding
sentence is made in reliance upon and subject to the accuracy of the
Purchaser's representation in paragraph 9 of this Agreement as to the source
of the funds to be used to pay the purchase price of the Notes to be purchased
by such Purchaser.
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8L. GOVERNMENTAL CONSENT. Neither the nature of the
Company or of any Subsidiary, nor any of their respective businesses or
properties, nor any relationship between the Company or any Subsidiary and any
other Person, nor any circumstance in connection with the offer, issue, sale or
delivery of any Note is such as to require any consent, approval or other
action by or any notice to or filing with any court or administrative or
governmental body (other than routine filings after the applicable Closing Day
with the Securities and Exchange Commission and/or State Blue Sky authorities)
in connection with the execution and delivery of this Agreement, the offer,
issue, sale or delivery of the Notes or fulfillment of or compliance with the
terms and provisions hereof or of the Notes.
8M. HOLDING COMPANY AND INVESTMENT COMPANY STATUS.
Neither the Company nor any Subsidiary is a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company," or a "public utility," within
the meaning of the Public Utility Holding Company Act of 1935, as amended, or a
"public utility" within the meaning of the Federal Power Act, as amended.
Neither the Company nor any Subsidiary is an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or an "investment adviser" within the meaning
of the Investment Advisers Act of 1940, as amended.
8N. POSSESSION OF FRANCHISES, ETC. The Company and its
Subsidiaries possess all franchises, certificates, licenses, permits and other
authorizations from governmental political subdivisions or regulatory
authorities, free from burdensome restrictions, that are necessary in any
material respect for the ownership, maintenance and operation of their
respective properties and assets, and neither the Company nor any Subsidiary is
in violation of any thereof in any material respect.
8O. PATENTS, ETC. The Company and its Subsidiaries
have obtained all patents, trademarks, servicemarks, trade names, copyrights,
licenses and other rights, free from burdensome restrictions, that are
necessary for the operation of their respective businesses as presently
conducted and as proposed to be conducted. Nothing has come to the attention
of the Company or any Subsidiary or to any of its directors or officers to the
effect that (i) any product, process, method, substance, part or other material
presently contemplated to be sold by or employed by the Company or any
Subsidiary in connection with such business may infringe any patent, trademark,
servicemark, trade name, copyright, license or other right owned by any other
Person, (ii) there is pending or threatened any claim or litigation against or
affecting the Company or any Subsidiary contesting its right to sell or use any
such product, process, method, substance, part or other material, or (iii)
there is, or there is pending or proposed, any patent, invention, device,
application or principle or any statute, rule, law, regulation, standard or
code which would prevent, inhibit or render obsolete the production or sale of
any products of, or substantially reduce the projected revenues of, or
otherwise adversely affect the business, condition or operations of, the
Company or any Subsidiary.
8P. DISCLOSURE. Neither this Agreement nor any other
document, certificate or statement furnished to the Purchasers by or on behalf
of the Company in connection herewith contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein not
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misleading. There is no fact peculiar to the Company or its Subsidiaries which
materially adversely affects or in the future may (so far as the Company can
now foresee) materially adversely affect the business, property or assets, or
financial condition of the Company or any of its Subsidiaries which has not
been set forth in this Agreement or in the other documents, certificates and
statements furnished to the Purchasers by or on behalf of the Company prior to
the date hereof in connection with the transactions contemplated hereby.
8Q. HOSTILE TENDER OFFERS. None of the proceeds from
the sale of any Notes will be used to finance Hostile Tender Offers.
9. REPRESENTATIONS OF THE PURCHASERS. Each Purchaser
represents: (i) that it is purchasing the Notes for its own account or for one
or more separate accounts maintained by it or for the account of one or more
pension or trust funds and not with a view to the distribution or sale thereof,
provided that the disposition of its property shall at all times be within its
control; and (ii) 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 by it hereunder:
(a) 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
(b) the Source is either (i) an insurance company
pooled separate account, within the meaning of Prohibited Transaction
Exemption ("PTE") 90-1 (issued January 29, 1990), (ii) 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 (iii) 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
(c) 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
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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 (i) the identity of such QPAM and (ii) the names of
all employee benefit plans whose assets are included in such
investment fund have been disclosed to the Company in writing pursuant
to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) 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 (e); or
(f) 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.
10. DEFINITIONS; ACCOUNTING MATTERS. For the purpose
of this Agreement, the terms defined in paragraphs 10A and 10B (or within the
text of any other paragraph) shall have the respective meanings specified
therein and all accounting matters shall be subject to determination as
provided in paragraph 10C.
10A. YIELD-MAINTENANCE TERMS.
"CALLED PRINCIPAL" shall mean, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to paragraph 4C or 4E or
is declared to be immediately due and payable pursuant to paragraph 7A, as the
context requires.
"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.
"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
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33
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 bill 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 made prior
to its scheduled due date.
"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 paragraphs 4C or 4E or is declared to be immediately due and
payable pursuant to paragraph 7A, as the context requires.
"YIELD-MAINTENANCE 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 Yield-Maintenance Amount shall
in no event be less than zero.
10B. OTHER TERMS.
"ACCEPTANCE" shall have the meaning specified in paragraph
2B(6).
"ACCEPTANCE DAY" shall have the meaning specified in paragraph
2B(6).
"ACCEPTANCE WINDOW" shall have the meaning specified in
paragraph 2B(6).
"ACCEPTED NOTE" shall have the meaning specified in paragraph
2B(6).
"AFFILIATE" shall mean any Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with,
the Company, except a Subsidiary. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly,
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34
the power to direct or cause the direction of the management and policies of
such corporation, whether through the ownership of voting securities, by
contract or otherwise.
"AUTHORIZED OFFICER" shall mean (i) in the case of the
Company, its chief executive officer, its chief financial officer, treasurer or
any vice president of the Company designated as an "Authorized Officer" of the
Company in the Information Schedule attached hereto or any vice president of
the Company designated as an "Authorized Officer" of the Company for the
purpose of this Agreement in an Officer's Certificate executed by the Company's
chief executive officer, chief financial officer or treasurer and delivered to
Prudential, and (ii) in the case of Prudential, any officer of Prudential
designated as its "Authorized Officer" in the Information Schedule or any
officer of Prudential designated as its "Authorized Officer" for the purpose of
this Agreement in a certificate executed by one of its Authorized Officers.
Any action taken under this Agreement on behalf of the Company by any
individual who on or after the date of this Agreement shall have been an
Authorized Officer of the Company and whom Prudential in good faith believes to
be an Authorized Officer of the Company at the time of such action shall be
binding on the Company even though such individual shall have ceased to be an
Authorized Officer of the Company, and any action taken under this Agreement on
behalf of Prudential by any individual who on or after the date of this
Agreement shall have been an Authorized Officer of Prudential and whom the
Company in good faith believes to be an Authorized Officer of Prudential at the
time of such action shall be binding on Prudential even though such individual
shall have ceased to be an Authorized Officer of Prudential.
"AVAILABLE FACILITY AMOUNT" shall have the meaning specified
in paragraph 2B(1).
"BANKRUPTCY LAW" shall have the meaning specified in clause
(viii) of paragraph 7A.
"BUSINESS DAY" shall mean any day other than (i) a Saturday or
a Sunday, (ii) a day on which commercial banks in New York City are required or
authorized to be closed and (iii) for purposes of paragraph 2B(4) hereof only,
a day on which The Prudential Insurance Company of America is not open for
business.
"CANCELLATION DATE" shall have the meaning specified in
paragraph 2B(9)(iv).
"CANCELLATION FEE" shall have the meaning specified in
paragraph 2B(9)(iv).
"CAPITALIZED LEASE OBLIGATION" shall mean any rental
obligation which, under generally accepted accounting principles, is or will be
required to be capitalized on the books of the Company or any Subsidiary, taken
at the amount thereof accounted for as indebtedness (net of interest expenses)
in accordance with such principles.
"CHANGE OF CONTROL" shall mean the acquisition after the date
of this Agreement by any Person (as such term is used in section 13(d) and
section 14(d)(2) of the Exchange Act or related persons constituting a group
(as such terms is used in Rule 13d-5
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35
under Exchange Act), other than any member of the Management Group, of
beneficial ownership (as such term is used under Rule 13d-3 under the Exchange
Act) directly or indirectly of Voting Stock sufficient to elect or cause the
election of at least a majority of the Company's Board of Directors.
"CLEAN-DOWN PERIOD" shall mean a period of ninety consecutive
days, chosen by the Company, during each fiscal year of the Company.
"CLOSING DAY" shall mean, with respect to the Series A Notes,
the Series A Closing Day and, with respect to any Accepted Note, the Business
Day specified for the closing of the purchase and sale of such Accepted Note in
the Request for Purchase of such Accepted Note, provided that (i) if the
Company and the Purchaser which is obligated to purchase such Accepted Note
agree on an earlier Business Day for such closing, the "CLOSING DAY" for such
Accepted Note shall be such earlier Business Day, and (ii) if the closing of
the purchase and sale of such Accepted Note is rescheduled pursuant to
paragraph 2B(8), the Closing Day for such Accepted Note, for all purposes of
this Agreement except references to "original Closing Day" in paragraph
2B(9)(iii), shall mean the Rescheduled Closing Day with respect to such
Accepted Note.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
"CONFIRMATION OF ACCEPTANCE" shall have the meaning specified
in paragraph 2B(6).
"CONSOLIDATED DEBT" shall mean, at any time, Debt of the
Company and its Subsidiaries consolidated in accordance with generally accepted
accounting principles.
"CONSOLIDATED EBIT" shall mean, for any applicable period of
the Company and its Subsidiaries on a consolidated basis, an amount equal to
(A) the sum for such period of Consolidated Net Income (Loss) plus interest
expense on all Debt of the Company and its Subsidiaries on a consolidated basis
plus Rentals, plus provisions for taxes on income minus (B):
(i) any gains resulting from the write-up of assets;
(ii) any deferred credit representing the excess of
equity in any Subsidiary of the Company at the date of acquisition
over the cost of the investment in such Subsidiary;
(iii) gains arising from the acquisition of debt
securities for a cost less than the principal amount and accrued
interest;
(iv) extraordinary items or transactions of a
non-recurring or non-operating and material nature or arising from
gains or sales relating to the discontinuance of operations;
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(v) any portion of the net income (included in the
determination of Consolidated Net Income (Loss)), of any Subsidiary
which for any reason shall be unavailable for payment of dividends to
the Company; or
(vi) any earnings or deferred credit (or amortization of
a deferred credit) of any Person acquired by the Company or any
Subsidiary through purchase, merger or consolidation or otherwise (an
"Acquired Person") for any period prior to the year of acquisition not
included in gross revenues under generally accepted accounting
principles unless there shall exist for such Acquired Person, a
consolidated balance sheet, and consolidated statements of earnings,
stockholders' equity and cash flows for the Acquired Person as at the
end of such year reported on by independent accountants of recognized
standing whose report shall be without limitation as to scope of
audit;
all as determined in accordance with generally accepted accounting principles.
"CONSOLIDATED NET INCOME (LOSS)" shall mean, for any
applicable period, for the Company and its Subsidiaries on a consolidated
basis, net income (or loss) determined in accordance with generally accepted
accounting principles.
"CONSOLIDATED NET WORTH" shall mean the sum of capital stock
(but excluding treasury stock and capital stock that is subscribed but
unissued) and retained earnings, paid in capital and the balance of the current
profit and loss account not transferred to retained earnings accounts of the
Company and its Subsidiaries appearing on the consolidated balance sheet of the
Company and its Subsidiaries prepared in accordance with generally accepted
accounting principles as of the date of determination, after eliminating all
intercompany transactions and all amounts properly attributed to minority
interests, if any, in the retained earnings, capital stock and paid in capital
of Subsidiaries.
"CURRENT DEBT" shall mean, with respect to any Person, all
Indebtedness of such Person for borrowed money (and any notes payable and
drafts accepted representing extensions of credit whether or not representing
obligations for borrowed money) which by its terms or by the terms of any
instrument or agreement relating thereto matures on demand or within one year
from the date of the creation thereof and is not directly or indirectly
renewable or extendible at the option of the debtor to a date more than one
year from the date of the creation thereof, provided that Indebtedness for
borrowed money outstanding under a revolving credit or similar agreement which
obligates the lender or lenders to extend credit over a period of more than one
year shall constitute Funded Debt and not Current Debt, even though such
Indebtedness by its terms matures on demand or within one year from the date of
the creation thereof.
"DEBT" shall mean Current Debt and Funded Debt.
"DELAYED DELIVERY FEE" shall have the meaning specified in
paragraph 2B(9)(iii).
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"ENVIRONMENTAL RELEASES" shall mean releases (as defined in
the Comprehensive Environmental Response, Compensation and Liability Act or
under any applicable state or local environmental law or regulation) of
Hazardous Materials. Environmental Releases does not include releases for
which no remediation or reporting is required by applicable Environmental
Requirements and which do not present a danger to health, safety or the
environment.
"ENVIRONMENTAL REQUIREMENTS" shall mean any applicable local,
state or federal law, rule, regulation, permit, order, decision, determination
or requirement relating in any way to Hazardous Materials or to health, safety
or the environment.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"ERISA AFFILIATE" shall mean any corporation which is a member
of the same controlled group of corporations as the Company within the meaning
of section 414(b) of the Code, or any trade or business which is under common
control with the Company within the meaning of section 414(c) of the Code.
"EVENT OF DEFAULT" shall mean any of the events specified in
paragraph 7A, provided that there has been satisfied any requirement in
connection with such event for the giving of notice, or the lapse of time, or
the happening of any further condition, event or act, and "DEFAULT" shall mean
any of such events, whether or not any such requirement has been satisfied.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
"FACILITY" shall have the meaning specified in paragraph 2B(1).
"FACILITY FEE" shall have the meaning specified in paragraph
2B(9)(i).
"FIXED CHARGES" shall mean, for the Company and its
Subsidiaries on a consolidated basis, the sum (without duplication) of:
(i) all Rentals (excluding all principal components of
Rentals under Capitalized Lease Obligations) paid during the most
recently completed four fiscal quarters; and
(ii) all interest expense (as determined in accordance
with generally accepted accounting principles) on all Debt (including
Capitalized Lease Obligations) of the Company and its Subsidiaries for
such period.
"FUNDED DEBT" shall mean with respect to any Person, all
Indebtedness of such Person which by its terms or by the terms of any
instrument or agreement relating thereto matures, or which is otherwise payable
or unpaid, more than one year from, or is directly or indirectly renewable or
extendible at the option of the debtor to a date more than one year
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38
(including an option of the debtor under a revolving credit or similar
agreement obligating the lender or lenders to extend credit over a period of
more than one year) from, the date of the creation thereof.
"GUARANTEE" shall mean, with respect to any Person, any direct
or indirect liability, contingent or otherwise, of such Person with respect to
any indebtedness, lease, dividend or other obligation of another, including,
without limitation, any such obligation directly or indirectly guaranteed,
endorsed (otherwise than for collection or deposit in the ordinary course of
business) or discounted or sold with recourse by such Person, or in respect of
which such Person is otherwise directly or indirectly liable, including,
without limitation, any such obligation in effect guaranteed by such Person
through any agreement (contingent or otherwise) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide funds
for the payment or discharge of such obligation (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or to maintain
the solvency or any balance sheet or other financial condition of the obligor
of such obligation, or to make payment for any products, materials or supplies
or for any transportation or service, regardless of the non-delivery or
non-furnishing thereof, in any such case if the purpose or intent of such
agreement is to provide assurance that such obligation will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such obligation will be protected against loss in respect
thereof. The amount of any Guarantee shall be equal to the outstanding
principal amount of the obligation guaranteed or such lesser amount to which
the maximum exposure of the guarantor shall have been specifically limited.
"HAZARDOUS MATERIAL" shall mean (a) hazardous waste as defined
in the Resource Conservation and Recovery Act of 1986, or any applicable
federal state or local law or regulation, (b) hazardous substances, as defined
in Comprehensive Environmental Response Compensation and Liability Act, or any
applicable state or local law or regulation, (c) gasoline, or any other
petroleum product or by-product, (d) toxic substances, as defined in the Toxic
Substance Control Act of 1976, or any applicable federal, state or local law or
regulation or (e) insecticides, fungicides, or rodenticides, as defined in the
Federal Insecticide, Fungicide, and Rodenticide Act of 1975, or any applicable
federal, state or local law or regulation, as each such Act, statute or
regulation may be amended from time to time.
"HEDGE TREASURY NOTE(S)" shall mean, with respect to any
Accepted Note, the United States Treasury Note or Notes whose duration (as
determined by Prudential) most closely matches the duration of such Accepted
Note.
"HOSTILE TENDER OFFER" shall mean, with respect to the use of
proceeds of any Note, any offer to purchase, or any purchase of, shares of
capital stock of any corporation or equity interests in any other entity, or
securities convertible into or representing the beneficial ownership of, or
rights to acquire, any such shares or equity interests, if such shares, equity
interests, securities or rights are of a class which is publicly traded on any
securities exchange or in any over-the-counter market, other than purchases of
such shares, equity interests, securities or rights representing less than 5%
of the equity interests or beneficial ownership of such corporation or other
entity for portfolio investment purposes, and such offer or purchase has not
been duly approved by the board of directors of such corporation or the
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39
equivalent governing body of such other entity prior to the date on which the
Company makes the Request for Purchase of such Note.
"INCLUDING" shall mean, unless the context clearly requires
otherwise, "including without limitation".
"INDEBTEDNESS" shall mean, with respect to any Person, without
duplication, (i) all items (excluding items of contingency reserves or of
reserves for deferred income taxes) which in accordance with generally accepted
accounting principles would be included in determining total liabilities as
shown on the liability side of a balance sheet of such Person as of the date on
which Indebtedness is to be determined (including all Capitalized Lease
Obligations), (ii) all indebtedness secured by any Lien on any property or
asset owned or held by such Person subject thereto, whether or not the
indebtedness secured thereby shall have been assumed, and (iii) all
indebtedness of others with respect to which such Person has become liable by
way of Guarantee.
"INVESTMENT" shall mean, when used with respect to any Person,
any direct or indirect advance, loan or other extension of credit (other than
the creation of receivables in the ordinary course of business) or capital
contribution by such Person (by means of transfers of property to others or
payments for property or services for the account or use of others, or
otherwise) to any other Person, or any direct or indirect purchase or other
acquisition by such Person of, or of a beneficial interest in, capital stock,
partnership interest, bonds, notes, debentures or other securities issued by
any other Person.
"ISSUANCE PERIOD" shall have the meaning specified in
paragraph 2B(2).
"LIEN" shall mean any mortgage, pledge, security interest,
encumbrance, lien (statutory or otherwise) or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction) or any other type of preferential arrangement for the
purpose, or having the effect, of protecting a creditor against loss or
securing the payment or performance of an obligation.
"MANAGEMENT GROUP" shall mean, collectively, the Company's
Employee Stock Ownership Plan and the officers and directors of the Company.
"MATERIAL SUBSIDIARY" shall mean any Subsidiary of the Company
which has (i) total assets equal to or greater than 10% of consolidated total
assets as of the most recently completed fiscal quarter or (ii) net income
equal to or greater than 10% of Consolidated Net Income for the four fiscal
quarters most recently completed; provided, however, that notwithstanding the
foregoing, if the Company and the Material Subsidiaries, as defined above, have
less than 90% of consolidated total assets (calculated as described above) or
have net income of less than 90% of Consolidated Net Income (as calculated
above), then the term "Material Subsidiary" shall mean each Subsidiary of the
Company, as specified by the Company, that together with the Company and each
other specified Subsidiary have assets
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equal to not less than 90% of consolidated total assets (calculated as
described above) and net income of not less than 90% of Consolidated Net Income
(calculated as described above).
"MULTIEMPLOYER PLAN" shall mean any Plan which is a
"multiemployer plan" (as such term is defined in section 4001(a)(3) of ERISA).
"NOTES" shall have the meaning specified in paragraph 1B.
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the
name of the Company by an Authorized Officer of the Company.
"PERSON" shall mean and include an individual, a partnership,
a joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
"PLAN" shall mean any employee pension benefit plan (as such
term is defined in section 3 of ERISA) which is or has been established or
maintained, or to which contributions are or have been made, by the Company or
any ERISA Affiliate.
"PREFERRED STOCK" shall mean, in respect of any corporation,
shares of the capital stock of such corporation that are entitled to a
preference on priority over any other shares of the capital stock of such
corporation in respect of the payment of dividends or distribution of assets
upon liquidation.
"PRIORITY DEBT" shall mean, at any time, the sum (without
duplication) of (i) all Debt of Subsidiaries, plus (ii) all Debt of the
Company secured by Liens plus (iii) all Preferred Stock of any Subsidiary owned
by any Person other than the Company or a wholly-owned Subsidiary.
"PROPERTIES" shall mean all real property owned, leased or
otherwise used or occupied by the Company or any Subsidiary, wherever located.
"PRUDENTIAL" shall mean The Prudential Insurance Company of
America.
"PRUDENTIAL AFFILIATE" shall mean any corporation or other
entity all of the Voting Stock (or equivalent voting securities or interests)
of which is owned by Prudential either directly or through Prudential
Affiliates.
"PURCHASERS" shall mean Prudential and with respect to the
Series A Notes and, with respect to any Accepted Notes, Prudential and/or the
Prudential Affiliate(s), which are purchasing such Accepted Notes.
"REQUEST FOR PURCHASE" shall have the meaning specified in
paragraph 2B(4).
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"REQUIRED HOLDER(S)" shall mean the holder or holders of at
least 66 2/3% of the aggregate principal amount of the Notes or of a Series of
Notes, as the context may require, from time to time outstanding.
"RESCHEDULED CLOSING DAY" shall have the meaning specified in
paragraph 2B(8).
"RESPONSIBLE OFFICER" shall mean the chief executive officer,
chief operating officer, chief financial officer or chief accounting officer of
the Company, general counsel of the Company or any other officer of the Company
involved principally in its financial administration or its controllership
function.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SERIES" shall have the meaning specified in paragraph 1B.
"SERIES A CLOSING DAY" shall have the meaning specified in
paragraph 2A.
"SERIES A NOTE(S)" shall have the meaning specified in
paragraph 1A.
"SIGNIFICANT HOLDER" shall mean (i) during the Issuance
Period, Prudential, and (ii) any other holder of at least 5% of the aggregate
principal amount of the Notes of any Series from time to time outstanding.
"SUBSIDIARY" shall mean any corporation organized under the
laws of any state of the United States of America, the Commonwealth of Puerto
Rico, Canada, or any province of Canada, which conducts the major portion of
its business in and makes the major portion of its sales to Persons located in
the United States of America, the Commonwealth of Puerto Rico, or Canada, and
all of the stock of every class of which, except directors' qualifying shares,
shall, at the time as of which any determination is being made, be owned by the
Company either directly or through Subsidiaries, and notwithstanding the
foregoing shall include Crown Crafts International, Inc. and Xxxx Xxxxxxxx
Furniture, Inc.
"SUBSTANTIAL STOCKHOLDER" shall mean (i) any Person owning,
directly or indirectly, either individually or together with all other Persons
to whom such Person is related by blood, adoption or marriage, stock of the
Company (of any class having ordinary voting power for the election of
directors) aggregating 5% or more of such voting power, or (ii) any Person
related by blood, adoption or marriage to any Person described or coming within
the provisions of clause (i) of this definition.
"TOTAL CAPITALIZATION" shall mean, at any time, the sum of (i)
Consolidated Net Worth plus (ii) Consolidated Debt at such time.
"THIRD PARTY" shall mean all lessees, sublessees, and other
users of the Property, excluding those users of the Property in the ordinary
course of the Company's business (consistent with its practices on the date of
this Agreement) and on a temporary basis.
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"TRANSFEREE" shall mean any direct or indirect transferee of
all or any part of any Note purchased by any Purchaser under this Agreement.
"VOTING STOCK" shall mean, with respect to any corporation,
any shares of stock of such corporation whose holders are entitled under
ordinary circumstances to vote for the election of directors of such
corporation (irrespective of whether at the time stock of any other class or
classes shall have or might have voting power by reason of the happening of any
contingency).
10C. ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS.
All references in this Agreement to "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES"
shall be deemed to refer to generally accepted accounting principles in effect
in the United States at the time of application thereof. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all unaudited financial statements and certificates and reports as to financial
matters required to be furnished hereunder shall be prepared, in accordance
with generally accepted accounting principles, applied on a basis consistent
with the most recent audited consolidated financial statements of the Company
and its Subsidiaries delivered pursuant to clause (ii) of paragraph 5A or, if
no such statements have been so delivered, the most recent audited financial
statements referred to in clause (i) of paragraph 8B, subject in the case of,
interim statements to normal year end adjustments and to the absence of
footnotes.
11. MISCELLANEOUS.
11A. NOTE PAYMENTS. The Company agrees that, so long as
any Purchaser shall hold any Note, it will make payments of principal of,
interest on, and any Yield-Maintenance Amount payable with respect to, such
Note, which comply with the terms of this Agreement, by wire transfer of
immediately available funds for credit (not later than 12:00 noon, New York
City local time, on the date due) to (i) the account or accounts of such
Purchaser specified in the Purchaser Schedule attached hereto in the case of
any Series A Notes, (ii) the account or accounts of such Purchaser specified in
the Confirmation of Acceptance with respect to such Note in the case of any
Shelf Note or (iii) such other account or accounts in the United States as such
Purchaser may from time to time designate in writing, notwithstanding any
contrary provision herein or in any Note with respect to the place of payment.
Each Purchaser agrees that, before disposing of any Note, it will make a
notation thereon (or on a schedule attached thereto) of all principal payments
previously made thereon and of the date to which interest thereon has been
paid. The Company agrees to afford the benefits of this paragraph 11A to any
Transferee which shall have made the same agreement as the Purchasers have made
in this paragraph 11A.
11B. EXPENSES. The Company agrees, whether or not the
transactions contemplated hereby shall be consummated, to pay, and save
Prudential, each Purchaser and any Transferee harmless against liability for
the payment of, all out-of-pocket expenses arising in connection with such
transactions, including (i) all document production and duplication charges and
the fees and expenses of any special counsel engaged by the Purchasers or any
Transferee in connection with this Agreement, the transactions contemplated
hereby and any
37
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subsequent proposed modification of, or proposed consent under, this Agreement,
whether or not such proposed modification shall be effected or proposed consent
granted, and (ii) the costs and expenses, including attorneys' fees, incurred
by any Purchaser or any Transferee in enforcing (or determining whether or how
to enforce) any rights under this Agreement or the Notes or in responding to
any subpoena or other legal process or informal investigative demand issued in
connection with this Agreement or the transactions contemplated hereby or by
reason of any Purchaser's or any Transferee's having acquired any Note,
including without limitation costs and expenses incurred in any bankruptcy
case. The obligations of the Company under this paragraph 11B shall survive
the transfer of any Note or portion thereof or interest therein by any
Purchaser or any Transferee and the payment of any Note.
11C. CONSENT TO AMENDMENTS. This Agreement may be
amended, and the Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, if the Company shall
obtain the written consent to such amendment, action or omission to act, of the
Required Holder(s) of the Notes of each Series except that, (i) with the
written consent of the holders of all Notes of a particular Series, and if an
Event of Default shall have occurred and be continuing, of the holders of all
Notes of all Series, at the time outstanding (and not without such written
consents), the Notes of such Series may be amended or the provisions thereof
waived to change the maturity thereof, to change or affect the principal
thereof, or to change or affect the rate or time of payment of interest on or
any Yield-Maintenance Amount payable with respect to the Notes of such Series,
(ii) without the written consent of the holder or holders of all Notes at the
time outstanding, no amendment to or waiver of the provisions of this Agreement
shall change or affect the provisions of paragraph 7A or this paragraph 11C
insofar as such provisions relate to proportions of the principal amount of the
Notes of any Series, or the rights of any individual holder of Notes, required
with respect to any declaration of Notes to be due and payable or with respect
to any consent, amendment, waiver or declaration, (iii) with the written
consent of Prudential (and not without the written consent of Prudential) the
provisions of paragraph 2B may be amended or waived (except insofar as any such
amendment or waiver would affect any rights or obligations with respect to the
purchase and sale of Notes which shall have become Accepted Notes prior to such
amendment or waiver), and (iv) with the written consent of all of the
Purchasers which shall have become obligated to purchase Accepted Notes of any
Series (and not without the written consent of all such Purchasers), any of the
provisions of paragraphs 2B and 3 may be amended or waived insofar as such
amendment or waiver would affect only rights or obligations with respect to the
purchase and sale of the Accepted Notes of such Series or the terms and
provisions of such Accepted Notes. Each holder of any Note at the time or
thereafter outstanding shall be bound by any consent authorized by this
paragraph 11C, whether or not such Note shall have been marked to indicate such
consent, but any Notes issued thereafter may bear a notation referring to any
such consent. No course of dealing between the Company and the holder of any
Note nor any delay in exercising any rights hereunder or under any Note shall
operate as a waiver of any rights of any holder of such Note. As used herein
and in the Notes, the term "THIS AGREEMENT" and references thereto shall mean
this Agreement as it may from time to time be amended or supplemented.
11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES;
LOST NOTES. The Notes are issuable as registered notes without coupons in
denominations of at least $1,000,000, except as may be necessary to reflect any
principal amount not evenly divisible
38
44
by $1,000,000. The Company shall keep at its principal office a register in
which the Company shall provide for the registration of Notes and of transfers
of Notes. Upon surrender for registration of transfer of any Note at the
principal office of the Company, the Company shall, at its expense, execute and
deliver one or more new Notes of like tenor and of a like aggregate principal
amount, registered in the name of such transferee or transferees. At the
option of the holder of any Note, such Note may be exchanged for other Notes of
like tenor and of any authorized denominations, of a like aggregate principal
amount, upon surrender of the Note to be exchanged at the principal office of
the Company. Whenever any Notes are so surrendered for exchange, the Company
shall, at its expense, execute and deliver the Notes which the holder making
the exchange is entitled to receive. Each installment of principal payable on
each installment date upon each new Note issued upon any such transfer or
exchange shall be in the same proportion to the unpaid principal amount of such
new Note as the installment of principal payable on such date on the Note
surrendered for registration of transfer or exchange bore to the unpaid
principal amount of such Note. No reference need be made in any such new Note
to any installment or installments of principal previously due and paid upon
the Note surrendered for registration of transfer or exchange. Every Note
surrendered for registration of transfer or exchange shall be duly endorsed, or
be accompanied by a written instrument of transfer duly executed, by the holder
of such Note or such holder's attorney duly authorized in writing. Any Note or
Notes issued in exchange for any Note or upon transfer thereof shall carry the
rights to unpaid interest and interest to accrue which were carried by the Note
so exchanged or transferred, so that neither gain nor loss of interest shall
result from any such transfer or exchange. Upon receipt of written notice from
the holder of any Note of the loss, theft, destruction or mutilation of such
Note and, in the case of any such loss, theft or destruction, upon receipt of
such holder's unsecured indemnity agreement, or in the case of any such
mutilation upon surrender and cancellation of such Note, the Company will make
and deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed
or mutilated Note.
11E. PERSONS DEEMED OWNERS; PARTICIPATIONS. Prior to
due presentment for registration of transfer, the Company may treat the Person
in whose name any Note is registered as the owner and holder of such Note for
the purpose of receiving payment of principal of and interest on, and any
Yield-Maintenance Amount payable with respect to, such Note and for all other
purposes whatsoever, whether or not such Note shall be overdue, and the Company
shall not be affected by notice to the contrary. Subject to the preceding
sentence, the holder of any Note may from time to time grant participations in
all or any part of such Note to any Person on such terms and conditions as may
be determined by such holder in its sole and absolute discretion.
11F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT. All representations and warranties contained herein or made in
writing by or on behalf of the Company in connection herewith shall survive the
execution and delivery of this Agreement and the Notes, the transfer by any
Purchaser of any Note or portion thereof or interest therein and the payment of
any Note, and may be relied upon by any Transferee, regardless of any
investigation made at any time by or on behalf of any Purchaser or any
Transferee. Subject to the preceding sentence, this Agreement and the Notes
embody the entire agreement and understanding between the parties hereto with
respect to the subject matter hereof and supersede all prior agreements and
understandings relating to such subject matter.
39
45
11G. SUCCESSORS AND ASSIGNS. All covenants and other
agreements in this Agreement contained by or on behalf of any of the parties
hereto shall bind and inure to the benefit of the respective successors and
assigns of the parties hereto (including, without limitation, any Transferee)
whether so expressed or not.
11H. INDEPENDENCE OF COVENANTS. All covenants
hereunder shall be given independent effect so that if a particular action or
condition is prohibited by any one of such covenants, the fact that it would be
permitted by an exception to, or otherwise be in compliance within the
limitations of, another covenant shall not avoid the occurrence of a Default or
Event of Default if such action is taken or such condition exists.
11I. NOTICES. All written communications provided for
hereunder (other than communications provided for under paragraph 2) shall be
sent by first class mail or nationwide overnight delivery service (with charges
prepaid) and (i) if to any Purchaser, addressed as specified for such
communications in the Purchaser Schedule attached hereto (in the case of the
Series A Notes) or the Purchaser Schedule attached to the applicable
Confirmation of Acceptance (in the case of any Shelf Notes) or at such other
address as any such Purchaser shall have specified to the Company in writing,
(ii) if to any other holder of any Note, addressed to it at such address as it
shall have specified in writing to the Company or, if any such holder shall not
have so specified an address, then addressed to such holder in care of the last
holder of such Note which shall have so specified an address to the Company and
(iii) if to the Company, addressed to it at 0000 Xxxxxxxxx Xxxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxx 00000, provided, however, that any such communication to the
Company may also, at the option of the Person sending such communication, be
delivered by any other means either to the Company at its address specified
above or to any Authorized Officer of the Company. Any communication pursuant
to paragraph 2 shall be made by the method specified for such communication in
paragraph 2, and shall be effective to create any rights or obligations under
this Agreement only if, in the case of a telephone communication, an Authorized
Officer of the party conveying the information and of the party receiving the
information are parties to the telephone call, and in the case of a telecopier
communication, the communication is signed by an Authorized Officer of the
party conveying the information, addressed to the attention of an Authorized
Officer of the party receiving the information, and in fact received at the
telecopier terminal the number of which is listed for the party receiving the
communication in the Information Schedule or at such other telecopier terminal
as the party receiving the information shall have specified in writing to the
party sending such information.
11J. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in
this Agreement or the Notes to the contrary notwithstanding, any payment of
principal of or interest on, or Yield-Maintenance Amount payable with respect
to, any Note that is due on a date other than a Business Day shall be made on
the next succeeding Business Day. If the date for any payment is extended to
the next succeeding Business Day by reason of the preceding sentence, the
period of such extension shall be included in the computation of the interest
payable on such Business Day.
40
46
11K. DESCRIPTIVE HEADINGS. The descriptive headings of
the several paragraphs of this Agreement are inserted for convenience only and
do not constitute a part of this Agreement.
11L. SATISFACTION REQUIREMENT. If any agreement,
certificate or other writing, or any action taken or to be taken, is by the
terms of this Agreement required to be satisfactory to any Purchaser, to any
holder of Notes or to the Required Holder(s), the determination of such
satisfaction shall be made by such Purchaser, such holder or the Required
Holder(s), as the case may be, in the sole and exclusive judgment (exercised in
good faith) of the Person or Persons making such determination.
11M. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE
GOVERNED BY, THE INTERNAL LAW OF THE STATE OF NEW YORK.
11N. SEVERALTY OF OBLIGATIONS. The sales of Notes to
the Purchasers are to be several sales, and the obligations of Prudential and
the Purchasers under this Agreement are several obligations. No failure by
Prudential or any Purchaser to perform its obligations under this Agreement
shall relieve any other Purchaser or the Company of any of its obligations
hereunder, and neither Prudential nor any Purchaser shall be responsible for
the obligations of, or any action taken or omitted by, any other such Person
hereunder.
11O. COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of
which together shall constitute one instrument.
41
47
11P. BINDING AGREEMENT. When this Agreement is executed
and delivered by the Company, and Prudential, it shall become a binding
agreement between the Company, and Prudential. This Agreement shall also inure
to the benefit of each Purchaser which shall have executed and delivered a
Confirmation of Acceptance, and each such Purchaser shall be bound by this
Agreement to the extent provided in such Confirmation of Acceptance.
Very truly yours,
CROWN CRAFTS, INC.
(CORPORATE SEAL) By: /s/ Xxxxxx X. Xxxxxxxx
----------------------
Xxxxxx X. Xxxxxxxx
Treasurer
The foregoing Agreement is
hereby accepted as of the
date first above written.
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /s/ Xxxxxx Xxxxx
------------------------
Vice President
42
48
PURCHASER SCHEDULE
Aggregate
Principal
Amount of
Notes to be Note Denom-
Purchased ination(s)
----------- -----------
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA $25,000,000 $22,000,000
$3,000,000
(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. 000-00-000 in the case of the promissory
note in the original principal amount of $22,000,000 and
Account No. 000-00-000 in the case of the promissory
note in the original principal amount of $3,000,000
Xxxxxx Guaranty Trust Company of New York
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(ABA No.: 021-000-238)
Each such wire transfer shall set forth the name
of the Company, a reference to "7.27% Senior Notes
due 2005, Security No. !Inv. 5202! in the case of
the promissory note in the original principal amount
of $22,000,000 and Security No. !Inv. 5203! in the
case of the promissory note in the original principal amount
of $3,000,000, and the due date and application (as among
principal, interest and Yield-Maintenance 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
Four Gateway Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000-0000
Attention: Investment Structure and Pricing
49
(3) Address for all other communications and notices:
The Prudential Insurance Company of America
c/o Prudential Capital Group
0000 Xxxxxxxxx Xxxxxx, X.X.
Suite 2525
Atlanta, Georgia 30309
Attention: Managing Director
(4) Recipient of telephone prepayment notices:
Manager, Investment Structure and Pricing
(000) 000-0000
(5) Tax Identification No.: 00-0000000
50
INFORMATION SCHEDULE
AUTHORIZED OFFICERS FOR PRUDENTIAL
Xxxxxxxxx X. Xxxxx
Xxxxxx X. Xxxxxxx
Xxxxxx X. XxXxx
Prudential Capital Group
0000 Xxxxxxxxx Xxxxxx, X.X.
Suite 2525
Atlanta, Georgia 30309
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Xxxxxx Xxxxx
Prudential Capital Group
Four Gateway Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
AUTHORIZED OFFICERS FOR THE COMPANY
Xxxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
Xxxx X. Xxxxxxxxxx, Xx.
Vice President, Chief Financial Officer
Xxxxx X. Xxxxxxx
Vice President, Law and Administration, Secretary
Xxxxxx X. Xxxxxxxx
Treasurer
Crown Crafts, Inc.
0000 Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
51
EXHIBIT A-1
FORM OF SERIES A NOTE
CROWN CRAFTS, INC.
7.27% SENIOR SERIES A NOTE DUE 2005
No. _____ [Date]
$________
FOR VALUE RECEIVED, the undersigned, CROWN CRAFTS, INC. (herein called
the "Company"), a corporation organized and existing under the laws of the
State of Georgia, hereby promises to pay to _________________________________,
or registered assigns, the principal sum of ____________________ DOLLARS on
October 12, 2005 with interest (computed on the basis of a 360-day
year--30-day month) (a) on the unpaid balance thereof at the rate of 7.27%%
per annum from the date hereof, payable quarterly on the 12th day of January,
April, July and October in each year, commencing with the January, April, July
or October next succeeding the date hereof, until the principal hereof shall
have become due and payable, and (b) on any overdue payment (including any
overdue prepayment) of principal, any overdue payment of Yield Maintenance
Amount and any overdue payment of interest, payable quarterly as aforesaid
(or, at the option of the registered holder hereof, on demand), at a rate per
annum from time to time equal to the greater of (i) 9.27% or (ii) 2% over the
rate of interest publicly announced by Xxxxxx Xxxxxxxx Trust Company of New
York from time to time in New York City as its Prime Rate.
Payments of principal, Yield Maintenance Amount, if any, and interest
are to be made at the main office of Xxxxxx Guaranty Trust Company of New York
in New York City or at such other place as the holder hereof shall designate to
the Company in writing, in lawful money of the United States of America.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to a Note Purchase and Private Shelf Agreement, dated
as of October 12, 1995 (herein called the "Agreement"), between the Company, on
the one hand, and The Prudential Insurance Company of America and each
Prudential Affiliate which becomes party thereto, on the other hand, and is
entitled to the benefits thereof. As provided in the Agreement, this Note is
subject to prepayment, in whole or from time to time in part, in certain cases
without Yield Maintenance Amount and in other cases with the Yield Maintenance
Amount specified in the Agreement.
A-1
52
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the
registered holder hereof or such holder's attorney duly authorized in writing,
a new Note for the then outstanding principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company shall not be affected by any notice to
the contrary.
The Company agrees to make prepayments of principal of this Note on
the dates and in the amounts specified in the Agreement.
In case an Event of Default shall occur and be continuing, the
principal of this Note may be declared or otherwise become due and payable in
the manner and with the effect provided in the Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings (if any) provided in the Agreement.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAW OF SUCH
STATE.
CROWN CRAFTS, INC.
By:
--------------------------
Title:
A-2
53
EXHIBIT A-2
FORM OF SHELF NOTE
CROWN CRAFTS, INC.
No. _________
ORIGINAL PRINCIPAL AMOUNT:
ORIGINAL ISSUE DATE:
INTEREST RATE:
INTEREST PAYMENT DATES:
FINAL MATURITY DATE:
PRINCIPAL PREPAYMENT DATES AND AMOUNTS:
FOR VALUE RECEIVED, the undersigned, CROWN CRAFTS, INC. (herein called
the "Company"), a corporation organized and existing under the laws of the
State of Georgia hereby promises to pay to _______________________, or
registered assigns, the principal sum of _______________________ DOLLARS [on
the Final Maturity Date specified above] [, payable on the Principal Prepayment
Dates and in the amounts specified above, and on the Final Maturity Date
specified above in an amount equal to the unpaid balance of the principal
hereof,] with interest (computed on the basis of a 360-day year -- 30-day
month) (a) on the unpaid balance thereof at the Interest Rate per annum
specified above, payable on each Interest Payment Date specified above and on
the Final Maturity Date specified above, commencing with the Interest Payment
Date next succeeding the date hereof, until the principal hereof shall have
become due and payable, and (b) on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of Yield Maintenance Amount and
any overdue payment of interest, payable on each Payment Date as aforesaid (or,
at the option of the registered holder hereof, on demand), at a rate per annum
from time to time equal to the greater of (i) 2% over the Interest Rate
specified above or (ii) 2% over the rate of interest publicly announced by
Xxxxxx Guaranty Trust Company of New York from time to time in New York City as
its Prime Rate.
Payments of principal, Yield Maintenance Amount, if any, and interest
are to be made at the main office of Xxxxxx Guaranty Trust Company of New York
in New York City or at such other place as the holder hereof shall designate to
the Company in writing, in lawful money of the United States of America.
A-2-1
54
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to a Private Shelf Agreement, dated as of October 12,
1995 (herein called the "Agreement"), between the Company and The Prudential
Insurance Company of America and each Prudential Affiliate (as defined in the
Agreement) which becomes party thereto, on the other hand, and is entitled to
the benefits thereof.
This Note is subject to optional prepayment, in whole or from time to
time in part, on the terms specified in the Agreement.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the
registered holder hereof or such holder's attorney duly authorized in writing,
a new Note for the then outstanding principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner thereof for the purpose of receiving payment
and for all other purposes, and the Company shall not be affected by any notice
to the contrary.
In case an Event of Default shall occur and be continuing, the
principal of this Note may be declared or otherwise become due and payable in
the manner and with the effect provided in the Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings (if any) provided in the Agreement.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAW OF SUCH
STATE.
CROWN CRAFTS, INC.
By
------------------------------------
Title:
A-2-2
55
EXHIBIT B
FORM OF REQUEST FOR PURCHASE
CROWN CRAFTS, INC.
Reference is made to the Note Purchase and Private Shelf Agreement
(the "Agreement"), dated as of October 12, 1995 between Crown Crafts, Inc. (the
"Company"), The Prudential Insurance Company of America ("Prudential") and each
Prudential Affiliate which becomes party thereto, on the other hand.
Capitalized terms used and not otherwise defined herein shall have the
respective meanings specified in the Agreement.
Pursuant to Paragraph 2B (4) of the Agreement, the Company hereby
makes the following Request for Purchase.
1. Aggregate principal amount of the Notes covered
hereby (the "Notes")...........................$_______________
2. Individual specifications of the Notes:
Principal
Final Prepayment Interest
Principal Maturity Dates and Payment
Amount(1) Date Amounts Period(2)
--------- -------- ---------- ---------
(1) Minimum principal amount of $5,000,000.
(2) Specify quarterly or semi-annually.
1
56
3. Use of proceeds of the Notes:
4. Proposed day for the closing of the purchase and sale of the
Notes:
5. The purchase price of the Notes is to be transferred to:
Name, Address
and ABA Routing Number of
Number of Bank Account
--------------- ---------
6. The Company certifies (a) that the representations and
warranties contained in paragraph 8 of the Agreement are true
on and as of the date of this Request for Purchase except to
the extent of changes caused by the transactions contemplated
in the Agreement and, (b) that there exists on the date of
this Request for Purchase no Event of Default or Default.
7. The Issuance Fee to be paid pursuant to the Agreement will be
paid by the Company on the closing date.
CROWN CRAFTS, INC.
By
-----------------------------
Title:
Dated:
2
57
EXHIBIT C
FORM OF CONFIRMATION OF ACCEPTANCE
CROWN CRAFTS, INC.
Reference is made to the Note Purchase and Private Shelf Agreement
(the "Agreement"), dated as of October 12, 1995, between Crown Crafts, Inc.
(the "Company"), The Prudential Insurance Company of America and each
Prudential Affiliate which becomes a party thereto, on the other hand. All
terms used herein that are defined in the Agreement have the respective
meanings specified in the Agreement.
Pursuant to paragraph 2B(6) of the Agreement, an Acceptance with
respect to the following Accepted Notes is hereby confirmed:
I. Aggregate principal amount $_________
(A) (a) Name of Purchaser:
(b) Principal Amount:
(c) Final maturity date:
(d) Principal installment dates and amounts:
(e) Interest rate:
(f) Interest payment period:
(B) (a) Name of Purchaser:
(b) Principal Amount:
(c) Final maturity date:
(d) Principal installment dates and amounts:
(e) Interest rate:
(f) Interest payment period:
[(C), (D).....: same information as to any other Purchaser]
II. Closing Day: _____________________
58
Dated: CROWN CRAFTS, INC.
By:
---------------------------------
Title:
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:
-----------------------------
Vice President
[Signature block for each named purchaser other than
Prudential]
59
EXHIBIT D-1
[FORM OF OPINION OF COMPANY'S COUNSEL]
[Letterhead of ________________]
[Date of Closing]
The Prudential Insurance Company of America
c/o Prudential Capital Group
Four Gateway Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Ladies and Gentlemen:
As ___________________ of CROWN CRAFTS, INC. (the "Company") I am
familiar with the Note Purchase and Private Shelf Agreement, dated as of
October 12, 1995 (the "Agreement") between the Company, on the one hand, and
The Prudential Insurance Company of America and each Prudential Affiliate which
becomes a party thereto, on the other hand, pursuant to which the Company has
issued to you today its Senior Series A Notes in the aggregate principal amount
of $25,000,000 (the "Notes"). Capitalized terms used and not otherwise defined
herein shall have the meanings provided in the Agreement. This letter is being
delivered to you in satisfaction of the condition set forth in paragraph 3A(v)
of the Agreement and with the understanding you are purchasing the Notes in
reliance on the opinions expressed herein.
In this connection, I have examined such certificates of public
officials, certificates of officers of the Company and copies certified to my
satisfaction of corporate documents and records of the Company and of other
papers, and have made such other investigations, as I have deemed relevant and
necessary as a basis for my opinion hereinafter set forth. I have relied upon
such certificates of public officials and of officers of the Company with
respect to the accuracy of material factual matters contained therein which
were not independently established. With respect to the opinion expressed in
paragraph 3 below, I have also relied upon the representation made by you in
paragraph 9(ii) of the Agreement.
Based on the foregoing, it is my opinion that:
60
1. The Company is a corporation duly organized and validly existing
in good standing under the laws of the State of Georgia. Each Subsidiary is a
corporation duly organized and validly existing in good standing under the laws
of its jurisdiction of incorporation. The Company and its Subsidiaries have
the corporate power to carry on their respective businesses as now being
conducted.
2. The Agreement and the Notes have been duly authorized by all
requisite corporate action and duly executed and delivered by authorized
officers of the Company, and are valid obligations of the Company, legally
binding upon and enforceable against the Company in accordance with their
respective terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and (b) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
3. It is not necessary in connection with the offering, issuance,
sale and delivery of the Notes under the circumstances contemplated by the
Agreement to register the Notes under the Securities Act or to qualify an
indenture in respect of the Notes under the Trust Indenture Act of 1939, as
amended.
4. The extension, arranging and obtaining of the credit represented
by the Notes do not result in any violation of regulation G, T or X of the
Board of Governors of the Federal Reserve System.
5. The execution and delivery of the Agreement and the Notes, the
offering, issuance and sale of the Notes and fulfillment of and compliance with
the respective provisions of the Agreement and the Notes do not conflict with,
or result in a breach of the terms, conditions or provisions of, or constitute
a default under, or result in any violation of, or result in the creation of
any Lien upon any of the properties or assets of the Company or any of its
Subsidiaries pursuant to, or require any authorization, consent, approval,
exemption, or other action by or notice to or filing with any court,
administrative or governmental body or other Person (other than routine filings
after the date hereof with the Securities and Exchange Commission and/or state
Blue Sky authorities) pursuant to, the charter or by-laws of the Company or any
of its Subsidiaries, any applicable law (including any securities or Blue Sky
law), statute, rule or regulation or (insofar as is known to us after having
made due inquiry with respect thereto) any agreement (including, without
limitation, any agreement listed in Schedule 8G to the Agreement), instrument,
order, judgment or decree to which the Company or any of its Subsidiaries is a
party or otherwise subject.
6. A Georgia state court or a federal court sitting in the State
of Georgia would give effect to the choice of New York law contained in the
Agreement.
Very truly yours,
61
EXHIBIT D-2
[FORM OF OPINION OF COMPANY'S COUNSEL]
[Letterhead of _______________]
[Date of Closing]
[Name(s) and address(es) of
purchaser(s)]
Ladies and Gentlemen:
As _______________ of Crown Crafts, Inc. (the "Company") I am familiar
with the Note Purchase and Private Shelf Agreement, dated as of October 12,
1995 (the "Agreement") between the Company, on the one hand, and The Prudential
Insurance Company of America and each Prudential Affiliate which becomes a
party thereto, on the other hand, pursuant to which the Company has issued to
you today Senior Series ___ Notes of the Company in the aggregate principal
amount of $__ __________ (the "Notes"). Capitalized terms used and not
otherwise defined herein shall have the meanings provided in the Agreement.
This letter is being delivered to you in satisfaction of the condition set
forth in paragraph 3A(v) of the Agreement and with the understanding that you
are purchasing the Notes in reliance on the opinions expressed herein.
In this connection, I have examined such certificates of public
officials, certificates of officers of the Company and copies certified to my
satisfaction of corporate documents and records of the Company and of other
papers, and have made such other investigations, as I have deemed relevant and
necessary as a basis for my opinion hereinafter set forth. I have relied upon
such certificates of public officials and of officers of the Company with
respect to the accuracy of material factual matters contained therein which
were not independently established. With respect to the opinion expressed in
paragraph 3 below, I have also relied upon the representation made by each of
you in paragraph 9A of the Agreement.
Based on the foregoing, it is my opinion that:
62
1. The Company is a corporation duly organized and validly existing
in good standing under the laws of the State of Georgia. Each Subsidiary is a
corporation duly organized and validly existing in good standing under the laws
of its jurisdiction of incorporation. The Company and its Subsidiaries have
the corporate power to carry on their respective businesses as now being
conducted.
2. The Agreement and the Notes have been duly authorized by all
requisite corporate action and duly executed and delivered by authorized
officers of the Company, and are valid obligations of the Company, legally
binding upon and enforceable against the Company in accordance with their
respective terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and (b) general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
3. It is not necessary in connection with the offering, issuance,
sale and delivery of the Notes under the circumstances contemplated by the
Agreement to register the Notes under the Securities Act or to qualify an
indenture in respect of the Notes under the Trust Indenture Act of 1939, as
amended.
4. The extension, arranging and obtaining of the credit represented
by the Notes do not result in any violation of regulation G, T or X of the
Board of Governors of the Federal Reserve System.
5. The execution and delivery of the Agreement and the Notes, the
offering, issuance and sale of the Notes and fulfillment of and compliance with
the respective provisions of the Agreement and the Notes do not conflict with,
or result in a breach of the terms, conditions or provisions of, or constitute
a default under, or result in any violation of, or result in the creation of
any Lien upon any of the properties or assets of the Company or any of its
Subsidiaries pursuant to, or require any authorization, consent, approval,
exemption, or other action by or notice to or filing with any court,
administrative or governmental body or other Person (other than routine filings
after the date hereof with the Securities and Exchange Commission and/or state
Blue Sky authorities) pursuant to, the charter or by-laws of the Company or
any of its Subsidiaries, any applicable law (including any securities or Blue
Sky law), statute, rule or regulation or (insofar as is known to us after
having made due inquiry with respect thereto) any agreement (including, without
limitation, any agreement listed in Schedule 8G to the Agreement), instrument,
order, judgment or decree to which the Company or any of its Subsidiaries is a
party or otherwise subject.
6. A Georgia state court or a federal court sitting in the State
of Georgia would give effect to the choice of New York law contained in the
Agreement.
Very truly yours,
63
Schedule 8A
Subsidiaries
Percent of
Ownership
----------
Xxxx Corp, a North Carolina corporation 100%
Crown Crafts Home Furnishings, Inc., a New York corporation 100%
Crown Crafts Home Furnishings of Illinois, Inc., a Delaware corporation 100%
Crown Crafts Home Furnishings of California, Inc., a California corporation 100%
Crown Crafts International, Inc., a Georgia corporation 100%
G.W. Stores, Inc., a North Carolina corporation 100%
Textile, Inc., a North Carolina corporation 100%
Xxxx Xxxxxxxx Xxxxxxxxx, Inc., a South Carolina corporation 51%
64
Schedule 8G
Agreements Restricting Debt
1. $15,000,000 Revolving Credit Facility between NationsBank, National
Association (Carolinas) and Crown Crafts, Inc. dated August 25, 1995.
2. $15,000,000 Revolving Credit Facility between Wachovia Bank of
Georgia, N.A. and Crown Crafts, Inc. dated August 25, 1995.
