1
Exhibit 10
THE X.X. XXXXXXX COMPANY
-----------------------------
NOTE PURCHASE AGREEMENT
-----------------------------
DATED AS OF AUGUST 23, 2000
$60,000,000
$17,000,000 7.70% SERIES A SENIOR NOTES DUE SEPTEMBER 1, 2005
$33,000,000 7.87% SERIES B SENIOR NOTES DUE SEPTEMBER 1, 2007
$10,000,000 7.94% SERIES C SENIOR NOTES DUE SEPTEMBER 1, 2010
[THE HOLDERS OF THE NOTES ISSUED PURSUANT TO THIS AGREEMENT HAVE BEEN REQUESTED,
AS A COURTESY, BUT SHALL HAVE NO OBLIGATION UNDER THIS AGREEMENT, TO PROVIDE THE
COMPANY WITH NOTICE OF THEIR DISCLOSURE OF "CONFIDENTIAL INFORMATION" (AS
DEFINED IN THIS AGREEMENT) IN RESPONSE TO ANY SUBPOENA OR OTHER LEGAL PROCESS OR
IN CONNECTION WITH CERTAIN REGULATORY DISCLOSURES]
================================================================================
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TABLE OF CONTENTS
PAGE
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1. AUTHORIZATION OF NOTES.............................................................2
1.1. Series A Notes............................................................2
1.2. Series B Notes............................................................2
1.3. Series C Notes............................................................2
1.4. Certain Defined Terms.....................................................2
2. SALE AND PURCHASE OF NOTES.........................................................3
3. CLOSING............................................................................3
4. CONDITIONS TO CLOSING..............................................................3
4.1. Representations and Warranties............................................3
4.2. Performance; No Default...................................................3
4.3. Compliance Certificates...................................................4
4.4. Opinions of Counsel.......................................................4
4.5. Purchase Permitted By Applicable Law, etc.................................4
4.6. Sale of Other Notes.......................................................4
4.7. Payment of Special Counsel Fees...........................................4
4.8. Private Placement Number..................................................5
4.9. Changes in Corporate Structure............................................5
4.10. Proceedings and Documents.................................................5
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................................5
5.1. Organization; Power and Authority.........................................5
5.2. Authorization, etc........................................................5
5.3. Disclosure................................................................6
5.4. Organization and Ownership of Shares of Subsidiaries......................6
5.5. Financial Statements......................................................6
5.6. Compliance with Laws, Other Instruments, etc..............................6
5.7. Governmental Authorizations, etc..........................................7
5.8. Litigation; Observance of Statutes and Orders.............................7
5.9. Taxes.....................................................................7
5.10. Title to Property;Leases..................................................7
5.11. Licenses, Permits, etc....................................................8
5.12. Compliance with ERISA.....................................................8
5.13. Private Offering by the Company...........................................9
5.14. Use of Proceeds; Margin Regulations.......................................9
5.15. Existing Indebtedness.....................................................9
5.16. Foreign Assets Control Regulations, etc...................................9
5.17. Status under Certain Statutes.............................................9
6. REPRESENTATIONS OF THE PURCHASER...................................................10
6.1. Purchase for Investment...................................................10
6.2. Source of Funds...........................................................10
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TABLE OF CONTENTS (CONTINUED)
PAGE
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6.3. Authorization, etc........................................................11
7. INFORMATION AS TO COMPANY..........................................................12
7.1. Financial and Business Information........................................12
7.2. Officer's Certificate.....................................................13
7.3. Inspection................................................................14
8. PREPAYMENT OF THE NOTES............................................................14
8.1. Payment of Notes at Maturity..............................................14
8.2. Optional Prepayments with Make-Whole Amount...............................15
8.3. Change in Control.........................................................15
8.4. Allocation of Partial Prepayments.........................................17
8.5. Maturity; Surrender, etc..................................................17
8.6. Purchase of Notes.........................................................17
8.7. Make-Whole Amount.........................................................18
9. AFFIRMATIVE COVENANTS..............................................................19
9.1. Compliance with Law.......................................................19
9.2. Insurance.................................................................19
9.3. Maintenance of Properties.................................................19
9.4. Payment of Taxes and Claims...............................................20
9.5. Corporate Existence, etc..................................................20
9.6. Pari Passu Ranking........................................................20
10. NEGATIVE COVENANTS.................................................................20
10.1. Transactions with Affiliates..............................................20
10.2. Merger, Consolidation, etc................................................20
10.3. Consolidated Net Worth....................................................21
10.4. Incurrence of Funded Debt.................................................21
10.5. Incurrence of Current Debt................................................22
10.6. Priority Debt.............................................................22
10.7. Liens.....................................................................22
10.8. Asset Sales...............................................................24
10.9. Sale-and-Leaseback Transactions...........................................25
10.10. Line of Business..........................................................25
11. EVENTS OF DEFAULT..................................................................25
12. REMEDIES ON DEFAULT, ETC...........................................................28
12.1. Acceleration..............................................................28
12.2. Other Remedies............................................................28
12.3. Rescission................................................................28
12.4. No Waivers or Election of Remedies, Expenses, etc.........................29
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES......................................29
13.1. Registration of Notes.....................................................29
13.2. Transfer and Exchange of Notes............................................29
13.3. Replacement of Notes......................................................30
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TABLE OF CONTENTS (CONTINUED)
PAGE
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14. PAYMENTS ON NOTES..................................................................30
14.1. Place of Payment..........................................................30
14.2. Home Office Payment.......................................................30
15. EXPENSES, ETC......................................................................31
15.1. Transaction Expenses......................................................31
15.2. Survival..................................................................31
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.......................31
17. AMENDMENT AND WAIVER...............................................................31
17.1. Requirements..............................................................31
17.2. Solicitation of Holders of Notes..........................................32
17.3. Binding Effect, etc.......................................................32
17.4. Notes held by Company, etc................................................33
18. NOTICES............................................................................33
19. REPRODUCTION OF DOCUMENTS..........................................................33
20. CONFIDENTIAL INFORMATION...........................................................33
21. MISCELLANEOUS......................................................................35
21.1. Successors and Assigns....................................................35
21.2. Payments Due on Non-Business Days.........................................35
21.3. Severability..............................................................35
21.4. Construction..............................................................35
21.5. Counterparts..............................................................35
21.6. Governing Law.............................................................36
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SCHEDULES & EXHIBITS
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SCHEDULE A -- Information Relating to Purchasers
SCHEDULE B -- Defined Terms
SCHEDULE 4.9 -- Changes in Corporate Structure
SCHEDULE 5.3 -- Disclosure Materials
SCHEDULE 5.4 -- Organization and Ownership of Shares of Subsidiaries
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.8 -- Certain Litigation
SCHEDULE 5.11 -- Licenses, Permits, etc.
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Existing Indebtedness
EXHIBIT 1.1 -- Form of 7.70% Series A Senior Notes due September 1, 2005
EXHIBIT 1.2 -- Form of 7.87% Series B Senior Notes due September 1, 2007
EXHIBIT 1.3 -- Form of 7.94% Series C Senior Notes due September 1, 2010
EXHIBIT 4.4(a) -- Form of Opinion of Counsel for the Company
EXHIBIT 4.4(b) -- Form of Opinion of Special Counsel for the Purchasers
EXHIBIT 5.13 -- Form of Offeree Letter
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THE X.X. XXXXXXX COMPANY
XXXXXXXXXX XXXX
XXXXXXXX, XXXX 00000
$60,000,000
$17,000,000 7.70% SERIES A SENIOR NOTES DUE SEPTEMBER 1, 2005
$33,000,000 7.87% SERIES B SENIOR NOTES DUE SEPTEMBER 1, 2007
$10,000,000 7.94% SERIES C SENIOR NOTES DUE SEPTEMBER 1, 2010
Dated as of August 23, 2000
To Each of the Purchasers Listed in
the Attached Schedule A:
Ladies and Gentlemen:
THE X.X. XXXXXXX COMPANY, an Ohio corporation (the "COMPANY"), agrees
with you as follows:
1. AUTHORIZATION OF NOTES
1.1. SERIES A NOTES
The Company will authorize the issue and sale of $17,000,000 aggregate
principal amount of its 7.70% Series A Senior Notes due September 1, 2005 (the
"SERIES A NOTES", such term to include any such notes issued in substitution
therefor pursuant to Section 13 of this Agreement or the Other Agreements (as
hereinafter defined)). The Series A Notes shall be substantially in the form set
out in Exhibit 1.1, with such changes therefrom, if any, as may be approved by
you and the Company.
1.2. SERIES B NOTES
The Company will authorize the issue and sale of $33,000,000 aggregate
principal amount of its 7.87% Series B Senior Notes due September 1, 2007 (the
"SERIES B NOTEs", such term to include any such notes issued in substitution
therefor pursuant to Section 13 of this Agreement or the Other Agreements (as
hereinafter defined)). The Series B Notes shall be substantially in the form set
out in Exhibit 1.2, with such changes therefrom, if any, as may be approved by
you and the Company.
1.3. SERIES C NOTES
The Company will authorize the issue and sale of $10,000,000 aggregate
principal amount of its 7.94% Series C Senior Notes due September 1, 2010 (the
"SERIES C NOTES", such term to include any such notes issued in substitution
therefor pursuant to Section 13 of this Agreement or the Other Agreements (as
hereinafter defined)). The Series C Notes shall be substantially in the form set
out in Exhibit 1.3, with such changes therefrom, if any, as may be approved by
you and the Company.
1.4. CERTAIN DEFINED TERMS
The Series A Notes, Series B Notes and Series C Notes (each, a
"SERIES") are herein referred to collectively as the "NOTES," and individually
as a "NOTE." Certain capitalized terms used in this Agreement are defined in
Schedule B; references to a "Schedule" or an "Exhibit" are, unless otherwise
specified, to a Schedule or an Exhibit attached to this Agreement.
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2. SALE AND PURCHASE OF NOTES
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closing
provided for in Section 3, Notes in the principal amount and in the Series
specified opposite your name in Schedule A at the purchase price of 100% of the
principal amount thereof. Contemporaneously with entering into this Agreement,
the Company is entering into separate Note Purchase Agreements (the "OTHER
AGREEMENTS") identical with this Agreement with each of the other purchasers
named in Schedule A (the "OTHER PURCHASERS"), providing for the sale at such
Closing to each of the Other Purchasers of Notes in the principal amount and in
the Series specified opposite its name in Schedule A. Your obligation hereunder
and the obligations of the Other Purchasers under the Other Agreements are
several and not joint obligations and you shall have no obligation under any
Other Agreement and no liability to any Person for the performance or
non-performance by any Other Purchaser thereunder.
3. CLOSING
The sale and purchase of the Notes to be purchased by you and the Other
Purchasers shall occur at the offices of Xxxxxxx Xxxx LLP, Xxx Xxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000, at 10:00 a.m., local time, at a closing (the
"CLOSING") on August 23, 2000 or on such other Business Day thereafter on or
prior to August 30, 2000 as may be agreed upon by the Company and you and the
Other Purchasers. At the Closing the Company will deliver to you the Notes to be
purchased by you in the form of a single Note for each Series (or such greater
number of Notes in denominations of at least $100,000 as you may request) dated
the date of the Closing and registered in your name (or in the name of your
nominee), against delivery by you to the Company or its order of immediately
available funds in the amount of the purchase price therefor by wire transfer of
immediately available funds for the account of the Company to account number
0000000 at National City Bank, Cleveland, Ohio, ABA number 000000000, Attn: The
X.X. Xxxxxxx Company. If at the Closing the Company shall fail to tender such
Notes to you as provided above in this Section 3, or any of the conditions
specified in Section 4 shall not have been fulfilled to your satisfaction, you
shall, at your election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights you may have by reason of such
failure or such nonfulfillment.
4. CONDITIONS TO CLOSING
Your obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your reasonable satisfaction, prior
to or at the Closing, of the following conditions:
4.1. REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Company in this Agreement
shall be correct when made and at the time of the Closing.
4.2. PERFORMANCE; NO DEFAULT.
The Company shall have performed and complied with all agreements and
conditions contained in this Agreement required to be performed or complied with
by it prior to or at the Closing and after giving effect to the issue and sale
of the Notes (and the application of the proceeds thereof as contemplated by
Schedule 5.14) no Default or Event of Default shall have occurred and be
continuing.
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4.3. COMPLIANCE CERTIFICATES.
(a) OFFICER'S CERTIFICATE. The Company shall have delivered to
you an Officer's Certificate, dated the date of the Closing, certifying
that the conditions specified in Sections 4.1, 4.2 and 4.9 have been
fulfilled.
(b) SECRETARY'S CERTIFICATE. The Company shall have delivered
to you a certificate certifying as to the resolutions attached thereto
and other corporate proceedings relating to the authorization,
execution and delivery of the Notes, this Agreement and the Other
Agreements.
4.4. OPINIONS OF COUNSEL.
You shall have received opinions in form and substance satisfactory to
you, dated the date of the Closing from
(a) Xxxxxx X. Xxxxxxxxx, General Counsel of the Company, in
the form set forth in Exhibit 4.4(a) (and the Company hereby instructs
its counsel to deliver such opinion to you), and
(b) Xxxxxxx Xxxx LLP, your special counsel in connection with
such transactions, in the form set forth in Exhibit 4.4(b).
4.5. PURCHASE PERMITTED BY APPLICABLE LAW, ETC.
On the date of the Closing your purchase of Notes shall (i) be
permitted by the laws and regulations of each jurisdiction to which you are
subject, without recourse to provisions (such as Section 1405(a)(8) of the New
York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (ii) not
violate any applicable law or regulation (including, without limitation,
Regulation T, U or X of the Board of Governors of the Federal Reserve System)
and (iii) not subject you to any tax, penalty or liability under or pursuant to
any applicable law or regulation, which law or regulation was not in effect on
the date hereof. If requested by you, you shall have received an Officer's
Certificate certifying as to such matters of fact as you may reasonably specify
to enable you to determine whether such purchase is so permitted.
4.6. SALE OF OTHER NOTES.
Contemporaneously with the Closing the Company shall sell to the Other
Purchasers and the Other Purchasers shall purchase the Notes to be purchased by
them at the Closing as specified in Schedule A.
4.7. PAYMENT OF SPECIAL COUNSEL FEES.
Without limiting the provisions of Section 15.1, the Company shall have
paid on or before the Closing the reasonable fees, charges and disbursements of
Xxxxxxx Xxxx LLP, your special counsel referred to in Section 4.4, to the extent
reflected in a statement of such counsel rendered to the Company at least one
Business Day prior to the Closing, which statement will include all accrued fees
and disbursements of such counsel, together with an estimate for the additional
fees and disbursements of such counsel necessary to complete the Closing and all
post-closing matters relating thereto (including, without limitation,
preparation of closing files).
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4.8. PRIVATE PLACEMENT NUMBER.
A Private Placement number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained by the Company
for each Series of Notes.
4.9. CHANGES IN CORPORATE STRUCTURE.
Except for the merger of JMS-Ohio, a wholly-owned Subsidiary of the
Company, with and into the Company, as further described in the Proxy Statement
of the Company dated July 14, 2000, which has been delivered to you, and as
specified in Schedule 4.9, the Company shall not have changed its jurisdiction
of incorporation or been a party to any merger or consolidation and shall not
have succeeded to all or any substantial part of the liabilities of any other
entity, at any time following the date of the most recent financial statements
referred to in Schedule 5.5.
4.10. PROCEEDINGS AND DOCUMENTS.
All corporate and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident to
such transactions shall be satisfactory to you and your special counsel, and you
and your special counsel shall have received all such counterpart originals or
certified or other copies of such documents as you or they may reasonably
request.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to you that:
5.1. ORGANIZATION; POWER AND AUTHORITY.
The Company is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation, and is duly
qualified as a foreign corporation and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The Company has the corporate power and authority to own or hold
under lease the properties it purports to own or hold under lease, to transact
the business it transacts and proposes to transact, to execute and deliver this
Agreement and the Other Agreements and the Notes and to perform the provisions
hereof and thereof.
5.2. AUTHORIZATION, ETC.
This Agreement and the Other Agreements and the Notes have been duly
authorized by all necessary corporate action on the part of the Company, and
this Agreement constitutes, and upon execution and delivery thereof each Note
will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
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5.3. DISCLOSURE.
Except as disclosed in Schedule 5.3, this Agreement, the documents,
certificates or other writings identified in Schedule 5.3, the financial
statements listed in Schedule 5.5 and the Proxy Statement of the Company dated
July 14, 2000, taken as a whole, do not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under which they
were made. Except as expressly described in Schedule 5.3, or in one of the
documents, certificates or other writings identified therein, or in the
financial statements listed in Schedule 5.5, since April 30, 2000, there has
been no change in the financial condition, operations, business or properties of
the Company or any of its Subsidiaries except changes that individually or in
the aggregate would not reasonably be expected to have a Material Adverse
Effect.
5.4. ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES .
(a) Schedule 5.4 is (except as noted therein) a complete and
correct list of the Company's Subsidiaries, showing, as to each
Subsidiary, the correct name thereof, the jurisdiction of its
organization, and the percentage of shares of each class of its capital
stock or similar equity interests outstanding owned by the Company and
each other Subsidiary.
(b) All of the outstanding shares of capital stock or similar
equity interests of each Subsidiary shown in Schedule 5.4 as being
owned by the Company and its Subsidiaries have been validly issued, are
fully paid and nonassessable and are owned by the Company or another
Subsidiary free and clear of any Lien (except as otherwise disclosed in
Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a
corporation or other legal entity duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization,
and is duly qualified as a foreign corporation or other legal entity
and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to
which the failure to be so qualified or in good standing would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Subsidiary has the corporate or
other power and authority to own or hold under lease the properties it
purports to own or hold under lease and to transact the business it
transacts and proposes to transact.
5.5. FINANCIAL STATEMENTS.
The Company has delivered to each Purchaser copies of the financial
statements of the Company and its Subsidiaries listed on Schedule 5.5. All of
said financial statements (including in each case the related schedules and
notes) fairly present in all material respects the consolidated financial
position of the Company and its Subsidiaries as of the respective dates
specified in such Schedule and the consolidated results of their operations and
cash flows for the respective periods so specified and have been prepared in
accordance with GAAP consistently applied throughout the periods involved except
as set forth in the notes thereto (subject, in the case of any interim financial
statements, to normal year-end adjustments).
5.6. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.
The execution, delivery and performance by the Company of this
Agreement and the Notes will not
(a) contravene, result in any breach of, or constitute a
default under, or result in the creation of any Lien in respect of any
property of the Company or any Subsidiary under, any
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indenture, mortgage, deed of trust, loan, purchase or credit agreement,
lease, corporate charter or by-laws, or any other Material agreement or
instrument to which the Company or any Subsidiary is bound or by which
the Company or any Subsidiary or any of their respective properties may
be bound or affected,
(b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of
any court, arbitrator or Governmental Authority applicable to the
Company or any Subsidiary or
(c) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Company or
any Subsidiary.
5.7. GOVERNMENTAL AUTHORIZATIONS, ETC.
Except for regular and routine filings with the Securities and Exchange
Commission, no consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the
execution, delivery or performance by the Company of this Agreement or the
Notes.
5.8. LITIGATION; OBSERVANCE OF STATUTES AND ORDERS.
(a) Except as disclosed in Schedule 5.8, there are no actions,
suits or proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Subsidiary or any
property of the Company or any Subsidiary in any court or before any
arbitrator of any kind or before or by any Governmental Authority that,
individually or in the aggregate, would reasonably be expected to have
a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under
any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law,
ordinance, rule or regulation (including without limitation
Environmental Laws) of any Governmental Authority, which default or
violation, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect.
5.9. TAXES.
The Company and its Subsidiaries have filed all income tax returns that
are required to have been filed in any jurisdiction, and have paid all taxes
shown to be due and payable on such returns and all other taxes and assessments
payable by them, to the extent such taxes and assessments have become due and
payable and before they have become delinquent, except for any taxes and
assessments (i) the amount of which is not individually or in the aggregate
Material or (ii) the amount, applicability or validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which the Company or a Subsidiary, as the case may be, has established adequate
reserves in accordance with GAAP. The federal income tax liabilities of the
Company and its Subsidiaries have been determined by the Internal Revenue
Service and paid for all fiscal years up to and including the fiscal year ended
April 30, 1998.
5.10. TITLE TO PROPERTY; LEASES.
The Company and its Subsidiaries have good and sufficient title to
their respective Material properties, including all such properties reflected in
the most recent audited balance sheet referred to in Section 5.5 or purported to
have been acquired by the Company or any Subsidiary after said date (except as
sold or otherwise disposed of in the ordinary course of business), in each case
free and clear of Liens prohibited by this Agreement, except for those defects
in title and Liens that,
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individually or in the aggregate, would not have a Material Adverse Effect. All
Material leases are valid and subsisting and are in full force and effect in all
material respects.
5.11. LICENSES, PERMITS, ETC.
Except as disclosed in Schedule 5.11, the Company and its Subsidiaries
own or possess all licenses, permits, franchises, authorizations, patents,
copyrights, service marks, trademarks and trade names, or rights thereto, that
are Material, without known conflict with the rights of others, except for those
conflicts that, individually or in the aggregate, would not have a Material
Adverse Effect.
5.12. COMPLIANCE WITH ERISA.
(a) The Company and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws except
for such instances of noncompliance as have not resulted in and could
not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans (as defined
in section 3 of ERISA), and no event, transaction or condition has
occurred or exists that would reasonably be expected to result in the
incurrence of any such liability by the Company or any ERISA Affiliate,
or in the imposition of any Lien on any of the rights, properties or
assets of the Company or any ERISA Affiliate, in either case pursuant
to Title I or IV of ERISA or to such penalty or excise tax provisions
or to section 401(a)(29) or 412 of the Code, other than such
liabilities or Liens as would not be individually or in the aggregate
Material.
(b) The present value of the aggregate benefit liabilities
under each of the Plans (other than Multiemployer Plans), determined as
of the end of such Plan's most recently ended plan year on the basis of
the actuarial assumptions specified for funding purposes in such Plan's
most recent actuarial valuation report, did not exceed the aggregate
current value of the assets of such Plan allocable to such benefit
liabilities. The term "benefit liabilities" has the meaning specified
in section 4001 of ERISA and the terms "current value" and "present
value" have the meaning specified in section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that individually or in the aggregate are Material.
(d) The expected postretirement benefit obligation (determined
as of the last day of the Company's most recently ended fiscal year in
accordance with Financial Accounting Standards Board Statement No. 106,
without regard to liabilities attributable to continuation coverage
mandated by section 4980B of the Code) of the Company and its
Subsidiaries is, as of April 30, 2000, $13,593,000.
(e) The execution and delivery of this Agreement and the
issuance and sale of the Notes hereunder will not involve any
transaction that is subject to the prohibitions of section 406 of ERISA
or in connection with which a tax could be imposed pursuant to section
4975(c)(1)(A)-(D) of the Code. The representation by the Company in the
first sentence of this Section 5.12(e) is made in reliance upon and
subject to the accuracy of your representation in Section 6.2 as to the
Sources to be used to pay the purchase price of the Notes to be
purchased by you.
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5.13. PRIVATE OFFERING BY THE COMPANY.
Neither the Company nor, based solely on the letter of Xxxxxxx Xxxxx &
Company attached hereto as Exhibit 5.13 (the "OFFEREE LETTER"), any Person
acting on its behalf, has offered the Notes or any similar Securities for sale
to, or solicited any offer to buy any of the same from, or otherwise approached
or negotiated in respect thereof with, any Person other than you, the Other
Purchasers and not more than 6 other Institutional Investors (as defined in
clause (c) of the definition of such term), each of which has been offered the
Notes at a private sale for investment. Neither the Company nor, based solely on
the Offeree Letter, any Person acting on its behalf has taken, or will take, any
action that would subject the issuance or sale of the Notes to the registration
requirements of Section 5 of the Securities Act. Xxxxxxx Xxxxx & Company is the
only Person the Company has authorized to act on its behalf in connection with
the matters referred to in this Section 5.13.
5.14. USE OF PROCEEDS; MARGIN REGULATIONS.
The Company will apply the proceeds of the sale of the Notes for the
purposes set forth in Schedule 5.14. None of the proceeds from the sale of the
Notes hereunder will be used, directly or indirectly, for the purpose of buying
or carrying or trading in any securities under such circumstances as to involve
the Company in a violation of Regulation U of the Board of Governors of the
Federal Reserve System (12 CFR 221) or a violation of Regulation X of said Board
(12 CFR 224) or to involve any broker or dealer in a violation of Regulation T
of said Board (12 CFR 220). Margin stock does not constitute more than 5% of the
value of the consolidated assets of the Company and its Subsidiaries and the
Company does not have any present intention that margin stock will constitute
more than 5% of the value of such assets. As used in this Section, the terms
"margin stock" and "purpose of buying or carrying" shall have the meanings
assigned to them in said Regulation U.
5.15. EXISTING INDEBTEDNESS.
Except as described therein, Schedule 5.15 sets forth a complete and
correct list of all outstanding Indebtedness of the Company and its Subsidiaries
as of April 30, 2000, since which date there has been no Material change in the
amounts, interest rates, sinking funds, installment payments or maturities of
the Indebtedness of the Company or its Subsidiaries. Neither the Company nor any
Subsidiary is in default and no waiver of default is currently in effect, in the
payment of any principal or interest on any Indebtedness of the Company or such
Subsidiary and no event or condition exists with respect to any Indebtedness of
the Company or any Subsidiary the outstanding principal amount of which exceeds
$15,000,000 that would permit (or that with notice or the lapse of time, or
both, would permit) one or more Persons to cause such Indebtedness to become due
and payable before its stated maturity or before its regularly scheduled dates
of payment.
5.16. FOREIGN ASSETS CONTROL REGULATIONS, ETC.
Neither the sale of the Notes by the Company hereunder nor its use of
the proceeds thereof will violate the Trading with the Enemy Act, as amended, or
any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
5.17. STATUS UNDER CERTAIN STATUTES.
Neither the Company nor any Subsidiary is subject to regulation under
the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, the Transportation Acts, as amended, or the
Federal Power Act, as amended.
14
6. REPRESENTATIONS OF THE PURCHASER
6.1. PURCHASE FOR INVESTMENT.
You represent that you are purchasing the Notes for your own account or
for one or more separate accounts maintained by you or for the account of one or
more pension or trust funds and not with a view to the distribution thereof,
provided that the disposition of your or their property shall at all times be
within your or their control. You understand that the Notes have not been
registered under the Securities Act and that the Company is not required to
register the Notes. You represent and agree that you will not resell any Notes
unless such Notes are registered pursuant to the provisions of the Securities
Act or if an exemption from registration is available, except under
circumstances where neither such registration nor such an exemption is required
by law. By the resale of any Note, the seller thereof, and by the acceptance of
any Note, the purchaser thereof, shall be deemed to have represented to the
Company that such Note has not been sold in violation of the Securities Act.
6.2. SOURCE OF FUNDS.
You represent that at least one of the following statements is an
accurate representation as to each source of funds (a "SOURCE") to be used by
you to pay the purchase price of the Notes to be purchased by you hereunder:
(a) INSURANCE COMPANY GENERAL ACCOUNT -- the Source is an
"insurance company general account" as defined in PTE 95-60 (60 FR
35925, July 12, 1995) and in respect thereof you represent that there
is no "employee benefit plan" (as defined in section 3(3) of ERISA and
section 4975(e)(1) of the Code, treating as a single plan all plans
maintained by the same employer (and affiliates thereof as defined in
section V(a)(1) of PTE 95-60) or employee organization or affiliate
thereof) with respect to which the amount of the general account
reserves and liabilities of all contracts held by or on behalf of such
plan exceeds 10% of the total reserves and liabilities of such general
account as determined under PTE 95-60 (exclusive of separate account
liabilities) plus surplus, as set forth in the National Association of
Insurance Commissioners' Annual Statement filed with your state of
domicile and that such acquisition is eligible for and satisfies the
other requirements of such exemption; or
(b) SEPARATE ACCOUNT - the Source is a separate account:
(i) 10% POOLED SEPARATE ACCOUNT -- that is an
insurance company pooled separate account, within the meaning
of DOL Prohibited Transaction Class Exemption 90-1 (issued
January 29, 1990), and to the extent that there is any
employee benefit plan, or group of plans maintained by the
same employer or employee organization, whose assets in such
separate account exceed ten percent (10%) of the assets of
such separate account, you have disclosed the names of such
plans to the Company in writing; or
(ii) IDENTIFIED PLAN ASSETS -- that is comprised of
employee benefit plans identified by you in writing and with
respect to which the Company hereby warrants and represents
that, as of the date of Closing, neither the Company nor any
ERISA Affiliate is a "party in interest" (as defined in
section 3 of ERISA) or a "disqualified person" (as defined in
section 4975 of the Code) with respect to any plan so
identified; or
15
(iii) GUARANTIED SEPARATE ACCOUNT -- that is
maintained solely in connection with fixed contractual
obligations of an insurance company, under which any amounts
payable, or credited, to any employee benefit plan having an
interest in such account and to any participant or beneficiary
of such plan (including an annuitant) are not affected in any
manner by the investment performance of the separate account
(as provided by 29 CFR Sec. 2510.3-101(h)(1)(iii)); or
(c) QPAM FUNDS -- the Source constitutes assets of an
"investment fund" (within the meaning of part V of PTE 84-14 (the "QPAM
EXEMPTION")) managed by a "qualified professional asset manager" or
"QPAM" (within the meaning of part V of the QPAM Exemption), no
employee benefit plan's assets that are included in such investment
fund, when combined with the assets of all other employee benefit plans
established or maintained by the same employer or by an affiliate
(within the meaning of section V(c)(1) of the QPAM Exemption) of such
employer or by the same employee organization and managed by such QPAM,
exceed twenty percent (20%) of the total client assets managed by such
QPAM, the conditions of part I(c) and (g) of the QPAM Exemption are
satisfied, neither the QPAM nor a person controlling or controlled by
the QPAM (applying the definition of "control" in section V(e) of the
QPAM Exemption) owns a five percent (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 Section
6.2(c); or
(d) GOVERNMENTAL PLANS -- the Source is a governmental plan;
or
(e) IDENTIFIED PLANS OR FUNDS -- the Source is one or more
employee benefit plans, or a separate account or trust fund comprised
of one or more employee benefit plans, each of which has been
identified to the Company in writing pursuant to this Section; or
(f) EXEMPT PLANS -- the Source does not include assets of any
employee benefit plan, other than a plan exempt from the coverage of
ERISA.
As used in this Section 6.2, the terms "employee benefit plan", "governmental
plan" and "separate account" shall have the respective meanings assigned to such
terms in section 3 of ERISA.
6.3. AUTHORIZATION, ETC.
You represent that this Agreement has been duly authorized by all
necessary corporate action on your part, and that this Agreement constitutes a
legal, valid and binding obligation upon you in accordance with its terms,
except as limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and (ii) general principles of equity (regardless of whether
considered in a proceeding in equity or at law).
16
7. INFORMATION AS TO COMPANY
7.1. FINANCIAL AND BUSINESS INFORMATION.
The Company shall deliver to each holder of Notes that is an
Institutional Investor:
(a) QUARTERLY STATEMENTS -- within 90 days after the end of
each quarterly fiscal period in each fiscal year of the Company (other
than the last quarterly fiscal period of each such fiscal year),
duplicate copies of,
(i) a consolidated balance sheet of the Company and
its Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such quarter and (in the case of the second
and third quarters) for the portion of the fiscal year ending
with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial
position of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from year-end
adjustments, provided that delivery within the time period specified
above of copies of the Company's Quarterly Report on Form 10-Q prepared
in compliance with the requirements therefor and filed with the
Securities and Exchange Commission shall be deemed to satisfy the
requirements of this Section 7.1(a);
(b) ANNUAL STATEMENTS -- within 120 days after the end of each
fiscal year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and
its Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied by an opinion thereon of independent
certified public accountants of recognized national standing, which
opinion shall state that such financial statements present fairly, in
all material respects, the financial position of the companies being
reported upon and their results of operations and cash flows and have
been prepared in conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has been made
in accordance with generally accepted auditing standards, and that such
audit provides a reasonable basis for such opinion in the
circumstances, provided that the delivery within the time period
specified above of the Company's Annual Report on Form 10-K for such
fiscal year (together with the Company's annual report to shareholders,
if any, prepared pursuant to Rule 14a-3 under the Exchange Act)
prepared in accordance with the requirements therefor and filed with
the Securities and Exchange Commission shall be deemed to satisfy the
requirements of this Section 7.1(b);
17
(c) SEC AND OTHER REPORTS -- promptly upon their becoming
available, one copy of (i) each financial statement, report, notice or
proxy statement sent by the Company or any Subsidiary to public
securities holders generally, and (ii) each regular or periodic report,
each registration statement that shall have become effective (without
exhibits except as expressly requested by such holder), and each final
prospectus and all amendments thereto filed by the Company or any
Subsidiary with the Securities and Exchange Commission;
(d) NOTICE OF DEFAULT OR EVENT OF DEFAULT -- promptly, and in
any event within five Business Days after a Responsible Officer
becoming aware of the existence of any Default or Event of Default, a
written notice specifying the nature and period of existence thereof
and what action the Company is taking or proposes to take with respect
thereto;
(e) ERISA MATTERS -- promptly, and in any event within five
Business Days after a Responsible Officer becoming aware of any of the
following, a written notice setting forth the nature thereof and the
action, if any, that the Company or an ERISA Affiliate proposes to take
with respect thereto:
(i) with respect to any Plan, any reportable event,
as defined in section 4043(b) of ERISA and the regulations
thereunder (other than a reportable event of a technical and
routine nature which occurs as a result of a transaction
permitted under Section 10.8(b)), for which notice thereof has
not been waived pursuant to such regulations as in effect on
the date hereof; or
(ii) the taking by the PBGC of steps to institute, or
the threatening by the PBGC of the institution of, proceedings
under section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by the Company or any ERISA Affiliate of a notice from
a Multiemployer Plan that such action has been taken by the
PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could
result in the incurrence of any liability by the Company or
any ERISA Affiliate pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to
employee benefit plans, or in the imposition of any Lien on
any of the rights, properties or assets of the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or such
penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then
existing, would reasonably be expected to have a Material
Adverse Effect; and
(f) REQUESTED INFORMATION -- with reasonable promptness and to
the extent not prohibited by applicable law, such other data and
information relating to the business, operations, affairs, financial
condition, assets or properties of the Company or any of its
Subsidiaries or relating to the ability of the Company to perform its
obligations hereunder and under the Notes as from time to time may be
reasonably requested by any such holder of Notes.
7.2. OFFICER'S CERTIFICATE .
Each set of financial statements delivered to a holder of Notes
pursuant to Section 7.1(a) or Section 7.1(b) hereof shall be accompanied by a
certificate of a Senior Financial Officer setting forth:
(a) COVENANT COMPLIANCE -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Section 10.3 through Section 10.9
hereof, inclusive, during the quarterly or
18
annual period covered by the statements then being furnished (including
with respect to each such Section, where applicable, the calculations
of the maximum or minimum amount, ratio or percentage, as the case may
be, permissible under the terms of such Sections, and the calculation
of the amount, ratio or percentage then in existence); and
(b) EVENT OF DEFAULT -- a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and
conditions of the Company and its Subsidiaries from the beginning of
the quarterly or annual period covered by the statements then being
furnished to the date of the certificate and that such review shall not
have disclosed the existence during such period of any condition or
event that constitutes a Default or an Event of Default or, if any such
condition or event existed or exists (including, without limitation,
any such event or condition resulting from the failure of the Company
or any Subsidiary to comply with any Environmental Law), specifying the
nature and period of existence thereof and what action the Company
shall have taken or proposes to take with respect thereto.
7.3. INSPECTION.
The Company shall permit the representatives of each holder of Notes
that is an Institutional Investor:
(a) NO DEFAULT -- if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable prior notice
to the Company, to visit the principal executive office of the Company,
to discuss the affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and, with the consent of the
Company (which consent will not be unreasonably withheld) to visit the
other offices and properties of the Company and each Subsidiary, all at
such reasonable times and as often as may be reasonably requested in
writing; and
(b) DEFAULT -- if a Default or Event of Default then exists,
at the expense of the Company to visit and inspect any of the offices
or properties of the Company or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent
public accountants (and by this provision the Company authorizes said
accountants to discuss the affairs, finances and accounts of the
Company and its Subsidiaries), all at such times and as often as may be
requested.
8. PREPAYMENT OF THE NOTES
8.1. PAYMENT OF NOTES AT MATURITY.
(a) SERIES A NOTES. The entire outstanding principal amount
of, and the interest then accrued and unpaid on, the Series A Notes
shall be due and payable on September 1, 2005.
(b) SERIES B NOTES. The entire outstanding principal amount
of, and the interest then accrued and unpaid on, the Series B Notes
shall be due and payable on September 1, 2007.
(c) SERIES C NOTES. The entire outstanding principal amount
of, and the interest then accrued and unpaid on, the Series C Notes
shall be due and payable on September 1, 2010.
19
8.2. OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT. The Company may, at
its option, upon notice as provided below, prepay at any time all, or from time
to time any part of, the Notes, in an amount not less than 5% of the aggregate
principal amount of the Notes then outstanding in the case of a partial
prepayment, at 100% of the principal amount so prepaid, plus the Make-Whole
Amount determined for the prepayment date with respect to such principal amount.
The Company will give each holder of Notes written notice of each optional
prepayment under this Section 8.2 not less than 30 days and not more than 60
days prior to the date fixed for such prepayment. Each such notice shall specify
such date, the aggregate principal amount of the Notes to be prepaid on such
date, the principal amount of each Note held by such holder to be prepaid
(determined in accordance with Section 8.4), and the interest to be paid on the
prepayment date with respect to such principal amount being prepaid, and shall
be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make-Whole Amount due in connection with such prepayment (calculated
as if the date of such notice were the date of the prepayment), setting forth
the details of such computation. Two Business Days prior to such prepayment, the
Company shall deliver to each holder of Notes a certificate of a Senior
Financial Officer specifying the calculation of such Make-Whole Amount as of the
specified prepayment date.
8.3. CHANGE IN CONTROL.
(a) NOTICE OF CHANGE IN CONTROL OR CONTROL EVENT. The Company
will, within five Business Days after any Responsible Officer has
knowledge of the occurrence of any Change in Control or Control Event,
give written notice of such Change in Control or Control Event to each
holder of Notes unless notice in respect of such Change in Control (or
the Change in Control contemplated by such Control Event) shall have
been given pursuant to Section 8.3(b). If a Change in Control has
occurred, such notice shall contain and constitute an offer to prepay
Notes as described in Section 8.3(c) and shall be accompanied by the
certificate described in Section 8.3(g).
(b) CONDITION TO COMPANY ACTION. The Company will not take any
action that consummates or finalizes a Change in Control unless
(i) at least 30 days prior to such action it shall
have given to each holder of Notes written notice containing
and constituting an offer to prepay Notes as described in
Section 8.3(c), accompanied by the certificate described in
Section 8.3(g), and
(ii) contemporaneously with such action, it prepays
all Notes required to be prepaid in accordance with this
Section 8.3.
(c) OFFER TO PREPAY NOTES. The offer to prepay Notes
contemplated by Section 8.3(a) and Section 8.3(b) shall be an offer to
prepay, in accordance with and subject to this Section 8.3, all, but
not less than all, the Notes held by each holder (in this case only,
"holder" in respect of any Note registered in the name of a nominee for
a disclosed beneficial owner shall mean such beneficial owner) on a
date specified in such offer (the "PROPOSED PREPAYMENT DATE"). If such
Proposed Prepayment Date is in connection with an offer contemplated by
Section 8.3(a), such date shall be not less than 30 days and not more
than 60 days after the date of such offer (if the Proposed Prepayment
Date shall not be specified in such offer, the Proposed Prepayment Date
shall be the 30th day after the date of such offer).
20
(d) ACCEPTANCE. A holder of Notes may accept the offer to
prepay made pursuant to this Section 8.3 by causing a notice of such
acceptance to be delivered to the Company at least five Business Days
prior to the Proposed Prepayment Date. A failure by a holder of Notes
to respond to an offer to prepay made pursuant to this Section 8.3
shall be deemed to constitute an acceptance of such offer by such
holder.
(e) PREPAYMENT. Prepayment of the Notes to be prepaid pursuant
to this Section 8.3 shall be at 100% of the principal amount of such
Notes, plus the Make-Whole Amount determined for the date of prepayment
with respect to such principal amount, together with interest on such
Notes accrued to the date of prepayment. Two Business Days preceding
the date of prepayment, the Company shall deliver to each holder of
Notes being prepaid a certificate of a Senior Financial Officer
specifying the calculation of the Make-Whole Amount due in connection
with such prepayment. The prepayment shall be made on the Proposed
Prepayment Date except as provided in Section 8.3(f).
(f) DEFERRAL OF OBLIGATION TO PURCHASE. The obligation of the
Company to prepay Notes pursuant to the offers accepted in accordance
with Section 8.3(d) is subject to the occurrence of the Change in
Control in respect of which such offers and acceptances shall have been
made. In the event that such Change in Control does not occur on the
Proposed Prepayment Date in respect thereof, the prepayment shall be
deferred until and shall be made on the date on which such Change in
Control occurs. The Company shall keep each holder of Notes reasonably
and timely informed of
(i) any such deferral of the date of prepayment,
(ii) the date on which such Change in Control and the
prepayment are expected to occur, and
(iii) any determination by the Company that efforts
to effect such Change in Control have ceased or been abandoned
(in which case the offers and acceptances made pursuant to
this Section 8.3 in respect of such Change in Control shall be
deemed rescinded).
(g) OFFICER'S CERTIFICATE. Each offer to prepay the Notes
pursuant to this Section 8.3 shall be accompanied by a certificate,
executed by a Senior Financial Officer of the Company and dated the
date of such offer, specifying:
(i) the Proposed Prepayment Date;
(ii) that such offer is made pursuant to this Section
8.3;
(iii) the principal amount and Series of each Note
offered to be prepaid;
(iv) the last date upon which the offer can be
accepted or rejected, and setting forth the consequences of
failing to provide an acceptance or rejection, as provided in
Section 8.3(d);
(v) the estimated Make-Whole Amount, if any, due in
connection with such prepayment (calculated as if the date of
such notice were the date of the prepayment), setting forth
the details of such computation;
(vi) the interest that would be due on each Note
offered to be prepaid, accrued to the Proposed Prepayment
Date;
21
(vii) that the conditions of this Section 8.3 have
been fulfilled; and
(viii) in reasonable detail, the nature and date or
proposed date of the Change in Control.
8.4. ALLOCATION OF PARTIAL PREPAYMENTS.
In the case of each partial prepayment of the Notes, the principal
amount of the Notes to be prepaid shall be allocated among all of the Notes
(without regard to Series) at the time outstanding in proportion, as nearly as
practicable, to the respective unpaid principal amounts thereof not theretofore
called for prepayment; provided, however, that, following such allocation, any
holder of Notes may (but shall not be required to) consent to the Company's
request to re-allocate all or any portion of the principal amount so prepaid to
such holder among one or more Series of Notes held by such holder (in such
proportions as the Company may request); provided, further, that (a) any such
request made by the Company shall be made on the same terms to all holders of at
least two Series of Notes, one of which is the Series to which the Company
desires to make such re-allocation and (b) promptly after such re-allocation,
the Company shall deliver to each holder of Notes a written notice setting forth
the outstanding principal amount of each Series of Notes held by each holder
following such re-allocation.
8.5. MATURITY; SURRENDER, ETC.
In the case of each prepayment of Notes pursuant to this Section 8, the
principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.
8.6. PURCHASE OF NOTES.
Except as otherwise provided in this Section 8, the Company will not
and will not permit any Affiliate to purchase, redeem, prepay, or otherwise
acquire, directly or indirectly, any of the outstanding Notes except pursuant to
an offer to purchase (which offer may or may not include the Make-Whole Amount,
if any, or any portion thereof) made by the Company or an Affiliate pro rata to
the holders of all Notes (without regard to Series) at the time outstanding upon
the same terms and conditions, provided that at the time such offer is made and
after giving effect to such purchase, no Default or Event of Default shall
exist. Any such offer shall provide each holder with sufficient information to
enable it to make an informed decision with respect to such offer, shall contain
a representation by the Company that no Default or Event of Default exists or
would exist after giving effect to such proposed purchase of Notes, and shall
remain open for at least ten Business Days. If the holders of more than 50% of
the principal amount of the Notes then outstanding accept such offer, the
Company shall promptly notify the remaining holders of such fact and the
expiration date for the acceptance by holders of Notes of such offer shall be
extended by the number of days necessary to give each such remaining holder at
least ten Business Days from its receipt of such notice to accept such offer.
The Company will promptly cancel all Notes acquired by it or any Affiliate
pursuant to any payment, prepayment or purchase of Notes pursuant to any
provision of this Agreement and no Notes may be issued in substitution or
exchange for any such Notes.
22
8.7. MAKE-WHOLE AMOUNT.
The term "Make-Whole Amount" means, with respect to any Note of any
Series, an amount equal to the excess, if any, of the Discounted Value of the
Remaining Scheduled Payments with respect to the Called Principal of such Note
over the amount of such Called Principal, provided that the Make-Whole Amount
may in no event be less than zero. For the purposes of determining the
Make-Whole Amount, the following terms have the following meanings:
"CALLED PRINCIPAL" means, with respect to any Note of any
Series, the principal of such Note that is to be prepaid pursuant to
the terms hereof or has become or is declared to be immediately due and
payable pursuant to Section 12.1, as the context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal
of any Note of any Series, 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 (applied on the same periodic basis
as that on which interest on such Series of Notes is payable) equal to
the Reinvestment Yield with respect to such Called Principal.
"REINVESTMENT YIELD" means, with respect to the Called
Principal of any Note of any Series, 0.50% over the yield to maturity
implied by
(i) the yields reported, as of 10:00 A.M. (New York
City time) on the second Business Day preceding the Settlement
Date with respect to such Called Principal, on the display
designated as Page "PX1" on the Bloomberg Financial Market
Service (or such other display as may replace Page "PX1" on
the Bloomberg Financial Market 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
(ii) if such yields are not reported as of such time
or the yields reported as of such time are not ascertainable,
the Treasury Constant Maturity Series Yields reported, for the
latest day for which such yields have been so reported as of
the second Business Day preceding the Settlement Date with
respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life
of such Called Principal as of such Settlement Date.
Such implied yield will be determined, if necessary, by (a) converting
U.S. Treasury xxxx quotations to bond-equivalent yields in accordance
with accepted financial practice and (b) interpolating linearly between
(1) the actively traded U.S. Treasury security with the duration
closest to and greater than such Remaining Average Life and (2) the
actively traded U.S. Treasury security with the duration closest to and
less than such Remaining Average Life.
"REMAINING AVERAGE LIFE" means, with respect to any Called
Principal of any Series of Notes, 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)
the principal component of each Remaining Scheduled Payment with
respect to such Called Principal by (b) the number of years (calculated
to the nearest one-twelfth year) that will elapse between the
Settlement Date with respect to such Called Principal and the scheduled
due date of such Remaining Scheduled Payment.
23
"REMAINING SCHEDULED PAYMENTS" means, with respect to the
Called Principal of any Note of any Series, all payments of such Called
Principal and interest thereon that would be due after the Settlement
Date with respect to such Called Principal if no payment of such Called
Principal were made prior to its scheduled due date, provided that if
such Settlement Date is not a date on which interest payments are due
to be made under the terms of the Notes of such Series, then the amount
of the next succeeding scheduled interest payment will be reduced by
the amount of interest accrued to such Settlement Date and required to
be paid on such Settlement Date.
"SETTLEMENT DATE" means, with respect to the Called Principal
of any Note of any Series, the date on which such Called Principal is
to be prepaid pursuant to the terms hereof or has become or is declared
to be immediately due and payable pursuant to Section 12.1, as the
context requires.
9. AFFIRMATIVE COVENANTS
The Company covenants that so long as any of the Notes are outstanding:
9.1. COMPLIANCE WITH LAW.
The Company will and will cause each of its Subsidiaries to comply with
all laws, ordinances or governmental rules or regulations to which each of them
is subject, including, without limitation, Environmental Laws, and will obtain
and maintain in effect all licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their respective
properties or to the conduct of their respective businesses, in each case to the
extent necessary to ensure that non-compliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or maintain in effect
such licenses, certificates, permits, franchises and other governmental
authorizations would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
9.2. INSURANCE.
The Company will and will cause each of its Subsidiaries to maintain,
with financially sound and reputable insurers, insurance with respect to their
respective properties and businesses against such casualties and contingencies,
of such types, on such terms and in such amounts (including deductibles,
co-insurance and self-insurance, if adequate reserves are maintained with
respect thereto) so that such insurance, taken as a whole, shall be customary
for entities of established reputations engaged in the same or a similar
business and similarly situated.
9.3. MAINTENANCE OF PROPERTIES.
The Company will and will cause each of its Subsidiaries to maintain
and keep, or cause to be maintained and kept, their respective properties in
good repair, working order and condition (other than ordinary wear and tear), so
that the business carried on in connection therewith may be properly conducted
at all times, provided that this Section shall not prevent the Company or any
Subsidiary from discontinuing the operation and the maintenance of any of its
properties if such discontinuance is desirable in the conduct of its business
and the Company has concluded that such discontinuance would not, individually
or in the aggregate, have a Material Adverse Effect.
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9.4. PAYMENT OF TAXES AND CLAIMS.
The Company will and will cause each of its Subsidiaries to file all
income tax or similar tax returns required to be filed in any jurisdiction and
to pay and discharge all taxes shown to be due and payable on such returns and
all other taxes, assessments, governmental charges, or levies payable by any of
them, to the extent such taxes and assessments have become due and payable and
before they have become delinquent and all claims for which sums have become due
and payable that have or might become a Lien on properties or assets of the
Company or any Subsidiary, provided that neither the Company nor any Subsidiary
need pay any such tax or assessment or claims if (i) the amount, applicability
or validity thereof is contested by the Company or such Subsidiary on a timely
basis in good faith and in appropriate proceedings, and the Company or a
Subsidiary has established adequate reserves therefor in accordance with GAAP on
the books of the Company or such Subsidiary or (ii) the nonpayment of all such
taxes and assessments in the aggregate would not reasonably be expected to have
a Material Adverse Effect.
9.5. CORPORATE EXISTENCE, ETC.
The Company will at all times preserve and keep in full force and
effect its corporate existence. Subject to Sections 10.2 and 10.8, the Company
will at all times preserve and keep in full force and effect the corporate
existence of each of its Subsidiaries (unless merged into the Company or a
Subsidiary) and all rights and franchises of the Company and its Subsidiaries
unless, in the good faith judgment of the Company, the termination of or failure
to preserve and keep in full force and effect such corporate existence, right or
franchise would not, individually or in the aggregate, have a Material Adverse
Effect.
9.6. PARI PASSU RANKING.
The Notes shall at all times rank pari passu, without preference or
priority, with all other outstanding, unsecured, unsubordinated Indebtedness of
the Company, present and future, that have not been accorded preferential
rights.
10. NEGATIVE COVENANTS
The Company covenants that so long as any of the Notes are outstanding:
10.1. TRANSACTIONS WITH AFFILIATES.
The Company will not and will not permit any Subsidiary to enter into
directly or indirectly any Material transaction or Material group of related
transactions (including, without limitation, the purchase, lease, sale or
exchange of properties of any kind or the rendering of any service) with any
Affiliate (other than the Company or another Subsidiary), except pursuant to the
reasonable requirements of the Company's or such Subsidiary's business and upon
fair and reasonable terms no less favorable to the Company or such Subsidiary
than would be obtainable in a comparable arm's-length transaction with a Person
not an Affiliate.
10.2. MERGER, CONSOLIDATION, ETC.
The Company will not consolidate with or merge with any other
corporation or convey, transfer or lease substantially all of its assets in a
single transaction or series of transactions to any Person unless:
(a) the successor formed by such consolidation or the survivor
of such merger or the Person that acquires by conveyance, transfer or
lease substantially all of the assets of the
25
Company as an entirety (the "SURVIVOR"), as the case may be, shall be a
solvent corporation organized and existing under the laws of the United
States, any state thereof or the District of Columbia, and, if the
Company is not such corporation, such corporation shall have expressly
assumed in writing, pursuant to such agreements and instruments as
shall be reasonably satisfactory to the Required Holders, the due and
punctual payment of the principal of and Make-Whole Amount, if any, and
interest on all of the Notes, according to their tenor, and the due and
punctual performance and observance of each covenant and condition of
this Agreement, the Other Agreements and the Notes to be performed or
observed by the Company; and
(b) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing.
No such conveyance, transfer or lease of substantially all of the assets of the
Company shall have the effect of releasing the Company or any successor
corporation that shall theretofore have become such in the manner prescribed in
this Section 10.2 from its liability under this Agreement or the Notes.
10.3. CONSOLIDATED NET WORTH.
The Company will not, at any time, permit Consolidated Net Worth to be
less than Two Hundred Forty Million Dollars ($240,000,000).
10.4. INCURRENCE OF FUNDED DEBT.
The Company will not, and will not permit any Subsidiary to, directly
or indirectly, create, incur, assume, guarantee, or otherwise become directly or
indirectly liable with respect to, any Funded Debt, except:
(a) the Notes;
(b) Funded Debt owing to the Company or a Wholly-Owned
Subsidiary;
(c) Funded Debt outstanding on the date hereof and disclosed
in Schedule 5.15, and any renewals, extensions, and refundings thereof
so long as (i) no Default or Event of Default shall exist, and (ii)
there is no increase in the aggregate principal amount thereof
outstanding, in each case on the date of any such renewal, extension or
refunding; and
(d) additional Funded Debt so long as on the date the Company
or such Subsidiary becomes liable with respect to any such Funded Debt
and immediately after giving effect thereto and the concurrent
retirement of any other Funded Debt,
(i) no Default or Event of Default exists,
(ii) the sum of (A) Consolidated Senior Funded Debt,
plus (B) the Clean-Down Amount of Consolidated Current Debt,
does not exceed 55% of Consolidated Total Capitalization, and
(iii) the sum of (A) Consolidated Funded Debt, plus
(B) the Clean-Down Amount of Consolidated Current Debt, does
not exceed 65% of Consolidated Total Capitalization.
26
As used in this Section 10.4, the term "Clean-Down Amount of
Consolidated Current Debt" means, at any date, the lowest average daily amount
of Consolidated Current Debt outstanding during any period of thirty (30)
consecutive days occurring in the twelve consecutive calendar months most
recently ended as of such date (or on such date if such date shall be the last
day of a calendar month).
For the purposes of this Section 10.4, any Person becoming a Subsidiary
after the date hereof shall be deemed, at the time it becomes a Subsidiary, to
have incurred all of its then outstanding Funded Debt, and any Person extending,
renewing or refunding any Funded Debt shall be deemed to have incurred such
Funded Debt at the time of such extension, renewal or refunding. For the
avoidance of doubt, the parties hereto acknowledge and agree that the covenant
set forth in this Section 10.4 is to be applied on and as of each date upon
which the Company or any Subsidiary shall, directly or indirectly, create,
incur, assume, guarantee or otherwise become directly or indirectly liable with
respect to (or, as described in the immediately preceding sentence, be deemed,
directly or indirectly, to create, incur, assume, guarantee or otherwise become
directly or indirectly liable with respect to), any Funded Debt.
10.5. INCURRENCE OF CURRENT DEBT.
The Company will not, and will not permit any Subsidiary to, directly
or indirectly, create, incur, assume, guarantee, or otherwise become directly or
indirectly liable with respect to, any Current Debt on any date unless no
Default or Event of Default shall exist on such date and there shall have been a
period of thirty (30) consecutive days occurring in the twelve consecutive
calendar months most recently ended as of such date (or on such date if such
date shall be the last day of a calendar month) on each day of which
Consolidated Current Debt shall not have been in excess of the amount of Funded
Debt that the Company and the Subsidiaries could have incurred, but did not
incur, on such day in accordance with Section 10.4(d).
For the purposes of this Section 10.5, any Person becoming a Subsidiary
after the date hereof shall be deemed, at the time it becomes a Subsidiary, to
have incurred all of its then outstanding Current Debt, and any Person
extending, renewing or refunding any Current Debt shall be deemed to have
incurred such Current Debt at the time of such extension, renewal or refunding.
For the avoidance of doubt, the parties hereto acknowledge and agree that the
covenant set forth in this Section 10.5 is to be applied on and as of each date
upon which the Company or any Subsidiary shall, directly or indirectly, create,
incur, assume, guarantee or otherwise become directly or indirectly liable with
respect to (or, as described in the immediately preceding sentence, be deemed,
directly or indirectly, to create, incur, assume, guarantee or otherwise become
directly or indirectly liable with respect to), any Current Debt.
10.6. PRIORITY DEBT.
The Company will not, at any date, permit Priority Debt to exceed 25%
of Consolidated Total Capitalization, determined as of the last day of the then
most recently ended fiscal quarter of the Company (or determined as of such date
if such date shall be the last day of a fiscal quarter of the Company).
10.7. LIENS.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly create, incur, assume or permit to exist (upon the
happening of a contingency or otherwise) any Lien
27
on or with respect to any property or asset (including, without limitation, any
document or instrument in respect of goods or accounts receivable) of the
Company or any such Subsidiary, whether now owned or held or hereafter acquired,
or any income or profits therefrom (whether or not provision is made for the
equal and ratable securing of the Notes in accordance with the last paragraph of
this Section 10.7), or assign or otherwise convey any right to receive income or
profits, except:
(a) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business
(i) in connection with workers' compensation,
unemployment insurance and other types of social security or
retirement benefits, or
(ii) to secure (or to obtain letters of credit that
secure) the performance of tenders, statutory obligations,
surety bonds, bids, leases (other than Capital Leases),
performance bonds, purchase, construction or sales contracts
and other similar obligations, in each case not incurred or
made in connection with the borrowing of money, the obtaining
of advances or credit or the payment of the deferred purchase
price of property;
(b) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other similar Liens, in each
case incurred in the ordinary course of business for sums not yet due
and payable or the payment of which is not at the time required by
Section 9.4;
(c) Liens arising from judicial attachments or judgments, or
securing appeal bonds, and other similar Liens, provided that
(i) the execution or other enforcement of such Liens
is effectively stayed, and
(ii) the claims secured thereby are being actively
contested in good faith and adequate reserves in respect
thereof have been established by the Company or such
Subsidiary in accordance with GAAP;
(d) leases or subleases granted to others, easements,
rights-of-way, restrictions and other similar charges or encumbrances,
in each case incidental to, and not interfering with, the ordinary
conduct of the business of the Company or any of the Subsidiaries,
provided that such Liens do not, in the aggregate, materially impair
the use of such property by the Company or such Subsidiary;
(e) Liens for taxes, assessments or other governmental charges
which are not yet due and payable or the payment of which is not at the
time required by Section 9.4;
(f) Liens on property of a Subsidiary, provided that such
Liens secure only Debt owing to the Company or a Subsidiary; and
(g) other Liens not otherwise permitted by paragraphs (a)
through (f) of this Section 10.7, so long as the Debt secured thereby
can be
(i) incurred under Section 10.4(d), and
28
(ii) incurred and remain outstanding in accordance
with the requirements of Section 10.6.
If, notwithstanding the prohibition contained herein, the Company
shall, or shall permit any of its Subsidiaries to, directly or indirectly
create, incur, assume or permit to exist any Lien, other than those Liens
permitted by the provisions of paragraphs (a) through (G) of this Section 10.7,
it will make or cause to be made effective provision whereby the Notes will be
secured equally and ratably with any and all other obligations thereby secured,
such security to be pursuant to agreements reasonably satisfactory to the
Required Holders and, in any such case, the Notes shall have the benefit, to the
fullest extent that, and with such priority as, the holders of the Notes may be
entitled under applicable law, of an equitable Lien on such property. Such
violation of this Section 10.7 will constitute an Event of Default, whether or
not provision is made for an equal and ratable Lien pursuant to this Section
10.7.
10.8. ASSET SALES.
(a) SALE OF ASSETS. The Company will not, and will not permit
any Subsidiary to, make any Asset Disposition unless:
(i) in the good faith opinion of the Company, the
Asset Disposition is in exchange for consideration having a
Fair Market Value at least equal to that of the property
exchanged and is in the best interest of the Company or such
Subsidiary;
(ii) immediately after giving effect to the Asset
Disposition, no Default or Event of Default would exist; and
(iii) immediately after giving effect to the Asset
Disposition, the sum of the Disposition Values in respect of
all property that was the subject of any Asset Disposition
occurring in the period commencing with the first day of the
Current Four Quarter Period and ending with and including the
date of such Asset Disposition would not exceed 15% of
Consolidated Total Assets as of the end of the then most
recently ended fiscal year of the Company. As used in this
Section 10.8(a)(iii), the term "Current Four Quarter Period"
means, as of any date, the period of four consecutive fiscal
quarters of the Company ending on the last day of the then
current fiscal quarter of the Company.
If the Company shall give written notice to the holders of the Notes
prior to consummation of any Transfer that it intends to apply the Net
Proceeds Amount arising therefrom to a Debt Prepayment Application or a
Property Reinvestment Application within 365 days after such Transfer,
then such Transfer, only for the purpose of determining compliance with
subsection (iii) of this Section 10.8(a), shall be deemed not to be an
Asset Disposition. If the Company shall fail to apply such Net Proceeds
Amount as stated in such notice within such period, such failure shall
constitute an Event of Default.
(b) DISPOSAL OF OWNERSHIP OF A SUBSIDIARY. The Company will
not, and will not permit any of the Subsidiaries to, Transfer any
shares of Subsidiary Stock (including, without limitation, pursuant to
any merger, consolidation or other transaction specified in Section
10.2 hereof), nor will the Company permit any such Subsidiary to issue
or Transfer any shares of its own Subsidiary Stock, provided that the
foregoing restrictions do not apply to:
(i) the issue of directors' qualifying shares by any
such Subsidiary;
29
(ii) any such Transfer of Subsidiary Stock
constituting a Transfer described in clause (a) of the
definition of "Asset Disposition"; and
(iii) the Transfer of all of the Subsidiary Stock of
a Subsidiary owned by the Company and the other Subsidiaries
if:
(A) such Transfer satisfies the requirements of Section
10.8(a) hereof,
(B) in connection with such Transfer the entire investment
(whether represented by stock, Debt, claims or otherwise) of the
Company and the other Subsidiaries in such Subsidiary is sold,
transferred or otherwise disposed of to a Person other than (1) the
Company, (2) another Subsidiary not being simultaneously disposed of,
or (3) an Affiliate, and
(C) the Subsidiary being disposed of has no continuing
investment in any other Subsidiary not being simultaneously disposed of
or in the Company.
10.9. SALE-AND-LEASEBACK TRANSACTIONS.
The Company will not, and will not permit any Subsidiary to, enter into
or permit to continue any Sale-and-Leaseback Transaction unless either (a) the
Attributable Debt associated therewith can be incurred and remain outstanding in
accordance with the requirements of Section 10.6 or (b) the Company shall give
written notice to the holders of the Notes prior to consummation of any such
transaction that it intends to apply the Net Proceeds Amount arising therefrom
to a Debt Prepayment Application or a Property Reinvestment Application within
365 days after such consummation, in which event such transaction, only for the
purpose of determining compliance with this Section 10.9, shall be deemed not to
be a Sale-and-Leaseback Transaction. If the Company shall fail to apply such Net
Proceeds Amount as stated in such notice within such period, such failure shall
constitute an Event of Default.
10.10. LINE OF BUSINESS.
The Company will not, and will not permit any of its Subsidiaries to,
engage in any business if, as a result, the general nature of the business in
which the Company and its Subsidiaries, taken as a whole, would then be engaged
would be substantially changed from the general nature of the business in which
the Company and its Subsidiaries, taken as a whole, are engaged on the date of
this Agreement as described in the Form 10-K filed for the fiscal year ending
April 30, 2000, and delivered to the Purchasers on or about July 19, 2000.
11. EVENTS OF DEFAULT
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or
Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any
Note for more than ten Business Days after the same becomes due and
payable; or
30
(c) the Company defaults in the performance of or compliance
with any term contained in any one or more of Section 7.1(d) or
Sections 10.2 through 10.9, inclusive; or
(d) the Company defaults in the performance of or compliance
with any term contained herein (other than those referred to in Section
11(a)), Section 11(b) or Section 11(c)) and such default is not
remedied within 30 days after the earlier of (i) a Responsible Officer
obtaining actual knowledge of such default and (ii) the Company
receiving written notice of such default from any holder of a Note (any
such written notice to be identified as a "notice of default" and to
refer specifically to this Section 11(d)); or
(e) any representation or warranty made in writing by or on
behalf of the Company or by any officer of the Company in this
Agreement or in any writing furnished in connection with the
transactions contemplated hereby proves to have been false or incorrect
in any material respect on the date as of which made; or
(f) the Company or any Significant Subsidiary
(i) is in default (as principal or as guarantor or
other surety) in the payment of any principal of or premium or
Make-Whole Amount or interest on any Indebtedness (other than
Indebtedness under this Agreement and the Notes) that is
outstanding in an aggregate principal amount of at least
$5,000,000 beyond any period of grace provided with respect
thereto (after giving effect to any consents or waivers in
respect thereof), or
(ii) is in default in the performance of or
compliance with any term of any evidence of any Indebtedness
in an aggregate outstanding principal amount of at least
$15,000,000 or of any mortgage, indenture or other agreement
relating thereto or any other condition exists, and as a
consequence of such default or condition such Indebtedness has
become, or has been declared due and payable before its stated
maturity or before its regularly scheduled dates of payment;
or
(g) the Company or any Significant Subsidiary
(i) is generally not paying, or admits in writing its
inability to pay, its debts as they become due,
(ii) files, or consents by answer or otherwise to the
filing against it of, a petition for relief or reorganization
or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy,
insolvency, reorganization, moratorium or other similar law of
any jurisdiction,
(iii) makes an assignment for the benefit of its
creditors,
(iv) consents to the appointment of a custodian,
receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its
property,
(v) is adjudicated as insolvent or to be liquidated,
or
(vi) takes corporate action for the purpose of any of
the foregoing; or
31
(h) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by the Company
or any of its Significant Subsidiaries, a custodian, receiver, trustee
or other officer with similar powers with respect to it or with respect
to any substantial part of its property, or constituting an order for
relief or approving a petition for relief or reorganization or any
other petition in bankruptcy or for liquidation or to take advantage of
any bankruptcy or insolvency law of any jurisdiction, or ordering the
dissolution, winding-up or liquidation of the Company or any of its
Significant Subsidiaries, or any such petition shall be filed against
the Company or any of its Significant Subsidiaries and such petition
shall not be dismissed within 90 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $15,000,000 are rendered against one or more
of the Company and its Significant Subsidiaries and which judgments are
not, within 30 days after entry thereof, bonded, discharged or stayed
pending appeal, or are not discharged within 30 days after the
expiration of such stay; or
(j) if
(i) any Plan shall fail to satisfy the minimum
funding standards of ERISA or the Code for any plan year or
part thereof or a waiver of such standards or extension of any
amortization period is sought or granted under section 412 of
the Code,
(ii) a notice of intent to terminate any Plan shall
have been or is reasonably expected to be filed with the PBGC
or the PBGC shall have instituted proceedings under ERISA
section 4042 to terminate or appoint a trustee to administer
any Plan or the PBGC shall have notified the Company or any
ERISA Affiliate that a Plan may become a subject of any such
proceedings,
(iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of section 4001(a)(18) of
ERISA) under all Plans, determined in accordance with Title IV
of ERISA, shall exceed $15,000,000,
(iv) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability
pursuant to Title I or IV of ERISA or the penalty or excise
tax provisions of the Code relating to employee benefit plans,
(v) the Company or any ERISA Affiliate withdraws from
any Multiemployer Plan for which there is unfunded withdrawal
liability in excess of $15,000,000, or
(vi) the Company or any Subsidiary establishes or
amends any employee welfare benefit plan that provides
post-employment welfare benefits in a manner that would
increase the liability of the Company or any Subsidiary
thereunder;
and any such event or events described in clauses (i) through (vi)
above, either individually or together with any other such event or
events, would reasonably be expected to have a Material Adverse Effect.
As used in Section 11(j), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
32
12. REMEDIES ON DEFAULT, ETC.
12.1. ACCELERATION.
(a) If an Event of Default with respect to the Company
described in paragraph (g) or (h) of Section 11 (other than an Event of
Default described in clause (i) of paragraph (g) or described in clause
(vi) of paragraph (g) by virtue of the fact that such clause
encompasses clause (i) of paragraph (g)) has occurred, all the Notes
then outstanding shall automatically become immediately due and
payable.
(b) If any other Event of Default has occurred and is
continuing, any holder or holders of a majority in principal amount of
the Notes at the time outstanding may at any time at its or their
option, by notice or notices to the Company, declare all the Notes then
outstanding to be immediately due and payable.
(c) If any Event of Default described in paragraph (a) or (b)
of Section 11 has occurred and is continuing, any holder or holders of
Notes at the time outstanding affected by such Event of Default may at
any time, at its or their option, by notice or notices to the Company,
declare all the Notes held by it or them to be immediately due and
payable.
Upon any Notes becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, plus (x) all accrued and
unpaid interest thereon and (y) the Make-Whole Amount determined in respect of
such principal amount (to the full extent permitted by applicable law), shall
all be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
12.2. OTHER REMEDIES.
If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Notes have become or have been declared immediately
due and payable under Section 12.1, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any Note, or for an
injunction against a violation of any of the terms hereof or thereof, or in aid
of the exercise of any power granted hereby or thereby or by law or otherwise.
12.3. RESCISSION.
At any time after any Notes have been declared due and payable pursuant
to clause (b) or (c) of Section 12.1, the holders of not less than 75% in
principal amount of the Notes then outstanding, by written notice to the
Company, may rescind and annul any such declaration and its consequences if (a)
the Company has paid all overdue interest on the Notes, all principal of and
Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid
other than by reason of such declaration, and all interest on such overdue
principal and Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at the Default
Rate,
33
(b) all Events of Default and Defaults, other than non-payment of amounts that
have become due solely by reason of such declaration, have been cured or have
been waived pursuant to Section 17, and (c) no judgment or decree has been
entered for the payment of any monies due pursuant hereto or to the Notes. No
rescission and annulment under this Section 12.3 will extend to or affect any
subsequent Event of Default or Default or impair any right consequent thereon.
12.4. NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC.
No course of dealing and no delay on the part of any holder of any Note
in exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under Section 15, the Company
will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including, without limitation,
reasonable attorneys' fees, expenses and disbursements.
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
13.1. REGISTRATION OF NOTES.
The Company shall keep at its principal executive office a register for
the registration and registration of transfers of Notes. The name and address of
each holder of one or more Notes, each transfer thereof and the name and address
of each transferee of one or more Notes shall be registered in such register.
Prior to due presentment for registration of transfer, the Person in whose name
any Note shall be registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and the Company shall not be affected by any
notice or knowledge to the contrary. The Company shall give to any holder of a
Note that is an Institutional Investor promptly upon request therefor, a
complete and correct copy of the names and addresses of all registered holders
of Notes.
13.2. TRANSFER AND EXCHANGE OF NOTES.
Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a surrender
for registration of transfer, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
his attorney duly authorized in writing and accompanied by the address for
notices of each transferee of such Note or part thereof), the Company shall
execute and deliver within five Business Days, at the Company's expense (except
as provided below), one or more new Notes of the same Series (as requested by
the holder thereof) in exchange therefor, in an aggregate principal amount equal
to the unpaid principal amount of the surrendered Note. Each such new Note shall
be payable to such Person as such holder may request and shall be substantially
in the form of such Series of Note set forth in Exhibit 1.1, Exhibit 1.2, or
Exhibit 1.3, as the case may be. Each such new Note shall be dated and bear
interest from the date to which interest shall have been paid on the surrendered
Note or dated the date of the surrendered Note if no interest shall have been
paid thereon. The Company may require payment of a sum sufficient to cover any
stamp tax or governmental charge imposed in respect of any such transfer of
Notes. Notes shall not be
34
transferred in denominations of less than $100,000, provided that if necessary
to enable the registration of transfer by a holder of its entire holding of
Notes, one Note may be in a denomination of less than $100,000. Any transferee,
by its acceptance of a Note registered in its name (or the name of its nominee),
shall be deemed to have made the representation set forth in the last sentence
of Section 6.1 and in Section 6.2.
13.3. REPLACEMENT OF NOTES.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from
such Institutional Investor of such ownership and such loss, theft, destruction
or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note
is, or is a nominee for, an original Purchaser or an Institutional
Investor, such Person's own unsecured agreement of indemnity shall be
deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense shall execute and deliver within five Business
Days, in lieu thereof, a new Note of the same Series, dated and bearing interest
from the date to which interest shall have been paid on such lost, stolen,
destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or
mutilated Note if no interest shall have been paid thereon.
14. PAYMENTS ON NOTES
14.1. PLACE OF PAYMENT.
Subject to Section 14.2, payments of principal, Make-Whole Amount, if
any, and interest becoming due and payable on the Notes shall be made in
Orrville, Ohio at the principal office of the Company in such jurisdiction. The
Company may at any time, by notice to each holder of a Note, change the place of
payment of the Notes so long as such place of payment shall be either the
principal office of the Company in such jurisdiction or the principal office of
a bank or trust company in such jurisdiction.
14.2. HOME OFFICE PAYMENT.
So long as you or your nominee shall be the holder of any Note, and
notwithstanding anything contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for principal,
Make-Whole Amount, if any, and interest by the method and at the address
specified for such purpose below your name in Schedule A, or by such other
method or at such other address as you shall have from time to time specified to
the Company in writing for such purpose, without the presentation or surrender
of such Note or the making of any notation thereon, except that upon written
request of the Company made concurrently with or reasonably promptly after
payment or prepayment in full of any Note, you shall surrender such Note for
cancellation, reasonably promptly after any such request, to the Company at its
principal executive office or at the place of payment most recently designated
by the Company pursuant to Section 14.1. Prior to any sale or other disposition
of any Note held by you or your nominee you will, at your election, either
endorse thereon the amount of principal paid thereon and the last date to
35
which interest has been paid thereon or surrender such Note to the Company in
exchange for a new Note or Notes pursuant to Section 13.2. The Company will
afford the benefits of this Section 14.2 to any Institutional Investor that is
the direct or indirect transferee of any Note purchased by you under this
Agreement and that has made the same agreement relating to such Note as you have
made in this Section 14.2.
15. EXPENSES, ETC.
15.1. TRANSACTION EXPENSES.
Whether or not the transactions contemplated hereby are consummated,
the Company will pay all out-of-pocket costs and expenses (including reasonable
attorneys' fees of a special counsel and, if reasonably required, local or other
counsel) incurred by you and each Other Purchaser or holder of a Note in
connection with such transactions and in connection with any amendments, waivers
or consents under or in respect of this Agreement or the Notes (whether or not
such amendment, waiver or consent becomes effective), including, without
limitation: (a) the costs and expenses incurred in enforcing or defending (or
determining whether or how to enforce or defend) any rights under this Agreement
or the Notes as against the Company or in responding to any subpoena or other
legal process or informal investigative demand issued in connection with this
Agreement or the Notes, or by reason of being a holder of any Note, and (b) the
costs and expenses, including financial advisors' fees, incurred in connection
with the insolvency or bankruptcy of the Company or any Subsidiary or in
connection with any work-out or restructuring of the transactions contemplated
hereby and by the Notes. The Company will pay, and will save you and each other
holder of a Note harmless from, all claims in respect of any fees, costs or
expenses if any, of brokers and finders (other than those retained by you).
15.2. SURVIVAL.
The obligations of the Company under this Section 15 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement or the Notes, and the termination of this Agreement.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT
All representations and warranties contained herein shall be deemed
made at and as of the date of the Closing and shall speak only as of such date.
The accuracy of such representations and warranties as at the date of the
Closing shall survive the execution and delivery of this Agreement and the
Notes, the purchase or transfer by you of any Note or portion thereof or
interest therein and the payment of any Note, and may be relied upon by any
subsequent holder of a Note, regardless of any investigation made at any time by
or on behalf of you or any other holder of a Note. All statements contained in
any certificate or other instrument delivered by or on behalf of the Company
pursuant to this Agreement shall be deemed representations and warranties of the
Company under this Agreement. Subject to the preceding sentence, this Agreement
and the Notes embody the entire agreement and understanding between you and the
Company and supersede all prior agreements and understandings relating to the
subject matter hereof.
17. AMENDMENT AND WAIVER
17.1. REQUIREMENTS.
This Agreement and the Notes may be amended, and the observance of any
term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written
36
consent of the Company and the Required Holders, except that (a) no amendment or
waiver of any of the provisions of Section 1, 2, 3, 4, 5 or 6 hereof, or any
defined term (as it is used therein), will be effective as to you unless
consented to by you in writing, and (b) no such amendment or waiver may, without
the written consent of the holder of each Note at the time outstanding, (i)
subject to the provisions of Section 12 relating to acceleration or rescission,
change the amount or time of any prepayment or payment of principal of, or
reduce the rate or change the time of payment or method of computation of
interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage
of the principal amount of the Notes the holders of which are required to
consent to any such amendment or waiver, or (iii) amend any of Sections 8,
11(a), 11(b), 12, 17 or 20.
17.2. SOLICITATION OF HOLDERS OF NOTES.
(a) SOLICITATION. The Company will provide each holder of the
Notes (irrespective of the amount of Notes then owned by it) with all
information that the Company reasonably believes is sufficient, and all
other information requested by any of the holders, sufficiently far in
advance of the date a decision is required, to enable such holder to
make an informed and considered decision with respect to any proposed
amendment, waiver or consent in respect of any of the provisions hereof
or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the
provisions of this Section 17 to each holder of outstanding Notes
promptly following the date on which it is executed and delivered by,
or receives the consent or approval of, the requisite holders of Notes.
(b) PAYMENT. The Company will not directly or indirectly pay
or cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, or grant any security, to any
holder of Notes as consideration for or as an inducement to the
entering into by any holder of Notes or any waiver or amendment of any
of the terms and provisions hereof unless such remuneration is
concurrently paid, or security is concurrently granted, on the same
terms, ratably to each holder of Notes then outstanding even if such
holder did not consent to such waiver or amendment.
(c) SCOPE OF CONSENT. Any amendment or waiver made pursuant to
this Section 17.2 by a holder of Notes that has transferred or has
agreed to transfer its Notes to the Company, any Subsidiary or any
Affiliate and has provided or has agreed to provide such amendment or
waiver as a condition to such transfer shall be void and of no force
and effect except solely as to such holder, and any amendments effected
or waivers granted that would not have been or would not be so effected
or granted but for such amendment or waiver (and the amendments or
waivers of all other holders of Notes that were acquired under the same
or similar conditions) shall be void and of no force and effect,
retroactive to the date such amendment or waiver initially took or
takes effect, except solely as to such holder.
17.3. BINDING EFFECT, ETC.
Any amendment or waiver consented to as provided in this Section 17
applies equally to all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the Company without regard to whether such
Note has been marked to indicate such amendment or waiver. No such amendment or
waiver will extend to or affect any obligation, covenant, agreement, Default or
Event of Default not expressly amended or waived or impair any right consequent
thereon. No course of dealing between 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, the term
"THIS AGREEMENT" and references thereto shall mean this Agreement as it may from
time to time be amended or supplemented.
37
17.4. NOTES HELD BY COMPANY, ETC.
Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company or any of its
Affiliates shall be deemed not to be outstanding.
18. NOTICES
All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the
address specified for such communications in Schedule A, or at
such other address as you or it shall have specified to the
Company in writing,
(ii) if to any other holder of any Note, to such
holder at such address as such other holder shall have
specified to the Company in writing, or
(iii) if to the Company, to the Company at its
address set forth at the beginning hereof to the attention of
the "Treasurer," with a copy to the attention of the "Legal
Department," or at such other address as the Company shall
have specified to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when actually received.
19. REPRODUCTION OF DOCUMENTS
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 19
shall not prohibit the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
20. CONFIDENTIAL INFORMATION
For the purposes of this Section 20, "CONFIDENTIAL INFORMATION" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature
38
and that was clearly marked or labeled or otherwise adequately identified when
received by you as being confidential information of the Company or such
Subsidiary, provided that such term does not include information that
(a) was publicly known or otherwise known to you prior to the
time of such disclosure,
(b) subsequently becomes publicly known through no act or
omission by you or any Person acting on your behalf,
(c) otherwise becomes known to you other than through
disclosure by the Company or any Subsidiary or
(d) constitutes financial statements delivered to you under
Section 7.1 that are otherwise publicly available.
You will maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by you in good faith to protect confidential
information of third parties delivered to you, provided that you may deliver or
disclose Confidential Information to
(i) your directors, officers, employees, agents,
attorneys and affiliates (to the extent such disclosure
reasonably relates to the administration of the investment
represented by your Notes and is not used in connection with
the analysis of any other investment in the Company except in
a manner that is in compliance with applicable securities
laws),
(ii) your financial advisors and other professional
advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this
Section 20,
(iii) any other holder of any Note,
(iv) any Institutional Investor to which you sell or
offer to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing
prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 20),
(v) any Person from which you offer to purchase any
Security of the Company (if such Person has agreed in writing
prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 20),
(vi) any federal or state regulatory authority having
jurisdiction over you,
(vii) the National Association of Insurance
Commissioners or any similar organization, or any nationally
recognized rating agency that requires access to information
about your investment portfolio, or
(viii) any other Person to which such delivery or
disclosure may be necessary or appropriate
(A) to effect compliance with any law, rule,
regulation or order applicable to you,
39
(B) in response to any subpoena or other legal process,
(C) in connection with any litigation to which you are a party
or
(D) if an Event of Default has occurred and is continuing, to
the extent you may reasonably determine such delivery and disclosure to
be necessary or appropriate in the enforcement or for the protection of
the rights and remedies under your Notes and this Agreement.
Each holder of a Note, by its acceptance of a Note, will be deemed to have
agreed to be bound by and to be entitled to the benefits of this Section 20 as
though it were a party to this Agreement. On reasonable request by the Company
in connection with the delivery to any holder of a Note of information required
to be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company embodying the provisions of
this Section 20.
21. MISCELLANEOUS
21.1. SUCCESSORS AND ASSIGNS.
All covenants and other agreements contained in this Agreement by or on
behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any subsequent
holder of a Note) whether so expressed or not.
21.2. PAYMENTS DUE ON NON-BUSINESS DAYS.
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or Make-Whole Amount or interest on
any Note that is due on a date other than a Business Day shall be made on the
next succeeding Business Day without including the additional days elapsed in
the computation of the interest payable on such next succeeding Business Day.
21.3. SEVERABILITY.
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
21.4. CONSTRUCTION.
Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained
herein, so that compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
21.5. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
40
21.6. GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND
THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE
THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
[Remainder of page intentionally blank; next page is signature page.]
41
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Company.
Very truly yours,
THE X.X. XXXXXXX COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President
The foregoing is hereby agreed to
as of the date thereof.
MINNESOTA LIFE INSURANCE COMPANY
By: Advantus Capital Management, Inc.
By: /s/ Xxx X. Xx Xxxxxxx
------------------------------
Name: Xxx X. xx Xxxxxxx
Title: Vice President
NATIONAL TRAVELERS LIFE COMPANY
By: Advantus Capital Management, Inc.
By: /s/ Xxx X. Xx Xxxxxxx
------------------------------
Name: Xxx X. xx Xxxxxxx
Title: Vice President
AMERICAN REPUBLIC INSURANCE COMPANY
By: Advantus Capital Management, Inc.
By: /s/ Xxx X. Xx Xxxxxxx
------------------------------
Name: Xxx X. xx Xxxxxxx
Title: Vice President
HARTFORD LIFE INSURANCE COMPANY
By: Hartford Investment Management Company
and by Hartford Investment Services, Inc.
Its Agents and Attorneys-in-Fact
By: /s/ Xxxxx Xxxxxxx
------------------------------
Name: Xxxxx Xxxxxxx
Title: Senior Vice President
NATIONWIDE MUTUAL FIRE INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President Equity Securities
42
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By: CIGNA Investments, Inc. (authorized agent)
By: /s/ Xxxxx X. Xxxxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Managing Director
THE TRAVELERS INSURANCE COMPANY, for
itself and two of its separate accounts
By: /S/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Investment Officer
PREMIER INSURANCE COMPANY OF MASSACHUSETTS
By: Travelers Asset Management International Company, LLC
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Investment Officer
FIRST TRENTON INDEMNITY COMPANY
By: Travelers Asset Management International Company, LLC
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Investment Officer
MODERN WOODMEN OF AMERICA
By: /s/ X. X. Xxxxxxx
------------------------------
Name: X. X. Xxxxxxx
Title: Director, Treasurer & Investment Manager
43
SCHEDULE B
DEFINED TERMS
-------------
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"AFFILIATE" means, at any time, and with respect to any Person, any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person. As used in this definition, "Control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise. Unless the context otherwise clearly
requires, any reference to an "Affiliate" is a reference to an Affiliate of the
Company.
"ASSET DISPOSITION" means any Transfer except:
(a) any
(i) Transfer from a Subsidiary to the Company or a
Wholly-Owned Subsidiary;
(ii) Transfer from the Company to a Wholly-Owned
Subsidiary; and
(iii) Transfer from the Company to a Subsidiary
(other than a Wholly-Owned Subsidiary) or from a Subsidiary to
another Subsidiary (other than a Wholly-Owned Subsidiary),
which in either case is for Fair Market Value,
so long as immediately before and immediately after the consummation of
any such Transfer and after giving effect thereto, no Default or Event
of Default exists; or
(b) any Transfer made in the ordinary course of business and
involving only property that is either (i) inventory held for sale or
(ii) equipment, fixtures, supplies or materials no longer required in
the operation of the business of the Company or any of its Subsidiaries
or that is obsolete.
"ATTRIBUTABLE DEBT" means, as to any particular lease relating to a
Sale-and-Leaseback Transaction, the present value of all Lease Rentals required
to be paid by the Company or any Subsidiary under such lease during the
remaining term thereof (determined in accordance with generally accepted
financial practice using a discount factor equal to the interest rate implicit
in such lease if known or, if not known, an interest rate of 10% per annum).
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
on which commercial banks in New York City, New York are required or authorized
to be closed.
"CAPITAL LEASE" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"CHANGE IN CONTROL" means either:
44
(a) the failure of the Xxxxxxx Family to hold, in the
aggregate, not less than the greater of: (i) 35% of the total voting
power of all classes of the Voting Stock of the Company; and (ii) 200%
of the voting power of all classes of the Voting Stock of the Company
possessed by any person (as such term is used in section 13(d) and
section 14(d)(2) of the Exchange Act as in effect on the date of the
Closing) or related persons constituting a group (as such term is used
in Rule 13d-5 under the Exchange Act as in effect on the date of the
Closing), other than the Xxxxxxx Family ; or
(b) all or substantially all of the assets of the Company are
sold or otherwise transferred, in a single transaction or a series of
related transactions, to any person (as such term is used in section
13(d) and section 14(d)(2) of the Exchange Act as in effect on the date
of the Closing) or related persons constituting a group (as such term
is used in Rule 13d-5 under the Exchange Act as in effect on the date
of the Closing).
"CLOSING" is defined in Section 3.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"COMPANY" is defined in the introductory sentence of this Agreement.
"CONFIDENTIAL INFORMATION" is defined in Section 20.
"CONSOLIDATED ATTRIBUTABLE DEBT" means, as of any date of
determination, the total of all Attributable Debt of the Company and its
Subsidiaries outstanding on such date, after eliminating all offsetting debits
and credits between the Company and its Subsidiaries and all other items
required to be eliminated in the course of the preparation of consolidated
financial statements of the Company and its Subsidiaries in accordance with
GAAP.
"CONSOLIDATED CURRENT DEBT" means, as of any date of determination, the
total of all Current Debt of the Company and its Subsidiaries outstanding on
such date, after eliminating all offsetting debits and credits between the
Company and its Subsidiaries and all other items required to be eliminated in
the course of the preparation of consolidated financial statements of the
Company and its Subsidiaries in accordance with GAAP.
"CONSOLIDATED FUNDED DEBT" means, as of any date of determination, the
total of all Funded Debt of the Company and its Subsidiaries outstanding on such
date, after eliminating all offsetting debits and credits between the Company
and its Subsidiaries and all other items required to be eliminated in the course
of the preparation of consolidated financial statements of the Company and its
Subsidiaries in accordance with GAAP.
"CONSOLIDATED NET WORTH" means, at any time,
(a) the sum of (i) the par value (or value stated on the books
of the corporation) of the capital stock (but excluding treasury stock,
capital stock subscribed and unissued and Preferred Stock redeemable
prior to the maturity date of the Notes) of the Company and its
Subsidiaries plus (ii) the amount of the paid-in capital and retained
earnings of the Company and its Subsidiaries, in each case as such
amounts would be shown on a consolidated balance sheet of the Company
and its Subsidiaries as of such time prepared in accordance with GAAP,
minus
45
(b) to the extent included in clause (a), all amounts properly
attributable to minority interests, if any, in the stock and surplus of
Subsidiaries.
"CONSOLIDATED SENIOR FUNDED DEBT" means all Senior Funded Debt of the
Company and the Subsidiaries, after eliminating all offsetting debits and
credits between the Company and its Subsidiaries and all other items required to
be eliminated in the course of the preparation of consolidated financial
statements of the Company and its Subsidiaries in accordance with GAAP.
"CONSOLIDATED TOTAL ASSETS" means, at any time, the total assets of the
Company and the Subsidiaries which would be shown as assets on a consolidated
balance sheet of the Company and the Subsidiaries as of such time prepared in
accordance with GAAP, after eliminating all amounts properly attributable to
minority interests, if any, in the stock and surplus of Subsidiaries.
"CONSOLIDATED TOTAL CAPITALIZATION" means, at any time, the sum of
Consolidated Net Worth and Consolidated Funded Debt.
"CONTROL EVENT" means:
(a) the execution, by the holders of Voting Stock of the
Company (together with their respective executors, heirs,
beneficiaries, successors and assigns) or (in the case of any natural
Person) their respective Families or Family Trusts, or by the Company
or any of its Subsidiaries or Affiliates, of any agreement or letter of
intent with respect to any proposed transaction or event or series of
transactions or events which, individually or in the aggregate, may
reasonably be expected to result in a Change in Control;
(b) the execution of any written agreement which, when fully
performed by the parties thereto, would result in a Change in Control;
or
(c) the making of any written offer by any person (as such
term is used in section 13(d) and section 14(d)(2) of the Exchange Act
as in effect on the Closing Date) or related persons constituting a
group (as such term is used in Rule 13d-5 under the Exchange Act as in
effect on the Closing Date) to the holders of the Voting Stock of the
Company, which offer, if accepted by the requisite number of holders,
would result in a Change in Control.
"CURRENT DEBT" means, with respect to any Person, all Debt of such
Person 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 obligor in respect thereof to a date one year or more from
such date, provided that (a) Debt outstanding under a revolving credit or
similar agreement which obligates the lender or lenders to extend credit over a
period of one year or more and (b) Current Maturities of Funded Debt shall
constitute Funded Debt and not Current Debt, even though such Debt by its terms
matures on demand or within one year from such date.
"CURRENT MATURITIES OF FUNDED DEBT" means, at any time and with respect
to any item of Funded Debt, the portion of such Funded Debt outstanding at such
time which by the terms of such Funded Debt or the terms of any instrument or
agreement relating thereto is due on demand or within one year from such time
(whether by sinking fund, other required prepayment or final payment at
maturity) and is not directly or indirectly renewable, extendible or refundable
at the option of the obligor under an agreement or firm commitment in effect at
such time to a date one year or more from such time.
"DEBT" means, with respect to any Person, without duplication:
46
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising in
the ordinary course of business but including, without limitation, all
liabilities created or arising under any conditional sale or other
title retention agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien
with respect to any property owned by such Person (whether or not it
has assumed or otherwise become liable for such liabilities); and
(e) any Guaranty of such Person with respect to liabilities of
a type described in any of clauses (a) through (d) hereof.
Debt of any Person shall include all obligations of such Person of the character
described in clauses (a) through (e) to the extent such Person remains legally
liable in respect thereof notwithstanding that any such obligation is deemed to
be extinguished under GAAP.
"DEBT PREPAYMENT APPLICATION" means, with respect to any Transfer of
property, the application by the Company or its Subsidiaries of cash in an
amount equal to the Net Proceeds Amount with respect to such Transfer to pay
Senior Funded Debt of the Company (other than Senior Funded Debt owing to the
Company, any of its Subsidiaries or any Affiliate and Senior Funded Debt in
respect of any revolving credit or similar credit facility providing the Company
or any of its Subsidiaries with the right to obtain loans or other extensions of
credit from time to time, except to the extent that in connection with such
payment of Senior Funded Debt the availability of credit under such credit
facility is permanently reduced by an amount not less than the amount of such
proceeds applied to the payment of such Senior Funded Debt).
"DEFAULT" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
"DEFAULT RATE" means, with respect to any Note, that rate of interest
that is the greater of (i) 2% per annum above the rate of interest stated in
clause (a) of the first paragraph of such Note or (ii) 2% per annum over the
rate of interest publicly announced from time to time by Xxxxxx Guaranty Trust
Company of New York (or its successor) in New York City as its "base" or "prime"
rate.
"DISPOSITION VALUE" means, at any time, with respect to any property
(a) in the case of property that does not constitute
Subsidiary Stock, the book value thereof, valued at the time of such
disposition in good faith by the Company, and
(b) in the case of property that constitutes Subsidiary Stock,
an amount equal to that percentage of book value of the assets of the
Subsidiary that issued such stock as is equal to the percentage that
the book value of such Subsidiary Stock represents of the book value of
all of the outstanding capital stock of such Subsidiary (assuming, in
making such calculations, that all Securities convertible into such
capital stock are so converted and giving full effect to all
transactions that would occur or be required in connection with such
conversion) determined at the time of the disposition thereof, in good
faith by the Company.
3
47
"ENVIRONMENTAL LAWS" means any and all federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
"EVENT OF DEFAULT" is defined in Section 11.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FAIR MARKET VALUE" means, at any time, the sale value of such property
that would be realized in an arm's-length sale at such time between an informed
and willing buyer and an informed and willing seller (neither being under a
compulsion to buy or sell), as determined by, in the case of any property that
is to be the subject of a Transfer:
(i) an appraiser of established reputation in appraising
property of the kind to be subject to such Transfer;
(ii) the highest price offered for such property in a
competitive bidding process in which at least three potential bidders
have been requested to participate so long as the Company had a
reasonable basis on which to make such request (in terms of such
potential bidders' financial resources and interest in such property);
or
(iii) an analysis prepared by the Company which in addition to
taking into account the standard set forth in this definition prior to
clause (i) shall take into account the operating costs that would be
saved by disposing of such property, and the relative tax benefits
attributable to continued ownership and to disposition of such
property; provided, however, that the sum of the Disposition Value of
such property, plus the Disposition Value of all other such property
Transferred during the 365 day period ending on such date, shall not
exceed an amount equal to 3% of Consolidated Total Assets as of the end
of the then most recently ended fiscal year of the Company (exclusive
of the Disposition Value of the real property of the Company located in
Pottstown, Pennsylvania, and the plant and equipment located thereon,
related to the "Mrs.'s Xxxxx'x" frozen pie business). Any such
evaluation shall be delivered to the holders of the Notes together with
an Officer's Certificate, signed by a Senior Financial Officer,
certifying as to the accuracy and completeness of such evaluation.
"FAMILY" means, in respect of any individual, the heirs, legatees,
descendants and blood relatives to the fifth degree of consanguinity of such
individual.
"FAMILY TRUSTS" means, in respect of any individual, any trusts for the
exclusive benefit of such individual, his or her spouse and lineal descendants.
"FUNDED DEBT" means, with respect to any Person, all Debt 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, one year or
more from, or is directly or indirectly renewable or extendible at the option of
the obligor in respect thereof to a date one year or more (including, without
limitation, an option of such obligor under a revolving credit or similar
agreement obligating
4
48
the lender or lenders to extend credit over a period of one year or more) from,
the date of the creation thereof.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"GOVERNMENTAL AUTHORITY" means
(a) the government of
(i) the United States of America or any state or
other political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or which
asserts jurisdiction over any properties of the Company or any
Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"GUARANTY" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment
of such indebtedness or obligation, or (ii) to maintain any working
capital or other balance sheet condition or any income statement
condition of any other Person or otherwise to advance or make available
funds for the purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or
obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"HOLDER" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
13.1.
"INDEBTEDNESS" with respect to any Person means, at any time, without
duplication:
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable Preferred Stock;
49
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising in
the ordinary course of business but including all liabilities created
or arising under any conditional sale or other title retention
agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien
with respect to any property owned by such Person (whether or not it
has assumed or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not
representing obligations for borrowed money);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of
a type described in any of clauses (a) through (f) hereof.
"INSTITUTIONAL INVESTOR" means (a) any original purchaser of a Note,
(b) any holder of a Note holding more than 5% of the aggregate principal amount
of the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"LEASE RENTALS" means, with respect to any period, the sum of the
minimum amount of rental and other obligations required to be paid during such
period by the Company or any Subsidiary as lessee under all leases of real or
personal property (other than Capital Leases), excluding any amounts required to
be paid by the lessee (whether or not therein designated as rental or additional
rental) (a) which are on account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges, or (b) which are based on profits,
revenues or sales realized by the lessee from the leased property or otherwise
based on the performance of the lessee.
"LIEN" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"MAKE-WHOLE AMOUNT" is defined in Section 8.7.
"MATERIAL" means material in relation to the business, operations,
affairs, financial condition, assets, or properties of the Company and its
Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole, or (b) the ability of the Company
to perform its obligations under this Agreement and the Notes, or (c) the
validity or enforceability of this Agreement or the Notes.
"MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
50
"NET PROCEEDS AMOUNT" means, with respect to any Transfer of any
property by any Person, an amount equal to the difference of
(a) the aggregate amount of the consideration (valued at the
Fair Market Value of such consideration at the time of the consummation
of such Transfer) received by such Person in respect of such Transfer,
minus
(b) all ordinary and reasonable out-of-pocket costs and
expenses actually incurred by such Person in connection with such
Transfer.
"NOTES" is defined in Section 1.4
"OFFEREE LETTER" is defined in Section 5.13.
"OFFICER'S CERTIFICATE" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
"OTHER AGREEMENTS" is defined in Section 2.
"OTHER PURCHASERS" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"PERSON" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"PLAN" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
"PREFERRED STOCK" means any class of capital stock of a corporation
that is preferred over any other class of capital stock of such corporation as
to the payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
"PRIORITY DEBT" means the sum of (a) all Debt of the Company secured by
Liens permitted by Section 10.7(g), (b) all Debt of Subsidiaries (other than
Debt held by the Company or a Wholly-Owned Subsidiary) and (c) Consolidated
Attributable Debt.
"PROPERTY" OR "PROPERTIES" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, xxxxxx
or inchoate.
"PROPERTY REINVESTMENT APPLICATION" means, with respect to any Transfer
of property, the satisfaction of each of the following conditions:
(a) an amount equal to the Net Proceeds Amount with respect to
such Transfer shall have been applied to the acquisition by the
Company, or any of its Subsidiaries making such Transfer, of property
that upon such acquisition is unencumbered by any Lien (other than
Liens described in subparagraphs (a) through (f), inclusive, of Section
10.7) and that
51
(i) constitutes property that is (x) property
classifiable under GAAP as non-current to the extent that such
proceeds are derived from the Transfer of property that was
properly classifiable as non-current, and otherwise properly
classifiable as either current or non-current, and (y) to be
used in the ordinary course of business of the Company and the
Subsidiaries, or
(ii) constitutes equity interests of a Person that
shall be, on or prior to the time of such acquisition, a
Subsidiary of the Company, and that shall invest the proceeds
of such acquisition in property of the nature described in the
immediately preceding clause (i); and
(b) the Company shall have delivered a certificate of a
Responsible Officer of the Company to each holder of a Note referring
to Section 10.8 or Section 10.9, as applicable, and identifying the
property that was the subject of such Transfer, the Disposition Value
of such property, and the nature, terms, amount and application of the
proceeds from the Transfer.
"PROPOSED PREPAYMENT DATE" is defined in Section 8.3(c).
"PTE" means a United States Department of Labor Prohibited Transaction
Class Exemption.
"PURCHASERS" means and includes each of the Persons listed in
Schedule A.
"QPAM EXEMPTION" is defined in Section 6.2(c).
"REQUIRED HOLDERS" means, at any time, the holders of at least a
majority in principal amount of the Notes at the time outstanding (exclusive of
Notes then owned by the Company or any of its Affiliates).
"RESPONSIBLE OFFICER" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this agreement.
"SALE-AND-LEASEBACK TRANSACTION" means a transaction or series of
transactions pursuant to which the Company or any Subsidiary shall sell or
transfer to any Person (other than the Company or a Subsidiary) any property,
whether now owned or hereafter acquired, and, as part of the same transaction or
series of transactions, the Company or any Subsidiary shall rent or lease as
lessee (other than pursuant to a Capital Lease), or similarly acquire the right
to possession or use of, such property or one or more properties which it
intends to use for the same purpose or purposes as such property.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time.
"SECURITY" has the meaning set forth in Section 2(1) of the Securities
Act.
"SENIOR FINANCIAL OFFICER" means the Vice President - Administration,
principal accounting officer, treasurer or controller of the Company.
"SENIOR FUNDED DEBT" means all Funded Debt of the Company (other than
Subordinated Funded Debt) and all Funded Debt of Subsidiaries.
"SERIES" is defined in Section 1.4.
"SERIES A NOTES" is defined in Section 1.1.
52
"SERIES B NOTES" is defined in Section 1.2.
"SERIES C NOTES" is defined in Section 1.3.
"SIGNIFICANT SUBSIDIARY" means at any time any Subsidiary that would at
such time constitute a "significant subsidiary" (as such term is defined in
Regulation S-X of the Securities and Exchange Commission as in effect on the
date of the Closing) of the Company.
"SOURCE" is defined in Section 6.2.
"XXXXXXX FAMILY" means and includes Xxxxxxxx X. Xxxxxxx, Xxxxxxx X.
Xxxxxxx, Xxxxxxx X. Xxxxxxx, Xxxxx Xxxxxxx Xxxxxxxx and Xxxxxxxx Xxxxxxx Xxxxx,
and their respective Families and Family Trusts.
"SUBORDINATED FUNDED DEBT" means any Funded Debt of the Company that is
subordinated in right of payment or security to Funded Debt evidenced by the
Notes, in each case, upon written terms and conditions reasonably satisfactory
to the Required Holders.
"SUBSIDIARY" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.
"SUBSIDIARY STOCK" means, with respect to any Person, the stock (or any
options or warrants to purchase stock or other Securities exchangeable for or
convertible into stock) of any Subsidiary of such Person.
"SURVIVOR" is defined in Section 10.2(a).
"SWAPS" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
"TRANSFER" means, with respect to any Person, any transaction in which
such Person sells, conveys, transfers or leases (as lessor) any of its property,
including, without limitation, Subsidiary Stock. For purposes of determining the
application of the Net Proceeds Amount in respect of any Transfer, the Company
may designate any Transfer as one or more separate Transfers each yielding a
separate Net Proceeds Amount. In any such case, the Disposition Value of any
property subject to each such separate Transfer shall be determined by ratably
allocating the aggregate Disposition
53
Value of all property subject to all such separate Transfers to each such
separate Transfer on a proportionate basis.
"VOTING STOCK" means capital stock of any class or classes of a Person
the holders of which are ordinarily, in the absence of contingencies, entitled
to elect corporate directors (or Persons performing similar functions).
"WHOLLY-OWNED SUBSIDIARY" means, at any time, any Subsidiary one
hundred percent (100%) of all of the equity interests (except directors'
qualifying shares) and voting interests of which are owned by any one or more of
the Company and the Company's other Wholly-Owned Subsidiaries at such time.
54
EXHIBIT 1.1
[FORM OF SERIES A NOTE]
THE X.X. XXXXXXX COMPANY
7.70% SERIES A SENIOR NOTE DUE SEPTEMBER 1, 2005
No. R-___ [Date]
$_______ PPN:832696 A# 5
FOR VALUE RECEIVED, the undersigned, THE X.X. XXXXXXX COMPANY (herein
called the "COMPANY"), a corporation organized and existing under the laws of
the State of Ohio, hereby promises to pay to ________________________, or
registered assigns, the principal sum of ___________________ DOLLARS ($________)
on _____________, ____, with interest (computed on the basis of a 360-day year
of twelve 30-day months) (a) on the unpaid balance thereof at the rate of 7.70%
per annum from the date hereof, payable semiannually, on the first day of March
and September in each year, commencing with the March 1 or September 1 next
succeeding the date hereof, until the principal hereof shall have become due and
payable, and (b) to the extent permitted by law on any overdue payment
(including any overdue prepayment) of principal, any overdue payment of interest
and any overdue payment of any Make-Whole Amount (as defined in the Note
Purchase Agreements referred to below), payable semiannually as aforesaid (or,
at the option of the registered holder hereof, on demand), at a rate per annum
from time to time equal to the greater of (i) 9.70% or (ii) 2% over the rate of
interest publicly announced from time to time by Xxxxxx Guaranty Trust Company
of New York in New York City, New York as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the address shown in the register maintained by the Company for such
purpose or at such other place as the Company shall have designated by written
notice to the holder of this Note as provided in the Note Purchase Agreements
referred to below.
This Note is one of a series of Series A Senior Notes (herein called
the "NOTES") issued pursuant to separate Note Purchase Agreements, dated as of
August 23, 2000 (as from time to time amended, the "NOTE PURCHASE AGREEMENTS"),
between the Company and the respective Purchasers named therein and is entitled
to the benefits thereof. Each holder of this Note will be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 20 of the Note Purchase Agreements and (ii) to have made the
representations set forth in the last sentence of Section 6.1 and in Section 6.2
of the Note Purchase Agreements.
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
55
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
THIS NOTE AND THE NOTE PURCHASE AGREEMENTS SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE
THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
THE X.X. XXXXXXX COMPANY
By:_________________________
Name:
Title:
56
EXHIBIT 1.2
[FORM OF SERIES B NOTE]
THE X.X. XXXXXXX COMPANY
7.87% SERIES B SENIOR NOTE DUE SEPTEMBER 1, 2007
No. R-___ [Date]
$_______ PPN:832696 B* 8
FOR VALUE RECEIVED, the undersigned, THE X.X. XXXXXXX COMPANY (herein
called the "COMPANY"), a corporation organized and existing under the laws of
the State of Ohio, hereby promises to pay to ________________________, or
registered assigns, the principal sum of ___________________ DOLLARS ($________)
on _____________, ____, with interest (computed on the basis of a 360-day year
of twelve 30-day months) (a) on the unpaid balance thereof at the rate of 7.87%
per annum from the date hereof, payable semiannually, on the first day of March
and September in each year, commencing with the March 1 or September 1 next
succeeding the date hereof, until the principal hereof shall have become due and
payable, and (b) to the extent permitted by law on any overdue payment
(including any overdue prepayment) of principal, any overdue payment of interest
and any overdue payment of any Make-Whole Amount (as defined in the Note
Purchase Agreements referred to below), payable semiannually as aforesaid (or,
at the option of the registered holder hereof, on demand), at a rate per annum
from time to time equal to the greater of (i) 9.87% or (ii) 2% over the rate of
interest publicly announced from time to time by Xxxxxx Guaranty Trust Company
of New York in New York City, New York as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the address shown in the register maintained by the Company for such
purpose or at such other place as the Company shall have designated by written
notice to the holder of this Note as provided in the Note Purchase Agreements
referred to below.
This Note is one of a series of Series B Senior Notes (herein called
the "NOTES") issued pursuant to separate Note Purchase Agreements, dated as of
August 23, 2000 (as from time to time amended, the "NOTE PURCHASE AGREEMENTS"),
between the Company and the respective Purchasers named therein and is entitled
to the benefits thereof. Each holder of this Note will be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 20 of the Note Purchase Agreements and (ii) to have made the
representations set forth in the last sentence of Section 6.1 and in Section 6.2
of the Note Purchase Agreements.
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
57
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
THIS NOTE AND THE NOTE PURCHASE AGREEMENTS SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE
THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
THE X.X. XXXXXXX COMPANY
By:_________________________
Name:
Title:
58
EXHIBIT 1.3
[FORM OF SERIES C NOTE]
THE X.X. XXXXXXX COMPANY
7.94% SERIES C SENIOR NOTE DUE SEPTEMBER 1, 2010
No. R-___ [Date]
$_______ PPN:832696 B@ 6
FOR VALUE RECEIVED, the undersigned, THE X.X. XXXXXXX COMPANY (herein
called the "COMPANY"), a corporation organized and existing under the laws of
the State of Ohio, hereby promises to pay to ________________________, or
registered assigns, the principal sum of ___________________ DOLLARS ($________)
on _____________, ____, with interest (computed on the basis of a 360-day year
of twelve 30-day months) (a) on the unpaid balance thereof at the rate of 7.94%
per annum from the date hereof, payable semiannually, on the first day of March
and September in each year, commencing with the March 1 or September 1 next
succeeding the date hereof, until the principal hereof shall have become due and
payable, and (b) to the extent permitted by law on any overdue payment
(including any overdue prepayment) of principal, any overdue payment of interest
and any overdue payment of any Make-Whole Amount (as defined in the Note
Purchase Agreements referred to below), payable semiannually as aforesaid (or,
at the option of the registered holder hereof, on demand), at a rate per annum
from time to time equal to the greater of (i) 9.94% or (ii) 2% over the rate of
interest publicly announced from time to time by Xxxxxx Guaranty Trust Company
of New York in New York City, New York as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the address shown in the register maintained by the Company for such
purpose or at such other place as the Company shall have designated by written
notice to the holder of this Note as provided in the Note Purchase Agreements
referred to below.
This Note is one of a series of Series C Senior Notes (herein called
the "NOTES") issued pursuant to separate Note Purchase Agreements, dated as of
August 23, 2000 (as from time to time amended, the "NOTE PURCHASE AGREEMENTS"),
between the Company and the respective Purchasers named therein and is entitled
to the benefits thereof. Each holder of this Note will be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 20 of the Note Purchase Agreements and (ii) to have made the
representations set forth in the last sentence of Section 6.1 and in Section 6.2
of the Note Purchase Agreements.
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
59
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
THIS NOTE AND THE NOTE PURCHASE AGREEMENTS SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE
THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
THE X.X. XXXXXXX COMPANY
By:_________________________
Name:
Title:
60
EXHIBIT 4.4(a)
FORM OF OPINION OF COUNSEL TO THE COMPANY
August 23, 2000
To the Persons Listed
on Annex 1 hereto
Re: $17,000,000 7.70% Series A Senior Notes due September 1, 2005
$33,000,000 7.87% Series B Senior Notes due September 1, 2007
$10,000,000 7.94% Series C Senior Notes due September 1, 2010
Ladies and Gentlemen:
Reference is made to the separate Note Purchase Agreements
(collectively, the "NOTE PURCHASE AGREEMENT"), each dated as of August 23, 2000,
between The X.X. Xxxxxxx Company (the "COMPANY") and each of you, pursuant to
which the Company has issued to you today its 7.70% Series A Senior Notes due
September 1, 2005, 7.87% Series B Senior Notes due September 1, 2007, and 7.94%
Series C Senior Notes due September 1, 2010 in the aggregate principal amount of
$60,000,000. Unless otherwise defined herein, all terms used herein that are
defined in the Note Purchase Agreement have the respective meanings specified in
the Note Purchase Agreement. This letter is being delivered to you in
satisfaction of the condition set forth in Section 4.4(a) of the Note Purchase
Agreement and with the understanding that you are purchasing the Notes in
reliance on the opinions expressed herein.
I am the Vice President - Finance and Administration,
Secretary/Treasurer, and General Counsel of the Company and have acted as
counsel for the Company in connection with the transactions contemplated by the
Note Purchase Agreement.
In acting as such counsel, I have examined:
(a) an execution copy of the form of the Note Purchase
Agreement;
(b) execution copies of each of the Company's 7.70% Series A
Senior Notes due September 1, 2005, 7.87% Series B Senior Notes due
September 1, 2007, and 7.94% Series C Senior Notes due September 1,
2010, each dated the date hereof, in the form of Exhibits 1.1, 1.2, and
1.3 to the Note Purchase Agreement and registered in the names, in the
principal amounts and with the registration numbers set forth in
Schedule A to the Note Purchase Agreement (collectively, the "NOTES");
(c) a long-form good standing certificate for the Company from
the State of Ohio, and foreign good standing certificates for the
Company from each of the states where the Company is qualified to do
business;
61
(d) a certified copy of the Articles of Incorporation of the
Company, the Regulations of the Company, and resolutions adopted by the
board of directors of the Company authorizing the Note Purchase
Agreement and the Notes, as certified by the Secretary of the Company;
(e) a letter to Xxxxxxx Xxxx LLP and the Company from Xxxxxxx
Xxxxx & Company, dated the date hereof, describing the manner of the
offering of the Notes (the "OFFEREE LETTER"); and
(f) originals, or copies certified or otherwise identified to
my satisfaction, of such other documents, records, instruments and
certificates of public officials and officers and representatives of
the Company as I have deemed necessary or appropriate to enable me to
render this opinion.
In rendering my opinion, I have assumed that all signatures (other than
signatures of officers and directors of the Company) are genuine, that all
documents submitted to me as originals are genuine, that all copies submitted to
me as copies conform to the originals, that all natural Persons have legal
capacity and, as to documents executed by or on behalf of Persons other than the
Company, that each such Person executing documents had the power to enter into
and perform its obligations under such documents and that such documents have
been duly authorized, executed and delivered by, and are binding upon and
enforceable against, such Persons. I have no actual knowledge of any information
that would indicate that any of my assumptions are invalid.
In rendering my opinion, I have relied, to the extent I deem necessary
and proper, on:
(i) warranties and representations as to certain factual
matters contained in the Note Purchase Agreement; and
(ii) the Offeree Letter.
I have no actual knowledge of any material inaccuracies in any of the facts
contained in the documents listed in item (i) or item (ii) above.
I am admitted to the practice of law solely in the State of Ohio and
the opinions expressed herein are limited to the laws of the State of Ohio and
to the federal law of the United States. No opinion is expressed herein as to
the laws of any other jurisdiction. I call your attention to the fact that the
Note Purchase Agreement and the Notes are governed by the laws of the State of
New York. In rendering the opinion in paragraph 5 below, I have assumed that the
laws of the State of New York are the same as the laws of the State of Ohio
(excluding choice of law rules, as to which I express no opinion).
62
Based on the foregoing, and subject to the further assumptions,
exceptions and limitations set forth below, it is my opinion that:
1. The Company is a corporation, validly existing and in good standing
under the laws of the State of Ohio and has all requisite corporate power and
authority to carry on its business as presently conducted and own its property.
Each of the Significant Subsidiaries is a corporation, validly existing and in
good standing under the laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to carry on its business as presently
conducted and own its property.
2. Each of the Company and the Significant Subsidiaries is qualified
and is in good standing as a foreign corporation in each jurisdiction where the
character of its properties or the nature of its activities makes such
qualification necessary, except where the failure to so qualify and be in good
standing would not have a material adverse effect on the ability of the Company
to perform its obligations under the Note Purchase Agreement and the Notes.
3. To the best of my knowledge after due inquiry, there is no judgment,
order, action, suit, proceeding, inquiry, order or investigation, at law or in
equity, before any court or governmental authority, arbitration board or
tribunal, pending or threatened against the Company, the Subsidiaries or any of
their respective properties which would have a material adverse effect on the
ability of the Company to perform its obligations under the Note Purchase
Agreement and the Notes.
4. The Company has the requisite corporate power and authority to
execute and deliver each of the Note Purchase Agreement and the Notes and to
perform its obligations set forth in each of the Note Purchase Agreement and the
Notes. The Company has the requisite corporate power and authority to offer,
issue and sell the Notes.
5. Each of the Note Purchase Agreement and the Notes has been duly
authorized by all necessary corporate action on the part of the Company (no
action on the part of the stockholders of the Company being required with
respect thereto), has been executed and delivered by one or more duly authorized
officers of the Company and constitutes a legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms.
6. The execution and delivery by the Company of each of the Note
Purchase Agreement and the Notes, the offer, issue and sale of the Notes by the
Company and the performance by the Company of its obligations under the Note
Purchase Agreement and the Notes will not conflict with, constitute a violation
of, result in a breach of any provision of, constitute a default under, or
result in the creation or imposition of any Lien upon any of the property of the
Company pursuant to its Articles of Incorporation or Regulations, any applicable
statute, rule or regulation to which the Company is subject, or any agreement or
instrument relating to the borrowing of money to which the Company is a party or
by which its property may be bound.
7. Other than routine filings with the Securities and Exchange
Commission, all consents, approvals and authorizations of, and all designations,
declarations, filings, registrations, qualifications and recordations with,
Governmental Authorities required on the part of the Company in connection with
the execution and delivery of each of the Note Purchase Agreement and the Notes,
the offer, issue and sale of the Notes and the use of the proceeds thereof have
been obtained.
8. Based upon the accuracy of the terms of the Offeree Letter and the
accuracy of each of your representations and warranties set forth in the Note
Purchase Agreement, the issuance and sale of the Notes to each of you, under the
circumstances contemplated by the Note Purchase Agreement, are not subject to
the registration requirements under the Securities Act, and the Company is not
required to qualify an indenture with respect to the Notes under the Trust
Indenture Act of 1939, as amended.
9. Neither the issuance of the Notes nor the intended use of the
proceeds of the Notes (as set forth in Section 5.14 of the Note Purchase
Agreement) will violate Regulations T, U or X of the Federal Reserve Board.
63
10. The Company is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, or a "holding company" or an
"affiliate" of a "holding company," or 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.
All opinions herein contained with respect to the enforceability of
agreements and instruments are qualified to the extent that:
(a) the availability of equitable remedies, including, without
limitation, specific enforcement and injunctive relief, is subject to
the discretion of the court before which any proceedings therefor may
be brought; and
(b) the enforceability of certain terms provided in the Note
Purchase Agreement and the Notes may be limited by applicable
bankruptcy, reorganization, arrangement, insolvency, moratorium or
similar laws affecting the enforcement of creditors' rights generally
as at the time in effect, and general principles of equity and the
discretion of a court in granting equitable remedies (whether
enforceability is considered in a proceeding at law or in equity).
64
I acknowledge that this opinion is being issued at the request of the
Company pursuant to paragraph 4.4(a) of the Note Purchase Agreement and I agree
that you and each of your respective successors and assigns (including, without
limitation, subsequent holders of the Notes) may rely on this opinion as if it
were addressed to them. Xxxxxxx Xxxx xxx rely on this opinion for the sole
purpose of rendering its opinion to be rendered pursuant to paragraph 4.4(b) of
the Note Purchase Agreement.
Very truly yours,
Xxxxxx X. Xxxxxxxxx
Vice President - Finance and Administration,
Secretary/Treasurer, and General Counsel
65
EXHIBIT 4.4(b)
FORM OF OPINION OF SPECIAL COUNSEL TO THE PURCHASERS
August 23, 2000
To each of the Persons listed
on Annex 1 attached hereto
Re: The X.X. Xxxxxxx Company
$17,000,000 7.70% Series A Senior Notes due September 1, 2005
$33,000,000 7.87% Series B Senior Notes due September 1, 2007
$10,000,000 7.94% Series C Senior Notes due September 1, 2010
Ladies and Gentlemen:
We have acted as special counsel for the persons set forth on Annex 1
attached hereto (collectively, the "PURCHASERS") in connection with (i) the
separate Note Purchase Agreements (collectively, the "NOTE PURCHASE AGREEMENT"),
each dated as of August 23, 2000, between The X.X. Xxxxxxx Company, an Ohio
corporation (the "ISSUER"), and each of the Purchasers and (ii) the transactions
contemplated thereby. Capitalized terms used herein and not otherwise defined
shall have the respective meanings given such terms in the Note Purchase
Agreement.
Our representation of the Purchasers has been as special counsel for
the purposes stated above.
As to all matters of fact (including factual conclusions and
characterizations and descriptions of purpose, intention or other state of
mind), we have relied, with your permission, entirely upon (a) the
representations and warranties of the Issuer and the Purchasers set forth in the
Note Purchase Agreement and (b) certificates of certain officers of the Issuer
delivered in connection with the Closing, and have assumed, without independent
inquiry, the accuracy of those representations, warranties, and certificates.
In connection with this opinion, we have examined originals or copies
of the documents identified below,
(i) the Note Purchase Agreement;
66
(ii) the 7.70% Series A Senior Notes due September 1, 2005,
the 7.87% Series B Senior Notes due September 1, 2007, and the 7.94%
Series C Senior Notes due September 1, 2010, each dated the date hereof,
in the form of Exhibit 1.1, Exhibit 1.2 and Exhibit 1.3, respectively,
to the Note Purchase Agreement, issued by the Issuer and registered in
the names, in the principal amounts and with the registration numbers
set forth in Schedule A to the Note Purchase Agreement (collectively,
the "NOTES");
(iii) a copy of the constitutive documents of the Issuer
certified by the Secretary of the Issuer as of the date hereof as being
true, complete and correct and in full force and effect;
(iv) a certificate of the Secretary of the Issuer, dated the
date hereof, certifying that the copies attached thereto of the
Issuer's articles of incorporation and bylaws and those certain
resolutions passed by the Board of Directors of the Issuer are true,
complete and correct copies thereof and are in full force and effect,
and that the copies attached thereto of certain amendments to the
articles of incorporation are true, complete and correct copies thereof
and will be filed with the Secretary of State of the State of Ohio
within five days after the Closing, and as to the incumbency and
specimen signatures of certain officers (the articles of incorporation
of the Issuer, both prior to and after giving effect to such
amendments, and such bylaws are referred to herein as the "ISSUER'S
GOVERNING DOCUMENTS");
(v) a certificate of an officer of the Issuer, dated the date
hereof, with respect to the matters set forth therein;
(vi) a letter, dated the date hereof, addressed to us and to
certain other Persons from Xxxxxxx Xxxxx & Company describing the
manner of the offering of the Notes (the "OFFEREE LETTER"); and
(vii) the opinion of Xxxxxx X. Xxxxxxxxx, Esq., general
counsel of the Issuer, dated the date hereof and delivered to you
pursuant to Section 4.4(a) of the Note Purchase Agreement.
In addition to the documents identified above, we have
examined such corporate and public records and agreements, instruments,
certificates and other documents as we have deemed necessary or appropriate for
the purposes of this opinion. Based on such investigation as we have deemed
appropriate, the opinion referred to in clause (vii) above is satisfactory in
form and scope to us, and, in our opinion, you are justified in relying thereon.
We have assumed the genuineness of all signatures, the conformity to
the originals of all documents reviewed by us as copies, the authenticity and
completeness of all original documents reviewed by us in original or copy form,
the legal competence of each individual executing any document and that each
Person executing any of the Note Purchase Agreement and the Notes validly
exists, has the power and authority to enter into and perform its obligations
thereunder, and is qualified to do business and is in good standing under the
law of its jurisdiction of incorporation and each jurisdiction where such
qualification is required generally or is necessary in order for such party to
enforce its rights under such documents, and that such documents have been duly
authorized, executed and delivered by, and, as to Persons other than the Issuer,
are binding upon and enforceable against, such Persons. In addition, we have
relied, to the extent we deem necessary and proper, upon the Offeree Letter.
For purposes of this opinion, we have made such examination of law as
we have deemed necessary. This opinion is limited solely to the internal
substantive laws of the State of New York as
67
applied by courts located in the State of New York without regard to choice of
law and the federal laws of the United States of America, and we express no
opinion as to the laws of any other jurisdiction. In particular, our opinion in
paragraph 3 below is based solely on a review of the Issuer's Governing
Documents and not on any analysis of the law of the jurisdiction of organization
of the Issuer and its effect on the interpretation of the Issuer's Governing
Documents. In addition, we note that the Note Purchase Agreement and the Notes
contain provisions stating that they are to be governed by the laws of the State
of New York (a "Chosen-Law Provision"). Except to the extent that such a
Chosen-Law Provision is made enforceable by New York General Obligations Law
section 5-1401 as applied by New York state courts or federal courts applying
New York choice of law rules, no opinion is given herein as to any Chosen-Law
Provision, or otherwise as to the choice of law or internal substantive rules of
law that any court or other tribunal may apply to the transactions contemplated
by the Note Purchase Agreement and the Notes. Except as set forth in paragraph 4
below, we express no opinions as to any securities or "blue sky" laws of any
jurisdiction.
Our opinion is further subject to the following exceptions,
qualifications and assumptions, all of which we understand to be acceptable to
you:
(a) The enforcement of any obligations of any person or entity
under the Note Purchase Agreement or the Notes or otherwise may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
laws and rules of law affecting the enforcement generally of creditors'
rights and remedies (including such as may deny giving effect to
waivers of debtors' or guarantors' rights); and we express no opinion
as to the status under any fraudulent conveyance laws or fraudulent
transfer laws of any of the obligations of any person or entity,
whether under the Note Purchase Agreement or the Notes or otherwise.
(b) We express no opinion as to the availability of any
specific or equitable relief of any kind.
(c) The enforcement of any of your rights may in all cases be
subject to an implied duty of good faith and fair dealing and to
general principles of equity (regardless of whether such enforceability
is considered in a proceeding at law or in equity).
(d) We express no opinion as to the enforceability of any
particular provision of the Note Purchase Agreement relating to (i)
waivers of any applicable defenses, setoffs, recoupments, or
counterclaims, (ii) waivers or variations of legal provisions or rights
which are not capable of waiver or variation under applicable law, or
(iii) exculpation or exoneration clauses, indemnity clauses and clauses
relating to releases or waivers of unmatured claims or rights.
(e) Our opinion in paragraph 2 below is based solely on a
review of generally applicable laws of the State of New York and the
United States of America and not on any search with respect to, or
review of, any orders, decrees, judgments or other determinations
specifically applicable to the Issuer.
(f) This opinion speaks as of the date hereof and does not
address any additional or changed facts, or changes in law, of which we
may become aware after the date hereof, and we assume no responsibility
to inform you of additional or changed facts, or changes in law, of
which we may become aware.
Based upon the foregoing, and subject to the limitations and
qualifications set forth below, we are of the opinion that:
68
1. Each of the Note Purchase Agreement and the Notes constitutes a
legal, valid and binding obligation of the Issuer, enforceable against the
Issuer in accordance with its terms.
2. No consent, approval or authorization of, or designation,
declaration, filing, registration, qualification or recordation with, any
Governmental Authority is required under the laws of the State of New York or
the United States of America in connection with the execution and delivery by
the Issuer of the Note Purchase Agreement or the Notes, or the offer, issue,
sale or delivery of the Notes by the Issuer under the circumstances contemplated
by the Note Purchase Agreement.
3. The execution and delivery of each of the Note Purchase Agreement
and the Notes by the Issuer, and the consummation of the transactions
contemplated thereby and compliance by the Issuer with the provisions thereof
will not constitute a violation by the Issuer of the provisions of the Issuer's
Governing Documents.
4. It is not necessary in connection with the offering, issuance, sale
and delivery of the Notes delivered to you today under the circumstances
contemplated by the Note Purchase Agreement to register the Notes under the
Securities Act of 1933, as amended, or to qualify an indenture in respect of the
issuance of the Notes under the Trust Indenture Act of 1939, as amended.
This opinion is delivered solely to you and for your benefit in
connection with the Note Purchase Agreement and may not be relied upon by you
for any other purpose or relied upon by any other person or entity (other than
future holders of Notes acquired in accordance with the terms of the Note
Purchase Agreement) for any reason without our prior written consent.
Very truly yours,
XXXXXXX XXXX LLP
69
EXHIBIT 5.13
FORM OF OFFEREE LETTER
[Letterhead of Xxxxxxx Xxxxx & Company]
[Date of Closing]
Xxxxxxx Xxxx LLP
Xxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
The X.X. Xxxxxxx Company
Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxxx, Esq.
Vice President - Administration
Ladies and Gentlemen:
Reference is made to the separate Note Purchase Agreements, each dated
as of August 23, 2000 (collectively, the "NOTE PURCHASE AGREEMENT"), between The
X.X. Xxxxxxx Company (the "COMPANY") and each of the purchasers listed on
Schedule A attached thereto (the "PURCHASERS"), which provide, among other
things, for the issuance and sale by the Company of its 7.70% Series A Senior
Notes due September 1, 2005, 7.87% Series B Senior Notes due September 1, 2007,
and 7.94% Series C Senior Notes due September 1, 2010 in the aggregate principal
amount of Sixty Million Dollars ($60,000,000). The capitalized terms used herein
and not defined herein have the meanings specified in the Note Purchase
Agreement.
1. We (who were authorized and employed by the Company in connection
with the offering and sale of the Notes) have not, directly or indirectly, sold
or disposed of, or attempted or offered to sell or dispose of, the Notes or
similar Securities to, or solicited offers to buy any Notes or similar
Securities from, or otherwise approached or negotiated with respect to the Notes
or similar Securities with, any Person that might be considered to be an offeree
in connection with the sale of the Notes or similar Securities, other than six
(6) institutional investors (which are the Purchasers), each of whom was offered
a portion of the Notes at private sale for investment.
2. Immediately prior to making any offer in connection with the Notes
to any of the aforementioned offerees, immediately prior to making any sale of
the Notes to any of the aforementioned offerees, and after making reasonable
inquiry, we had reasonable grounds to believe, and did believe, that each such
offeree had such knowledge and experience in financial and business matters that
it was capable of evaluating the merits and risks of its prospective investment.
3. We have not offered to sell, offered for sale or sold any Notes or
similar Securities by means of any form of general solicitation or general
advertising.
70
4. During the two-year period ending on the date hereof, we have not,
directly or indirectly, sold or disposed of, or attempted or offered to sell or
dispose of, any Securities of the Company other than the Notes and the 6.77%
Senior Notes due June 1, 2009 in the aggregate principal amount of $75,000,000,
issued pursuant to the Note Purchase Agreement dated as of June 16, 1999.
XXXXXXX XXXXX & COMPANY
By:________________________________
Name:
71
The following schedules and exhibits have not been included in this filing. A
copy of any omitted schedule will be provided to the Commission upon request:
SCHEDULE A - Information Relating to Purchasers
SCHEDULE 4.9 - Changes in Corporate Structure
SCHEDULE 5.3 - Disclosure Materials
SCHEDULE 5.4 - Organization and Ownership of Shares of Subsidiaries
SCHEDULE 5.5 - Financial Statements
SCHEDULE 5.8 - Certain Litigation
SCHEDULE 5.11 - Licenses, Permits, etc.
SCHEDULE 5.14 - Use of Proceeds
SCHEDULE 5.15 - Existing Indebtedness
EXHIBIT 4.4(a)
ANNEX 1 - Addresses
EXHIBIT 4.4(b)
ANNEX 1 - Addresses
