FURNITURE BRANDS INTERNATIONAL, INC. BROYHILL FURNITURE INDUSTRIES, INC. HDM FURNITURE INDUSTRIES, INC. LANE FURNITURE INDUSTRIES, INC. THOMASVILLE FURNITURE INDUSTRIES, INC. 6.83% Senior Notes Due May 17, 2018 NOTE PURCHASE AGREEMENT Dated as of May...
EXECUTION
COPY
FURNITURE
BRANDS INTERNATIONAL, INC.
BROYHILL
FURNITURE INDUSTRIES, INC.
HDM
FURNITURE INDUSTRIES, INC.
LANE
FURNITURE INDUSTRIES, INC.
THOMASVILLE
FURNITURE INDUSTRIES, INC.
$150,000,000
6.83%
Senior Notes
Due
May
17, 2018
_________
_________
Dated
as
of May 17, 2006
PPN:
36110# AB 3
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TABLE
OF
CONTENTS
Section
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Page
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1.
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AUTHORIZATION
OF NOTES
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1
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2.
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SALE
AND PURCHASE OF NOTES
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2
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3.
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CLOSING
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2
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4.
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CONDITIONS
TO CLOSING
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2
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4.1.
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Representations
and Warranties
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2
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4.2.
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Performance;
No Default
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3
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4.3.
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Compliance
Certificates
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3
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4.4.
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Opinions
of Counsel
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3
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4.5.
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Purchase
Permitted By Applicable Law, etc
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3
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4.6.
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Sale
of Other Notes
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4
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4.7.
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Payment
of Special Counsel Fees
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4
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4.8.
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Private
Placement Number
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4
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4.9.
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Changes
in Corporate Structure
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4
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4.10.
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Credit
Agreement
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4
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4.11.
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Subsidiary
Guaranty
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4
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4.12.
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Funding
Instructions
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4
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4.13.
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Proceedings
and Documents.
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5
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5.
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REPRESENTATIONS
AND WARRANTIES OF THE OBLIGORS
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5
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5.1.
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Organization;
Power and Authority
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5
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5.2.
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Authorization,
etc
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5
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5.3.
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Disclosure
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5
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5.4.
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Organization
and Ownership of Shares of Subsidiaries; Affiliates
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6
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5.5.
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Financial
Statements; Material Liabilities
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7
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5.6.
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Compliance
with Laws, Other Instruments, etc
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7
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5.7.
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Governmental
Authorizations, etc.
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7
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5.8.
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Litigation;
Observance of Statutes and Orders
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7
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5.9.
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Taxes
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8
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5.10.
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Title
to Property; Leases
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8
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5.11.
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Licenses,
Permits, etc
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8
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5.12.
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Compliance
with ERISA
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9
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5.13.
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Private
Offering by the Company
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10
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5.14.
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Use
of Proceeds; Margin Regulations
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10
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5.15.
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Existing
Indebtedness; Future Liens
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10
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5.16.
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Foreign
Assets Control Regulations, etc
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11
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5.17.
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Status
under Certain Statutes
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11
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5.18.
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Environmental
Matters
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11
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5.19.
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Solvency
of Obligors and Subsidiary Guarantors
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12
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6.
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REPRESENTATIONS
OF THE PURCHASERS.
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12
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6.1.
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Purchase
for Investment
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12
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i
6.2.
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Source
of Funds
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13
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7.
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INFORMATION
AS TO OBLIGORS
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14
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7.1.
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Financial
and Business Information
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14
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7.2.
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Officer’s
Certificate
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17
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7.3.
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Visitation
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18
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7.4.
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Limitation
on Disclosure Obligation
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18
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8.
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PAYMENT
AND PREPAYMENT OF THE NOTES
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18
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8.1.
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Prepayments
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18
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8.2.
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Optional
Prepayments with Make-Whole Amount
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19
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8.3.
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Allocation
of Partial Prepayments
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20
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8.4.
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Maturity;
Surrender, etc
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20
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8.5.
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Purchase
of Notes
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20
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8.6.
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Make-Whole
Amount
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21
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9.
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AFFIRMATIVE
COVENANTS
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22
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9.1.
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Compliance
with Law
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22
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9.2.
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Insurance
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22
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9.3.
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Maintenance
of Properties
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23
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9.4.
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Payment
of Taxes
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23
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9.5.
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Corporate
Existence, etc
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23
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9.6.
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Books
and Records
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24
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10.
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NEGATIVE
COVENANTS
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24
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10.1.
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Consolidated
Debt
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24
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10.2.
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Fixed
Charge Coverage
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24
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10.3.
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Priority
Debt
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24
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10.4.
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Indebtedness
of Subsidiaries
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24
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10.5.
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Liens
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25
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10.6.
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Mergers,
Consolidations, etc
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27
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10.7.
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Sale
of Assets
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28
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10.8.
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Terrorism
Sanctions Regulations
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29
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10.9.
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Subsidiary
Guaranty
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29
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10.10.
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Nature
of Business
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29
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10.11.
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Transactions
with Affiliates
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29
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11.
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EVENTS
OF XXXXXXX
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00
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00.
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REMEDIES
ON DEFAULT, ETC
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32
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12.1.
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Acceleration
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32
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12.2.
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Other
Remedies
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33
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12.3.
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Rescission
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33
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12.4.
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No
Waivers or Election of Remedies, Expenses, etc
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33
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13.
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REGISTRATION;
EXCHANGE; SUBSTITUTION OF NOTES
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33
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13.1.
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Registration
of Notes
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33
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13.2.
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Transfer
and Exchange of Notes
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34
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13.3.
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Replacement
of Notes
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34
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14.
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PAYMENTS
ON NOTES
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35
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ii
14.1.
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Place
of Payment
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35
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14.2.
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Home
Office Payment
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35
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15.
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EXPENSES,
ETC
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35
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15.1.
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Transaction
Expenses
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35
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15.2.
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Survival
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36
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16.
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SURVIVAL
OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT
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36
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17.
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AMENDMENT
AND WAIVER
|
36
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17.1.
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Requirements
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36
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17.2.
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Solicitation
of Holders of Notes
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37
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17.3.
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Binding
Effect, etc
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37
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17.4.
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Notes
Held by Obligors, etc
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38
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18.
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NOTICES
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38
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19.
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REPRODUCTION
OF DOCUMENTS
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38
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20.
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CONFIDENTIAL
INFORMATION
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39
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21.
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SUBSTITUTION
OF PURCHASER
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40
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22.
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RELEASE
OF SUBSIDIARY XXXXXXXXX
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00
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00.
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MISCELLANEOUS
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40
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23.1.
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Successors
and Assigns
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40
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23.2.
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Payments
Due on Non-Business Days
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41
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23.3.
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Accounting
Terms
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41
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23.4.
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Severability
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41
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23.5.
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Construction
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41
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23.6.
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Counterparts
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41
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23.7.
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Governing
Law
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42
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23.8.
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Jurisdiction
and Process; Waiver of Jury Trial
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42
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23.9.
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Independent
Obligation; Waiver
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43
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iii
SCHEDULE
A
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--
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Information
Relating to Purchasers
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SCHEDULE
B
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--
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Defined
Terms
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SCHEDULE
5.3
|
--
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Disclosure
Materials
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SCHEDULE
5.4
|
--
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Subsidiaries
and Ownership of Subsidiary Stock
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SCHEDULE
5.5
|
--
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Financial
Statements
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SCHEDULE
5.14
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--
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Use
of Proceeds
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SCHEDULE
5.15
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--
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Indebtedness
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SCHEDULE
10.4
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--
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Indebtedness
of Subsidiaries
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SCHEDULE
10.5
|
--
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Liens
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EXHIBIT
1(a)
|
--
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Form
Senior Note
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EXHIBIT
1(b)
|
--
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Form
of Subsidiary Guaranty
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EXHIBIT
4.4(a)
|
--
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Form
of Opinion of Special Counsel for the Obligors
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EXHIBIT
4.4(b)
|
--
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Form
of Opinion of Special Counsel to the
Purchasers
|
iv
FURNITURE
BRANDS INTERNATIONAL, INC.
BROYHILL
FURNITURE INDUSTRIES, INC.
HDM
FURNITURE INDUSTRIES, INC.
LANE
FURNITURE INDUSTRIES, INC.
THOMASVILLE
FURNITURE INDUSTRIES, INC.
000
Xxxxx
Xxxxxx Xxxx
Xx.
Xxxxx, Xxxxxxxx 00000
(000)
000-0000
Fax:
(000) 000-0000
$150,000,000
6.83% Senior Notes
Due
May
17, 2018
Dated
as
of May 17, 2006
TO
EACH
OF THE PURCHASERS LISTED IN
THE
ATTACHED SCHEDULE A:
Ladies
and Gentlemen:
FURNITURE
BRANDS INTERNATIONAL, INC., a Delaware corporation (the “Company”), and each
Subsidiary Co-Obligor (each such Subsidiary Co-Obligor and the Company, an
“Obligor,” and collectively the “Obligors”), jointly and severally, agree with
you as follows:
The
Obligors have authorized the issue and sale of $150,000,000 of 6.83% Senior
Notes, due May 17, 2018 (the “Notes”, such term to include any such Notes issued
in substitution therefor pursuant to Section 13 of this Agreement). The Notes
shall be substantially in the form set out in Exhibit 1(a), with such
changes therefrom, if any, as may be approved by you, the Other Purchasers
and
the Obligors. 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. Subject
to
Section 22, the Notes will be guaranteed by any Subsidiary that is not an
Obligor and is now or in the future becomes a guarantor of, or otherwise becomes
obligated in respect of, any Indebtedness to banks under the Credit
Agreement (individually,
a “Subsidiary Guarantor” and collectively, the “Subsidiary Guarantors”) pursuant
to a guaranty in substantially the form of Exhibit 1(b) (the “Subsidiary
Guaranty”).
The Notes will be unsecured and will rank pari
passu
with the
Obligors’ Indebtedness to banks under the Credit Agreement and with all other
senior unsecured Indebtedness of the Obligors.
Subject
to the terms and conditions of this Agreement, the Obligors will issue and
sell
to you and each of the other purchasers named in Schedule A (the “Other
Purchasers”), and you and the Other Purchasers will purchase from the Obligors,
at the Closing provided for in Section 3, Notes in the principal amount
specified opposite your names in Schedule A at the purchase price of 100% of
the
principal amount thereof. Your obligation hereunder and the obligations of
the
Other Purchasers are several and not joint obligations and you shall have no
obligation and no liability to any Person for the performance or non-performance
by any Other Purchaser hereunder.
3.
|
The
sale
and purchase of the Notes to be purchased by you and the Other Purchasers shall
occur at the offices of Xxxxxxx Xxxxxx & Xxxxxxx LLP, 000 Xxxxx Xxxxxx
Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000-0000, at 9:00 a.m., Chicago time,
at
a closing (the “Closing”) on May 17, 2006 or on such other Business Day
thereafter on or prior to May 19, 2006 as may be agreed upon by the Obligors
and
you and the Other Purchasers. At the Closing the Obligors will deliver to you
the Notes to be purchased by you in the form of a single Note (or such greater
number of Notes in denominations of at least $500,000 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 Obligors or their 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 Obligors to account number
716487293 at JPMorgan Chase Bank, 10 South Dearborn, Xxxxxxx, Xxxxxxxx 00000,
ABA Number 000000000. If at the Closing the Obligors 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 reasonable 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.
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:
The
representations and warranties of the Obligors in this Agreement shall be
correct when made and at the time of the Closing, except for failures to be
so
correct that individually or in the aggregate would not reasonably be expected
to result in a Material Adverse
2
Effect;
provided, however, that representations and warranties containing a material
adverse effect or other materiality qualifier shall be correct in all
respects.
The
Obligors shall have performed and complied with all agreements and conditions
contained in this Agreement required to be performed or complied with by them
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.
No
Obligor or any other Subsidiary shall have entered into any transaction since
the date of the Memorandum that would have been prohibited by Section 10 had
such Section applied since such date.
4.3.
|
(a)
|
Officer’s
Certificate.
The Obligors 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 and each other Obligor 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 and this
Agreement.
|
4.4.
|
You
shall
have received opinions in form and substance satisfactory to you, dated the
date
of such Closing (a) from Xxxxx Xxxxxxxx, General Counsel of the Obligors,
substantially in the form set forth in Exhibit 4.4(a) and covering such other
matters incident to the transactions contemplated hereby as you or your counsel
may reasonably request (and the Obligors instruct their counsel to deliver
such
opinion to you) and (b) from Xxxxxxx Xxxxxx & Xxxxxxx LLP, your special
counsel in connection with such transactions, substantially in the form set
forth in Exhibit 4.4(b) and covering such other matters incident to such
transactions as you may reasonably request.
On
the
date of the Closing your purchase of Notes shall (a) 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, (b) 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 (c) 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
3
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.
|
Contemporaneously
with the Closing the Obligors 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.
Without
limiting the provisions of Section 15.1, the Obligors shall have paid on or
before the Closing the reasonable fees, charges and disbursements of your
special counsel referred to in Section 4.4 to the extent reflected in a
statement of such counsel rendered to the Obligors at least one Business Day
prior to the Closing.
A
Private
Placement Number issued by Standard & Poor’s CUSIP Service Bureau (in
cooperation with the SVO) shall have been obtained by Xxxxxxx Xxxxxx &
Xxxxxxx LLP for the Notes.
No
Obligor shall have changed its jurisdiction of incorporation or been a party
to
any merger or consolidation or shall 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.
|
You
and
your special counsel shall have received a copy of the executed Credit
Agreement.
4.11.
|
Each
Subsidiary Guarantor shall have executed and delivered the Subsidiary Guaranty
in favor of you and the Other Purchasers and you shall have received a copy
of a
fully executed counterpart thereof.
4.12.
|
At
least
three Business Days prior to the date of the Closing, each Purchaser shall
have
received written instructions signed by a Responsible Officer on letterhead
of
the Company confirming the information specified in Section 3 including
(i) the name and address of the
4
transferee
bank, (ii) such transferee bank’s ABA number and (iii) the account
name and number into which the purchase price for the Notes is to be
deposited.
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 reasonably 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.
The
Obligors, jointly and severally, represent and warrant to you that:
Each
Obligor is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation, and is duly qualified
as a
foreign corporation and is in good standing 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
Obligor has the corporate power and authority to own or hold under lease the
properties it purports to own or hold under lease, to transact the business
it
transacts and proposes to transact, to execute and deliver this Agreement and
the Notes and to perform the provisions hereof and thereof.
5.2.
|
This
Agreement and the Notes have been duly authorized by all necessary corporate
action on the part of each Obligor, and this Agreement constitutes, and upon
execution and delivery thereof each Note will constitute, a legal, valid and
binding obligation of each Obligor enforceable against such Obligor 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).
5.3.
|
The
Obligors, through their agents, X.X. Xxxxxx Securities Inc., Mitsubishi
Securities (USA), Inc., Wachovia Capital Markets, LLC and Xxxxx Fargo Capital
Markets, have delivered to you and each Other Purchaser a copy of a Confidential
Offering Placement Memorandum (including the documents incorporated by reference
therein), dated April 2006 (the “Memorandum”), relating to the transactions
contemplated hereby. The Memorandum fairly describes, in all material respects,
the general nature of the business and principal properties of
5
the
Company and its Subsidiaries. This Agreement, the Memorandum, the documents,
certificates or other writings delivered to you and each Other Purchaser by
or
on behalf of the Obligors in connection with the transactions contemplated
hereby and identified in Schedule 5.3, and the financial statements listed
in
Schedule 5.5 (this Agreement, the Memorandum and such documents, certificates
or
other writings and such financial statements delivered to you and each Other
Purchaser prior to May 17, 2006 being
referred to, collectively, as the “Disclosure Documents”), taken as a whole, do
not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading in light
of the circumstances under which they were made. Except as disclosed in the
Disclosure Documents, since December 31, 2005, there has been no change in
the
financial condition, operations, business or properties of the Company or any
Subsidiary, except changes that individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. There is no fact
known
to the Obligors that could reasonably be expected to have a Material Adverse
Effect that has not been set forth herein or in the Disclosure
Documents.
(a)
|
Schedule
5.4 contains (except as noted therein) complete and correct lists
of: (i)
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, (ii)
the
Company’s Affiliates, other than Subsidiaries, and (iii) the Company’s
directors and senior officers.
|
|
(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.
|
|
(d)
|
No
Subsidiary is a party to, or otherwise subject to any legal, regulatory,
contractual or other restriction (other than this Agreement, the
agreements listed on Schedule 5.4, renewals and replacements of such
agreements, and customary limitations imposed by corporate law or
similar
statutes) restricting the ability of such Subsidiary to pay dividends
out
of profits or make any other similar distributions of profits to
the
|
6
Company
or any of its Subsidiaries that owns outstanding shares of capital
stock
or similar equity interests of such
Subsidiary.
|
The Obligors have delivered to you and each Other Purchaser, or made available through the Company’s public filings with the SEC, copies of the consolidated 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 and absence of footnotes). The Company and its Subsidiaries do not have any Material liabilities that are not disclosed on such financial statements or otherwise disclosed in the Disclosure Documents.
The
execution, delivery and performance by each Obligor of this Agreement and the
Notes will not (i) 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 any Obligor or any other Subsidiary under, any indenture, mortgage, deed
of
trust, loan, purchase or credit agreement, lease, corporate charter or by-laws,
or any other agreement or instrument to which any Obligor or any other
Subsidiary is bound or by which any Obligor or any other Subsidiary or any
of
their respective properties may be bound or affected, (ii) 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 any Obligor or any other Subsidiary or (iii) violate any provision
of any statute or other rule or regulation of any Governmental Authority
applicable to any Obligor or any other Subsidiary.
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 any Obligor of this Agreement or the Notes, other
than current reports on Form 8-K to be filed with the Securities and Exchange
Commission.
(a)
|
There
are no actions, suits, investigations or proceedings pending or, to the
knowledge of the Obligors, threatened against or affecting any Obligor
or
any other Subsidiary or any property of any Obligor or any other
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.
|
7
(b)
|
No
Obligor or any other Subsidiary is in default under any term of any
agreement or instrument to which it is a party or by which it is
bound, or
any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law,
ordinance, rule or regulation (including Environmental Laws and the
USA
Patriot Act) 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.
|
The
Company and its Subsidiaries have filed all 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 levied upon
them
or their properties, assets, income or franchises, to the extent such taxes
and
assessments have become due and payable and before they have become delinquent,
except for any taxes and assessments (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 Company
knows of no basis for any other tax or assessment that would reasonably be
expected to have a Material Adverse Effect. The charges, accruals and reserves
on the books of the Company and its Subsidiaries in respect of federal, state
or
other taxes for all fiscal periods are adequate in all material respects. The
federal income tax liabilities of the Company and its Subsidiaries have been
finally determined (whether by reason of completed audits or the statute of
limitations having run) for all fiscal years up to and including the fiscal
year
ended December 31, 2005.
The
Company and its Subsidiaries have good and sufficient title to their respective
properties that individually or in the aggregate are Material, including all
such properties reflected in the most recent audited balance sheet referred
to
in Section 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. All leases that individually or in the aggregate are Material
are valid and subsisting and are in full force and effect in all material
respects.
5.11.
|
(a)
|
The
Company and its Subsidiaries own or possess all licenses, permits,
franchises, authorizations, patents, copyrights, proprietary software,
service marks, trademarks and trade names, or rights thereto, that
individually or in the aggregate are Material, without known conflict
with
the rights of others,
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|
(b)
|
To
the best knowledge of each Obligor, no product of the Company or
any of
its Subsidiaries infringes in any material respect any license, permit,
franchise,
|
8
authorization,
patent, copyright, proprietary software, service xxxx, trademark,
trade
name or other right owned by any other Person; and
|
||
(c)
|
To
the best knowledge of each Obligor, there is no Material violation
by any
Person of any right of the Obligor or any other Subsidiary with respect
to
any patent, copyright, proprietary software, service xxxx, trademark,
trade name or other right owned or used by any Obligor or any other
Subsidiary.
|
5.12.
|
(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 would 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 or
section 4068 of ERISA, 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 in an amount that
would
be individually or in the aggregate Material. 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 not
Material.
|
|
(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
|
9
|
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 Obligors 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 of the funds used to pay the purchase price of the Notes to be purchased by you. |
No
Obligor or anyone 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 44 other Institutional
Investors, each of which has been offered the Notes at a private sale for
investment. No Obligor or anyone 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 or to the
registration requirements of any securities or blue sky laws of any applicable
jurisdiction.
The
Obligors expect to apply the proceeds of the sale of the Notes to refinance
or
repay Indebtedness of the Company as set forth in Schedule 5.14 and for general
corporate purposes. No part of the proceeds from the sale of the Notes will
be
used, directly or indirectly, for the purpose of buying or carrying any margin
stock within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying
or
trading in any securities under such circumstances as to involve any Obligor
in
a violation of Regulation X of said Board (12 CFR 224) or to involve any broker
or dealer in a violation of Regulation T of said Board (12 CFR 220). Margin
stock does not constitute more than 1% 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 1% 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.
(a)
|
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
March 31, 2006 (including a description of the obligors and obligees,
principal amount outstanding and collateral therefor, if any, and
Guaranty
thereof, if any), 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.
No
Obligor or any other 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 any Obligor or other Subsidiary and no event or condition
exists with respect to any Indebtedness of any Obligor or any other
Subsidiary that would permit (or that with notice or the lapse of
time, or
both, would permit) one or more Persons to cause
such
|
10
Indebtedness
to become due and payable before its stated maturity or before its
regularly scheduled dates of payment.
|
||
(b)
|
Except
as disclosed in Schedule 5.15, no Obligor or any other Subsidiary
has
agreed or consented to cause or permit in the future (upon the happening
of a contingency or otherwise) any of its property, whether now owned
or
hereafter acquired, to be subject to a Lien not permitted by Section
10.5.
|
|
(c)
|
No
Obligor or any other Subsidiary is a party to, or otherwise subject
to any
provision contained in, any instrument evidencing Indebtedness of
such
Obligor or any other Subsidiary, any agreement relating thereto or
any
other agreement (including, but not limited to, its charter or other
organizational document) that limits the amount of, or otherwise
imposes
restrictions on the incurring of, Indebtedness of any Obligor, except
as
specifically indicated in Schedule
5.15.
|
(a)
|
Neither
the sale of the Notes by the Obligors hereunder nor their use of
the
proceeds thereof will violate the Trading with the Enemy Act, as
amended,
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.
|
|
(b)
|
No
Obligor or any other Subsidiary (i) is a Person described or designated
in
the Specially Designated Nationals and Blocked Persons List of the
Office
of Foreign Assets Control or in Section 1 of the Anti-Terrorism Order
or
(ii) engages in any dealings or transactions with any such Person.
The
Obligors and each other Subsidiary are in compliance, in all material
respects, with the USA Patriot Act.
|
|
(c)
|
No
part of the proceeds from the sale of the Notes hereunder will be
used,
directly or indirectly, for any payments to any governmental official
or
employee, political party, official of a political party, candidate
for
political office, or anyone else acting in an official capacity,
in order
to obtain, retain or direct business or obtain any improper advantage,
in
violation of the United States Foreign Corrupt Practices Act of 1977,
as
amended, assuming in all cases that such Act applies to the
Obligors.
|
No
Obligor or any other Subsidiary is subject to regulation under the Investment
Company Act of 1940, as amended, the Interstate Commerce Act, as amended by
the
ICC Termination Act, as amended, or the Federal Power Act, as
amended.
(a)
|
No
Obligor or any other Subsidiary has knowledge of any claim or has
received
any notice of any claim, and no proceeding has been instituted raising
any
claim against any Obligor or any other Subsidiary or any of their
respective real properties now
|
11
|
or
formerly owned, leased or operated by any of them or other assets,
alleging any damage to the environment or violation of any Environmental
Laws, except, in each case, such as would not reasonably be expected
to
result in a Material Adverse Effect.
|
|
(b)
|
No
Obligor or any other Subsidiary has knowledge of any facts that would
give
rise to any claim, public or private, of violation of Environmental
Laws
or damage to the environment emanating from, occurring on or in any
way
related to real properties now or formerly owned, leased or operated
by
any of them or to other assets or their use, except, in each case,
such as
would not reasonably be expected to result in a Material Adverse
Effect.
|
|
(c)
|
No
Obligor or any other Subsidiary has stored any Hazardous Materials
on real
properties now or formerly owned, leased or operated by any of them
and
has not disposed of any Hazardous Materials in a manner contrary
to any
Environmental Laws in each case in any manner that would reasonably
be
expected to result in a Material Adverse Effect.
|
|
(d)
|
All
buildings on all real properties now owned, leased or operated by
any
Obligor or any other Subsidiary are in compliance with applicable
Environmental Laws, except where failure to comply could not reasonably
be
expected to result in a Material Adverse
Effect.
|
After
giving effect to the transactions contemplated herein and after giving due
consideration to any rights of contribution and reimbursement, (i) each
Obligor and Subsidiary Guarantor has received reasonably equivalent value for,
in the case of each Obligor, executing and delivering this Agreement and issuing
and selling the Notes and, in the case of each Subsidiary Guarantor, executing
and delivering the Subsidiary Guaranty, (ii) the fair value of the assets of
each Obligor and Subsidiary Guarantor (both at fair valuation and at present
fair saleable value) exceeds its liabilities, (iii) each Obligor and Subsidiary
Guarantor is able to and expects to be able to pay its debts as they mature,
and
(iv) each Obligor and Subsidiary Guarantor has capital sufficient to carry
on
its business as conducted and as proposed to be conducted.
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 may be resold only if registered pursuant to the
provisions of the Securities Act or if an exemption from registration is
available, except under circumstances where neither such registration nor such
an exemption is required by law, and that the Obligors are not required to
register the Notes. You represent that you (i) are a “qualified
12
institutional
buyer” within the meaning of Rule 144A under the Securities Act and (ii) have
had the opportunity to ask questions of the Obligors and have received answers
regarding such questions and the transactions contemplated hereby.
6.2
|
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)
|
the
Source is an “insurance company general account” (as the term is defined
in the United States Department of Labor’s Prohibited Transaction
Exemption (“PTE”) 95-60) in respect of which the reserves and liabilities
(as defined by the annual statement for life insurance companies
approved
by the NAIC (the “NAIC Annual Statement”)) for the general account
contract(s) held by or on behalf of any employee benefit plan together
with the amount of the reserves and liabilities for the general account
contract(s) held by or on behalf of any other employee benefit plans
maintained by the same employer (or affiliate thereof as defined
in PTE
95-60) or by the same employee organization in the general account
do not
exceed 10% of the total reserves and liabilities of the general account
(exclusive of separate account liabilities) plus surplus as set forth
in
the NAIC Annual Statement filed with such Purchaser’s state of domicile;
or
|
|
(b)
|
the
Source is a separate account that is maintained solely in connection
with
such Purchaser’s fixed contractual obligations under which the amounts
payable, or credited, to any employee benefit plan (or its related
trust)
that has any interest in such separate account (or to any participant
or
beneficiary of such plan (including any annuitant)) are not affected
in
any manner by the investment performance of the separate account;
or
|
|
(c)
|
the
Source is either (i) an insurance company pooled separate account,
within
the meaning of PTE 90-1, or (ii) a bank collective investment fund,
within
the meaning of PTE 91-38 and, except as you have disclosed to the
Obligors
in writing pursuant to this clause (c), no employee benefit plan
or group
of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled
separate account or collective investment fund; or
|
|
(d)
|
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 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”
|
|
13
in
Section V(e) of the QPAM Exemption) owns a 5% or more interest in
any
Obligor and (i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose assets are included in such investment
fund
have been disclosed to the Obligors in writing pursuant to this clause
(d); or
|
(e)
|
the
Source constitutes assets of a “plan(s)” (within the meaning of Section IV
of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset
manager” or “INHAM” (within the meaning of Part IV of the INHAM
exemption), the conditions of Part I(a), (g) and (h) of the INHAM
Exemption are satisfied, neither the INHAM nor a person controlling
or
controlled by the INHAM (applying the definition of “control” in Section
IV(h) of the INHAM Exemption) owns a 5% or more interest in any Obligor
and (i) the identity of such INHAM and (ii) the name(s) of the employee
benefit plan(s) whose assets constitute the Source have been disclosed
to
the Obligors in writing pursuant to this clause (e);
or
|
(f)
|
the
Source is a governmental plan; or
|
(g)
|
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 Obligors in writing pursuant to this clause
(g); or
|
(h)
|
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.
The
Obligors will
deliver to each holder of Notes that is an Institutional Investor:
(a)
|
Quarterly
Statements
--
within 45 days (or such shorter period as is 15 days greater than
the
period applicable to the filing of the Company’s Quarterly Report on Form
10-Q (the “Form 10-Q”) with the SEC regardless of whether the Company is
subject to the filing requirements thereof) 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,
|
||
(ii)
|
consolidated
statements of operations and shareholders’ equity and comprehensive income
of the Company and its Subsidiaries for such quarter
and
|
14
(in
the case of the second and third quarters) for the portion of the
fiscal
year ending with such quarter, and
|
|||
(iii)
|
consolidated
statements of cash flows of the Company and its Subsidiaries for
such
quarter or (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 Form 10-Q prepared in compliance with the requirements
therefor and filed with the SEC shall be deemed to satisfy the requirements
of
this Section 7.1(a); and provided, further, that the Company shall be deemed
to
have made such delivery of such Form 10-Q if it shall have timely made such
Form
10-Q available on “XXXXX” and on its home page on the worldwide web (at the date
of this Agreement located at xxx.xxxxxxxxxxxxxxx.xxx)
and
shall have given each Purchaser prior notice of such availability on XXXXX
and
on its home page in connection with each delivery (such availability and notice
thereof being referred to as “Electronic Delivery”);
(b)
|
Annual
Statements
--
within 80 days (or such shorter period as is 15 days greater than
the
period applicable to the filing of the Company’s Annual Report on Form
10-K (the “Form 10-K”) with the SEC regardless of whether the Company is
subject to the filing requirements thereof) after the end of each
fiscal
year of the Company, 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 operations, shareholders’ equity and comprehensive income
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 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 Form 10-K for such
15
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 SEC shall be deemed to satisfy
the requirements of this Section 7.1(b); and provided further, that the Company
shall be deemed to have made such delivery of such Form 10-K if it shall have
timely made Electronic Delivery thereof;
(c)
|
SEC
and Other Reports
--
promptly upon their becoming available, one copy of each regular
or
periodic report, each registration statement other than registration
statements on Form S-8 (without exhibits except as expressly requested
by
such holder), and each prospectus (other than one relating solely
to
employee benefit plans) and all amendments thereto filed by the Company
or
any Subsidiary with the SEC and of all press releases and other written
statements made available generally by the Company or any Subsidiary
to
the public concerning developments that are Material; provided that
in
each case the Company shall be deemed to have made such delivery
if it
shall have made Electronic Delivery thereof;
|
||
(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
or that any Person has given any notice to any Obligor or taken any
action
with respect to a claimed default hereunder or that any Person has
given
any notice to any Obligor or taken any action with respect to a claimed
default of the type referred to in Section 11(f), a written notice
specifying the nature and period of existence thereof and what action
the
Obligors are taking or propose 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, 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
|
16
IV
of ERISA or such penalty or excise tax provisions, if such liability
or
Lien, taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a Material Adverse
Effect;
|
|||
(f)
|
Notices
from Governmental Authority
--
promptly, and in any event within 30 days of receipt by a Responsible
Officer thereof, subject to Regulation FD, applicable privacy laws
or
regulations and contractual obligations, copies of any written notice
to
the Company or any Subsidiary from any federal or state Governmental
Authority relating to non-compliance or alleged non-compliance with
any
order, ruling, statute or other law or regulation that would reasonably
be
expected to have a Material Adverse Effect; and
|
||
(g)
|
Requested
Information
--
with reasonable promptness, subject to Regulation FD, applicable
privacy
laws or regulations and contractual obligations, such other data
and
information relating to the business, operations, affairs, financial
condition, assets or properties of the Obligors or any other Subsidiary
or
relating to the ability of the Obligors to perform their obligations
hereunder and under the Notes as from time to time may be reasonably
requested by any such holder of
Notes.
|
Each
set
of financial statements delivered to a holder of Notes pursuant to
Section 7.1(a) or Section 7.1(b) shall be accompanied by a certificate
of a Senior Financial Officer setting forth (which in the case of Electronic
Delivery of any such financial statements, shall be by separate substantially
concurrent delivery of such certificate to each holder of Notes):
(a)
|
Covenant
Compliance
--
the information (including detailed calculations) required in order
to
establish whether the Obligors were in compliance with the requirements
of
Section 10.1 through Section 10.11, inclusive, during the quarterly
or annual period covered by the statements then being furnished (including
with respect to each such Section, where applicable, the calculations
of
the maximum or minimum amount, ratio or percentage, as the case may
be,
permissible under the terms of such Sections, and the calculation
of the
amount, ratio or percentage then in existence); and
|
|
(b)
|
Event
of Default
--
a statement that such Senior Financial Officer has reviewed, or caused
review by a Responsible Officer of, 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 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 Obligors shall have taken or
propose
to take with respect thereto.
|
17
7.3.
|
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, but no more
than
one time in any fiscal year, to visit during normal business hours
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 during normal business
hours
the other offices and properties of the Company and each Subsidiary,
all
at such reasonable times 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 (which shall not exceed the reasonable expenses incurred
by such
holder), to visit during normal business hours 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, all
at such
reasonable times and as often as may be reasonably
requested.
|
No
Obligor shall be required to disclose the following information pursuant to
Section 7.1 or 7.3:
(a)
|
Information
that the Company determines after consultation with counsel qualified
to
advise on such matters that, notwithstanding the confidentiality
requirements of Section 20, such Obligor would be prohibited from
disclosing by applicable privacy laws or regulations;
or
|
|
(b)
|
Information
that, notwithstanding the confidentiality requirements of Section
20, such
Obligor is prohibited from disclosing by the terms of an obligation
of
confidentiality contained in any agreement with any non-Affiliate
binding
upon such Obligor and not entered into in contemplation of this clause
(b).
|
8.1.
|
(a)
|
Required
Prepayments.
On May 17, 2014 and on each May 17 thereafter to and including May
17,
2017 the Obligors will prepay $30,000,000 principal amount (or such
lesser
prin-cipal amount as shall then be outstanding) of the Notes at par
and
without payment of the Make-Whole Amount or any premium, provided
that
upon any partial prepayment of the Notes pursuant to Section 8.2,
the
principal amount of each
required
|
18
prepayment
of the Notes becoming due under this Section 8.1 on and after the
date of such prepayment shall be reduced in the same proportion as
the
aggregate unpaid principal amount of the Notes is reduced as a result
of
such prepayment.
|
|||
(b)
|
|||
(i)
|
Upon
the occurrence of a Change of Control Event, the Obligors, upon notice
as
provided below, shall offer to prepay the entire principal amount
of the
Notes at 100% of the principal amount thereof, plus accrued interest,
without the payment of any Make-Whole Amount. The Obligors shall
give
notice of any offer to prepay the Notes to each holder of the Notes
promptly, but in no event later than 15 Business Days, after any
Responsible Officer has actual knowledge of a Change of Control Event.
Such notice shall specify (i) the nature of the Change of Control
Event in reasonable detail, (ii) the date fixed for prepayment,
which, to the extent practicable, shall be not less than 30 or more
than
60 calendar days after the date of such notice, but in any event
shall not
be later than the Effective Date of the Change of Control if it has
not
occurred or 15 Business Days thereafter if it has occurred, (iii)
the estimated Effective Date of the Change of Control if it has not
occurred, (iv) the interest to be paid on the prepayment date with
respect
to such principal amount being prepaid and (v) the date by which any
holder of a Note that wishes to accept such offer must deliver notice
thereof to the Obligors, which shall not be later than 30 calendar
days
after the date of such notice. Failure by a holder of Notes to respond
to
an offer made pursuant to this Section 8.1(b) shall be deemed to
constitute rejection of such offer by such holder.
|
||
(ii)
|
The
obligation of the Obligors to prepay Notes pursuant to the offers
required
by, and accepted in accordance with, Section 8.1(b)(i) is subject
to the
effectiveness of the Change of Control Event in respect of which
such
offers and acceptances shall have been made. In the event that the
Effective Date of the Change of Control does not occur on the proposed
prepayment date in respect thereof, the prepayment shall be deferred
until
and shall be made on the Effective Date of the Change of Control
(which
shall be a Business Day). The Obligors shall keep each holder of
Notes
reasonably and timely informed of (A) any such deferral of the date
of
prepayment, (B) the expected Effective Date of the Change of Control
and
(C) any determination by the Obligors that efforts to consummate
the
change of control constituting the Change of Control Event have ceased
or
been abandoned (in which case the offers and acceptances made pursuant
to
Section 8.1(b)(i) shall be deemed
rescinded).
|
The
Obligors may, at their 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
$2,000,000 in the aggregate in the case of a partial prepayment, at 100% of
the
principal amount so prepaid, and the Make-Whole Amount determined for the
prepayment date with respect to such principal amount. The Obligors will give
each holder of Notes written notice of each optional prepayment under
19
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 (which
shall be a Business Day), 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 8.3), 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 Obligors 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.
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 at the time outstanding
in proportion, as nearly as practicable, to the respective unpaid principal
amounts thereof not theretofore called for prepayment.
In
the
case of each prepayment of Notes pursuant to this Section 8, except as otherwise
provided in Section 8.1(b), the principal amount of each Note to be prepaid
shall mature and become due and payable on the date fixed for such prepayment
(which shall be a Business Day), 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 Obligors 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 canceled
and shall not be reissued, and no Note shall be issued in lieu of any prepaid
principal amount of any Note.
8.5.
|
The
Obligors will not and will not permit any Affiliate to purchase, redeem, prepay
or otherwise acquire, directly or indirectly, any of the outstanding Notes
except (a) upon the payment or prepayment of the Notes in accordance with the
terms of this Agreement and the Notes or (b) pursuant to an offer to purchase
made by the Obligors or an Affiliate pro rata to the holders of all Notes at
the
time outstanding upon the same terms and conditions. Any such offer shall
provide each holder with sufficient information to enable it to make an informed
decision with respect to such offer, and shall remain open for at least 30
Business Days. If the holders of more than 25% of the principal amount of the
Notes then outstanding accept such offer, the Obligors 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 10 Business Days from its receipt
of
such notice to accept such offer. The Obligors will promptly cancel all Notes
acquired by it or any Affiliate
20
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.
8.6.
|
The
term “Make-Whole
Amount”
means,
with respect to any Note, 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, the principal of such Note that is to be prepaid
pursuant to Section 8.2 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, 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 the 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, .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 the “PX1 Screen”
(or such other display as may replace Page PX1) on Bloomberg Financial Markets
for the most recently issued actively traded on the run 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 (including
by
way of interpolation), 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 (or any comparable
successor publication) for U.S. Treasury securities having a constant maturity
equal to the Remaining Average Life of such Called Principal as of such
Settlement Date.
In
the
case of each determination under clause (i) or clause (ii), as the case may
be,
of the preceding paragraph, 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 U.S. Treasury security with the maturity closest to
and
greater than such Remaining Average Life and (2) the U.S. Treasury security
with
the maturity closest to and less than such Remaining Average Life. The
Reinvestment Yield shall be rounded to the number of decimal places as appears
in the interest rate of the applicable Note.
21
“Remaining
Average Life”
means,
with respect to any Called Principal, 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.
“Remaining
Scheduled Payments”
means,
with respect to the Called Principal of any Note, 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, 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 pursuant to Section 8.2 or Section
12.1.
“Settlement
Date”
means,
with respect to the Called Principal of any Note, the date on which such Called
Principal is to be prepaid pursuant to Section 8.2 or has become or is
declared to be immediately due and payable pursuant to Section 12.1, as the
context requires.
The
Obligors, jointly and severally, covenant that so long as any of the Notes
are
outstanding:
9.1.
|
Without
limiting Section 10.8, each Obligor will, and will cause each other Subsidiary
to, comply with all laws, ordinances or governmental rules or regulations to
which each of them is subject, including, without limitation, ERISA, the USA
Patriot Act and 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, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
9.2.
|
Each
Obligor will, and will cause each other Subsidiary 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
22
amounts
(including deductibles, co-insurance and self-insurance, if adequate reserves
are maintained with respect thereto) as is customary in the case of entities
of
established reputations engaged in the same or a similar business and similarly
situated, except where the failure to do so would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
Each
Obligor will, and will cause each other Subsidiary 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 any Obligor or any other
Subsidiary from discontinuing the operation and the maintenance of any of its
properties if such Obligor or Subsidiary has concluded that 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, reasonably
be
expected to have a Material Adverse Effect.
9.4.
|
Each
Obligor will, and will cause each other Subsidiary to, file all tax returns
required to be filed in any jurisdiction and to pay and discharge all taxes
shown to be due and payable on such returns and all other taxes, assessments,
governmental charges, or levies imposed on them or any of their properties,
assets, income or franchises, to the extent such taxes 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 any Obligor or any other Subsidiary,
provided that
no
Obligor or any other Subsidiary need pay any such tax, assessment, charge,
levy
or claims if (i) the amount, applicability or validity thereof is contested
by
any Obligor or such other 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 non-filing of all such returns and/or nonpayment
of all such taxes, assessments, charges, levies and claims in the aggregate
would not reasonably be expected to have a Material Adverse Effect.
Subject
to Sections 10.6 and 10.7, each Obligor will at all times preserve and keep
in
full force and effect its corporate existence. Subject to Sections 10.6 and
10.7, the Obligors will at all times preserve and keep in full force and effect
the corporate existence of each other Subsidiary (unless merged into or with,
or
substantially all of its assets are transferred to, an Obligor or a Wholly
Owned
Subsidiary) and all rights and franchises of the Obligors and the other
Subsidiaries unless, in the good faith judgment of the Company, the termination
of or failure to preserve and keep in full force and effect a particular
corporate existence, right or franchise would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
23
9.6.
|
Each
Obligor will, and will cause each other Subsidiary to, maintain proper books
of
record and account in conformity with GAAP and all applicable requirements
of
any Governmental Authority having legal or regulatory jurisdiction over such
Obligor or such Subsidiary, as the case may be, except where the failure to
do
so would not, individually or in the aggregate, reasonably be expected to have
a
Material Adverse Effect.
The
Obligors, jointly and severally, covenant that so long as any of the Notes
are
outstanding:
10.1.
|
The
Company will not permit the ratio of Consolidated Debt (as of any date) to
Consolidated EBITDA (for the Company’s then most recently completed four fiscal
quarters) to be greater than 3.50 to 1.00 at any time.
10.2.
|
The
Company will not permit the ratio of Consolidated EBITDAR to Consolidated Fixed
Charges (in each case for the Company’s then most recently completed four fiscal
quarters) to be less than 2.50 to 1.00 at any time.
10.3.
|
The
Company will not permit Priority Debt to exceed 20% of Consolidated Net Worth
(as of the end of the Company’s then most recently completed fiscal quarter) at
any time.
The
Company will not at any time permit any Subsidiary, directly or indirectly,
to
create, incur, assume, guarantee, have outstanding, or otherwise become or
remain directly or indirectly liable for, any Indebtedness other
than:
(a)
|
Indebtedness
outstanding on the date hereof that is described on Schedule 10.4 and
any extension, renewal, refunding or refinancing thereof, provided
that
the principal amount outstanding at the time of such extension, renewal,
refunding or refinancing is not increased;
|
|
(b)
|
Indebtedness
owed to the Company or a Wholly Owned Subsidiary;
|
|
(c)
|
Indebtedness
of the Obligors outstanding under this Agreement and the Credit
Agreement;
|
24
(d)
|
Indebtedness
of a Subsidiary outstanding at the time of its acquisition by the
Company,
provided that (i) such Indebtedness was not incurred in contemplation
of
becoming a Subsidiary, (ii) at the time of such acquisition and after
giving effect thereto, no Default or Event of Default exists or would
exist, and (iii) such Indebtedness may not be extended, renewed,
refunded
or refinanced except as otherwise permitted herein;
|
||
(e)
|
Indebtedness
not otherwise permitted by the preceding clauses (a) through (d),
provided that immediately before and after giving effect thereto
and to
the application of the proceeds thereof,
|
||
(i)
|
no
Default or Event of Default exists, and
|
||
(ii)
|
Priority
Debt does not exceed 20% of Consolidated Net Worth (as of the end
of the
Company’s then most recently completed fiscal
quarter).
|
10.5.
|
The
Company will not, and will not permit any other Subsidiary to, permit to exist,
create, assume or incur, directly or indirectly, any Lien on its properties
or
assets, whether now owned or hereafter acquired, except:
(a)
|
Liens
for taxes, assessments or governmental charges not then due and delinquent
or the nonpayment of which is permitted by Section 9.4;
|
|
(b)
|
any
attachment or judgment Lien, unless the judgment it secures has not,
within 60 days after the entry thereof, been discharged or execution
thereof stayed pending appeal, or has not been discharged within
60 days
after the expiration of any such stay;
|
|
(c)
|
Liens
incidental to the conduct of business or the ownership of properties
and
assets (including landlords’, lessors’, carriers’, operators’,
warehousemen’s, mechanics’, materialmen’s and other similar Liens) and
Liens to secure the performance of bids, tenders, leases or trade
contracts, or to secure statutory obligations (including obligations
under
workers’ compensation, unemployment insurance and other social security
legislation), surety or appeal bonds or other Liens of like general
nature
incurred in the ordinary course of business and not in connection
with the
borrowing of money;
|
|
(d)
|
encumbrances
in the nature of leases, subleases, zoning restrictions, easements,
rights
of way and other rights and restrictions of record on the use of
real
property and defects in title arising or incurred in the ordinary
course
of business, which, individually and in the aggregate, do not materially
impair the use or value of the property or assets subject thereto
or which
relate only to assets that in the aggregate are not
Material;
|
|
(e)
|
Liens
securing Indebtedness existing on property or assets of the Company
or any
other Subsidiary as of the date of this Agreement that are described
in
Schedule 10.5;
|
25
(f)
|
Liens
securing Indebtedness of a Subsidiary to the Company or to another
Wholly
Owned Subsidiary;
|
|
(g)
|
Liens
(i) existing on property at the time of its acquisition by the Company
or
a Subsidiary and not created in contemplation thereof, whether or
not the
Indebtedness secured by such Lien is assumed by the Company or a
Subsidiary; or (ii) on property created contemporaneously with its
acquisition or within 180 days of the acquisition or completion of
construction or development thereof to secure or provide for all
or a
portion of the purchase price or cost of the acquisition, construction
or
development of such property after the date of Closing; or (iii)
existing
on property of a Person at the time such Person is merged or consolidated
with, or becomes a Subsidiary of, or substantially all of its assets
are
acquired by, the Company or a Subsidiary and not created in contemplation
thereof; provided that in the case of clauses (i), (ii) and (iii)
such
Liens do not extend to additional property of the Company or any
Subsidiary (other than property that is an improvement to or is acquired
for specific use in connection with the subject property) and that
the
aggregate principal amount of Indebtedness secured by each such Lien
does
not exceed the fair market value (determined in good faith by one
or more
officers of the Company to whom authority to enter into such transaction
has been delegated by the board of directors of the Company) of the
property subject thereto;
|
|
(h)
|
customary
rights of set-off upon deposit accounts and securities accounts of
cash in
favor of banks or other depositary institutions and other securities
intermediaries;
|
|
(i)
|
Liens
in the nature of licenses that arise in the ordinary course of business
of
the Company or any of its Subsidiaries;
|
|
(j)
|
any
call or similar right in the nature of a right of first offer or
a first
refusal right of a third party that is an investor in a joint venture
of a
Subsidiary of the Company in the case of equity interests issued
by such
joint venture or qualifying shares or similar arrangements designed
to
satisfy requirements of applicable laws in the case of equity interests
issued by a joint venture or Subsidiary so long as such call or similar
right does not secure Indebtedness of the Company or any
Subsidiary;
|
|
(k)
|
Liens
resulting from extensions, renewals or replacements of Liens permitted
by
paragraphs (e) and (g), provided that (i) there is no increase in
the
principal amount or decrease in maturity of the Indebtedness secured
thereby at the time of such extension, renewal or replacement (except
to
the extent, if any, premiums or refinancing costs are paid in connection
therewith), (ii) any new Lien attaches only to the same property
theretofore subject to such earlier Lien and (iii) immediately after
such
extension, renewal or replacement no Default or Event of Default
would
exist; and
|
|
(l)
|
Liens
securing Indebtedness not otherwise permitted by paragraphs (a) through
(k) of this Section 10.5, provided that, at the time of creation,
assumption or incurrence thereof and immediately after giving effect
thereto and to the application of
the
|
26
proceeds
therefrom, Priority Debt does not exceed 20% of Consolidated Net
Worth (as
of the end of the Company’s then most recently completed fiscal
quarter).
|
Notwithstanding
the foregoing, the Company will not, and will not permit any other Subsidiary
to, permit to exist, create, assume or incur, directly or indirectly, any Liens
securing obligations under the Credit Agreement, unless the Company
contemporaneously provides for the Notes to be equally and ratably secured
with
such obligations under the Credit Agreement (pursuant to documentation,
including an intercreditor agreement, reasonably satisfactory to the Required
Holders), and in 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. The holders of
the
Notes agree to release any such Liens to the extent that Liens are released
under the Credit Agreement; provided, that (x) at the time of such release,
no
Default or Event of Default exists and the Company shall deliver a certificate
of a Responsible Officer to the holders of the Notes to such effect, and (y)
if
any fee or other form of consideration is given to the lenders under the Credit
Agreement specifically for such release, holders of the Notes shall receive
equivalent consideration.
The
Company will not, and will not permit any Subsidiary to, consolidate with or
merge with any other Person or convey, transfer, sell or lease all or
substantially all of its assets in a single transaction or series of
transactions to any Person except that:
(a)
|
any
Obligor may consolidate or merge with any other Obligor or other
Person or
convey, transfer, sell or lease all or substantially all of its assets
in
a single transaction or series of transactions to any other Obligor
or any
other Person, provided that:
|
||
(i)
|
the
successor formed by such consolidation or the survivor of such merger
or
the Person that acquires by conveyance, transfer, sale or lease all
or
substantially all of the assets of an Obligor as an entirety, as
the case
may be, is a solvent corporation, general partnership, limited partnership
or limited liability company or other business entity organized and
existing under the laws of the United States or any state thereof
(including the District of Columbia), and, if an Obligor is not such
survivor or Person, (A) such survivor or Person shall have executed
and
delivered to each holder of any Notes its assumption of the due and
punctual performance and observance of each covenant and condition
of this
Agreement and the Notes and (B) shall have caused to be delivered
to each
holder of any Notes an opinion of counsel reasonably satisfactory
to the
Required Holders (which may be counsel to the Company), to the effect
that
all agreements or instruments effecting such assumption are enforceable
in
accordance with their terms and comply with the terms
hereof;
|
||
(ii)
|
after
giving effect to such transaction, no Default or Event of Default
shall
exist; and
|
27
(iii)
|
after
giving effect to such transaction, the Obligors or such successor,
survivor or Person could incur at least $1.00 of additional
Indebtedness
|
||
(b)
|
any
other Subsidiary may (x) merge into an Obligor (provided that the
Obligor is the surviving corporation) or another Wholly Owned Subsidiary
or (y) sell, transfer or lease all or any part of its assets to an
Obligor or another Wholly Owned Subsidiary, or (z) merge or
consolidate with, or sell, transfer or lease all or substantially
all of
its assets to, any Person in a transaction that is permitted by Section
10.7 or, as a result of which, such Person becomes a Subsidiary;
provided
in each instance set forth in clauses (x) through (z) that, immediately
after giving effect thereto, there shall exist no Default or Event
of
Default;
|
No
such
conveyance, transfer, sale or lease of all or substantially all of the assets
of
any Obligor shall have the effect of releasing such Obligor or any successor
corporation that shall theretofore have become such in the manner prescribed
in
this Section 10.6 from its liability under this Agreement or the
Notes.
10.7.
|
Except
as
permitted by Section 10.6, the Company will not, and will not permit any
Subsidiary to, make any Asset Disposition unless:
(a)
|
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;
|
|
(b)
|
immediately
before and after giving effect to the Asset Disposition, no Default
or
Event of Default would exist; and
|
|
(c)
|
immediately
after giving effect to the Asset Disposition, the aggregate net book
value
of all Asset Dispositions in any fiscal year would not exceed 20%
of
Consolidated Total Assets as of the end of the then most recently
completed fiscal year of the
Company.
|
Notwithstanding
the foregoing, the Company may, or may permit any Subsidiary to, make an Asset
Disposition and the assets subject to such Asset Disposition shall not be
subject to or included in the foregoing limitation and computation contained
in
clause (c) of the preceding sentence to the extent that the net proceeds from
such Asset Disposition are, within 365 days of such Asset Disposition,
(A) reinvested
in assets to be used in the existing business of the Company or a Subsidiary,
or
(B) applied to the payment or prepayment of the Notes or any other
outstanding Indebtedness of the Company or any Subsidiary ranking pari
passu with
or
senior to the Notes (other than Indebtedness owing to the Company, any
Subsidiary or any Affiliate or in respect of any revolving credit or similar
credit facility providing the Company or any Subsidiary 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 Indebtedness the availability of credit
under
such credit facility is permanently reduced by an amount not less than the
amount of such proceeds applied
28
to
the
payment of such Indebtedness). For purposes of the foregoing clause (B),
the Obligors shall offer to prepay (not less than 30 or more than 60 days
following such offer) the Notes on a pro rata basis with such other Indebtedness
at a price of 100% of the principal amount of the Notes to be prepaid (without
any Make-Whole Amount) together with interest accrued to the date of prepayment;
provided that if any holder of the Notes declines such offer, the proceeds
that
would have been paid to such holder shall be offered pro rata to the other
holders of the Notes that have accepted the offer. A failure by a holder of
Notes to respond in writing not later than 10 Business Days prior to the
proposed prepayment date to an offer to prepay made pursuant to this Section
10.7 shall be deemed to constitute a rejection of such offer by such
holder.
The
Company will not and will not permit any Subsidiary to (a) become a Person
described or designated in the Specially Designated Nationals and Blocked
Persons List of the Office of Foreign Assets Control or in Section 1 of the
Anti-Terrorism Order or (b) engage in any dealings or transactions with any
such Person.
10.9.
|
The
Company will not permit any Subsidiary that is not an Obligor to become a
borrower or a guarantor of Indebtedness owed to banks under the Credit Agreement
unless such Subsidiary is, or concurrently therewith becomes, a party to the
Subsidiary Guaranty.
10.10.
|
The
Company will not, and will not permit any Subsidiary 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 that the Company and its
Subsidiaries, taken as a whole, are engaged on the date of this Agreement as
described in the Memorandum.
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 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 in the ordinary course of the Company’s or such
Subsidiary’s business and upon fair and reasonable terms not materially 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.
An
“Event
of Default” shall exist if any of the following conditions or events shall occur
and be continuing:
29
(a)
|
any
Obligor 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)
|
any
Obligor defaults in the payment of any interest on any Note for more
than
five Business Days after the same becomes due and payable;
or
|
|
(c)
|
any
Obligor defaults in the performance of or compliance with any term
contained in Section 7.1(d) or Sections 10.1 through 10.9;
or
|
|
(d)
|
any
Obligor defaults in the performance of or compliance with any term
contained herein (other than those referred to in Sections 11(a),
(b) and
(c)) and such default is not remedied within 45 days after the earlier
of
(i) a Responsible Officer obtaining actual knowledge of such default
and (ii) any Obligor receiving written notice of such default from
any holder of a Note; or
|
|
(e)
|
any
representation or warranty made in writing by or on behalf of the
Obligors
or any Subsidiary Guarantor or by any officer of any Obligor or any
Subsidiary Guarantor in this Agreement, the Subsidiary Guaranty or
in any
writing furnished in connection with the transactions contemplated
hereby
or thereby proves to have been false or incorrect in any material
respect
on the date as of which made; or
|
|
(f)
|
(i)
any Obligor or any Material Subsidiary 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 that is outstanding
in an aggregate principal amount of at least $25,000,000 beyond any
period
of grace provided with respect thereto, or (ii) any Obligor or any
Material Subsidiary 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 $25,000,000 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 (or one or more Persons are entitled to declare
such
Indebtedness to be), due and payable before its stated maturity or
before
its regularly scheduled dates of payment or (iii) as a consequence
of the
occurrence or continuation of any event or condition (other than
the
passage of time or the right of the holder of Indebtedness to convert
such
Indebtedness into equity interests or any purchase or repayment of
Indebtedness on account of the voluntary sale or transfer of the
property
or assets which secures such Indebtedness and which is required by
the
terms of the agreement pursuant to which such Indebtedness is
outstanding), (x) any Obligor or any Material Subsidiary has become
obligated to purchase or repay Indebtedness before its regular maturity
or
before its regularly scheduled dates of payment in an aggregate
outstanding principal amount of at least $25,000,000, or (y) one
or more
Persons have the right to require any Obligor or any Material Subsidiary
so to purchase or repay such Indebtedness; or
|
|
(g)
|
any
Obligor or any Material Subsidiary (i) is generally not paying, or
admits in writing its inability to pay, its debts as they become
due,
(ii) files, or consents
|
30
by
answer or otherwise to the filing against it of, a petition for relief
or
reorganization or arrangement or any other petition in bankruptcy,
for
liquidation or to take advantage of any bankruptcy, insolvency,
reorganization, moratorium or other similar law of any jurisdiction,
(iii) makes an assignment for the benefit of its creditors,
(iv) consents to the appointment of a custodian, receiver, trustee or
other officer with similar powers with respect to it or with respect
to
any substantial part of its property, (v) is adjudicated as insolvent
or to be liquidated, or (vi) takes corporate action for the purpose
of any of the foregoing; or
|
||
(h)
|
a
court or other Governmental Authority of competent jurisdiction enters
an
order appointing, without consent by any Obligor or any Material
Subsidiary, a custodian, receiver, trustee or other officer with
similar
powers with respect to it or with respect to any substantial part
of its
property, or constituting an order for relief or approving a petition
for
relief or reorganization or any other petition in bankruptcy or for
liquidation or to take advantage of any bankruptcy or insolvency
law of
any jurisdiction, or ordering the dissolution, winding-up or liquidation
of any Obligor or any Material Subsidiary, or any such petition shall
be
filed against any Obligor or any Material Subsidiary and such petition
shall not be dismissed within 75 days; or
|
|
(i)
|
a
final judgment or judgments for the payment of money aggregating
in excess
of $40,000,000 are rendered against one or more of the Obligors or
any
other Subsidiary (other than all or any portion of such judgment(s)
to the
extent covered by insurance pursuant to which the insurer has accepted
liability), which judgments are not, within 75 days after entry thereof,
bonded, discharged or stayed pending appeal, or are not discharged
within
75 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, is Material, (iv) 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, 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, could reasonably be expected to have a Material Adverse Effect;
or
|
31
(k)
|
any
Subsidiary Guarantor defaults in the performance of or compliance
with any term contained in the Subsidiary Guaranty or the Subsidiary
Guaranty ceases to be in full force and effect or is declared to
be null
and void in whole or in material part by a court or other governmental
or
regulatory authority having jurisdiction or the validity or enforceability
thereof shall be contested by the Company or any Subsidiary Guarantor
or
any of them renounces any of the same or denies that it has any or
further
liability thereunder.
|
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.
12.1.
|
(a)
|
If
an Event of Default with respect to any Obligor described in Section
11(g)
or (h) (other than an Event of Default described in clause (i) of
Section
11(g) or described in clause (vi) of Section 11(g) by virtue of the
fact
that such clause encompasses clause (i) of Section 11(g)) has occurred
and
is continuing, 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 51% or more 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 Obligors, declare all the Notes then outstanding to be immediately
due and payable.
|
|
(c)
|
If
any Event of Default described in Section 11(a) or (b) 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 Obligors, 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 (including, but not limited to, interest accrued thereon at the Default
Rate) 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 Obligors
acknowledge, 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
Obligors (except as herein specifically provided for) and that the provision
for
payment of a Make-Whole Amount by the Obligors 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.
32
12.2.
|
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.
|
At
any
time after any Notes have been declared due and payable pursuant to Section
12.1(b) or (c), the holders of not less than 51% in principal amount of the
Notes then outstanding, by written notice to the Obligors, may rescind and
annul
any such declaration and its consequences if (a) the Obligors have 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, (b) neither the
Company nor any other Person shall have paid any amounts that have become due
solely by reason of such declaration, (c) 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 (d) 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.
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, any Note or the Subsidiary Guaranty 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 Obligors under Section 15,
the Obligors will pay to the holder of each Note on demand such further amount
as shall be sufficient to cover all reasonable costs and expenses of such holder
incurred in any enforcement or collection under this Section 12, including
reasonable attorneys’ fees, expenses and disbursements.
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
33
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.
Upon
surrender of any Note to the Company at the address and to the attention of
the
designated officer (all as specified in Section 18(iii) for registration of
transfer or exchange (and in the case of a surrender for registration of
transfer, accompanied by a written instrument of transfer duly executed by
the
registered holder of such Note or such holder’s attorney duly authorized in
writing and accompanied by the relevant name, address and other information
for
notices of each transferee of such Note or part thereof), within 10 Business
Days thereafter, the Obligors shall execute and deliver, at the Obligors’
expense (except as provided below), one or more new Notes (as requested by
the
holder thereof) in exchange therefor, in an aggregate principal amount equal
to
the unpaid principal amount of the surrendered Note. Each such new Note shall
be
payable to such Person as such holder may request and shall be substantially
in
the form of Exhibit 1(a). Each such new Note shall be dated and bear interest
from the date to which interest shall have been paid on the surrendered Note
or
dated the date of the surrendered Note if no interest shall have been paid
thereon. The Obligors may require payment of a sum sufficient to cover any
stamp
tax or governmental charge imposed in respect of any such transfer of Notes.
Notes shall not be transferred in denominations of less than $500,000, 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
$500,000. 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 Section 6.2.
Upon
receipt by the Company at the address and to the attention of the designated
officer (all as specified in Section 18(iii)) 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 another Institutional Investor
holder of a Note with a minimum net worth of at least $100,000,000,
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,
|
34
within
10
Business Days thereafter, the Obligors at their own expense shall execute and
deliver, in lieu thereof, a new Note, dated and bearing interest from the date
to which interest shall have been paid on such lost, stolen, destroyed or
mutilated Note or dated the date of such lost, stolen, destroyed or mutilated
Note if no interest shall have been paid thereon.
14.1.
|
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 New York, New York at
the
principal office of JPMorgan Chase Bank, N.A. in such jurisdiction. The Obligors
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.
|
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 Obligors
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 Obligors 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 Obligors 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 Obligors 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 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 Obligors 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.
|
15.1.
|
Whether
or not the transactions contemplated hereby or by the Subsidiary Guaranty are
consummated, the Obligors will pay all reasonable costs and expenses (including
reasonable attorneys’ fees of one special counsel for all holders and, if
reasonably required by the Required Holders, 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, the Notes or the Subsidiary Guaranty (whether
or
35
not
such
amendment, waiver or consent becomes effective), including: (a) the costs and
expenses incurred in enforcing or defending (or determining whether or how
to
enforce or defend) any rights under this Agreement, the Notes or the Subsidiary
Guaranty, or in responding to any subpoena or other legal process or informal
investigative demand issued in connection with this Agreement, the Notes or
the
Subsidiary Guaranty, or by reason of being a holder of any Note, (b) the
reasonable costs and expenses incurred in connection with the insolvency or
bankruptcy of any Obligor or any other Subsidiary or in connection with any
work-out or restructuring of the transactions contemplated hereby, by the Notes
and by the Subsidiary Guaranty, (c) the reasonable costs and expenses incurred
in connection with transactions permitted by Section 10.6, and (d) the filing
fee charged by the SVO in connection with the initial filing of this Agreement
and all related documents and financial information with the SVO, provide that
the fees under this clause (d) shall not exceed $5,000. The Obligors will pay,
and will save you and each other holder of a Note harmless from, all claims
in
respect of any reasonable fees, costs or expenses if any, of brokers and finders
(other than those retained by you or another holder in connection with its
purchase of the Notes).
15.2.
|
The
obligations of the Obligors 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.
All
representations and warranties contained herein 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 Obligors pursuant to this Agreement shall be deemed
representations and warranties of the Obligors under this Agreement. Subject
to
the preceding sentence, this Agreement and the Notes embody the entire agreement
and understanding between you and the Obligors and supersede all prior
agreements and understandings relating to the subject matter
hereof.
17.1.
|
This
Agreement, the Notes and the Subsidiary Guaranty may be amended, and the
observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of
the
Obligors and the Required Holders, except that (a) no amendment or waiver of
any
of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 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
36
consent
of the holder of each Note at the time outstanding affected thereby,
(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.
(a)
|
Solicitation.
The Obligors will provide each holder of the Notes (irrespective
of the
amount of Notes then owned by it) with sufficient information,
sufficiently far in advance of the date a decision is required, to
enable
such holder to make an informed and considered decision with respect
to
any proposed amendment, waiver or consent in respect of any of the
provisions hereof or of the Notes. The Obligors 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 Obligors 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 or provide other credit support,
to
any holder of Notes as consideration for or as an inducement to the
entering into by any holder of Notes of any waiver or amendment of
any of
the terms and provisions hereof unless such remuneration is concurrently
paid, or security is concurrently granted or other credit support
concurrently provided, 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)
|
Consent
in Contemplation of Transfer or Prepayment.
Any consent made pursuant to this Section 17 by a holder of Notes
that has
transferred or has agreed to transfer its Notes to the Obligors,
any other
Subsidiary or any Affiliate of the Obligors or has agreed to accept
a
prepayment of its Notes and has provided or has agreed to provide
such
written consent as a condition to such transfer or prepayment shall
be
void and of no force or effect except solely as to such holder, and
any
amendments effected or waivers granted or to be effected or granted
that
would not have been or would not be so effected or granted but for
such
consent (and the consents of all other holders of Notes that were
acquired
under the same or similar conditions) shall be void and of no force
or
effect except solely as to such
holder.
|
17.3.
|
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 Obligors 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
37
right
consequent thereon. No course of dealing between the Obligors 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” or “the Agreement” and references thereto
shall mean this Agreement as it may from time to time be amended or
supplemented.
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 any Obligor or any of its Affiliates shall
be
deemed not to be outstanding.
18.
|
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 any Obligor or any Subsidiary Guarantor, to the Company at its
address
set forth at the beginning hereof to the attention of the Treasurer,
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.
This
Agreement and all documents relating thereto, including (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, electronic, digital or other similar process and you may destroy
any original document so reproduced. The Obligors agree and stipulate that,
to
the extent permitted
38
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 any Obligor 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.
For
the
purposes of this Section 20, “Confidential Information” means information
delivered to you by or on behalf of any Obligor or any other Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature, 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 any
Obligor or any other Subsidiary or by any Person known to you to be acting
in
breach of any duty of confidentiality owed to any Obligor or any other
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), (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 any Obligor (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 NAIC or the SVO or, in each case, 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
(w) to effect compliance with any law, rule, regulation or order applicable
to you, (x) in response to any subpoena or other legal process, (y) in
connection with any litigation to which you are a party or (z) 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 Obligors 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
39
Agreement
or its nominee), such holder will enter into an agreement with the Obligors
embodying the provisions of this Section 20. You agree that for purposes of
Regulation FD of the SEC, the provisions of this Section 20 shall constitute
a
confidentiality agreement within the meaning of Rule 100(b)(2) of Regulation
FD.
You
shall
have the right to substitute any one of your Affiliates as the purchaser of
the
Notes that you have agreed to purchase hereunder, by written notice to the
Obligors, which notice shall be signed by both you and such Affiliate, shall
contain such Affiliate’s agreement to be bound by this Agreement and shall
contain a confirmation by such Affiliate of the accuracy with respect to it
of
the representations set forth in Section 6. Upon receipt of such notice,
wherever the word “you” is used in this Agreement (other than in this Section
21), such word shall be deemed to refer to such Affiliate in lieu of you. In
the
event that such Affiliate is so substituted as a purchaser hereunder and such
Affiliate thereafter transfers to you all of the Notes then held by such
Affiliate, upon receipt by the Obligors of notice of such transfer, wherever
the
word “you” is used in this Agreement (other than in this Section 21), such
word shall no longer be deemed to refer to such Affiliate, but shall refer
to
you, and you shall have all the rights of an original holder of the Notes under
this Agreement.
You
and
each subsequent holder of a Note agree to release any Subsidiary Guarantor
from
the Subsidiary Guaranty (i) if such Subsidiary Guarantor ceases to be such
as a
result of an Asset Disposition or other transaction permitted by Section 10.6
or
10.7, or (ii) if such Subsidiary is released as a guarantor under and in respect
of the Credit Agreement; provided, however, that you and each subsequent holder
will not be required to release a Subsidiary Guarantor from the Subsidiary
Guaranty if (A) a Default or Event of Default has occurred and is continuing,
(B) such Subsidiary Guarantor is to become a borrower under the Credit
Agreement, or (C) such release is part of a plan of financing that contemplates
such Subsidiary Guarantor guaranteeing any other Indebtedness of the Company.
Such Subsidiary Guarantor shall automatically be released from the Subsidiary
Guaranty upon the delivery to the holders of the Notes of a certificate from
a
Senior Financial Officer of the Company stating that the circumstances described
in either clause (i) or (ii) exist and none of the circumstances described
in
clauses (A), (B) and (C) above are true. If any fee or other form of
consideration is given to any holder of Indebtedness of the Company for such
release, holders of the Notes shall receive equivalent consideration.
23.
|
23.1.
|
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 any subsequent holder of a Note) whether
so
expressed or not.
40
Anything
in this Agreement or the Notes to the contrary notwithstanding (but without
limiting the requirement in Section 8.4 that the notice of any optional
prepayment specify a Business Day as the date fixed for such prepayment), 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; provided that if
the
maturity date of any Note is a date other than a Business Day, the payment
otherwise due on such maturity date shall be made on the next succeeding
Business Day and shall include the additional days elapsed in the computation
of
interest payable on such next succeeding Business Day.
23.3.
|
All
accounting terms used herein which are not expressly defined in this Agreement
have the meanings respectively given to them in accordance with GAAP. Except
as
otherwise specifically provided herein, (i) all computations made pursuant
to this Agreement shall be made in accordance with GAAP, and (ii) all
financial statements shall be prepared in accordance with GAAP; provided,
however, that for purposes of determining compliance with the covenants set
forth in Sections 10.1 through 10.5 and Section 10.7, all computations shall
be
based on GAAP as in effect on the date of the Closing applied on a basis
consistent with that used in the preparation of the most recent audited
consolidated financial statements of the Company listed in Schedule
5.5.
23.4.
|
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.
23.5.
|
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.
23.6.
|
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
41
may
consist of a number of copies hereof, each signed by less than all, but together
signed by all, of the parties hereto.
23.7.
|
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 permit the
application of the laws of a jurisdiction other than such State.
(a)
|
Each
Obligor irrevocably submits to the non-exclusive jurisdiction of
any New
York State or federal court sitting in the Borough of Manhattan,
The City
of New York, over any suit, action or proceeding arising out of or
relating to this Agreement, the Notes or the Subsidiary Guaranty.
To the
fullest extent permitted by applicable law, each Obligor irrevocably
waives and agrees not to assert, by way of motion, as a defense or
otherwise, any claim that it is not subject to the jurisdiction of
any
such court, any objection that it may now or hereafter have to the
laying
of the venue of any such suit, action or proceeding brought in any
such
court and any claim that any such suit, action or proceeding brought
in
any such court has been brought in an inconvenient
forum.
|
|
(b)
|
Each
Obligor consents to process being served by or on behalf of any holder
of
Notes in any suit, action or proceeding of the nature referred to
in
Section 23.8(a) by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid,
return
receipt requested, to it at its address specified in Section 18 or at
such other address of which such holder shall then have been notified
pursuant to said Section. Each Obligor agrees that such service upon
receipt (i) shall be deemed in every respect effective service of
process upon it in any such suit, action or proceeding and
(ii) shall, to the fullest extent permitted by applicable law, be
taken and held to be valid personal service upon and personal delivery
to
it. Notices hereunder shall be conclusively presumed received as
evidenced
by a delivery receipt furnished by the United States Postal Service
or any
reputable commercial delivery service.
|
|
(c)
|
Nothing
in this Section 23.8 shall affect the right of any holder of a Note
to serve process in any manner permitted by law, or limit any right
that
the holders of any of the Notes may have to bring proceedings against
any
Obligor in the courts of any appropriate jurisdiction or to enforce
in any
lawful manner a judgment obtained in one jurisdiction in any other
jurisdiction.
|
|
(d)
|
THE
PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON
OR WITH
RESPECT TO THIS AGREEMENT, THE NOTES OR ANY OTHER DOCUMENT EXECUTED
IN
CONNECTION HEREWITH OR THEREWITH.
|
42
The
obligations of each Obligor under this Agreement and the Notes are joint and
several and are independent of the obligations of the other Obligors or any
guarantor, and a separate action or actions may be brought and prosecuted
against each Obligor, whether or not any other Obligor or guarantor is joined
in
any such action or actions. Each Obligor waives any right to require the holders
of the Notes to (i) proceed against any other Obligor, any guarantor or any
other party, (ii) proceed against or exhaust any security, if any, held from
any
Obligor, any guarantor or any other party, or (iii) pursue any other remedy
in
such holders’ power. Each Obligor waives any defense based on or arising out of
suretyship or any impairment of security held from any Obligor, any guarantor
or
any other party or on or arising out of any defense of any other Obligor, any
guarantor or any other party other than the indefeasible payment in full in
cash
of the obligations under this Agreement and the Notes, including any defense
based on or arising out of the disability of any other Obligor, any guarantor
or
any other party, or the unenforceability of such obligations or any part thereof
from any cause, or the cessation from any cause of the liability of any other
Obligor, in each case other than as the result of the payment in full in cash
of
such obligations.
*
* * *
*
43
If
you
are in agreement with the foregoing, please sign the form of agreement on a
counterpart of this Agreement and return it to the Obligors, whereupon the
foregoing shall become a binding agreement between you and the
Obligors.
Very
truly yours,
|
||
FURNITURE
BRANDS INTERNATIONAL, INC.
|
||
By:
|
/s/
Xxxx Xxxxxxxxxxxx
|
|
Name:
|
Xxxx
Xxxxxxxxxxxx
|
|
Title:
|
Chief
Administrative Officer and
|
|
Senior
Vice President
|
||
SUBSIDIARY
CO-OBLIGORS
|
||
BROYHILL
FURNITURE INDUSTRIES, INC.
|
||
HDM
FURNITURE INDUSTRIES, INC.
|
||
LANE
FURNITURE INDUSTRIES, INC.
|
||
THOMASVILLE
FURNITURE INDUSTRIES, INC.
|
||
By:
|
/s/
Xxxx Xxxxxxxxxxxx
|
|
Name:
|
Xxxx
Xxxxxxxxxxxx
|
|
Title:
|
Vice
President
|
S-1
The
foregoing is agreed
to
as of
the date thereof.
THE
PRUDENTIAL INSURANCE
|
|||
COMPANY
OF AMERICA
|
|||
By:
|
/s/
Xxxxx Xxxxxx
|
||
Vice
President
|
|||
GIBRALTAR
LIFE INSURANCE CO.,
|
|||
LTD.
|
|||
By:
|
Prudential
Investment Management
|
||
(Japan),
Inc., as Investment Manager
|
|||
By:
|
Prudential
Investment Management, Inc., as
|
||
Sub-Adviser
|
|||
By:
|
/s/
Xxxxx Xxxxxx
|
||
Vice
President
|
|||
GATEWAY
RECOVERY TRUST
|
|||
By:
|
Prudential
Investment Management, Inc., as
|
||
Asset
Manager
|
|||
By:
|
/s/
Xxxxx Xxxxxx
|
||
Vice
President
|
|||
ZURICH
AMERICAN INSURANCE
|
|||
COMPANY
|
|||
By:
|
Prudential
Private Placement Investors,
|
||
L.P.
(as Investment Advisor)
|
|||
By:
|
Prudential
Private Placement Investors, Inc. (as
|
||
its
General Partner)
|
|||
By:
|
/s/
Xxxxx Xxxxxx
|
||
Vice
President
|
|||
S-2
AMERICAN
MEMORIAL LIFE
|
|||
INSURANCE
COMPANY
|
|||
By:
|
Prudential
Private Placement Investors,
|
||
L.P.
(as Investment Advisor)
|
|||
By:
|
Prudential
Private Placement Investors, Inc.
|
||
(as
its General Partner)
|
|||
By:
|
/s/
Xxxxx Xxxxxx
|
||
Vice
President
|
|||
UNION
SECURITY INSURANCE
|
|||
COMPANY
|
|||
By:
|
Prudential
Private Placement Investors,
|
||
L.P.
(as Investment Advisor)
|
|||
By:
|
Prudential
Private Placement Investors, Inc.
|
||
(as
its General Partner)
|
|||
By:
|
/s/
Xxxxx Xxxxxx
|
||
Vice
President
|
|||
AMERICAN
SECURITY INSURANCE
|
|||
COMPANY
|
|||
By:
|
Prudential
Private Placement Investors,
|
||
L.P.
(as Investment Advisor)
|
|||
By:
|
Prudential
Private Placement Investors, Inc.
|
||
(as
its General Partner)
|
|||
By:
|
/s/
Xxxxx Xxxxxx
|
||
Vice
President
|
|||
S-3
UNITED
SERVICE PROTECTION CORP.
|
|||
By:
|
Prudential
Private Placement Investors,
|
||
L.P.
(as Investment Advisor)
|
|||
By:
|
Prudential
Private Placement Investors, Inc.
|
||
(as
its General Partner)
|
|||
By:
|
/s/
Xxxxx Xxxxxx
|
||
Vice
President
|
S-4
ING
USA ANNUITY AND LIFE
|
|
INSURANCE
COMPANY
|
|
ING
LIFE INSURANCE AND ANNUITY
|
|
COMPANY
|
|
RELIASTAR
LIFE INSURANCE
|
|
COMPANY
|
|
SECURITY
LIFE OF DENVER
|
|
INSURANCE
COMPANY
|
|
By:
|
/s/
Xxxxx X. Xxxxxxx
|
Name:
|
Xxxxx
X. Xxxxxxx
|
Title:
|
Senior
Vice President
|
S-5
TRANSAMERICA
LIFE INSURANCE
|
|
COMPANY
|
|
By:
|
/s/
Xxxxxxxxxxx X. Xxxxxx
|
Name:
|
Xxxxxxxxxxx
X. Xxxxxx
|
Title:
|
Vice
President
|
S-6
THE
GUARDIAN LIFE INSURANCE
|
|
COMPANY
OF AMERICA
|
|
By:
|
/s/
Xxxxx Xxxxxxxxxxx
|
Name:
|
Xxxxx
Xxxxxxxxxxx
|
Title:
|
Private
Placements Manager
|
S-7
BANKERS
LIFE AND CASUALTY
|
|
COMPANY
|
|
CONSECO
LIFE INSURANCE COMPANY
|
|
CONSECO
SENIOR HEALTH INSURANCE
|
|
COMPANY
|
|
CONSECO
HEALTH INSURANCE
|
|
COMPANY
|
|
WASHINGTON
NATIONAL INSURANCE
|
|
COMPANY
|
|
By:
|
/s/
Xxxxxxx X. Xxxxxx
|
Name:
|
Xxxxxxx
X. Xxxxxx
|
Title:
|
Vice
President
|
S-8
AMERUS
LIFE INSURANCE COMPANY
|
|||
By:
|
AmerUs
Capital Management Group, Inc., its
|
||
authorized
attorney-in-fact
|
|||
By:
|
/s/
Xxxxx X. Xxxx
|
||
Name:
|
Xxxxx
X. Xxxx
|
||
Title:
|
Vice
President-Private Placements
|
AMERICAN
INVESTORS LIFE INSURANCE
|
||
COMPANY
|
||
By:
|
AmerUs
Capital Management Group, Inc., its
|
|
authorized
attorney-in-fact
|
||
By:
|
/s/
Xxxxx X. Xxxx
|
|
Name:
|
Xxxxx
X. Xxxx
|
|
Title:
|
Vice
President-Private Placements
|
S-9
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, (a) any other Person that at such
time directly or indirectly through one or more intermediaries Controls, or
is
Controlled by, or is under common Control with, such first Person, (b) with
respect to the Company, shall include any Person beneficially owning or holding,
directly or indirectly, 10% or more of any class of voting or equity interests
of the Company or any Subsidiary or any corporation of which the Company and
its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests, and (c) any other Person
who is a director, officer or partner of such 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 an Obligor.
“Anti-Terrorism
Order”
means
Executive Order No. 13,224 of September 23, 2001 Blocking Property and
Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support
Terrorism (66 Fed. Reg. 49,079 (2001)), as
amended.
“Asset
Disposition”
means
the sale, lease, conveyance, disposition or other transfer of any assets other
than:
(a)
|
those
made by a Subsidiary to an Obligor or another Wholly Owned Subsidiary
or
by an Obligor to another Obligor; or
|
|
(b)
|
inventory
held for sale or lease;
|
|
(c)
|
equipment,
fixtures, supplies or materials no longer required in the operation
of the
business of the Obligors or any other Subsidiary or that is
obsolete;
|
|
(d)
|
assets
subject to licenses, leases or subleases entered into in the ordinary
course of business and not interfering in any material respect with
the
business of the Obligors; and
|
|
(e)
|
accounts
receivable sold or discounted without recourse in connection with
the
compromise or collection thereof.
|
“Business
Day”
means
(a) for the purposes of Section 8.6 only, any day other than a Saturday, a
Sunday or a day on which commercial banks in New York City are required or
authorized to be closed, and (b) for the purposes of any other provision of
this
Agreement, any
Schedule
B
day
other
than a Saturday, a Sunday or a day on which commercial banks in New York City
or
St. Louis, Missouri 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.
“Capitalized
Lease Obligation”
means,
with respect to any Person and a Capital Lease, the amount of the obligation
of
such Person as the lessee under such Capital Lease that would, in accordance
with GAAP, appear as a liability on a balance sheet of such Person.
“Change
of Control Event”
means,
the (i) acquisition through purchase or otherwise by any Person, or group
of Persons acting in concert, directly or indirectly, in one or more
transactions, of beneficial ownership or control of securities representing
more
than 50% of the combined voting power of the Company’s Voting Stock (including
the agreement to act in concert by Persons who beneficially own or control
securities representing more than 50% of the combined voting power of the
Company’s Voting Stock), or (ii) entering into by the Company of a written
agreement providing for or contemplating an acquisition described in
clause (i) hereof. The date on which the acquisition described in clause
(i) of the first sentence occurs is referred to as the “Effective
Date of the Change of Control.”
“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”
means
Furniture Brands International, Inc., a Delaware corporation.
“Confidential
Information”
is
defined in Section 20.
“Consolidated
Current Liabilities”
means,
as of any date, the amounts that would be classified as consolidated current
liabilities of the Company and its Subsidiaries at such time in accordance
with
GAAP in a consolidated balance sheet, but excluding the current portion of
any
Indebtedness under the Credit Agreement and any other Indebtedness that would
otherwise be included therein.
“Consolidated
Debt”
means,
as of any date, the remainder of (i) the sum of (x) Indebtedness of the
Company and its Subsidiaries at such time determined on a consolidated basis
with respect to borrowed money or other obligations of such Persons which at
such time would appear on the balance sheet of such Persons as Indebtedness
(including unreimbursed drawings under letters of credit and unreimbursed
payments under acceptances (each as provided for under the Credit Agreement),
but excluding Consolidated Current Liabilities and deferred tax and pension
liabilities) and (y) without duplication, the aggregate amount of all of the
Contingent Obligations of the Company and its Subsidiaries less (ii) the amount
of unrestricted cash in
2
Schedule
B
excess
of
$5,000,000 shown on the consolidated balance sheet of the Company and its
Subsidiaries at such time.
“Consolidated
EBITDA”
means,
for any period, Consolidated Net Income for such period plus, to the extent
deducted in calculating Consolidated Net Income for such period,
(i) Consolidated Interest Expense, (ii) all provisions for federal, state
and other income taxes, (iii) depreciation expense, (iv) amortization
expense, including amortization of goodwill and other intangible assets, and
(v)
all provisions for non-cash impairment charges associated with closed facilities
or sales of assets other than inventory sold in the ordinary course of business.
If, during the period for which Consolidated EBITDA is being calculated, the
Company or any Subsidiary has acquired or disposed of one or more Persons (or
the assets thereof) in any transaction or group of related transactions, the
fair market value (determined in good faith by the Company) of which exceeds
$25,000,000, Consolidated EBITDA shall be calculated on a pro forma basis as
if
the transaction or transactions had occurred on the first day of such
period.
“Consolidated
EBITDAR”
means,
for any period, Consolidated EBITDA for such period plus, to the extent deducted
in calculating Consolidated EBITDA for such period, Consolidated Net Rental
Expense. If, during the period for which Consolidated EBITDAR is being
calculated, the Company or any Subsidiary has acquired or disposed of one or
more Persons (or the assets thereof) in any transaction or group of related
transactions, the fair market value (determined in good faith by the Company)
of
which exceeds $25,000,000, Consolidated EBITDAR shall be calculated on a pro
forma basis as if the transaction or transactions had occurred on the first
day
of such period.
“Consolidated
Fixed Charges”
means,
for any period, the sum of Consolidated Interest Expense and Consolidated Net
Rental Expense.
“Consolidated
Interest Expense”
means,
for any period, the consolidated interest expense of the Company and its
Subsidiaries for such period (including capitalized interest and the interest
component of Capitalized Lease Obligations) determined on a consolidated basis
in accordance with GAAP.
“Consolidated
Net Income”
means
for any period, the net after tax income of the Company and its Subsidiaries
determined on a consolidated basis, without giving effect to any extraordinary
gains or losses; provided that (without duplication of exclusions) (i) the
net
income (to the extent positive) of any Person that is not a Subsidiary or that
is accounted for by the equity method of accounting shall be included only
to
the extent of the amount of dividends or distributions paid in cash to the
Company or a Wholly Owned Subsidiary, (ii) to the extent Consolidated Net Income
reflects amounts attributable to minority interests in Subsidiaries that are
not
Wholly Owned Subsidiaries, Consolidated Net Income shall be reduced by the
amounts attributable to such minority interests, (iii) the net income of any
Subsidiary shall be excluded to the extent that the declaration or payment
of
dividends and distributions by that Subsidiary of net income is not at the
date
of determination permitted without any prior governmental approval (that has
not
been obtained) or, directly or indirectly, by operation of the terms of its
charter or
3
Schedule
B
any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary or its stockholders, (iv) the net
income of any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded and (v) the
cumulative effect of a change in accounting principles shall be
excluded
“Consolidated
Net Rental Expense”
means,
for any period, the rent expense of the Company and its Subsidiaries under
all
leases other than Capital Leases for such period, less any related income from
subleases, all as determined on a consolidated basis in accordance with
GAAP.
“Consolidated
Net Worth” means,
as
of any date, the consolidated stockholders’ equity of the Company and its
Subsidiaries as of such date, determined in accordance with GAAP.
“Consolidated
Total Assets”
means,
as of any date, the assets and properties of the Company and its Subsidiaries
as
of such date, determined on a consolidated basis in accordance with
GAAP.
“Contingent
Obligation”
means,
with respect to any Person, any obligation of such Person guaranteeing or having
the economic effect of guaranteeing any Indebtedness, leases, dividends or
other
obligations (“primary obligations”) of any other Person (the “primary obligor”)
in any manner, whether directly or indirectly, including, without limitation,
any obligation of such Person, whether or not contingent, (i) to purchase any
such primary obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (x) for the purchase or payment
of any such primary obligation or (y) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the holder of such
primary obligation against loss in respect thereof; provided, however, that
the
term Contingent Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made (or, if less, the maximum amount of such primary
obligation for which such Person may be liable pursuant to the terms of the
instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
“Credit
Agreement” means
the
Credit Agreement dated as of April 21, 2006, among the Company and each
Subsidiary Co-Obligor, as borrowers, various lenders, The Bank of
Tokyo-Mitsubishi UFJ, Ltd., PNC Bank, National Association, Wachovia Bank,
National Association and Xxxxx Fargo Bank, NA, as co-syndication agents,
JPMorgan Chase Bank, N.A., as administrative agent, and X.X. Xxxxxx Securities
Inc., as sole bookrunner and sole lead
4
Schedule
B
arranger,
as such agreement may be hereafter amended, modified, restated, supplemented,
replaced, refinanced, increased or reduced from time to time, and any successor
credit agreement or similar facility.
“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
that rate of interest that is 2% per annum above the rate of interest stated
in
clause (a) of the first paragraph of the Notes.
“Disclosure
Documents”
is
defined in Section 5.3.
“Electronic
Delivery”
is
defined in Section 7.1(a).
“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
Materials.
“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.
“Form
10-K”
is
defined in Section 7.1(b).
“Form
10-Q”
is
defined in Section 7.1(a).
“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
|
5
Schedule
B
(ii)
|
any
other 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 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.
“Hazardous
Material”
means
any and all pollutants, toxic or hazardous wastes or other substances that
might
pose a hazard to health and safety, the removal of which may be required or
the
generation, manufacture, refining, production, processing, treatment, storage,
handling, transportation, transfer, use, disposal, release, discharge, spillage,
seepage or filtration of which is or shall be restricted, prohibited or
penalized by any applicable law (including, asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, petroleum, petroleum products, lead-based
paint, radon gas or similar restricted, prohibited or penalized
substances).
“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.
6
Schedule
B
“Indebtedness”
with
respect to any Person means, at any time, without duplication,
(a)
|
all
indebtedness (including principal, interest, fees and charges) of
such
Person for borrowed money or for the deferred purchase price of property
or services (excluding accounts payable arising in the ordinary course
of
business);
|
|
(b)
|
the
maximum amount available to be drawn under all letters of credit
issued
for the account of such Person and all unpaid drawings in respect
of such
letters of credit;
|
|
(c)
|
all
Indebtedness of the types described in clause (a), (b), (d), (e),
(f) or
(g) of this definition secured by any Lien on any property owned
by such
Person, whether or not such Indebtedness has been assumed by such
Person
(to the extent of the value of the respective
property);
|
|
(d)
|
the
aggregate amount required to be capitalized under leases under which
such
Person is the lessee;
|
|
(e)
|
all
obligations of such Person to pay a specified purchase price for
goods or
services, whether or not delivered or accepted (i.e.,
take-or-pay
and similar obligations);
|
|
(f)
|
all
Contingent Obligations of such Person; and
|
|
(g)
|
all
obligations under any (i) interest rate swap agreement, interest
rate cap
agreement, interest collar agreement, interest rate hedging agreement,
interest rate floor agreement or other similar agreement or arrangement,
or (ii) foreign exchange contract, currency swap agreement or other
similar agreements or arrangements designed to protect against the
fluctuations in currency values.
|
“INHAM
Exemption” is
defined in Section 6.2(e).
“Institutional
Investor”
means
(a) any original purchaser of a Note and (b) 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.
“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).
7
Schedule
B
“Make-Whole
Amount”
is
defined in Section 8.6.
“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, (b) the ability of any Obligor to perform its obligations under this
Agreement and the Notes, (c) the ability of any Subsidiary Guarantor to perform
its obligations under the Subsidiary Guaranty, or (d) the validity or
enforceability of this Agreement, the Notes or the Subsidiary
Guaranty.
“Material
Subsidiary”
means
each Subsidiary that (i) owned as of the most recently completed fiscal quarter
(or, in the case of an acquired Subsidiary, on a pro forma basis would have
owned) assets representing in excess of 10% of the Consolidated Total Assets
of
the Company as of the end of such fiscal quarter or (ii) generated (or in the
case of an acquired Subsidiary, on a pro forma basis would have generated)
annual revenues in excess of 10% of the Company’s consolidated total revenues
for the most recently completed fiscal year.
“Memorandum”
is
defined in Section 5.3.
“Multiemployer
Plan”
means
any Plan that is a “multiemployer plan” (as such term is defined in section
4001(a)(3) of ERISA).
“NAIC”
means
the National Association of Insurance Commissioners or any successor
thereto.
“NAIC
Annual Statement”
is
defined in Section 6.2.
“Notes”
is
defined in Section 1.
“Obligor”
means
each of the Company and the Subsidiary Co-Obligors.
“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
Purchasers”
is
defined in Section 2.
“PBGC”
means
the Pension Benefit Guaranty Corporation referred to and defined in ERISA or
any
successor thereto.
8
Schedule
B
“Person”
means an
individual, partnership, corporation, limited liability company, association,
trust, unincorporated organization, business entity or Governmental
Authority.
“Plan”
means an
“employee benefit plan” (as defined in section 3(3) of ERISA) subject to Title I
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.
“Priority
Debt” means,
as
of any date, the sum (without duplication) of (a) Indebtedness of the
Obligors and any other Subsidiaries secured by Liens not otherwise permitted
by
Sections 10.5(a) through (k), and (b) Indebtedness of a Subsidiary that is
not an Obligor not otherwise permitted by Sections 10.4(a) through
(d).
“property”
or
“properties”
means,
unless otherwise specifically limited, real or personal property of any kind,
tangible or intangible, xxxxxx or inchoate.
“PTE”
is
defined in Section 6.2(a).
“Purchaser”
means
each purchaser listed in Schedule A.
“QPAM
Exemption”
is
defined in Section 6.2(d).
“Required
Holders”
means,
at any time, the holders of more than 50% in principal amount of the Notes
at
the time outstanding (exclusive of Notes then owned by an Obligor 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.
“SEC”
shall
mean the Securities and Exchange Commission of the United States, or any
successor thereto.
“Securities
Act”
means
the Securities Act of 1933, as amended from time to time.
“Senior
Financial Officer”
means
the chief financial officer, principal accounting officer, treasurer or
comptroller of the Company.
“Source”
is
defined in Section 6.2.
9
Schedule
B
“Subsidiary”
means,
as to any Person, any other Person in which such first Person or one or more
of
its Subsidiaries or such first 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 second Person,
and
any partnership, joint venture or limited liability company if more than a
50%
interest in the profits or capital thereof is owned by such first Person or
one
or more of its Subsidiaries or such first Person and one or more of its
Subsidiaries (unless such partnership or limited liability company 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
Co-Obligor”
means
each of Broyhill Furniture Industries, Inc., a North Carolina corporation;
HDM
Furniture Industries, Inc., a Delaware corporation; Lane Furniture Industries,
Inc., a Mississippi corporation; and Thomasville Furniture Industries, Inc.,
a
Delaware corporation.
“Subsidiary
Guarantor”
is
defined in Section 1.
“Subsidiary
Guaranty”
is
defined in Section 1.
“SVO”
means
the Securities Valuation Office of the NAIC or any successor to such
Office.
“this
Agreement” or “the Agreement” is
defined in Section 17.3.
“USA
Patriot Act”
means
United States Public Law 107-56, Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT
ACT)
Act of 2001, as amended from time to time, and the rules and regulations
promulgated thereunder from time to time in effect.
“Voting
Stock”
means
securities of any class or classes, the holders of which are ordinarily, in
the
absence of contingencies, entitled to elect a majority of the corporate
directors (or Persons performing similar functions).
“Wholly
Owned Subsidiary”
means,
at any time, any Subsidiary 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.