Exhibit 10.1
FINAL VERSION
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XXXXXXXXX FARMS, INC.
$50,000,000
6.12% Senior Notes due April 28, 2016
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NOTE PURCHASE AGREEMENT
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Dated as of April 28, 2006
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TABLE OF CONTENTS
(Not a part of the Agreement)
SECTION HEADING PAGE
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SECTION 1. AUTHORIZATION OF NOTES........................................ 1
SECTION 2. SALE AND PURCHASE OF NOTES.................................... 1
Section 2.1. Purchase and Sale of Notes............................. 1
Section 2.2. Subsidiary Guaranties.................................. 1
SECTION 3. CLOSING....................................................... 3
SECTION 4. CONDITIONS TO CLOSING......................................... 3
Section 4.1. Representations and Warranties......................... 3
Section 4.2. Performance; No Default................................ 3
Section 4.3. Compliance Certificates................................ 4
Section 4.4. Opinions of Counsel.................................... 4
Section 4.5. Purchase Permitted by Applicable Law, Etc.............. 4
Section 4.6. Sale of Other Notes.................................... 5
Section 4.7. Payment of Special Counsel Fees........................ 5
Section 4.8. Private Placement Number............................... 5
Section 4.9. Changes in Corporate Structure......................... 5
Section 4.10. Consent................................................ 5
Section 4.11. Subsidiary Guaranty, Etc............................... 5
Section 4.12. Funding Instructions................................... 5
Section 4.13. Proceedings and Documents.............................. 5
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY................. 6
Section 5.1. Organization; Power and Authority...................... 6
Section 5.2. Authorization, Etc..................................... 6
Section 5.3. Disclosure............................................. 6
Section 5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates.......................................... 7
Section 5.5. Financial Statements; Material Liabilities............. 7
Section 5.6. Compliance with Laws, Other Instruments, Etc........... 8
Section 5.7. Governmental Authorizations, Etc....................... 8
Section 5.8. Litigation; Observance of Agreements, Statutes and
Orders.............................................. 8
Section 5.9. Taxes.................................................. 8
Section 5.10. Title to Property; Leases.............................. 9
Section 5.11. Licenses, Permits, Etc................................. 9
Section 5.12. Compliance with ERISA.................................. 9
Section 5.13. Private Offering by the Company........................ 10
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Section 5.14. Use of Proceeds; Margin Regulations.................... 10
Section 5.15. Existing Debt; Future Liens............................ 11
Section 5.16. Foreign Assets Control Regulations, Etc................ 11
Section 5.17. Status under Certain Statutes.......................... 11
Section 5.18. Notes Rank Pari Passu.................................. 12
Section 5.19. Environmental Matters.................................. 12
SECTION 6. REPRESENTATIONS OF THE PURCHASERS............................. 12
Section 6.1. Purchase for Investment................................ 12
Section 6.2. Source of Funds........................................ 13
SECTION 7. INFORMATION AS TO THE COMPANY................................. 15
Section 7.1. Financial and Business Information..................... 15
Section 7.2. Officer's Certificate.................................. 17
Section 7.3. Visitation............................................. 18
SECTION 8. PREPAYMENT OF THE NOTES....................................... 19
Section 8.1. Required Prepayments................................... 19
Section 8.2. Optional Prepayments with Make-Whole Amount............ 19
Section 8.3. Change in Control...................................... 19
Section 8.4. Allocation of Partial Prepayments...................... 21
Section 8.5. Maturity; Surrender, Etc............................... 21
Section 8.6. Purchase of Notes...................................... 21
Section 8.7. Make-Whole Amount...................................... 21
SECTION 9. AFFIRMATIVE COVENANTS......................................... 23
Section 9.1. Compliance with Law.................................... 23
Section 9.2. Insurance.............................................. 23
Section 9.3. Maintenance of Properties.............................. 23
Section 9.4. Payment of Taxes and Claims............................ 24
Section 9.5. Legal Existence, Etc................................... 24
Section 9.6. Notes to Rank Pari Passu............................... 24
Section 9.7. Guaranty by Subsidiaries............................... 24
Section 9.8. Books and Records...................................... 25
SECTION 10. NEGATIVE COVENANTS........................................... 25
Section 10.1. Current Ratio.......................................... 25
Section 10.2. Limitation on Total Debt............................... 25
Section 10.3. Limitation on Consolidated Priority Debt............... 25
Section 10.4. ConsolidatedNet Worth.................................. 25
Section 10.5. Limitation on Liens.................................... 26
Section 10.6. Mergers, Consolidations, Etc........................... 28
Section 10.7. Sale of Assets......................................... 29
Section 10.8. Transactions with Affiliates........................... 30
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Section 10.9. Designation of Subsidiaries............................ 30
Section 10.10. Line of Business....................................... 31
Section 10.11. Terrorism Sanctions Regulations........................ 31
SECTION 11. EVENTS OF DEFAULT............................................ 31
SECTION 12. REMEDIES ON DEFAULT, ETC..................................... 33
Section 12.1. Acceleration........................................... 33
Section 12.2. Other Remedies......................................... 34
Section 12.3. Rescission............................................. 34
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc...... 35
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES................ 35
Section 13.1. Registration of Notes.................................. 35
Section 13.2. Transfer and Exchange of Notes......................... 35
Section 13.3. Replacement of Notes................................... 36
SECTION 14. PAYMENTS ON NOTES............................................ 36
Section 14.1. Place of Payment....................................... 36
Section 14.2. Home Office Payment.................................... 36
SECTION 15. EXPENSES, ETC................................................ 37
Section 15.1. Transaction Expenses................................... 37
Section 15.2. Survival............................................... 37
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT.................................................... 38
SECTION 17. AMENDMENT AND WAIVER......................................... 38
Section 17.1. Requirements........................................... 38
Section 17.2. Solicitation of Holders of Notes....................... 38
Section 17.3. Binding Effect, Etc.................................... 39
Section 17.4. Notes Held by Company, Etc............................. 39
SECTION 18. NOTICES...................................................... 39
SECTION 19. REPRODUCTION OF DOCUMENTS.................................... 40
SECTION 20. CONFIDENTIAL INFORMATION..................................... 40
SECTION 21. SUBSTITUTION OF PURCHASER.................................... 41
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SECTION 22. MISCELLANEOUS................................................ 42
Section 22.1. Successors and Assigns................................. 42
Section 22.2. Payments Due on Non-Business Days...................... 42
Section 22.3. Accounting Terms....................................... 42
Section 22.4. Severability........................................... 42
Section 22.5. Construction, Etc...................................... 42
Section 22.6. Counterparts........................................... 42
Section 22.7. Governing Law.......................................... 43
Section 22.8. Waiver of Jury Trial................................... 43
Signature................................................................ 44
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SCHEDULE A -- INFORMATION RELATING TO PURCHASERS
SCHEDULE B -- DEFINED TERMS
SCHEDULE 5.3 -- Disclosure Materials
SCHEDULE 5.4 -- Subsidiaries of the Company and Ownership of Subsidiary Stock
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.15 -- Existing Debt
EXHIBIT 1 -- Form of 6.12% Senior Note due April 28, 2016
EXHIBIT 2.2(a) -- Form of Subsidiary Guaranty
EXHIBIT 2.2(b) -- Form of Intercreditor Agreement
EXHIBIT 4.4(a) -- Form of Opinion of Special Counsel for the Company
EXHIBIT 4.4(b) -- Form of Opinion of Special Counsel for the Purchasers
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XXXXXXXXX FARMS, INC.
000 XXXXX XXXX
XXXXXX, XXXXXXXXXXX 00000
6.12% Senior Notes due April 28, 2016
Dated as of April 28, 2006
TO EACH OF THE PURCHASERS LISTED IN
SCHEDULE A HERETO:
Ladies and Gentlemen:
XXXXXXXXX FARMS, INC., a Mississippi corporation (the "Company"), agrees
with each of the purchasers whose names appear at the end hereof (each, a
"Purchaser" and, collectively, the "Purchasers") as follows:
SECTION 1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of $50,000,000 aggregate
principal amount of its 6.12% Senior Notes due April 28, 2016 (the "Notes", such
term to include any such notes issued in substitution therefor pursuant to
SECTION 13). The Notes shall be substantially in the form set out in EXHIBIT 1.
Certain capitalized and other terms used in this Agreement are defined in
SCHEDULE B; and references to a "SCHEDULE" or an "EXHIBIT" are, unless otherwise
specified, to a Schedule or an Exhibit attached to this Agreement.
SECTION 2. SALE AND PURCHASE OF NOTES.
Section 2.1. Purchase and Sale of Notes. Subject to the terms and
conditions of this Agreement, the Company will issue and sell to each Purchaser
and each Purchaser will purchase from the Company, at the Closing provided for
in SECTION 3, Notes in the principal amount specified opposite such Purchaser's
name in SCHEDULE A at the purchase price of 100% of the principal amount
thereof. The Purchasers' obligations hereunder are several and not joint
obligations and no Purchaser shall have any liability to any Person for the
performance or non-performance of any obligation by any other Purchaser
hereunder.
Section 2.2. Subsidiary Guaranties. (a) The payment by the Company of all
amounts due with respect to the Notes and the performance by the Company of its
obligations under this Agreement will be absolutely and unconditionally
guaranteed by Xxxxxxxxx Farms, Inc. (Foods Division), a Mississippi corporation,
Xxxxxxxxx
Farms, Inc. (Production Division), a Mississippi corporation, and Xxxxxxxxx
Farms, Inc. (Processing Division), a Mississippi corporation (together with any
additional Subsidiary who executes and delivers a guaranty pursuant to SECTION
9.7, the "Subsidiary Guarantors") pursuant to the guaranty agreement
substantially in the form of EXHIBIT 2.2(A) attached hereto and made a part
hereof (as the same may be amended, modified, extended or renewed, the
"Subsidiary Guaranty").
(b) The enforcement of the rights and benefits in respect of the Subsidiary
Guaranty and the allocation of proceeds thereof shall be subject to an
intercreditor agreement substantially in the form of EXHIBIT 2.2(B) attached
hereto and made a part hereof (as the same may be amended, modified, extended or
renewed, the "Intercreditor Agreement").
(c) The holders of the Notes acknowledge and agree that such holders will
discharge and release any Subsidiary Guarantor from the Subsidiary Guaranty
pursuant to the written request of the Company, provided that (i) either (1)
such Subsidiary Guarantor has been released and discharged as an obligor and
guarantor under and in respect of all Debt of the Company or (2) the liability
of such Subsidiary Guarantor as obligor or guarantor in respect of all such Debt
is at the time of discharge and release of such Subsidiary Guaranty incurred
within the limitations of SECTION 10, including, without limitation, SECTIONS
10.2 and 10.3 thereof, and, in either event, the Company so certifies to the
holders of the Notes in a certificate which accompanies such request for release
and discharge, which certificate shall also include information in reasonable
detail to show compliance with SECTION 10 if such release and discharge is
requested pursuant to clause (2), (ii) any such release and discharge shall be
expressly conditioned upon receipt by the holders of the Notes of a written
agreement executed by the Subsidiary Guarantor to be released pursuant to which
such Subsidiary Guarantor shall agree that if, for any reason whatsoever, it
thereafter becomes an obligor or guarantor under and in respect of any Debt of
the Company, then such Subsidiary Guarantor shall contemporaneously provide
written notice thereof to the holders of the Notes accompanied by either (1) an
executed Subsidiary Guaranty of such Subsidiary Guarantor or (2) a certificate
of the Company certifying to the holders of the Notes that the liability of such
Subsidiary Guarantor as an obligor or guarantor under or in respect of such Debt
of the Company is incurred within the limitations of SECTION 10, which
certificate shall also include information in reasonable detail to show
compliance with SECTION 10, including, without limitation, SECTIONS 10.2 and
10.3 thereof, and (iii) at the time of such release and discharge, the Company
shall deliver a certificate of a Responsible Officer to the holders of the Notes
to the effect that no Default or Event of Default exists.
(d) The Company agrees that it will not, nor will it permit any Subsidiary
or Affiliate to, directly or indirectly, pay or cause to be paid any
consideration or remuneration, whether by way of supplemental or additional
interest, fee or otherwise, to any creditor of the Company or of any Subsidiary
Guarantor as consideration for or as an inducement to the entering into by any
such creditor of any release or discharge of any Subsidiary Guarantor with
respect to any liability of such Subsidiary Guarantor as an obligor or guarantor
under or in respect of Debt of the Company, unless such consideration or
remuneration is concurrently paid, on the same terms, ratably to the Noteholders
of all of the Notes then outstanding.
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SECTION 3. CLOSING.
The sale and purchase of the Notes to be purchased by each Purchaser shall
occur at the offices of Xxxxxxx and Xxxxxx LLP, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000, at 10:00 A.M. Chicago time, at a closing (the "Closing") on
April 28, 2006 or on such other Business Day thereafter on or prior to May 15,
2006 as may be agreed upon by the Company and the Purchasers. At the Closing,
the Company will deliver to each Purchaser the Notes to be purchased by such
Purchaser in the form of a single Note (or such greater number of Notes in
denominations of at least $100,000 as such Purchaser may request) dated the date
of the Closing and registered in such Purchaser's name (or in the name of its
nominee), against delivery by such Purchaser to the Company or its order of
immediately available funds in the amount of the purchase price therefor by wire
transfer of immediately available funds for the account of the Company to
account number 5200240001 at AmSouth Bank, ABA number 000000000, Account Name:
Xxxxxxxxx Farms, Inc. If at the Closing the Company shall fail to tender such
Notes to any Purchaser as provided above in this SECTION 3, or any of the
conditions specified in SECTION 4 shall not have been fulfilled to such
Purchaser's reasonable satisfaction, such Purchaser shall, at its election, be
relieved of all further obligations under this Agreement, without thereby
waiving any rights such Purchaser may have by reason of such failure or such
nonfulfillment.
SECTION 4. CONDITIONS TO CLOSING.
Each Purchaser's obligation to purchase and pay for the Notes to be sold to
such Purchaser at the Closing is subject to the fulfillment to such Purchaser's
reasonable satisfaction, prior to or at the Closing, of the following
conditions:
Section 4.1. Representations and Warranties. (a) The representations and
warranties of the Company in this Agreement shall be correct when made and at
the time of the Closing.
(b) The representations and warranties of each Subsidiary Guarantor in the
Subsidiary Guaranty shall be correct when made and at the time of Closing.
Section 4.2. Performance; No Default. (a) The Company shall have performed
and complied in all material respects with all agreements and conditions
contained in this Agreement required to be performed or complied with by it
prior to or at the Closing, and after giving effect to the issue and sale of the
Notes (and the application of the proceeds thereof as contemplated by SECTION
5.14), no Default or Event of Default shall have occurred and be continuing.
Neither the Company nor any 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.
(b) Each Subsidiary Guarantor shall have performed and complied in all
material respects with all agreements and conditions contained in the Subsidiary
Guaranty required to be performed and complied with by it prior to or at the
Closing, and after giving effect to the issue
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and sale of Notes (and the application of the proceeds thereof as contemplated
by SECTION 5.14), no Default or Event of Default shall have occurred and be
continuing.
Section 4.3. Compliance Certificates.
(a) Officer's Certificate. The Company shall have delivered to such
Purchaser an Officer's Certificate, dated the date of the Closing, certifying
that the conditions specified in SECTIONS 4.1(A), 4.2(B) and 4.9 have been
fulfilled.
(b) Subsidiary Guarantor Officer's Certificate. Each Subsidiary Guarantor
shall have delivered to such Purchaser a certificate of an authorized officer,
dated the date of the Closing, certifying that the conditions set forth in
SECTION 4.1(B), 4.2(B) and 4.9 have been fulfilled.
(c) Secretary's Certificate. The Company shall have delivered to such
Purchaser a certificate of its Secretary or Assistant Secretary, dated the date
of Closing, certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of
the Notes and this Agreement.
(d) Subsidiary Guarantor Secretary's Certificate. Each Subsidiary Guarantor
shall have delivered to such Purchaser a certificate of its Secretary or
Assistant Secretary, dated the date of Closing, certifying as to the resolutions
attached thereto and other corporate proceedings relating to the authorization,
execution and delivery of the Subsidiary Guaranty.
Section 4.4. Opinions of Counsel. Such Purchaser shall have received
opinions in form and substance satisfactory to such Purchaser, dated the date of
the Closing (a) from Xxxxxxx Xxxxxxx Xxxxxxx Xxxxxx Xxxxx Xxxxxxxx & Xxxxxx, LLP
and Xxxx Xxxxxx Child & Xxxxxxx, P.A., independent counsel for the Company and
the Subsidiary Guarantors, covering the matters set forth in EXHIBIT 4.4(A) and
covering such other matters incident to the transactions contemplated hereby as
such Purchaser or its counsel may reasonably request (and the Company hereby
authorizes its counsel to deliver such opinion to the Purchasers) and (b) from
Xxxxxxx and Xxxxxx LLP, the Purchasers' 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 such Purchaser may
reasonably request.
Section 4.5. Purchase Permitted by Applicable Law, Etc. On the date of the
Closing such Purchaser's purchase of Notes shall (a) be permitted by the laws
and regulations of each jurisdiction to which such Purchaser is 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 such
Purchaser 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 such Purchaser, such Purchaser shall have received an Officer's
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Certificate certifying as to such matters of fact as such Purchaser may
reasonably specify to enable such Purchaser to determine whether such purchase
is so permitted.
Section 4.6. Sale of Other Notes. Contemporaneously with the Closing, the
Company shall sell to each other Purchaser, and each other Purchaser shall
purchase, the Notes to be purchased by it at the Closing as specified in
SCHEDULE A.
Section 4.7. Payment of Special Counsel Fees. Without limiting the
provisions of SECTION 15.1, the Company shall have paid on or before the Closing
the fees, charges and disbursements of the Purchasers' special counsel referred
to in SECTION 4.4 to the extent reflected in a statement of such counsel
rendered to the Company at least one Business Day prior to the Closing.
Section 4.8. Private Placement Number. A Private Placement Number issued by
Standard & Poor's CUSIP Service Bureau (in cooperation with the Securities
Valuation Office of the National Association of Insurance Commissioners) shall
have been obtained for the Notes.
Section 4.9. Changes in Corporate Structure. None of the Company and the
Subsidiary Guarantors shall have changed its jurisdiction of incorporation or
organization, as applicable, or been a party to any merger or consolidation or
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.
Section 4.10. Consent. Such Purchaser shall have received a true, correct
and complete copy, certified by a Responsible Officer of the Company of: (a) the
Bank Credit Agreement and (b) any necessary amendments, consents or waivers to
each of the Bank Credit Agreement and the Intercreditor Agreement to permit the
issuance and sale of the Notes with the benefit of the Intercreditor Agreement.
Section 4.11. Subsidiary Guaranty, Etc. The Subsidiary Guaranty and the
Intercreditor Agreement shall be in full force and effect and shall constitute
the legal, valid and binding obligations of all of the parties thereto.
Section 4.12. Funding Instructions. 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
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.
Section 4.13. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to such Purchaser and its special counsel, and such Purchaser and
its special
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counsel shall have received all such counterpart originals or certified or other
copies of such documents as such Purchaser or such special counsel may
reasonably request.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each Purchaser that:
Section 5.1. Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and authority to own or hold under lease the properties
it purports to own or hold under lease, to transact the business it transacts
and proposes to transact, to execute and deliver this Agreement and the Notes
and to perform the provisions hereof and thereof.
Section 5.2. Authorization, Etc. This Agreement and the Notes have been
duly authorized by all necessary corporate action on the part of the Company,
and this Agreement constitutes, and upon execution and delivery thereof each
Note will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (b) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
Section 5.3. Disclosure. The Company, through its agent, Xxxxxx Xxxxxxx
Corp., has delivered to each Purchaser a copy of a Private Placement Memorandum,
dated March 2006 (the "Memorandum", which defined term includes the information
that is incorporated therein by reference), relating to the transactions
contemplated hereby. The Memorandum fairly describes, in all material respects,
the general nature of the business and principal properties of the Company and
its Subsidiaries. This Agreement, the Memorandum and the documents, certificates
or other writings delivered to the Purchasers by or on behalf of the Company 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 each Purchaser prior to April 7, 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 the Disclosure Documents
reflect in Section IX of the Memorandum, since October 31, 2005, there has been
no change in the financial condition, operations, business, properties or
prospects 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 Company that could
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reasonably be expected to have a Material Adverse Effect that has not been set
forth in the Disclosure Documents.
Section 5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates. (a) SCHEDULE 5.4 contains (except as noted therein) complete and
correct lists (i) of the Company's Subsidiaries, showing, as to each Subsidiary,
the correct name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary, (ii) of
the Company's Affiliates, other than Subsidiaries, (iii) of the Company's
Restricted Subsidiaries, and (iv) of 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
that is prohibited by this Agreement (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 could 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 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 Company or any of its Restricted Subsidiaries that owns outstanding shares
of capital stock or similar equity interests of such Restricted Subsidiary.
Section 5.5. Financial Statements; Material Liabilities. The Company has
delivered to each Purchaser copies of the financial statements of the Company
and its Subsidiaries listed on SCHEDULE 5.5. All of said financial statements
(including in each case the related schedules and notes) fairly present in all
material respects the consolidated financial position of the Company and its
Subsidiaries as of the respective dates specified in such financial statements
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). 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.
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Section 5.6. Compliance with Laws, Other Instruments, Etc. The execution,
delivery and performance by the Company of this Agreement and the Notes will not
(a) contravene, result in any breach of, or constitute a default under, or
result in the creation of any Lien in respect of any property of the Company or
any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or
credit agreement, lease, corporate charter or by-laws, or any other agreement or
instrument to which the Company or any Subsidiary is bound or by which the
Company or any Subsidiary or any of their respective properties may be bound or
affected, (b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or any Subsidiary
or (c) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary.
Section 5.7. Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement or the Notes, other than a filing under the
Exchange Act with respect to the consummation of the transactions contemplated
by this Agreement.
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders. (a)
There are no actions, suits, investigations or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company or any
Subsidiary or any property of the Company or any Subsidiary in any court or
before any arbitrator of any kind or before or by any Governmental Authority
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(b) Neither the Company nor any 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 without limitation Environmental Laws or the USA Patriot
Act) of any Governmental Authority, which default or violation, individually or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
Section 5.9. Taxes. 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 (a) the amount
of which is not individually or in the aggregate Material or (b) 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 could
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of
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the Company and its Subsidiaries in respect of Federal, state or other taxes for
all fiscal periods are adequate. 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 October 31, 2004.
Section 5.10. Title to Property; Leases. 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.
Section 5.11. Licenses, Permits, Etc. (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.
(b) To the best knowledge of the Company, no product of the Company or any
of its Subsidiaries infringes in any Material respect any license, permit,
franchise, authorization, patent, copyright, proprietary software, service xxxx,
trademark, trade name or other right owned by any other Person.
(c) To the best knowledge of the Company, there is no Material violation by
any Person of any right of the Company or any of its Subsidiaries with respect
to any patent, copyright, proprietary software, service xxxx, trademark, trade
name or other right owned or used by the Company or any of its Subsidiaries.
Section 5.12. Compliance with ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in section 3 of ERISA), and no
event, transaction or condition has occurred or exists that could 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
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year on the basis of the actuarial assumptions specified for funding purposes in
such Plan's most recent actuarial valuation report, did not exceed the aggregate
current value of the assets of such Plan allocable to such benefit liabilities.
The term "benefit liabilities" has the meaning specified in section 4001 of
ERISA and the terms "current value" and "present value" have the meaning
specified in section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The expected post retirement 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 section 406 of ERISA or in connection with which a tax could be
imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation by
the Company in the first sentence of this SECTION 5.12(E) is made in reliance
upon and subject to the accuracy of such Purchaser's 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 such Purchaser.
Section 5.13. Private Offering by the Company. Neither the Company nor
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 the
Purchasers and not more than 44 other Institutional Investors, each of which has
been offered the Notes at a private sale for investment. Neither the Company nor
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.
Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply
the proceeds of the sale of the Notes as set forth in Section I.d of the
Memorandum. No part of the proceeds from the sale of the Notes hereunder 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 the Company 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 2% 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 2% 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.
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Section 5.15. Existing Debt; Future Liens. (a) SCHEDULE 5.15 sets forth a
complete and correct list of all outstanding Debt of the Company and its
Subsidiaries as of the date of the Closing (including a description of the
obligors and obligees, principal amount outstanding and collateral therefor, if
any, and Guaranty thereof, if any). Neither the Company nor any Subsidiary is in
default and no waiver of default is currently in effect, in the payment of any
principal or interest on any Debt of the Company or such Subsidiary and no event
or condition exists with respect to any Debt of the Company or any Subsidiary
that would permit (or that with notice or the lapse of time, or both, would
permit) one or more Persons to cause such Debt 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, neither the Company nor any
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) Neither the Company nor any Subsidiary is a party to, or otherwise
subject to any provision contained in, any instrument evidencing Debt of the
Company or such Subsidiary, any agreement relating thereto or any other
agreement (including, but not limited to, its charter or other organizational
document) which limits the amount of, or otherwise imposes restrictions on the
incurring of, Debt of the Company or any Subsidiary, except as specifically
indicated in SCHEDULE 5.15.
Section 5.16. Foreign Assets Control Regulations, Etc. (a) Neither the sale
of the Notes by the Company hereunder nor its use of the proceeds thereof will
violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto.
(b) Neither the Company nor any 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 Company
and its Subsidiaries 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 Company.
Section 5.17. Status under Certain Statutes. Neither the Company nor any
Subsidiary is subject to regulation under the
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Investment Company Act of 1940, as amended, the ICC Termination Act of 1995, as
amended, or the Federal Power Act, as amended.
Section 5.18. Notes Rank Pari Passu. The obligations of the Company under
this Agreement and the Notes rank at least pari passu in right of payment with
all other unsecured Senior Debt (actual or contingent) of the Company,
including, without limitation, all unsecured Senior Debt of the Company
described in SCHEDULE 5.15 hereto.
Section 5.19. Environmental Matters. (a) Neither the Company nor any
Subsidiary has knowledge of any claim or has received any notice of any claim,
and no proceeding has been instituted raising any claim against the Company or
any of its Subsidiaries or any of their respective real properties now 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 could not reasonably be expected to result in a Material
Adverse Effect.
(b) Neither the Company nor any Subsidiary has knowledge of any facts which
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 could not
reasonably be expected to result in a Material Adverse Effect.
(c) Neither the Company nor any Subsidiary has stored any Hazardous
Materials on real properties now or formerly owned, leased or operated by any of
them or has disposed of any Hazardous Materials in a manner contrary to any
Environmental Laws in each case in any manner that could reasonably be expected
to result in a Material Adverse Effect.
(d) All buildings on all real properties now owned, leased or operated by
the Company or any 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.
SECTION 6. REPRESENTATIONS OF THE PURCHASERS.
Section 6.1. Purchase for Investment. (a) Each Purchaser severally
represents that (i) it is purchasing the Notes for its own account or for one or
more separate accounts maintained by such Purchaser 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 such Purchaser's or their property shall at all
times be within such Purchaser's or their control; and provided, further, that
the disposition of the Notes or any part or portion thereof will be in
accordance with applicable law and the terms of this Agreement, (ii) it is an
"accredited investor" as that term is defined in Rule 501(a)(1),(a)(3) or (a)(7)
of Regulation D promulgated under the Securities Act (an "Accredited Investor"),
(iii) it has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of purchasing the Notes,
(iv) it is purchasing the Notes for its own account or for a Related Fund
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which is an Accredited Investor and not for unregistered distribution, and (v)
it is familiar with the conditions of Rules 144 and 144A under the Securities
Act regarding certain resales of Securities such as the Notes. Each Purchaser
understands 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 Company is not required to register the Notes.
(b) Each Purchaser understands and agrees that it will not transfer the
Notes or any part or portion thereof held by it to any Person that is a
Competitor.
Section 6.2. Source of Funds. Each Purchaser severally represents that at
least one of the following statements is an accurate representation as to each
source of funds (a "Source") to be used by such Purchaser to pay the purchase
price of the Notes to be purchased by such Purchaser 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) (A) in respect of which the reserves
and liabilities (as defined by the annual statement for life insurance
companies approved by the National Association of Insurance Commissioners
(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 ten percent (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; (B) the terms of
the purchase of the Notes are at least as favorable to the insurance
company general account as the terms generally available in arm's-length
transactions between unrelated parties; and (C) to the best of such
Purchaser's knowledge, the purchase of the Notes is not part of an
agreement, arrangement or understanding designed to benefit a "party in
interest" (as defined in Section V of PTE 95-60); 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 the PTE 91-38 and, (1) except as
have been disclosed by such Purchaser to the Company 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
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than 10% of all assets allocated to such pooled separate account or
collective investment fund; (2) the terms of the purchase of the Notes are
not less favorable to the pooled separate account or collective investment
fund than the terms generally available in arm's-length transactions
between unrelated parties; and (3) the insurance company or bank, as the
case may be, will maintain and make unconditionally available at its
customary location for examination during normal business hours the records
necessary to determine compliance with the conditions of the applicable
exemption; or
(d) the Source constitutes assets of an "investment fund" (within the
meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of the
QPAM Exemption), and (i) 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, (ii) the conditions of Part l(c) and (g) of the QPAM Exemption are
satisfied, (iii) as of the last day of its most recent calendar quarter,
neither the QPAM nor a Person controlling or controlled by the QPAM
(applying the definition of "control" in Section V(e) of the QPAM
Exemption) owns a 20% or more interest in the Company (or a more than 10%
interest if such Person exercises control over the management or policies
of the Company by reason of its ownership interest; (iv) at the time of
Closing and at the time of any subsequent renewal or modification hereof
that requires the consent of the QPAM, the terms of this transaction are
(or will be) in the case of a renewal or modification) at least as
favorable to the investment fund as the terms generally available in arm's
length transactions between unrelated parties; and (v) the identity of such
QPAM and the names of all employee benefit plans whose assets are included
in such investment fund have been disclosed to the Company in writing
pursuant to this clause (d); or
(e) the Source is a governmental plan; or
(f) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans, each
of which has been identified to the Company in writing pursuant to this
clause (g); or
(g) 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", "party in interest" and "separate account" shall have the
respective meanings assigned to such terms in section 3 of ERISA. "Employee
benefit plan" shall also include a "plan" as described in Section 4975(e)(1) of
the Code.
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SECTION 7. INFORMATION AS TO THE COMPANY.
Section 7.1. Financial and Business Information. The Company shall deliver
to each holder of Notes that is an Institutional Investor:
(a) Quarterly Statements -- within 60 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
consolidated Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in shareholders'
equity and cash flows of the Company and its consolidated Subsidiaries
for such quarter and (in the case of the second and third quarters)
for the portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial statements generally, and
certified by a Senior Financial Officer as fairly presenting, in all material
respects, the financial position of the companies being reported on and their
results of operations and cash flows, subject to changes resulting from year-end
adjustments; provided that delivery within the time period specified above of
copies of the Company's 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); provided, further, that the Company shall be deemed to have
made such delivery of such Form 10-Q if it shall have timely filed the same with
the SEC and on its home page on the worldwide web (at the date of this Agreement
located at: http//xxx.xxxxxxxxxxxxxx.xxx) and shall have given each Purchaser
prior notice of such filing 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 105 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, duplicate copies of,
(i) a consolidated balance sheet of the Company and its
consolidated Subsidiaries, as at the end of such year, and
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(ii) consolidated statements of income, changes in shareholders'
equity and cash flows of the Company and its consolidated
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 the standards of the Public
Company Accounting Oversight Board (United States), 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 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);
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 (which may be transmitted by Electronic Delivery) of (i) each
financial statement, report, notice or proxy statement sent by the Company
or any Subsidiary to its principal lending banks as a whole (excluding
information sent to such banks in the ordinary course of administration of
a bank facility, such as information relating to pricing and borrowing
availability or to its public securities holders generally) and (ii) each
regular or periodic report, each registration statement (without exhibits
except as expressly requested by such holder), and each prospectus and all
amendments thereto filed by the Company or any Subsidiary with the SEC and
of all press releases and other statements made available generally by the
Company or any Subsidiary to the public concerning developments that are
Material;
(d) Notice of Default or Event of Default -- promptly, and in any
event within five 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 or taken any action with respect to a claimed default hereunder
or that any Person has given any notice 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 Company is taking or proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within five 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:
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(i) with respect to any Plan, any reportable event, as defined in
section 4043(c) 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 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) Restricted Subsidiaries -- Within the respective periods provided
in paragraphs (a) and (b) above, consolidated financial statements of the
character and for the dates and periods as in said paragraphs (a) and (b)
provided, covering the Company and its Restricted Subsidiaries if
Unrestricted Subsidiaries constitute in the aggregate more than 5% of
Consolidated Total Assets or contribute in the aggregate more than 5% of
Consolidated Net Income in any fiscal period;
(g) Notices from Governmental Authority -- promptly, and in any event
within 30 days of receipt thereof, copies of any notice to the Company or
any Subsidiary from any Federal or state Governmental Authority relating to
any order, ruling, statute or other law or regulation that could reasonably
be expected to have a Material Adverse Effect; and
(h) Requested Information -- with reasonable promptness, such other
data and information relating to the business, operations, affairs,
financial condition, assets or properties of the Company or any of its
Subsidiaries (including, but without limitation, actual copies of the
Company's Form 10-Q and Form 10-K) or relating to the ability of the
Company to perform its obligations hereunder and under the Notes as from
time to time may be reasonably requested by any such holder of Notes.
Section 7.2. Officer's Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to SECTION 7.1(A) or SECTION 7.1(B)
shall be accompanied by a certificate of a Senior Financial Officer setting
forth (which, in the case of Electronic Delivery of such financial statements,
shall be by separate concurrent delivery of such certificate to each holder of
Notes):
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(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of SECTION 10.1 through SECTION 10.7,
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 the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and conditions
of the Company and its Subsidiaries from the beginning of the quarterly or
annual period covered by the statements then being furnished to the date of
the certificate and that such review shall not have disclosed the existence
during such period of any condition or event that constitutes a Default or
an Event of Default or, if any such condition or event existed or exists
(including, without limitation, any such event or condition resulting from
the failure of the Company or any Subsidiary to comply with any
Environmental Law), specifying the nature and period of existence thereof
and what action the Company shall have taken or proposes to take with
respect thereto.
Section 7.3. Visitation. The Company shall permit the representatives of
each holder of Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then exists, at
the expense of such holder and upon reasonable prior notice to the Company,
to visit the principal executive office of the Company, to discuss the
affairs, finances and accounts of the Company and its Restricted
Subsidiaries with the Company's officers, and (with the consent of the
Company, which consent will not be unreasonably withheld) its independent
public accountants, and (with the consent of the Company, which consent
will not be unreasonably withheld) to visit the other offices and
properties of the Company and each Restricted Subsidiary, all at such
reasonable times and as often as may be reasonably requested in writing;
and
(b) Default -- if a Default or Event of Default then exists, at the
expense of the Company, to visit and inspect any of the offices or
properties of the Company or any Restricted Subsidiary, to examine all
their respective books of account, records, reports and other papers, to
make copies and extracts therefrom, and to discuss their respective
affairs, finances and accounts with their respective officers and
independent public accountants (and by this provision the Company
authorizes said accountants to discuss the affairs, finances and accounts
of the Company and its Restricted Subsidiaries), all at such times and as
often as may be reasonably requested.
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SECTION 8. PREPAYMENT OF THE NOTES.
Section 8.1. Required Prepayments. In addition to paying the remaining
outstanding principal amount and the interest due on the Notes on the maturity
date thereof, on April 28_, 2012 and on each April 28 thereafter to and
including April 28, 2015 the Company will prepay $10,000,000 principal amount
(or such lesser principal 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 or 8.3, the
principal amount of each required 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.
Section 8.2. Optional Prepayments with Make-Whole Amount. The Company may,
at its option, upon notice as provided below, prepay at any time all, or from
time to time any part of, the Notes, in an amount not less than 10% of the
aggregate principal amount of the Notes then outstanding in the case of a
partial prepayment, at 100% of the principal amount so prepaid, together with
interest accrued thereon to the date of such prepayment, and the Make-Whole
Amount determined for the prepayment date with respect to such principal amount.
The Company will give each holder of Notes written notice of each optional
prepayment under this SECTION 8.2 not less than 30 days and not more than 60
days prior to the date fixed for such prepayment. Each such notice shall specify
such date (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 8.4), and the
interest to be paid on the prepayment date with respect to such principal amount
being prepaid, and shall be accompanied by a certificate of a Senior Financial
Officer as to the estimated Make-Whole Amount due in connection with such
prepayment (calculated as if the date of such notice were the date of the
prepayment), setting forth the details of such computation. Two Business Days
prior to such prepayment, the Company shall deliver to each holder of Notes a
certificate of a Senior Financial Officer specifying the calculation of such
Make-Whole Amount as of the specified prepayment date.
Section 8.3. Change in Control. (a) Notice of Change in Control. The
Company will, within five Business Days after any Responsible Officer has
knowledge of the occurrence of any Change in Control, give written notice of
such Change in Control. If a Change in Control has occurred, such notice shall
contain and constitute an offer to prepay Notes as described in subparagraph (b)
of this SECTION 8.3 and shall be accompanied by the certificate described in
subparagraph (f) of this SECTION 8.3.
(b) Offer to Prepay Notes. The offer to prepay Notes contemplated by
subparagraph (a) of this SECTION 8.3 shall be an offer to prepay, in accordance
with and subject to this SECTION 8.3, all, but not less than all, the Notes held
by each holder (in this case only, "holder" in respect of any Note registered in
the name of a nominee for a disclosed beneficial owner shall mean such
beneficial owner) on a date specified in such offer (the "Proposed Prepayment
Date"). Such
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date shall be not less than 30 days and not more than 120 days after the date of
such offer (if the Proposed Prepayment Date shall not be specified in such
offer, the Proposed Prepayment Date shall be the first Business Day after the
45th day after the date of such offer).
(c) Rejection. A holder of Notes may accept the offer to prepay made
pursuant to this SECTION 8.3 by causing a notice of such acceptance to be
delivered to the Company not later than 15 days after receipt by such holder of
the most recent offer of prepayment. A failure by a holder of Notes to respond
to an offer to prepay made pursuant to this SECTION 8.3 shall be deemed to
constitute a rejection of such offer by such holder.
(d) Prepayment. Prepayment of the Notes to be prepaid pursuant to this
SECTION 8.3 shall be at 100% of the principal amount of such Notes, together
with interest on such Notes accrued to the date of prepayment, but without
Make-Whole Amount or other premium. The prepayment shall be made on the Proposed
Prepayment Date except as provided in subparagraph (e) of this SECTION 8.3.
(e) Officer's Certificate. Each offer to prepay the Notes pursuant to this
SECTION 8.3 shall be accompanied by a certificate, executed by a Senior
Financial Officer of the Company and dated the date of such offer, specifying:
(i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this
SECTION 8.3; (iii) the principal amount of each Note offered to be prepaid; (iv)
the interest that would be due on each Note offered to be prepaid, accrued to
the Proposed Prepayment Date; (v) that the conditions of this SECTION 8.3 have
been fulfilled; and (vi) in reasonable detail, the nature and date or proposed
date of the Change in Control.
(f) Effect on Required Payments. The amount of each payment of the
principal of the Notes made pursuant to this SECTION 8.3 shall be applied
against and reduce each of the then remaining principal payments due pursuant to
SECTION 8.1 by a percentage equal to the aggregate principal amount of the Notes
so paid divided by the aggregate principal amount of the Notes outstanding
immediately prior to such payment.
(g) Definition. "Change of Control" means any of (a) the acquisition by any
"person" or "group" (as such terms are used in sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) at any time of beneficial ownership
of a majority of the voting power in the elections of directors, other than
acquisitions of such interests by the estate of Xxx Xxxxxxxx Xxxxxxxxx,
deceased, the direct lineal descendents of Xxx Xxxxxxxx Xxxxxxxxx, deceased, the
direct lineal descendants of Xxxxx Xxxxxxxxx, deceased, their spouses, any
trusts for the benefit of any of the foregoing, and any employee stock ownership
plan established by the Company, (b) the failure of individuals who are members
of the board of directors (or similar governing body) of the Company on May 18,
2004, (together with any new or replacement directors whose initial nomination
for election was approved by a majority of the directors who were either
directors on such date or previously so approved) to constitute a majority of
the board of directors (or similar governing body) of the Company, or (c) any
"Change of Control" (or words of like import), as defined in any agreement or
indenture relating to any issue of Debt in an aggregate principal amount in
excess of $10,000,000 of the Company shall occur.
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(h) All calculations contemplated in this SECTION 8.3 involving the capital
stock of any Person shall be made with the assumption that all convertible
Securities of such Person then outstanding and all convertible Securities
issuable upon the exercise of any warrants, options and other rights outstanding
at such time were converted at such time and that all options, warrants and
similar rights to acquire shares of capital stock of such Person were exercised
at such time.
Section 8.4. Allocation of Partial Prepayments. In the case of each partial
prepayment of the Notes pursuant to SECTION 8.2, 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. All partial
prepayments made pursuant to SECTION 8.3 shall be applied only to the Notes of
the holders who have elected to participate in such prepayment.
Section 8.5. Maturity; Surrender, Etc. In the case of each prepayment of
Notes pursuant to this SECTION 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment (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 Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.
Section 8.6. Purchase of Notes. The Company will not and will not permit
any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except (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 Company 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 15 Business Days. If the holders
of more than 10% of the principal amount of the Notes then outstanding accept
such offer, the Company shall promptly notify the remaining holders of such fact
and the expiration date for the acceptance by holders of Notes of such offer
shall be extended by the number of days necessary to give each such remaining
holder at least 5 Business Days from its receipt of such notice to accept such
offer. The Company will promptly cancel all Notes acquired by it or any
Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to
any provision of this Agreement and no Notes may be issued in substitution or
exchange for any such Notes.
Section 8.7. Make-Whole Amount. 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
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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% (50 basis points) over the yield to maturity implied by (i)
the yields reported as of 10:00 a.m. (New York City time) on the second
Business Day preceding the Settlement Date with respect to such Called
Principal, on the display designated as "Page PX1" (or such other display
as may replace Page PX1 on Bloomberg Financial Markets ("Bloomberg") or, if
Page PX1 (or its successor screen on Bloomberg) is unavailable, the
Telerate Access Service screen which corresponds most closely to Page PX1
for the most recently issued actively traded U.S. Treasury securities
having a maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date, or (ii) if such yields are not
reported as of such time or the yields reported as of such time are not
ascertainable (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 (519) (or any comparable successor publication)
for actively traded U.S. Treasury securities having a constant maturity
equal to the Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield will be determined, if necessary, by
(a) converting U.S. Treasury xxxx quotations to bond-equivalent yields in
accordance with accepted financial practice and (b) interpolating linearly
between (1) the actively traded U.S. Treasury security with the maturity
closest to and greater than such Remaining Average Life and (2) the
actively traded 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.
"Remaining Average Life" means, with respect to any Called Principal,
the number of years (calculated to the nearest one-twelfth year) obtained
by dividing (a) such Called Principal into (b) the sum of the products
obtained by multiplying (i) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by (ii) 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.
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"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
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.
SECTION 9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
Section 9.1. Compliance with Law. The Company will, and will cause each of
its Subsidiaries to, comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without limitation,
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 could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
Section 9.2. Insurance. The Company will, and will cause each of its
Subsidiaries to, maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is reasonably deemed adequate
by the Company.
Section 9.3. Maintenance of Properties. The Company will, and will cause
each of its Subsidiaries to, maintain and keep, or cause to be maintained and
kept, their respective properties in reasonably good repair, working order and
condition (other than ordinary wear and tear), so that the business carried on
in connection therewith may be properly conducted at all times; provided that
this Section shall not prevent the Company or any Restricted Subsidiary from
discontinuing the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Company has
concluded that such discontinuance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
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Section 9.4. Payment of Taxes and Claims. The Company will, and will cause
each of its Subsidiaries 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 the Company or any
Subsidiary; provided that neither the Company nor any Subsidiary need pay any
such tax or assessment or claims if (a) the amount, applicability or validity
thereof is contested by the Company or such Subsidiary on a timely basis in good
faith and in appropriate proceedings, and the Company or a Subsidiary has
established adequate reserves therefor if required in accordance with GAAP on
the books of the Company or such Subsidiary or (b) the nonpayment of all such
taxes, assessments and claims in the aggregate could not reasonably be expected
to have a Material Adverse Effect.
Section 9.5. Legal Existence, Etc. Subject to SECTION 10.6, the Company
will at all times preserve and keep in full force and effect its corporate
existence. Subject to SECTIONS 10.6 and 10.7, the Company will at all times
preserve and keep in full force and effect the legal existence of each of its
Subsidiaries (unless merged into the Company or a Wholly-owned Subsidiary) and
all rights and franchises of the Company and its Subsidiaries unless, in the
good faith judgment of the Company, the termination of or failure to preserve
and keep in full force and effect such legal existence, right or franchise could
not, individually or in the aggregate, have a Material Adverse Effect.
Section 9.6. Notes to Rank Pari Passu. The Notes and all other obligations
under this Agreement of the Company are and at all times shall rank at least
pari passu in right of payment with all other present and future unsecured
Senior Debt (actual or contingent) of the Company which is not expressed to be
subordinate or junior in rank to any other unsecured Debt of the Company.
Section 9.7. Guaranty by Subsidiaries. The Company will cause each
Restricted Subsidiary that is a Material Subsidiary and each other Subsidiary
which delivers a Guaranty pursuant to the Bank Credit Agreement to concurrently
enter into or join the Subsidiary Guaranty, and within three Business Days
thereafter, will deliver to each of the holders of the Notes the following
items:
(a) an executed counterpart of such Subsidiary Guaranty or joinder
agreement in respect thereof;
(b) a certificate signed by the President, a Vice President or another
authorized Responsible Officer of such Subsidiary making representations
and warranties to the effect of those contained in SECTIONS 5.1, 5.2, 5.6
and 5.7, but with respect to such Subsidiary and the Subsidiary Guaranty;
(c) such documents and evidence with respect to such Subsidiary as the
Required Holders may reasonably request in order to establish the legal
existence and
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good standing of such Subsidiary and the authorization of the transactions
contemplated by such Subsidiary Guaranty;
(d) an opinion of counsel reasonably satisfactory to the Required
Holders to the effect that such Subsidiary Guaranty has been duly
authorized, executed and delivered and constitutes the legal, valid and
binding contract and agreement of such Subsidiary enforceable in accordance
with its terms, except as an enforcement of such terms may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
and similar or related laws, cases and legal doctrines affecting the
enforcement of creditors' rights generally and by general equitable
principles; and
(e) an executed counterpart of an intercreditor agreement among the
holders of the Notes, the 1999 Holders, the Bank Agent and each Bank
Lender, which agreement shall provide that the proceeds from the
enforcement of any such Guaranty shall be shared on an equal and ratable
basis with and among the holders of the Notes, the 1999 Holders and the
Bank Lenders.
Section 9.8. Books and Records. The Company will, and will cause each of
its Subsidiaries 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 the Company, or such Subsidiary, as the
case may be.
SECTION 10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
Section 10.1. Current Ratio. The Company shall maintain on the last day of
each fiscal year Consolidated Current Assets at not less than one hundred
thirty-five percent (135%) of Consolidated Adjusted Current Liabilities.
Section 10.2. Limitation on Total Debt. The Company will not at any time
permit Consolidated Total Debt to exceed fifty-five percent (55%) of
Consolidated Total Capitalization.
Section 10.3. Limitation on Consolidated Priority Debt. The Company will
not at any time permit Consolidated Priority Debt to exceed fifteen percent
(15%) of Consolidated Total Capitalization.
Section 10.4. Consolidated Net Worth. The Company will at all times keep
and maintain Consolidated Net Worth at an amount not less than the sum of (a)
two hundred fifty million dollars ($250,000,000) plus (b) an aggregate amount
equal to twenty-five percent (25%) of Consolidated Net Income (but, in each
case, only if a positive number) for each completed fiscal quarter commencing
with the fiscal quarter ending April 30, 2006.
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Section 10.5. Limitation on Liens. The Company will not, and will not
permit any Restricted Subsidiary to, create or incur, or suffer to be incurred
or to exist, any Lien on its or their property or assets, whether now owned or
hereafter acquired, or upon any income or profits therefrom, or transfer any
property for the purpose of subjecting the same to the payment of obligations in
priority to the payment of its or their general creditors, or acquire or agree
to acquire, or permit any Restricted Subsidiary to acquire, any property or
assets upon conditional sales agreements or other title retention devices,
except:
(a) Liens for taxes and assessments or governmental charges or levies
and Liens securing claims or demands of mechanics and materialmen; provided
that payment thereof is not at the time required by SECTION 9.4;
(b) Liens of or resulting from any judgment or award, (i) the time for
the appeal or petition for rehearing of which shall not have expired, or
(ii) in respect of which the Company or a Restricted Subsidiary shall at
all times in good faith be prosecuting an appeal or proceeding for a review
and in respect of which a stay of execution pending such appeal or
proceeding for review shall have been secured; provided that the Company or
such Restricted Subsidiary (1) is contesting such judgment or award on a
timely basis, in good faith and by appropriate proceedings, and (2) has
established adequate reserves therefor if required in accordance with GAAP
on the books of the Company or such Restricted Subsidiary, as the case may
be;
(c) Liens incidental to the conduct of business or the ownership of
properties and assets (including Liens in connection with worker's
compensation, unemployment insurance and other like laws, warehousemen's
and attorneys' liens and statutory landlords' liens) and Liens to secure
the performance of bids, tenders or trade contracts, or to secure statutory
obligations, surety or appeal bonds or other Lien of like general nature,
in any such case incurred in the ordinary course of business and not in
connection with the borrowing of money; provided that (i) any such Lien
secures only amounts not due and payable or the payment of which is being
contested in good faith by appropriate actions or proceedings and (ii) any
such Lien does not materially impair the business of the Company and its
Restricted Subsidiaries taken as a whole or the value of the related
property for the purposes of such business;
(d) survey exceptions or minor encumbrances, leases or subleases
granted to others, easements or reservations, or rights of others for
rights-of-way, utilities and other similar purposes, or zoning or other
restrictions as to the use of real properties, (i) which are necessary for
the conduct of the activities of the Company and its Restricted
Subsidiaries or which customarily exist on properties of corporations
engaged in similar activities and similarly situated and (ii) which do not
in any event materially impair their use in the operation of the business
of the Company and its Restricted Subsidiaries taken as a whole or the
value of such properties;
(e) Liens securing Debt of a Restricted Subsidiary to the Company or
to another Wholly-owned Restricted Subsidiary;
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(f) Liens existing as of date of the Closing and described on SCHEDULE
5.15 hereto;
(g) Liens created or incurred after the date of the Closing given to
secure the payment of the purchase price incurred in connection with the
acquisition or purchase or the cost of construction of property or of
assets useful and intended to be used in carrying on the business of the
Company or a Restricted Subsidiary, including Liens existing on such
property or assets at the time of acquisition thereof or at the time of
completion of construction, as the case may be, whether or not such
existing Liens were given to secure the payment of the acquisition or
purchase price or cost of construction, as the case may be, of the property
or assets to which they attach; provided that (i) the Lien shall attach
solely to the property or assets acquired, purchased or constructed, (ii)
such Lien shall have been created or incurred within twelve months of the
date of acquisition or purchase or completion of construction, as the case
may be, (iii) at the time of acquisition or purchase or of completion of
construction of such property or assets, the aggregate amount remaining
unpaid on all Debt secured by Liens on such property or assets, whether or
not assumed by the Company or a Restricted Subsidiary, shall not exceed an
amount equal to 100% of the lesser of the total purchase price or fair
market value at the time of acquisition or purchase (as determined in good
faith by a Senior Financial Officer of the Company) or the cost of
construction on the date of completion thereof, and (iv) at the time of
creation, issuance, assumption, guarantee or incurrence of the Debt secured
by such Lien and after giving effect thereto and to the application of the
proceeds thereof, no Default or Event of Default would exist;
(h) any Lien existing on property or assets of a Person at the time
such Person is consolidated with or merged into the Company or a Restricted
Subsidiary or becomes a Restricted Subsidiary, or any Lien existing on any
property or assets acquired by the Company or any Restricted Subsidiary at
the time such property or assets are so acquired (whether or not the Debt
secured thereby shall have been assumed), provided that (i) each such Lien
shall extend solely to the property or assets so acquired and (ii) at the
time of creation, issuance, assumption, guarantee or incurrence of the Debt
secured by such Lien and after giving effect thereto and to the application
of the proceeds thereof, no Default or Event of Default would exist;
(i) Liens created or incurred after the date of the Closing given to
secure Funded Debt of the Company or any Restricted Subsidiary in addition
to the Liens permitted by the preceding clauses (a) through (h) hereof;
provided that (i) all Debt secured by such Liens shall have been incurred
within the applicable limitations provided at the time of creation,
issuance, assumption, guarantee or incurrence of the Debt secured by such
Lien and after giving effect thereto and to the application of the proceeds
thereof, no Default or Event of Default would exist; and
(j) any extension, renewal or refunding of any Lien permitted by the
preceding clause (f) of this SECTION 10.5 in respect of the same property
theretofore subject to such Lien in connection with the extension, renewal
or refunding of the Debt secured thereby; provided that (i) such extension,
renewal or refunding of Debt shall be
-27-
without increase in the principal amount remaining unpaid as of the date of
such extension, renewal or refunding, (ii) such Lien shall attach solely to
the same such property, and (iii) at the time of such extension, renewal or
refunding and after giving effect thereto, no Default or Event of Default
would exist.
Section 10.6. Mergers, Consolidations, Etc. The Company will not, and will
not permit any Restricted Subsidiary to, consolidate with or be a party to a
merger with any other Person, or sell, lease or otherwise dispose of all or
substantially all of its assets; provided that:
(a) any Restricted Subsidiary may merge or consolidate with or into
the Company or any Wholly-owned Restricted Subsidiary so long as (i) in any
merger or consolidation involving the Company, the Company shall be the
surviving or continuing corporation and (ii) in any merger or consolidation
involving a Wholly-owned Restricted Subsidiary (and not the Company), the
Wholly-owned Restricted Subsidiary shall be the surviving or continuing
corporation or limited liability company;
(b) the Company may consolidate or merge with or into any other
corporation if (i) the corporation or limited liability company which
results from such consolidation or merger (the "Surviving Person") is
organized under the laws of any state of the United States or the District
of Columbia or of Canada or any Province thereof, (ii) the due and punctual
payment of the principal of and premium, if any, and interest on all of the
Notes, according to their tenor, and the due and punctual performance and
observation of all of the covenants in the Notes and this Agreement to be
performed or observed by the Company are expressly assumed in writing by
the Surviving Person and the Surviving Person shall furnish to the holders
of the Notes an opinion of counsel satisfactory to the Required Holders to
the effect that the instrument of assumption has been duly authorized,
executed and delivered and constitutes the legal, valid and binding
contract and agreement of the Surviving Person enforceable in accordance
with its terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
and similar or related laws, cases and legal doctrines affecting the
enforcement of creditors' rights generally and by general equitable
principles, (iii) each of the Subsidiary Guarantors shall have confirmed in
writing the due and punctual performance and observation of all of its
covenants and agreements contained in the Subsidiary Guaranty, and (iv) at
the time of such consolidation or merger and immediately after giving
effect thereto, no Default or Event of Default would exist; and
(c) the Company may sell or otherwise dispose of all or substantially
all of its assets (other than as provided in SECTION 10.7) to any Person
for consideration which represents the fair market value of such assets (as
determined in good faith by the Board of Directors of the Company) at the
time of such sale or other disposition if (i) the acquiring Person (the
"Acquiring Person") is a corporation organized under the laws of any state
of the United States or the District of Columbia or of Canada or any
Province thereof, (ii) the due and punctual payment of the principal of and
premium, if any, and interest on all the Notes, according to their tenor,
and the due and punctual performance
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and observance of all of the covenants in the Notes and in this Agreement
to be performed or observed by the Company are expressly assumed in writing
by the Acquiring Person and the Acquiring Person shall furnish to the
holders of the Notes an opinion of counsel satisfactory to the Required
Holders to the effect that the instrument of assumption has been duly
authorized, executed and delivered and constitutes the legal, valid and
binding contract and agreement of such Acquiring Person enforceable in
accordance with its terms, except as enforcement of such terms may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and similar or related laws, cases and legal doctrines affecting
the enforcement of creditors' rights generally and by general equitable
principles, (iii) each of the Subsidiary Guarantors shall have confirmed in
writing the due and punctual performance and observation of all of its
covenants and agreements contained in the Subsidiary Guaranty, and (iv) at
the time of such sale or disposition and immediately after giving effect
thereto, no Default or Event of Default would exist.
Section 10.7. Sale of Assets. The Company will not, and will not permit any
Restricted Subsidiary to, sell, lease, transfer, abandon or otherwise dispose of
assets (except assets sold in the ordinary course of business for fair market
value and except as provided in SECTION 10.6); provided that the foregoing
restrictions do not apply to:
(a) the sale, lease, transfer or other disposition of assets of a
Restricted Subsidiary to the Company or a Wholly-owned Restricted
Subsidiary; or
(b) the sale of assets for cash or other property to a Person or
Persons other than an Affiliate if all of the following conditions are met:
(i) such assets (valued at net book value) do not, together with
all other assets of the Company and its Restricted Subsidiaries
previously disposed of during the twelve-month period then ending
(other than in the ordinary course of business), exceed 15% of
Consolidated Total Assets determined as of the end of the immediately
preceding fiscal year;
(ii) in the opinion of a Senior Financial Officer of the Company,
the sale is for fair value and is in the best interests of the
Company; and
(iii) immediately after the consummation of the transaction and
after giving effect thereto, no Default or Event of Default would
exist;
provided, however, that for purposes of the foregoing calculation, there
shall not be included any assets the proceeds of which were or are applied
within twelve months of the date of sale of such assets to either (A) the
acquisition of assets useful and intended to be used in the operation of
the business of the Company and its Restricted Subsidiaries as described in
SECTION 10.10 and having a fair market value (as determined in good faith
by a Senior Financial Officer of the Company) at least equal to that of the
assets so disposed
-29-
of or (B) the prepayment at any applicable prepayment premium, on a pro
rata basis, of Senior Funded Debt of the Company.
Without limiting the foregoing clause (b), the Company agrees that:
(x) the timing and manner of any offer of prepayment to the
holders of the Notes shall be in the manner contemplated by SECTION
8.2; provided that any such prepayment of the Notes pursuant to this
SECTION 10.7 may be in an amount less than 10% of the aggregate
principal amount of the Notes then outstanding and shall only be at
100% of the principal amount thereof, together with interest accrued
and unpaid thereon to the date of such prepayment, and in no event
with a Make-Whole Amount or other premium;
(y) any holder of the Notes may decline any offer of prepayment
pursuant to the foregoing clause (b); and
(z) if such offer is so accepted, the proceeds so offered towards
the prepayment of the Notes and accepted shall be prepaid and applied
in the manner provided in SECTION 8.2, excepting only that such
prepayment shall be at 100% of the principal amount thereof, together
with interest accrued and unpaid thereon to the date of such
prepayment, without payment of Make-Whole Amount or other premium.
To the extent that any holder of the Notes declines or is deemed to have
declined such offer of prepayment, the Company may use the remaining amount
of such prepayment so declined for general corporate purposes.
Section 10.8. Transactions with Affiliates. The Company will not and will
not permit any Restricted Subsidiary to enter into directly or indirectly any
transaction or group of related transactions (including without limitation the
purchase, lease, sale or exchange of properties of any kind or the rendering of
any service) with any Affiliate (other than the Company or another Restricted
Subsidiary), except in the ordinary course and pursuant to the reasonable
requirements of the Company's or such Restricted Subsidiary's business and upon
fair and reasonable terms no less favorable to the Company or such Restricted
Subsidiary than would be obtainable in a comparable arm's-length transaction
with a Person not an Affiliate.
Section 10.9. Designation of Subsidiaries. The Company may designate or
redesignate any Unrestricted Subsidiary as a Restricted Subsidiary and may
designate or redesignate any Restricted Subsidiary as an Unrestricted
Subsidiary; provided that: (a) the Company shall have given not less than 10
days' prior written notice to the holders of the Notes that a Senior Financial
Officer has made such determination, (b) at the time of such designation or
redesignation and immediately after giving effect thereto, no Default or Event
of Default would exist, and (c) in the case of the designation of a Restricted
Subsidiary as an Unrestricted Subsidiary and after giving effect thereto, (i)
such Unrestricted Subsidiary so designated shall not, directly or indirectly,
own any Debt or capital
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stock of the Company or any Restricted Subsidiary and (ii) such designation
shall be deemed a sale of assets and shall be permitted by the provisions of
SECTION 10.7, (d) in the case of the designation of an Unrestricted Subsidiary
as a Restricted Subsidiary and after giving effect thereto: (i) all outstanding
Debt of such Restricted Subsidiary so designated shall be permitted within the
limitations of SECTIONS 10.2 AND 10.3, notwithstanding that any such Debt was
outstanding as of the date of Closing, and (ii) all existing Liens of such
Restricted Subsidiary so designated shall be permitted within the applicable
limitations of SECTION 10.5 (other than SECTION 10.5(E), notwithstanding that
any such Lien existed as of the date of Closing), (e) in the case of the
designation of a Restricted Subsidiary as an Unrestricted Subsidiary, such
Restricted Subsidiary shall not at any time after the date of this Agreement
have previously been designated as an Unrestricted Subsidiary more than twice,
and (f) in the case of the designation of an Unrestricted Subsidiary as a
Restricted Subsidiary, such Unrestricted Subsidiary shall not at any time after
the date of this Agreement have previously been designated as a Restricted
Subsidiary more than twice.
Section 10.10. Line of Business. The Company will not and will not permit
any Restricted Subsidiary to engage in any business if, as a result, the general
nature of the business in which the Company and its Restricted Subsidiaries,
taken as a whole, would then be engaged would be substantially changed from the
general nature of the business in which the Company and its Restricted
Subsidiaries, taken as a whole, are engaged on the date of this Agreement as
described in the Memorandum.
Section 10.11. Terrorism Sanctions Regulations. 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.
SECTION 11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or Make-Whole
Amount, if any, on any Note when the same becomes due and payable, whether
at maturity or at a date fixed for prepayment or by declaration or
otherwise; or
(b) the Company defaults in the payment of any interest on any Note
for more than five Business Days after the same becomes due and payable; or
(c) the Company defaults in the performance of or compliance with any
term contained in SECTION 7.1(D) or SECTIONS 10.2 through 10.4; or
(d) (i) the Company defaults in the performance of or compliance with
any term contained herein (other than those referred to in SECTIONS 11(A),
(B) and (C)) or (ii) any Subsidiary Guarantor defaults in the performance
of or compliance with any term
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contained in the Subsidiary Guaranty to which it is a party and in any such
case such default is not remedied within 30 days after the earlier of (x) a
Responsible Officer obtaining actual knowledge of such default and (y) the
Company receiving written notice of such default from any holder of a Note
(any such written notice to be identified as a "notice of default" and to
refer specifically to this SECTION 11(D)); or
(e) any representation or warranty made in writing by or on behalf of
the Company or any Subsidiary Guarantor or by any officer of the Company or
any Subsidiary Guarantor in this Agreement or in any 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) the Company or any Restricted 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 Debt that is
outstanding in an aggregate principal amount of at least $10,000,000 beyond
any period of grace provided with respect thereto, or (ii) the Company or
any Restricted Subsidiary is in default in the performance of or compliance
with any term of any evidence of any Debt in an aggregate outstanding
principal amount of at least $10,000,000 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 Debt has become, or has been
declared, 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 Debt to convert such Debt
into equity interests), the Company or any Restricted Subsidiary has become
obligated to purchase or repay Debt before its regular maturity or before
its regularly scheduled dates of payment in an aggregate outstanding
principal amount of at least $10,000,000; or
(g) the Company or any Restricted Subsidiary (i) is generally not
paying, or admits in writing its inability to pay, its debts as they become
due, (ii) files, or consents by answer or otherwise to the filing against
it of, a petition for relief or reorganization or arrangement or any other
petition in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law of
any jurisdiction, (iii) makes an assignment for the benefit of its
creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with
respect to any substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes corporate action for the
purpose of any of the foregoing; or
(h) a court or Governmental Authority of competent jurisdiction enters
an order appointing, without consent by the Company or any of its
Restricted Subsidiaries, a custodian, receiver, trustee or other officer
with similar powers with respect to it or with respect to any substantial
part of its property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in bankruptcy
or for liquidation or to take advantage of any bankruptcy or insolvency law
of any jurisdiction, or ordering the dissolution, winding-up or liquidation
of the Company or any of its
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Restricted Subsidiaries, or any such petition shall be filed against the
Company or any of its Restricted Subsidiaries and such petition shall not
be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money aggregating
in excess of $10,000,000 are rendered against one or more of the Company
and its Restricted Subsidiaries and which judgments are not, within 60 days
after entry thereof, bonded, discharged or stayed pending appeal, or are
not discharged within 60 days after the expiration of such stay; or
(j) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is sought
or granted under section 412 of the Code, (ii) a notice of intent to
terminate any Plan shall have been or is reasonably expected to be filed
with the PBGC or the PBGC shall have instituted proceedings under ERISA
Section 4042 to terminate or appoint a trustee to administer any Plan or
the PBGC shall have notified the Company or any ERISA Affiliate that a Plan
may become a subject of any such proceedings, (iii) the aggregate "amount
of unfunded benefit liabilities" (within the meaning of Section 4001(a)(18)
of ERISA) under all Plans, determined in accordance with Title IV of ERISA,
shall exceed $5,000,000, (iv) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability pursuant to Title
I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans, (v) the Company or any ERISA Affiliate
withdraws from any Multiemployer Plan, or (vi) the Company or any
Restricted 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 Restricted 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
(k) the Subsidiary Guaranty shall cease to be in full force and effect
for any reason whatsoever, including, without limitation, a determination
by any Governmental Authority that the Subsidiary Guaranty is invalid, void
or unenforceable or any Subsidiary Guarantor which is a party to the
Subsidiary Guaranty shall contest or deny in writing the validity or
enforceability of any of its obligations under the Subsidiary Guaranty, but
excluding any Subsidiary Guaranty which ceases to be in full force and
effect in accordance with and by reason of the express provisions of
SECTION 2.2(C).
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.
SECTION 12. REMEDIES ON DEFAULT, ETC.
Section 12.1. Acceleration. (a) If an Event of Default with respect to the
Company 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
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virtue of the fact that such clause encompasses clause (i) of SECTION 11(G)) has
occurred, all the Notes then outstanding shall automatically become immediately
due and payable.
(b) If any other Event of Default has occurred and is continuing, any
holder or holders of more than 51% in principal amount of the Notes at the time
outstanding may at any time at its or their option, by notice or notices to the
Company, declare all the Notes then outstanding to be immediately due and
payable.
(c) If any Event of Default described in 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 Company, declare all the Notes held by it or them to be
immediately due and payable.
Upon any Notes becoming due and payable under this SECTION 12.1, whether
automatically or by declaration, such Notes will forthwith mature and the entire
unpaid principal amount of such Notes, plus (i) all accrued and unpaid interest
thereon (including, but not limited to, interest accrued (x) on such accrued and
unpaid interest and (y) on the entire unpaid principal amount of such Notes, in
each case at the Default Rate) and (ii) the Make-Whole Amount determined in
respect of such principal amount (to the full extent permitted by applicable
law), plus all accrued and unpaid interest thereon (including but not limited to
interest accrued on such accrued and unpaid interest at the Default Rate) shall
all be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for), and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
Section 12.2. Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under SECTION 12.1, the holder of
any Note at the time outstanding may proceed to protect and enforce the rights
of such holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or in any Note, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.
Section 12.3. Rescission. 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
60% in principal amount of the Notes then outstanding, by written notice to the
Company, may rescind and annul any such declaration and its consequences if (a)
the Company has paid all overdue interest on the Notes, all principal of and
Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid
other than by reason of such declaration, and all interest on such overdue
principal and Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at the Default
Rate,
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(b) neither the Company nor any other Person shall have paid any amounts which
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.
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No course
of dealing and no delay on the part of any holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such holder's rights, powers or remedies. No right, power or remedy conferred by
this Agreement or by any Note upon any holder thereof shall be exclusive of any
other right, power or remedy referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise. Without limiting the
obligations of the Company under SECTION 15, the Company will pay to the holder
of each Note on demand such further amount as shall be sufficient to cover all
out-of-pocket costs and expenses of such holder incurred in any enforcement or
collection under this SECTION 12, including, without limitation, reasonable
attorneys' fees, expenses and disbursements.
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
Section 13.1. Registration of Notes. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of Notes.
Section 13.2. Transfer and Exchange 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, tax identification number and other information for
notices of each transferee of such Note or part thereof), within ten Business
Days thereafter, the Company shall execute and deliver, at the Company's 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. Each such new
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Note shall be dated and bear interest from the date to which interest shall have
been paid on the surrendered Note or dated the date of the surrendered Note if
no interest shall have been paid thereon. The Company may require payment of a
sum sufficient to cover any stamp tax or governmental charge imposed in respect
of any such transfer of Notes. Notes shall not be transferred in denominations
of less than $100,000; provided that if necessary to enable the registration of
transfer by a holder of its entire holding of Notes, one Note may be in a
denomination of less than $100,000. Any transferee, by its acceptance of a Note
registered in its name (or the name of its nominee), shall be deemed to have
made the representations set forth in SECTIONS 6.1 and 6.2 and shall confirm
such representations in writing upon written request by the Company.
Section 13.3. Replacement of Notes. 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 holder of a Note with a
minimum net worth of at least $100,000,000 or a Qualified Institutional
Buyer, 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,
within ten Business Days thereafter, the Company at its 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.
SECTION 14. PAYMENTS ON NOTES.
Section 14.1. Place of Payment. Subject to SECTION 14.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in Chicago, Illinois at the principal office of Xxxxxx
X.X. in such jurisdiction. The Company may at any time, by notice to each holder
of a Note, change the place of payment of the Notes so long as such place of
payment shall be either the principal office of the Company in such jurisdiction
or the principal office of a bank or trust company in such jurisdiction.
Section 14.2. Home Office Payment. So long as any Purchaser or its nominee
shall be the holder of any Note, and notwithstanding anything contained in
SECTION 14.1 or in such Note to the contrary, the Company will pay all sums
becoming due on such Note for principal, Make-Whole Amount, if any, and interest
by the method and at the address specified for such purpose below such
Purchaser's name in
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SCHEDULE A, or by such other method or at such other address as such Purchaser
shall have from time to time specified to the Company in writing for such
purpose, without the presentation or surrender of such Note or the making of any
notation thereon, except that upon written request of the Company made
concurrently with or reasonably promptly after payment or prepayment in full of
any Note, such Purchaser shall surrender such Note for cancellation, reasonably
promptly after any such request, to the Company at its principal executive
office or at the place of payment most recently designated by the Company
pursuant to SECTION 14.1. The Company will make such payments in immediately
available funds, no later than 12:00 noon New York, New York time on the date
due. If for any reason whatsoever the Company does not make any such payment by
such 12:00 noon transmittal time, such payment shall be deemed to have been made
on the next following Business Day and such payment shall bear interest at the
Default Rate set forth in the Note. Prior to any sale or other disposition of
any Note held by a Purchaser or its nominee, such Purchaser will, at its
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
Company will afford the benefits of this SECTION 14.2 to any Institutional
Investor that is the direct or indirect transferee of any Note purchased by a
Purchaser under this Agreement and that has made the same agreement relating to
such Note as the Purchasers have made in this SECTION 14.2.
SECTION 15. EXPENSES, ETC.
Section 15.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all costs and expenses
(including reasonable attorneys' fees of a special counsel and, if reasonably
required by the Required Holders, local or other counsel) incurred by the
Purchasers and each other 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, the Subsidiary Guaranty or the Intercreditor
Agreement (whether or not such amendment, waiver or consent becomes effective),
including, without limitation: (a) the costs and expenses incurred in enforcing
or defending (or determining whether or how to enforce or defend) any rights
under this Agreement, the Notes, the Subsidiary Guaranty or the Intercreditor
Agreement or in responding to any subpoena or other legal process or informal
investigative demand issued by reason of being a holder of any Note or in
connection with this Agreement, the Notes, the Subsidiary Guaranty or the
Intercreditor Agreement and (b) the costs and expenses, including the fees of
one financial advisor acting on behalf of all of the holders of the Notes,
incurred in connection with the insolvency or bankruptcy of the Company or any
Subsidiary or in connection with any work-out or restructuring of the
transactions contemplated hereby and by the Notes, the Subsidiary Guaranty and
the Intercreditor Agreement. The Company will pay, and will save each Purchaser
and each other holder of a Note harmless from, all claims in respect of any
fees, costs or expenses, if any, of brokers and finders (other than those, if
any, retained by a Purchaser or other holder in connection with its purchase of
the Notes) in connection with the offer and sale of the Notes.
Section 15.2. Survival. The obligations of the Company under this SECTION
15 will survive the payment or transfer of any Note, the
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enforcement, amendment or waiver of any provision of this Agreement, the Notes,
the Subsidiary Guaranty or the Intercreditor Agreement and the termination of
this Agreement.
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein or in the Subsidiary
Guaranty shall survive the execution and delivery of this Agreement and the
Notes, the purchase or transfer by any Purchaser of any Note or portion thereof
or interest therein and the payment of any Note, and may be relied upon by any
subsequent holder of a Note, regardless of any investigation made at any time by
or on behalf of such Purchaser or any other holder of a Note. All statements
contained in any certificate or other instrument delivered by or on behalf of
the Company or any Subsidiary Guarantor pursuant to this Agreement or the
Subsidiary Guaranty shall be deemed representations and warranties of the
Company or a Subsidiary Guarantor, as the case may be, under this Agreement.
Subject to the preceding sentence, this Agreement, the Notes, the Subsidiary
Guaranty and the Intercreditor Agreement embody the entire agreement and
understanding between each Purchaser, the Company and the Subsidiary Guarantors
and supersede all prior agreements and understandings relating to the subject
matter hereof.
SECTION 17. AMENDMENT AND WAIVER.
Section 17.1. Requirements. This Agreement and the Notes may be amended,
and the observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written consent of the
Company and the Required Holders, except that (a) no amendment or waiver of any
of the provisions of SECTION 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term
(as it is used therein), will be effective as to any Purchaser unless consented
to by such Purchaser in writing, and (b) no such amendment or waiver may,
without the written 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 SECTION 8, 11(A), 11(B), 12, 17 or 20. The Subsidiary Guaranty and the
Intercreditor Agreement may be amended in accordance with the terms thereof.
Section 17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with 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 Company will deliver executed or true and correct
copies
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of each amendment, waiver or consent effected pursuant to the provisions of this
SECTION 17 to each holder of outstanding Notes promptly following the date on
which it is executed and delivered by, or receives the consent or approval of,
the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay or cause to be
paid any remuneration, whether by way of supplemental or additional interest,
fee or otherwise, or grant any security 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.
Section 17.3. Binding Effect, Etc. Any amendment or waiver consented to as
provided in this SECTION 17 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein, the term "this Agreement" and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.
Section 17.4. Notes Held by Company, Etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding.
SECTION 18. NOTICES.
All notices and communications provided for hereunder shall be in writing
and sent (a) by telefacsimile 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 any Purchaser or its nominee, to such Purchaser or nominee
at the address specified for such communications in SCHEDULE A, or at such
other address as such Purchaser or nominee shall have specified to the
Company in writing,
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(ii) if to any other holder of any Note, to such holder at such
address as such other holder shall have specified to the Company in
writing, or
(iii) if to the Company, to the Company at its address set forth at
the beginning hereof to the attention of Chief Financial Officer, 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.
SECTION 19. REPRODUCTION OF DOCUMENTS.
This Agreement and the Subsidiary Guaranty and all documents relating
thereto, including, without limitation, (a) consents, waivers and modifications
that may hereafter be executed, (b) documents received by any Purchaser at the
Closing (except the Notes themselves), and (c) financial statements,
certificates and other information previously or hereafter furnished to any
Purchaser, may be reproduced by such Purchaser by any photographic, photostatic,
electronic, digital or other similar process and such Purchaser may destroy any
original document so reproduced. The Company agrees and stipulates that, to the
extent permitted by applicable law, any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by such Purchaser in the regular course of business) and
any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This SECTION 19 shall not prohibit the
Company or any other holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from introducing evidence
to demonstrate the inaccuracy of any such reproduction.
SECTION 20. CONFIDENTIAL INFORMATION.
For the purposes of this SECTION 20, "Confidential Information" means
information delivered to any Purchaser by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified in writing when received by
such Purchaser as being confidential information of the Company or such
Subsidiary; provided that such term does not include information that (a) was
publicly known or otherwise known to such Purchaser prior to the time of such
disclosure, (b) subsequently becomes publicly known through no act or omission
by such Purchaser or any Person acting on such Purchaser's behalf, (c) otherwise
becomes known to such Purchaser other than through disclosure by the Company or
any Subsidiary or (d) constitutes financial statements delivered to such
Purchaser under SECTION 7.1 that are otherwise publicly available. Each
Purchaser will maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by such Purchaser in good faith to protect
confidential information of third parties delivered to such Purchaser; provided
that such Purchaser may deliver or disclose Confidential Information to (i) its
directors, trustees, officers, employees, agents, attorneys and affiliates (to
the extent such disclosure reasonably relates to the administration of the
investment represented
-40-
by its Notes), (ii) its 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 it sells or offers 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 it offers to
purchase the Notes (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 such
Purchaser, (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 such Purchaser's 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 such Purchaser,
(x) in response to any subpoena or other legal process, (y) in connection with
any litigation to which such Purchaser is a party or (z) if an Event of Default
has occurred and is continuing, to the extent such Purchaser 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 such
Purchaser's Notes and this Agreement, provided that such Purchaser shall use
reasonable best efforts to inform the Company as promptly as reasonably possible
of its intention to make a disclosure under this clause (viii) unless to so
inform the Company would be unlawful. 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 and
will confirm such agreement in writing if requested in writing to do so by the
Company. On reasonable request by the Company in connection with the delivery to
any holder of a Note of information required to be delivered to such holder
under this Agreement or requested by such holder (other than a holder that is a
party to this Agreement or its nominee), such holder will enter into an
agreement with the Company embodying the provisions of this SECTION 20.
SECTION 21. SUBSTITUTION OF PURCHASER.
Each Purchaser shall have the right to substitute any one of its Affiliates
as the purchaser of the Notes that it has agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both such
Purchaser 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, any reference to such Purchaser in this Agreement
(other than in this SECTION 21) shall be deemed to refer to such Affiliate in
lieu of such original Purchaser. In the event that such Affiliate is so
substituted as a Purchaser hereunder and such Affiliate thereafter transfers to
such original Purchaser all of the Notes then held by such Affiliate, upon
receipt by the Company of notice of such transfer, any reference to such
Affiliate as a "Purchaser" in this Agreement (other than in this SECTION 21)
shall no longer be deemed to refer to such Affiliate, but shall refer to such
original Purchaser, and such original Purchaser shall again have all the rights
of an original holder of the Notes under this Agreement.
-41-
SECTION 22. MISCELLANEOUS.
Section 22.1. Successors and Assigns. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not.
Section 22.2. Payments Due on Non-Business Days. Anything in this Agreement
or the Notes to the contrary notwithstanding (but without limiting the
requirement in SECTION 8.5 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.
Section 22.3. Accounting Terms. 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.
Section 22.4. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
Section 22.5. Construction, Etc. 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.
For the avoidance of doubt, all Schedules and Exhibits attached to this
Agreement shall be deemed to be a part hereof.
Section 22.6. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of
-42-
which together shall constitute one instrument. Each counterpart may consist of
a number of copies hereof, each signed by less than all, but together signed by
all, of the parties hereto.
SECTION 22.7. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW
OF THE STATE OF ILLINOIS, 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.
SECTION 22.8. WAIVER OF JURY TRIAL. 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.
* * * * *
-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 Company,
whereupon this Agreement shall become a binding agreement between you and the
Company.
Very truly yours,
XXXXXXXXX FARMS, INC.
By /s/ X.X. Xxxxxxxx
-------------------------------------
Name: D. Xxxxxxx Xxxxxxxx
Title: Chief Financial Officer and
Treasurer
---------------------------------
This Agreement is hereby accepted and
agreed to as of the date thereof.
NORTHWEST FARM CREDIT SERVICES, PCA
By /s/ Xxxxx Xxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
---------------------------------
-44-
INFORMATION RELATING TO PURCHASERS
PRINCIPAL AMOUNT OF
NAME AND ADDRESS OF PURCHASER NOTES TO BE PURCHASED
NORTHWEST FARM CREDIT SERVICES, PCA
0000 Xxxxx Xxxxxxxx Xxxxxx $50,000,000
Xxxxxxx, XX 00000
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
immediately available funds (identifying each payment as Xxxxxxxxx Farms, Inc.,
6.12% Senior Notes, due April 28, 2016) to:
Bank Name: CoBank, ACB
ABA #000000000
Bank Location: 0000 X. Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, XX 00000
for credit to: Technical Accounting
Account Name: HQ Part Xxxxxxxxx
Account Number: [ ]
Notices
All notices of payments on or in respect of the Notes and written confirmation
of each such payment to be addressed to:
Technical Accounting Services
Phone: 0-000-000-0000
Fax: 000-000-0000
E-mail: xxxx_xxxxx@xxxx-xxxxxx.xxx
All notices and communications other than those in respect to payments to be
addressed to:
Xxx Xxxxx
Phone: 000-000-0000
Fax: 000-000-0000
E-mail: xxxxxxxxxxxxxx@xxxx-xxxxxx.xxx
Name of Nominee in which Notes are to be issued: N/A
Taxpayer I.D. Number: 00-0000000
SCHEDULE A
(to Note Purchase Agreement)
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:
"Accountants' Certificate" is defined in SECTION 7.1.
"Accredited Investor" is defined in SECTION 6.1.
"Acquiring Person" is defined in SECTION 10.6(C).
"Affiliate" means, at any time, and with respect to any Person, any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and 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. As used in this definition, "CONTROL" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise. Unless the context otherwise clearly
requires, any reference to an "AFFILIATE" is a reference to an Affiliate of the
Company.
"Anti-Terrorism Order" means Executive Order No. 13,224 of September
24, 2001, Blocking Property and Prohibiting Transactions with Persons Who
Commit, Threaten to Commit or Support Terrorism, 66 U.S. Fed. Reg. 49, 079
(2001), as amended.
"Bank Agent" means Xxxxxx X.X., as agent under the Bank Credit
Agreement, together with its successors and assigns, and any Person serving in a
similar capacity.
"Bank Credit Agreement" means the Credit Agreement dated as of
November 17, 2005, among the Company, the Bank Lenders signatory thereto, and
the Bank Agent, as amended by and as further amended from time to time, and any
renewals or replacements thereof.
"Bank Lender" means and includes each of Xxxxxx X.X., SunTrust Bank,
AmSouth Bank, U.S. Bank National Association, Regions Bank and Trustmark
National Association, together with any successors and assigns thereof and any
other lenders under the Bank Credit Agreement.
"Board of Directors" means, at any time, the board of directors of the
Company or any committee thereof which, in the instance, shall have the lawful
power to exercise the power and authority of such board of directors.
"Business Day" means (a) for the purposes of SECTION 8.7 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
(to Note Purchase Agreement)
day other than a Saturday, a Sunday or a day on which commercial banks in
Chicago, Illinois or Jackson, Mississippi 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.
"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 Xxxxxxxxx Farms, Inc., a Mississippi corporation or
any successor that becomes such in the manner prescribed in SECTION 10.6.
"Competitor" means any Person which is engaged in the business of the
production, processing, marketing and/or distribution of fresh and/or frozen
chicken and/or in the processing, marketing and/or distribution of processed
and/or prepared food items, provided that:
(i) the provision of investment advisory services by a Person to
a Plan which is owned or controlled by a Person which would otherwise
be a Competitor shall not in any event cause the Person providing such
services to be deemed to be a Competitor, provided that such Person
providing such services has established and maintains procedures which
will prevent Confidential Information supplied to such Person from
being transmitted or otherwise made available to such Plan;
(ii) in no event shall an Institutional Investor be deemed a
Competitor unless such Institutional Investor owns or holds more than
50% of the Voting Stock of, and in connection therewith exercises
control over management of, a Person that is engaged in the business
of the production, processing, marketing and/or distribution of fresh
and/or frozen chicken and/or in the processing, marketing and/or
distribution of processed and/or prepared food items;
(iii) in no event shall an Institutional Investor be deemed a
Competitor if such Institutional Investor is a pension plan sponsored
by a Person which would otherwise be a Competitor but which is a
regular investor in privately placed Securities and such pension plan
has established and maintains procedures which will prevent
Confidential Information supplied to such pension plan by the Company
from being transmitted or otherwise made available to such plan
sponsor;
(iv) an Institutional Investor that would otherwise be deemed a
Competitor pursuant to the foregoing provisions of this definition by
virtue of its ownership or control as a portfolio investment of the
equity Securities of any Person engaged in the business of the
production, processing, marketing and/or distribution of fresh and/or
frozen chicken and/or in the processing, marketing and/or distribution
of processed and/or prepared food items, shall not be deemed a
Competitor if such Institutional
B-2
Investor has established and maintains procedures which will prevent
Confidential Information supplied to such Institutional Investor by
the Company from being transmitted or otherwise made available to such
Person; and
(v) any Private Placement Agent that would otherwise be deemed to
be a Competitor pursuant to the foregoing provisions of this
definition, shall not be deemed to be a Competitor if such Private
Placement Agent holds the Notes only in connection with its role as an
intermediary in the prompt and expeditious sale in accordance with
customary financial market conditions of the Note or Notes owned by
one Institutional Investor who is not a Competitor (it being
understood and agreed by the parties hereto that each and every
Purchaser named on Schedule A to this Agreement shall be deemed not to
be a Competitor) to another purchasing Institutional Investor who is
not a Competitor and such Private Placement Agent has established
procedures which will prevent confidential information supplied to
either the selling or buying Institutional Investor by the Company
from being transmitted or otherwise made available to such Private
Placement Agent or any of its Affiliates in any capacity other than as
the agent and intermediary in connection with such sale of any such
Note or Notes.
"Confidential Information" is defined in SECTION 20.
"Consolidated Adjusted Current Liabilities" means, as of the date of
any determination thereof and without duplication, the aggregate amount at which
the current liabilities of the Company and the Restricted Subsidiaries
(specifically excluding the current portion of any obligation (i) arising under
the Bank Credit Agreement, including any increase in the amount outstanding
thereunder, or (ii) constituting deferred income taxes) would be shown on a
consolidated balance sheet of such Persons at such time.
"Consolidated Current Assets" means, as of the date of any
determination thereof and without duplication, the amount at which the current
assets of the Company and the Restricted Subsidiaries would be shown on a
consolidated balance sheet of such Persons at such time.
"Consolidated Net Income" for any period means, as of the date of any
determination thereof and without duplication, net income of the Company and its
Restricted Subsidiaries as determined and computed on a consolidated basis
according to GAAP consistently applied.
"Consolidated Net Worth" means, as of the date of any determination
thereof and without duplication, the aggregate of capital (including without
limitation redeemable preferred stock), surplus (exclusive of any surplus
arising by virtue of any appraisal or revaluation of any assets) and retained
earnings of the Company and its Subsidiaries as determined on a consolidated
basis in accordance with GAAP consistently applied.
"Consolidated Priority Debt" means, as of the date of any
determination thereof and without duplication, all Priority Debt of the Company
and its Restricted Subsidiaries determined on a consolidated basis in accordance
with GAAP after eliminating inter-company items.
B-3
"Consolidated Total Assets" means, as of the date of any determination
thereof and without duplication, total assets of the Company and its Restricted
Subsidiaries (less reserves properly deductible) determined on a consolidated
basis in accordance with GAAP.
"Consolidated Total Capitalization" means, as of the date of any
determination thereof and without duplication, the sum of (a) Consolidated Total
Debt plus (b) Consolidated Net Worth.
"Consolidated Total Debt" means, as of the date of any determination
thereof and without duplication, the aggregate amount of Debt of the Company and
its Restricted Subsidiaries at such time, determined on a consolidated basis in
accordance with GAAP consistently applied.
"Debt" with respect to any Person means, as of the date of any
determination thereof and without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the
ordinary course of business but including all liabilities created or
arising under any conditional sale or other title retention agreement
with respect to any such property);
(c) (i) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases and (ii) all
liabilities which would appear on its balance sheet in accordance with
GAAP in respect of Synthetic Leases assuming such Synthetic Leases
were accounted for as Capital Leases;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has
assumed or otherwise become liable for such liabilities, provided that
if such Person has not so assumed or otherwise become liable for such
liabilities, the amount of such Debt shall be deemed to be the book
value of such property);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not
representing obligations for borrowed money); and
(f) any Guaranty of such Person with respect to liabilities of a
type described in any of clauses (a) through (e) hereof.
Debt of any Person shall include all obligations of such Person of the character
described in clauses (a) through (f) to the extent such Person remains legally
liable in respect thereof notwithstanding that any such obligation is deemed to
be extinguished under GAAP. Anything contained in this definition of "Debt" to
the contrary notwithstanding, for purposes of determining compliance with the
financial covenants contained in SECTIONS 10.1 through 10.4,
B-4
the term "Debt" shall not include Debt relating to the Economic Development
Bonds so long as the Company or a Subsidiary of the Company is a holder of such
Economic Development Bonds.
"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 the greater of (i)
1% per annum above the rate of interest stated in clause (a) of the first
paragraph of the Notes or (ii) 1% over the rate of interest publicly announced
by Xxxxxx X.X. in Chicago, Illinois as its "base" or "prime" rate.
"Disclosure Documents" is defined in SECTION 5.3.
"Economic Development Bonds" means any industrial revenue bonds,
economic development bonds or other similar notes, debentures or instruments
issued by or on behalf of a governmental entity, unit or authority for the
benefit of the Company or a Subsidiary for the purpose of financing or
refinancing property (including by means of a sale and leaseback or similar
transaction involving property of the Company or a Subsidiary).
"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
from time to time, and the rules and regulations promulgated thereunder from
time to time in effect.
"Form 10-K" is defined in SECTION 7.1(B).
"Form 10-Q" is defined in SECTION 7.1(A).
"Funded Debt" of any Person means, as of the date of any determination
thereof and without duplication, (a) all Debt of such Person having a final
maturity of more than one year from the date of origin thereof (or which is
renewable or extendible at the option of the obligor for a period or periods
more than one year from the date of origin), including all payments in
B-5
respect thereof that are required to be made within one year from the date of
any determination of Funded Debt, whether or not the obligation to make such
payments shall constitute a current liability of the obligor under GAAP, (b)
liabilities appearing on the balance sheet in accordance with GAAP in respect of
Capital Leases of such Person, and (c) all Guaranties by such Person of Funded
Debt of others.
"GAAP" means generally accepted accounting principles as in effect
from time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or other
political subdivision thereof, or
(ii) any 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
Debt, dividend or other obligation of any other Person in any manner, whether
directly or indirectly, including (without limitation) obligations incurred
through an agreement, contingent or otherwise, by such Person:
(a) to purchase such Debt or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of
such Debt 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 Debt or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such Debt or
obligation of the ability of any other Person to make payment of the
Debt or obligation; or
(d) otherwise to assure the owner of such Debt or obligation
against loss in respect thereof.
B-6
In any computation of the Debt or other liabilities of the obligor under any
Guaranty, the Debt 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 any other substances, including all substances listed in or regulated
in any Environmental law 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, regulated, prohibited or penalized by any applicable law
including, but not limited to, 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.
"Institutional Investor" means (a) any Purchaser of a Note, (b) any
holder of a Note holding (together with one or more of its affiliates) more than
5% of the aggregate principal amount of the Notes then outstanding and which is
an Accredited Investor, (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, in each such case as
described in Rule 144A promulgated under the Securities Act, or any other
similar financial institution or entity, regardless of legal form, and (d) any
Related Fund of any holder of any Note.
"Intercreditor Agreement" is defined in SECTION 2.2(B).
"Lien" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"Make-Whole Amount" is defined in SECTION 8.7.
"Material" means material in relation to the business, operations,
affairs, financial condition, assets or properties of the Company and its
Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole, or (b) the ability of the Company
to perform its obligations under this Agreement and the Notes, or (c) the
validity or enforceability of this Agreement or the Notes.
"Material Subsidiary" shall mean each Subsidiary whose assets have a
book value in excess of 5% of the aggregate book value of the total assets of
the Company and its Subsidiaries
B-7
on a consolidated basis in accordance with generally accepted accounting
principles, consistently applied.
"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.
"1999 Holders" means the holders of the notes issued under the Note
Purchase Agreements dated as of June 15, 1999 between the Company and each of
the Purchasers named in Annex I thereto.
"Notes" is defined in SECTION 1.
"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.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, 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 the date of any determination thereof and
without duplication, (a) any Debt of the Company secured by a Lien created or
incurred within the limitations of SECTION 10.5(I), and (b) any Debt of the
Company's Restricted Subsidiaries; provided there shall be excluded from any
calculation of Priority Debt, the Debt of any Restricted Subsidiary constituting
Qualified Restricted Subsidiary Debt.
"Private Placement Agent" shall mean any company organized as a
"broker" or "dealer" (as each such term is defined in Section 3(a) (4) and (5),
respectively, of the Exchange Act) of recognized national standing regularly
engaged as an intermediary in the placement or sale to and among Institutional
Investors of Debt Securities exempt from registration under the Securities Act.
"property" or "properties" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, xxxxxx
or inchoate.
B-8
"Purchaser" is defined in the first paragraph of this Agreement.
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"Qualified Institutional Buyer" means any Person who is a "qualified
institutional buyer" within the meaning of such term as set forth in Rule
144A(a)(1) under the Securities Act.
"Qualified Restricted Subsidiary Debt" means (a) Debt of a Restricted
Subsidiary owing to the Company or any Wholly-owned Restricted Subsidiary, (b)
Debt of a Restricted Subsidiary outstanding as of the date of the Closing and
described on SCHEDULE 5.15 hereto, (c) Debt of a Restricted Subsidiary which
becomes a Restricted Subsidiary after the date of the Closing to the extent that
such Debt existed at the time that such Person became a Restricted Subsidiary
and such Debt was not incurred in contemplation of such Person becoming a
Restricted Subsidiary, and (d) any extension, renewal or refunding of any Debt
of a Restricted Subsidiary described in the foregoing clauses (a), (b) and (c),
provided that (i) any such extension, renewal or refunding of such Debt shall be
without increase in the principal amount remaining unpaid as of the date of such
extension, renewal or refunding, (ii) at the time of such extension, renewal or
refunding and after giving effected thereto, no Default or Event of Default
would exist, and (iii) in the case of any such Debt secured by a Lien, such Lien
shall attach solely to the same such property.
"Related Fund" means, with respect to any holder of any Note, any fund
or entity that (i) invests in Securities or bank loans, and (ii) is advised or
managed by such holder, the same investment advisor as such holder or by an
affiliate of such holder or such investment advisor.
"Required Holders" means, at any time, the holders of at least 51% in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by the Company or any of its Affiliates).
"Responsible Officer" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"Restricted Subsidiary" at any time means and includes each of the
Subsidiary Guarantors and each other Subsidiary which (a) as of the date of the
Closing has been designated as a "Restricted Subsidiary" on SCHEDULE 5.4 hereto
or, after the date of the Closing and in accordance with and within the
limitations of SECTION 10.9 hereto, has been designated a "Restricted
Subsidiary" and (b) in any such case,
(a) is organized under the laws of the United States or Canada or
a jurisdiction thereof,
(b) conducts substantially all of its business and has
substantially all of its Property within the United States, Puerto
Rico and Canada, and
B-9
(c) at least 60% (by number of votes) of each class of Voting
Stock (other than directors' qualifying shares) of which are legally
and beneficially owned by the Company and its Wholly-owned Restricted
Subsidiaries, at such time.
"SEC" shall mean the Securities and Exchange Commission of the United
States, or any successor thereto.
"Securities" or Security" shall have the same meaning as in Section
2(1) of the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and the rules and regulations promulgated thereunder from time to
time in effect.
"Senior Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or comptroller of the Company.
"Senior Funded Debt" means all Funded Debt of the Company which is not
expressed to be subordinate or junior in rank to any other Funded Debt of the
Company.
"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 or joint venture if more than a 50% interest
in the profits or capital thereof is owned by such Person or one or more of its
Subsidiaries or such first Person and one or more of its Subsidiaries (unless
such partnership can and does ordinarily take major business actions without the
prior approval of such Person or one or more of its Subsidiaries). Unless the
context otherwise clearly requires, any reference to a "Subsidiary" is a
reference to a Subsidiary of the Company.
"Subsidiary Guarantor" is defined in SECTION 2.2(A) and shall include
any Subsidiary Guarantor which is required to comply with the requirements of
SECTION 9.7.
"Subsidiary Guaranty" is defined in SECTION 2.2(A) and shall include
any Subsidiary Guaranty delivered pursuant to SECTION 9.7 means any Guaranty of
any Subsidiary of the Company with respect to the payment of the Notes and all
other sums due and owing by the Company under this Agreement, which Guaranty
shall be in form and substance reasonably satisfactory to the Required Holders.
"Surviving Person" is defined in SECTION 10.6(A).
"SVO" means the Securities Valuation Office of the NAIC or any
successor to such Office.
"Synthetic Lease" means, at any time, any lease (including leases that
may be terminated by the lessee at any time) of any property (a) that is
accounted for as an operating lease under
B-10
GAAP and (b) in respect of which the lessee retains or obtains ownership of the
property so leased for U.S. federal income tax purposes, other than any such
lease under which such Person is the lessor.
"Unrestricted Subsidiary" means any Subsidiary which (a) as of the
date of the Closing is not a Restricted Subsidiary, (b) after the date of the
Closing shall have been, pursuant to and within the limitations of SECTION 10.9
hereof, designated as an Unrestricted Subsidiary or (c) otherwise does not
satisfy the criteria for a Restricted Subsidiary set forth in the definition of
"Restricted Subsidiary."
"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 one
hundred percent (100%) of all of the equity interests (except directors'
qualifying shares) and voting interests of which are owned by any one or more of
the Company and the Company's other Wholly-owned Subsidiaries at such time.
B-11
SCHEDULE OF ADDITIONAL DISCLOSURES
None
SCHEDULE 5.3
(to Note Purchase Agreement)
SCHEDULE OF RESTRICTED SUBSIDIARIES
Xxxxxxxxx Farms, Inc. (Processing Division)
Xxxxxxxxx Farms, Inc. (Production Division)
Xxxxxxxxx Farms, Inc. (Foods Division)
SCHEDULE 5.4
(to Note Purchase Agreement)
FINANCIAL STATEMENTS
The financial statements included in the Company's Annual Report on
Form 10-K filed in connection with its fiscal year ended October 31, 2005, and
the financial statements in the Quarterly Report on Form 10-Q filed in
connection with the Company's first fiscal quarter ended January 31, 2006 are
incorporated into this schedule by reference.
SCHEDULE 5.5
(to Note Purchase Agreement)
EXISTING DEBT
OUTSTANDING BAL
AT
OBLIGEE OBLIGOR MARCH 31, 2006 SECURITY
------- --------------------- --------------- ------------------------------
Touchstone Asset Management - Foods Division Xxxxxxxxx Farms, Inc. $ 466,074.57 Real Property at Foods Divison
Pike County - MBIA Capital Lease Xxxxxxxxx Farms, Inc. $ 2,320,000.00 XxXxxx Waste Water Assets
Xxxxxx Bank - Revolver Xxxxxxxxx Farms, Inc. $35,000,000.00 UNSECURED
Lincoln National Life Insurance Company- Term Loan Xxxxxxxxx Farms, Inc. $ 8,000,000.00 UNSECURED
--------------
$45,786,074.57
==============
SCHEDULE 5.15
(to Note Purchase Agreement)
[FORM OF NOTE]
THIS NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF
1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE. THIS NOTE MAY BE
OFFERED OR SOLD ONLY IF REGISTERED UNDER APPLICABLE SECURITIES LAWS OR IF AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
XXXXXXXXX FARMS, INC.
6.12% Senior Note due April 28, 2016
No. [_________] _________ [Date]
$[____________] PPN 800013 A @ 3
FOR VALUE RECEIVED, the undersigned, XXXXXXXXX FARMS, INC. (herein
called the "Company"), a corporation organized and existing under the laws of
the State of Mississippi, hereby promises to pay to [________________], or
registered assigns, the principal sum of [________________] DOLLARS (or so much
thereof as shall not have been prepaid) on April 28, 2016, with interest
(computed on the basis of a 360-day year of twelve 30-day months) on the unpaid
balance hereof at the rate of (a) 6.12% per annum from the date hereof, payable
semiannually, on the 28th day of April and October in each year, commencing with
the April 28 or October 28 next succeeding the date hereof, until the principal
hereof shall have become due and payable, and (b) to the extent permitted by
law, on any overdue payment (including overdue repayment) of principal, any
overdue payment of interest and on any overdue payment of any Make-Whole Amount,
at a rate per annum from time to time equal to the greater of (i) 7.12% or (ii)
1.00% over the rate of interest publicly announced by Xxxxxx X.X. from time to
time in Chicago, Illinois as its "base" or "prime" rate payable semiannually as
aforesaid (or, at the option of the registered holder hereof, on demand).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at [_______] or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreement referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to the Note Purchase Agreement, dated as of April 28,
2006 (as from time to time amended, the "Note Purchase Agreement"), between the
Company and the respective Purchasers named therein and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, to have (i) agreed to the confidentiality provisions set forth in
SECTION 20 of the Note Purchase Agreement and (ii) made the representation set
forth in SECTION 6.2 of the Note Purchase Agreement. Unless otherwise indicated,
capitalized terms used in this Note shall have the respective meanings ascribed
to such terms in the Note Purchase Agreement.
EXHIBIT 1
(to Note Purchase Agreement)
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
The Company will make required prepayments of principal on the Note on
the dates and in the amounts specified in the Note Purchase Agreement. This Note
is also subject to optional prepayment, in whole or from time to time in part,
at the times and on the terms specified in the Note Purchase Agreement, but not
otherwise.
The payment by the Company of the principal of, Make-Whole Amount, if
any, and any interest on this Note is guaranteed by the Subsidiary Guarantors as
provided in the Subsidiary Guaranty (each such term having the meaning assigned
thereto in the Note Purchase Agreement).
If an Event of Default occurs and is continuing, the principal of this
Note may be declared or otherwise become due and payable in the manner, at the
price (including any applicable Make-Whole Amount) and with the effect provided
in the Note Purchase Agreement.
THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE
RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF ILLINOIS,
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE
APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
XXXXXXXXX FARMS, INC.
By
-------------------------------------
[Title]
--------------------------------
E-12
