EXHIBIT 10(j)(2)
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UNIVERSAL FOREST PRODUCTS, INC.
NOTE AGREEMENT
Dated as of December 18, 2002
Re: $15,000,000 5.63% Series 2002-A Senior Notes, Tranche A,
Due December 18, 2009
and
$40,000,000 6.16% Series 2002-A Senior Notes, Tranche B,
Due December 18, 2012
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TABLE OF CONTENTS
(Not a part of the Agreement)
SECTION HEADING PAGE
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT......................1
Section 1.1. Description of Notes.....................................1
Section 1.2. Commitment, Closing Date.................................2
Section 1.3. Other Agreements.........................................2
Section 1.4. Additional Series of Notes...............................3
Section 1.5. Subsidiary Note Guaranty.................................3
SECTION 2. PREPAYMENT OF NOTES......................................4
Section 2.1. Required Prepayments.....................................4
Section 2.2. Optional Prepayment with Premium.........................4
Section 2.3. Prepayment of Notes upon Change of Control...............4
Section 2.4. Notice of Optional Prepayments...........................5
Section 2.5. Application of Prepayments...............................6
Section 2.6. Direct Payment...........................................6
SECTION 3. REPRESENTATIONS..........................................6
Section 3.1. Representations of the Company...........................6
Section 3.2. Representations of the Purchaser.........................7
SECTION 4. CLOSING CONDITIONS.......................................7
Section 4.1. Conditions...............................................7
Section 4.2. Waiver of Conditions.....................................9
Section 4.3. Conditions to Issuance of Additional Notes...............9
SECTION 5. COMPANY COVENANTS.......................................10
Section 5.1. Corporate Existence, Etc................................10
Section 5.2. Insurance...............................................10
Section 5.3. Taxes, Claims for Labor and Materials;
Compliance with Laws...........................10
Section 5.4. Maintenance, Etc........................................11
Section 5.5. Nature of Business......................................11
Section 5.6. Consolidated Net Worth..................................11
Section 5.7. Fixed Charges Coverage Ratio............................12
Section 5.8. Limitations on Current Debt and Funded Debt.............12
Section 5.9. Limitation on Liens.....................................13
Section 5.10. Mergers, Consolidations and Sales of Assets.............15
Section 5.11. Guaranties..............................................18
Section 5.12. Notes to Rank Pari Passu................................19
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Section 5.13. Repurchase of Notes.....................................19
Section 5.14. Transactions with Affiliates............................19
Section 5.15. Termination of Pension Plans............................19
Section 5.16. Reports; Rights of Inspection; Retention of Consultants.19
Section 5.17. Guaranty by Subsidiaries................................23
Section 5.18. Stock Pledge Agreement..................................24
Section 5.19. Designation of Subsidiaries.............................25
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.................25
Section 6.1. Events of Default.......................................25
Section 6.2. Notice to Holders.......................................27
Section 6.3. Acceleration of Maturities..............................28
Section 6.4. Rescission of Acceleration..............................28
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS........................29
Section 7.1. Consent Required........................................29
Section 7.2. Solicitation of Holders.................................29
Section 7.3. Effect of Amendment or Waiver...........................30
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS................30
Section 8.1. Definitions.............................................30
Section 8.2. Accounting Principles...................................43
Section 8.3. Directly or Indirectly..................................43
SECTION 9. MISCELLANEOUS...........................................43
Section 9.1. Registered Notes........................................43
Section 9.2. Exchange of Notes.......................................44
Section 9.3. Loss, Theft, Etc. of Notes..............................44
Section 9.4. Expenses, Stamp Tax Indemnity...........................44
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative.......45
Section 9.6. Notices.................................................45
Section 9.7. Environmental Indemnity and Covenant Not to Xxx.........45
Section 9.8. Successors and Assigns..................................46
Section 9.9. Survival of Covenants and Representations...............46
Section 9.10. Severability............................................46
Section 9.11. Governing Law...........................................46
Section 9.12. Submission to Jurisdiction..............................47
Section 9.13. Captions................................................47
Signatures..................................................................48
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ATTACHMENTS TO NOTE AGREEMENT:
SCHEDULE I -- Names and Addresses of the Purchasers and Amounts of Commitments
SCHEDULE II -- Funded Debt; Liens Securing Funded Debt (including Capitalized Leases); Subsidiaries; and
Restricted Subsidiaries as of the first and second Closing Date
SCHEDULE III -- Environmental Obligations
EXHIBIT A-1 -- Form of 5.63% Series 2002-A Senior Note, Tranche A, due December 18, 2009
EXHIBIT A-2 -- Form of 6.16% Series 2002-A Senior Note, Tranche B, due December 18, 2012
Exhibit B-1 -- Form of Subsidiary Note Guaranty
Exhibit B-2 -- Intercreditor Agreement
EXHIBIT C -- Representations and Warranties of the Company
EXHIBIT D -- Description of Special Counsel's Closing Opinion
EXHIBIT E -- Description of Closing Opinion of Counsel to the Company
EXHIBIT F -- Form of Supplement to Note Agreement
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UNIVERSAL FOREST PRODUCTS, INC.
0000 XXXX XXXXXXXX, X.X.
XXXXX XXXXXX, XXXXXXXX 00000
NOTE AGREEMENT
Re: $15,000,000 5.63% Series 2002-A Senior Notes, Tranche A,
Due December 18, 2009
and
$40,000,000 6.16% Series 2002-A Senior Notes, Tranche B,
Due December 18, 2012
Dated as of
December 18, 2002
To the Purchaser named in Schedule I
hereto which is a signatory of this
Agreement
Ladies and Gentlemen:
The undersigned, Universal Forest Products, Inc., a Michigan
corporation (the "Company"), agrees with you as follows:
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT.
Section 1.1. Description of Notes. (a) The Company will authorize the
issue and sale of:
(i) $15,000,000 aggregate principal amount of its 5.63%
Series 2002-A Senior Notes, Tranche A (the "Tranche A Notes"), to be
dated the date of issue, to bear interest from such date at the rate of
5.63% per annum, payable semiannually on the 18th day of June and
December in each year (commencing June 18, 2003) and at maturity and to
bear interest on overdue principal (including any overdue optional
prepayment of principal) and premium, if any, and (to the extent
legally enforceable) on any overdue installment of interest at the
Overdue Rate after the date due, whether by acceleration or otherwise,
until paid, to mature on December 18, 2009, and to be substantially in
the form attached hereto as Exhibit A-1; and
(ii) $40,000,000 aggregate principal amount of its 6.16%
Series 2002-A Senior Notes, Tranche B (the "Tranche B Notes"), to be
dated the date of issue, to bear interest from such date at the rate of
6.16% per annum, payable semiannually on the 18th day of June and
December in each year (commencing June 18, 2003) and at maturity and to
bear interest on overdue principal (including any overdue optional
prepayment of principal) and premium, if any, and (to the extent
legally enforceable) on any overdue
installment of interest at the Overdue Rate after the date due, whether
by acceleration or otherwise, until paid, to mature on December 18,
2012, and to be substantially in the form attached hereto as Exhibit
A-2. The Series 2002-A Notes, together with each series of Additional
Notes which may from time to time be issued pursuant to the provisions
of SECTION 1.4, are sometimes hereinafter collectively referred to as
the "Notes".
(b) Interest on the Series 2002-A Notes shall be computed on the basis
of a 360-day year of twelve 30-day months. The Series 2002-A Notes are not
subject to prepayment or redemption at the option of the Company prior to their
expressed maturity dates except on the terms and conditions and in the amounts
and with the premium, if any, set forth in SECTION 2. You and the other
purchasers named in Schedule I are hereinafter sometimes referred to as the
"Purchasers". The terms which are capitalized herein shall have the meanings set
forth in SECTION 8.1 unless the context shall otherwise require.
Section 1.2. Commitment, Closing Date. Subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue and sell to you, and you
agree to purchase from the Company, the Series 2002-A Notes in the principal
amount and of the tranche set forth opposite your name on Schedule I hereto at a
price of 100% of the principal amount thereof on the Closing Date hereafter
mentioned.
Delivery of the Series 2002-A Notes will be made at the offices of
Xxxxxxx and Xxxxxx, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, against
payment therefor in Federal Reserve or other funds current and immediately
available at the principal office of Xxxxxx Bank, ABA No.: 000000000, Account
Name: Universal Forest Products, Inc.--Concentration Account, Account No.:
000-000-0, in the amount of the purchase price at 10:00 A.M., Chicago time, on
December 18, 2002 (the "Closing Date"). The Notes delivered to you on the
Closing Date will be delivered to you in the form of a single registered Note of
each tranche in the form attached hereto as Exhibits A-1 and A-2, as the case
may be, for the full amount of your purchase (unless different denominations are
specified by you), registered in your name or in the name of such nominee as may
be specified in Schedule I attached hereto.
Section 1.3. Other Agreements. Simultaneously with the execution and
delivery of this Agreement, the Company is entering into similar agreements with
the other Purchasers under which such other Purchasers agree to purchase from
the Company the principal amount and the tranche of Series 2002-A Notes set
opposite such Purchaser's name in Schedule I, and your obligation and the
obligations of the Company hereunder are subject to the execution and delivery
of the similar agreements by the other Purchasers. This Agreement and said
similar agreements with the other Purchasers, together with any Supplement, are
herein collectively referred to as the "Agreements". The obligations of each
Purchaser, and the obligations of the Additional Purchasers under the
Supplements, shall be several and not joint and no Purchaser shall be liable or
responsible for the acts of any other Purchaser or have any obligation under any
Supplement or any liability to any Person for the performance or non-performance
by any Additional Purchaser thereunder.
Section 1.4. Additional Series of Notes. The Company may, from time to
time, in its sole discretion but subject to the terms hereof, issue and sell one
or more additional series of its
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unsecured promissory notes under the provisions of this Agreement pursuant to a
supplement (a "Supplement") substantially in the form attached hereto as Exhibit
F. Each additional series of Notes (the "Additional Notes") issued pursuant to a
Supplement shall be subject to the following terms and conditions:
(i) each series of Additional Notes, when so issued, shall be
differentiated from all previous series by year and sequential
alphabetical designation inscribed thereon;
(ii) Additional Notes of the same series may consist of more
than one different and separate tranches and may differ with respect to
outstanding principal amounts, maturity dates, interest rates and
premiums, if any, and price and terms of redemption or payment prior to
maturity;
(iii) each series of Additional Notes shall be dated the date
of issue, bear interest at such rate or rates, mature on such date or
dates, be subject to such mandatory and optional prepayment on the
dates and at the premiums, if any, have such additional or different
conditions precedent to closing, such representations and warranties
and such additional covenants as shall be specified in the Supplement
under which such Additional Notes are issued;
(iv) each series of Additional Notes issued under this
Agreement shall be in substantially the form attached hereto as Exhibit
1 to Exhibit F with such variations, omissions and insertions as are
necessary or permitted hereunder;
(v) the minimum principal amount of any Note issued under a
Supplement shall be $100,000, except as may be necessary to evidence
the outstanding amount of any Note originally issued in a denomination
of $100,000 or more;
(vi) all Additional Notes shall constitute Senior Funded Debt
of the Company and shall rank pari passu with all other outstanding
Notes; and
(vii) no Additional Notes shall be issued hereunder if at the
time of issuance thereof and after giving effect to the application of
the proceeds thereof, any Default or Event of Default shall have
occurred and be continuing.
Section 1.5. Subsidiary Note Guaranty. The payment by the Company of
all amounts due in respect of the Notes and the performance by the Company of
its obligations under this Agreement will be absolutely and unconditionally
guaranteed by Tresstar, LLC, UFP Ventures, Inc., UFP Ventures II, Inc.,
Universal Forest Products of Modesto LLC, UFP Real Estate, Inc., Universal
Forest Products Eastern Division, Inc., Universal Forest Products Western
Division, Inc., Xxxxxxxx Holding Company, Inc., Universal Forest Products
Xxxxxxxx, LLC, Syracuse Real Estate, LLC, Universal Forest Products Indiana
Limited Partnership, Universal Forest Products Texas Limited Partnership,
Universal Forest Products Holding Company, Inc., Universal Forest Products
Reclamation Center, Inc., Universal Truss, Inc. and Consolidated Building
Components, Inc. (individually, an "Existing Subsidiary Guarantor"; and,
collectively, the
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"Existing Subsidiary Guarantors") pursuant to a Guaranty Agreement dated as of
the Closing Date (the "2002 Subsidiary Note Guaranty") substantially in the form
attached hereto as Exhibit B-1. Without limiting the foregoing, enforcement of
the rights and benefits in respect of the 2002 Subsidiary Note Guaranty will be
subject to an Intercreditor Agreement dated as of November 13, 1998 (the
"Intercreditor Agreement") among the Creditors (as defined therein) and Bank
One, N.A., as Collateral Agent, and to be joined by the Purchasers and any
Additional Purchasers.
SECTION 2. PREPAYMENT OF NOTES.
Section 2.1. Required Prepayments. There shall be no required
prepayment of any tranche of the Series 2002-A Notes prior to the stated
maturity thereof. Any Additional Notes shall be subject to required prepayment
only as set forth in the applicable Supplement.
Section 2.2. Optional Prepayment with Premium. Upon compliance with
SECTION 2.4, the Company shall have the privilege, at any time and from time to
time, of prepaying any tranche of the Notes, either in whole or in part (but if
in part then in a minimum principal amount of $1,000,000), by payment of the
principal amount of such tranche, or portion thereof to be prepaid, and accrued
interest thereon to the date of such prepayment, together with a premium equal
to the Make-Whole Amount, determined as of two Business Days prior to the date
of such prepayment pursuant to this SECTION 2.2.
Section 2.3. Prepayment of Notes upon Change of Control. (a)(1) In the
event that any Change of Control shall occur, the Company will give written
notice (the "Company Notice") of such fact in the manner provided in SECTION 9.6
to the holders of the Notes. The Company Notice shall be delivered promptly upon
receipt of such knowledge by the Company and in any event no later than three
Business Days following the occurrence of any Change of Control. The Company
Notice shall (1) describe the facts and circumstances of such Change of Control
in reasonable detail, (2) make reference to this SECTION 2.3 and the right of
the holders of the Notes to require prepayment of the Notes on the terms and
conditions provided for in this SECTION 2.3, (3) offer in writing to prepay the
outstanding Notes, together with accrued interest to the date of prepayment, and
a premium equal to the then applicable Make-Whole Amount, and (4) specify a date
for such prepayment (the "Change of Control Prepayment Date"), which Change of
Control Prepayment Date shall be not more than 90 days nor less than 30 days
following the date of such Company Notice. Each holder of the then outstanding
Notes shall have the right to accept such offer and require prepayment of the
Notes held by such holder in full by written notice to the Company (a
"Noteholder Notice") given not later than 20 days after receipt of the Company
Notice. A failure by a holder of Notes to respond to an offer to prepay made
pursuant to this SECTION 2.3(a) within such 20 day period shall be deemed to
constitute an acceptance of such offer by such holder. The Company shall on the
Change of Control Prepayment Date prepay in full all of the Notes held by
holders which have so accepted such offer of prepayment or which have failed in
writing to accept or reject such offer within such 20 day period. The prepayment
price of the Notes payable upon the occurrence of any Change of Control shall be
an amount equal to 100% of the outstanding principal amount of the Notes so to
be prepaid and accrued interest thereon to the date of such prepayment, together
with a premium equal to the then applicable Make-Whole
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Amount, determined as of two Business Days prior to the date of such prepayment
pursuant to this SECTION 2.3(a).
(2) Without limiting clause (1) of this SECTION 2.3(a), the Company
shall immediately after any Responsible Officer has knowledge of an event which
in the judgment of such Responsible Officer or the Board of Directors of the
Company is reasonably likely to occur which would constitute a Change of Control
and in any event no later than three Business Days thereafter, give written
notice of such fact in the manner provided in SECTION 9.6 to the holders of the
Notes.
(b) Without limiting the foregoing, notwithstanding any failure on the
part of the Company to give the Company Notice required by SECTION 2.3(a), each
holder of the Notes shall have the right, by delivery of written notice to the
Company, to require the Company upon the occurrence of a Change of Control to
prepay, and the Company will prepay, such holder's Notes in full, together with
accrued interest thereon to the date of prepayment, and a premium equal to the
then applicable Make-Whole Amount. Notice of any required prepayment pursuant to
this SECTION 2.3(b) shall be delivered by any holder of the Notes which was
entitled to, but did not receive, such Company Notice to the Company at any time
after such holder has actual knowledge of such Change of Control. On the date
(the "Change of Control Delayed Prepayment Date") designated in such holder's
notice (which shall be not more than 90 days nor less than 30 days following the
date of such holder's notice), the Company shall prepay in full all of the Notes
held by such holder, together with accrued interest thereon to the date of
prepayment, and a premium equal to the then applicable Make-Whole Amount. If the
holder of any Note gives any notice pursuant to this SECTION 2.3(b), the Company
shall give a Company Notice within three Business Days of receipt of such notice
and identify the Change of Control Delayed Prepayment Date to all other holders
of the Notes and each of such other holders shall then and thereupon have the
right to accept the Company's offer to prepay the Notes held by such holder in
full and require prepayment of such Notes by delivery of a Noteholder Notice
within 20 days following receipt of such Company Notice; provided only that any
date for prepayment of such holder's Notes shall be the Change of Control
Delayed Prepayment Date. A failure by a holder of Notes to respond to an offer
to prepay made pursuant to this SECTION 2.3(b) within such 20 day period shall
be deemed to constitute an acceptance of such offer by such holder. On the
Change of Control Delayed Prepayment Date, the Company shall prepay in full the
Notes of each holder thereof which has accepted such offer of prepayment or
which has failed to accept or reject such offer within such 20 day period, in
any such case at a prepayment price equal to 100% of the outstanding principal
amount of the Notes so to be prepaid and accrued interest thereon to the date of
such prepayment, together with a premium equal to the then applicable Make-Whole
Amount, determined as of two Business Days prior to the date of such prepayment
pursuant to this SECTION 2.3(b).
Section 2.4. Notice of Optional Prepayments. The Company will give
notice of any prepayment of any tranche of the Notes pursuant to SECTION 2.2 to
each holder of such tranche of not less than 30 days nor more than 60 days
before the date fixed for such optional prepayment specifying (a) such date, (b)
the principal amount of the holder's Notes of such tranche to be prepaid on such
date, (c) that the Make-Whole Amount may be payable, (d) the date when such
Make-Whole Amount will be calculated, (e) the estimated Make-Whole Amount, and
(f) the accrued interest applicable to the prepayment. Such notice of prepayment
shall also certify all
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facts, if any, which are conditions precedent to any such prepayment. Notice of
prepayment having been so given, the aggregate principal amount of the Notes
specified in such notice, together with accrued interest thereon and the
Make-Whole Amount, if any, payable with respect to such tranche shall become due
and payable on the prepayment date specified in said notice. Two Business Days
prior to the prepayment date specified in such notice, the Company shall provide
each holder of a Note of the tranche to be prepaid written notice of the
Make-Whole Amount, if any, payable in connection with such prepayment and,
whether or not any Make-Whole Amount is payable, a reasonably detailed
computation thereof.
Section 2.5. Application of Prepayments. All partial prepayments made
pursuant to SECTION 2.2 shall be applied on all outstanding Notes of the same
tranche ratably in accordance with the unpaid principal amounts thereof. All
partial prepayments made pursuant to SECTION 2.3 shall be applied only to the
Notes of the holders who have elected to participate in such prepayment.
Section 2.6. Direct Payment. Notwithstanding anything to the contrary
contained in this Agreement or the Notes, in the case of any Note owned by you
or your nominee or owned by any subsequent Institutional Holder which has given
written notice to the Company requesting that the provisions of this SECTION 2.6
shall apply, the Company will punctually pay when due the principal thereof,
interest thereon and Make-Whole Amount, if any, due with respect to said
principal, without any presentment thereof, directly to you, to your nominee or
to such subsequent Institutional Holder at your address or your nominee's
address set forth in Schedule I hereto (or Schedule I to any Supplement) or such
other address as you, your nominee or such subsequent Institutional Holder may
from time to time designate in writing to the Company or, if a bank account with
a United States bank is designated for you or your nominee on Schedule I hereto
(or Schedule I to any Supplement) or in any written notice to the Company from
you, from your nominee or from any such subsequent Institutional Holder, the
Company will make such payments in immediately available funds to such bank
account, no later than 11:00 a.m. Eastern Standard Time on the date due, marked
for attention as indicated, or in such other manner or to such other account in
any United States bank as you, your nominee or any such subsequent Institutional
Holder may from time to time direct in writing. If for any reason whatsoever the
Company does not make any such payment by such 11:00 a.m. 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 Overdue Rate.
SECTION 3. REPRESENTATIONS.
Section 3.1. Representations of the Company. The Company represents and
warrants that all representations and warranties set forth in Exhibit C are true
and correct as of the date hereof and are incorporated herein by reference with
the same force and effect as though herein set forth in full.
Section 3.2. Representations of the Purchaser. (a) You represent, and
in entering into this Agreement the Company understands, that you are acquiring
the Notes for the purpose of investment and not with a view to the distribution
thereof, and that you have no present intention of selling, negotiating or
otherwise disposing of the Notes, it being understood, however, that the
disposition of your property shall at all times be and remain within your
control.
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(b) You further represent that either: (1) you are acquiring the Notes
with your "insurance company general account" within the meaning of Department
of Labor Prohibited Transaction Exemption ("PTE") 95-60 (issued July 12, 1995)
and there is no employee benefit plan, treating as a single plan, all plans
maintained by the same employer or employee organization, with respect to which
the amount of the general account reserves and liabilities for all contracts
held by or on behalf of such plan, exceeds ten percent (10%) of the total
reserves and liabilities of such general account (exclusive of separate account
liabilities) plus surplus, as set forth in the NAIC Annual Statement filed with
your state of domicile; (2) no part of such funds constitutes assets of an
"employee benefit plan" within the meaning of Section 3(3) of ERISA or a "plan"
within the meaning of section 4975(e)(1) of the Code; or (3) all or a part of
such funds constitute assets of one or more separate accounts, trusts or a
commingled pension trust maintained by you, and you have disclosed to the
Company the names of such employee benefit plans whose assets in such separate
account or accounts or pension trusts exceed 10% of the total assets or are
expected to exceed 10% of the total assets of such account or accounts or trusts
as of the date of such purchase and the Company has advised you in writing (and
in making the representations set forth in this clause (3) you are relying on
such advice) that the Company is not a party-in-interest nor are the Notes
employer securities with respect to the particular employee benefit plan
disclosed to the Company by you as aforesaid (for the purpose of this clause
(3), all employee benefit plans maintained by the same employer or employee
organization are deemed to be a single plan). As used in this SECTION 3.2(b),
the terms "separate account", "party-in-interest", "employer securities" and
"employee benefit plan" shall have the respective meanings assigned to them in
ERISA.
SECTION 4. CLOSING CONDITIONS.
Section 4.1. Conditions. Your obligation to purchase the Notes on the
Closing Date shall be subject to the performance by the Company of its
agreements hereunder which by the terms hereof are to be performed at or prior
to the time of delivery of the Notes and to the following further conditions
precedent:
(a) Closing Certificates. (1) Concurrently with the delivery
of the Notes on the Closing Date, you shall have received a certificate
dated the Closing Date, signed by a Responsible Officer of the Company,
the truth and accuracy of which shall be a condition to your obligation
to purchase the Notes proposed to be sold to you and to the effect that
(i) the representations and warranties of the Company set forth in
Exhibit C hereto are true and correct on and with respect to the
Closing Date, (ii) the Company has performed all of its obligations
hereunder which are to be performed on or prior to the Closing Date,
and (iii) no Default or Event of Default has occurred and is
continuing; and
(2) You shall have received a certificate dated the Closing
Date, signed by an authorized officer of each of the Existing
Subsidiary Guarantors, the truth and accuracy of which shall be a
condition to your obligation to purchase the Notes proposed to be sold
to you and to the effect that (i) the representations and warranties of
the Existing Subsidiary Guarantors set forth in the 2002 Subsidiary
Note Guaranty are true and correct on and with respect to the Closing
Date, (ii) each Existing Subsidiary Guarantor has performed all of its
obligations under the 2002 Subsidiary Note Guaranty which are to be
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performed on or prior to the Closing Date, and (iii) no Default or
Event of Default has occurred and is continuing.
(b) 2002 Subsidiary Note Guaranty and Intercreditor
Agreement. (1) The 2002 Subsidiary Note Guaranty shall have been duly
executed and delivered by the parties thereto to you and shall be in
full force and effect and you shall have received true, correct and
complete copies thereof; and
(2) You shall have joined the Intercreditor Agreement.
(c) Legal Opinions. You shall have received from Xxxxxxx and
Xxxxxx, who are acting as your special counsel in this transaction, and
from Varnum, Riddering, Xxxxxxx & Xxxxxxx, counsel for the Company and
the Initial Subsidiary Guarantors, their respective opinions dated the
Closing Date, in form and substance satisfactory to you, and covering
the matters set forth in Exhibits D and E, respectively, hereto.
(d) Existence and Authority. On or prior to the Closing Date,
you shall have received, in form and substance reasonably satisfactory
to you and your special counsel, such documents and evidence with
respect to the Company and each of the Existing Subsidiary Guarantors
as you may reasonably request in order to establish the existence and
good standing of the Company and each of the Existing Subsidiary
Guarantors and the authorization of the transactions contemplated by
this Agreement and the 2002 Subsidiary Note Guaranty.
(e) Related Transactions. The Company shall have consummated
the sale of the entire principal amount of the Notes scheduled to be
sold on the Closing Date pursuant to this Agreement and the other
agreements referred to in SECTION 1.3.
(f) Private Placement Numbers. On or prior to the Closing
Date, special counsel to the Purchasers shall have duly made the
appropriate filings with Standard & Poor's CUSIP Service Bureau, as
agent for the National Association of Insurance Commissioners, in order
to obtain a private placement number for each tranche of the series of
Notes being sold on the Closing Date.
(g) Funding Instructions. At least three Business Days prior
to the Closing Date, you shall have received written instructions
executed by a Responsible Officer of the Company directing the manner
of the payment of funds on the Closing Date and setting forth (1) the
name of the transferee bank, (2) such transferee bank's ABA number, (3)
the account name and number into which the purchase price for the Notes
is to be deposited, (4) the purchase price of the Notes to be purchased
by you, and (5) the name and telephone number of the account
representative responsible for verifying receipt of such funds.
(h) Special Counsel Fees. Concurrently with the delivery of
the Notes to you on the Closing Date, the reasonable charges and
disbursements of Xxxxxxx and Xxxxxx, your special counsel, shall have
been paid by the Company to the extent reflected in a
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statement of such counsel rendered to the Company at least one Business
Day prior to the Closing Date.
(i) Legality of Investment. The Notes to be purchased by you
shall be a legal investment for you under the laws of each jurisdiction
to which you may be subject (without resort to any so-called "basket
provisions" to such laws).
(j) Satisfactory Proceedings. All proceedings taken in
connection with the transactions contemplated by this Agreement and the
2002 Subsidiary Note Guaranty, and all documents necessary to the
consummation thereof, shall be satisfactory in form and substance to
you and your special counsel, and you shall have received a copy
(executed or certified as may be appropriate) of all legal documents or
proceedings taken in connection with the consummation of said
transactions.
Section 4.2. Waiver of Conditions. If on the Closing Date the Company
fails to tender to you the Notes to be issued to you on such date or if the
conditions specified in SECTION 4.1 have not been fulfilled, you may thereupon
elect to be relieved of all further obligations under this Agreement. Without
limiting the foregoing, if the conditions specified in SECTION 4.1 have not been
fulfilled, you may waive compliance by the Company with any such condition to
such extent as you may in your sole discretion determine. Nothing in this
SECTION 4.2 shall operate to relieve the Company of any of its obligations
hereunder or to waive any of your rights against the Company.
Section 4.3. Conditions to Issuance of Additional Notes. The
obligations of the Additional Purchasers to purchase Additional Notes shall be
subject to the following conditions precedent, in addition to the conditions
specified in the Supplement pursuant to which such Additional Notes may be
issued:
(a) Compliance Certificate. A duly authorized Responsible
Officer shall execute and deliver to each Additional Purchaser an
Officer's Certificate dated the date of issue of such Additional Notes
stating that such officer has reviewed the provisions of this Agreement
(including any Supplements hereto) and setting forth the information
and computations (in sufficient detail) required in order to establish
whether the Company is in compliance with the requirements of SECTIONS
5.6, 5.7, 5.8, 5.9 and 5.10 on such date.
(b) Execution and Delivery of Supplement. The Company and
each such Additional Purchaser shall execute and deliver a Supplement
substantially in the form of Exhibit F hereto.
(c) Representations of Additional Purchasers. Each Additional
Purchaser shall have confirmed in the Supplement that the
representations set forth in SECTION 3 are true with respect to such
Additional Purchaser on and as of the date of issue of the Additional
Notes.
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SECTION 5. COMPANY COVENANTS.
From and after the Closing Date and continuing so long as any amount
remains unpaid on any Note:
Section 5.1. Corporate Existence, Etc. The Company will preserve and
keep in full force and effect, and will cause each Restricted Subsidiary to
preserve and keep in full force and effect, its corporate existence and all
licenses and permits necessary to the proper conduct of its business, if in the
case of any such license or permit, the failure to preserve and keep the same
could reasonably be expected to have a Material Adverse Effect, provided that
the foregoing shall not prevent any transaction permitted by SECTION 5.10.
Section 5.2. Insurance. The Company will maintain, and will cause each
Restricted Subsidiary to maintain, insurance coverage by financially sound and
reputable insurers and in such forms and amounts and against such risks as are
customary for corporations of established reputation engaged in the same or a
similar business and owning and operating similar properties; provided that
nothing contained in this SECTION 5.2 shall be deemed or construed to prohibit
the Company or any Restricted Subsidiary from self-insuring such risks as are
customary for corporations having a net worth (determined in accordance with
GAAP) comparable to the net worth of the Company or such Restricted Subsidiary,
as the case may be, and engaged in the same or a similar business and owning and
operating similar properties.
Section 5.3. Taxes, Claims for Labor and Materials; Compliance with
Laws. (a) The Company will promptly pay and discharge, and will cause each
Restricted Subsidiary promptly to pay and discharge, all lawful taxes,
assessments and governmental charges or levies imposed upon the Company or such
Restricted Subsidiary, respectively, or upon or in respect of all or any part of
the property or business of the Company or such Restricted Subsidiary, all trade
accounts payable in accordance with usual and customary business terms, and all
claims for work, labor or materials, which if unpaid might become a Lien upon
any property of the Company or such Restricted Subsidiary; provided that the
Company or such Restricted Subsidiary shall not be required to pay or make a
filing with regard to any such tax, assessment, charge, levy, account payable or
claim if (1)(i) the validity, applicability or amount thereof is being contested
in good faith by appropriate actions or proceedings which will prevent the
forfeiture or sale of any property of the Company or such Restricted Subsidiary
or any material interference with the use thereof by the Company or such
Restricted Subsidiary and (ii) the Company or such Restricted Subsidiary shall
set aside on its books, reserves deemed by it to be adequate with respect
thereto, or (2) the non-payment of any such tax, assessment, charge, levy,
account payable or claim could not reasonably be expected to have a Material
Adverse Effect, or (3) to the extent that failure to pay any of the foregoing or
comply with any of the foregoing relates solely to Restricted Subsidiaries which
are not Wholly-owned Restricted Subsidiaries of the Company or Subsidiary
Guarantors and if all such non Wholly-owned Restricted Subsidiaries do not, if
considered in the aggregate as a single Restricted Subsidiary, constitute a
Significant Restricted Subsidiary (but the Company shall provide notice to the
holders of the Notes of the occurrence of any such failure to comply or failure
to pay described in this proviso).
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(b) The Company will promptly comply and will cause each Restricted
Subsidiary to promptly comply with all laws, ordinances or governmental rules
and regulations to which it is subject, including, without limitation, the
Occupational Safety and Health Act of 1970, as amended, ERISA and all
Environmental Laws, the violation of which could reasonably be expected to have
a Material Adverse Effect or would result in any Lien not permitted under
SECTION 5.9, provided that the foregoing does not apply to Restricted
Subsidiaries which are not Wholly-owned Restricted Subsidiaries of the Company
or Subsidiary Guarantors if all such non Wholly-owned Restricted Subsidiaries do
not, if considered in the aggregate as a single Restricted Subsidiary,
constitute a Significant Restricted Subsidiary.
Section 5.4. Maintenance, Etc. The Company will maintain, preserve and
keep, and will cause each Restricted Subsidiary to maintain, preserve and keep,
its properties which are used or useful in the conduct of its business (whether
owned in fee or a leasehold interest) in good repair and working order and from
time to time will make all necessary repairs, replacements, renewals and
additions so that at all times the efficiency and marketability thereof shall
not be materially impaired or materially degraded, if the failure to complete
any such repair, replacement, renewal or addition could reasonably be expected
to have a Material Adverse Effect.
Section 5.5. Nature of Business. Neither the Company nor any Restricted
Subsidiary will engage in any business if, as a result, the general nature of
the business, taken on a consolidated basis, which would then be engaged in by
the Company and its Restricted Subsidiaries would be substantially changed from
the general nature of the business engaged in by the Company and its Restricted
Subsidiaries on the date of this Agreement and described in the Offering
Materials.
Section 5.6. 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)
$155,000,000 plus (b) 50% of Consolidated Net Earnings for the fiscal quarter of
the Company ending in December, 1998 and each fiscal year of the Company ending
thereafter, provided that if such Consolidated Net Earnings of the Company is
negative for the fiscal quarter ending in December, 1998 or any fiscal year
thereafter, as the case may be, the amount added for such fiscal quarter or year
shall be zero and it shall not reduce the amount added for any other fiscal
year, and plus 100% of the net proceeds from the sale or other transfer of any
capital stock of the Company.
Section 5.7. Fixed Charges Coverage Ratio. The Company will at all
times keep and maintain the ratio of Consolidated Net Earnings Available for
Fixed Charges for any four of the immediately preceding five fiscal quarters
(taken as a single accounting period) to Consolidated Fixed Charges for such
period at not less than 1.75 to 1.00.
For purposes of calculations under this SECTION 5.7, Consolidated Net
Earnings Available for Fixed Charges and Consolidated Fixed Charges shall be
adjusted for the period in respect of which any such calculation is being made
to give effect to (i) the audited "net earnings" (determined in a manner
consistent with the definition of "Consolidated Net Earnings" contained in this
Agreement) of any business entity acquired by the Company or any Restricted
Subsidiary (the "Acquired Business") and (ii) all Indebtedness incurred by the
Company or any Restricted Subsidiary in connection with such acquisition, and
shall be computed as if the Acquired
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Business had been a Restricted Subsidiary throughout the period and all
Indebtedness incurred in connection with such acquisition had been incurred at
the beginning of such period in respect of which such calculation is being made.
In the case of any business entity acquired during the twelve calendar month
period immediately preceding the date of any determination hereunder whose
financial records are not, and are not required to be in accordance with
applicable laws, rules and regulations, audited by the Company's independent
public accountants at the time of the acquisition thereof, the Company shall
base such determination upon the Company's internally audited net earnings of
such business entity for the immediately preceding fiscal year or the net
earnings of such business entity as audited by such business entity's
independent auditors for the immediately preceding fiscal year.
Section 5.8. Limitations on Current Debt and Funded Debt. (a) The
Company will not permit or suffer the Adjusted Leveraged Ratio to be greater
than 0.60 to 1.0 at any time.
(b) The Company will not, and will not permit any Restricted Subsidiary
to, create, assume, guarantee or otherwise incur or any in manner be or become
liable in respect of (1) any Current Debt or Funded Debt of the Company or any
Restricted Subsidiary secured by Liens permitted by SECTION 5.9(a)(8), or (2)
any other Current Debt or Funded Debt of a Restricted Subsidiary (other than
Qualified Current Debt and Qualified Funded Debt of a Restricted Subsidiary
Guarantor), or (3) any Attributable Indebtedness of Sale and Leaseback
Transactions of the Company or any Restricted Subsidiary, unless at the time of
creation, issuance, assumption, guarantee or incurrence thereof and after giving
effect thereto and to the application of the proceeds thereof, the sum of (A)
Current Debt and Funded Debt of the Company and its Restricted Subsidiaries
secured by Liens permitted by SECTION 5.9(a)(8), plus (without duplication) (B)
Current Debt and Funded Debt of Restricted Subsidiaries (other than Qualified
Current Debt and Qualified Funded Debt of Restricted Subsidiary Guarantors) and
(C) Attributable Indebtedness of Sale and Leaseback Transactions of the Company
and its Restricted Subsidiaries would not exceed 15% of Consolidated Net Worth.
(c) Any Person which becomes a Restricted Subsidiary after the date
hereof shall for all purposes of this SECTION 5.8 be deemed to have created,
assumed or incurred at the time it becomes a Restricted Subsidiary all Current
Debt and Funded Debt of such Person existing immediately after it becomes a
Restricted Subsidiary.
Section 5.9. Limitation on Liens. (a) 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:
(1) Liens for property taxes and assessments or governmental
charges or levies and Liens securing claims or demands of mechanics and
materialmen, provided that payment thereof is not at the time required
by SECTION 5.3 and the existence of such Lien would not materially and
adversely affect the properties, business, profits, prospects or
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condition (financial or otherwise) of the Company or of the Company and
its Restricted Subsidiaries, taken as a whole;
(2) Liens of or resulting from any judgment or award, the
time for the appeal or petition for rehearing of which shall not have
expired, or in respect of which the Company or a Restricted Subsidiary
shall at any time in good faith be prosecuting an appeal or proceeding
for a review and in respect of which a stay of execution pending such
appeal or proceeding for review shall have been secured; provided that
the existence of such Lien would not materially and adversely affect
the properties, business, prospects, profits or condition (financial or
otherwise) of the Company or of the Company and its Restricted
Subsidiaries, taken as a whole;
(3) Liens incidental to the conduct of business or the
ownership of properties and assets (including Liens in connection with
worker's compensation, unemployment insurance and other like laws,
warehousemen's and attorneys' liens and statutory landlords' liens) and
Liens to secure the performance of bids, tenders or trade contracts, or
to secure statutory obligations, surety or appeal bonds or other Liens
of like general nature, in any such case incurred in the ordinary
course of business and not in connection with the borrowing of money,
which in any such case would not materially and adversely affect the
properties, business, prospects, profits or condition (financial or
otherwise) of the Company or of the Company and its Restricted
Subsidiaries taken as a whole, provided that any obligation so secured
is not overdue or, if overdue, is being contested in good faith by
appropriate actions or proceedings;
(4) minor survey exceptions or minor encumbrances, easements
or reservations, or rights of others for rights-of-way, utilities and
other similar purposes, or zoning or other restrictions as to the use
of real properties, which are necessary for the conduct of the
activities of the Company and its Restricted Subsidiaries or which
customarily exist on properties of corporations engaged in similar
activities and similarly situated and which do not in any event
materially impair their use in the operation of the business of the
Company or of the Company and its Restricted Subsidiaries taken as a
whole;
(5) Liens securing Indebtedness of a Restricted Subsidiary to
the Company or to a Wholly-owned Restricted Subsidiary;
(6) Liens existing as of the Closing Date and described on
Schedule II hereto;
(7) Liens created or incurred after the Closing Date given to
secure the payment of the purchase price, cost of improvement or cost
of construction of property or 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 acquisition or purchase by the
Company or a Restricted Subsidiary of any business entity then owning
such property or assets, whether or not such existing Liens were given
to secure the payment of the purchase price of the property or assets
to which they attach, provided that (1) the Lien shall attach solely to
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the property or assets acquired, purchased, improved or constructed,
(2) such Lien shall have been created or incurred within 120 days of
the date of acquisition or purchase or of completion of such
improvement or construction, as the case may be, (3) at the time of
acquisition or purchase or the date of completion of such improvement
or construction, as the case may be, the aggregate amount remaining
unpaid on all Indebtedness secured by Liens on such property or assets,
whether or not assumed by the Company or a Restricted Subsidiary, shall
not exceed the lesser of (i) the total purchase price, cost of
improvement or cost of construction, as the case may be, or (ii) the
fair market value at the time of acquisition or purchase or the date of
completion of the improvement or construction of such property or
assets (as determined in good faith by the Board of Directors of the
Company) and (4) all such Funded Debt shall have been incurred within
the limitations provided in SECTION 5.8(b);
(8) Liens created or incurred after the Closing Date given to
secure Current Debt or Funded Debt of the Company and its Restricted
Subsidiaries, in addition to the Liens permitted by the preceding
clauses (1) through (7) of this SECTION 5.9(a), provided that all
Current Debt and Funded Debt secured by Liens created or incurred
pursuant to this clause (8) shall have been incurred within the
limitations provided in SECTION 5.8(a) and (b);
(9) any extension, renewal or refunding of any Lien permitted
by the preceding clause (6) of this SECTION 5.9(a) in respect of the
same property theretofore subject to such Lien in connection with the
extension, renewal or refunding of the Indebtedness secured thereby;
provided that (i) such extension, renewal or refunding of Indebtedness
shall be 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; and
(10) Liens created by any Stock Pledge Agreements.
(b) In case any property, asset or income or profits therefrom is
subjected to a Lien in violation of this SECTION 5.9, the Company will make or
cause to be made provisions whereby the Notes will be secured equally and
ratably with all other obligations secured thereby, and in any case the Notes
shall have the benefit, to the full extent that, and with such priority as, the
holders may be entitled thereto under applicable law, of an equitable and
ratable Lien on such property, asset, income or profits securing the Notes. Such
violation of SECTION 5.9 shall constitute an Event of Default hereunder, whether
or not any such provision is made pursuant to this SECTION 5.9(b), unless such
Event of Default is waived by the Requisite Holders.
Section 5.10. Mergers, Consolidations and Sales of Assets. (a) The
Company will not, and will not permit any Restricted Subsidiary to, consolidate
with or be a party to a merger with any other corporation, or sell, lease or
otherwise dispose of all or substantially all of its assets; provided that:
(1) any Restricted Subsidiary may merge or consolidate with
or into the Company or any Wholly-owned Restricted Subsidiary which is
a Domestic Restricted
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Subsidiary so long as in any merger or consolidation involving the
Company, the Company shall be the surviving or continuing corporation;
(2) the Company may consolidate or merge with any other
corporation if (i) the corporation which results from such merger or
consolidation (the "surviving corporation") is organized under the laws
of any state of the United States or the District of Columbia, (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 corporation and the
surviving corporation shall furnish the holders of the Notes an opinion
of counsel satisfactory to such 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 corporation enforceable in accordance with
its terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles, and (iii) at the time of such consolidation or
merger and immediately after giving effect thereto, (A) no Default or
Event of Default would exist and (B) the surviving corporation would be
permitted by the provisions of SECTION 5.8(b) to incur at least $1.00
of additional Funded Debt;
(3) the Company may sell or otherwise dispose of all or
substantially all of its assets (other than stock and Indebtedness of a
Restricted Subsidiary, which may only be sold or otherwise disposed of
pursuant to SECTION 5.10(c)) to any Person for consideration which
represents the fair market value (as determined in good faith by the
Board of Directors of the Company, a copy of which determination
certified by the Secretary or an Assistant Secretary of the Company
shall have been furnished to the holders of the Notes) at the time of
such sale or other disposition if (i) the acquiring Person is a
corporation organized under the laws of any state of the United States
or the District of Columbia, (ii) the due and punctual payment of the
principal of and premium, if any, and interest on all the Notes,
according to their tenor, and the due and punctual performance and
observance of all of the covenants in the Notes and in this Agreement
to be performed or observed by the Company are expressly assumed in
writing by the acquiring corporation and the acquiring corporation
shall furnish the holders of the Notes an opinion of counsel
satisfactory to such 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 corporation enforceable in accordance with its terms, except
as enforcement of such terms may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles, and
(iii) at the time of such sale or disposition and immediately after
giving effect thereto, (A) no Default or Event of Default would exist
and (B) the acquiring corporation would be permitted by the provisions
of SECTION 5.8(b) to incur at least $1.00 of additional Funded Debt.
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(b) Notwithstanding any of the provisions of SECTION 5.10(a)(3), 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); provided that the foregoing
restrictions do not apply to:
(1) the sale, lease, transfer or other disposition of assets
of a Restricted Subsidiary to the Company or a Wholly-owned Restricted
Subsidiary or of the Company to a Wholly-Owned Restricted Subsidiary;
or
(2) the sale of such 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
Subsidiaries previously disposed of during the same fiscal
year (other than in the ordinary course of business), exceed
10% of Consolidated Total Assets, and 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 period from the date of this Agreement to and
including the date of the sale of such assets (other than in
the ordinary course of business), exceed 25% of Consolidated
Total Assets, in each such case determined as of the end of
the immediately preceding fiscal quarter;
(ii) in the opinion of the Board of Directors of the
Company if the aggregate sale price of such assets is
$1,000,000 or more and in the opinion of a Responsible Officer
of the Company if the aggregate sale price of such assets is
less than $1,000,000, the sale is for fair value and is in the
best interests of the Company; and
(iii) immediately prior to and immediately after the
consummation of the transaction and after giving effect
thereto, (A) no Default or Event of Default would exist, and
(B) the Company would be permitted by the provisions of
SECTION 5.8(b) to incur at least $1.00 of additional Funded
Debt;
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 property or assets useful and intended to
be used in the operation of the Company and its Restricted Subsidiaries
as described in SECTION 5.5 and similar in nature to the assets so sold
and the purchase price of which is at least equal to that of the
property or assets so disposed of or (B) the prepayment at any
applicable prepayment premium, on a pro rata basis, of Senior
Indebtedness (including, without limitation, the Notes) of the Company
ranking pari passu with the Notes. It is understood and agreed by the
Company that any such proceeds paid and applied to the prepayment of
the Notes as hereinabove provided shall be prepaid as and to the extent
provided in SECTION 2.2.
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Computations pursuant to this SECTION 5.10(b) shall include
dispositions made pursuant to SECTION 5.10(c) and computations pursuant to
SECTION 5.10(c) shall include dispositions made pursuant to this SECTION
5.10(b).
(c) The Company will not, and will not permit any Restricted Subsidiary
to, sell, pledge or otherwise dispose of any shares of the stock (including as
"stock" for the purposes of this Section any options or warrants to purchase
stock or other Securities exchangeable for or convertible into stock) of a
Restricted Subsidiary (said stock, options, warrants and other Securities herein
called "Restricted Subsidiary Stock") or any Indebtedness of any Restricted
Subsidiary, nor will any Restricted Subsidiary issue, sell, pledge or otherwise
dispose of any shares of its own Restricted Subsidiary Stock, provided that the
foregoing restrictions do not apply to:
(1) the issue of directors qualifying shares; or
(2) the issue of Restricted Subsidiary Stock to the Company;
or
(3) the sale or other disposition at one time to a Person
(other than directly or indirectly to an Affiliate) of the entire
Investment of the Company and its Restricted Subsidiaries in any
Restricted Subsidiary, provided that any sale or other disposition
pursuant to this clause (3) of SECTION 5.10(c) must satisfy all of the
following conditions:
(i) the assets (valued at the higher of net book
value or fair market value) of such Restricted Subsidiary do
not, together with all other assets of the Company and its
Restricted Subsidiaries previously disposed of during the same
fiscal year (other than in the ordinary course of business),
exceed 10% of Consolidated Total Assets, and the assets
(valued at the higher of net book value or fair market value)
of such Restricted Subsidiary do not, together with all other
assets of the Company and its Restricted Subsidiaries
previously disposed of during the period from the date of this
Agreement to and including the date of the sale of such assets
(other than in the ordinary course of business), exceed 25% of
Consolidated Total Assets, in each such case determined as of
the end of the immediately preceding fiscal quarter;
(ii) in the opinion of the Company's Board of
Directors, the sale is for fair value and is in the best
interests of the Company;
(iii) immediately after the consummation of the
transaction and after giving effect thereto, such Restricted
Subsidiary shall have no Indebtedness of or continuing
Investment in the capital stock of the Company or of any
Restricted Subsidiary and any such Indebtedness or Investment
shall have been discharged or acquired, as the case may be, by
the Company or a Restricted Subsidiary; and
(iv) immediately prior to and immediately after the
consummation of the transaction and after giving effect
thereto, (A) no Default or Event of Default
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would exist, and (B) the Company would be permitted by the
provisions of SECTION 5.8(b) to incur at least $1.00 of
additional Funded Debt;
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 property or assets useful and intended to
be used in the operation of the Company and its Restricted Subsidiaries
as described in SECTION 5.5 and similar in nature to the assets so sold
and the purchase price of which is at least equal to that of the
property or assets so disposed of or (B) the prepayment at any
applicable prepayment premium, on a pro rata basis, of Senior
Indebtedness (including, without limitation, the Notes) of the Company
ranking pari passu with the Notes. It is understood and agreed by the
Company that any such proceeds paid and applied to the prepayment of
the Notes as hereinabove provided shall be prepaid as and to the extent
provided SECTION 2.2.
Computations pursuant to this SECTION 5.10(c) shall include
dispositions made pursuant to SECTION 5.10(b) and computations pursuant to
SECTION 5.10(b) shall include dispositions made pursuant to this SECTION
5.10(c).
Section 5.11. Guaranties. The Company will not, and will not permit any
Restricted Subsidiary to, become or be liable in respect of any Guaranty except
Guaranties by the Company which are limited in amount to a stated maximum dollar
exposure or which constitute Guaranties of obligations incurred by any
Restricted Subsidiary in compliance with the provisions of this Agreement;
provided that nothing contained in this SECTION 5.11 shall be deemed or
construed to prohibit any Restricted Subsidiary from executing and delivering
any new Subsidiary Note Guaranty or joining the 2002 Subsidiary Note Guaranty
and the Existing Subsidiary Note Guaranty, as the case may be, as contemplated
by Sections SECTION 1.5 and SECTION 5.17, respectively, or from executing and
delivering any Subsidiary Bank Guaranty; provided that in each such case each
beneficiary of any such Guaranty shall have entered into and become a party to
the Intercreditor Agreement.
Section 5.12. Notes to Rank Pari Passu. The Company will keep and
maintain the Notes and all other obligations outstanding at any time under this
Agreement as direct obligations of the Company ranking pari passu as against the
assets of the Company with all other present and future unsecured Senior
Indebtedness of the Company.
Section 5.13. Repurchase of Notes. Neither the Company nor any
Restricted Subsidiary or Affiliate, directly or indirectly, may repurchase or
make any offer to repurchase any Notes.
Section 5.14. Transactions with Affiliates. The Company will not, and
will not permit any Restricted Subsidiary to, enter into or be a party to any
transaction or arrangement with any Affiliate (including, without limitation,
the purchase from, sale to or exchange of property with, or the rendering of any
service by or for, any Affiliate), except in the ordinary course of 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 obtain in a comparable arm's-length
transaction with a Person other than
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an Affiliate; provided that nothing contained in this SECTION 5.14 shall be
deemed or construed to prohibit the Company from making Investments in Officer
Notes; provided that the aggregate principal amount of all such Officer Notes at
any one time outstanding shall not exceed $1,500,000 and the aggregate principal
amount of all Officer Notes due and owing from any one officer of the Company at
any one time outstanding shall not exceed $100,000.
Section 5.15. Termination of Pension Plans. The Company will not and
will not permit any Restricted Subsidiary to withdraw from any Multiemployer
Plan or permit any employee benefit plan maintained by it to be terminated if
such withdrawal or termination could result in withdrawal liability (as
described in Part 1 of Subtitle E of Title IV of ERISA) or the imposition of a
Lien on any property of the Company or any Restricted Subsidiary pursuant to
Section 4068 of ERISA.
Section 5.16. Reports; Rights of Inspection; Retention of Consultants.
(a) Reports. The Company will keep, and will cause each Restricted Subsidiary to
keep, proper books of record and account in which full and correct entries will
be made of all dealings or transactions of, or in relation to, the business and
affairs of the Company or such Restricted Subsidiary, in accordance with GAAP
consistently applied (except for changes disclosed in the financial statements
furnished to you pursuant to this SECTION 5.16(a) and concurred in by the
independent public accountants referred to in SECTION 5.16(a)(2)), and will
furnish to you so long as you are the holder of any Note and to each other
Institutional Holder of the then outstanding Notes (in duplicate if so specified
below or otherwise requested):
(1) Quarterly Statements. As soon as available and in any
event within 45 days after the end of each quarterly fiscal period
(except the last) of each fiscal year, copies of:
(i) a consolidated balance sheet of the Company and
its Subsidiaries as of the close of such quarterly fiscal
period, setting forth in comparative form the consolidated
figures for the fiscal year then most recently ended,
(ii) a consolidated statement of earnings of the
Company and its Subsidiaries for such quarterly fiscal period
and for the portion of the fiscal year ending with such
quarterly fiscal period, in each case setting forth in
comparative form the consolidated figures for the
corresponding periods of the preceding fiscal year, and
(iii) a consolidated statement of cash flows and
shareholder's equity of the Company and its Subsidiaries for
the portion of the fiscal year ending with such quarterly
fiscal period, setting forth in comparative form the
consolidated figures for the corresponding period of the
preceding fiscal year,
all in reasonable detail and certified as complete and correct by an
authorized financial officer of the Company, provided that delivery
within the time period specified above of copies of the Company's
Quarterly Report on Form 10-Q prepared in compliance with
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the requirements therefor and filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this SECTION
5.16(a)(1);
(2) Annual Statements. As soon as available and in any event
within 90 days after the close of each fiscal year of the Company,
copies of:
(i) a consolidated balance sheet of the Company and
its Subsidiaries as of the close of such fiscal year, and
(ii) consolidated statements of earnings,
shareholders' equity and cash flows of the Company and its
Subsidiaries for such fiscal year,
in each case setting forth in comparative form the consolidated figures
for the preceding fiscal year, all in reasonable detail and accompanied
by a report thereon of a firm of independent public accountants of
recognized national standing selected by the Company to the effect that
the consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Company and its
Subsidiaries as of the end of the fiscal year being reported on and the
consolidated results of the operations and cash flows for said year in
conformity with GAAP and that the examination of such accountants in
connection with such financial statements has been conducted in
accordance with generally accepted auditing standards and included such
tests of the accounting records and such other auditing procedures as
said accountants deemed necessary in the circumstances, provided that
the delivery within the time period specified above of the Company's
Annual Report on Form 10-K for such fiscal year (together with the
Company's annual report to shareholders, if any, prepared pursuant to
Rule 14a-3 under the Exchange Act) prepared in accordance with the
requirements therefor and filed with the Securities and Exchange
Commission, together with the accountant's certificate described in
paragraph (7) below, shall be deemed to satisfy the requirements of
this SECTION 5.16(a)(2);
(3) Audit Reports. Promptly upon receipt thereof, one copy of
each interim or special audit made by independent accountants of the
books of the Company or any Restricted Subsidiary and any management
letter received from such accountants; provided that nothing contained
in this clause (3) shall be deemed or construed to require the Company
or any Restricted Subsidiary to furnish to any holder of the Notes any
interim or special audit made by any internal accountant employed by
the Company or any Restricted Subsidiary;
(4) SEC and Other Reports. A copy of any SEC filing by the
Company containing information of a financial nature and of any press
release of the Company generally made available to stockholders of the
Company concerning a Material development, in each case to be delivered
promptly after becoming available;
(5) ERISA Reports. Promptly upon the occurrence thereof,
written notice of (i) a Reportable Event with respect to any Plan; (ii)
the institution of any steps by the Company, any ERISA Affiliate, the
PBGC or any other Person to terminate any Plan;
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(iii) the institution of any steps by the Company or any ERISA
Affiliate to withdraw from any Plan; (iv) a non-exempt "prohibited
transaction" within the meaning of Section 406 of ERISA in connection
with any Plan; (v) any material increase in the contingent liability of
the Company or any Restricted Subsidiary with respect to any
post-retirement welfare liability; or (vi) the taking of any action by,
or the threatening of the taking of any action by, the Internal Revenue
Service, the Department of Labor or the PBGC with respect to any of the
foregoing;
(6) Officer's Certificates. Within the periods provided in
paragraphs (1) and (2) above, a certificate of a senior financial
officer of the Company stating that such officer has reviewed the
provisions of this Agreement and setting forth: (i) the information and
computations (in sufficient detail) required in order to establish
whether the Company was in compliance with the requirements of SECTION
5.6 through SECTION 5.10 at the end of the period covered by the
financial statements then being furnished, including, without
limitation, computations (in sufficient detail) required in order to
establish whether the Company was in compliance with the provisions of
SECTION 5.7 at the end of each calendar month during the fiscal quarter
then ended, and (ii) whether there existed as of the date of such
financial statements and whether, to the best of such officer's
knowledge, there exists on the date of the certificate or existed at
any time during the period covered by such financial statements any
Default or Event of Default and, if any such condition or event exists
on the date of the certificate, specifying the nature and period of
existence thereof and the action the Company is taking and proposes to
take with respect thereto;
(7) Accountants' Certificates. Within the period provided in
paragraph (2) above, a certificate of the accountants who render an
opinion with respect to such financial statements, stating that they
have reviewed this Agreement and the officer's certificate delivered in
accordance with paragraph (6) above for the quarterly fiscal period
ending on the last day of the immediately preceding fiscal year, and
stating further whether, in making their audit and reviewing such
officer's certificate, such accountants have become aware of any
Default or Event of Default under any of the terms or provisions of
this Agreement insofar as any such terms or provisions pertain to or
involve accounting matters or determinations, and if any such condition
or event then exists, specifying the nature and period of existence
thereof;
(8) Requested Information. With reasonable promptness, such
other data and information as you or any such Institutional Holder may
reasonably request;
(9) Unrestricted Subsidiaries. In the event that Unrestricted
Subsidiaries account for more than 10% of the consolidated total assets
of the Company and its Subsidiaries, or more than 10% of the
consolidated revenue of the Company and its Subsidiaries, then each set
of financial information delivered pursuant to paragraphs (1) and (2)
of this SECTION 5.16(a) shall be accompanied by unaudited financial
statements for all Unrestricted Subsidiaries of the Company taken as a
group, together with consolidating statements reflecting eliminations
or adjustments required to reconcile such group statements to the
consolidated financial statements of the Company and its Subsidiaries;
and
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(10) Supplements. In the event that more than one series of
Notes is issued under this Agreement, within 10 Business Days after the
execution and delivery thereof, a copy of any Supplement.
(b) Rights of Inspection. Without limiting the foregoing, the Company
will permit you, so long as you are the holder of any Note, and each
Institutional Holder of the then outstanding Notes (or such Persons as either
you or such Institutional Holder may designate), to visit and inspect, under the
Company's guidance, any of the properties of the Company or any Restricted
Subsidiary, to examine all of their books of account, records, reports and other
papers, to make copies and extracts therefrom and to discuss their respective
affairs, finances and accounts with their respective officers, employees, and
independent public accountants (and by this provision the Company authorizes
said accountants to discuss with you the finances and affairs of the Company and
its Restricted Subsidiaries), all at such reasonable times and as often as may
be reasonably requested. Any visitation shall be at the sole expense of you or
such Institutional Holder, unless a Default or Event of Default shall have
occurred and be continuing or the holder of any Note or of any other evidence of
Indebtedness of the Company or any Restricted Subsidiary gives any written
notice or takes any other action with respect to a claimed default, in which
case, any such visitation or inspection shall be at the sole expense of the
Company.
(c) Retention of Consultants. If a Default or an Event of Default has
occurred and is continuing, the Requisite Holders may request that the Company,
at the sole cost and expense of the Company, retain a business, financial,
pension or environmental consultant to review and analyze the reports required
to be made by the Company pursuant to this SECTION 5.16 or to inspect the books
of account, records, reports and other papers and the properties, operations and
administration of the Company or any Restricted Subsidiary, and to submit
written reports of such review, analysis or inspection to the holders of the
Notes, and the Company agrees within fifteen (15) Business Days of such request
to appoint a consultant which in the reasonable judgment of a Responsible
Officer of the Company is qualified to complete such review and analysis and
which consultant shall be reasonably acceptable to the Requisite Holders. The
Company agrees that the Requisite Holders may, at the sole cost and expense of
the Company, retain at any time a business, financial, pension or environmental
consultant to review and analyze the reports required to be made by the Company
pursuant to this SECTION 5.16 or to inspect the books of account, records,
reports and other papers and the properties, operations and administration of
the Company and any Restricted Subsidiary and to submit written reports of such
review, analysis or inspection to the holders of the Notes. The Company agrees
to give prompt written notice of any such request by the Requisite Holders to
each of the other holders of the Notes and to furnish a copy of each such
written report to each of the holders of the Notes.
Section 5.17. Guaranty by Subsidiaries. (a) Subject to clause (b) of
this SECTION 5.17, the Company will cause each Subsidiary which delivers a
Guaranty after the Closing Date to concurrently enter into a Subsidiary Note
Guaranty, and within three Business Days thereafter shall deliver to each of the
holders of the Notes the following items:
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(1) an executed counterpart of the Subsidiary Note
Guaranty or a joinder agreement pursuant to which such
Subsidiary becomes a party to the 2002 Subsidiary Note
Guaranty and the Existing Subsidiary Note Guaranty;
(2) a certificate signed by an executive officer of
such Subsidiary making representations and warranties to the
effect of those contained in Sections 2, 10, 12 and 17 of
Exhibit C to the
Note Agreements, but with respect to such
Subsidiary and such Subsidiary Note Guaranty and the 2002
Subsidiary Note Guaranty and Existing Subsidiary Note
Guaranty;
(3) such documents and evidence with respect to such
Subsidiary as the Requisite Holders may reasonably request in
order to establish the existence and good standing of such
Subsidiary and the authorization of the transactions
contemplated by such Subsidiary Note Guaranty and the 2002
Subsidiary Note Guaranty and Existing Subsidiary Note
Guaranty; and
(4) an opinion of counsel satisfactory to the
Requisite Holders to the effect that such Subsidiary Note
Guaranty or the joinder agreement pursuant to which such
Subsidiary has become a party to the 2002 Subsidiary Note
Guaranty and the Existing Subsidiary Note Guaranty, as the
case may be, 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
and similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles.
(b) Notwithstanding the requirements of clause (a) of this
SECTION 5.17, the Company shall not be required to comply therewith if,
but only if, the Company can create or incur the Indebtedness evidenced
by any Guaranty entered into by a Subsidiary within the limitations of
SECTION 5.8(a) AND (b).
(c) Nothing contained in this SECTION 5.17 shall be deemed or
construed to otherwise permit a Subsidiary of the Company to create,
assume, guaranty or otherwise incur or in any manner be or become
liable in respect of any Current Debt or Funded Debt which is not
otherwise within the limitations of SECTION 5.8 and the other
applicable provisions of this Agreement.
Section 5.18. Stock Pledge Agreement. If the Company shall enter into a
stock pledge agreement in form and substance satisfactory to the Requisite
Holders (each, a "Stock Pledge Agreement") pursuant to which the Company shall
grant to the Collateral Agent or any other Institutional Holder a pledge of and
security interest in the capital stock of a Subsidiary, then and in such event,
the Company shall concurrently with the execution and delivery of such Stock
Pledge Agreement, deliver to each of the holders of the Notes the following
items:
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(a) an executed counterpart of such Stock Pledge Agreement;
(b) a certificate signed by an executive officer of the
Company making representations and warranties to the effect of those
contained in Sections 2, 10, 12 and 17 of Exhibit C to the
Note
Agreements, but with respect to such Stock Pledge Agreement and to the
effect that such Stock Pledge Agreement constitutes a first and prior
perfected security interest in the capital stock which is the subject
of such Stock Pledge Agreement free and clear of all Liens of creditors
of the Company, other than the Lien of such Stock Pledge Agreement;
(c) such modifications, amendments or supplements to the
Intercreditor Agreement as may be deemed necessary by the Requisite
Holders to confirm that any proceeds realized from the enforcement by
the Collateral Agent or such other Institutional Holder of its rights
pursuant to such Stock Pledge Agreement as pledgee of such capital
stock shall be applied in accordance with the terms and provisions of
the Intercreditor Agreement; and
(d) an opinion of independent counsel to the Company
satisfactory to the Requisite Holders to the effect that (1) such Stock
Pledge Agreement has been duly authorized, executed and delivered and
constitutes the legal, valid and binding contract and agreement of the
Company enforceable in accordance with its terms, except as an
enforcement of such terms may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles and
(2) such Stock Pledge Agreement creates a valid and perfected first and
prior security interest in and pledge of the capital stock of the
Subsidiary which is the subject of such Stock Pledge Agreement.
Section 5.19. 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: (i) no Default or Event of
Default would exist and (ii) the Company would be permitted by the
provisions of SECTION 5.8(b) to incur at least $1.00 of additional
Indebtedness,
(c) in the case of the designation of an Unrestricted
Subsidiary as a Restricted Subsidiary and after giving effect thereto:
(i) all outstanding Indebtedness of such Restricted Subsidiary so
designated shall be permitted within the applicable limitations of
SECTION 5.8 and (ii) all existing Liens of such Restricted Subsidiary
so designated shall be permitted within the applicable limitations of
SECTION 5.9, other than SECTION 5.9(6) (notwithstanding that any such
Lien existed as of the Closing Date), and
(d) the designation of a Subsidiary as "Restricted" or
"Unrestricted" shall not be changed more than twice.
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SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
Section 6.1. Events of Default. Any one or more of the following shall
constitute an "Event of Default" as such term is used herein:
(a) Default shall occur in the payment of interest on any Note
when the same shall have become due and such default shall continue for
more than five Business Days; or
(b) Default shall occur in the making of any required
prepayment on any of the Notes as provided in SECTION 2.1; or
(c) Default shall occur in the making of any other payment of
the principal of any Note or premium, if any, thereon at the expressed
or any accelerated maturity date or at any date fixed for prepayment;
or
(d) Default shall occur in the observance or performance of
any covenant or agreement contained in SECTION 5.6 through SECTION
5.11; or
(e) Default shall occur in the observance or performance of
any other provision of this Agreement which is not remedied within 30
days after the occurrence thereof; or
(f) Default shall be made in the payment when due (whether by
lapse of time, by declaration, by call for redemption or otherwise) of
the principal of or interest on any Indebtedness for borrowed money
(other than the Notes) of the Company or any Restricted Subsidiary
aggregating in excess of $3,000,000 and such default shall continue
beyond the period of grace, if any, allowed with respect thereto,
provided that an Event of Default shall not be deemed to have occurred
under SECTION 6.1(f) if any of the foregoing events occur only with
respect to Restricted Subsidiaries which are not Wholly-owned
Restricted Subsidiaries of the Company or Subsidiary Guarantors and if
all such non-Wholly-owned Restricted Subsidiaries do not, if considered
in the aggregate as a single Restricted Subsidiary, constitute a
Significant Restricted Subsidiary; or
(g) Default or the happening of any event shall occur under
any indenture, agreement or other instrument under which any
Indebtedness for borrowed money (other than the Notes) of the Company
or any Restricted Subsidiary aggregating in excess of $3,000,000 is
outstanding and such default or event shall result in the acceleration
of the maturity of any Indebtedness for borrowed money of the Company
or any Restricted Subsidiary outstanding thereunder, provided that an
Event of Default shall not be deemed to have occurred under this
SECTION 6.1(g) if any of the foregoing events occur only with respect
to Restricted Subsidiaries which are not Wholly-owned Restricted
Subsidiaries of the Company or Subsidiary Guarantors and if all such
non-Wholly-owned Restricted Subsidiaries do not, if considered in the
aggregate as a single Restricted Subsidiary, constitute a Significant
Restricted Subsidiary.
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(h) Any representation or warranty made by the Company
herein, in any Supplement, or made by the Company in any statement or
certificate furnished by the Company in connection with the
consummation of the issuance and delivery of the Notes or furnished by
the Company pursuant hereto, is untrue in any material respect as of
the date of the issuance or making thereof; or
(i) Final judgment or judgments for the payment of money
aggregating in excess of $1,000,000 (net of insurance proceeds to the
extent the insurer has acknowledged liability with respect thereto) is
or are outstanding against the Company or any Restricted Subsidiary or
against any property or assets of either and any one of such judgments
has remained unpaid, unvacated, unbonded or unstayed by appeal or
otherwise for a period of 45 days from the date of its entry, provided
that an Event of Default shall not be deemed to have occurred under
this SECTION 6.1(i) if any of the foregoing events occur only with
respect to Restricted Subsidiaries which are not Wholly-owned
Restricted Subsidiaries of the Company or Subsidiary Guarantors and if
all such non-Wholly-owned Restricted Subsidiaries do not, if considered
in the aggregate as a single Restricted Subsidiary, constitute a
Significant Restricted Subsidiary; or
(j) A custodian, liquidator, trustee or receiver is appointed
for the Company or any Restricted Subsidiary or for the major part of
the property of either and is not discharged within 30 days after such
appointment, provided that an Event of Default shall not be deemed to
have occurred under this SECTION 6.1(j) if any of the foregoing events
occur only with respect to Restricted Subsidiaries which are not
Wholly-owned Restricted Subsidiaries of the Company or Subsidiary
Guarantors and if all such non-Wholly-owned Restricted Subsidiaries do
not, if considered in the aggregate as a single Restricted Subsidiary,
constitute a Significant Restricted Subsidiary; or
(k) The Company or any Restricted Subsidiary becomes
insolvent or bankrupt, is generally not paying its debts as they become
due or makes an assignment for the benefit of creditors, or the Company
or any Restricted Subsidiary applies for or consents to the appointment
of a custodian, liquidator, trustee or receiver for the Company or such
Restricted Subsidiary or for the major part of the property of either,
provided that an Event of Default shall not be deemed to have occurred
under this SECTION 6.1(k) if any of the foregoing events occur only
with respect to Restricted Subsidiaries which are not Wholly-owned
Restricted Subsidiaries of the Company or Subsidiary Guarantors and if
all such non-Wholly-owned Restricted Subsidiaries do not, if considered
in the aggregate as a single Restricted Subsidiary, constitute a
Significant Restricted Subsidiary; or
(l) Bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any bankruptcy or
similar law or laws for the relief of debtors, are instituted by or
against the Company or any Restricted Subsidiary and, if instituted
against the Company or any Restricted Subsidiary, are consented to or
are not dismissed within 60 days after such institution, provided that
an Event of Default shall not be deemed to have occurred under this
SECTION 6.1(l) if any of the foregoing events occur only with respect
to Restricted Subsidiaries which are not Wholly-owned Restricted
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Subsidiaries of the Company or Subsidiary Guarantors and if all such
non-Wholly-owned Restricted Subsidiaries do not, if considered in the
aggregate as a single Restricted Subsidiary, constitute a Significant
Restricted Subsidiary; or
(m) For any reason any Subsidiary Note Guaranty or any Stock
Pledge Agreement shall cease to be in full force and effect for any
reason whatsoever, including, without limitation, a determination by
any governmental body or court that any of such agreements is invalid,
void or unenforceable or any Person which is a party thereto shall
contest or deny in writing the validity or enforceability of any of its
obligations under such agreement; or
(n) Any Plan shall fail to satisfy minimum funding
requirements of ERISA, a notice of intent to terminate a Plan shall
have been received by the Company, or the aggregate amount of unfunded
benefit liabilities shall exceed an amount equal to 5% of Consolidated
Net Worth and any such event or events could reasonably be expected to
have a Material Adverse Effect.
Section 6.2. Notice to Holders. When any Default or Event of Default
described in the foregoing SECTION 6.1 has occurred, or if the holder of any
Note or of any other evidence of Indebtedness for borrowed money of the Company
gives any written notice with respect to a default claimed by such holder in
such written notice to exist in respect of such Indebtedness for borrowed money
or under the instrument or agreement under which such Indebtedness for borrowed
money is outstanding, the Company agrees to give notice within three Business
Days of such event to all holders of the Notes then outstanding.
Section 6.3. Acceleration of Maturities. When any Event of Default
described in paragraph (a), (b) or (c) of SECTION 6.1 has happened and is
continuing with respect to any series of Notes, any holder of any Note of such
series may, by notice in writing to the Company sent in the manner provided in
SECTION 9.6, declare the entire principal and all interest accrued on such Note
of such series to be, and such Note shall thereupon become, forthwith due and
payable, without any presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived. When any Event of Default described in
paragraphs (a) through (i), inclusive, or paragraphs (m) or (n), of said SECTION
6.1 has happened and is continuing, the holders of a majority of the aggregate
principal amount outstanding of any series of Notes may, by notice in writing to
the Company in the manner provided in SECTION 9.6, declare the entire principal
and all interest accrued on all Notes of such series to be, and all Notes of
such series shall thereupon become, forthwith due and payable, without any
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived. When any Event of Default described in paragraph (j),
(k) or (l) of SECTION 6.1 has occurred, then all outstanding Notes of every
series shall immediately become due and payable without presentment, demand or
notice of any kind. Upon the Notes becoming due and payable as a result of any
Event of Default as aforesaid, the Company will forthwith pay to the holders of
the Notes the entire principal and interest accrued on the Notes and, to the
extent not prohibited by applicable law, an amount as liquidated damages for the
loss of the bargain evidenced hereby (and not as a penalty) equal to the
Make-Whole Amount, determined as of the date on which the Notes shall so become
due and payable. No course of dealing on the part of the holder or holders of
any Notes nor any delay or failure on the part of any holder of
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Notes to exercise any right shall operate as a waiver of such right or otherwise
prejudice such holder's rights, powers and remedies. The Company further agrees,
to the extent permitted by law, to pay to the holder or holders of the Notes all
costs and expenses incurred by them in the collection of any Notes upon any
default hereunder or thereon, including reasonable compensation to such holder's
or holders' attorneys for all services rendered in connection therewith.
Section 6.4. Rescission of Acceleration. The provisions of SECTION 6.3
are subject to the condition that if the principal of and accrued interest on
all or any outstanding Notes have been declared immediately due and payable by
reason of the occurrence of any Event of Default described in paragraphs (a)
through (i), inclusive, or paragraphs (m) or (n), of SECTION 6.1, the holders of
55% or more in aggregate principal amount of the outstanding Notes of any series
then outstanding may, by written instrument filed with the Company, rescind and
annul such declaration and the consequences thereof with respect to such series
of the Notes, provided that at the time such declaration is annulled and
rescinded:
(a) no judgment or decree has been entered for the payment of
any monies due pursuant to the Notes of such series or this Agreement;
(b) all arrears of interest upon all the Notes of such series
and all other sums payable under the Notes of such series and under
this Agreement (except any principal, interest or premium on the Notes
of such series which has become due and payable solely by reason of
such declaration under SECTION 6.3) shall have been duly paid; and
(c) each and every other Default and Event of Default shall
have been made good, cured or waived pursuant to SECTION 7.1;
and provided further, that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereto or affect in any manner whatsoever any recission or annulment pertaining
to any other series of the Notes or impair any right consequent thereto. Without
limiting the foregoing, the provisions of SECTION 6.3 are subject to the
condition that if the principal of and accrued interest on any outstanding Note
of any series have been declared by the holder thereof to be immediately due and
payable by reason of the occurrence of any Event of Default described in
paragraph (a), (b) or (c) of SECTION 6.1, such holder may, by written instrument
filed with the Company, rescind and annul such declaration and the consequences
thereof.
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.
Section 7.1. Consent Required. Any term, covenant, agreement or
condition of this Agreement or any Supplement with respect to any series of
Notes, as the case may be, may, with the consent of the Company, be amended or
compliance therewith may be waived (either generally or in a particular instance
and either retroactively or prospectively), if the Company shall have obtained
the consent in writing of the Requisite Holders of such series; provided that
without the written consent of the holders of all of the Notes of a particular
series then outstanding, no such amendment or waiver shall be effective (a)
which will change the time of
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payment (including any prepayment required by SECTION 2.1) of the principal of
or the interest on any Note of such series or change the principal amount
thereof or change the rate of interest thereon, or (b) which will change any of
the provisions with respect to optional prepayments in respect of such series,
or (c) which will change the definitions of "Make-Whole Amount", "Reinvestment
Rate", "Statistical Release" or "Weighted Average Life to Maturity" insofar as
the same pertains to such series, or (d) which will change the percentage of
holders of the Notes required to consent to any such amendment or waiver or the
taking of any other action by Noteholders under any of the provisions of this
SECTION 7 or SECTION 6 insofar as the same pertains to such series.
Section 7.2. Solicitation of Holders. So long as there are any Notes
outstanding, the Company will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of this
Agreement, any Supplement or the Notes unless each holder of Notes of each
series (irrespective of the amount of Notes then owned by it) shall, if such
proposed waiver or amendment shall affect such series, be informed thereof by
the Company and shall be afforded the opportunity of considering the same and
shall be supplied by the Company with sufficient information to enable it to
make an informed decision with respect thereto. The Company will not, directly
or indirectly, pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, to any holder of Notes as
consideration for or as an inducement to entering into by any holder of Notes of
any waiver or amendment of any of the terms and provisions of this Agreement or
the Notes unless such remuneration is concurrently offered and paid, on the same
terms, ratably to the holders of all Notes then outstanding (whether or not any
such holder has consented to such waiver or amendment). Promptly and in any
event within 30 days of the date of execution and delivery of any such waiver or
amendment, the Company shall provide a true, correct and complete copy thereof
to each of the holders of the Notes.
Section 7.3. Effect of Amendment or Waiver. Any such amendment or
waiver shall apply equally to all of the holders of the Notes of the series to
which such amendment or waiver pertains and shall be binding upon them, upon
each future holder of any Note of such series and upon the Company, whether or
not such Note shall have been marked to indicate such amendment or waiver. No
such amendment or waiver shall extend to or affect any obligation not expressly
amended or waived or impair any right consequent thereon.
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS.
Section 8.1. Definitions. Unless the context otherwise requires, the
terms hereinafter set forth when used herein shall have the following meanings
and the following definitions shall be equally applicable to both the singular
and plural forms of any of the terms herein defined:
"Acquiring Person" shall mean a "person" or "group of persons" within
the meaning of Sections 13(d) and 14(d) of the Securities and Exchange Act of
1934, as amended, provided that notwithstanding the foregoing, "Acquiring
Person" shall not be deemed to include any member of the Company Control Group
unless such member has, directly or indirectly, disposed of, sold or otherwise
transferred to, or encumbered or restricted (whether by means of voting trust
agreement or otherwise) for the benefit of, an Acquiring Person all or any
portion of the Voting Stock of the Company directly or indirectly owned or
controlled by such member or such
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member directly or indirectly votes all or any portion of the Voting Stock of
the Company directly or indirectly owned or controlled by such member for the
taking of any action which, directly or indirectly, constitutes or would result
in a Change of Control, in which event such member of the Company Control Group
shall be deemed to constitute an Acquiring Person to the extent of the Voting
Stock of the Company owned or controlled by such member.
"Additional Purchasers" shall mean a purchaser of Additional Notes.
"Additional Notes" shall have the meaning set forth in SECTION 1.4.
"Adjusted Leverage Ratio" shall mean, as of any date, the ratio of (a)
the Total Seasonally Adjusted Debt as of such date to (b) the Total Adjusted
Capitalization as of such date.
"Affiliate" shall mean any Person (other than a Subsidiary) (a) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Company, (b) which
beneficially owns or holds 10% or more of any class of the Voting Stock of the
Company or (c) 10% or more of the Voting Stock (or in the case of a Person which
is not a corporation, 10% or more of the equity interest) of which is
beneficially owned or held by the Company or a Restricted Subsidiary. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of Voting Stock, by contract or otherwise.
"Agreements" shall have the meaning set forth in SECTION 1.3.
"Attributable Indebtedness of Sale and Leaseback Transactions" shall
mean as of the date of any determination thereof with respect to all Sale and
Leaseback Transactions entered into by the Company or any Restricted Subsidiary,
an amount equal to the lesser of (a) the fair market value of the property or
assets which is or are the subject of such Sale and Leaseback Transactions (as
determined in good faith by the Board of Directors of the Company at or about
the time of the consummation of such Sale and Leaseback Transaction) and (b) the
aggregate amount of the Rentals due and to become due (discounted from the
respective due dates thereof to such date at the interest rate per annum
implicit in such lease, with all such discounts to be computed on the basis of a
360-day year of twelve 30-day months, and otherwise in accordance with GAAP)
under the lease or leases relating to such Sale and Leaseback Transactions.
"Bank Credit Agreement" shall mean the Credit Agreement dated as of
November 25, 2002, as the same may be amended, supplemented, replaced, renewed,
or otherwise modified from time to time, by and among the Company, lenders party
thereto from time to time, Bank One, N.A., as syndication agent and Standard
Federal Bank, N.A., as documentation agent.
"Banks" or "the Banks" shall mean the lenders party to the Bank Credit
Agreement.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which banks in Grand Rapids, Michigan or
New York,
New York are
required by law to close or are customarily closed.
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"Capitalized Lease" shall mean any lease the obligation for Rentals
with respect to which is required to be capitalized on a consolidated balance
sheet of the lessee and its subsidiaries in accordance with GAAP.
"Capitalized Rentals" of any Person shall mean as of the date of any
determination thereof the amount at which the aggregate Rentals due and to
become due under all Capitalized Leases under which such Person is a lessee
would be reflected as a liability on a consolidated balance sheet of such
Person.
"Change of Control" shall mean the earliest to occur of: (1) the date
the Company enters into a binding written agreement with an Acquiring Person to
permit such Acquiring Person to acquire, directly or indirectly, beneficial
ownership of more than 50% of the total Voting Stock of the Company then
outstanding, or (2) the date a tender offer or exchange offer results in an
Acquiring Person, directly or indirectly, beneficially owning more than 50% of
the total Voting Stock of the Company then outstanding, or (3) the date an
Acquiring Person becomes, directly or indirectly, the beneficial owner of more
than 50% of the total Voting Stock of the Company then outstanding, or (4) the
date of a merger between the Company and any other Person, a consolidation of
the Company with any other Person or an acquisition of any other Person by the
Company, if immediately after such event, the Acquiring Person shall hold more
than 50% of the total Voting Stock of the Company outstanding immediately after
giving effect to such merger, consolidation or acquisition, or, if the Company
shall not be the surviving entity, of the surviving, resulting or continuing
corporation.
"Change of Control Delayed Prepayment Date" shall have the meaning set
forth in SECTION 2.3(b).
"Change of Control Prepayment Date" shall have the meaning set forth in
SECTION 2.3(a).
"Closing Date" shall have the meaning set forth in SECTION 1.2.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the regulations from time to time promulgated thereunder.
"Collateral Agent" shall mean Bank One, N.A., in its role as Collateral
Agent under the Intercreditor Agreement.
"Company" shall mean Universal Forest Products, Inc., a Michigan
corporation, and any Person who succeeds to all, or substantially all, of the
assets and business of Universal Forest Products, Inc.
"Company Control Group" shall mean all, or any combination of, any one
or more of the individuals comprising Current Management and who, as of the date
of any determination hereof: (a) is employed on a full-time basis by the Company
as a director or officer of the Company, and (b) has been so employed for at
least three years preceding such date of determination, except Xxxx Xxxxxx who
shall in any event be deemed to be a member of the
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Company Control Group for so long as he is employed on a full-time basis by the
Company as a director or officer.
"Company Notice" shall have the meaning set forth in SECTION 2.3(a).
"Consolidated Fixed Charges" for any period shall mean on a
consolidated basis the sum of (a) all Rentals expense (other than Rentals on
Capitalized Leases) during such period of the Company and its Restricted
Subsidiaries, (b) all Interest Expense on all Indebtedness (including the
interest component of Rentals on Capitalized Leases) of the Company and its
Restricted Subsidiaries and (c) all capitalized interest of the Company and its
Restricted Subsidiaries.
"Consolidated Funded Debt" shall mean all Funded Debt of the Company
and its Restricted Subsidiaries, determined on a consolidated basis eliminating
intercompany items.
"Consolidated Net Earnings" for any period shall mean the gross
revenues of the Company and its Restricted Subsidiaries for such period less all
expenses and other proper charges (including taxes on income), determined on a
consolidated basis after eliminating earnings or losses attributable to
outstanding Minority Interests, but excluding in any event:
(a) any gains or losses on the sale or other disposition of
Investments or fixed or capital assets, and any taxes on such excluded
gains and any tax deductions or credits on account of any such excluded
losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Restricted Subsidiary
accrued prior to the date it became a Restricted Subsidiary;
(d) net earnings and losses of any corporation (other than a
Restricted Subsidiary that is a Restricted Subsidiary prior to being
acquired by the Company or any Restricted Subsidiary), substantially
all the assets of which have been acquired in any manner by the Company
or any Restricted Subsidiary, realized by such corporation prior to the
date of such acquisition;
(e) net earnings and losses of any corporation (other than a
Restricted Subsidiary that is a Restricted Subsidiary prior to being
consolidated or merged with or into the Company or any Restricted
Subsidiary) with which the Company or a Restricted Subsidiary shall
have consolidated or which shall have merged into or with the Company
or a Restricted Subsidiary prior to the date of such consolidation or
merger;
(f) net earnings of any business entity (other than a
Restricted Subsidiary) in which the Company or any Restricted
Subsidiary has an ownership interest unless such net earnings shall
have actually been received by the Company or such Restricted
Subsidiary in the form of cash distributions;
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(g) any portion of the net earnings of any Restricted
Subsidiary which for any reason is unavailable for payment of dividends
to the Company or any other Restricted Subsidiary;
(h) earnings or losses resulting from any reappraisal,
revaluation, write-up or write-down of assets (other than earnings or
losses resulting from any reappraisal, revaluation, write-up or
write-down of assets or a business entity acquired by the Company or
any of its Restricted Subsidiaries, which reappraisal, revaluation,
write-up or write-down is made (x) in accordance with GAAP and with the
concurrence of the Company's independent public accountants and (y)
concurrently with the acquisition of such assets or business entity, as
the case may be);
(i) any deferred or other credit representing any excess of
the equity in any Restricted Subsidiary at the date of acquisition
thereof over the amount invested in such Restricted Subsidiary;
(j) any gain or loss arising from the acquisition of any
Securities of the Company or any Restricted Subsidiary;
(k) any reversal of any contingency reserve, except to the
extent that provision for such contingency reserve shall have been made
from income arising during such period and except any reversal of any
contingency reserve created to secure or fund any liability of the
Company or any of its Restricted Subsidiaries in connection with the
violation of any Environmental Law or in connection with any liability
relating to health or medical insurance maintained by the Company or
any of its Restricted Subsidiaries if in connection with any such
reversal the Company has created an alternative security, contingency
reserve or similar such offsetting asset relating to such liability
which in the reasonable opinion of the Board of the Directors of the
Company is adequate and prudent under the circumstances; and
(l) any other extraordinary gain or loss.
"Consolidated Net Earnings Available for Fixed Charges" for any period
shall mean the sum of (a) Consolidated Net Earnings during such period plus (to
the extent deducted in determining Consolidated Net Earnings), (b) all
provisions for any Federal, state or other income taxes made by the Company and
its Restricted Subsidiaries during such period and (c) Consolidated Fixed
Charges during such period.
"Consolidated Net Worth" shall mean, as of any date, the amount of any
capital stock, paid in capital and similar equity accounts plus (or minus in the
case of a deficit) the capital surplus and retained earnings of the Company and
its Restricted Subsidiaries and the amount of any foreign currency translation
adjustment account shown as a capital account of the Company and its Restricted
Subsidiaries, all on a consolidated basis in accordance with GAAP.
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"Consolidated Total Assets" shall mean as of the date of any
determination thereof, total assets of the Company and its Restricted
Subsidiaries determined on a consolidated basis in accordance with GAAP.
"Consolidated Total Capitalization" shall mean as of the date of any
determination thereof, the sum of (a) Consolidated Funded Debt plus (b)
Consolidated Net Worth.
"Contingent Liabilities" of any Person shall mean, as of any date, all
obligations of such Person or of others for which such Person is contingently
liable, as obligor, guarantor, surety or in any other capacity, or in respect of
which obligations such Person assures a creditor against loss or agrees to take
any action to prevent any such loss (other than endorsements of negotiable
instruments for collection in the ordinary course of business), including
without limitation all reimbursement obligations of such Person in respect of
any letters of credit, surety bonds or similar obligations and all obligations
of such Person to advance funds to, or to purchase assets, property or services
from, any other Person in order to maintain the financial condition of such
other Person.
"Current Debt" of any Person shall mean as of the date of any
determination thereof all (i) Indebtedness of such Person other than Funded Debt
and (ii) Guaranties by such Person of Current Debt of others.
"Current Management" shall mean Xxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxx,
Xxxxxxx Xxxxxx, Xxxxxxx X. Xxxxx and Xxxxxxx X. Xxxx, whether in case of each of
the foregoing, such Person owns capital stock of the Company directly or
beneficially.
"Default" shall mean any event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute an
Event of Default.
"Domestic Restricted Subsidiary" shall mean any direct or indirect
Restricted Subsidiary of the Company organized under the laws of any state of
the United States of America or the District of Columbia.
"Environmental Law" shall mean any federal, state or local statute,
law, regulation, order, consent decree or permit relating to the environment,
including, without limitation, those relating to releases, discharges or
emissions to air, water, land or groundwater, to the withdrawal or use of
groundwater, to the disposal, treatment, storage or management of hazardous
waste or Hazardous Substances, or to exposure to toxic or hazardous materials,
to the handling, transportation, discharge or release of gaseous or liquid
Hazardous Substances and any regulation, order, notice or demand issued pursuant
to such law, statute or ordinance, in each case applicable to the property of
the Company and its Subsidiaries or the operation of any thereof, including
without limitation the following: the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986 and the Small Business Liability Relief and
Brownfields Revitalization Act of 2002, the Solid Waste Disposal Act, as amended
by the Resource Conservation and Recovery Act of 1976 and the Hazardous and
Solid Waste Amendments of 1984, the Hazardous Materials Transportation Act, as
amended, the Federal Water Pollution
-34-
Control Act, as amended by the Clean Water Act of 1976, the Safe Drinking Water
Control Act, the Clean Air Act of 1966, as amended, the Toxic Substances Control
Act of 1976, the Emergency Planning and Community Right-to-Know Act of 1986, the
National Environmental Policy Act of 1975, and any similar or implementing state
law, and any state statute and any further amendments to these laws providing
for financial responsibility for cleanup or other actions with respect to the
release or threatened release of Hazardous Substances, and all rules and
regulations promulgated thereunder.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA shall be construed to also refer to any successor sections.
"ERISA Affiliate" shall mean any corporation, trade or business that
is, along with the Company, a member of a controlled group of corporations or a
controlled group of trades or businesses, as described in section 414(b) and
414(c), respectively, of the Code or Section 4001 of ERISA.
"Existing Subsidiary Note Guaranty" shall mean the Guaranty Agreement
dated as of December 1, 1998 from the Subsidiary Guarantors to the parties
therein named, as amended, supplemented or otherwise modified.
"Event of Default" shall have the meaning set forth in SECTION 6.1.
"Financial Contract "of a Person shall mean (a) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics, or (b) any agreements, devices or
arrangements providing for payments related to fluctuations of interest rates,
exchange rates or forward rates, including, but not limited to, interest rate
exchange agreements, forward currency exchange agreements, interest rate cap or
collar protection agreements, forward rate currency or interest rate options.
"Funded Debt" of any Person shall mean (a) all Indebtedness of such
Person for borrowed money or which has been incurred in connection with the
acquisition of assets in each case having a final maturity of one or more than
one year from the date of origin thereof (or which is renewable or extendible at
the option of the obligor for a period or periods more than one year from the
date of origin), including all payments in respect thereof that are required to
be made within one year from the date of any determination of Funded Debt,
whether or not the obligation to make such payments shall constitute a current
liability of the obligor under GAAP, (b) all Capitalized Rentals of such Person,
(c) all Guaranties by such Person of Funded Debt of others, and (d) if, during
the 365-day period immediately preceding the date of any determination of Funded
Debt of such Person, there shall not have been a period of at least 30
consecutive days during which Indebtedness of such Person outstanding under all
revolving credit or similar agreements are equal to zero, then, and in such an
event, an amount equal to the highest aggregate amount of all such Indebtedness
outstanding during any period of 30 consecutive days selected by such Person
during such preceding 365-day period.
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"GAAP" shall mean United States generally accepted accounting
principles at the time.
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing, or in effect guaranteeing,
any Indebtedness, dividend or other obligation of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent or
otherwise, by such Person: (a) to purchase such Indebtedness or obligation or
any property or assets constituting security therefor, (b) to advance or supply
funds (1) for the purchase or payment of such Indebtedness or obligation or (2)
to maintain working capital or any balance sheet or income statement condition
or otherwise to advance or make available funds for the purchase or payment of
such Indebtedness or obligation, (c) to lease property or to purchase Securities
or other property or services primarily for the purpose of assuring the owner of
such Indebtedness or obligation of the ability of the primary obligor to make
payment of the Indebtedness or obligation, or (d) otherwise to assure the owner
of the Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purposes of all computations made under this Agreement, a
Guaranty in respect of any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such Indebtedness for borrowed
money which has been guaranteed, and a Guaranty in respect of any other
obligation or liability or any dividend shall be deemed to be Indebtedness equal
to the maximum aggregate amount of such obligation, liability or dividend.
"Hazardous Substance" shall mean chromium, chromated copper arsenate,
or any other hazardous or toxic material, substance or waste, pollutant or
contaminant which is regulated under any statute, law, ordinance, rule or
regulation of any local, state, regional or federal authority having
jurisdiction over the property of the Company and its Subsidiaries or its use,
including but not limited to any material, substance or waste which is: (a)
defined as a hazardous substance under Section 311 of the Federal Water
Pollution Control Act (33 U.S.C. Section 1317) as amended; (b) regulated as a
hazardous waste under Section 1004 or Section 3001 of the Federal Solid Waste
Disposal Act, as amended by the Resource Conservation and Recovery Act (42
U.S.C. Section 6901 et seq.), as amended; (c) defined as a hazardous substance
under Section 101 of the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601 et seq.), as amended; (d) defined or
regulated as an ambient or hazardous air pollutant pursuant to the Clean Air Act
(42 U.S.C. Section 7401 et seq.), as amended; or (e) defined or regulated as a
hazardous substance or hazardous waste under any rules or regulations
promulgated under any of the foregoing statutes.
"Indebtedness" of any Person shall mean, as of any date, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person as lessee under any Capitalized Lease, (c) the unpaid purchase price for
goods, property or services acquired by such Person, except for accounts payable
and other accrued liabilities arising in the ordinary course of business which
are not materially past due, (d) all obligations of such Person to purchase
goods, property or services where payment therefor is required regardless of
whether delivery of such goods or property or the performance of such services
is ever made or tendered (generally referred to as "take or pay contracts"),
other than obligations incurred in the ordinary course of business, (e) all
obligations of such Person in respect of any Financial Contract (valued in an
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amount equal to the highest termination payment, if any, that would be payable
by such Person upon termination for any reason on the date of determination),
(f) to the extent not included in the foregoing, obligations and liabilities
which would be classified as part of Total Debt, and (g) all obligations of
others similar in character to those described in clauses (a) through (f) of
this definition for which such Person is contingently liable, as obligor,
guarantor, surety or in any other capacity, or in respect of which obligations
such Person assures a creditor against loss or agrees to take any action to
prevent any such loss (other than endorsements of negotiable instruments for
collection in the ordinary course of business), including without limitation all
reimbursement obligations of such Person in respect of letters of credit, surety
bonds or similar obligations and all obligations of such Person to advance funds
to, or to purchase assets, property or services from, any other Person in order
to maintain the financial condition of such other Person.
"Institutional Holder" shall mean any of the following Persons: (a) any
bank, savings and loan association, savings institution, trust company or
national banking association, acting for its own account or in a fiduciary
capacity, (b) any charitable foundation, (c) any insurance company, (d) any
fraternal benefit society, (e) any pension, retirement or profit sharing trust
or fund within the meaning of Title I of ERISA or for which any bank, trust
company, national banking association or investment adviser registered under the
Investment Advisers Act of 1940, as amended, is acting as trustee or agent, (f)
any investment company or business development company, as defined in the
Investment Company Act of 1940, as amended, (g) any small business investment
company licensed under the Small Business Investment Act of 1958, as amended,
(h) any broker or dealer registered under the Securities Exchange Act of 1934,
as amended, or any investment adviser registered under the Investment Adviser
Act of 1940, as amended, (i) any government, any public employees' pension or
retirement system, or any other government agency supervising the investment of
public funds, (j) any other entity all of the equity owners of which are
Institutional Holders or (k) any other Person which may be within the definition
of "qualified institutional buyer" as such term is used in Rule 144A, as from
time to time in effect, promulgated under the Securities Act of 1933, as
amended.
"Intercreditor Agreement" shall have the meaning set forth in SECTION
1.5.
"Interest Expense" for any period shall mean all interest and all
amortization of debt discount and any other fees, commissions and expenses
(including without limitation net interest costs of interest rate swaps and
xxxxxx) on or in respect of any particular Indebtedness (including, without
limitation, payment-in-kind, zero coupon and other like Securities and letters
of credit and banker's acceptances) for which such calculations are being made.
Computations of Interest Expense on a pro forma basis for Indebtedness having a
variable interest rate shall be calculated at the rate in effect on the date of
any determination.
"Investments" shall mean all investments, in cash or by delivery of
property, made directly or indirectly in any Person, whether by acquisition of
shares of capital stock, Indebtedness or other obligations or Securities or by
loan, advance, capital contribution or otherwise; provided, however, that
"Investments" shall not mean or include routine investments and property to be
used or consumed in the ordinary course of business.
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"Lien" shall mean any interest in property securing an obligation owed
to, or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute or contract, and including but not
limited to the security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances (including, with respect to
stock, stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements) affecting property. For the purposes of this
Agreement, the Company or a Restricted Subsidiary shall be deemed to be the
owner of any property which it has acquired or holds subject to a conditional
sale agreement, Capitalized Lease or other arrangement pursuant to which title
to the property has been retained by or vested in some other Person for security
purposes and such retention or vesting shall constitute a Lien.
"Make-Whole Amount" shall mean in connection with any prepayment or
acceleration of the Notes the excess, if any, of (a) the aggregate present value
as of the date of such prepayment or payment of each dollar of principal being
prepaid or paid (taking into account the application of such prepayment or
payment required by SECTION 2.1) and the amount of interest (exclusive of
interest accrued to the date of prepayment or payment) that would have been
payable in respect of such dollar if such prepayment or payment had not been
made, determined by discounting such amounts at the Reinvestment Rate from the
respective dates on which they would have been payable, over (b) 100% of the
principal amount of the outstanding Notes being prepaid or paid. For purposes of
any determination of the Make-Whole Amount:
"Reinvestment Rate" shall mean (1) the sum of .50%, plus the
yield reported on page "PX1" of the Bloomberg Financial Markets
Services Screen (or, if not available, any other nationally recognized
trading screen reporting on-line intraday trading in the United States
government Securities) at 11:00 A.M. (
New York City,
New York time) for
the United States government Securities having a maturity (rounded to
the nearest month) corresponding to the remaining Weighted Average Life
to Maturity of the principal being prepaid or paid or (2) in the event
that no nationally recognized trading screen reporting on-line intraday
trading in the United States government Securities is available,
Reinvestment Rate shall mean the sum of .50%, plus the arithmetic mean
of the yields for the two columns under the heading "Week Ending"
published in the Statistical Release under the caption "Treasury
Constant Maturities" for the maturity (rounded to the nearest month)
corresponding to the Weighted Average Life to Maturity of the principal
being prepaid or paid. If no maturity exactly corresponds to such
Weighted Average Life to Maturity, yields for the two published
maturities most closely corresponding to such Weighted Average Life to
Maturity shall be calculated pursuant to the immediately preceding
sentence and the Reinvestment Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding in
each of such relevant periods to the nearest month. For the purposes of
calculating the Reinvestment Rate, the most recent Statistical Release
published prior to the date of determination of the Make-Whole Amount
shall be used.
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"Statistical Release" shall mean the then most recently
published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Federal Reserve System and
which establishes yields on actively traded U.S. Government Securities
adjusted to constant maturities or, if such statistical release is not
published at the time of any determination hereunder, then such other
reasonably comparable index which shall be designated by the Requisite
Holders.
"Weighted Average Life to Maturity" of the principal amount of
the Notes being prepaid or paid shall mean, as of the time of any
determination thereof, the number of years obtained by dividing the
then Remaining Dollar-Years of such principal by the aggregate amount
of such principal. The term "Remaining Dollar-Years" of such principal
shall mean the amount obtained by (1) multiplying (i) the remainder of
the amount of principal that would have become due on each scheduled
payment date if such prepayment or payment had not been made by (ii)
the number of years (calculated to the nearest one-twelfth) which will
elapse between the date of determination and such scheduled payment
date, and (2) totaling the products obtained in (1).
"Material Adverse Effect" shall mean a material adverse effect on (i)
the business, operations, affairs, financial condition, assets, or properties of
the Company and its Restricted Subsidiaries taken as a whole, (ii) the ability
of the Company to perform its obligation under this Agreement and the Notes or
(iii) the validity or enforceability of this Agreement or the Notes.
"Minority Interests" shall mean any shares of stock of any class of a
Restricted Subsidiary (other than directors' qualifying shares as required by
law) that are not owned by the Company and/or one or more of its Subsidiaries.
Minority Interests shall be valued by valuing Minority Interests constituting
preferred stock at the voluntary or involuntary liquidating value of such
preferred stock, whichever is greater, and by valuing Minority Interests
constituting common stock at the book value of capital and surplus applicable
thereto adjusted, if necessary, to reflect any changes from the book value of
such common stock required by the foregoing method of valuing Minority Interests
in preferred stock.
"Multiemployer Plan" shall have the same meaning as in ERISA.
"Noteholder Notice" shall have the meaning set forth in SECTION 2.3(a).
"Notes" shall have the meaning set forth in SECTION 1.1.
"Offering Materials" shall mean the Private Placement Memorandum dated
November, 2002 delivered to each of the Purchasers by Banc One Capital Markets,
Inc.
"Officer Notes" shall mean notes or other evidences of Indebtedness
entered into by officers of the Company within the limitations of this
Agreement, including without limitation SECTION 5.14, in connection with and as
part of an incentive stock option plan of the Company the purpose of which is to
permit such officer to acquire capital stock of the Company.
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"Overdue Rate" shall mean the lesser of (a) the maximum interest rate
permitted by law and (b) the coupon rate of interest plus 2% per annum.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Plan" shall mean a "pension plan," as such term is defined in ERISA,
established or maintained by the Company or any ERISA Affiliate or as to which
the Company or any ERISA Affiliate contributed or is a member or otherwise may
have any liability.
"Person" shall include an individual, a corporation, a limited
liability company, an association, a partnership, a trust or estate, a joint
stock company, an unincorporated organization, a joint venture, a trade or
business (whether or not incorporated), a government (foreign or domestic) and
any agency or political subdivision thereof, or any other entity.
"Purchasers" shall have the meaning set forth in SECTION 1.1.
"Qualified Current Debt" and "Qualified Funded Debt" shall mean Current
Debt or Funded Debt, as the case may, of a Restricted Subsidiary Guarantor which
is a Restricted Subsidiary Guarantor on the Closing Date or any Person who has
become a Restricted Subsidiary Guarantor after the Closing Date in accordance
with SECTION 5.17 hereof; provided that the obligee of such Current Debt or
Funded Debt shall have entered into the Intercreditor Agreement.
"Rentals" shall mean and include as of the date of any determination
thereof all fixed payments (including as such all payments which the lessee is
obligated to make to the lessor on termination of the lease or surrender of the
property) payable by the Company or a Restricted Subsidiary, as lessee or
sublessee under a lease of real or personal property (less, in the case of any
determination of Consolidated Fixed Charges, any fixed rents received by the
Company or any such Restricted Subsidiary, as sublessor, under any "triple net,
non-cancellable" sublease of the same such real or personal property). Fixed
rents under any so-called "percentage leases" shall be computed solely on the
basis of the minimum rents, if any, required to be paid by the lessee regardless
of sales volume or gross revenues.
"Reportable Event" shall have the same meaning as in ERISA.
"Requisite Holders" shall mean the holders of at least a majority in
aggregate principal amount of the outstanding Notes of a series.
"Responsible Officer" shall mean the Chief Executive Officer, the
President or the Vice President-Finance of the Company.
"Restricted Subsidiary" shall mean any Subsidiary which: (i) at least
60% of the voting securities are owned by the Company and/or one or more
Wholly-owned Restricted Subsidiaries and (ii) the Company has designated a
Restricted Subsidiary by notice in writing given to the holders of the Notes,
provided that the designation of a Subsidiary as "unrestricted" or "restricted"
shall not be changed more than twice.
-40-
"Restricted Subsidiary Guarantor" shall mean a Subsidiary Guarantor
that is a Restricted Subsidiary.
"Sale and Leaseback Transaction" shall mean any arrangement whereby the
Company or any Restricted Subsidiary shall sell or transfer any property owned
by the Company or any Restricted Subsidiary to any Person other than the Company
or a Restricted Subsidiary and thereupon the Company or a Restricted Subsidiary
shall lease or intend to lease, as lessee, the same property.
"Security" shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
"Senior Funded Debt" shall mean 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.
"Senior Indebtedness" shall mean all unsecured Indebtedness for
borrowed money of the Company which is not expressed to be subordinate or junior
in rank to any other Indebtedness for borrowed money of the Company.
"Significant Restricted Subsidiary" shall mean any one or more
Restricted Subsidiaries which, if considered in the aggregate as a single
Restricted Subsidiary, would comprise 10% or more of the total assets of the
Company and its Subsidiaries on a consolidated basis.
"Stock Pledge Agreement" shall have the meaning set forth in SECTION
5.18.
"Subsidiary" shall mean as to any particular parent corporation, any
corporation of which more than 50% (of the number of votes) of the Voting Stock
shall be beneficially owned, directly or indirectly, by such parent corporation.
"Subsidiary" shall mean a subsidiary of the Company.
"Subsidiary Bank Guaranty" shall mean any Guaranty of any Subsidiary of
the Company with respect to the payment of sums due and owing under the Bank
Credit Agreement, or any replacement, renewal or modification thereof.
"Subsidiary Guarantor" shall mean a Subsidiary that Guaranties the
payment of the Notes and all other obligations of the Company under this
Agreement.
"Subsidiary Note Guaranty" shall mean 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 (including the Existing Subsidiary
Note Guaranty).
"Supplement" shall have the meaning set forth in SECTION 1.4.
"Total Adjusted Capitalization" shall mean, as of any date, the sum of
Consolidated Net Worth and Total Seasonally Adjusted Debt as of such date.
-41-
"Total Debt" as of any date, shall mean, without duplication, all of
the following for the Company and its Restricted Subsidiaries on a consolidated
basis: (a) all Indebtedness for borrowed money and similar monetary obligations
evidenced by bonds, notes, debentures, acceptances, Capitalized Lease
obligations or otherwise, (b) all liabilities secured by any Lien existing on
property owned or acquired by the Company or any Restricted Subsidiary subject
thereto, whether or not the liability secured thereby shall have been assumed,
(c) all reimbursement obligations under outstanding letters of credit, bankers'
acceptances or similar instruments in respect of drafts which (i) may be
presented or (ii) have been presented and have not yet been paid and are not
included in clause (a) above, and (d) all Guarantees and other Contingent
Liabilities relating to indebtedness, obligations or liabilities of the type
described in the foregoing clauses (a), (b) and (c).
"2002 Subsidiary Note Guaranty" shall have the meaning set forth in
SECTION 1.5.
"Total Seasonally Adjusted Debt" shall mean, as of the end of any
fiscal quarter of the Company, the following appropriate amount for such fiscal
quarter end: (a) for any fiscal quarter ending in March or June, 85% of Total
Debt as of the end of such fiscal quarter, and (b) for any fiscal quarter ending
in September or December, 115% of Total Debt as of the end of such fiscal
quarter.
"Tranche A Notes" shall have the meaning set forth in Section
1.1(a)(i).
"Tranche B Notes" shall have the meaning set forth in Section
1.1(a)(II).
"Unrestricted Subsidiary" shall mean a Subsidiary of the Company that
is not a Restricted Subsidiary.
"Voting Stock" shall mean Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or Persons performing similar
functions).
"Wholly-owned" when used in connection with any Subsidiary shall mean a
Subsidiary of which all of the issued and outstanding shares of stock (except
shares required as directors' qualifying shares) and all Indebtedness for
borrowed money shall be owned by the Company and/or one or more of its
Wholly-owned Subsidiaries.
Section 8.2. Accounting Principles. Where the character or amount of
any asset or liability or item of income or expense is required to be determined
or any consolidation or other accounting computation is required to be made for
the purposes of this Agreement, the same shall be done in accordance with GAAP,
to the extent applicable, except where such principles are inconsistent with the
requirements of this Agreement.
Section 8.3. Directly or Indirectly. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether the action in
question is taken directly or indirectly by such Person.
-42-
SECTION 9. MISCELLANEOUS.
Section 9.1. Registered Notes. The Company shall cause to be kept at
its principal office a register for the registration and transfer of the Notes,
and the Company will register or transfer or cause to be registered or
transferred, as hereinafter provided, any Note issued pursuant to this
Agreement.
At any time and from time to time the holder of any Note which has been
duly registered as hereinabove provided may transfer such Note upon surrender
thereof at the principal office of the Company duly endorsed or accompanied by a
written instrument of transfer duly executed by the holder of such Note or its
attorney duly authorized in writing.
The Person in whose name any Note shall be registered shall be deemed
and treated as the owner and holder thereof for all purposes of this Agreement.
Payment of or on account of the principal, premium, if any, and interest on any
Note shall be made to or upon the written order of such holder.
Section 9.2. Exchange of Notes. At any time and from time to time, upon
not less than ten days' notice to that effect given by the holder of any Note
initially delivered or of any Note substituted therefor pursuant to SECTION 9.1,
this SECTION 9.2 or SECTION 9.3, and, upon surrender of such Note at its office,
the Company will deliver in exchange therefor, without expense to such holder,
except as set forth below, a Note of the same series and tranche, if any, for
the same aggregate principal amount as the then unpaid principal amount of the
Note so surrendered, or Notes in the denomination of $100,000 (or such lesser
amount as shall constitute 100% of the Notes of such holder) or any amount in
excess thereof as such holder shall specify, dated as of the date to which
interest has been paid on the Note so surrendered or, if such surrender is prior
to the payment of any interest thereon, then dated as of the date of issue,
registered in the name of such Person or Persons as may be designated by such
holder, and otherwise of the same form and tenor as the Notes so surrendered for
exchange. The Company may require the payment of a sum sufficient to cover any
stamp tax or governmental charge imposed upon such exchange or transfer.
Section 9.3. Loss, Theft, Etc. of Notes. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of any
Note, and in the case of any such loss, theft or destruction upon delivery of a
bond of indemnity in such form and amount as shall be reasonably satisfactory to
the Company, or in the event of such mutilation upon surrender and cancellation
of the Note, the Company will make and deliver without expense to the holder
thereof, a new Note, of like tenor, in lieu of such lost, stolen, destroyed or
mutilated Note. If the Purchaser or any subsequent Institutional Holder is the
owner of any such lost, stolen or destroyed Note, then the affidavit of an
authorized officer of such owner, setting forth the fact of loss, theft or
destruction and of its ownership of such Note at the time of such loss, theft or
destruction shall be accepted as satisfactory evidence thereof and no further
indemnity shall be required as a condition to the execution and delivery of a
new Note other than the written agreement of such owner to indemnify the
Company.
-43-
Section 9.4. Expenses, Stamp Tax Indemnity. Whether or not the
transactions herein contemplated shall be consummated, the Company agrees to pay
directly all of your out-of-pocket expenses in connection with the preparation,
execution and delivery of this Agreement and the transactions contemplated
hereby, including but not limited to the charges and disbursements of Xxxxxxx
and Xxxxxx, your special counsel, duplicating and printing costs and charges for
shipping the Notes, adequately insured to you at your home office or at such
other place as you may designate, and all such expenses relating to any
amendments, waivers or consents pursuant to the provisions hereof (whether or
not the same are actually executed and delivered), including, without
limitation, any amendments, waivers, or consents resulting from any work-out,
renegotiation or restructuring relating to the performance by the Company of its
obligations under this Agreement and the Notes. Without limiting SECTION 4.1(h),
the Company agrees to pay, within fifteen Business Days of receipt thereof,
supplemental statements of Xxxxxxx and Xxxxxx for disbursements unposted or not
incurred as of a Closing Date. The Company further agrees that it will pay and
save you harmless against any and all liability with respect to stamp and other
taxes, if any, which may be payable or which may be determined to be payable in
connection with the execution and delivery of this Agreement or the Notes,
whether or not any Notes are then outstanding and to pay and save you harmless
against any and all losses, costs and expenses relating to any request by the
Requisite Holders of the Notes for the Company to hire a consultant pursuant to
SECTION 5.16(c). The Company agrees to protect and indemnify you against any
liability for any and all brokerage fees and commissions payable or claimed to
be payable to any Person in connection with the transactions contemplated by
this Agreement. Without limiting the foregoing, the Company agrees to pay the
cost of obtaining the private placement number for each series, and tranche, if
any, of the Notes and authorizes the submission of such information as may be
required by Standard & Poor's CUSIP Service Bureau for the purpose of obtaining
such number.
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative. No
delay or failure on the part of the holder of any Note in the exercise of any
power or right shall operate as a waiver thereof; nor shall any single or
partial exercise of the same preclude any other or further exercise thereof, or
the exercise of any other power or right, and the rights and remedies of the
holder of any Note are cumulative to, and are not exclusive of, any rights or
remedies any such holder would otherwise have.
Section 9.6. Notices. All communications provided for hereunder shall
be in writing and, if to you, delivered or mailed prepaid by registered or
certified mail or overnight air courier, or by facsimile communication, in each
case addressed to you at your address appearing on Schedule I to this Agreement
or any Supplement or such other address as you or the subsequent holder of any
Note initially issued to you may designate to the Company in writing, and if to
the Company, delivered or mailed by registered or certified mail or overnight
air courier, or by facsimile communication, to the Company at 0000 Xxxx
Xxxxxxxx, X.X., Xxxxx Xxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxx, or to
such other address as the Company may in writing designate to you or to a
subsequent holder of the Note initially issued to you; provided, however, that a
notice to you by overnight air courier shall only be effective if delivered to
you at a street address designated for such purpose in Schedule I to this
Agreement or any Supplement, and a notice to you by facsimile communication
shall only be effective if made by confirmed transmission to you at a telephone
number designated for such purpose in Schedule I to this
-44-
Agreement or any Supplement, or, in either case, as you or a subsequent holder
of any Note initially issued to you may designate to the Company in writing.
Section 9.7. Environmental Indemnity and Covenant Not to Xxx. (a) The
Company agrees to indemnify and hold harmless from time to time the Purchasers
and each other holder of the Notes, each Person claiming by, through, under or
on account of any of the foregoing and the respective directors, officers,
counsel and employees of each of the foregoing Persons (the "Indemnified
Parties") from and against any and all losses, claims, cost recovery actions,
administrative orders or proceedings, damages and liabilities to which any such
Indemnified Party may become subject (1) under any Environmental Law applicable
to the Company or any of its Subsidiaries or any of their respective properties,
(2) the presence, use, release, storage, treatment or disposal of Hazardous
Substances on or at any property owned or operated by the Company or any
Subsidiary, (3) as a result of the breach of or non-compliance by the Company or
any of its Subsidiaries with any Environmental Law applicable to the Company or
any of its Subsidiaries and (4) due to past ownership of any of their respective
properties or past activity on any of their respective properties which, though
lawful and fully permissible at the time, could result in present liability,
except to the extent the acts or omissions of such Indemnified Party, its
successors and assigns are the sole and direct cause of the circumstances giving
rise to such demand, claim, cost recovery action or lawsuit. The provisions of
this SECTION 9.7(a) shall survive termination of this Agreement by payment in
full of all of the Notes issued hereunder and shall survive the transfer of any
Note or Notes issued hereunder.
(b) Without limiting the provisions of SECTION 9.7(a), the Company and
its successors and assigns hereby waive, release and covenant not to bring
against any of the Indemnified Parties any demand, claim, cost recovery action
or lawsuit they may now or hereafter have or accrue arising from (1) any
Environmental Law now or hereafter enacted (including those applicable to the
Company or any of its Subsidiaries), (2) the presence, use, release, storage,
treatment or disposal of Hazardous Substances on or at any of the properties
owned or operated by the Company or any of its Subsidiaries, or (3) the breach
of or non-compliance by the Company with any Environmental Law or environmental
covenant applicable to the Company or any of its Subsidiaries, except to the
extent the acts or omissions of such Indemnified Party, its successors and
assigns are the sole and direct cause of the circumstances giving rise to such
demand, claim, cost recovery action or lawsuit.
The foregoing provisions of this SECTION 9.7 shall not restrict the
Company's ability to enforce its right to recover damages pursuant to any policy
of insurance providing coverage for environmental matters underwritten by any
holder of Notes in its capacity as an insurance company.
Section 9.8. Successors and Assigns. This Agreement shall be binding
upon the Company and its successors and assigns and shall inure to your benefit
and to the benefit of your successors and assigns, including each successive
holder or holders of any Notes.
Section 9.9. Survival of Covenants and Representations. All covenants,
representations and warranties made by the Company herein (including any
Supplement) and in any certificates
-45-
delivered pursuant hereto, whether or not in connection with a Closing Date,
shall survive the closing and the delivery of this Agreement and the Notes.
Section 9.10. Severability. Should any part of this Agreement for any
reason be declared invalid or unenforceable, such decision shall not affect the
validity or enforceability of any remaining portion, which remaining portion
shall remain in force and effect as if this Agreement had been executed with the
invalid or unenforceable portion thereof eliminated and it is hereby declared
the intention of the parties hereto that they would have executed the remaining
portion of this Agreement without including therein any such part, parts or
portion which may, for any reason, be hereafter declared invalid or
unenforceable.
Section 9.11. Governing Law. THIS AGREEMENT AND THE NOTES ISSUED AND
SOLD HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
NEW YORK
LAW, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
Section 9.12. Submission to Jurisdiction. The Company hereby expressly
waives all right to object to jurisdiction or execution in any legal action or
proceeding relating to this Agreement or the Notes which it may now or hereafter
have by reason of its domicile or by reason of any subsequent or other domicile.
The Company agrees that any legal action or proceeding with respect to this
Agreement or any Note, or any instrument, agreement or document mentioned or
contemplated herein, or to enforce any judgment obtained against the Company in
any such legal action or proceeding against it or any of its properties or
revenues, may be brought by the holder of any Note in the courts of the County
of
New York, State of
New York or of the United States of America located in
New
York,
New York, as the holder of any Note may elect, and by execution and
delivery of this Agreement, the Company irrevocably submits to each such
jurisdiction for such purpose only.
In addition, the Company hereby irrevocably and unconditionally waives,
to the extent not prohibited by applicable law, any objection which it may now
or hereafter have to the laying of venue of any of the aforesaid actions, suits
or proceedings arising out of or in connection with this Agreement or the Notes
brought in any of the aforesaid courts, and hereby further irrevocably and
unconditionally waives and agrees, to the extent not prohibited by applicable
law, not to plead or claim that any such action, suit or proceeding brought in
any such court has been brought in an inconvenient forum.
Section 9.13. Captions. The descriptive headings of the various
Sections or parts of this Agreement are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
-46-
The execution hereof by you shall constitute a contract between us for
the uses and purposes hereinabove set forth, and this Agreement may be executed
in any number of counterparts, each executed counterpart constituting an
original but all together only one agreement.
UNIVERSAL FOREST PRODUCTS, INC.
By
--------------------------------------
Its:
---------------------------------
Accepted as of December 18, 2002.
[VARIATION]
By
--------------------------------------
Its:
---------------------------------
-47-
INFORMATION RELATING TO PURCHASERS
NAME AND ADDRESS PRINCIPAL AMOUNT OF NOTES
OF PURCHASER TO BE PURCHASED
CONNECTICUT GENERAL LIFE INSURANCE $5,000,000
COMPANY $5,000,000
x/x XXXXX Xxxxxxxxxx & Xxxxxxxxxx Xxxxxxxx. (Xxxxxxx X)
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000 $8,000,000
Attention: Private and Alternative Investments - H16B $4,000,000
Fax: 000-000-0000 (Tranche B)
Payments
All payments on or in respect of the Notes to be by Federal Funds Wire Transfer
to:
X.X.Xxxxxx Xxxxx Bank
BNF=CIGNA Private Placements/AC=9009001802
ABA #000000000
OBI=[name of company; description of security; interest rate; maturity
date; PPN; due date] and application (as among principal, premium and
interest of the payment being made); contact name and phone.
Address for Notices Related to Payments:
CIG & Co.
c/o CIGNA Retirement & Investments Services
Attention: Securities Processing, H05P
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
CIG & Co.
c/o CIGNA Retirement & Investment Services
Attention: Private and Alternative Investments, H16B
Operations Group
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Fax: 000-000-0000
SCHEDULE I
(to
Note Agreement)
with a copy to:
X.X. Xxxxxx Xxxxx Bank
Private Placement Servicing
P. O. Box 0000
Xxxxxxx Xxxxx Xxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: CIGNA Private Placements
Fax: 000-000-0000/1005
Address for All Other Notices:
CIG & Co.
c/o CIGNA Retirement & Investments Services
Attention: Private and Alternative Investments, H16B
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Fax: 000-000-0000
Name of Nominee in which Notes are to be issued: CIG & Co.
Taxpayer I.D. Number for CIG & Co.: 00-0000000
I-2
NAME AND ADDRESS PRINCIPAL AMOUNT OF NOTES
OF PURCHASER TO BE PURCHASED
PRINCIPAL LIFE INSURANCE COMPANY $13,000,000
c/o Principal Global Investors, LLC $3,000,000
000 Xxxxx Xxxxxx x0,000,000
Xxx Xxxxxx, Xxxx 00000-0000 $1,000,000
$1,000,000
(Tranche B)
Payments
All payments on or in respect of the Notes to be made by 12:00 Noon (
New York
City time) by bank wire transfer of immediately available funds to:
ABA #000000000
Xxxxx Fargo Bank Iowa, N.A.
7th and Xxxxxx Xxxxxxx
Xxx Xxxxxx, Xxxx 00000
For credit to Principal Life Insurance Company
Account Xx. 0000000000
XXX XXXXX (X) B0065565
With sufficient information (including interest rate, maturity date,
interest amount, principal amount and premium amount, if applicable) to
identify the source and application of such funds.
All notices with respect to payments to:
Principal Global Investors, LLC
000 Xxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
Attention: Investment Accounting - Securities
Telefacsimile: (000) 000-0000
Confirmation: (000) 000-0000
All other notices and communications to:
Principal Capital Management, LLC
000 Xxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
Attention: Fixed Income - Securities
Telefacsimile: (000) 000-0000
Confirmation: (000) 000-0000
I-3
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
I-4
NAME AND ADDRESS PRINCIPAL AMOUNT OF NOTES
OF PURCHASER TO BE PURCHASED
SCOTTISH RE (U.S.), INC. $1,000,000
c/o Principal Global Investors, LLC (Tranche B)
000 Xxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
Attn: Fixed Income - Securities
Payments
All payments on account of the Note to be made by 12:00 noon (New York City
time) by wire transfer of immediately available funds to:
Comerica Bank/Trust Operations
AC: 2158598532
BNF: Scottish Annuity & Life Holdings, Ltd.
AC: 011000734950
BBI: Trade Settlement (000) 000-0000
Bank Routing Number: 000000000
OBI PFGSE (S) B0065565
With sufficient information (including interest rate, maturity date,
interest amount, principal amount and premium amount, if applicable) to
identify the source and application of such funds.
Notices
All notices with respect to the Note payable to Scottish Re, except with respect
to payment, should be sent to:
Scottish Re (U.S.), Inc.
c/o Principal Global Investors, LLC
000 Xxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
Attn: Fixed Income - Securities
Fax: (000) 000-0000
Confirmation: (000) 000-0000
I-5
All notices with respect to payments on the Note payable to Scottish Re should
be sent to::
Scottish Re (U.S.), Inc.
c/o Principal Global Investors, LLC
000 Xxxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
Attn: Investment Accounting - Securities
Fax: (000) 000-0000
Confirmation: (000) 000-0000
Upon closing, deliver Note to:
Deutsche Bank
(Bankers Trust Company)
00 Xxxx Xxxxxx
0xx Xxxxx, Window 44
Comercia Bank A/C 090755
Xxx Xxxx, Xxx Xxxx 00000
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
I-6
NAME AND ADDRESS PRINCIPAL AMOUNT OF NOTES
OF PURCHASER TO BE PURCHASED
STATE FARM LIFE INSURANCE COMPANY $4,000,000
One State Farm Plaza (Tranche A)
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Investment Department E-10 $4,000,000
(Tranche B)
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Universal Forest Products, Inc. and as to interest rate, security description,
maturity date and PPN, principal, premium or interest") to:
The Chase Manhattan Bank
ABA #000000000
SSG Private Income Processing
A/C #000-0-000000
for Credit to: Account Number G 06893
Notices
Send notices, financial statements, officer's certificates and other
correspondence to:
State Farm Life Insurance Company
Investment Dept. E-8
Xxx Xxxxx Xxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Send confirms to:
State Farm Life Insurance Company
Investment Accounting Dept. D-3
Xxx Xxxxx Xxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
I-7
NAME AND ADDRESS PRINCIPAL AMOUNT OF NOTES
OF PURCHASER TO BE PURCHASED
STATE FARM LIFE & ACCIDENT $1,000,000
ASSURANCE COMPANY (Tranche A)
Xxx Xxxxx Xxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Investment Department E-10
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Universal Forest Products, Inc. and as to interest rate, security description,
maturity date and PPN, principal, premium or interest") to:
The Chase Manhattan Bank
ABA #000000000
SSG Private Income Processing
A/C #000-0-000000
for Credit to: Account Number G 06895
Notices
Send notices, financial statements, officer's certificates and other
correspondence to:
State Farm Life and Accident Assurance Company
Investment Dept. E-8
Xxx Xxxxx Xxxx Xxxxx
Xxxxxxxxxxx, XX 00000
I-8
Send confirms to:
State Farm Life and Assurance Company
Investment Accounting Dept. D-3
Xxx Xxxxx Xxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 00-0000000
I-9
NAME AND ADDRESS PRINCIPAL AMOUNT OF NOTES
OF PURCHASER TO BE PURCHASED
THE CANADA LIFE ASSURANCE COMPANY $4,000,000
000 Xxxxxxxxxx Xxxxxx, XX-00 (Xxxxxxx B)
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
Attention: Xxxx Xxxxxxx, U.S. Investments Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds to:
For call or maturity payments:
Chase Manhattan Bank
ABA #000-000-000
Account No. 000-0-000000
Trust Account No. G52708
Reference: CUSIP, Name of Issuer & description,
and call or maturity date
For all other payments (by wire):
Chase Manhattan Bank
ABA #000-000-000
Account No. 000-0-000000
Trust Account No. G52708
Reference: PPN, Name of Issuer and description,
and Principal and Interest payment
For all other payments (by mail):
Mail check payment to:
J. Romeo & Co.
c/o Chase Manhattan Bank
P. O. Xxx 00000
Xxxxxx, Xxx Xxxxxx 00000-0000
Attention: Funds Clearance/ A/C# G52708
Reference: CUSIP, Name of Issuer and description,
and Principal and Interest payment
I-10
Notices
Notices with respect to payments and written confirmation of each such payment,
to be addressed:
Chase Manhattan Bank
North American Insurance
0 Xxxxx XxxxxXxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Doll Balbadar
with a copy to:
The Canada Life Assurance Company
000 Xxxxxxxxxx Xxxxxx, SP-12
Securities Accounting
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
All other notices and communications (including financial statements) to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: J. Romeo & Co.
Taxpayer I.D. Number: 00-0000000
I-11
FUNDED DEBT; LIENS SECURING FUNDED DEBT
(INCLUDING CAPITALIZED LEASES); SUBSIDIARIES; AND
RESTRICTED SUBSIDIARIES AS OF THE CLOSING DATE
See Attached
SCHEDULE II
(to
Note Agreement)
ENVIRONMENTAL OBLIGATIONS
See Attached
SCHEDULE III
(to
Note Agreement)
UNIVERSAL FOREST PRODUCTS, INC.
5.63% Series 2002-A Senior Note, Tranche A,
Due December 18, 2009
PPN 913543 B@ 2
No.
December 18, 2002
$
UNIVERSAL FOREST PRODUCTS, INC., a Michigan corporation (the
"Company"), for value received, hereby promises to pay to
or registered assigns
on the 18th day of December, 2009
the principal amount of
DOLLARS ($ )
and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at the
rate of 5.63% per annum from the date hereof until maturity, payable
semiannually on the 18th day of June and December in each year (commencing on
June 18, 2003) and at maturity. The Company agrees to pay interest on overdue
principal (including any overdue optional prepayment of principal) and premium,
if any, and (to the extent legally enforceable) on any overdue installment of
interest, at the Overdue Rate after the due date, whether by acceleration or
otherwise, until paid. "Overdue Rate" shall mean the lesser of (a) the maximum
interest rate permitted by law and (b) 7.63% per annum.
Both the principal hereof and interest hereon are payable at the
principal office of the Company in Grand Rapids, Michigan in coin or currency of
the United States of America which at the time of payment shall be legal tender
for the payment of public and private debts. If any amount of principal,
premium, if any, or interest on or in respect of this Note becomes due and
payable on any date which is not a Business Day, such amount shall be payable on
the immediately succeeding Business Day. "Business Day" means any day other than
a Saturday, Sunday or other day on which banks in either Grand Rapids, Michigan
or New York, New York are required by law to close or are customarily closed.
This Note is one of the 5.63% Series 2002-A Senior Notes, Tranche A,
due December 18, 2009 of the Company in the aggregate principal amount of
$15,000,000, which, together with the 6.16% Series 2002-A Senior Notes, Tranche
B, due December 18, 2012 of the Company in the aggregate principal amount of
$40,000,000, and any Additional Notes are issued or to be issued
EXHIBIT A-1
(to
Note Agreement)
under and pursuant to the terms and provisions of the separate Note Agreements,
each dated as of December 18, 2002 (the "Note Agreements"), entered into by the
Company with the original Purchasers therein referred to and any Additional
Purchasers of Additional Notes and the holder hereof is entitled equally and
ratably with the holders of all other Notes outstanding under the Note
Agreements to all the benefits provided for thereby or referred to therein.
Reference is hereby made to the Note Agreements for a statement of such rights
and benefits.
This Note and the other Notes outstanding under the Note Agreements may
be declared due prior to their expressed maturity dates and certain prepayments
are required to be made thereon, all in the events, on the terms and in the
manner and amounts as provided in the Note Agreements.
The Notes are not subject to prepayment or redemption at the option of
the Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in the
Note Agreements.
This Note is registered on the books of the Company and is transferable
only by surrender thereof at the principal office of the Company duly endorsed
or accompanied by a written instrument of transfer duly executed by the
registered holder of this Note or its attorney duly authorized in writing.
Payment of or on account of principal, premium, if any, and interest on this
Note shall be made only to or upon the order in writing of the registered
holder.
THIS NOTE AND SAID NOTE AGREEMENTS ARE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE.
UNIVERSAL FOREST PRODUCTS, INC.
By
--------------------------------------
Its:
---------------------------------
A-1-2
UNIVERSAL FOREST PRODUCTS, INC.
6.16% Series 2002-A Senior Note, Tranche B,
Due December 18, 2012
PPN 913543 B# 0
No.
December 18, 2002
$
UNIVERSAL FOREST PRODUCTS, INC., a Michigan corporation (the
"Company"), for value received, hereby promises to pay to
or registered assigns
on the 18th day of December, 2012
the principal amount of
DOLLARS ($ )
and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at the
rate of 6.16% per annum from the date hereof until maturity, payable
semiannually on the 18th day of June and December in each year (commencing on
June 18, 2003) and at maturity. The Company agrees to pay interest on overdue
principal (including any overdue optional prepayment of principal) and premium,
if any, and (to the extent legally enforceable) on any overdue installment of
interest, at the Overdue Rate after the due date, whether by acceleration or
otherwise, until paid. "Overdue Rate" shall mean the lesser of (a) the maximum
interest rate permitted by law and (b) 8.16% per annum.
Both the principal hereof and interest hereon are payable at the
principal office of the Company in Grand Rapids, Michigan in coin or currency of
the United States of America which at the time of payment shall be legal tender
for the payment of public and private debts. If any amount of principal,
premium, if any, or interest on or in respect of this Note becomes due and
payable on any date which is not a Business Day, such amount shall be payable on
the immediately succeeding Business Day. "Business Day" means any day other than
a Saturday, Sunday or other day on which banks in either Grand Rapids, Michigan
or New York, New York are required by law to close or are customarily closed.
This Note is one of the 6.16% Series 2002-A Senior Notes, Tranche B,
due December 18, 2012 of the Company in the aggregate principal amount of
$40,000,000, which, together with the 5.63% Series 2002-A Senior Notes, Tranche
A, due December 18, 2009 of the Company in the
EXHIBIT A-2
(to Note Agreement)
aggregate principal amount of $15,000,000, and any Additional Notes are issued
or to be issued under and pursuant to the terms and provisions of the separate
Note Agreements, each dated as of December 18, 2002 (the "Note Agreements"),
entered into by the Company with the original Purchasers therein referred to and
any Additional Purchasers of Additional Notes and the holder hereof is entitled
equally and ratably with the holders of all other Notes outstanding under the
Note Agreements to all the benefits provided for thereby or referred to therein.
Reference is hereby made to the Note Agreements for a statement of such rights
and benefits.
This Note and the other Notes outstanding under the Note Agreements may
be declared due prior to their expressed maturity dates and certain prepayments
are required to be made thereon, all in the events, on the terms and in the
manner and amounts as provided in the Note Agreements.
The Notes are not subject to prepayment or redemption at the option of
the Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in the
Note Agreements.
This Note is registered on the books of the Company and is transferable
only by surrender thereof at the principal office of the Company duly endorsed
or accompanied by a written instrument of transfer duly executed by the
registered holder of this Note or its attorney duly authorized in writing.
Payment of or on account of principal, premium, if any, and interest on this
Note shall be made only to or upon the order in writing of the registered
holder.
THIS NOTE AND SAID NOTE AGREEMENTS ARE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE.
UNIVERSAL FOREST PRODUCTS, INC.
By
--------------------------------------
Its:
---------------------------------
A-2-2
[FORM OF SUBSIDIARY NOTE GUARANTY]
\
EXHIBIT B-1
(to Note Agreement)
[INTERCREDITOR AGREEMENT]
EXHIBIT B-2
(to Note Agreement)
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to you as follows:
1. Subsidiaries. Schedule II attached to the Agreements correctly
states the name of each of the Company's Subsidiaries, its jurisdiction of
incorporation, the percentage of its Voting Stock owned by the Company and/or
its Subsidiaries and whether each such Subsidiary is a Restricted Subsidiary or
an Unrestricted Subsidiary. The Company and each Restricted Subsidiary has good
and marketable title to all of the shares it purports to own of the stock of
each Restricted Subsidiary, free and clear in each case of any Lien. All such
shares have been duly issued and are fully paid and non-assessable.
2. Corporate Organization and Authority. The Company, and each
Restricted Subsidiary,
(a) is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation;
(b) has all requisite power and authority and all licenses and
permits to own and operate its properties and to carry on its business
as now conducted and as presently proposed to be conducted, except for
any license or permit the failure of which to have would not materially
and adversely affect the properties, business, prospects, profits or
condition (financial or otherwise) of the Company or of the Company and
its Restricted Subsidiaries, taken as a whole; and
(c) is duly licensed or qualified and is in good standing as a
foreign corporation in each jurisdiction wherein the nature of the
business transacted by it or the nature of the property owned or leased
by it makes such licensing or qualification necessary.
3. Business and Property. You have heretofore been furnished with a
copy of the Offering Materials (as defined in the Agreements and herein referred
to as the "Offering Materials") delivered to you by Banc One Capital Markets,
Inc. which generally sets forth the business conducted and proposed to be
conducted by the Company and its Subsidiaries and the principal properties of
the Company and its Subsidiaries.
4. Financial Statements. (a) The consolidated balance sheets of the
Company and its consolidated Subsidiaries as of December 27, 1997, December 26,
1998, December 25, 1999, December 30, 2000 and December 29, 2001 and the
statements of earnings, shareholders' equity and cash flows for the fiscal years
ended on said dates, each accompanied by a report thereon containing an opinion
unqualified as to scope limitations imposed by the Company and otherwise without
qualification except as therein noted, by Deloitte & Touche in the case of
fiscal years 1997, 1998, 1999 and 2000 and Xxxxxx Xxxxxxxx LLP in the case of
fiscal year 2001, have been prepared in accordance with GAAP consistently
applied except as therein noted, are correct and complete and present fairly the
financial position of the Company and its
EXHIBIT C
(to Note Agreement)
consolidated Subsidiaries as of such dates and the results of their operations
and changes in their cash flows for such periods.
(b) Since December 29, 2001, there has been no change in the condition,
financial or otherwise, of the Company and its consolidated Subsidiaries as
shown on the consolidated balance sheet as of such date except changes in the
ordinary course of business, none of which individually or in the aggregate
could reasonably be expected to have a Material Adverse Effect.
5. Indebtedness. Schedule II attached to the Agreements correctly
describes all Current Debt, Funded Debt, Capitalized Leases and Attributable
Indebtedness of Sale and Leaseback Transactions of the Company and its
Restricted Subsidiaries outstanding on the first and second Closing Date.
6. Full Disclosure. Neither the financial statements referred to in
paragraph 4 hereof nor the Agreements, the Offering Materials or any other
written statement furnished by the Company to you in connection with the
negotiation of the sale of the Notes, contains any untrue statement of a
material fact or omits a material fact necessary to make the statements
contained therein or herein not misleading. There is no fact peculiar to the
Company or its Restricted Subsidiaries which the Company has not disclosed to
you in writing which materially affects adversely nor, so far as the Company can
now foresee, will materially affect adversely the properties, business,
prospects, profits or condition (financial or otherwise) of the Company and its
Restricted Subsidiaries, taken as a whole.
7. Pending Litigation. There are no proceedings pending or, to the
knowledge of the Company after due inquiry, threatened against or affecting the
Company or any Restricted Subsidiary in any court or before any governmental
authority or arbitration board or tribunal which could reasonably be expected to
have a Material Adverse Effect.
8. Title to Properties. The Company and each Restricted Subsidiary has
good and marketable title in fee simple (or its equivalent under applicable law)
to all material parcels of real property and has good title to all the other
material items of property it purports to own, including that reflected in the
most recent balance sheet referred to in paragraph 4 hereof, except as sold or
otherwise disposed of in the ordinary course of business and except for Liens
permitted by the Agreements.
9. Patents and Trademarks. The Company and each Restricted Subsidiary
owns or possesses all patents, trademarks, trade names, service marks,
copyright, licenses and rights with respect to the foregoing necessary for the
present and planned future conduct of its business, without any known conflict
with the rights of others.
10. Sale is Legal and Authorized. The sale of the Notes and compliance
by the Company with all of the provisions of the Agreements (including any
Supplement) and the Notes:
(a) are within the corporate powers of the Company;
C-2
(b) will not violate any provisions of any law or any order of
any court or governmental authority or agency and will not conflict
with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default under the Articles of
Incorporation or By-laws of the Company or any indenture or other
material agreement or instrument to which the Company is a party or by
which it may be bound or result in the imposition of any Liens or
encumbrances on any property of the Company; and
(c) have been duly authorized by proper corporate action on
the part of the Company (no action by the stockholders of the Company
being required by law, by the Articles of Incorporation or By-laws of
the Company or otherwise), executed and delivered by the Company and
the Agreements and the Notes constitute the legal, valid and binding
obligations, contracts and agreements of the Company enforceable in
accordance with their respective terms.
11. No Defaults. No Default or Event of Default has occurred and is
continuing. The Company is not in default in the payment of principal or
interest on any Indebtedness for borrowed money and is not in default under any
instrument or instruments or agreements under and subject to which any
Indebtedness for borrowed money has been issued and no event has occurred and is
continuing under the provisions of any such instrument or agreement which with
the lapse of time or the giving of notice, or both, would constitute an event of
default thereunder.
12. Governmental Consent. No approval, consent or withholding of
objection on the part of any regulatory body, state, Federal or local, is
necessary in connection with the execution and delivery by the Company of the
Agreements or the issuance, sale or delivery of the Notes or compliance by the
Company with any of the provisions of the Agreements or the Notes.
13. Taxes. All tax returns required to be filed by the Company or any
Restricted Subsidiary in any jurisdiction have, in fact, been filed, and all
taxes, assessments, fees and other governmental charges upon the Company or any
Restricted Subsidiary or upon any of their respective properties, income or
franchises, which are shown to be due and payable in such returns have been
paid. For all taxable years ending on or before December 31, 1997, the Federal
income tax liability of the Company and its Restricted Subsidiaries has been
satisfied and either the period of limitations on assessment of additional
Federal income tax has expired or the Company and its Restricted Subsidiaries
have entered into an agreement with the Internal Revenue Service closing
conclusively the total tax liability for the taxable year. The Company does not
know of any proposed additional tax assessment against it for which adequate
provision has not been made on its accounts, and no material controversy in
respect of additional Federal or state income taxes due since said date is
pending or to the knowledge of the Company threatened. The provisions for taxes
on the books of the Company and each Restricted Subsidiary are adequate for all
open years, and for its current fiscal period.
14. Use of Proceeds. The net proceeds from the sale of the Notes will
be used for general corporate purposes including to repay existing Indebtedness
of the Company and its Subsidiaries. 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
C-3
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 5% of the value of the consolidated assets of the Company and its
Restricted Subsidiaries and the Company does not have any present intention that
margin stock will constitute more than 5% of the value of such assets. As used
in this Paragraph 14, the terms "margin stock" and "purpose of buying or
carrying" shall have the meanings assigned to them in said Regulation U.
15. Private Offering. Neither the Company, directly or indirectly, nor
any agent on its behalf has offered or will offer the Notes or any similar
Security or has solicited or will solicit an offer to acquire the Notes or any
similar Security from or has otherwise approached or negotiated or will approach
or negotiate in respect of the Notes or any similar Security with any Person
other than the Purchasers and not more than 15 other institutional investors,
each of whom was offered a portion of the Notes at private sale for investment.
Neither the Company, directly or indirectly, nor any agent on its behalf has
offered or will offer the Notes or any similar Security or has solicited or will
solicit an offer to acquire the Notes or any similar Security from any Person so
as to bring the issuance and sale of the Notes within the provisions of Section
5 of the Securities Act of 1933, as amended.
16. ERISA. (a) The Company and each ERISA Affiliate (i) have operated
and administered each of its plans in compliance with all applicable laws,
except where non-compliance could not reasonably be expected to result in a
Material Adverse Effect, and (ii) has not incurred any Material liability, nor
has any event, transaction or condition occurred or exists that would reasonably
be expected to result in the incurrence of any such Material liability or the
imposition of any Material Lien, pursuant to Title I or IV of ERISA or pursuant
to penalty or excise tax provisions of the Code relating to employee benefit
plans or to Section 401(a)(29) or 412 of the Code.
(b) The present value of the aggregate benefit liabilities under each
of its plans (other than multiemployer plans), determined as of the end of such
plan's most recently ended plan year, did not exceed the aggregate current value
of the assets of such plan allocable to such benefit liabilities, or such
deficit, if any, did not exceed 5% of Adjusted Consolidated Net Worth. 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 currently does not have any Multiemployer plans.
(d) The expected postretirement benefit obligation (determined as of
the last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by Section 4980B of
the Code) of the Company and its Subsidiaries is not Material or has otherwise
been disclosed in the most recent audited consolidated financial statements of
the Company and its Subsidiaries.
C-4
(e) The execution and delivery of the Note Agreement and the issuance
and sale of the Notes 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 which in either event
could reasonably be expected to result in a Material Adverse Effect. The
representation is made in reliance upon and subject to the accuracy of the
representation as to the sources of the funds used to pay the purchase price of
the Notes to be purchased.
17. Compliance with Law. Neither the Company nor any Restricted
Subsidiary (1) is in violation of any law, ordinance, franchise, governmental
rule or regulation to which it is subject; or (2) has failed to obtain any
license, permit, franchise or other governmental authorization necessary to the
ownership of its property or to the conduct of its business, which violation or
failure to obtain could reasonably be expected to have a Material Adverse Effect
or impair the ability of the Company to perform its obligations contained in the
Agreement (including any Supplement) or the Notes. Neither the Company nor any
Restricted Subsidiary is in default with respect to any order of any court or
governmental authority or arbitration board or tribunal.
18. Investment Company Act. The Company is not, and is not directly or
indirectly controlled by or acting on behalf of any Person which is, required to
register as an "investment company" under the Investment Company Act of 1940, as
amended.
19. Foreign Assets Control Regulations, etc. Neither the Company nor
any of the Company's Restricted Subsidiaries or Affiliates is, by reason of
being a "national" of "designated foreign country" or a "specially designated
national" within the meaning of the Regulations of the Office of Foreign Assets
Control, United States Treasury Department (31 C.F.R., Subtitle B, Chapter V),
or for any other reason, subject to any restriction or prohibition under, or is
in violation of, any Federal statue or Presidential Executive Order, or any
rules or regulations of any department, agency or administrative body
promulgated under any such statute or order, concerning trade or other relations
with any foreign country or any citizen or national thereof or the ownership or
operation of any property. Without limiting the foregoing, neither the Company
nor any Restricted Subsidiary (a) is or will become a person whose property or
interests in property are blocked pursuant to Section 1 of Executive Order 13224
of September 23, 2001 Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079
(2001)) or (b) engages or will engage in any dealings or transactions, or be
otherwise associated, with any such person.
20. Environmental Matters. To the best of the Company's knowledge,
except for any of such matters which individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect, the following clauses
(a) through (f) are true and correct:
(a) the Company, each Restricted Subsidiary, and the
properties each owns or operates comply with every applicable
Environmental Law;
(b) the Company and each Restricted Subsidiary has obtained
all permits, licenses and other governmental approvals required by
every applicable Environmental Law for its operations and the
properties it owns or operates;
C-5
(c) no Hazardous Substance has been released or disposed at
any property currently owned or operated or while previously owned or
operated by the Company or any Restricted Subsidiary;
(d) neither the Company nor any Restricted Subsidiary has any
liability for restoration, removal, remedial, response or corrective
action, natural resource damage or other harm pursuant to any
applicable Environmental Law, either with respect to properties
currently or previously owned or operated by the Company and its
Subsidiaries;
(e) neither the Company nor any Restricted Subsidiary is
subject to, has notice or knowledge of or is required to give any
notice of any claim, demand, action, lawsuit or legal proceeding
pursuant to any applicable Environmental Law in connection with the
operations of or the properties owned by the Company or any Restricted
Subsidiary; and
(f) there is no legal or regulatory proceeding pending or
applicable Environmental Law which would be expected to prohibit or
materially reduce the use of chromated copper arsenate or any other
wood preservative by the Company or any Restricted Subsidiary.
C-6
SUPPLEMENT TO NOTE PURCHASE AGREEMENT
Dated as of
--------------------, ----
To the Purchaser(s) named in
Schedule I hereto
Ladies and Gentlemen:
This [Number] Supplement to Note Purchase Agreement (the "Supplement")
is between Universal Forest Products, Inc. (the "Company") whose address is 0000
Xxxx Xxxxxxxx, X.X. Xxxxx Xxxxxx, Xxxxxxxx 00000 and the institutional investors
named on Schedule I attached hereto (the "Purchasers").
Reference is hereby made to the separate and several Note Purchase
Agreements dated as of December 18, 2002 (the "Note Agreements") between the
Company and the purchasers listed on Schedule I thereto. All capitalized terms
not otherwise defined herein shall have the same meaning as specified in the
Note Agreements. Reference is further made to Section 4.3 thereof which requires
that, prior to the delivery of any Additional Notes, the Company and each
Additional Purchaser shall execute and deliver a Supplement.
The Company hereby agrees with the Purchaser(s) named on Schedule I
hereto as follows:
1. The Company has authorized the issue and sale of $__________
aggregate principal amount of its _____% Series ___ Senior Notes, due _________,
____ (the "Series ___ Notes"). The Series ___ Notes, together with the Series
2002-A Notes initially issued pursuant to the Note Agreements and each series of
Additional Notes which may from time to time be issued pursuant to the
provisions of Section 1.4 of the Note Agreements, are collectively referred to
as the "Notes" (such term shall also include any such notes issued in
substitution therefor pursuant to Section 9.2 of the Note Agreement). The Series
___ Notes shall be substantially in the form attached hereto as Exhibit 1 with
such changes therefrom, if any, as may be approved by the Purchaser(s) and the
Company.
2. Subject to the terms and conditions hereof and as set forth in the
Note Agreements and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue and sell to each Purchaser,
and each Purchaser agrees to purchase from the Company, Series __ Notes in the
principal amount [and of the tranche] set forth opposite such Purchaser's name
on Schedule I hereto at a price of 100% of the principal amount thereof on the
Closing Date hereafter mentioned.
3. Delivery of the $__________ in aggregate principal amount of the
Series __ Notes will be made at the offices of _________________________,
_______________,
EXHIBIT F
(to Note Agreement)
_________, against payment therefor in Federal Reserve or other funds current
and immediately available at the principal office of Banc One Capital Markets,
Inc., Chicago, Illinois in the amount of the purchase price at 10:00 A.M.,
Chicago time, on __________, _____ or such later date (not later than _____,
_____) as shall mutually be agreed upon by the Company and the Purchasers of the
Series ____ Notes (the "Closing Date").
4. [Here insert prepayment provisions (including any applicable premium
upon default and acceleration), closing conditions and representations and
warranties applicable to Series ___ Notes].
5. The Purchaser represents and warrants that the representations and
warranties set forth in Section 3.2 of the Note Agreements are true and correct
on the date hereof with respect to the Series __ Notes.
6. The Company and each Purchaser agree to be bound by and comply with
the terms and provisions of the Note Agreements as if such Purchaser were an
original signatory to the Note Agreements.
The execution hereof shall constitute a contract between the Company
and the Purchaser(s) for the uses and purposes hereinabove set forth, and this
agreement may be executed in any number of counterparts, each executed
counterpart constituting an original but all together only one agreement.
UNIVERSAL FOREST PRODUCTS, INC.
By
--------------------------------------
Printed Name:
------------------------
Its:
---------------------------------
Accepted as of __________, _____
[VARIATION]
By
--------------------------------------
Printed Name:
------------------------
Its:
---------------------------------
F-2
FORM OF SERIES __ NOTE
___% Series __ Note, Tranche __,
Due _________
PPN ____________
No.
---------------
$
UNIVERSAL FOREST PRODUCTS, INC., a Michigan corporation (the
"Company"), for value received, hereby promises to pay to
or registered assigns
on the _____ day of ________________
the principal amount of
DOLLARS ($ )
and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at the
rate of ___% per annum from the date hereof until maturity, payable ___________
on the ______ day of _______ and _________ in each year (commencing on
___________________) and at maturity. The Company agrees to pay interest on
overdue principal (including any overdue optional prepayment of principal) and
premium, if any, and (to the extent legally enforceable) on any overdue
installment of interest, at the Overdue Rate after the due date, whether by
acceleration or otherwise, until paid. "Overdue Rate" shall mean the lesser of
(a) the maximum interest rate permitted by law and (b) _____% per annum.
Both the principal hereof and interest hereon are payable at the
principal office of the Company in Grand Rapids, Michigan in coin or currency of
the United States of America which at the time of payment shall be legal tender
for the payment of public and private debts. If any amount of principal,
premium, if any, or interest on or in respect of this Note becomes due and
payable on any date which is not a Business Day, such amount shall be payable on
the immediately succeeding Business Day. "Business Day" means any day other than
a Saturday, Sunday or other day on which banks in either Grand Rapids, Michigan
or New York, New York are required by law to close or are customarily closed.
This Note is one of the ___% Series ____ Notes, Tranche __, due
_________ of the Company in the aggregate principal amount of $_________, which,
together with the 5.63% Series 2002-A Senior Notes, Tranche A, due December 18,
2009 of the Company in the aggregate principal amount of $15,000,000, the 6.16%
Series 2002-A Senior Notes, Tranche B, due December 18, 2012 of the Company in
the
SCHEDULE I
(to [Number] Supplement)
aggregate principal amount of $40,000,000 and any Additional Notes are issued or
to be issued under and pursuant to the terms and provisions of the separate Note
Agreements, each dated as of December 18, 2002 (the "Note Agreements"), entered
into by the Company with the original Purchasers therein referred to and any
Additional Purchasers of Additional Notes and the holder hereof is entitled
equally and ratably with the holders of all other Notes outstanding under the
Note Agreements to all the benefits provided for thereby or referred to therein.
Reference is hereby made to the Note Agreements for a statement of such rights
and benefits.
This Note and the other Notes outstanding under the Note Agreements may
be declared due prior to their expressed maturity dates and certain prepayments
are required to be made thereon, all in the events, on the terms and in the
manner and amounts as provided in the Note Agreements.
The Notes are not subject to prepayment or redemption at the option of
the Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in the
Note Agreements.
This Note is registered on the books of the Company and is transferable
only by surrender thereof at the principal office of the Company duly endorsed
or accompanied by a written instrument of transfer duly executed by the
registered holder of this Note or its attorney duly authorized in writing.
Payment of or on account of principal, premium, if any, and interest on this
Note shall be made only to or upon the order in writing of the registered
holder.
THIS NOTE AND SAID NOTE AGREEMENTS ARE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE.
UNIVERSAL FOREST PRODUCTS, INC.
By
--------------------------------------
Its:
---------------------------------
-2-
================================================================================
GUARANTY AGREEMENT
Dated as of December 18, 2002
By
UNIVERSAL FOREST PRODUCTS OF MODESTO LLC,
TRESSTAR, LLC,
UNIVERSAL TRUSS, INC.,
UFP VENTURES, INC.,
UFP VENTURES II, INC.,
UNIVERSAL FOREST PRODUCTS WESTERN DIVISION, INC.,
UNIVERSAL FOREST PRODUCTS EASTERN DIVISION, INC.,
XXXXXXXX HOLDING COMPANY, INC.,
CONSOLIDATED BUILDING COMPONENTS, INC.,
UNIVERSAL FOREST PRODUCTS XXXXXXXX, LLC,
UNIVERSAL FOREST PRODUCTS INDIANA LIMITED PARTNERSHIP,
UNIVERSAL FOREST PRODUCTS TEXAS LIMITED PARTNERSHIP,
UNIVERSAL FOREST PRODUCTS HOLDING COMPANY, INC.,
UFP REAL ESTATE, INC.,
SYRACUSE REAL ESTATE, LLC
and
UNIVERSAL FOREST PRODUCTS RECLAMATION CENTER, INC.
Re: $55,000,000 Senior Notes
due 2009-2012
of
UNIVERSAL FOREST PRODUCTS, INC.
================================================================================
GUARANTY AGREEMENT
PARTIES
THIS GUARANTY AGREEMENT, dated as of December 18, 2002 (this
"Guaranty"), is made by UNIVERSAL FOREST PRODUCTS OF MODESTO LLC, TRESSTAR, LLC,
UFP VENTURES, INC., UFP VENTURES II, INC., CONSOLIDATED BUILDING COMPONENTS,
INC., UNIVERSAL FOREST PRODUCTS EASTERN DIVISION, INC., UNIVERSAL FOREST
PRODUCTS WESTERN DIVISION, INC., XXXXXXXX HOLDING COMPANY, INC., UNIVERSAL
FOREST PRODUCTS XXXXXXXX, LLC, UFP REAL ESTATE, INC., UNIVERSAL TRUSS, INC.,
UNIVERSAL FOREST PRODUCTS INDIANA LIMITED PARTNERSHIP, UNIVERSAL FOREST PRODUCTS
TEXAS LIMITED PARTNERSHIP, UNIVERSAL FOREST PRODUCTS HOLDING COMPANY, INC.,
SYRACUSE REAL ESTATE, LLC AND UNIVERSAL FOREST PRODUCTS RECLAMATION CENTER, INC.
(each, a "Guarantor" and collectively, the "Guarantors") in favor of each of the
Noteholders (as defined below).
RECITALS
A. Each Guarantor is wholly-owned, directly or indirectly, by Universal
Forest Products, Inc., a corporation incorporated under the laws of Michigan
(the "Company").
B. Pursuant to the separate and several Note Agreements, each dated as
of December 18, 2002 (the "Note Agreements"), between the Company and the
Purchasers named on Schedule I thereto (each, a "Purchaser," and collectively,
the "Purchasers"), the Company has agreed to issue and sell to the Purchasers
(a) $15,000,000 in principal amount of the Company's 5.63% Series 2002-A Senior
Notes, Tranche A, due December 18, 2009 (the "Tranche A Notes") and (b)
$40,000,000 in principal amount of the Company's 6.16% Series 2002-A Senior
Notes, Tranche B, due December 18, 2012 (the "Tranche B Notes"; the Tranche B
Notes and the Tranche A Notes are hereinafter collectively referred to as the
"Notes").
C. Each Guarantor will receive substantial direct and indirect benefit
from the sale of the Notes.
D. The Purchasers have required as a condition to their purchase of the
Notes that the Guarantors enter into this Guaranty as security for the Notes and
accordingly the Guarantors have agreed to provide this Guaranty.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and for the purpose of
inducing the Purchasers to purchase the Notes and in further consideration of
the sum of Ten Dollars ($10.00) paid to the Guarantors by the Purchasers, the
receipt and sufficiency of which is hereby acknowledged, the Guarantors do
hereby covenant and agree as follows:
1. Defined Terms. As used in this Guaranty, terms defined in the first
paragraph of this Guaranty and in the recital paragraphs are used herein as
defined therein, and the following terms shall have the following meanings:
"Cumulative Guarantors" shall mean the Guarantors and all other future
guarantors of the Liabilities.
"Liabilities" shall mean all indebtedness, obligations and liabilities
of the Company to any of the Noteholders in connection with or pursuant to the
Note Agreements and the Notes, including, without limitation, all principal,
interest, premium, charges, fees and all costs and expenses, including, without
limitation, reasonable fees and expenses of counsel, in each case whether now
existing or hereafter arising, direct or indirect, absolute or contingent, joint
and/or several, secured or unsecured, arising by operation of law or otherwise.
"Noteholders" shall mean the Purchasers and any subsequent holders of
the Notes.
All other capitalized terms used but not defined herein shall have the
meanings ascribed thereto in the Note Agreements.
2. Guarantee. (a) Each Guarantor hereby guarantees to the Noteholders,
irrevocably, absolutely and unconditionally, as primary obligor and not as
surety only, the prompt and complete payment of the Liabilities.
(b) All payments to be made under this Guaranty (except
pursuant to paragraph (c) below) shall be made to each Noteholder pro
rata in accordance with the unpaid amount of Liabilities held by each
Noteholder at the time of such payment.
(c) The Guarantors agree to make prompt payment, on demand, of
any and all reasonable costs and expenses incurred by any Noteholder in
connection with enforcing the obligations of any of the Guarantors
hereunder, including, without limitation, the reasonable fees and
disbursements of counsel.
3. Consents to Renewals, Modifications and other Actions and Events.
This Guaranty and all of the obligations of the Guarantors hereunder shall
remain in full force and effect without regard to and shall not be released,
affected or impaired by: (a) any amendment, assignment, transfer, modification
of or addition or supplement to the Liabilities or any of the Note Agreements;
(b) any extension, indulgence, increase in the Liabilities or other action or
inaction in respect of any of the Note Agreements or otherwise with respect to
the Liabilities, or any acceptance of security for, or other guaranties of, any
of the Liabilities or Note Agreements, or any surrender, release, exchange,
impairment or alteration of any such security or guaranties, including, without
limitation, the failing to perfect a security interest in any such security or
abstaining from taking advantage of or realizing upon any other guaranties or
upon any security interest in any such security; (c) any default by the Company
under, or any lack of due execution, invalidity or unenforceability of, or any
irregularity or other defect in, any of the Note Agreements; (d) any waiver by
any Noteholder or any other person of any required performance or otherwise of
any condition precedent or waiver of any requirement imposed by any of the
-2-
Note Agreements, any other guaranties or otherwise with respect to the
Liabilities; (e) any exercise or non-exercise of any right, remedy, power or
privilege in respect of this Guaranty, any other guaranty or any of the Note
Agreements; (f) any sale, lease, transfer or other disposition of the assets of
the Company or any consolidation or merger of the Company with or into any other
person, corporation, or entity, or any transfer or other disposition of any
shares of capital stock of the Company; (g) any bankruptcy, insolvency,
reorganization or similar proceedings involving or affecting the Company or any
other guarantor of the Liabilities; (h) the release or discharge of the Company
from the performance or observance of any agreement, covenant, term or condition
under any of the Liabilities or contained in any of the Note Agreements, of any
Cumulative Guarantor or of this Guaranty, by operation of law or otherwise; or
(i) any other cause whether similar or dissimilar to the foregoing which, in the
absence of this provision, would release, affect or impair the obligations,
covenants, agreements or duties of any Guarantor hereunder or constitute a
defense hereto, including, without limitation, any act or omission by any
Noteholder or any other person which increases the scope of any Guarantor's
risk, and in each case described in this paragraph whether or not any Guarantor
shall have notice or knowledge of any of the foregoing, each of which is
specifically waived by each Guarantor. Each Guarantor warrants to the
Noteholders that it has adequate means to obtain from the Company on a
continuing basis information concerning the financial condition and other
matters with respect to the Company and that it is not relying on any Noteholder
to provide such information either now or in the future.
4. Waivers, Etc. Each Guarantor unconditionally waives: (a) notice of
any of the matters referred to in Paragraph 3 above; (b) all notices which may
be required by statute, rule of law or otherwise to preserve any rights of any
Noteholder, including, without limitation, notice to the Guarantors of default,
presentment to and demand of payment or performance from the Company and protest
for non-payment or dishonor; (c) any right to the exercise by any Noteholder of
any right remedy, power or privilege in connection with any of the Note
Agreements; (d) any requirement of diligence or marshaling on the part of any
Noteholder; (e) any requirement that any Noteholder, in the event of any default
by the Company, first make demand upon or seek to enforce remedies against, the
Company or any other Cumulative Guarantor before demanding payment under or
seeking to enforce this Guaranty; (f) any right to notice of the disposition of
any security which any Noteholder may hold from the Company or otherwise and any
right to object to the commercial reasonableness of the disposition of any such
security; and (g) all errors and omissions in connection with any Noteholder's
administration of any of the Liabilities, any of the Note Agreements or any
other Cumulative Guarantor, or any other act or omission of any Noteholder which
changes the scope of such Guarantor's risk. The obligations of each Guarantor
hereunder shall be complete and binding forthwith upon the execution of this
Guaranty by it and subject to no condition whatsoever, precedent or otherwise,
and notice of acceptance hereof or action in reliance hereon shall not be
required.
5. Nature of Guaranty; Payments. This Guaranty is an absolute,
unconditional, irrevocable and continuing guaranty of payment and not a guaranty
of collection, and is wholly independent of and in addition to other rights and
remedies of any Noteholder with respect to the Company, any collateral, any
Cumulative Guarantor or otherwise, and it is not contingent upon the pursuit by
any Noteholder of any such rights and remedies, such pursuit being hereby waived
by each Guarantor. The obligations of each Guarantor hereunder shall be
continuing and shall
-3-
continue (irrespective of any statute of limitations otherwise applicable) and
cover and include all the Liabilities of the Company accruing or in the process
of accruing to the Noteholders before the Noteholders deliver to the Guarantors
a release of this Guaranty, which is in writing, refers specifically to this
Guaranty, and is signed by a President, a Senior Vice-President, or a
Vice-President of each Noteholder. Nothing shall discharge or satisfy the
liability of any Guarantor hereunder except the full and irrevocable payment and
performance of all of the Liabilities and the expiration or termination of all
the Note Agreements. All payments to be made by the Guarantors hereunder shall
be made without set-off or counterclaim, and each Guarantor hereby waives the
assertion of any set-off or counterclaim in any proceeding to enforce its
obligations hereunder. All payments to be made by each Guarantor hereunder shall
also be made without deduction or withholding for, or on account of, any present
or future taxes or other similar charges of whatsoever nature, provided that if
any Guarantor is nevertheless required by law to make any deduction or
withholding, such Guarantor shall pay to the Noteholders such additional amounts
as may be necessary to ensure that the Noteholders shall receive a net sum equal
to the sum which it would have received had no such deduction or withholding
been made. Each Guarantor agrees that, if at any time all or any part of any
payment previously applied by any Noteholder to any of the Liabilities must be
returned by such Noteholder for any reason, whether by court order,
administrative order, or settlement and whether as a "voidable preference",
"fraudulent conveyance" or otherwise, each Guarantor remains liable for the full
amount returned as if such amount had never been received by such Noteholder,
notwithstanding any termination of this Guaranty or any cancellation of any of
the Note Agreements and the Liabilities and all obligations of each Guarantor
hereunder shall be reinstated in such case.
6. Evidence of Liabilities. Each Noteholder's books and records showing
the Liabilities shall be admissible in any action or proceeding, shall be
binding upon each Guarantor for the purpose of establishing the Liabilities due
from the Company and shall constitute prima facie proof, absent manifest error,
of the Liabilities of the Company to such Noteholder, as well as the obligations
of each Guarantor to such Noteholder.
7. Subordination, Subrogation, Contribution, Etc. Each Guarantor agrees
that all present and future indebtedness, obligations and liabilities of the
Company to such Guarantor shall be fully subordinate and junior in right and
priority of payment to any indebtedness of the Company to the Noteholders, and
no Guarantor shall have any right of subrogation, contribution (including,
without limitation, the contribution and subrogation rights granted below),
reimbursement or indemnity whatsoever nor any right of recourse to security for
the debts and obligations of the Company unless and until all Liabilities shall
have been paid in full, such payment is not subject to any possibility of
revocation or rescission and all Note Agreements have expired or been
terminated. Subject to the preceding sentence, if any Guarantor makes a payment
in respect of the Liabilities it shall be subrogated to the rights of the payee
against the Company with respect to such payment and shall have the rights of
contribution set forth below against all other Cumulative Guarantors and each
Guarantor agrees that all other Cumulative Guarantors shall have the rights of
contribution against it set forth below. If any Guarantor makes a payment in
respect of the Liabilities that is smaller in proportion to its Payment Share
(as hereinafter defined) than such payments made by the other Cumulative
Guarantors are in proportion to the amounts of their respective Payment Shares,
such Guarantor shall, when
-4-
permitted by the first sentence of this Section 7, pay to the other Guarantors
an amount such that the net payments made by the Cumulative Guarantors in
respect of the Liabilities shall be shared among the Cumulative Guarantors pro
rata in proportion to their respective Payment Shares. If any Guarantor receives
any payment by way of subrogation that is greater in proportion to the amount of
its Payment Share than the payments received by the other Cumulative Guarantors
are in proportion to the amounts of their respective Payment Shares, such
Guarantor shall, when permitted by the first sentence of this Section 7, pay to
the other Cumulative Guarantors an amount such that the subrogation payments
received by the Guarantors shall be shared among the Cumulative Guarantors pro
rata in proportion to their respective Payment Shares.
For purposes of this Guaranty, the "Payment Share" of any Cumulative
Guarantor shall be the sum of (a) the aggregate proceeds of the Liabilities
received by such Guarantor (and, if received subject to a repayment obligation,
remaining unpaid on the Determination Date (as hereinafter defined)), plus (b)
the product of (i) the aggregate Liabilities remaining unpaid on the date such
Liabilities become due and payable in full, whether by stated maturity,
acceleration or otherwise (the "Determination Date") reduced by the amount of
such Liabilities attributed to all of the Cumulative Guarantors pursuant to
clause (a) above, times (ii) a fraction, the numerator of which is such
Guarantor's net worth on the effective date of this Guaranty (determined as of
the end of the immediately preceding fiscal reporting period of the Guarantor),
and the denominator of which is the aggregate net worth of all of the Cumulative
Guarantors, determined for each Cumulative Guarantor on the respective effective
date of the guaranty signed by such Cumulative Guarantor.
8. Assignment by Noteholders. Each Noteholder shall have the right to
assign and transfer this Guaranty to any assignee of any portion of the
Liabilities. Each Noteholder's successors and assigns hereunder shall have the
right to rely upon and enforce this Guaranty.
9. Joint and Several Obligations. The obligations of the Guarantors
hereunder and all other Cumulative Guarantors shall be joint and several and
each Guarantor shall be liable for all of the Liabilities to the extent provided
herein regardless of any other Cumulative Guarantors, and each Noteholder shall
have the right, in its sole discretion to pursue its remedies against any
Guarantor without the need to pursue its remedies against any other Cumulative
Guarantor, whether now or hereafter in existence, or against any one or more
Cumulative Guarantors separately or against any two or more jointly, or against
some separately and some jointly.
10. Representations and Warranties. Each Guarantor hereby represents
and warrants to the Noteholders that:
(a) the execution, delivery and performance by the Guarantor
of this Guaranty are within its corporate powers, have been duly
authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency or
official, and do not contravene or constitute a default under, any
provision of applicable law or regulation or of the articles of
incorporation or other charter documents or bylaws of such Guarantor,
or of any agreement, judgment, injunction, order, decree or other
instrument binding upon such Guarantor, or result in the creation or
imposition of any lien, security interest or other charge or
encumbrance on any asset of such Guarantor;
-5-
(b) this Guaranty constitutes a legal, valid and binding
agreement of each Guarantor, enforceable against such Guarantor in
accordance with its terms;
(c) as of the date hereof, each of the following is true and
correct for each Guarantor, assuming value is given to the rights of
contribution and subrogation as described in Section 7 hereof: (i) the
fair saleable value and the fair valuation of such Guarantor's property
is greater than the total amount of its liabilities (including
contingent liabilities) and greater than the amount that would be
required to pay its probable aggregate liability on its existing debts
as they become absolute and matured, (ii) each Guarantor's capital is
not unreasonably small in relation to its current and/or contemplated
business or other undertaken transactions and (iii) each Guarantor does
not intend to incur, or believe that it will incur, debt beyond its
ability to pay such debts as they become due; and
(d) the Company and the Guarantors are engaged as an
integrated group in the business of providing related services; the
integrated operation requires financing on such a basis that proceeds
from the sale of Notes paid to the Company by the Purchasers can be
made available from time to time to various subsidiaries of the
Company, as required for the continued successful operation of the
integrated group as a whole; and each Guarantor has requested that the
Purchasers purchase the Notes from the Company for the purpose of
financing the integrated operations of the Company and its
subsidiaries, including such Guarantor, with such Guarantor expecting
to derive benefit, direct or indirectly, from the purchase of the Notes
by the Purchasers from the Company, both in such Guarantor's separate
capacity and as a member of the integrated group, inasmuch as the
successful operation and condition of such Guarantor is dependent upon
the continued successful performance of the functions of the integrated
group as a whole. Each of the Guarantors hereby determines and agrees
that the execution, delivery and performance of this Guaranty are
necessary and convenient to the conduct, promotion or attainment of the
business of such Guarantor and in furtherance of the corporate purposes
of such Guarantor.
11. Binding on Successors and Assigns. This Guaranty shall be the
valid, binding and enforceable obligation of the Guarantors and their successors
and assigns.
12. Indemnity. As a separate, additional and continuing obligation,
each Guarantor unconditionally and irrevocably undertakes and agrees with each
Noteholder that, should the Liabilities not be recoverable from any Guarantor as
guarantor under this Guaranty for any reason whatsoever (including, without
limitation, by reason of any provision of any of the Liabilities or the Note
Agreements being or becoming void, unenforceable, or otherwise invalid under any
applicable law) then, notwithstanding any knowledge thereof by any Noteholder at
any time, each Guarantor as original and independent obligor, upon demand by the
Noteholders, will make payment to the Noteholders of the Liabilities by way of a
full indemnity.
13. Cumulative Rights and Remedies, Etc. The obligations of each
Guarantor under this Guaranty are continuing obligations and a new cause of
action shall arise in respect of each default hereunder. No course of dealing on
the part of any Noteholder, nor any delay or failure
-6-
on the part of any Noteholder in exercising any right, power or privilege
hereunder, shall operate as a waiver of such right, power, or privilege or
otherwise prejudice the Noteholders' rights and remedies hereunder, nor shall
any single or partial exercise thereof preclude any further exercise thereof or
the exercise of any other right, power or privilege. No right or remedy
conferred upon or reserved to any Noteholder under this Guaranty is intended to
be exclusive of any other right or remedy, and every right and remedy shall be
cumulative and in addition to every other right or remedy given hereunder or now
or hereafter existing under any applicable law. Every right and remedy given by
this Guaranty or by applicable law to the Noteholders may be exercised from time
to time and as often as may be deemed expedient by any Noteholder.
14. Severability. If any one or more provisions of this Guaranty should
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected, impaired, prejudiced or disturbed thereby, and any provision
hereunder found partially unenforceable shall be interpreted to be enforceable
to the fullest extent possible. If at any time all or any portion of the
obligation of any Guarantor under this Guaranty would otherwise be determined by
a court of competent jurisdiction to be invalid, unenforceable or avoidable
under Section 548 of the federal Bankruptcy Code or under any fraudulent
conveyance or transfer laws or similar applicable law of any jurisdiction, then
notwithstanding any other provisions of this Guaranty to the contrary such
obligation or portion thereof of such Guarantor under this Guaranty shall be
limited to the greatest of (i) the value of any quantified economic benefits
accruing to such Guarantor as a result of this Guaranty, (ii) an amount equal to
95% of the excess on the date the relevant Liabilities were incurred of the
present fair saleable value of the assets of such Guarantor over the amount of
all liabilities of such Guarantor, contingent or otherwise and (iii) the maximum
amount of which this Guaranty is determined to be enforceable.
15. Merger, Amendments. This Guaranty is intended as a final expression
of the subject matter hereof and is also intended as a complete and exclusive
statement of the terms hereof. Each Guarantor's liability hereunder is
independent of and in addition to its liability under any other guaranty
previously of subsequently executed. No course of dealing, course of performance
or trade usage, and no parole evidence of any nature, shall be used to
supplement or modify any terms hereof, nor are there any conditions to the full
effectiveness of this Guaranty. None of the terms and provisions of this
Guaranty may be waived, altered, modified or amended in any way except by an
instrument in writing executed by duly authorized officers of each Noteholder
and the Guarantors.
16. Consent to Jurisdiction. Notwithstanding the place where any
Liability originates or arises, or is to be repaid, any suit, action or
proceeding arising out of or relating to this Guaranty or any of the Note
Agreements may be instituted in any court of the United States of America or the
State of Illinois, sitting in the City of Chicago, State of Illinois, and each
Guarantor hereby irrevocably waives any objection which it may have or hereafter
have to the laying of the venue of any such suit, action or proceeding and any
claim that any such suit action or proceeding has been brought in an
inconvenient forum; and each Guarantor hereby irrevocably submits his person and
property to the jurisdiction of any such court in any such suit, action or
proceeding. Each Guarantor hereby consents to the service of process in any suit
action or proceeding of the nature referred to in this paragraph by the mailing
of a copy thereof
-7-
by registered or certified mail, postage prepaid, or personally delivering a
copy thereof to such Guarantor, at the address set forth under its signature
below, or at such other address as such Guarantor may hereafter specify to the
Noteholders in writing. Nothing in this paragraph shall affect the right of any
Noteholder to serve process in any other manner permitted by law or limit the
right of the Noteholders to bring proceedings against any Guarantor or any of
its property in the courts of any other jurisdiction in which it is subject to
service of process. To the extent that any Guarantor now or hereafter may be
entitled, in any jurisdiction in which proceedings may at any time be commenced
with respect to this Guaranty or the transactions contemplated hereby, to claim
itself or its revenues, assets or properties any immunity (including, without
limitation, immunity from service of process, jurisdiction, suit, judgment,
counterclaim, enforcement of or execution on a judgment attachment prior to the
judgment, attachment in aid of execution of a judgment or other legal process),
and to the extent that in any such jurisdiction there may be attributed any such
immunity (whether or not claimed), such Guarantor hereby irrevocably undertakes
not to claim and hereby irrevocably waives any such immunity to the fullest
extent permitted by law. Each Guarantor irrevocably and generally consents in
respect of any proceedings to the giving of any relief or the issue of any
process in connection with those proceedings including, without limitation, the
making, enforcement or execution against any assets whatsoever of any order or
judgment which may be made or given in those proceedings.
17. Governing Law; Headings. This Guaranty shall be governed by and
construed in accordance with the laws of the State of Michigan without giving
effect to the choice of law principles of such state. The headings of the
various paragraphs hereof are for the convenience of reference only and shall in
no way modify any of the terms or provisions hereof.
18. Notices. Any notice, demand, consent or request given or made to
each Guarantor by any Noteholder shall be deemed to have been duly given or made
if sent in writing (including telecommunications) to such Guarantor to the
address or telex or telecopy number set forth below the name of such Guarantor
on the signature page hereof, or at such other address or telex or telecopy
number as such Guarantor may hereafter specify to the Noteholders in writing.
All notices or other communications sent by means of telecopy, telex or other
wire transmission shall be made with request for assurance of receipt in a
manner typical with respect to communications of that type. Written notices or
other communications shall be deemed delivered upon receipt if delivered by hand
or by telecopy, three business days after mailing if mailed, or one business day
after deposit with an overnight courier service if delivered by overnight
courier. Notices or other communications delivered by hand shall be deemed
delivered upon receipt.
19. WAIVER OF JURY TRIAL. THE NOTEHOLDERS, IN ACCEPTING THIS GUARANTY,
AND THE GUARANTORS, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT
WITH COUNSEL, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF
THEM MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF
THIS GUARANTY OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED BY THIS GUARANTY OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY OF THEM. NEITHER THE NOTEHOLDERS NOR
THE GUARANTORS SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH
ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER
-8-
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS
SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY ANY
OF THE NOTEHOLDERS OR THE GUARANTORS EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY
ALL OF THEM. THIS GUARANTY IS FREELY AND VOLUNTARILY GIVEN TO THE NOTEHOLDERS BY
THE GUARANTORS WITHOUT ANY DURESS OR COERCION, AND AFTER EACH GUARANTOR HAS
EITHER CONSULTED WITH COUNSEL OR BEEN GIVEN AN OPPORTUNITY TO DO SO. EACH
GUARANTOR HAS CAREFULLY AND COMPLETELY READ ALL OF THE TERMS AND PROVISIONS OF
THIS GUARANTY AND OF EACH NOTE AGREEMENT.
[INTENTIONALLY BLANK]
-9-
UNIVERSAL FOREST PRODUCTS OF MODESTO
LLC
By
Its
------------------------------------
TRESSTAR, LLC
By
Its
------------------------------------
UNIVERSAL TRUSS, INC.
By
Its
------------------------------------
UFP VENTURES, INC.
By
Its
------------------------------------
-10-
UFP VENTURES II, INC.,
By
Its
------------------------------------
UNIVERSAL FOREST PRODUCTS WESTERN
DIVISION, INC.
By
Its
------------------------------------
UNIVERSAL FOREST PRODUCTS EASTERN
DIVISION, INC.
By
Its
------------------------------------
XXXXXXXX HOLDING COMPANY, INC.
By
Its
------------------------------------
CONSOLIDATED BUILDING COMPONENTS, INC.
By
Its
------------------------------------
-00-
XXXXXXXXX XXXXXX PRODUCTS XXXXXXXX,
LLC.
By
Its
------------------------------------
UNIVERSAL FOREST PRODUCTS INDIANA
LIMITED PARTNERSHIP
By
Its
------------------------------------
UNIVERSAL FOREST PRODUCTS TEXAS
LIMITED PARTNERSHIP
By
Its
------------------------------------
UNIVERSAL FOREST PRODUCTS HOLDING
COMPANY, INC.
By
Its
------------------------------------
UFP REAL ESTATE, INC.
By
Its
------------------------------------
-12-
SYRACUSE REAL ESTATE, LLC
By
Its
------------------------------------
UNIVERSAL FOREST PRODUCTS RECLAMATION
CENTER, INC.
By
Its
------------------------------------
-13-
