__________________________________________________________________________
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MATSON NAVIGATION COMPANY, INC.
$50,000,000
PRIVATE SHELF AGREEMENT
June 29, 2001
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TABLE OF CONTENTS
SECTION PAGE NO.
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1. AUTHORIZATION OF ISSUE OF NOTES..................................1
2A. Intentionally Omitted............................................2
2B. Purchase and Sale of Notes.......................................2
2B(1). Facility ................................................2
2B(2). Issuance Period..........................................2
2B(3). Request for Purchase.....................................2
2B(4). Rate Quotes..............................................3
2B(5). Acceptance...............................................3
2B(6). Market Disruption........................................4
2B(7). Facility Closings........................................4
2B(8). Fees.....................................................5
2B(8)(i). Structuring Fee...............................5
2B(8)(ii) Issuance Fee..................................5
2B(8)(iii) Delayed Delivery Fee..........................5
2B(8)(iv) Cancellation Fee..............................5
3. CONDITIONS OF CLOSING............................................6
3A. Certain Documents................................................6
3B. Representations and Warranties; No Default.......................7
3C. Purchase Permitted by Applicable Laws............................7
3D. Payment of Fees..................................................7
4. PREPAYMENTS......................................................8
4A. Required Prepayments of Notes....................................8
4B. Optional Prepayment with Yield-Maintenance Amount................8
4C. Notice of Optional Prepayment....................................8
4D. Application of Prepayments.......................................8
4E. Retirement of Notes..............................................8
5. AFFIRMATIVE COVENANTS............................................9
5A. Financial Statements.............................................9
5B. Inspection of Property..........................................10
5C. Covenant to Secure Note Equally.................................10
5D. Information Required by Rule 144A...............................10
5E. Maintenance of Properties; Insurance............................11
6. NEGATIVE COVENANTS..............................................11
6A. Financial Covenants.............................................11
6A(1). Working Capital Requirement.............................11
6A(2). Net Worth Requirement...................................11
6A(3). Fixed Charge Coverage Requirement.......................11
6B. Dividend and Investment Limitation..............................11
6C. Lien, Debt and Other Restrictions...............................11
6C(1). Liens...................................................11
6C(2). Funded Debt.............................................13
6C(3). Merger..................................................13
6C(4). Sale of Assets..........................................13
6C(5). Sale of Stock and Debt of Subsidiaries..................14
6C(6). Sale and Lease-Back.....................................14
6C(7). Transactions with Affiliates and Subsidiaries...........14
6C(8). Loans, Advances and Investments.........................14
7. EVENTS OF DEFAULT 15
7A. Acceleration....................................................15
7B. Rescission of Acceleration......................................18
7C. Notice of Acceleration or Rescission............................18
7D. Other Remedies..................................................18
8. REPRESENTATIONS, COVENANTS AND WARRANTIES.......................18
8A. Organization....................................................19
8B. Financial Statements............................................19
8C. Actions Pending.................................................19
8D. Outstanding Debt................................................20
8E. Title to Properties.............................................20
8F. Taxes...........................................................20
8G. Conflicting Agreements and Other Matters........................20
8H. Offering of the Notes...........................................20
8I. Regulation U, etc...............................................21
8J. ERISA...........................................................21
8K. Governmental Consent............................................21
8L. Holding Company and Investment Company Status...................21
8M. Possession of Franchises, Licenses, etc.........................22
8N. Environmental and Safety Matters................................22
8O. Hostile Tender Offers...........................................22
8P. Employee Relations..............................................22
8Q. Regulations and Legislation.....................................22
8R. Disclosure......................................................23
9. REPRESENTATIONS OF EACH PURCHASER...............................23
9A. Nature of Purchase..............................................23
9B. Source of Funds.................................................23
10. DEFINITIONS; ACCOUNTING MATTERS.................................23
10A. Yield Maintenance Terms.........................................23
10B. Other Terms.....................................................25
10C. Accounting Principles, Terms and Determinations.................32
11. MISCELLANEOUS...................................................33
11A. Note Payments...................................................33
11B. Expenses........................................................33
11C. Consent to Amendments...........................................33
11D. Form; Registration, Transfer and Exchange of Notes..............34
11E. Persons Deemed Owners, Participations...........................35
11F. Survival of Representations and Warranties; Entire Agreement....35
11G. Successors and Assigns..........................................35
11H. Independence of Covenants.......................................35
11I. Notices.........................................................36
11J. Descriptive Headings............................................36
11K. Satisfaction Requirement........................................36
11L. Governing Law...................................................36
11M. Payments Due on Non-Business Days...............................37
11N. Severability....................................................37
11O. Severalty of Obligations........................................37
11P. Counterparts....................................................37
11Q. Binding Agreement...............................................38
SCHEDULES AND EXHIBITS
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Information Schedule
Exhibit A -- Form of Note
Exhibit B -- Form of Request for Purchase
Exhibit C -- Form of Confirmation of Acceptance
Exhibit D -- Form of Opinion of Company's General Counsel
Schedule 8G -- Agreements Restricting Incurrence of Debt
MATSON NAVIGATION COMPANY, INC.
333 Market Street
San Francisco, California 94120
As of June 29, 2001
The Prudential Insurance Company
of America ("PRUDENTIAL")
Each Prudential Affiliate (as hereinafter
defined) which becomes bound by certain
provisions of this Agreement as hereinafter
provided (together with Prudential,
the "PURCHASERS")
c/o Prudential Capital Group
Four Embarcadero Center
Suite 2700
San Francisco, CA 94111
Ladies and Gentlemen:
The undersigned, Matson Navigation Company, Inc. (the "Company") hereby
agrees with you as follows:
1. AUTHORIZATION OF ISSUE OF NOTES. The Company has authorized the
issue of its senior promissory notes in the aggregate principal amount of
$50,000,000, to be dated the date of issue thereof, to mature, in the case of
each Note so issued, no more than twelve years from the date of original
issuance, to have an average life, in the case of each Note so issued, of no
more than ten years, to bear interest on the unpaid balance thereof from the
date thereof at the rate per annum, and to have such other particular terms, as
shall be set forth, in the case of each Note so issued, in the Confirmation of
Acceptance with respect to such Note delivered pursuant to paragraph 2B(5), and
to be substantially in the form of Exhibit A attached hereto. The terms "NOTE"
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and "NOTES" as used herein shall include each Note delivered pursuant to any
provision of this Agreement and each Note delivered in substitution or exchange
for any such Note pursuant to any such provision. Notes which have (i) the
same final maturity, (ii) the same principal prepayment dates, (iii) the same
principal prepayment amounts (as a percentage of the original principal amount
of each Note), (iv) the same interest rate, (v) the same interest payment
periods and (vi) the same date of issuance (which, in the case of a Note issued
in exchange for another Note, shall be deemed for these purposes the date on
which such Note's ultimate predecessor Note was issued), are herein called a
"SERIES" of Notes.
2A. INTENTIONALLY OMITTED.
2B. PURCHASE AND SALE OF NOTES.
2B(1). FACILITY. Prudential is willing to consider, in its sole
discretion and within limits which may be authorized for purchase by Prudential
and Prudential Affiliates from time to time, the purchase of Notes pursuant to
this Agreement. The willingness of Prudential to consider such purchase of
Notes is herein called the "FACILITY". At any time, the aggregate principal
amount of Notes stated in paragraph 1, minus the aggregate principal amount of
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Notes purchased and sold pursuant to this Agreement prior to such time, and
minus the aggregate principal amount of Accepted Notes (as hereinafter defined)
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which have not yet been purchased and sold hereunder prior to such time, is
herein called the "AVAILABLE FACILITY AMOUNT" at such time. NOTWITHSTANDING
THE WILLINGNESS OF PRUDENTIAL TO CONSIDER PURCHASES OF NOTES, THIS AGREEMENT IS
ENTERED INTO ON THE EXPRESS UNDERSTANDING THAT NEITHER PRUDENTIAL NOR ANY
PRUDENTIAL AFFILIATE SHALL BE OBLIGATED TO MAKE OR ACCEPT OFFERS TO PURCHASE
NOTES, OR TO QUOTE RATES, SPREADS OR OTHER TERMS WITH RESPECT TO SPECIFIC
PURCHASES OF NOTES, AND THE FACILITY SHALL IN NO WAY BE CONSTRUED AS A
COMMITMENT BY PRUDENTIAL OR ANY PRUDENTIAL AFFILIATE.
2B(2). ISSUANCE PERIOD. Notes may be issued and sold pursuant to this
Agreement until the earlier of (i) the third anniversary of the date of this
Agreement (or if such anniversary is not a Business Day, the Business Day next
preceding such anniversary) and (ii) the thirtieth day after Prudential shall
have given to the Company, or the Company shall have given to Prudential, a
written notice stating that it elects to terminate the issuance and sale of
Notes pursuant to this Agreement (or if such thirtieth day is not a Business
Day, the Business Day next preceding such thirtieth day). The period during
which Notes may be issued and sold pursuant to this Agreement is herein called
the "ISSUANCE PERIOD".
2B(3). REQUEST FOR PURCHASE. The Company may from time to time during
the Issuance Period make requests for purchases of Notes (each such request
being herein called a "REQUEST FOR PURCHASE"). Each Request for Purchase shall
be made to Prudential by telefacsimile or overnight delivery service, and shall
(i) specify the aggregate principal amount of Notes covered thereby, which
shall not be less than $5,000,000 and not be greater than the Available
Facility Amount at the time such Request for Purchase is made, (ii) specify the
principal amounts, final maturities, principal prepayment dates and amounts and
interest payment periods (monthly, quarterly or semiannual in arrears) of the
Notes covered thereby, (iii) specify the use of proceeds of such Notes,
(iv) specify the proposed day for the closing of the purchase and sale of such
Notes, which shall be a Business Day during the Issuance Period not less than 5
Business Days and not more than 30 Business Days after the making of such
Request for Purchase, (v) specify the number of the account and the name and
address of the depository institution to which the purchase price of such Notes
is to be transferred on the Closing Day for such purchase and sale,
(vi) certify that the representations and warranties contained in paragraph 8
are true on and as of the date of such Request for Purchase and that there
exists on the date of such Request for Purchase no Event of Default or Default,
(vii) specify the Designated Spread for such Notes and (viii) be substantially
in the form of Exhibit B attached hereto. Each Request for Purchase shall be
in writing and shall be deemed made when received by Prudential.
2B(4). RATE QUOTES. Not later than five Business Days after the
Company shall have given Prudential a Request for Purchase pursuant to
paragraph 2B(3), Prudential may, but shall be under no obligation to, provide
to the Company by telephone between 9:30 A.M. and 2:00 P.M. New York City local
time (or such later time as Prudential may elect) interest rate quotes for the
several principal amounts, maturities, principal prepayment schedules, and
interest payment periods of Notes specified in such Request for Purchase. Each
quote shall represent the interest rate per annum payable on the outstanding
principal balance of such Notes at which Prudential or a Prudential Affiliate
would be willing to purchase such Notes at 100% of the principal amount
thereof.
2B(5). ACCEPTANCE. Within five minutes after Prudential shall have
provided any interest rate quotes pursuant to paragraph 2B(4), or such shorter
period as Prudential may specify to the Company (such period herein called the
"ACCEPTANCE WINDOW"), the Company may, subject to paragraph 2B(6), elect to
accept such interest rate quotes as to not less than $5,000,000 aggregate
principal amount of the Notes specified in the related Request for Purchase.
Such election shall be made by an Authorized Officer of the Company notifying
Prudential by telephone or telefacsimile within the Acceptance Window that the
Company elects to accept such interest rate quotes, specifying the Notes (each
such Note being herein called an "ACCEPTED NOTE") as to which such acceptance
(herein called an "ACCEPTANCE") relates. The day the Company notifies an
Acceptance with respect to any Accepted Notes is herein called the "ACCEPTANCE
DAY" for such Accepted Notes. Any interest rate quotes as to which Prudential
does not receive an Acceptance within the Acceptance Window shall expire, and
no purchase or sale of Notes hereunder shall be made based on such expired
interest rate quotes. Subject to paragraph 2B(6) and the other terms and
conditions hereof, the Company agrees to sell to Prudential or a Prudential
Affiliate, and Prudential agrees to purchase, or to cause the purchase by a
Prudential Affiliate of, the Accepted Notes at 100% of the principal amount of
such Notes. As soon as practicable following the Acceptance Day, the Company,
Prudential and each Prudential Affiliate which is to purchase any such Accepted
Notes will execute a confirmation of such Acceptance substantially in the form
of Exhibit C attached hereto (herein called a "CONFIRMATION OF ACCEPTANCE").
If the Company should fail to execute and return to Prudential within three
Business Days following receipt thereof a Confirmation of Acceptance with
respect to any Accepted Notes, Prudential may at its election at any time prior
to its receipt thereof cancel the closing with respect to such Accepted Notes
by so notifying the Company in writing.
2B(6). MARKET DISRUPTION. Notwithstanding the provisions of paragraph
2B(5), if Prudential shall have provided interest rate quotes pursuant to
paragraph 2B(4) and thereafter prior to the time an Acceptance with respect to
such quotes shall have been notified to Prudential in accordance with paragraph
2B(5) the domestic market for U.S. Treasury securities or derivatives shall
have closed or there shall have occurred a general suspension, material
limitation, or significant disruption of trading in securities generally on the
New York Stock Exchange or in the domestic market for U.S. Treasury securities
or derivatives, then such interest rate quotes shall expire, and no purchase or
sale of Notes hereunder shall be made based on such expired interest rate
quotes. If the Company thereafter notifies Prudential of the Acceptance of any
such interest rate quotes, such Acceptance shall be ineffective for all
purposes of this Agreement, and Prudential shall promptly notify the Company
that the provisions of this paragraph 2B(6) are applicable with respect to such
Acceptance.
2B(7). FACILITY CLOSINGS. Not later than 1:30 P.M. (New York City local
time) on the Closing Day for any Accepted Notes, the Company will deliver to
each Purchaser listed in the Confirmation of Acceptance relating thereto at the
offices of Prudential Capital Group the Accepted Notes to be purchased by such
Purchaser in the form of one or more Notes in authorized denominations as such
Purchaser may request for each Series of Accepted Notes to be purchased on the
Closing Day, dated the Closing Day and registered in such Purchaser's name (or
in the name of its nominee), against payment of the purchase price thereof by
transfer of immediately available funds for credit to the account specified by
the Company in the Request for Purchase of such Notes. If the Company fails to
tender to any Purchaser the Accepted Notes to be purchased by such Purchaser on
the scheduled Closing Day for such Accepted Notes as provided above in this
paragraph 2B(7), or any of the conditions specified in paragraph 3 shall not
have been fulfilled by the time required on such scheduled Closing Day, the
Company shall, prior to 2:30 P.M., New York City local time, on such scheduled
Closing Day notify Prudential (which notification shall be deemed received by
each Purchaser) in writing whether (i) such closing is to be rescheduled (such
rescheduled date to be a Business Day during the Issuance Period not less than
one Business Day and not more than 10 Business Days after such scheduled
Closing Day (the "RESCHEDULED CLOSING DAY") and certify to Prudential (which
certification shall be for the benefit of each Purchaser) that the Company
reasonably believes that it will be able to comply with the conditions set
forth in paragraph 3 on such Rescheduled Closing Day and that the Company will
pay the Delayed Delivery Fee in accordance with paragraph 2B(8)(iii) or
(ii) such closing is to be canceled. In the event that the Company shall
fail to give such notice referred to in the preceding sentence, Prudential
(on behalf of each Purchaser) may at its election, at any time after 2:30
P.M., New York City local time, on such scheduled Closing Day, notify the
Company in writing that such closing is to be canceled. Notwithstanding
anything to the contrary appearing in this Agreement, the Company may not elect
to reschedule a closing with respect to any given Accepted Notes on more than
one occasion, unless Prudential shall have otherwise consented in writing.
2B(8). FEES.
2B(8)(i). STRUCTURING FEE. In consideration for the time, effort and
expense involved in the preparation, negotiation and execution of this
Agreement, at the time of the execution and delivery of this Agreement by the
Company and Prudential, the Company shall pay to Prudential in immediately
available funds a fee (herein called the "Structuring Fee") in the amount of
$50,000.
2B(8)(ii). ISSUANCE FEE. The Company agrees to pay to each Purchaser in
immediately available funds a fee (herein called the "ISSUANCE FEE") on each
Closing Day in an amount equal to 0.10% of the aggregate principal amount of
Notes sold to such Purchaser on such Closing Day; provided that (a) no Issuance
Fee shall be due on any Closing Day occurring in 2001 and (b) if at least
$20,000,000 in principal amount of Notes have been issued on or before
September 30, 2001, no Issuance Fee will be due on any Closing Day occurring
prior to March 31, 2002.
2B(8)(iii). DELAYED DELIVERY FEE. If the closing of the purchase
and sale of any Accepted Note is delayed for any reason beyond the original
Closing Day for such Accepted Note, the Company agrees to pay to Prudential (a)
on the Cancellation Date or actual closing date of such purchase and sale and
(b) if earlier, the next Business Day following 90 days after the Acceptance
Day for such Accepted Note and on each Business Day following 90 days after the
prior payment hereunder, a fee (herein called the "DELAYED DELIVERY FEE")
calculated as follows:
(BEY - MMY) X DTS/360 X PA
where "BEY" means Bond Equivalent Yield, i.e., the bond equivalent yield per
annum of such Accepted Note, "MMY" means Money Market Yield, i.e., the yield
per annum on a commercial paper investment of the highest quality selected by
Prudential on the date Prudential receives notice of the delay in the closing
for such Accepted Note having a maturity date or dates the same as, or closest
to, the Rescheduled Closing Day or Rescheduled Closing Days (a new alternative
investment being selected by Prudential each time such closing is delayed);
"DTS" means Days to Settlement, i.e., the number of actual days elapsed from
and including the original Closing Day with respect to such Accepted Note (in
the case of the first such payment with respect to such Accepted Note) or from
and including the date of the next preceding payment (in the case of any
subsequent delayed delivery fee payment with respect to such Accepted Note) to
but excluding the date of such payment; and "PA" means Principal Amount, i.e.,
the principal amount of the Accepted Note for which such calculation is being
made. In no case shall the Delayed Delivery Fee be less than zero. Nothing
contained herein shall obligate any Purchaser to purchase any Accepted Note on
any day other than the Closing Day for such Accepted Note, as the same may be
rescheduled from time to time in compliance with paragraph 2B(7).
2B(8)(iv). CANCELLATION FEE. If the Company at any time notifies
Prudential in writing that the Company is canceling the closing of the purchase
and sale of any Accepted Note, or if Prudential notifies the Company in writing
under the circumstances set forth in the last sentence of paragraph 2B(5) or
the penultimate sentence of paragraph 2B(7) that the closing of the purchase
and sale of such Accepted Note is to be canceled, or if the closing of the
purchase and sale of such Accepted Note is not consummated on or prior to the
last day of the Issuance Period (the date of any such notification, or the last
day of the Issuance Period, as the case may be, being herein called the
"CANCELLATION DATE"), the Company agrees to pay to Prudential in immediately
available funds an amount (the "CANCELLATION FEE") calculated as follows:
PI X PA
where "PI" means Price Increase, i.e., the quotient (expressed in decimals)
obtained by dividing (a) the excess of the ask price (as determined by
Prudential) of the Hedge Treasury Note(s) on the Cancellation Date over the bid
price (as determined by Prudential) of the Hedge Treasury Notes(s) on the
Acceptance Day for such Accepted Note by (b) such bid price; and "PA" has the
meaning ascribed to it in paragraph 2B(8)(iii). The foregoing bid and ask
prices shall be as reported by Bridge\Telerate (or, if such data for any reason
ceases to be available through Bridge\Telerate, any publicly available source
of similar market data). Each price shall be based on a U.S. Treasury security
having a par value of $100.00 and shall be rounded to the second decimal place.
In no case shall the Cancellation Fee be less than zero.
3. CONDITIONS OF CLOSING. On or before the date on which this
Agreement is executed and delivered the Company shall (a) pay to Prudential the
Structuring Fee referenced in paragraph 2B(8)(i) and (b) deliver to Prudential
an amendment to the Note Agreement dated as of July 17, 1992, and the Guaranty
dated as of March 19, 1999, in each case in form and content satisfactory to
Prudential. The obligation of any Purchaser to purchase and pay for any Notes
is subject to the satisfaction, on or before the Closing Day for such Notes, of
the following conditions:
3A. CERTAIN DOCUMENTS. Such Purchaser shall have received the
following, each dated the date of the applicable Closing Day:
(i) The Note(s) to be purchased by such Purchaser.
(ii) Certified copies of the resolutions of the Board of
Directors of the Company authorizing the execution and delivery of
this Agreement and the issuance of the Notes, and of all documents
evidencing other necessary corporate action and governmental
approvals, if any, with respect to this Agreement and the Notes.
(iii) A certificate of the Secretary or an Assistant Secretary
and one other officer of the Company certifying the names and true
signatures of the officers of the Company authorized to sign this
Agreement and the Notes and the other documents to be delivered
hereunder.
(iv) Certified copies of the Certificate of Incorporation and
By-laws of the Company.
(v) A favorable opinion of the Company's general counsel (or such
other counsel designated by the Company and acceptable to the
Purchaser(s)) satisfactory to such Purchaser and substantially in the
form of Exhibit D attached hereto and as to such other matters as
such Purchaser may reasonably request. The Company hereby directs
each such counsel to deliver such opinion, agrees that the issuance
and sale of any Notes will constitute a reconfirmation of such
direction, and understands and agrees that each Purchaser receiving
such an opinion will and is hereby authorized to rely on such opinion.
(vi) A good standing certificate for the Company from the
secretaries of state of Hawaii and California, in each case dated as
of a recent date and such other evidence of the status of each Company
as such Purchaser may reasonably request.
(vii) Additional documents or certificates with respect to legal
matters or corporate or other proceedings related to the transactions
contemplated hereby as may be reasonably requested by such Purchaser.
3B. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The representations
and warranties contained in paragraph 8 shall be true on and as of such Closing
Day, except to the extent of changes caused by the transactions herein
contemplated; there shall exist on such Closing Day no Event of Default or
Default; and the Company shall have delivered to such Purchaser an Officer's
Certificate, dated such Closing Day, to both such effects.
3C. PURCHASE PERMITTED BY APPLICABLE LAWS. The purchase of and payment
for the Notes to be purchased by such Purchaser on the terms and conditions
herein provided (including the use of the proceeds of such Notes by each
Company) shall not violate any applicable law or governmental regulation
(including, without limitation, Section 5 of the Securities Act or Regulation
T, U or X of the Board of Governors of the Federal Reserve System) and shall
not subject such Purchaser to any tax, penalty, liability or other onerous
condition under or pursuant to any applicable law or governmental regulation,
and such Purchaser shall have received such certificates or other evidence as
it may request to establish compliance with this condition. This paragraph 3D
is a closing condition and shall not be construed as a tax indemnity.
3D. PAYMENT OF FEES. The Company shall have paid to Prudential or any
other Purchaser any fees due it pursuant to or in connection with this
Agreement, including the Structuring Fee due pursuant to paragraph 2B(8)(i),
any Issuance Fee due pursuant to paragraph 2B(8)(ii) and any Delayed Delivery
Fee due pursuant to paragraph 2B(8)(iii).
4. PREPAYMENTS. The Notes shall be subject to required prepayment as
and to the extent provided in paragraph 4A. The Notes shall also be subject to
prepayment under the circumstances set forth in paragraph 4B. Any prepayment
made by the Company pursuant to any other provision of this paragraph 4 shall
not reduce or otherwise affect its obligation to make any required prepayment
as specified in paragraph 4A.
4A. REQUIRED PREPAYMENTS OF NOTES. Each Series of Notes shall be
subject to the required prepayments, if any, set forth in the Notes of such
Series.
4B. OPTIONAL PREPAYMENT WITH YIELD-MAINTENANCE AMOUNT. The Notes of
each Series shall be subject to prepayment, in whole at any time or from time
to time in part (in integral multiples of $100,000 and in a minimum amount of
$1,000,000), at the option of the Company, at 100% of the principal amount so
prepaid plus interest thereon to the prepayment date and the Yield-Maintenance
Amount, if any, with respect to each such Note. Any partial prepayment of a
Series of the Notes pursuant to this paragraph 4B shall be applied in
satisfaction of required payments of principal in inverse order of their
scheduled due dates.
4C. NOTICE OF OPTIONAL PREPAYMENT. The Company shall give the holder of
each Note of a Series to be prepaid pursuant to paragraph 4B irrevocable
written notice of such prepayment not less than five Business Days prior to the
prepayment date, specifying such prepayment date, the aggregate principal
amount of the Notes of such Series to be prepaid on such date, the principal
amount of the Notes of such Series held by such holder to be prepaid on that
date and that such prepayment is to be made pursuant to paragraph 4B. Notice
of prepayment having been given as aforesaid, the principal amount of the
Notes specified in such notice, together with interest thereon to the
prepayment date and together with the Yield-Maintenance Amount, if any, herein
provided, shall become due and payable on such prepayment date. The Company
shall, on or before the day on which it gives written notice of any prepayment
pursuant to paragraph 4B, give telephonic notice of the principal amount of the
Notes to be prepaid and the prepayment date to each Significant Holder which
shall have designated a recipient for such notices in the purchaser schedule
attached to the applicable Confirmation of Acceptance or by notice in writing
to the Company.
4D. APPLICATION OF PREPAYMENTS. In the case of each prepayment of less
than the entire unpaid principal amount of all outstanding Notes of any Series
pursuant to paragraph 4A or 4B, the amount to be prepaid shall be applied pro
rata to all outstanding Notes of such Series (including, for the purpose of
this paragraph 4D only, all Notes prepaid or otherwise retired or purchased or
otherwise acquired by the Company or any of its Subsidiaries or Affiliates
other than by prepayment pursuant to paragraph 4A or 4B) according to the
respective unpaid principal amounts thereof.
4E. RETIREMENT OF NOTES. The Company shall not, and shall not permit
any of its Subsidiaries or Affiliates to, prepay or otherwise retire in whole
or in part prior to their stated final maturity (other than by prepayment
pursuant to paragraphs 4A or 4B, or upon acceleration of such final maturity
pursuant to paragraph 7A), or purchase or otherwise acquired, directly or
indirectly, Notes of any Series held by any holder unless the Company or such
Subsidiary or Affiliate shall have offered to prepay or otherwise retire or
purchase or otherwise acquire, as the case may be, the same proportion of the
aggregate principal amount of Notes of such Series held by each other holder
of Notes of such Series at the time outstanding upon the same terms and
conditions. Any Notes so prepaid or otherwise retired or purchased or
otherwise acquired by the Company or any of its Subsidiaries or Affiliates
shall not be deemed to be outstanding for any purpose under this Agreement,
except as provided in paragraph 4D.
5. AFFIRMATIVE COVENANTS. During the Issuance Period and so long
thereafter as any Note is outstanding and unpaid, the Company covenants as
follows:
5A. FINANCIAL STATEMENTS. The Company covenants that it will deliver
to each holder of the Notes in duplicate:
(i) as soon as practicable and in any event within 60 days after
the end of each quarterly period (other than the last quarterly
period) in each fiscal year, consolidated statements of income and
cash flows of the Company and its Subsidiaries for the period from the
beginning of the current fiscal year to the end of such quarterly
period, and a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarterly period, setting forth in
each case in comparative form figures for the corresponding period in
the preceding fiscal year, all in reasonable detail and certified by
an authorized financial officer of the Company, subject only to
changes resulting from year-end adjustments;
(ii) as soon as practicable and in any event within 120 days
after the end of each fiscal year, consolidated statements of income
and cash flows of the Company and its Subsidiaries for such year and a
consolidated balance sheet of the Company and its Subsidiaries as at
the end of such year, setting forth in each case in comparative form
corresponding figures from the preceding annual audit, all in
reasonable detail and reasonably satisfactory in scope to the Required
Holder(s) and certified by independent public accountants of
recognized national standing whose opinion shall be unqualified and
otherwise satisfactory in scope and substance to the Required
Holder(s);
(iii) promptly upon transmission thereof, copies of all such
financial, proxy and information statements, notices and other reports
as are sent to the Company's public stockholders and copies of all
registration statements (without exhibits) and all reports which are
filed with the Securities and Exchange Commission (or any governmental
body or agency succeeding to the functions of the Securities and
Exchange Commission);
(iv) promptly upon receipt thereof, a copy of each other report
submitted to the Company or any of its Subsidiaries by independent
accountants in connection with any material annual, interim or special
audit made by them of the books of such Company or such Subsidiary;
and
(v) with reasonable promptness, such other financial data
as any holder of Notes may reasonably request.
Together with each delivery of financial statements required by clauses (i) and
(ii) above, the Company will deliver to each holder of Notes an Officers'
Certificate (a) demonstrating (with computations in reasonable detail)
compliance with the covenants in paragraphs [6A(1), 6A(3), 6B, 6C(2), 6C(4)]
and (b) stating that there exists no Default or Event of Default, or if any
such Default or Event of Default exists, specifying the nature and period of
existence thereof and what action the Company proposes to take with respect
thereto.
The Company also covenants that forthwith upon the chief executive
officer, chief financial officer, treasurer or controller obtaining actual
knowledge of an Event of Default or Default, it will deliver to each holder of
Notes an Officers' Certificate specifying the nature and period of existence
thereof and what action the Company proposes to take with respect thereto.
5B. INSPECTION OF PROPERTY. The Company covenants that it will permit
any Person designated by any Significant Holder in writing, at such Significant
Holder's expense, to visit and inspect any of the properties of the Company and
its Subsidiaries, to examine their books and financial records and to make
copies thereof or extracts therefrom and to discuss their affairs, finances and
accounts with the principal officers and the Company's independent certified
public accountants, all at such reasonable times and as often as such
Significant Holder may reasonably request; provided that a principal financial
officer of the Company shall have prior notice of, and may elect to be present
during, discussions with the Company's independent public accountants.
5C. COVENANT TO SECURE NOTE EQUALLY. The Company covenants that, if it
or any of its Subsidiaries shall create, assume or otherwise incur any Lien
upon any of its property or assets, whether now owned or hereafter acquired,
other than Liens permitted by the provisions of paragraph 6C(1) (unless prior
written consent to the creation or assumption thereof shall have been obtained
pursuant to paragraph 11C), it will make or cause to be made effective
provision whereby the Notes will be secured by such Lien equally and ratably
with any obligation thereby secured so long as any such other obligation shall
be so secured.
5D. INFORMATION REQUIRED BY RULE 144A. The Company covenants that it
will, upon the request of the holder of any Note, provide such holder, and any
qualified institutional buyer designated by such holder, such financial and
other information as such holder may reasonably determine to be necessary in
order to permit compliance with the information requirements of Rule 144A under
the Securities Act in connection with the resale of Notes, except at such times
as the Company is subject to and in compliance with the reporting requirements
of section 13 or 15(d) of the Exchange Act. For the purpose of this paragraph
5D, the term "QUALIFIED INSTITUTIONAL BUYER" shall have the meaning specified
in Rule 144A under the Securities Act.
5E. MAINTENANCE OF PROPERTIES; INSURANCE. The Company covenants that
it and each Subsidiary will (i) maintain or cause to be maintained in good
repair, working order and condition all properties used or useful at that time
in its business and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements thereof and (ii) maintain
insurance with reputable and financially sound insurers in such amounts and
against such liabilities and hazards as is customarily maintained by other
companies operating similar businesses.
6. NEGATIVE COVENANTS. During the Issuance Period and so long
thereafter as any Note or amount due hereunder is outstanding and unpaid, the
Company covenants as follows:
6A. FINANCIAL COVENANTS. The Company will not permit:
6A(1). WORKING CAPITAL REQUIREMENT. Consolidated Working Capital at any
time to be less than $1;
6A(2). NET WORTH REQUIREMENT. Consolidated Net Worth at any time to be
less than $250,000,000; or
6A(3). FIXED CHARGE COVERAGE REQUIREMENT. The Fixed Charge Coverage Ratio
at any time to be less than 4.50 to 1.00.
6B. DIVIDEND AND INVESTMENT LIMITATION. The Company covenants that it
will not pay or declare any dividend on any class of stock or make any other
distribution on account of any class of its stock, or redeem, purchase or
otherwise acquire, directly or indirectly, any shares of its stock or make any
Restricted Investment (all of the foregoing being herein called "Restricted
Payments") unless after giving effect to any proposed Restricted Payment (i)
consolidated Funded Debt of the Company and Subsidiaries does not exceed 50% of
Consolidated Total Capital or (ii) the total of all Restricted Payments made
during the then current fiscal year of the Company does not exceed $10,000,000
plus, if positive, 40% of Consolidated Net Earnings for the then current fiscal
year. For purposes of clause (i) of the next preceding sentence, the amount of
any Restricted Investments shall be excluded when calculating Consolidated
Total Capital.
6C. LIEN, DEBT AND OTHER RESTRICTIONS. The Company covenants that it
will not and will not permit any Subsidiary to:
6C(1). LIENS. Create, assume or suffer to exist any Lien upon any of its
property or assets, whether now owned or hereafter acquired (whether or not
provision is made for the equal and ratable securing of the Notes in accordance
with the provisions of paragraph 5C), except
(i) Liens for taxes not yet due or which are being actively
contested in good faith by appropriate proceedings,
(ii) Liens (other than Liens pursuant to ERISA) incidental to the
conduct of its business or the ownership of its property and assets which
were not incurred in connection with the borrowing of money or the
obtaining of advances or credit, and which do not in the aggregate
materially detract from the value of its property or assets or materially
impair the use thereof in the operation of its business,
(iii) Liens on property or assets of a Subsidiary securing
obligations of such Subsidiary to the Company or another Subsidiary,
(iv) Liens on container(s) and equipment acquired subsequent to
December 31, 2000 (including Liens in connection with financing or
capitalized leases), securing Funded Debt of the Company or any Subsidiary
permitted by paragraph 6C(2); provided that any such Lien may arise at any
time after the date on which the encumbered container(s) or equipment were
acquired if such Lien relates to a cross border lease of such container(s)
or equipment where (A) the lease or financing agreement provides that in
the event of the bankruptcy or insolvency of the lessor, lessee, trustee
or other lease transaction party, a default or casualty, or any other type
of lease termination event (whether scheduled or otherwise), title to the
leased containers or equipment reverts to the Company or such Subsidiary,
(B) the aggregate amount of lease payments and consideration paid to
obtain reconveyance of title to the leased containers or equipment does
not exceed the original cost thereof, (C) no security interest, financing
statement or similar filings are made in the United States of America in
respect of the leased containers or equipment for the benefit of any
Person other than the Company or such Subsidiary and (D) prior to such
Lien becoming effective, the Company or such Subsidiary receives a legal
opinion of counsel to the lessor and trustee, if any, to the effect that
the agreements referred to in subclause (A) of this clause (iv) are valid
and legally binding agreements, enforceable against the lessor or trustee,
if any, in accordance with their respective terms,
(v) Liens on Capital Assets acquired subsequent to December 31,
2000 (excluding any asset consisting of, or acquired with, insurance
proceeds received in connection with any asset owned on December 31, 2000)
securing Funded Debt of the Company and Subsidiaries permitted by clause
(iii) of paragraph 6C(2),
(vi) Liens encumbering the Company's Capital Construction Fund to
the extent incurred in connection with Company's financing of obligations
constituting "qualified withdrawals" under regulations adopted by the
Maritime Administration under the Merchant Marine Act, 1936, as amended,
and
(vii) any Lien existing on any property of any Person at the time
it becomes a Subsidiary, or existing prior to the time of acquisition upon
any property acquired by the Company or any Subsidiary through purchase,
merger or consolidation or otherwise, whether or not assumed by the
Company or such Subsidiary; provided that (a) any such Lien shall not
encumber any other property of the Company or such Subsidiary, and (b) the
aggregate amount of Funded Debt secured by all such Liens is at all times
permitted by paragraph 6C(2);
6C(2). FUNDED DEBT. Create, incur, assume or suffer to exist any Funded
Debt, except
(i) Funded Debt of any Subsidiary to the Company or another
Subsidiary,
(ii) Funded Debt of Subsidiaries in an aggregate principal amount
at no time in excess of $25,000,000 (exclusive of Funded Debt permitted by
clause (i) or (iii) hereof),
(iii) Funded Debt of Subsidiaries described in clause (v) of
paragraph 6C(1) and Funded Debt of the Company; provided that the
aggregate principal amount thereof shall at no time exceed an amount equal
to 200% of Consolidated Net Worth at such time;
6C(3). MERGER. Enter into any transaction of merger, consolidation
or other combination with any other Person; provided that
(i) any Subsidiary may merge with the Company; provided that the
Company shall be the continuing or surviving corporation and no Default or
Event of Default will result therefrom,
(ii) any Subsidiary may merge with another Subsidiary, and
(iii) the Company may merge, consolidate or combine with any other
corporation; provided that (a) immediately after such merger, consolida-
tion or combination, no Default or Event of Default shall exist and (b) if
the Company is not the continuing or surviving corporation, the successor
corporation shall be a solvent corporation organized under the laws of any
state of the United States of America and shall expressly assume in
writing all of the obligations of the Company under this Agreement,
including all covenants herein contained, and such successor or acquiring
corporation shall be substituted for the Company with the same effect as
if it had been named herein as a party hereto;
6C(4). SALE OF ASSETS. Sell, lease or transfer or otherwise
dispose of any Capital Asset to any Person, except that during any rolling
twelve-month period, the Company may sell or otherwise dispose of Capital
Assets which constituted up to 10% of the total value of the assets of the
Company as of December 31, 2000, so long as (A) such Capital Assets sold
contributed less than 25% of the Consolidated Net Earnings in each of the three
fiscal years immediately preceding any such sale and (B) such Capital Assets,
when considered together with all other Capital Assets sold or otherwise
disposed of subsequent to December 31, 2000, do not constitute in excess of
30% of the total value of the assets of the Company as of December 31, 2000;
6C(5). SALE OF STOCK AND DEBT OF SUBSIDIARIES. Sell or
otherwise dispose of, or part with control of, any shares of stock or Debt of
any Subsidiary, except to the Company or another Subsidiary, and except that
all shares of stock and Debt of any Subsidiary at the time owned by or owed to
the Company and all Subsidiaries may be sold as an entirety for a cash
consideration which represents their fair value (as determined in good faith by
the Board of Directors of the Company), at the time of sale of the shares of
stock and Debt so sold, and provided that at the time of such sale, such
Subsidiary shall not own, directly or indirectly, any shares of stock or Debt
of any other Subsidiary (unless all of the shares of stock and Debt of such
other Subsidiary owned, directly or indirectly, by the Company and all
Subsidiaries are simultaneously being sold as permitted by this paragraph
6C(5));
6C(6). SALE AND LEASE-BACK. Enter into any arrangement with
any lender or investor or to which such lender or investor is a party providing
for the leasing by the Company or any Subsidiary of real or personal property
owned by the Company or any Subsidiary as of December 31, 2000 (including any
such property acquired with insurance proceeds received in connection with any
real or personal property owned by the Company or any Subsidiary on such date),
which has been or is to be sold or transferred by the Company or any Subsidiary
to such lender or investor or to any Person to whom funds have been or are to
be advanced by such lender or investor on the security of such property or
rental obligations of the Company or any Subsidiary;
6C(7). TRANSACTIONS WITH AFFILIATES AND STOCKHOLDERS. Directly
or indirectly, purchase, acquire or lease any property from, or sell, transfer
or lease any property to, or otherwise deal with, in the ordinary course of
business or otherwise (i) any Affiliate, (ii) any Person owning, beneficially
or of record, directly or indirectly, either individually or together with all
other Persons to whom such Person is related by blood, adoption or marriage,
stock of the Company or stock of any Person owning stock of the Company (of any
class having ordinary voting power for the election of directors) aggregating
5% or more of such voting power or (iii) any Person related by blood, adoption
or marriage to any Person described or coming within the provisions of clause
(i) or (ii) of this paragraph 6C(7); provided that the Company and Subsidiaries
may enter into such transactions on terms no less favorable to the Company or
Subsidiary than if no such relationship existed, including (subject in each
case to the limitations of paragraph 6B)) Restricted Payments and transactions
of the Company involving the sale or purchase of shares of the Company's stock;
or
6C(8). LOANS, ADVANCES AND INVESTMENTS. Make or permit to remain
outstanding any loan or advance to, or own, purchase or acquire any
stock, obligations or securities of, or any other interest in, or make any
capital contribution to, any Person, except that the Company or any Subsidiary
may
(i) make or permit to remain outstanding loans or advances to any
Subsidiary;
(ii) own, purchase or acquire stock, obligations or securities of
a Subsidiary or of a Person which immediately after such purchase or
acquisition will be a Subsidiary;
(iii) acquire and own stock, obligations or securities received in
settlement of debt (created in the ordinary course of business) owing to
the Company or any Subsidiary,
(iv) make investments in accordance with the resolutions of the
Board of Directors of the Company; provided that such resolutions
authorize only investments rated investment grade by Standard & Poor's
Corporation, Moody's Investors Services, or any other nationally
recognized credit rating agency,
(v) make Restricted Investments to the extent permitted by
paragraph 6B; and
(vi) make other investments, loans and advances (other than
Restricted Investments which may be made only to the extent permitted by
paragraph 6B) which in aggregate (at original cost) do not exceed
$25,000,000.
Notwithstanding the foregoing, amounts in the Capital Construction Fund may be
invested only as provided in clause (iv) above.
7. EVENTS OF DEFAULT.
7A. ACCELERATION. If any of the following events shall occur and be
continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law or
otherwise):
(i) the Company defaults in the payment of any principal of, or
interest or Yield-Maintenance Amount on, any Note for more than two
Business Days after the same shall become due, either by the terms
thereof or otherwise as herein provided; or
(ii) the Company or any Subsidiary defaults in any payment of
principal of, or premium or interest on, any obligation for money
borrowed (or of any obligation under conditional sale or other title
retention agreement or of any obligation issued or assumed as full or
partial payment for property whether or not secured by a purchase
money mortgage or of any obligation under notes payable or drafts
accepted representing extensions of credit) other than the Notes
beyond any period of grace provided with respect thereto, or the
Company or any Subsidiary fails to perform or observe any other
agreement, term or condition contained in any agreement (or any other
event thereunder or under any such agreement occurs and is continuing)
and the effect of such default, failure or other event is to cause, or
permit the holder or holders of such obligation (or a trustee on
behalf of such holder or holders) to cause, such obligation to become
due (or to be repurchased by the Company or any Subsidiary) prior to
any stated maturity; provided that the aggregate amount of all
obligations as to which such a payment default shall occur or such a
failure or other event causing or permitting acceleration (or resale
to a Company or any Subsidiary) shall occur and be continuing exceeds
$5,000,000; or
(iii) any representation or warranty made by the Company herein
or by the Company or any of its officers in any writing furnished in
connection with or pursuant to this Agreement shall be false or
misleading in any material respect on the date as of which made; or
(iv) the Company fails to perform or observe any agreement con-
tained in paragraphs 5C or 6 hereof; or
(v) the Company or any Subsidiary fails to perform or observe any
other agreement, term or condition contained herein and such failure
shall not be remedied within 30 days after any officer of the Company
obtains actual knowledge thereof; or
(vi) the Company or any Material Subsidiary makes an assignment
for the benefit of creditors or is generally not paying its debts as
such debts become due; or
(vii) any decree or order for relief in respect of the Company
or any Material Subsidiary is entered under any bankruptcy, reorgan-
ization, compromise, arrangement, insolvency, readjustment of debt,
dissolution, liquidation or similar law, whether now or hereafter in
effect (herein called the "Bankruptcy Law"), of any jurisdiction; or
(viii) the Company or any Material Subsidiary petitions or
applies to any tribunal for, or consents to, the appointment of, or
taking possession by, a trustee, receiver, custodian, liquidator or
similar official of the Company or any such Material Subsidiary, or of
any substantial part of the assets of the Company or any such Material
Subsidiary, or commences a voluntary case under the Bankruptcy Law of
the United States or any proceedings (other than proceedings for the
voluntary liquidation and dissolution of a Material Subsidiary)
relating to the Company or any Material Subsidiary under the Bankrupt-
cy Law of any other jurisdiction; or
(ix) any petition or application of the type described in clause
(viii) of this paragraph 7A is filed, or any such proceedings are
commenced, against the Company or any Material Subsidiary and the
Company or such Material Subsidiary by any act indicates its approval
thereof, consent thereto or acquiescence therein, or an order,
judgment or decree is entered appointing any such trustee, receiver,
custodian, liquidator or similar official, or approving the petition
in any such proceedings, and such order, judgment or decree remains
unstayed and in effect for more than 30 days; or
(x) any order, judgment or decree is entered in any proceedings
against the Company decreeing the dissolution of the Company and such
order, judgment or decree remains unstayed and in effect for more than
60 days; or
(xi) any order, judgment or decree is entered in any proceedings
against the Company or any Material Subsidiary decreeing a split-up of
the Company or such Material Subsidiary which requires the divestiture
of (A) assets representing a substantial part, or the stock of, or
other ownership interest in, a Material Subsidiary whose assets
represent a substantial part of the consolidated assets of the Company
or a Material Subsidiary or (B) assets or the stock of or other
ownership interest in a Subsidiary that has contributed a substantial
part of consolidated net income of the Company or a Material
Subsidiary for any of the three fiscal years then most recently ended,
and such order, judgment or decree remains unstayed and in effect for
more than 60 days; or
(xii) (a) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is
sought or granted under section 412 of the Code, (b) a notice of
intent to terminate any Plan shall have been or is reasonably expected
to be filed with the PBCG or the PBGC shall have instituted
proceedings under ERISA section 4042 to terminate or appoint a trustee
to administer any Plan or the PBGC shall have notified the Company or
any ERISA Affiliate that a Plan may become a subject of such
proceedings, (c) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of section 4001(a)(18) of ERISA)
under all Plans, determined in accordance with Title IV of ERISA,
shall exceed $5,000,000, (d) the Company or any ERISA Affiliate shall
have incurred or is reasonably expected to incur any liability
pursuant to Title I or IV or ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, (e) the
Company or any ERISA Affiliate withdraws from any Multiemployer Plan,
or (f) the Company or any Subsidiary establishes or amends any
employee welfare benefit plan that provides post-employment welfare
benefits in a manner that would increase the liability of the Company
or any Subsidiary thereunder; and any such event or events described
in clauses (a) through (f) above, either individually or together with
any other such event or events, could reasonably be expected to have a
material adverse effect on the business or condition (financial or
otherwise) of the Company; or
(xiii) any judgment or decree in the amount of $5,000,000 or
more shall be entered against the Company or any of its Subsidiaries
that is not paid or fully covered (beyond any applicable deductibles)
by insurance and such judgment or decree shall not have been vacated,
discharged or stayed or bonded pending appeal within 60 days from the
entry thereof;
then (a) if such event is an Event of Default specified in clause (vii), (viii)
or (ix) of this paragraph 7A with respect to the Company, all of the Notes at
the time outstanding shall automatically become immediately due and payable
together with interest accrued thereon and the Yield-Maintenance Amount with
respect thereto, without presentment, demand, protest or notice of any kind,
all of which are hereby waived by the Company, and (b) with respect to any
event constituting an Event of Default, the Required Holder(s) of any Series
of Notes may at its or their option, by notice in writing to the Company,
declare all of the Notes of such Series to be, and all of the Notes of such
Series shall thereupon be and become, immediately due and payable together with
interest accrued thereon and together with the Yield-Maintenance Amount, if
any, with respect to each Note of such Series, without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Company.
7B. RESCISSION OF ACCELERATION. At any time after any or all of the
Notes of a Series shall have been declared immediately due and payable pursuant
to paragraph 7A, the Required Holder(s) of such Series may, by notice in
writing to the Company, rescind and annul such declaration and its consequences
if (i) the Company shall have paid all overdue interest on the Notes of such
Series, the principal of and Yield-Maintenance Amount, if any, payable with
respect to any Notes of such Series which have become due otherwise than by
reason of such declaration, and interest on such overdue interest and overdue
principal and Yield-Maintenance Amount at the rate specified in the Notes of
such Series, (ii) the Company shall not have paid any amounts which have become
due solely by reason of such declaration, (iii) all Events of Default and
Defaults, other than non-payment of amounts which have become due solely by
reason of such declaration, shall have been cured or waived pursuant to
paragraph 11C, and (iv) no judgment or decree shall have been entered for the
payment of any amounts due pursuant to the Notes of such Series or this
Agreement (as this Agreement pertains to the Notes of such Series). No such
rescission or annulment shall extend to or affect any subsequent Event of
Default or Default or impair any right arising therefrom.
7C. NOTICE OF ACCELERATION OR RESCISSION. Whenever any Note shall be
declared immediately due and payable pursuant to paragraph 7A or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B, the
Company shall forthwith give written notice thereof to the holder of each Note
at the time outstanding.
7D. OTHER REMEDIES. If any Event of Default or Default shall
occur and be continuing, the holder of any Note may proceed to protect and
enforce its rights under this Agreement and such Note by exercising such
remedies as are available to such holder in respect thereof under applicable
law, either by suit in equity or by action at law, or both, whether for
specific performance of any covenant or other agreement contained in this
Agreement or in aid of the exercise of any power granted in this Agreement.
No remedy conferred in this Agreement upon the holder of any Note is intended
to be exclusive of any other remedy, and each and every such remedy shall be
cumulative and shall be in addition to every other remedy conferred herein or
now or hereafter existing at law or in equity or by statute or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company
represents, covenants and warrants as follows:
8A. ORGANIZATION. The Company and each Subsidiary is duly
organized, validly existing and in good standing under the laws of the state of
its organization. The Company and each Subsidiary has the full power and
authority to own its properties and to carry on its business as now being
conducted. The Company has full power, authority and right to execute and
deliver, and to perform and observe, the provisions of this Agreement and the
Notes and to carry out the transactions contemplated hereby and thereby. The
execution, delivery and performance of this Agreement and the Notes has been
duly authorized by all necessary corporate and other action, and, when duly
executed and delivered, will be the legal, valid and binding obligations of the
Company, enforceable against it in accordance with their respective terms.
8B. FINANCIAL STATEMENTS. The Company has furnished each
Purchaser of any Accepted Notes with the following financial statements,
identified by a principal financial officer of the Company: (i) consolidated
balance sheets of the Company and its Subsidiaries as of the last day in each
of the five fiscal years of the Company most recently completed prior to the
date as of which this representation is made or repeated (other than fiscal
years completed within 120 days prior to such date for which audited financial
statements have not been released) and consolidated statements of income,
shareholders' equity and cash flows of the Company and its Subsidiaries for
each such year, certified by an internationally recognized independent public
accounting firm; and (ii) consolidated balance sheets of the Company and its
Subsidiaries as at the end of the quarterly period (if any) most recently
completed prior to such date and after the end of such fiscal year (other than
quarterly periods completed within 60 days prior to such date for which
financial statements have not been released) and the comparable quarterly
period in the preceding fiscal year and consolidated statements of income,
stockholders' equity and cash flows of the Company and its Subsidiaries for the
periods from the beginning of the fiscal years in which such quarterly periods
are included to the end of such quarterly periods, in each case prepared by the
Company. Such financial statements (including any related schedules and/or
notes) are true and correct in all material respects (subject, as to interim
statements, to changes resulting from audits and year-end adjustments), have
been prepared in accordance with GAAP consistently followed throughout the
periods involved and show all liabilities, direct and contingent, of the
Company and its Subsidiaries required to be shown in accordance with such
principles. The balance sheets fairly present the condition of the Company and
its Subsidiaries as at the dates thereof, and the statements of income,
shareholders' equity and cash flows fairly present the results of the
operations and cash flows of the Company and its Subsidiaries for the periods
indicated. There has been no material adverse change in the business,
condition (financial or otherwise) or operations of the Company and its
Subsidiaries taken as a whole since the end of the most recent fiscal year for
which such audited financial statements have been furnished.
8C. ACTIONS PENDING. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened against the
Company or any Subsidiary or any properties or rights of the Company or any
Subsidiary, by or before any court, arbitrator or administrative or
governmental body which could reasonably be expected to result in any material
adverse change in the business, condition (financial or otherwise) or
operations of the Company and its Subsidiaries taken as a whole.
8D. OUTSTANDING DEBT. Neither the Company nor any Subsidiary
has any Funded Debt outstanding except as permitted by paragraph 6C(2). There
exists no default under the provisions of any instrument evidencing any Debt of
the Company or any Subsidiary or of any agreement relating thereto.
8E. TITLE TO PROPERTIES. The Company has and each Subsidiary has
good and indefeasible title to its respective real properties (other than
properties which it leases) and good title to all of its other properties and
assets, including the properties and assets reflected in the most recent
audited balance sheet referred to in paragraph 8B (other than properties and
assets disposed of in the ordinary course of business), subject to no Liens of
any kind except Liens permitted by paragraph 6C(1). There is no material
default, nor any event that, with notice or lapse of time or both, would
constitute such a material default under any material lease to which either the
Company or any Subsidiary is a lessee, lessor, sublessee or sublessor.
8F. TAXES. The Company has and each Subsidiary has filed all Federal,
state and other income tax and informational returns which are required to be
filed by it. The Company and each such Subsidiary has paid all taxes as shown
on its returns and on all assessments received to the extent that such taxes
have become due, except such assessments as are being contested in good faith
by appropriate proceedings for which adequate reserves have been established in
accordance with GAAP.
8G. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the execution
nor delivery of this Agreement or the Notes, nor the offering, issuance and
sale of the Notes, nor fulfillment of nor compliance with the terms and
provisions of this Agreement or the Notes will conflict with, or result in a
breach of the terms, conditions or provisions of, or constitute a default
under, or result in any violation of, or result in the creation of any Lien
upon any of the properties or assets of the Company or any Subsidiary pursuant
to, their respective articles or incorporation or bylaws (or other comparable
governing documents, as applicable), any award of any arbitrator or any
agreement, instrument, order, judgment, decree, statute, law, rule or
regulation to which the Company or any Subsidiary is subject. Neither the
Company nor any Subsidiary is a party to, or otherwise subject to any provision
contained in, any instrument evidencing any of their respective Debt, any
agreement relating thereto or any other contract or agreement which restricts
or otherwise limits the incurring of Debt pursuant hereto, except as set
forth on Schedule 8G hereto.
8H. OFFERING OF THE NOTES. Neither the Company nor any agent
acting on its behalf has, directly or indirectly, offered the Notes or any
similar security of the Company for sale to, or solicited any offers to buy the
Notes or any similar security of the Company from, or otherwise approached or
negotiated with respect thereto with, any Person or Persons other than
Prudential and the Purchasers, and neither the Company nor any agent acting on
its behalf has taken or will take any action which would subject the issuance
or sale of the Notes to the provisions of Section 5 of the Securities Act or to
the provisions of any securities or blue sky law of any applicable
jurisdiction.
8I. REGULATION U, ETC. None of the proceeds of the Notes will be used,
directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying any "margin stock" (as defined in
Regulation U (12 CFR Part 221) of the Board of Governors of the Federal Reserve
System (herein called "margin stock")) or for the purpose of maintaining,
reducing or retiring any indebtedness which was originally incurred to purchase
or carry any stock that is currently a margin stock or for any other purpose
which might constitute this transaction a "purpose credit" within the meaning
of such Regulation U. Neither the Company nor any agent acting on its behalf
has taken or will take any action which might cause this Agreement or the Notes
to violate Regulation U, Regulation T or any other regulation of the Board of
Governors of the Federal Reserve System or to violate the Exchange Act, in each
case as in effect now or as the same may hereafter be in effect.
8J. ERISA. No accumulated funding deficiency (as defined in section
302 of ERISA and section 412 of the Code), whether or not waived, exists
with respect to any Plan (other than a Multiemployer Plan). No liability to
the PBGC has been or is expected by the Company or any ERISA Affiliate to be
incurred with respect to any Plan (other than a Multiemployer Plan) by the
Company, any Subsidiary or any ERISA Affiliate which is or would be materially
adverse to the business, condition (financial or otherwise) or operations of
the Company and its Subsidiaries taken as a whole. Neither the Company, any of
its Subsidiaries or any ERISA Affiliate has incurred or presently expects to
incur any withdrawal liability under Title IV of ERISA with respect to any
Multiemployer Plan which is or would be materially adverse to the Company and
its Subsidiaries taken as a whole. The execution and delivery of this
Agreement and the issuance and sale of the Notes will be exempt from, or will
not involve any transaction which is subject to the prohibitions of, section
406 of ERISA and will not involve any transaction in connection with which a
penalty could be imposed under section 502(i) of ERISA or a tax could be
imposed pursuant to section 4975 of the Code. The representation by the
Company in the next preceding sentence is made in reliance upon and subject to
the accuracy of each Purchaser's representation in paragraph 9B.
8K. GOVERNMENTAL CONSENT. Neither the nature of the Company or any of
its Subsidiaries, nor any of their respective businesses or properties, nor any
relationship between the Company or a Subsidiary and any other Person, nor any
circumstance in connection with the offering, issuance, sale or delivery of the
Notes is such as to require any authorization, consent, approval, exemption or
other action by, notice to or filing with any court, administrative or
governmental body (other than routine filings after the date of closing with
the Securities and Exchange Commission and/or state blue sky authorities) in
connection with (i) the execution and delivery of this Agreement, (ii) the
offering, issuance, sale or delivery of the Notes or (iii) fulfillment of or
compliance with the terms and provisions of this Agreement and the Notes.
8L. HOLDING COMPANY AND INVESTMENT COMPANY STATUS. Except as
set forth in the next succeeding sentence, neither the Company nor any of its
Subsidiaries is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary
company," or a "public utility," within the meaning of the Public Utility
Holding Company Act of 1935, as amended, or a "Public utility" within the
meaning of the Federal Power Act, as amended, or an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, or an
"Investment adviser" within the meaning of the Investment Advisers Act of 1940,
as amended. The Company's corporate parent (the "PARENT") is a "holding
company" as such term is defined in the public Utility Holding Company Act of
1935, as amended, but is exempt from all provisions of such Act, except section
9(a)(2) thereof (relating to the acquisition of securities of a "public-utility
company"), because (i) the Parent is incorporated in Hawaii, and substantially
all of its utility operations are conducted in Hawaii and (ii) of the filing
annually with the Securities and Exchange Commission of an exemption statement.
On each date as of which this representation is made or confirmed, the Parent
has on file with the Securities and Exchange Commission such an exemption
statement, which is in full force and effect.
8M. POSSESSION OF FRANCHISES, LICENSES, ETC. The Company and its
Subsidiaries possess all material franchises, certificates, licenses,
development and other permits and other authorizations from governmental
political subdivisions or regulatory authorities and all patents, trademarks,
service marks, trade names, copyrights, licenses, easements, rights of way and
other rights (collectively, "Material Rights"), free from burdensome
restriction, that are necessary in the judgment of the Company in any material
respect for the ownership, maintenance and operation of their business,
properties and assets, and neither the Company nor any of its Subsidiaries is
in violation of any Material Rights in any material respect. No event has
occurred which permits, or after notice or lapse of time or both would permit,
the revocation or termination of any such Material Rights, or which materially
and adversely affects the rights of the Company or its Subsidiaries thereunder.
8N. ENVIRONMENTAL AND SAFETY MATTERS. The Company and its
Subsidiaries and all of their respective properties and facilities have
complied at all times and in all respects with all Environmental and Safety
Laws except where failure to comply would not result in a material adverse
effect on the business, condition (financial or otherwise) or operations of the
Company and its Subsidiaries taken as a whole.
8O. HOSTILE TENDER OFFERS. None of the proceeds of the sale of
any Notes will be used to finance a Hostile Tender Offer.
8P. EMPLOYEE RELATIONS. Neither the Company nor any Subsidiary is the
subject of (i) any material strike, work slowdown or stoppage, union organizing
drive or other similar activity or (ii) any material action, suit,
investigation or other proceeding involving alleged employment discrimination,
unfair termination, employee safety or similar matters or, to the best
knowledge of the Company, is any such event imminent or likely to occur except
those which, individually or in aggregate, could not reasonably be expected to
have a material adverse effect on the business, condition (financial or
otherwise) or operations of the Company and its Subsidiaries taken as a whole.
8Q. REGULATIONS AND LEGISLATION. To the best knowledge of the Company,
no law, regulation, interpretation or legislation has been enacted or issued
that could reasonably be expected to have a material adverse effect on the
business, condition (financial or otherwise) or operations of the Company and
its Subsidiaries taken as a whole.
8R. DISCLOSURE. Neither this Agreement nor any other document,
certificate or statement furnished to Prudential or any Purchaser by or on
behalf of the Company in connection herewith contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein not misleading. There is no fact
peculiar to the Company or any Subsidiary which materially adversely affects,
or in the future may (so far as the Company can now foresee) materially
adversely affect, the consolidated business, property, assets, prospects or
financial condition of the Company and the Subsidiaries and which has not been
set forth in this Agreement or in the other documents, certificates and
statements furnished to each Purchaser by or on behalf of the Company prior to
the date this representation is made or confirmed in connection with the
transactions contemplated hereby.
9. REPRESENTATIONS OF THE PURCHASERS.
Each Purchaser represents as follows:
9A. NATURE OF PURCHASE. Such Purchaser is acquiring the Notes
purchased by it hereunder for the purpose of investment and not with a view to
or for sale in connection with any distribution thereof within the meaning of
the Securities Act, provided that the disposition of such Purchaser's property
shall at all times be and remain within its control.
9B. SOURCE OF FUNDS. At least one of the following statements is true
regarding the source of funds being used by such Purchaser to pay the purchase
price of the Notes being purchased by such Purchaser hereunder: (i) the source
is the "insurance company general account" of such Purchaser (as such term is
defined under Section V of the United States Department of Labor's Prohibited
Transaction Class Exemption ("PTCE") 95-60), and as of the date of the purchase
of the Notes such Purchaser satisfies all of the applicable requirements for
relief under Sections I and IV of PTCE 95-60 or (ii) the source is a separate
account maintained by such Purchaser in which no employee benefit plan, other
than employee benefit plans identified on a list which has been furnished by
such Purchaser to the Company, participates to the extent of 10% or more or
(iii) the source does not include assets of any employee benefit plan, other
than a plan exempt from the coverage of ERISA. For the purpose of this
paragraph 9B, the terms "SEPARATE ACCOUNT" and "EMPLOYEE BENEFIT PLAN" shall
have the respective meanings specified in section 3 of ERISA.
10. DEFINITIONS; ACCOUNTING MATTERS. For the purpose of this
Agreement, the terms defined in paragraphs 10A and 10B (or within the text of
any other paragraph) shall have the respective meanings specified therein and
all accounting matters shall be subject to determination as provided in
paragraph 10C.
10A. YIELD-MAINTENANCE TERMS.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a day
on which commercial banks in New York City or San Francisco, California are
required or authorized to be closed.
"CALLED PRINCIPAL" shall mean, with respect to any Note, the principal of
such Note that (i) is to be prepaid pursuant to paragraph 4B or (ii) is
declared to be immediately due and payable pursuant to paragraph 7A, as the
context requires.
"DESIGNATED SPREAD" shall mean 0 in the case of each Note of any Series
unless the Confirmation of Acceptance with respect to the Notes of such Series
specifies a different Designated Spread in which case it shall mean, with
respect to each Note of such Series, the Designated Spread so specified.
"DISCOUNTED VALUE" shall mean, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining Scheduled Payments with
respect to such Called Principal from their respective scheduled due dates to
the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (converted to reflect the
periodic basis on which interest on such Note is payable, if payable other than
on a semiannual basis) equal to the Reinvestment Yield with respect to such
Called Principal.
"REINVESTMENT YIELD" shall mean, with respect to the Called Principal of
any Note, the Designated Spread over the yield to maturity implied by (i) the
yields reported, as of 10:00 a.m. (New York City time) on the Business Day next
preceding the Settlement Date with respect to such Called Principal, on the
display designated as "Page 678" on the Bridge\Telerate Service (or such other
display as may replace Page 678 on the Bridge\Telerate Service) for actively
traded U.S. Treasury securities having a maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date, or if such
yields shall not be reported as of such time or the yields reported as of such
time shall not be ascertainable, (ii) the Treasury Constant Maturity Series
yields reported, for the latest day for which such yields shall have been so
reported as of the Business Day next preceding the Settlement Date with respect
to such Called Principal, in Federal Reserve Statistical Release H.15 (519) (or
any comparable successor publication) for actively traded U.S. Treasury
securities having a constant maturity equal to the Remaining Average Life of
such Called Principal as of such Settlement Date. Such implied yield shall be
determined, if necessary, by (a) converting U.S. Treasury bill quotations to
bond-equivalent yields in accordance with accepted financial practice and
(b) interpolating linearly between yields reported for various maturities.
The Reinvestment Yield shall be rounded to the same number of decimal places
as appears in the coupon of the applicable Note.
"REMAINING AVERAGE LIFE" shall mean, with respect to the Called Principal
of any Note, the number of years (calculated to the nearest one-twelfth year)
obtained by dividing (i) such Called Principal into (ii) the sum of the
products obtained by multiplying (a) each Remaining Scheduled Payment of such
Called Principal (but not of interest thereon) by (b) the number of years
(calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due
date of such Remaining Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
scheduled due date.
"SETTLEMENT DATE" shall mean, with respect to the Called Principal of any
Note, the date on which such Called Principal (i) is to be prepaid pursuant to
paragraph 4B or (ii) is declared to be immediately due and payable pursuant to
paragraph 7A, as the context requires.
"YIELD-MAINTENANCE AMOUNT" shall mean, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Called Principal of
such Note over the sum of (i) such Called Principal plus (ii) interest accrued
thereon as of (including interest due on) the Settlement Date with respect to
such Called Principal. The Yield-Maintenance Amount shall in no event be less
than zero.
10B. OTHER TERMS.
"ACCEPTANCE" shall have the meaning specified in paragraph 2B(5).
"ACCEPTANCE DAY" shall have the meaning specified in paragraph 2B(5).
"ACCEPTANCE WINDOW" shall have the meaning specified in paragraph 2B(5).
"ACCEPTED NOTE" shall have the meaning specified in paragraph 2B(5).
"AFFILIATE" shall mean any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, the Company,
except a Subsidiary. A Person shall be deemed to control another Person if
such first Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of such other Person,
whether through the ownership of voting securities, by contract or otherwise.
"AGREEMENT" shall have the meaning specified in paragraph 11C.
"AUTHORIZED OFFICER" shall mean (i) in the case of the Company, any
officer of the Company designated as an "Authorized Officer" in the Information
Schedule or any officer of the Company designated as an "Authorized Officer"
for the purpose of this Agreement in a certificate executed by one of the
Company's Authorized Officers and (ii) in the case of Prudential, any officer
of Prudential designated as its "Authorized Officer" in the Information
Schedule or any officer of Prudential designated as its "Authorized Officer"
for the purpose of this Agreement in a certificate executed by one of its
Authorized Officers. Any action taken under this Agreement on behalf of the
Company by any individual who on or after the date of this Agreement shall have
been an Authorized Officer of the Company and whom Prudential in good faith
believes to be an Authorized Officer of the Company at the time of such action
shall be binding on the Company even though such individual shall have ceased
to be an Authorized Officer of the Company, and any action taken under this
Agreement on behalf of Prudential by any individual who on or after the date of
this Agreement shall have been an Authorized Officer of Prudential, and whom
the Company in good faith believe to be an Authorized Officer of Prudential at
the time of such action shall be binding on Prudential even though such
individual shall have ceased to be an Authorized Officer of Prudential.
"AVAILABLE FACILITY AMOUNT" shall have the meaning specified in paragraph
2B(1).
"BANKRUPTCY LAW" shall have the meaning specified in clause (vii) of
paragraph 7A.
"BUSINESS DAY" shall have the meaning specified in paragraph 10A.
"CANCELLATION DATE" shall have the meaning specified in paragraph
2B(8)(iv).
"CANCELLATION FEE" shall have the meaning specified in paragraph
2B(8)(iv).
"CAPITAL ASSETS" shall mean all assets other than current assets, and
shall not include any amounts in the Capital Construction Fund.
"CAPITAL CONSTRUCTION FUND" shall mean the fund established and maintained
by Company in accordance with Section 607 of the Merchant Marine Act, 1936, as
amended.
"CAPITALIZED LEASE OBLIGATION" shall mean, with respect to any Person, any
rental obligation of such Person which, under GAAP, is or will be required to
be capitalized on the books of such Person, taken at the amount thereof
accounted for as indebtedness (net of interest expense) in accordance with such
principles.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation
and Liability Act (42 U.S.C. Section 9601 et. seq.), as amended, and the
regulations promulgated thereunder.
"CLOSING DAY" shall mean, with respect to any Accepted Note, the Business
Day specified for the closing of the purchase and sale of such Accepted Note in
the Request for Purchase of such Accepted Note, provided that (i) if the
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Company and the Purchaser which is obligated to purchase such Accepted Note
agree on an earlier Business Day for such closing, the "CLOSING DAY" for such
Accepted Note shall be such earlier Business Day, and (ii) if the closing of
the purchase and sale of such Accepted Note is rescheduled pursuant to
paragraph 2B(7), the Closing Day for such Accepted Note, for all purposes of
this Agreement except references to "original Closing Day" in paragraph
2B(8)(iii), shall mean the Rescheduled Closing Day with respect to such
Accepted Note.
"CODE" shall mean the Internal Revenue Code of 1986, as amended.
"CONFIRMATION OF ACCEPTANCE" shall have the meaning specified in paragraph
2B(5).
"CONSOLIDATED EBITDA" shall mean, for any period, Consolidated Net
Earnings for such period plus, to the extent deducted in the calculation
thereof, Consolidated Interest Expense, taxes, depreciation and amortization.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, the sum of all
amounts that would, in accordance with GAAP, be deducted in computing
Consolidated Net Earnings for such period on account of interest, including
without limitation, imputed interest in respect of Capitalized Lease
Obligations, fees in respect of letters of credit and bankers' acceptance
financing and amortization of debt discount and expense.
"CONSOLIDATED NET EARNINGS" shall mean, for any period, the consolidated
net income of the Company and Subsidiaries as determined in accordance with
GAAP.
"CONSOLIDATED NET WORTH" shall mean, as of the time of any determination,
the sum of (i) the par value (or value stated on the books of the Company) of
the capital stock of all classes of the Company, plus (or minus in the case of
a surplus deficit) (ii) the amount of the consolidated surplus, whether capital
or earned, of the Company and its Subsidiaries.
"CONSOLIDATED TANGIBLE NET WORTH" shall mean, as of the time of any
determination, Consolidated Net Worth minus the sum of treasury stock,
unamortized debt discount and expense, goodwill, trademarks, trade names,
patents, deferred charges and other intangible assets of the Company and
Subsidiaries on a consolidated basis and any write-up of the value of any of
their assets after December 31, 2000.
"CONSOLIDATED TOTAL CAPITAL" shall mean, as of the time of any
determination, the sum of (i) consolidated Funded Debt of the Company and
Subsidiaries, (ii) Consolidated Net Worth and (iii) Deferred Income Taxes.
"CONSOLIDATED WORKING CAPITAL" shall mean the excess of consolidated
current assets over consolidated current liabilities of the Company and
Subsidiaries.
"CURRENT DEBT" shall mean any obligation for borrowed money (and any notes
payable and drafts accepted representing extensions of credit whether or not
representing obligations for borrowed money) payable on demand or within a
period of one year from the date of the creation thereof; provided that any
obligation shall be treated as Funded Debt, regardless of its term, if such
obligation is renewable pursuant to the terms thereof or of a revolving credit
or similar agreement effective for more than one year after the date of the
creation of such obligation, or may be payable out of the proceeds of a
revolving credit or similar agreement effective for more than one year after
the date such agreement was entered into pursuant to the terms of such
agreement.
"DEBT" shall mean Funded Debt and/or Current Debt, as the case may be.
"DEFERRED INCOME TAXES" shall mean as of the time of any determination,
the liability for deferred income taxes of the Company and Subsidiaries on a
consolidated basis.
"DELAYED DELIVERY FEE" shall have the meaning specified in paragraph
2B(8)(iii).
"DESIGNATED EVENT" shall mean any event (including any issuance or
transfer of equity securities or voting rights) which results in Alexander &
Baldwin, Inc. (i) ceasing to own 100% of the capital stock of the Company or
(ii) no longer possessing the unrestricted ability to elect all members of the
Company's board of directors and in connection with which the Company or any
Subsidiary incurs or guarantees any Debt.
"ENVIRONMENTAL AND SAFETY LAWS" shall mean all Federal, state and local
laws, regulations and ordinances, relating to the discharge, handling,
disposition or treatment of Hazardous Materials and other substances or the
protection of the environment or of employee health and safety, including,
without limitation, CERCLA, the Hazardous Materials Transportation Act (49
U.S.C. Section 1901 et. Seq.), the Resource Conservation and Recovery Act (42
U.S.C. Section 6901 et. Seq.), the Federal Water Pollution Control Act (33
U.S.C. Section 1251 et. Seq.), the Clean Air Act (42 U.S.C. Section 7401 et.
seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601 et. seq.), the
Occupational Safety and Health Act (29 U.S.C. Section 651 et. seq.) and the
Emergency Planning and Community Right-To-Know Act (42 U.S.C. Section 11001 et.
seq.), each as the same may be amended and supplemented.
"ERISA" shall mean the Employment Retirement Income Security Act of 1974,
as amended.
"ERISA AFFILIATE" shall mean any corporation which is a member of the same
controlled group of corporations as the Company within the meaning of section
414(b) of the Code, or any trade or business which is under common control with
the Company within the meaning of section 414(c) of the Code.
"EVENT OF DEFAULT" shall mean any of the events specified in paragraph 7A,
provided that there has been satisfied any requirement in connection with such
event for the giving of notice, or the lapse of time, or the happening of any
further condition, event or act, and "DEFAULT" shall mean any of such events,
whether or not any such requirement has been satisfied.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"FACILITY" shall have the meaning specified in paragraph 2B(1).
"FACILITY FEE " shall have the meaning specified in paragraph 2B(8)(i).
"FIXED CHARGE COVERAGE RATIO" shall mean (i) at the end of any fiscal
quarter ending prior to the occurrence of a Designated Event and at the end of
any fiscal quarter ending subsequent to the last fiscal quarter when clause
(ii), below, is operative, the ratio of Consolidated EBITDA to Consolidated
Interest Expense for the period of four consecutive fiscal quarters then most
recently ended, (ii) at the time of the occurrence of a Designated Event and
the end of each of the next three complete fiscal quarters ended subsequent
to the occurrence of a Designated Event, the ratio of Pro Forma Consolidated
EBITDA to Pro Forma Consolidated Interest Expense.
"FUNDED DEBT" shall mean and include, without duplication, (i) any
obligation payable more than one year from the date of creation thereof, which
is shown on the balance sheet as a liability in accordance with GAAP (including
Capitalized Lease Obligations but excluding reserves for deferred income taxes
and other reserves to the extent that such reserves do not constitute an
obligation), (ii) endorsements (other than endorsements of negotiable
instruments for collection in the ordinary course of business), guarantees and
other contractually incurred contingent liabilities (whether direct or
indirect) in connection with the obligations of any Person, to the extent that
such obligations are payable more than one year from the date of creation
thereof (including all guarantees of Funded Debt of another Person) and (iii)
obligations under any contract providing for the making of loans, advances or
capital contributions to any Person, or for the purchase of any property from
any Person, in each case in order to enable such Person primarily to maintain
working capital, net worth or any other balance sheet condition or to pay
debts, dividends or expenses, to the extent that such obligations are payable
more than one year from the date of creation thereof.
"GAAP" shall have the meaning provided in paragraph 10C.
"HEDGE TREASURY NOTE(S)" shall mean, with respect to any Accepted Note,
the United States Treasury Note or Notes whose duration (as determined by
Prudential) most closely matches the duration of such Accepted Note.
"HOSTILE TENDER OFFER" shall mean, with respect to the use of proceeds of
any Note, any offer to purchase, or any purchase of, shares of capital stock of
any corporation or equity interests in any other entity, or securities
convertible into or representing the beneficial ownership of, or rights to
acquire, any such shares or equity interests, if such shares, equity interests,
securities or rights are of a class which is publicly traded on any securities
exchange or in any over-the-counter market, other than purchases for portfolio
investment purposes of such shares, equity interests, securities or rights
which, together with any shares, equity interests, securities or rights then
owned, represent less than 5% of the equity interests or beneficial ownership
of such corporation or other entity, and such offer or purchase has not been
duly approved by the board of directors of such corporation or the equivalent
governing body of such other entity prior to the date on which the Company
makes the Request for Purchase of such Note.
"INCLUDING" shall mean, unless the context clearly requires otherwise,
"including without limitation".
"ISSUANCE PERIOD" shall have the meaning specified in paragraph 2B(2).
"LIEN" shall mean any mortgage, pledge, security interest, encumbrance,
deposit arrangement, lien (statutory or otherwise) or charge of any kind
(including any agreement to give any of the foregoing, any conditional sale or
other title retention agreement, any lease in the nature thereof, and the
filing of or agreement to give any financing statement (exclusive of financing
statements field for precautionary purposes only) under the Uniform Commercial
Code of any jurisdiction) or any other type of preferential arrangement for the
purpose, or having the effect, of protecting a creditor against loss or
securing the payment or performance of an obligation.
"MARGIN STOCK" shall have the meaning specified in paragraph 8I.
"MATERIAL SUBSIDIARY" shall mean any Subsidiary, the tangible net worth of
which is, on the date of determination, 5% or more of Consolidated Tangible Net
Worth.
"MULTIEMPLOYER PLAN" shall mean any Plan which is a "multiemployer plan"
(as such term is defined in section 4001(a)(3) of ERISA).
"NOTES" shall have the meaning specified in paragraph 1.
"OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of the
Company by its Chief Executive Officer, Chief Financial Officer, President, one
of its Vice Presidents or its Treasurer.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor or replacement entity thereto under ERISA.
"PERSON" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, a limited liability company, an unincorporated
organization and a government or any department or agency thereof.
"PLAN" shall mean any "employee pension benefit plan" (as such term is
defined in section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by either Company or any ERISA
Affiliate.
"PRO FORMA CONSOLIDATED EBITDA" shall mean (i) at the time of the
occurrence of a Designated Event and after giving effect to any incurrence or
repayment of indebtedness in connection therewith, for the immediately
succeeding 365 day period, projected Consolidated EBITDA for such period as set
forth in the most recent projections provided to the Company's Board of
Directors as constituted prior to the Designated Event (which projected
Consolidated EBITDA shall be deemed to be 125% of Consolidated EBITDA for the
most recently completed fiscal year of the Company for which audited financial
statements have been delivered to the Note holders if the projected
Consolidated EBITDA provided to the Board of Directors exceeds 125% of the
Consolidated EBITDA derived from such audited statements), (ii) for the first
complete fiscal quarter ended subsequent to the date of a Designated Event,
Consolidated EBITDA for such fiscal quarter multiplied by four, (iii) for the
second complete fiscal quarter ended subsequent to the date of a Designated
Event, Consolidated EBITDA for such fiscal quarter and the immediately
preceding fiscal quarter multiplied by two and (iv) for the third complete
fiscal quarter ended subsequent to the date of a Designated Event, Consolidated
EBITDA for such fiscal quarter and the immediately preceding two fiscal
quarters multiplied by 1.33.
"PRO FORMA CONSOLIDATED INTEREST EXPENSE" shall mean (i) at the time of
the occurrence of a Designated Event and after giving effect to any incurrence
or repayment of indebtedness in connection therewith, for the immediately
succeeding 365 day period, Consolidated Interest Expense calculated on a pro
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forma basis assuming the consolidated indebtedness of the Company and
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Subsidiaries outstanding upon giving effect to the Designated Event was
outstanding on each day of such 365 day period, (ii) for the first complete
fiscal quarter ended subsequent to the date of a Designated Event, Consolidated
Interest Expense for such fiscal quarter multiplied by four, (iii) for the
second complete fiscal quarter ended subsequent to the date of a Designated
Event, Consolidated Interest Expense for such fiscal quarter and the
immediately preceding fiscal quarter multiplied by two and (iv) for the third
complete fiscal quarter ended subsequent to the date of a Designated Event,
Consolidated Interest Expense for such fiscal quarter and the immediately
preceding two fiscal quarters multiplied by 1.33. Pro Forma Consolidated
Interest Expense shall include interest expense with respect to indebtedness
guaranteed by the Company or any Subsidiary if the guaranty was entered into
in connection with a Designated Event.
"PROHIBITED TRANSACTION" shall mean any transaction described in section
406 of ERISA which is not exempt by reason of section 408 of ERISA or the
transitional rules set forth in section 414(c) of ERISA and any transaction
described in section 4975(c) of the Code which is not exempt by reason of
section 4975(c) (2) or section 4975(d) of the Code, or the transitional rules
of section 2003(c) of ERISA.
"PRUDENTIAL" shall mean The Prudential Insurance Company of America.
"PRUDENTIAL AFFILIATE" shall mean (i) any corporation or other entity
controlling, controlled by, or under common control with, Prudential and (ii)
any managed account or investment fund which is managed by Prudential or a
Prudential Affiliate described in clause (i) of this definition. For purposes
of this definition the terms "control", "controlling" and "controlled" shall
mean the ownership, directly or through subsidiaries, of a majority of a
corporation's or other Person's voting stock or equivalent voting securities or
interests.
"PURCHASERS" shall mean, with respect to any Accepted Notes, Prudential
and/or the Prudential Affiliate(s) which are purchasing such Accepted Notes.
"REQUEST FOR PURCHASE" shall have the meaning specified in paragraph
2B(3).
"REQUIRED HOLDER(S)" shall mean the holder or holders of at least 51% of
the aggregate principal amount of the Notes or of a Series of Notes, as the
context may require, from time to time outstanding and, if no Notes are
outstanding, shall mean Prudential.
"RESCHEDULED CLOSING DAY" shall have the meaning specified in paragraph
2B(7).
"RESTRICTED INVESTMENT" shall mean any loan or advance to, or purchase of
or investment in any stock, notes, obligations or securities or, or any other
interest in, or any capital contribution to, any Affiliate or any Person with
any ownership interest in any Affiliate.
"RESTRICTED PAYMENTS" shall have the meaning specified in paragraph 6B.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"SERIES" shall have the meaning specified in paragraph 1.
"SIGNIFICANT HOLDER" shall mean (i) Prudential or any Prudential
Affiliate, so long as Prudential or any Prudential Affiliate shall hold any
Note or the Issuance Period has not terminated or (ii) any other holder of at
least 10% of the aggregate principal amount of the Notes of any Series from
time to time outstanding.
"SUBSIDIARY" shall mean any Person, all of the stock (or other equity
interests) of every class of which, except directors' qualifying or residency
shares (or their equivalent) shall, at the time as of which any determination
is being made, be owned by the Company either directly or through Subsidiaries.
"TRANSFEREE" shall mean any direct or indirect transferee of all or any
part of any Note purchased under this Agreement.
10C. ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS. All references in
this Agreement to "generally accepted accounting principles" and "GAAP" shall
be deemed to refer to generally accepted accounting principles in effect in the
United States at the time of application thereof. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all unaudited financial statements and certificates and reports as to financial
matters required to be furnished hereunder shall be prepared, in accordance
with generally accepted accounting principles, applied on a basis consistent
with the most recent audited consolidated financial statements of the Company
and its Subsidiaries delivered pursuant to clause (ii) of paragraph 5A or, if
no such statements have been so delivered, the most recent audited financial
statements referred to in clause (i) of paragraph 8B.
11. MISCELLANEOUS.
11A. NOTE PAYMENTS. The Company agrees that, so long as any Purchaser
shall hold any Note, it will make payments of principal of, interest on, and
any Yield-Maintenance Amount payable with respect to, such Note, which comply
with the terms of this Agreement, by wire transfer of immediately available
funds for credit on the date due to the account or accounts of such Purchaser
specified in the purchaser schedule attached to the applicable Confirmation of
Acceptance with respect to such Note or such other account or accounts in the
United States as such Purchaser may from time to time designate in writing,
notwithstanding any contrary provision herein or in any Note with respect to
the place of payment. Each Purchaser agrees that, before disposing of any
Note, it will make a notation thereon (or on a schedule attached thereto) of
all principal payments previously made thereon and of the date to which
interest thereon has been paid. The Company agrees to afford the benefits of
this paragraph 11A to any Transferee which shall have made the same agreement
as the Purchasers have made in this paragraph 11A.
11B. EXPENSES. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save Prudential, each
Purchaser and any Transferee harmless against liability for the payment of, all
out-of-pocket expenses arising in connection with such transactions, including
(i) all document production and duplication charges and the fees and expenses
of any special counsel engaged by the Purchasers or any Transferee in
connection with this Agreement, the transactions contemplated hereby and any
subsequent proposed modification of, or proposed consent under, this Agreement,
whether or not such proposed modification shall be effected or proposed consent
granted, and (ii) the reasonable costs and expenses, including attorneys' fees,
incurred by any Purchaser or any Transferee in enforcing any rights under this
Agreement or the Notes or in responding to any subpoena or other legal process
or informal investigative demand issued in connection with this Agreement or
the transactions contemplated hereby or by reason of any Purchaser's or any
Transferee's having acquired any Note, including without limitation costs and
expenses incurred in any bankruptcy case. The obligations of the Company under
this paragraph 11B shall survive the transfer of any Note or portion thereof or
interest therein by any Purchaser or any Transferee and the payment of any
Note. Notwithstanding the foregoing, the Company shall have no reimbursement
obligation for any fees, costs or expenses incurred through the date of this
Agreement.
11C. CONSENT TO AMENDMENTS. This Agreement may be amended, and the
Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, if the Company shall obtain the written
consent to such amendment, action or omission to act, of the Required Holder(s)
of the Notes of each Series except that, (i) with the written consent of the
holders of all Notes of a particular Series, and if an Event of Default shall
have occurred and be continuing, of the holders of all Notes of all Series, at
the time outstanding (and not without such written consents), the Notes of such
Series may be amended or the provisions thereof waived to change the maturity
thereof, to change or affect the principal thereof, or to change or affect the
rate or time of payment of interest on or any Yield-Maintenance Amount payable
with respect to the Notes of such Series, (ii) without the written consent of
the holder or holders of all Notes at the time outstanding, no amendment to or
waiver of the provisions of this Agreement shall change or affect the
provisions of paragraph 7A or this paragraph 11C insofar as such provisions
relate to proportions of the principal amount of the Notes of any Series, or
the rights of any individual holder of Notes, required with respect to any
declaration of Notes to be due and payable or with respect to any consent,
amendment, waiver or declaration, (iii) with the written consent of Prudential
(and not without the written consent of Prudential) the provisions of paragraph
2B may be amended or waived (except insofar as any such amendment or waiver
would affect any rights or obligations with respect to the purchase and sale of
Notes which shall have become Accepted Notes prior to such amendment or
waiver), and (iv) with the written consent of all of the Purchasers which shall
have become obligated to purchase Accepted Notes of any Series (and not without
the written consent of all such Purchasers), any of the provisions of
paragraphs 2B and 3 may be amended or waived insofar as such amendment or
waiver would affect only rights or obligations with respect to the purchase and
sale of the Accepted Notes of such Series or the terms and provisions of such
Accepted Notes. Each holder of any Note at the time or thereafter outstanding
shall be bound by any consent authorized by this paragraph 11C, whether or not
such Note shall have been marked to indicate such consent, but any Notes issued
thereafter may bear a notation referring to any such consent. No course of
dealing between the Company and the holder of any Note nor any delay in
exercising any rights hereunder or under any Note shall operate as a waiver of
any rights of any holder of such Note. As used herein and in the Notes, the
term "THIS AGREEMENT" and references thereto shall mean this Agreement as it
may from time to time be amended or supplemented.
11D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES. The Notes are
issuable as registered notes without coupons in denominations of at least
$1,000,000, except as may be necessary to reflect any principal amount not
evenly divisible by $1,000,000. The Company shall keep at its principal office
a register in which the Company shall provide for the registration of Notes and
of transfers of Notes. Upon surrender for registration of transfer of any Note
at the principal office of the Company, the Company shall, at its expense,
execute and deliver one or more new Notes of like tenor and of a like aggregate
principal amount, registered in the name of such transferee or transferees. At
the option of the holder of any Note, such Note may be exchanged for other
Notes of like tenor and of any authorized denominations, of a like aggregate
principal amount, upon surrender of the Note to be exchanged at the principal
office of the Company. Whenever any Notes are so surrendered for exchange, the
Company shall, at its expense, execute and deliver the Notes which the holder
making the exchange is entitled to receive. Each prepayment of principal
payable on each prepayment date upon each new Note issued upon any such
transfer or exchange shall be in the same proportion to the unpaid principal
amount of such new Note as the prepayment of principal payable on such date on
the Note surrendered for registration of transfer or exchange bore to the
unpaid principal amount of such Note. No reference need be made in any such
new Note to any prepayment or prepayments of principal previously due and paid
upon the Note surrendered for registration of transfer or exchange. Every Note
surrendered for registration of transfer or exchange shall be duly endorsed, or
be accompanied by a written instrument of transfer duly executed, by the holder
of such Note or such holder's attorney duly authorized in writing. Any Note or
Notes issued in exchange for any Note or upon transfer thereof shall carry the
rights to unpaid interest and interest to accrue which were carried by the Note
so exchanged or transferred, so that neither gain nor loss of interest shall
result from any such transfer or exchange. Upon receipt of written notice from
the holder of any Note of the loss, theft, destruction or mutilation of such
Note and, in the case of any such loss, theft or destruction, upon receipt of
such holder's unsecured indemnity agreement, or in the case of any such
mutilation upon surrender and cancellation of such Note, the Company will make
and deliver a new Note, of like tenor, in lieu of the lost, stolen, destroyed
or mutilated Note.
11E. PERSONS DEEMED OWNERS; PARTICIPATIONS. Prior to due presentment
for registration of transfer, the Company may treat the Person in whose name
any Note is registered as the owner and holder of such Note for the purpose of
receiving payment of principal of and Yield Maintenance Amount, if any, and
interest on such Note and for all other purposes whatsoever, whether or not
such Note shall be overdue, and the Company shall not be affected by notice to
the contrary. Subject to the preceding sentence, the holder of any Note may
from time to time grant participations in all or any part of such Note on such
terms and conditions as may be determined by such holder in its sole and
absolute discretion.
11F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All
representations and warranties contained herein or made in writing by or on
behalf of the Company in connection herewith shall survive the execution and
delivery of this Agreement and the Notes, the transfer of any Note or portion
thereof or interest therein and the payment of any Note, and may be relied upon
by any Transferee, regardless of any investigation made at any time by or on
behalf of any Purchaser or Transferee. Subject to the preceding sentence, this
Agreement and the Notes embody the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersede all
prior agreements and understandings relating to the subject matter hereof.
11G. SUCCESSORS AND ASSIGNS. All covenants and other agreements in this
Agreement contained by or on behalf of either of the parties hereto shall bind
and inure to the benefit of the respective successors and assigns of the
parties hereto (including, without limitation, any Transferee) whether so
expressed or not.
11H. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
independent effect so that if a particular action or condition is prohibited by
any one of such covenants, the fact that it would be permitted by an exception
to, or otherwise be in compliance within the limitations of, another covenant
shall not (i) avoid the occurrence of a Default or Event of Default if such
action is taken or such condition exists or (ii) in any way prejudice an
attempt by the holder of any Note to prohibit, through equitable action or
otherwise, the taking of any action by the Company or any Subsidiary which
would result in a Default or Event of Default.
11I. NOTICES. All written communications provided for hereunder (other
than communications provided for under paragraph 2B) shall be sent by first
class mail or nationwide overnight delivery service (with charges prepaid) and
(i) if to any Purchaser, addressed as specified for such communications in the
purchaser schedule attached to the applicable Confirmation of Acceptance or at
such other address as any such Purchaser shall have specified to the Company in
writing, (ii) if to any other holder of any Note, addressed to it at such
address as it shall have specified in writing to the Company or, if any such
holder shall not have so specified an address, then addressed to such holder in
care of the last holder of such Note which shall have so specified an address
to the Company and (iii) if to the Company, addressed to it at 333 Market
Street, San Francisco, California 94120, Attention: Chief Financial Officer or
at such other address as the Company shall have specified to each holder of a
Note in writing, provided, however, that any such communication to the Company
may also, at the option of the Person sending such communication, be delivered
by any other means either to the Company at its address specified above or to
any Authorized Officer of the Company. Any communication pursuant to paragraph
2B shall be made by the method specified for such communication in paragraph
2B, and shall be effective to create any rights or obligations under this
Agreement only if, in the case of a telephone communication, an Authorized
Officer of the party conveying the information and of the party receiving the
information are parties to the telephone call, and in the case of a
telefacsimile communication, the communication is signed by an Authorized
Officer of the party conveying the information, addressed to the attention of
an Authorized Officer of the party receiving the information, and in fact
received at the telefacsimile terminal the number of which is listed for the
party receiving the communication in the Information Schedule or at such other
telefacsimile terminal as the party receiving the information shall have
specified in writing to the party sending such information.
11J. DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
11K. SATISFACTION REQUIREMENT. If any agreement, certificate or other
writing, or any action taken or to be taken, is, by the terms of this
Agreement, required to be satisfactory to Prudential, any Purchaser or the
Required Holder(s), the determination of such satisfaction shall be made by
Prudential, such Purchaser or the Required Holder(s), as the case may be, in
the sole and exclusive judgment (exercised in good faith) of the Person(s)
making such determination.
11L. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the law of
the State of New York.
11M. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of
principal of or interest, or Yield-Maintenance Amount payable with respect to,
any Note that is due on a date other than a Business Day shall be made on the
next succeeding Business Day.
11N. SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11O. SEVERALTY OF OBLIGATIONS. The sales of Notes to the Purchasers are
to be several sales, and the obligations of Prudential and the Purchasers under
this Agreement are several obligations. No failure by Prudential or any
Purchaser to perform its obligations under this Agreement shall relieve any
other Purchaser or the Company of any of its obligations hereunder, and neither
Prudential nor any Purchaser shall be responsible for the obligations of, or
any action taken or omitted by, any other such Person hereunder.
11P. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
[Balance of Page Intentionally Left Blank.]
11Q. BINDING AGREEMENT. When this Agreement is executed and delivered
by the Company and Prudential, it shall become a binding agreement between the
Company and Prudential. This Agreement shall also inure to the benefit of each
Purchaser which shall have executed and delivered a Confirmation of Acceptance,
and each such Purchaser shall be bound by this Agreement to the extent provided
in such Confirmation of Acceptance.
MATSON NAVIGATION COMPANY, INC.,
a Hawaii corporation
By: /s/ M. J. Cox
----------------------------
Its: SVP, CFO and Controller
And by: /s/ R. J. Donohue
----------------------------
Its: Senior Vice President
The foregoing Agreement is
hereby accepted as of the
date first above written.
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By /s/ Mitchell W. Reed
----------------------------
Vice President
EXHIBIT A
---------
MATSON NAVIGATION COMPANY, INC.
SERIES ___ SENIOR NOTE
No.
ORIGINAL PRINCIPAL AMOUNT:
ORIGINAL ISSUE DATE:
INTEREST RATE:
INTEREST PAYMENT DATES:
FINAL MATURITY DATE:
PRINCIPAL PREPAYMENT DATES AND AMOUNTS:
FOR VALUE RECEIVED, the undersigned, MATSON NAVIGATION COMPANY, INC.
(herein called the "Company"), a corporation organized and existing under the
laws of the State of Hawaii, hereby promises to pay to _______________, or
registered assigns, the principal sum of ______________DOLLARS payable [on the
Principal Prepayment Dates and in the amounts specified above, and] on the
Final Maturity Date specified above [in an amount equal to the unpaid balance
of the principal amount hereof,] with interest (computed on the basis of a
360-day year--30-day month) (a) on the unpaid balance thereof at the Interest
Rate per annum specified above, on each Interest Payment Date specified above
and on the Final Maturity Date specified above, commencing with the Interest
Payment Date next succeeding the date hereof, until the principal hereof shall
have become due and payable, and (b) on any overdue payment (including any
overdue prepayment) of principal, any overdue payment of Yield-Maintenance
Amount and any overdue payment of interest, payable on each Interest Payment
Date as aforesaid (or, at the option of the registered holder hereof,
on demand), at a rate per annum from time to time equal to the greater of
(i) 2% over the Interest Rate specified above or (ii) 2% over the rate of
interest publicly announced by The Bank of New York from time to time in New
York City as its Prime Rate.
Payments of principal, Yield-Maintenance Amount, if any, and interest are
to be made at the main office of Bank of New York in New York City or at such
other place as the holder hereof shall designate to the Company in writing, in
lawful money of the United States of America.
This Note is one of a series of Senior Notes (herein called the "Notes")
issued pursuant to a Private Shelf Agreement, dated as of June 29, 2001 (herein
called the "Agreement"), between the Company, on the one hand, and The
Prudential Insurance Company of America and each Prudential Affiliate (as
defined in the Agreement) which becomes party thereto, on the other hand, and
is entitled to the benefits thereof.
This Note is subject to optional prepayment, in whole or from time to time
in part, on the terms specified in the Agreement.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the
registered holder hereof or such holder's attorney duly authorized in writing,
a new Note for the then outstanding principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company shall not be affected by any notice to
the contrary.
In case an Event of Default shall occur and be continuing, the principal
of this Note may be declared or otherwise become due and payable in the manner
and with the effect provided in the Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings (if any) provided in the Agreement.
This Note shall be construed and enforced in accordance with the internal
law of the State of California.
MATSON NAVIGATION COMPANY, INC.
By:
Title:
EXHIBIT B
---------
[FORM OF REQUEST FOR PURCHASE]
MATSON NAVIGATION COMPANY, INC.
Reference is made to the Private Shelf Agreement (the "Agreement"), dated
as of June 29, 2001 between Matson Navigation Company, Inc. (the "Company"), on
the one hand, and The Prudential Insurance Company of America and each
Prudential Affiliate which becomes party thereto, on the other hand.
Capitalized terms used and not otherwise defined herein shall have the
respective meanings specified in the Agreement.
Pursuant to paragraph 2B(3) of the Agreement, the Company hereby makes the
following Request for Purchase:
1. Aggregate principal amount of
the Notes covered hereby
(the "Notes")............$____________
2. Individual specifications of the Notes:
Principal
Final Prepayment Interest
Principal Maturity Dates and Payment
Amount1 Date2 Amounts2 Period
- --------- ----- -------- ------
3. Use of proceeds of the Notes:
4. Proposed day for the closing of the purchase and sale
of the Notes:
5. The purchase price of the Notes is to be transferred to:
Name, Address
and ABA Routing Number of
Number of Bank Account
-------------- -------
6. The Company certifies (a) that the representations and warranties
contained in paragraph 8 of the Agreement are true on and as of the
date of this Request for Purchase and (b) that there exists on the date
of this Request for Purchase no Event of Default or Default.
7. In connection with any rate quotes it may provide, Prudential should
assume a Designated Spread of ___%.
Dated: MATSON NAVIGATION COMPANY, INC.
By:
Authorized Officer
__________________________
1 Minimum principal amount of $5,000,000.
2 Maturity of not more than twelve years and average life of not more than
ten years.
EXHIBIT C
---------
[FORM OF CONFIRMATION OF ACCEPTANCE]
MATSON NAVIGATION COMPANY, INC.
Reference is made to the Private Shelf Agreement (the "Agreement"), dated
as of June 29, 2001 between Matson Navigation Company, Inc. (the "Company"), on
the one hand, and The Prudential Insurance Company of America ("Prudential")
and each Prudential Affiliate which becomes party thereto, on the other hand.
All terms used herein that are defined in the Agreement have the respective
meanings specified in the Agreement.
Prudential or the Prudential Affiliate which is named below as a Purchaser
of Notes hereby confirms the representations as to such Notes set forth in
paragraph 9 of the Agreement, and agrees to be bound by the provisions of
paragraphs 2B(5) and 2B(7) of the Agreement relating to the purchase and sale
of such Notes and by the provisions of the penultimate sentence of paragraph
11A of the Agreement.
Pursuant to paragraph 2B(5) of the Agreement, an Acceptance with respect
to the following Accepted Notes is hereby confirmed:
I. Accepted Notes: Aggregate principal
amount $__________________
(A) (a) Name of Purchaser:
(b) Principal amount:
(c) Final maturity date:
(d) Principal prepayment dates and amounts:
(e) Interest rate:
(f) Interest payment period:
(g) Payment and notice instructions: As set forth on attached
Purchaser Schedule
(h) Designated Spread: ____%
(B) (a) Name of Purchaser:
(b) Principal amount:
(c) Final maturity date:
(d) Principal prepayment dates and amounts:
(e) Interest rate:
(f) Interest payment period:
(g) Payment and notice instructions: As set forth on attached
Purchaser Schedule
(h) Designated Spread: ____%
[(C), (D)... same information as above.]
II. Closing Day:
Dated: MATSON NAVIGATION COMPANY, INC.
By:
Title:
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:
Vice President
[PRUDENTIAL AFFILIATE(S)]
EXHIBIT D
---------
[FORM OF OPINION OF COMPANY'S GENERAL COUNSEL]
[Date of Closing]
[Each Purchaser]
c/o Prudential Capital Group
Four Embarcadero Center
Suite 2700
San Francisco, California 94111
Ladies and Gentlemen:
As the General Counsel of Matson Navigation Company, Inc., a Hawaii
corporation (the "Company"), I am familiar with the Private Shelf Agreement,
dated as of June 29, 2001, between the Company, on the one hand, and The
Prudential Insurance Company of America and each Prudential Affiliate which may
become bound thereby, on the other hand (the "Agreement"), pursuant to which
the Company has issued to you today its ___% Series ___ Senior Notes in the
aggregate principal amount of $________ (the "Notes"). All capitalized terms
used herein that are defined in the Agreement shall have, unless otherwise
defined herein, the respective meanings specified in the Agreement. This
letter is being delivered to you in satisfaction of the condition set forth in
clause (v) of paragraph 3A of the Agreement and with the understanding that you
are purchasing the Notes in reliance on the opinions expressed herein.
In this connection, I have examined such certificates of public
officials, certificates of officers of the Company and copies certified to my
satisfaction of documents and records of the Company, and have made such other
investigations, as I have deemed relevant and necessary as a basis for my
opinion hereinafter set forth. I have relied upon such certificates of public
officials and of officers of the Company with respect to the accuracy of
material factual matters contained therein which I have not independently
established. With respect to the opinion expressed in paragraph 6 below, I
have also relied upon the representation made by [each of] you in paragraph
9A of the Agreement.
Based on the foregoing, it is my opinion that:
1. The Company is a corporation duly organized and validly existing in
good standing under the laws of the State of Hawaii, with the corporate power,
authority and legal right to conduct its business as presently conducted.
2. The Company has the full corporate power, authority and legal right
to execute and deliver the Agreement and the Notes and to perform and observe
its obligations thereunder.
3. The Agreement and the Notes have been duly authorized by all
requisite corporate action on the part of the Company and have been duly
executed and delivered by authorized officers of the Company and constitute the
legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms.
4. The execution and delivery of the Agreement and the Notes by the
Company do not, and the performance and observance of the terms thereof will
not, breach, conflict with or contravene any provisions in the articles of
incorporation or by-laws of the Company or any provision of any material law or
regulation applicable to the Company or its properties or other assets.
5. The execution and delivery of the Agreement and the Notes do not, and
the performance and observance of the terms thereof will not, (A) conflict
with, (B) result in any breach of the terms, conditions or provisions of, (C)
constitute a default under or violation of, or (D) result in or permit the
creation or imposition of any Liens upon any of the properties or other assets
of the Company pursuant to, any material order, judgment, decree, indenture,
mortgage or any other material agreement or instrument known to me (inclusive
of all agreements listed on Schedule 8G to the Agreement) to which the Company
is a party or by which any of its properties or other assets are bound.
6. The issuance, sale and delivery of the Notes to you is an exempt
transaction under the Securities Act of 1933, as amended, and does not require
the registration of the Notes under such Act, nor is qualification of an
indenture in respect thereof required under the Trust Indenture Act of 1939, as
amended.
7. The extension, arranging and obtaining of the credit represented by
the Notes does not result in any violation of Regulation U or X of the Board of
Governors of the Federal Reserve System.
8. To the best of my knowledge after due inquiry, there is no action,
suit, investigation or proceeding pending or threatened against any Company or
any of its Subsidiaries or any of their respective properties which could
reasonably be expected to have a material adverse effect on the Company and its
Subsidiaries taken as a whole
9. The Company is a citizen of the United States within the meaning of
the Shipping Act, 1916, as amended.
10. None of the Company or any of its Subsidiaries is a "public utility"
within the meaning of the Federal Power Act, as amended, or an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended, or an "investment
adviser" within the meaning of the Investment Advisers Act of 1940, as amended.
The Company and its Subsidiaries are an "affiliate" of a "holding company"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended, but are exempt from all provisions of the Public Utility Holding
Company Act of 1935, as amended, except section 9(a)(2) thereof.
The above opinions are subject to the following qualifications:
(i) That the opinions concerning the enforceability of the rights
and remedies provided in any document against any particular
party are subject to any applicable bankruptcy, reorganization,
insolvency, arrangement, moratorium, fraudulent transfer, usury
or other similar laws affecting generally the enforcement of
creditors' rights from time to time in effect;
(ii) That the opinions concerning the validity, binding effect and
enforceability of any document with respect to any party are
based on the assumption that such document constitutes or will
constitute a legal, valid and binding agreement of the other
parties thereto;
(iii) That with respect to the opinions concerning the enforceability
of any document, no opinion is expressed as to the specific
remedy any court, other governmental authority or arbitrator
may grant, impose or render;
(iv) That the opinions concerning the enforceability of certain
remedies authorized or contained in any document may be limited
by general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at
law); and
(v) That the opinions concerning enforceability are subject to the
effect of court decisions and statutes which indicate that
provisions in the Agreement which permit you to take action or
make determinations may be subject to a requirement that such
actions be taken or such determinations be made on a reasonable
basis in good faith or that it be shown that such action is
reasonably necessary for your protection.
Except as specifically provided above, this opinion speaks as of the date
hereof, and I have no responsibility to update this opinion for events of
circumstances occurring after the date hereof or as to facts relating to prior
events which are subsequently brought to my attention. I shall not have any
obligation or duty to advise you of any changes of law. I am admitted to
practice in the State of New York and, except with respect to the opinions
rendered in paragraphs 1 through 3 hereof, this opinion is limited solely to
the present law of the States of New York and the United States of America, to
present judicial interpretations thereof and to the facts as they currently
exist.
This opinion is rendered solely in connection with the transaction
described herein and, without my express permission, may not be relied upon by
any Person other than you and any Transferee.
Very truly yours,
INFORMATION SCHEDULE
Authorized Officers for Prudential
----------------------------------
ALLEN A. WEAVER STEPHEN J. DEMARTINI
Senior Managing Director Managing Director
PRUDENTIAL CAPITAL GROUP PRUDENTIAL CAPITAL GROUP
Two Prudential Plaza Four Embarcadero Center
Suite 5400 Suite 2700
Chicago, Illinois 60601 San Francisco, California 94111
Telephone: (312) 540-4211 Telephone: (415) 291-5058
Facsimile: (312) 540-4219 Facsimile: (415) 421-6233
JOSEPH Y. ALOUF MITCHELL W. REED
Senior Vice President Vice President
PRUDENTIAL CAPITAL GROUP PRUDENTIAL CAPITAL GROUP
Four Embarcadero Center Four Embarcadero Center
Suite 2700 Suite 2700
San Francisco, California 94111 San Francisco, California 94111
Telephone: (415) 291-5056 Telephone: (415) 291-5059
Facsimile: (415) 421-6233 Facsimile: (415) 421-6233
Authorized Officers for the Company
-----------------------------------
C. B. MULHOLLAND MATTHEW J. COX
President and Senior Vice President, Chief
Chief Executive Officer Financial Officer & Controller
MATSON NAVIGATION COMPANY, INC. MATSON NAVIGATION COMPANY, INC.
Post Office Box 7452 Post Office Box 7452
San Francisco, California 94120 San Francisco, California 94120
Telephone: (415) 957-4565 Telephone: (415) 957-4556
Facsimile: (415) 957-4234 Facsimile: (415) 957-4930
T.H. REID
Treasurer
MATSON NAVIGATION COMPANY, INC.
Post Office Box 7452
San Francisco, California 94120
Telephone: (415) 957-4768
Facsimile: (415) 957-4076