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KEMET Corporation
$100,000,0006.66% Senior Notes due May 4, 2010______________
Note Purchase Agreement_____________
Dated as of May 1, 1998
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Table of Contents
(Not a part of the Agreement)
Section Heading
Page
Section 1. Authorization of Notes 1
Section 2. Sale and Purchase of Notes 1
Section 3. Closing 2
Section 4. Conditions to Closing 2
Section 4.1. Representations and Warranties 2
Section 4.2. Performance; No Default. 2
Section 4.3. Compliance Certificates 2
Section 4.4. Opinions of Counsel 3
Section 4.5. Purchase Permitted By Applicable Law, Etc 3
Section 4.6. Sale of Other Notes 3
Section 4.7. Payment of Special Counsel Fees. 3
Section 4.8. Private Placement Number 3
Section 4.9. Changes in Corporate Structure 4
Section 4.10. Subsidiary Guaranty 4
Section 4.11. Funding Instructions 4
Section 4.12. Proceedings and Documents 4
Section 5. Representations and Warranties of the Company 4
Section 5.1. Organization; Power and Authority 4
Section 5.2. Authorization, Etc 4
Section 5.3. Disclosure 5
Section 5.4. Organization and Ownership of Shares of
Subsidiaries; Affiliates 5
Section 5.5. Financial Statements 6
Section 5.6. Compliance with Laws, Other Instruments, Etc 6
Section 5.7. Governmental Authorizations, Etc 6
Section 5.8. Litigation; Observance of Agreements, Statutes
and Orders 6
Section 5.9. Taxes 7
Section 5.10. Title to Property; Leases 7
Section 5.11. Licenses, Permits, Etc 7
Section 5.12. Compliance with ERISA 8
Section 5.13. Private Offering by the Company 9
Section 5.14. Use of Proceeds; Margin Regulations 9
Section 5.15. Existing Debt; Future Liens 9
Section 5.16. Foreign Assets Control Regulations, Etc 9
Section 5.17. Status under Certain Statutes 10
Section 5.18. Notes Rank Pari Passu 10
Section 5.19. Environmental Matters 10
Section 5.20. Computer 2000 Compliant 10
Section 6. Representations of the Purchaser 10
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Section 6.1. Purchase for Investment 10
Section 6.2. Source of Funds 11
Section 7. Information as to the Company 12
Section 7.1. Financial and Business Information 12
Section 7.2. Officer's Certificate 15
Section 7.3. Inspection 15
Section 8. Prepayment of the Notes 16
Section 8.1. Required Prepayments 16
Section 8.2. Optional Prepayments with Make-Whole Amount 16
Section 8.3. Prepayment of Notes upon Change of Control 17
Section 8.4. Allocation of Partial Prepayments 18
Section 8.5. Maturity; Surrender, Etc 18
Section 8.6. Purchase of Notes 19
Section 8.7. Make-Whole Amount 19
Section 9. Affirmative Covenants 20
Section 9.1. Compliance with Law 20
Section 9.2. Insurance 20
Section 9.3. Maintenance of Properties 21
Section 9.4. Payment of Taxes and Claims 21
Section 9.5. Corporate Existence, Etc 21
Section 9.6. Nature of Business 21
Section 9.7. Notes to Rank Pari Passu 21
Section 9.8. Guaranty by Subsidiaries 22
Section 9.9. Termination of Certain Obligations under Bank
Credit Agreement 22
Section 10. Negative Covenants 22
Section 10.1. Consolidated Net Worth 22
Section 10.2. Limitations on Funded Debt 23
Section 10.3. Limitation on Liens 24
Section 10.4. Merger, Consolidation, etc 26
Section 10.5. Sale of Assets, etc 27
Section 10.6. Transactions with Affiliates 28
Section 11. Events of Default 28
Section 12. Remedies on Default, Etc 31
Section 12.1. Acceleration 31
Section 12.2. Other Remedies 31
Section 12.3. Rescission 31
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc 32
Section 13. Registration; Exchange; Substitution of Notes 32
Section 13.1. Registration of Notes 32
Section 13.2. Transfer and Exchange of Notes 32
Section 13.3. Replacement of Notes 33
Section 14. Payments on Notes 33
Section 14.1. Place of Payment 33
Section 14.2. Home Office Payment 33
Section 15. Expenses, Etc 34
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Section 15.1. Transaction Expenses 34
Section 15.2. Survival 34
Section 16. Survival of Representations and Warranties; Entire
Agreement 35
Section 17. Amendment and Waiver 35
Section 17.1. Requirements 35
Section 17.2. Solicitation of Holders of Notes 35
Section 17.3. Binding Effect, Etc 36
Section 17.4. Notes Held by Company, Etc 36
Section 18. Notices 36
Section 19. Reproduction of Documents 37
Section 20. Confidential Information 37
Section 21. Substitution of Purchaser 38
Section 22. Miscellaneous 38
Section 22.1. Successors and Assigns 38
Section 22.2. Payments Due on Non-Business Days 38
Section 22.3. Severability 39
Section 22.4. Construction 39
Section 22.5. Counterparts 39
Section 22.6. Governing Law 39
Signature 40
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Schedule A Information Relating To Purchasers
Schedule B Defined Terms
Schedule 5.4 Subsidiaries of the Company and Ownership of
Subsidiary Stock
Schedule 5.5 Financial Statements
Schedule 5.14 Use of Proceeds
Schedule 5.15 Existing Debt
Schedule 10.3 Existing Liens
Exhibit 1 Form of 6.66% Senior Note due May 4, 2010
Exhibit 4.4(a) Form of Opinion of Special Counsel for the Company
Exhibit 4.4(b) Form of Opinion of Special Counsel for the
Purchasers
Exhibit 9.8 Form of Subsidiary Guaranty
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KEMET Corporation
2835 Kemet Way
Simpsonville, South Carolina 29681
6.66% Senior Notes due May 4, 2010
Dated as of May 1, 1998
To the Purchaser listed in the attached
Schedule A who is a signatory hereto:
Ladies and Gentlemen:
KEMET Corporation, a Delaware corporation (the "Company"),
agrees with you as follows:
.c.Section 1. Authorization of Notes;.
The Company will authorize the issue and sale of $100,000,000
aggregate principal amount of its 6.66% Senior Notes due May 4,
2010 (the "Notes", such term to include any such notes issued in
substitution therefor pursuant to Section 13 of this Agreement or
the Other Agreements (as hereinafter defined)). The Notes shall be
substantially in the form set out in Exhibit 1, with such changes
therefrom, if any, as may be approved by you and the Company.
Certain capitalized terms used in this Agreement are defined in
Schedule B; references to a "Schedule" or an "Exhibit" are, unless
otherwise specified, to a Schedule or an Exhibit attached to this
Agreement.
.c.Section 2. Sale and Purchase of Notes;.
Subject to the terms and conditions of this Agreement, the
Company will issue and sell to you and you will purchase from the
Company, at the Closing provided for in Section 3, Notes in the
principal amount specified opposite your name in Schedule A at the
purchase price of 100% of the principal amount thereof.
Contemporaneously with entering into this Agreement, the Company is
entering into separate Note Purchase Agreements (the "Other
Agreements") identical with this Agreement with each of the other
purchasers named in Schedule A (the "Other Purchasers"), providing
for the sale at such Closing to each of the Other Purchasers of
Notes in the principal amount specified opposite its name in
Schedule A. Your obligation hereunder, and the obligations of the
Other Purchasers under the Other Agreements, are several and not
joint obligations, and you shall have no obligation under any Other
Agreement and no liability to any Person for the performance or
nonperformance by any Other Purchaser thereunder.
.c.Section 3. Closing;.
The sale and purchase of the Notes to be purchased by you and
the Other Purchasers shall occur at the offices of Chapman and
Cutler, 111 West Monroe Street, Chicago, Illinois
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60603, at 10:00 a.m. Chicago time, at a closing (the "Closing") on
May 4, 1998 or on such other Business Day thereafter on or prior to
May 30, 1998 as may be agreed upon by the Company and you and the
Other Purchasers. At the Closing the Company will deliver to you
the Notes to be purchased by you in the form of a single Note (or
such greater number of Notes in denominations of at least $100,000
as you may request) dated the date of the Closing and registered in
your name (or in the name of your nominee), against delivery by you
to the Company or its order of immediately available funds in the
amount of the purchase price therefor by wire transfer of
immediately available funds for the account of the Company to
account number 540298353 at Wachovia Bank, N.A., Columbia, South
Carolina, ABA 053900225. If at the Closing the Company shall fail
to tender such Notes to you as provided above in this Section 3, or
any of the conditions specified in Section 4 shall not have been
fulfilled to your satisfaction, you shall, at your election, be
relieved of all further obligations under this Agreement, without
thereby waiving any rights you may have by reason of such failure
or such nonfulfillment.
.c.Section 4. Conditions to Closing;.
Your obligation to purchase and pay for the Notes to be sold
to you at the Closing is subject to the fulfillment to your
satisfaction, prior to or at the Closing, of the following
conditions:
.c2.Section 4.1. Representations and Warranties;. The
representations and warranties of the Company in this Agreement
shall be correct when made and at the time of the Closing.
.c2.'Section 4.2. Performance; No Default.'; The Company shall have
performed and complied with all agreements and conditions contained
in this Agreement required to be performed or complied with by it
prior to or at the Closing, and after giving effect to the issue
and sale of the Notes (and the application of the proceeds thereof
as contemplated by Schedule 5.14), no Default or Event of Default
shall have occurred and be continuing. Neither the Company nor any
Subsidiary shall have entered into any transaction since the date
of the Memorandum that would have been prohibited by Section 10
hereof had such Section 10 applied since such date.
.c2.Section 4.3. Compliance Certificates;.
(a) Officer's Certificate. The Company shall have delivered
to you an Officer's Certificate, dated the date of the Closing,
certifying that the conditions specified in Sections 4.1, 4.2 and
4.9 have been fulfilled.
(b) Secretary's Certificate. The Company shall have
delivered to you a certificate certifying as to the resolutions
attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Notes and the
Agreements.
(c) Subsidiary Guarantor Officer's Certificate. Each
Subsidiary Guarantor shall have delivered to you an Officer's
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Certificate, dated the date of the Closing, certifying that (i) the
representations and warranties of such Subsidiary Guarantor
contained in the Subsidiary Guaranty are true and correct at the
time of the Closing and (ii) the conditions specified in Sections
4.2 and 4.9 with respect to such Subsidiary Guarantor have been
fulfilled.
(d) Subsidiary Guarantor Secretary's Certificate. Each
Subsidiary Guarantor shall have delivered to you a certificate
certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and
delivery of the Subsidiary Guaranty.
.c2.Section 4.4. Opinions of Counsel;. You shall have received
opinions in form and substance satisfactory to you, dated the date
of the Closing (a) from Kirkland and Ellis, counsel for the Company
and each Subsidiary Guarantor, covering the matters set forth in
Exhibit 4.4(a) and covering such other matters incident to the
transactions contemplated hereby as you or your counsel may
reasonably request (and the Company hereby instructs its counsel to
deliver such opinion to you) and (b) from Chapman and Cutler, your
special counsel in connection with such transactions, substantially
in the form set forth in Exhibit 4.4(b) and covering such other
matters incident to such transactions as you may reasonably
request.
.c2.'Section 4.5. Purchase Permitted By Applicable Law, Etc';. On
the date of the Closing your purchase of Notes shall (a) be
permitted by the laws and regulations of each jurisdiction to which
you are subject, without recourse to provisions (such as Section
1405(a)(8) of the New York Insurance Law) permitting limited
investments by insurance companies without restriction as to the
character of the particular investment, (b) not violate any
applicable law or regulation (including, without limitation,
Regulation T, U or X of the Board of Governors of the Federal
Reserve System) and (c) not subject you to any tax, penalty or
liability under or pursuant to any applicable law or regulation,
which law or regulation was not in effect on the date hereof. If
requested by you, you shall have received an Officer's Certificate
certifying as to such matters of fact as you may reasonably specify
to enable you to determine whether such purchase is so permitted.
.c2.Section 4.6. Sale of Other Notes;. Contemporaneously with the
Closing, the Company shall sell to the Other Purchasers, and the
Other Purchasers shall purchase, the Notes to be purchased by them
at the Closing as specified in Schedule A.
.c2.Section 4.7. Payment of Special Counsel Fees.; Without limiting
the provisions of Section 15.1, the Company shall have paid on or
before the Closing the fees, charges and disbursements of your
special counsel referred to in Section 4.4 to the extent reflected
in a statement of such counsel rendered to the Company at least one
Business Day prior to the Closing.
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.c2.Section 4.8. Private Placement Number;. A Private Placement
Number issued by Standard & Poor's CUSIP Service Bureau (in
cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained
for the Notes.
.c2.Section 4.9. Changes in Corporate Structure;. Neither the
Company nor any Subsidiary shall have changed its jurisdiction of
incorporation or been a party to any merger or consolidation nor
shall the Company or any Subsidiary have succeeded to all or any
substantial part of the liabilities of any other entity, at any
time following the date of the most recent financial statements
referred to in Schedule 5.5, other than the liabilities assumed by
the Subsidiary Guarantors pursuant to the Subsidiary Guaranties.
.c2.Section 4.10. Subsidiary Guaranty;. Each Subsidiary Guarantor
shall have executed and delivered the Subsidiary Guaranty.
.c2.Section 4.11. Funding Instructions;. At least three Business
Days prior to the date of the Closing, you shall have received
written instructions executed by a Responsible Officer of the
Company directing the manner of the payment of funds and setting
forth (1) the name and address of the transferee bank, (2) such
transferee bank's ABA number, (3) the account name and number into
which the purchase price for the Notes is to be deposited, and (4)
the name and telephone number of the account representative
responsible for verifying receipt of such funds.
.c2.Section 4.12. Proceedings and Documents;. All corporate and
other proceedings in connection with the transactions contemplated
by this Agreement and all documents and instruments incident to
such transactions shall be satisfactory to you and your special
counsel, and you and your special counsel shall have received all
such counterpart originals or certified or other copies of such
documents as you or they may reasonably request.
.c.Section 5. Representations and Warranties of the Company;.
The Company represents and warrants to you that:
.c2.'Section 5.1. Organization; Power and Authority';. The Company
is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and
is duly qualified as a foreign corporation and is in good standing
in each jurisdiction in which such qualification is required by
law, other than those jurisdictions as to which the failure to be
so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect. The Company has the corporate power and authority to own
or hold under lease the properties it purports to own or hold under
lease, to transact the business it transacts and proposes to
transact, to execute and deliver this Agreement and the Other
Agreements and the Notes and to perform the provisions hereof and
thereof.
.c2.Section 5.2. Authorization, Etc;. This Agreement, the Other
Agreements and the Notes have been duly authorized by all necessary
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corporate action on the part of the Company, and this Agreement
constitutes, and upon execution and delivery thereof each Note will
constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and
except that equitable remedies lie in the discretion of a court and
may be unenforceable.
.c2.Section 5.3. Disclosure;. The Company, through its agent, First
Union Capital Markets, has delivered to you and each Other
Purchaser a copy of a Private Placement Memorandum, dated March
1998 (the "Memorandum"), relating to the transactions contemplated
hereby. The Memorandum fairly describes, in all material respects,
the general nature of the business and principal properties of the
Company and its Subsidiaries. This Agreement, the Memorandum, the
documents, certificates or other written information delivered to
you by or on behalf of the Company in connection with the
transactions contemplated hereby and the financial statements
listed in Schedule 5.5, taken as a whole, do not contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading in light of
the circumstances under which they were made. Except as disclosed
in the Memorandum, since March 31, 1997, there has been no change
in the financial condition, operations, business or properties of
the Company or any Subsidiary except changes that individually or
in the aggregate could not reasonably be expected to have a
Material Adverse Effect. There is no fact known to the Company
that could reasonably be expected to have a Material Adverse Effect
that has not been set forth herein or in the Memorandum or in the
other documents, certificates and other written information
delivered to you by or on behalf of the Company specifically for
use in connection with the transactions contemplated hereby.
.c2.'Section 5.4. Organization and Ownership of Shares of
Subsidiaries; Affiliates';. (a) Schedule 5.4 contains (except as
noted therein) complete and correct lists (i) of the Company's
Subsidiaries, showing, as to each Subsidiary, the correct name
thereof, the jurisdiction of its organization, and the percentage
of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other
Subsidiary, (ii) of the Company's Affiliates (other than
Subsidiaries) existing on March 31, 1998 and all of the Company's
Affiliates (other than Subsidiaries) known to it since such date
and (iii) of the Company's directors and senior officers.
(b) All of the outstanding shares of capital stock or similar
equity interests of each Significant Subsidiary shown in Schedule
5.4 as being owned by the Company and its Subsidiaries have been
validly issued, are fully paid and nonassessable and are owned by
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the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 5.4).
(c) Each Significant Subsidiary identified in Schedule 5.4 is
a corporation or other legal entity duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign corporation or
other legal entity and is in good standing in each jurisdiction in
which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good
standing could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each such Significant
Subsidiary has the corporate or other power and authority to own or
hold under lease the properties it purports to own or hold under
lease and to transact the business it transacts and proposes to
transact.
(d) No Significant Subsidiary is a party to, or otherwise
subject to, any legal restriction or any agreement (other than this
Agreement, the agreements listed on Schedule 5.4 and customary
limitations imposed by corporate law statutes) restricting the
ability of such Significant Subsidiary to pay dividends out of
profits or make any other similar distributions of profits to the
Company or any of its Subsidiaries that owns outstanding shares of
capital stock or similar equity interests of such Significant
Subsidiary.
.c2.Section 5.5. Financial Statements;. The Company has delivered
to each Purchaser copies of the financial statements of the Company
and its Subsidiaries listed on Schedule 5.5. All of said financial
statements (including in each case the related schedules and notes)
fairly present in all material respects the consolidated financial
position of the Company and its Subsidiaries as of the respective
dates specified in such financial statements and the consolidated
results of their operations and cash flows for the respective
periods so specified and have been prepared in accordance with GAAP
consistently applied throughout the periods involved except as set
forth in the notes thereto (subject, in the case of any interim
financial statements, to normal year-end adjustments).
.c2.Section 5.6. Compliance with Laws, Other Instruments, Etc;. The
execution, delivery and performance by the Company of this
Agreement and the Notes will not (a) contravene, result in any
breach of, or constitute a default under, or result in the creation
of any Lien in respect of any property of the Company or any
Subsidiary under, any indenture, mortgage, deed of trust, loan,
purchase or credit agreement, lease, corporate charter or by-laws,
or any other agreement or instrument to which the Company or any
Subsidiary is bound or by which the Company or any Subsidiary or
any of their respective properties may be bound or affected, (b)
conflict with or result in a breach of any of the terms, conditions
or provisions of any order, judgment, decree, or ruling of any
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court, arbitrator or Governmental Authority applicable to the
Company or any Subsidiary or (c), assuming the representations of
the Purchasers, with respect to the Securities Act, contained in
Section 6 are true and correct on the date of Closing, violate any
provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary.
.c2.Section 5.7. Governmental Authorizations, Etc;. Assuming the
representations of the Purchasers, with respect to the Securities
Act, contained in Section 6 are true and correct on the date of
Closing, no consent, approval or authorization of, or registration,
filing or declaration with, any Governmental Authority is required
in connection with the execution, delivery or performance by the
Company of this Agreement or the Notes.
.c2.'Section 5.8. Litigation; Observance of Agreements, Statutes and
Orders';. (a) There are no actions, suits or proceedings pending
or, to the knowledge of the Company, threatened against or
affecting the Company or any Subsidiary or any property of the
Company or any Subsidiary in any court or before any arbitrator of
any kind or before or by any Governmental Authority that,
individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default
under any term of any agreement or instrument to which it is a
party or by which it is bound, or any order, judgment, decree or
ruling of any court, arbitrator or Governmental Authority or is in
violation of any applicable law, ordinance, rule or regulation
(including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or
in the aggregate, could reasonably be expected to have a Material
Adverse Effect.
.c2.Section 5.9. Taxes;. The Company and its Subsidiaries have
filed all tax returns that are required to have been filed in any
jurisdiction, and have paid all taxes shown to be due and payable
on such returns and all other taxes and assessments levied upon
them or their properties, assets, income or franchises, to the
extent such taxes and assessments have become due and payable and
before they have become delinquent, except for any taxes and
assessments (a) the amount of which is not individually or in the
aggregate Material or (b) the amount, applicability or validity of
which is currently being contested in good faith by appropriate
proceedings and with respect to which the Company or a Subsidiary,
as the case may be, has established adequate reserves in accordance
with GAAP. The Company knows of no basis for any other tax or
assessment that could reasonably be expected to have a Material
Adverse Effect. The charges, accruals and reserves on the books of
the Company and its Subsidiaries in respect of Federal, state or
other taxes for all fiscal periods are adequate. The Federal
income tax liabilities of the Company and its Subsidiaries have
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been determined by the Internal Revenue Service and paid for all
fiscal years up to and including the fiscal year ended March 31,
1997.
.c2.'Section 5.10. Title to Property; Leases';. The Company and its
Subsidiaries have good and sufficient title to their respective
properties that individually or in the aggregate are Material,
including all such properties reflected in the most recent audited
balance sheet referred to in Section 5.5 or purported to have been
acquired by the Company or any Subsidiary after said date (except
as sold or otherwise disposed of in the ordinary course of
business), in each case free and clear of Liens prohibited by this
Agreement. All leases that individually or in the aggregate are
Material are valid and subsisting and are in full force and effect
in all material respects.
.c2.Section 5.11. Licenses, Permits, Etc;. (a) The Company and its
Subsidiaries own or possess all licenses, permits, franchises,
authorizations, patents, copyrights, service marks, trademarks and
trade names, or rights thereto, that individually or in the
aggregate are Material, without known conflict with the rights of
others;
(b) To the best knowledge of the Company, no product of the
Company infringes in any material respect any license, permit,
franchise, authorization, patent, copyright, service mark,
trademark, trade name or other right owned by any other Person; and
(c) To the best knowledge of the Company, there is no
material violation by any Person of any right of the Company or any
of its Subsidiaries with respect to any patent, copyright, service
mark, trademark, trade name or other right owned or used by the
Company or any of its Subsidiaries.
.c2.Section 5.12. Compliance with ERISA;. (a) The Company and each
ERISA Affiliate have operated and administered each Plan in
compliance with all applicable laws except for such instances of
noncompliance as have not resulted in and could not reasonably be
expected to result in a Material Adverse Effect. Neither the
Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions
of the Code relating to employee benefit plans (as defined in
Section 3 of ERISA), and no event, transaction or condition has
occurred or exists that could reasonably be expected to result in
the incurrence of any such liability by the Company or any ERISA
Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in
either case pursuant to Title I or IV of ERISA or to such penalty
or excise tax provisions or to Section 401(a)(29) or 412 of the
Code, other than such liabilities or Liens as would not be
individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities
under each of the Plans (other than Multiemployer Plans),
determined as of the end of such Plan's most recently ended plan
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year on the basis of the actuarial assumptions specified for
funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of
such Plan allocable to such benefit liabilities by more than
$1,000,000 in the case of any single Plan and by more than
$1,000,000 in the aggregate for all Plans. The term "benefit
liabilities" has the meaning specified in Section 4001 of ERISA and
the terms "current value" and "present value" have the meaning
specified in section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred
withdrawal liabilities (and are not subject to contingent
withdrawal liabilities) under Section 4201 or 4204 of ERISA in
respect of Multiemployer Plans that individually or in the
aggregate are Material.
(d) The expected post-retirement benefit obligation
(determined as of the last day of the Company's most recently ended
fiscal year in accordance with Financial Accounting Standards Board
Statement No. 106, without regard to liabilities attributable to
continuation coverage mandated by Section 4980B of the Code) of the
Company and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the
issuance and sale of the Notes hereunder will not involve any
transaction that is subject to the prohibitions of Section 406 of
ERISA or in connection with which a tax could be imposed pursuant
to Section 4975(c)(1)(A)-(D) of the Code. The representation by
the Company in the first sentence of this Section 5.12(e) is made
in reliance upon and subject to the accuracy of your representation
in Section 6.2 as to the sources of the funds used to pay the
purchase price of the Notes to be purchased by you.
.c2.Section 5.13. Private Offering by the Company;. Neither the
Company nor First Union Capital Markets, a division of Wheat First
Securities (the only Person authorized to act on the Company's
behalf), has offered the Notes or any similar securities for sale
to, or solicited any offer to buy any of the same from, or
otherwise approached or negotiated in respect thereof with, any
Person other than you, the Other Purchasers and not more than
sixty-one other Institutional Investors, each of which has been
offered the Notes at a private sale for investment. Neither the
Company nor anyone acting on its behalf has taken, or will take,
any action that would subject the issuance or sale of the Notes to
the registration requirements of Section 5 of the Securities Act.
.c2.'Section 5.14. Use of Proceeds; Margin Regulations';. The Company
will apply the proceeds of the sale of the Notes as set forth in
Schedule 5.14. No part of the proceeds from the sale of the Notes
hereunder will be used, directly or indirectly, for the purpose of
buying or carrying any margin stock within the meaning of
Regulation U of the Board of Governors of the Federal Reserve
System (12 CFR 207), or for the purpose of buying or carrying or
trading in any securities under such circumstances as to involve
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the Company in a violation of Regulation X of said Board (12 CFR
224) or to involve any broker or dealer in a violation of
Regulation T of said Board (12 CFR 220). Margin stock does not
constitute more than 3% of the value of the consolidated assets of
the Company and its Subsidiaries and the Company does not have any
present intention that margin stock (other than a repurchase of
common stock of the Company publicly traded on a nationally
recognized exchange) will constitute more than 3% of the value of
such assets. As used in this Section, the terms "margin stock" and
"purpose of buying or carrying" shall have the meanings assigned to
them in said Regulation U.
.c2.'Section 5.15. Existing Debt; Future Liens';. (a) Schedule 5.15
sets forth a complete and correct list of all outstanding Debt of
the Company and its Subsidiaries as of the date of the Closing.
Neither the Company nor any Subsidiary is in default and no waiver
of default is currently in effect, in the payment of any principal
or interest on any Debt of the Company or such Subsidiary and no
event or condition exists with respect to any Debt of the Company
or any Subsidiary that would permit (or that with notice or the
lapse of time, or both, would permit) one or more Persons to cause
such Debt to become due and payable before its stated maturity or
before its regularly scheduled dates of payment.
(b) Neither the Company nor any Subsidiary has agreed or
consented to cause or permit in the future (upon the happening of
a contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien not permitted by
Section 10.3.
.c2.Section 5.16. Foreign Assets Control Regulations, Etc;. Neither
the sale of the Notes by the Company hereunder nor its use of the
proceeds thereof will violate the Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the
United States Treasury Department (31 CFR, Subtitle B, Chapter V,
as amended) or any enabling legislation or executive order relating
thereto.
.c2.Section 5.17. Status under Certain Statutes;. Neither the
Company nor any Subsidiary is an "investment company" registered or
required to be registered or subject to regulation under the
Investment Company Act of 1940, as amended, or is subject to
regulation under the Public Utility Holding Company Act of 1935, as
amended, or the Federal Power Act, as amended.
.c2.Section 5.18. Notes Rank Pari Passu;. The obligations of the
Company under this Agreement and the Notes rank at least pari passu
in right of payment with all other senior unsecured Debt (actual or
contingent) of the Company, including, without limitation, all
senior unsecured Debt of the Company described in Schedule 5.15
hereto.
.c2.Section 5.19. Environmental Matters;. Neither the Company nor
any Subsidiary has knowledge of any claim or has received any
notice of any claim, and no proceeding has been instituted raising
16
any claim against the Company or any of its Subsidiaries or any of
their respective real properties now or formerly owned, leased or
operated by any of them or other assets, alleging any damage to the
environment or violation of any Environmental Laws, except, in each
case, such as could not reasonably be expected to result in a
Material Adverse Effect. Except as otherwise disclosed to you in
writing:
(a) neither the Company nor any Subsidiary has
knowledge of any facts which would give rise to any claim,
public or private, of violation of Environmental Laws or
damage to the environment emanating from, occurring on or in
any way related to real properties now or formerly owned,
leased or operated by any of them or to other assets or their
use, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its
Subsidiaries has stored any Hazardous Materials on real properties now or
formerly owned, leased or operated by any of them or has
disposed of any Hazardous Materials in a manner contrary to
any Environmental Laws in each case in any manner that could
reasonably be expected to result in a Material Adverse Effect;
and
(c) all buildings on all real properties now owned,
leased or operated by the Company or any of its Subsidiaries
are in compliance with applicable Environmental Laws, except
where failure to comply could not reasonably be expected to
result in a Material Adverse Effect.
.c2. Section 5.20. Computer 2000 Compliant;. The Company and its
Subsidiaries are in the process of taking steps to address the
impact of the occurrence of the year 2000 on their internal
computer systems and the occurrence of the year 2000 and its impact
on said internal computer systems is not expected to have a
Material Adverse Effect.
.c.Section 6. Representations of the Purchaser;.
.c2.Section 6.1. Purchase for Investment;. You represent that you
are purchasing the Notes for your own account or for one or more
separate accounts maintained by you or for the account of one or
more pension or trust funds and not with a view to the distribution
thereof; provided that the disposition of your or their property
shall at all times be within your or their control. You understand
that the Notes have not been registered under the Securities Act
and may be resold only if registered pursuant to the provisions of
the Securities Act or if an exemption from registration is
available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the
Company is not required to and does not intend to register the
Notes under the Securities Act for resale.
.c2.Section 6.2. Source of Funds;. You represent that at least one
of the following statements is an accurate representation as to
17
each source of funds (a "Source") to be used by you to pay the
purchase price of the Notes to be purchased by you hereunder:
(a) the Source is an "insurance company general
account" within the meaning of Department of Labor Prohibited
Transaction Exemption ("PTE") 95-60 (issued July 12, 1995) and
there is no employee benefit plan treating as a single plan,
all plans maintained by the same employer or employee
organization, with respect to which the amount of the general
account reserves and liabilities for all contracts held by or
on behalf of such plan, exceed ten percent (10%) of the total
reserves and liabilities of such general account (exclusive of
separate account liabilities) plus surplus, as set forth in
the NAIC Annual Statement filed with your state of domicile;
or
(b) the Source is either (i) an insurance company
pooled separate account, within the meaning of PTE 90-1
(issued January 29, 1990), or (ii) a bank collective
investment fund, within the meaning of the PTE 91-38 (issued
July 12, 1991) and, except as you have disclosed to the
Company in writing pursuant to this paragraph (b), no employee
benefit plan or group of plans maintained by the same employer
or employee organization beneficially owns more than 10% of
all assets allocated to such pooled separate account or
collective investment fund; or
(c) the Source constitutes assets of an "investment
fund" (within the meaning of Part V of the QPAM Exemption)
managed by a "qualified professional asset manager" or "QPAM"
(within the meaning of Part V of the QPAM Exemption), no
employee benefit plan's assets that are included in such
investment fund when combined with the assets of all other
employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section
V(c)(1) of the QPAM Exemption) of such employer or by the same
employee organization and managed by such QPAM, exceed 20% of
the total client assets managed by such QPAM, the conditions
of Part l(c) and (g) of the QPAM Exemption are satisfied,
neither the QPAM nor a Person controlling or controlled by the
QPAM (applying the definition of "control" in Section V(e) of
the QPAM Exemption) owns a 5% or more interest in the Company
and (i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose assets are included in such
investment fund have been disclosed to the Company in writing
pursuant to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans,
or a separate account or trust fund comprised of one or more
employee benefit plans, each of which has been identified to
the Company in writing pursuant to this paragraph (e); or
(f) the Source does not include assets of any employee
18
benefit plan, other than a plan exempt from the coverage of
ERISA.
If you or any subsequent transferee of the Notes indicates
that you or such transferee are relying on any representation
contained in paragraph (b), (c) or (e) above, the Company shall
deliver on the date of Closing and on the date of any applicable
transfer a certificate, which shall either state that (i) it is
neither a party in interest nor a "disqualified person" (as defined
in Section 4975(e)(2) of the Code), with respect to any plan
identified pursuant to paragraphs (b) or (e) above, or (ii) with
respect to any plan, identified pursuant to paragraph (c) above,
neither it nor any "affiliate" (as defined in Section V(c) of the
QPAM Exemption) has at such time, and during the immediately
preceding one year, exercised the authority to appoint or terminate
said QPAM as manager of any plan identified in writing pursuant to
paragraph (c) above or to negotiate the terms of said QPAM's
management agreement on behalf of any such identified plan. As
used in this Section 6.2, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account"
shall have the respective meanings assigned to such terms in
Section 3 of ERISA.
.c.Section 7. Information as to the Company;.
.c2.Section 7.1. Financial and Business Information;. The Company
shall deliver to each holder of Notes that is an Institutional
Investor:
(a) Quarterly Statements within 60 days after the end
of each quarterly fiscal period in each fiscal year of the
Company (other than the last quarterly fiscal period of each
such fiscal year), duplicate copies of:
(i) a consolidated balance sheet of the Company and
its Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and
its Subsidiaries for such quarter and (in the case of the
second and third quarters) for the portion of the fiscal
year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in
reasonable detail, prepared in accordance with GAAP applicable to
quarterly financial statements generally, and certified by a Senior
Financial Officer as fairly presenting, in all material respects,
the financial position of the companies being reported on and their
results of operations and cash flows, subject to changes resulting
from year-end adjustments; provided that delivery within the time
period specified above of copies of the Company's Quarterly Report
on Form 10-Q prepared in compliance with the requirements therefor
and filed with the Securities and Exchange Commission shall be
deemed to satisfy all of the requirements of this Section 7.1(a);
(b) Annual Statements within 105 days after the end of
19
each fiscal year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and
its Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and
its Subsidiaries, for such year,
setting forth in each case in comparative form the figures for
the previous fiscal year, all in reasonable detail, prepared
in accordance with GAAP, and accompanied by:
(1) an opinion thereon of independent certified
public accountants of recognized national standing, which
opinion shall state that such financial statements
present fairly, in all material respects, the financial
position of the companies being reported upon and their
results of operations and cash flows and have been
prepared in conformity with GAAP, and that the
examination of such accountants in connection with such
financial statements has been made in accordance with
generally accepted auditing standards, and that such
audit provides a reasonable basis for such opinion in the
circumstances, and
(2) a certificate of such accountants stating that
they have reviewed this Agreement and stating further
whether, in conducting their customary audit, they have
become aware of any condition or event that then
constitutes a Default or an Event of Default, and, if
they are aware that any such condition or event then
exists, specifying the nature and period of the existence
thereof (it being understood that such accountants shall
not be liable, directly or indirectly, for any failure to
obtain knowledge of any Default or Event of Default
unless such accountants should have obtained knowledge
thereof in making an audit in accordance with generally
accepted auditing standards or did not make such an
audit),
provided that the delivery within the time period specified
above of the Company's Annual Report on Form 10-K for such
fiscal year (together with the Company's annual report to
shareholders, if any, prepared pursuant to Rule 14a-3 under
the Exchange Act) prepared in accordance with the requirements
therefor and filed with the Securities and Exchange
Commission, together with the accountant's certificate
described in clause (2) above, shall be deemed to satisfy the
requirements of this Section 7.1(b);
(c) SEC and Other Reports promptly upon their becoming
available, one copy of (i) each financial statement, report,
notice or proxy statement sent by the Company or any
Subsidiary to public securities holders generally, (ii) each
regular or periodic report filed with the Securities and
20
Exchange Commission, and all press releases and other
statements made available generally by the Company or any
Subsidiary to the public concerning developments that are
Material and (iii) prompt written notice and sufficient
information relating to the filing of each registration
statement and each prospectus and all amendments thereto filed
by the Company or any Subsidiary with the Securities and
Exchange Commission;
(d) Notice of Default or Event of Default promptly,
and in any event within five days after a Responsible Officer
becoming aware of the existence of any Default or Event of
Default or that any Person has given any notice or taken any
action with respect to a claimed default hereunder or that any
Person has given any notice or taken any action with respect
to a claimed default of the type referred to in Section 11(f),
a written notice specifying the nature and period of existence
thereof and what action the Company is taking or proposes to
take with respect thereto;
(e) ERISA Matters promptly, and in any event within
five days after a Responsible Officer becoming aware of any of
the following, a written notice setting forth the nature
thereof and the action, if any, that the Company or an ERISA
Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable event,
as defined in Section 4043(b) of ERISA and the
regulations thereunder, for which notice thereof has not
been waived pursuant to such regulations as in effect on
the date hereof; or
(ii) the taking by the PBGC of steps to institute,
or the threatening by the PBGC of the institution of,
proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Company or
any ERISA Affiliate of a notice from a Multiemployer Plan
that such action has been taken by the PBGC with respect
to such Multiemployer Plan; or
(iii) any event, transaction or condition that could
result in the incurrence of any liability by the Company
or any ERISA Affiliate pursuant to Title I or IV of ERISA
or the penalty or excise tax provisions of the Code
relating to employee benefit plans, or in the imposition
of any Lien on any of the rights, properties or assets of
the Company or any ERISA Affiliate pursuant to Title I or
IV of ERISA or such penalty or excise tax provisions, if
such liability or Lien, taken together with any other
such liabilities or Liens then existing, could reasonably
be expected to have a Material Adverse Effect;
(f) Notices from Governmental Authority promptly, and
in any event within 30 days of receipt thereof, copies of any
21
notice to the Company or any Subsidiary from any Federal or
state Governmental Authority relating to any order, ruling,
statute or other law or regulation that could reasonably be
expected to have a Material Adverse Effect; and
(g) Requested Information with reasonable promptness,
such other data and information relating to the business,
operations, affairs, financial condition, assets or properties
of the Company or any of its Subsidiaries or relating to the
ability of the Company to perform its obligations hereunder
and under the Notes as from time to time may be reasonably
requested by any such holder of Notes, including without
limitation, such information as is required by SEC Rule 144A
under the Securities Act to be delivered to the prospective
transferee of the Notes, but excluding, so long as no Default
or Event of Default exists, projections and confidential data
or information of a technical or scientific nature which does
not relate directly to the business, operations, affairs,
financial conditions, assets or properties of the Company or
any of its Subsidiaries or to the ability of the Company to
perform its obligations hereunder and under the Notes.
.c2.Section 7.2. Officer's Certificate;. Each set of financial
statements delivered to a holder of Notes pursuant to Section
7.1(a) or Section 7.1(b) hereof shall be accompanied by a
certificate of a Senior Financial Officer setting forth:
(a) Covenant Compliance the information (including
detailed calculations) required in order to establish whether
the Company was in compliance with the requirements of Section
10.1 through Section 10.5 hereof, inclusive, during the
quarterly or annual period covered by the statements then
being furnished (including with respect to each such Section,
where applicable, the calculations of the maximum or minimum
amount, ratio or percentage, as the case may be, permissible
under the terms of such Sections, and the calculation of the
amount, ratio or percentage then in existence); and
(b) Event of Default a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to
be made, under his or her supervision, a review of the
transactions and conditions of the Company and its
Subsidiaries from the beginning of the quarterly or annual
period covered by the statements then being furnished to the
date of the certificate and that such review shall not have
disclosed the existence during such period of any condition or
event that constitutes a Default or an Event of Default or, if
any such condition or event existed or exists (including,
without limitation, any such event or condition resulting from
the failure of the Company or any Subsidiary to comply with
any Environmental Law), specifying the nature and period of
existence thereof and what action the Company shall have taken
or proposes to take with respect thereto.
22
.c2.Section 7.3. Inspection;. The Company shall permit the
representatives of each holder of Notes that is an Institutional
Investor:
(a) No Default if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable
prior notice to the Company, to visit the principal executive
office of the Company, to discuss the affairs, finances and
accounts of the Company and its Subsidiaries with the
Company's officers, and (with the consent of the Company,
which consent will not be unreasonably withheld) its
independent public accountants, and (with the consent of the
Company, which consent will not be unreasonably withheld) to
visit the other offices and properties of the Company and each
Subsidiary, all at such reasonable times and as often as may
be reasonably requested in writing, provided that a
Responsible Officer shall be given an opportunity to attend
any such meeting or visit; and
(b) Default if a Default or Event of Default then
exists, at the expense of the Company, to visit and inspect
any of the offices or properties of the Company or any
Significant Subsidiary, to examine all their respective books
of account, records, reports and other papers, to make copies
and extracts therefrom, and to discuss their respective
affairs, finances and accounts with their respective officers
and independent public accountants (and by this provision the
Company authorizes said accountants to discuss the affairs,
finances and accounts of the Company and its Subsidiaries),
all at such times and as often as may be requested.
.c.Section 8. Prepayment of the Notes;.
.c2.Section 8.1. Required Prepayments;. On May 4, 2006 and on each
May 4 thereafter to and including May 4, 2009 the Company will
prepay $20,000,000 principal amount (or such lesser principal
amount as shall then be outstanding) of the Notes at par and
without payment of the Make-Whole Amount or any premium; provided
that upon any partial prepayment of the Notes pursuant to Section
8.2 or Section 8.3 the principal amount of each required prepayment
of the Notes becoming due under this Section 8.1 on and after the
date of such prepayment or purchase shall be reduced in the same
proportion as the aggregate unpaid principal amount of the Notes is
reduced as a result of such prepayment or purchase.
.c2.Section 8.2. Optional Prepayments with Make-Whole Amount;. The
Company may, at its option, upon notice as provided below, prepay
at any time all, or from time to time any part of, the Notes, in an
amount not less than 10% of the aggregate principal amount of the
Notes then outstanding in the case of a partial prepayment, at 100%
of the principal amount so prepaid, together with interest accrued
thereon to the date of such prepayment, plus the Make-Whole Amount
determined for the prepayment date with respect to such principal
amount. The Company will give each holder of Notes written notice
23
of each optional prepayment under this Section 8.2 not less than 30
days and not more than 60 days prior to the date fixed for such
prepayment. Each such notice shall specify such date, the
aggregate principal amount of the Notes to be prepaid on such date,
the principal amount of each Note held by such holder to be prepaid
(determined in accordance with Section 8.4), and the interest to be
paid on the prepayment date with respect to such principal amount
being prepaid, and shall be accompanied by a certificate of a
Senior Financial Officer as to the estimated Make-Whole Amount due
in connection with such prepayment (calculated as if the date of
such notice were the date of the prepayment), setting forth the
details of such computation. Two Business Days prior to such
prepayment, the Company shall deliver to each holder of Notes a
certificate of a Senior Financial Officer specifying the
calculation of such Make-Whole Amount as of the specified
prepayment date.
.c2.Section 8.3. Prepayment of Notes upon Change of Control;. (a)
(i) In the event that any Change of Control shall occur or any
Responsible Officer of the Company shall have knowledge of any
Control Event, the Company will give written notice (the "Company
Notice") of such fact in the manner provided in Section 18 hereof
to the holders of the Notes. The Company Notice shall be delivered
promptly upon receipt of such knowledge by the Company and in any
event no later than three Business Days following the occurrence of
any Change of Control or Control Event, as the case may be. If a
Change in Control has occurred, the Company Notice shall also (1)
describe the facts and circumstances of such Change of Control in
reasonable detail, (2) make reference to this Section 8.3(a) and
the right of the holders of the Notes to require prepayment of the
Notes on the terms and conditions provided for in this Section
8.3(a), (3) offer in writing to prepay the outstanding Notes,
together with accrued interest to the date of prepayment, but
without premium, and (4) specify a date for such prepayment (the
"Change of Control Prepayment Date"), which Change of Control
Prepayment Date shall be not more than 90 days nor less than 30
days following the date of such Company Notice. Each holder of the
then outstanding Notes shall have the right to accept such offer
and require prepayment of the Notes held by such holder in full by
written notice to the Company (a "Noteholder Notice") given not
later than 20 days after receipt of the Company Notice. The
Company shall on the Change of Control Prepayment Date prepay in
full all of the Notes held by holders which have so accepted such
offer of prepayment. It is understood and agreed that the failure
of any holder of the Notes to accept or decline an offer of
prepayment pursuant to this Section 8.3 shall be deemed to be an
election by such holder to decline such prepayment. The prepayment
price of the Notes payable upon the occurrence of any Change of
Control shall be an amount equal to 100% of the outstanding
principal amount of the Notes so to be prepaid and accrued interest
24
thereon to the date of such prepayment, but without premium.
(ii) The Company will not take any action that consummates or
finalizes a Change of Control unless at least ten days prior to
such action it shall have given to each holder of Notes written
notice containing and constituting an offer to prepay Notes as
described in subparagraph (a)(i) of this Section 8.3 and
contemporaneously with such action it prepays all Notes required to
be prepaid in accordance with subparagraph (a)(i) of this Section
8.3 as a result of such Change of Control having been consummated.
(iii) The obligation of the Company to prepay Notes pursuant to
the offer required and accepted in accordance with subparagraph(a)
(i) of this Section 8.3 is subject to the occurrence of the Change
in Control in respect of which such offers and acceptances shall
have been made. In the event that such Change in Control does not
occur on the Change of Control Prepayment Date, the prepayment
shall be deferred until and shall be made on the date on which such
Change in Control occurs. The Company shall keep each holder of
Notes reasonably and timely informed of (1) any such deferral of
the date of prepayment, (2) the date on which such Change in
Control and the prepayment are expected to occur, and (3) any
determination by the Company that efforts to effect such Change in
Control have ceased or been abandoned (in which case the offers and
acceptances made pursuant to this Section 8.3 in respect of such
Change in Control shall be deemed rescinded).
(b)(i) Without limiting the foregoing, notwithstanding any
failure on the part of the Company to give the Company Notice
herein required as a result of the occurrence of a Change of
Control, each holder of the Notes shall have the right by delivery
of written notice to the Company to require the Company to prepay,
and the Company will prepay, such holder's Notes in full, together
with accrued interest thereon to the date of prepayment, but
without premium. Notice of any required prepayment pursuant to
this Section 8.3(b)(i) may be delivered by any holder of the Notes
which was entitled to, but did not receive, such Company Notice to
the Company after such holder has actual knowledge of such Change
of Control. On the date (the "Change of Control Delayed Prepayment
Date") designated in such holder's notice (which shall be on or
after the date of the Change of Control and shall be not more than
90 days nor less than 30 days following the date of such holder's
notice), the Company shall prepay in full all of the Notes held by
such holder, together with accrued interest thereon to the date of
prepayment, but without premium. If the holder of any Note gives
any notice pursuant to this Section 8.3(b)(i), the Company shall
give a Company Notice within three Business Days of receipt of such
notice and identify the Change of Control Delayed Prepayment Date
to all other holders of the Notes and each of such other holders
shall then and thereupon have the right to accept the Company's
offer to prepay the Notes held by such holder in full and require
prepayment of such Notes by delivery of a Noteholder Notice within
25
20 days following receipt of such Company Notice; provided only
that any date for prepayment of such holder's Notes shall be the
Change of Control Delayed Prepayment Date. On the Change of
Control Delayed Prepayment Date, the Company shall prepay in full
the Notes of each holder thereof which has accepted such offer of
prepayment at a prepayment price equal to 100% of the outstanding
principal amount of the Notes so to be prepaid and accrued interest
thereon to the date of such prepayment, but without premium.
(ii) Compliance with the provisions of this Section 8.3(b)
shall not be deemed to constitute a waiver of, or consent to, any
Default or Event of Default caused by any violation of the
provisions of Section 8.3(a).
.c2.Section 8.4. Allocation of Partial Prepayments;. In the case
of each partial prepayment of the Notes pursuant to Section 8.2,
the principal amount of the Notes to be prepaid shall be allocated
among all of the Notes at the time outstanding in proportion, as
nearly as practicable, to the respective unpaid principal amounts
thereof not theretofore called for prepayment. All partial
prepayments made pursuant to Section 8.3 shall be applied only to
the Notes of the holders who have elected to participate in such
prepayment.
.c2.'Section 8.5. Maturity; Surrender, Etc';. In the case of each
prepayment of Notes pursuant to this Section 8, the principal
amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with
interest on such principal amount accrued to such date and the
applicable Make-Whole Amount, if any. From and after such date,
unless the Company shall fail to pay such principal amount when so
due and payable, together with the interest and Make-Whole Amount,
if any, as aforesaid, interest on such principal amount shall cease
to accrue. Any Note paid or prepaid in full shall be surrendered
to the Company and cancelled and shall not be reissued, and no Note
shall be issued in lieu of any prepaid principal amount of any
Note.
.c2.Section 8.6. Purchase of Notes;. The Company will not and will
not permit any Affiliate to purchase, redeem, prepay or otherwise
acquire, directly or indirectly, any of the outstanding Notes
except upon the payment or prepayment of the Notes in accordance
with the terms of this Agreement and the Notes. The Company will
promptly cancel all Notes acquired by it or any Affiliate pursuant
to any payment, prepayment or purchase of Notes pursuant to any
provision of this Agreement and no Notes may be issued in
substitution or exchange for any such Notes.
.c2.Section 8.7. Make-Whole Amount;. The term "Make-Whole Amount"
means, with respect to any Note, an amount equal to the excess, if
any, of the Discounted Value of the Remaining Scheduled Payments
with respect to the Called Principal of such Note over the amount
of such Called Principal; provided that the Make-Whole Amount may
in no event be less than zero. For the purposes of determining the
26
Make-Whole Amount, the following terms have the following meanings:
"Called Principal" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to
Section 8.2 or has become or is declared to be immediately due
and payable pursuant to Section 12.1, as the context requires.
"Discounted Value" means, with respect to the Called
Principal of any Note, the amount obtained by discounting all
Remaining Scheduled Payments with respect to such Called
Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount
factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment
Yield with respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called
Principal of any Note, 0.5% over the yield to maturity implied
by (a) the yields reported, as of 10:00 A.M. (New York City
time) on the second Business Day preceding the Settlement Date
with respect to such Called Principal, on the display
designated as "Page USD" of the Bloomberg Financial Markets
Services Screen (or, if not available, any other national
recognized trading screen reporting on-line intraday trading
in the U.S. Treasury securities) 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 (b) if such yields are not reported as of such time
or the yields reported as of such time are not ascertainable,
the Treasury Constant Maturity Series Yields reported, for the
latest day for which such yields have been so reported as of
the second Business Day preceding the Settlement Date with
respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life
of such Called Principal as of such Settlement Date. Such
implied yield will be determined, if necessary, by (i)
converting U.S. Treasury bill quotations to bond-equivalent
yields in accordance with accepted financial practice and (ii)
interpolating linearly between (1) the actively traded U.S.
Treasury security with the maturity closest to and greater
than the Remaining Average Life and (2) the actively traded
U.S. Treasury security with the maturity closest to and less
than the Remaining Average Life.
"Remaining Average Life" means, with respect to any
Called Principal, the number of years (calculated to the
nearest one-twelfth year) obtained by dividing (a) such Called
Principal into (b) the sum of the products obtained by
multiplying (i) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by
27
(ii) the number of years (calculated to the nearest
one-twelfth year) that will elapse between the Settlement Date
with respect to such Called Principal and the scheduled due
date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the
Called Principal of any Note, all payments of such Called
Principal and interest thereon that would be due after the
Settlement Date with respect to such Called Principal if no
payment of such Called Principal were made prior to its
scheduled due date; provided that if such Settlement Date is
not a date on which interest payments are due to be made under
the terms of the Notes, then the amount of the next succeeding
scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be
paid on such Settlement Date pursuant to Section 8.2 or 12.1.
"Settlement Date" means, with respect to the Called
Principal of any Note, the date on which such Called Principal
is to be prepaid pursuant to Section 8.2 or has become or is
declared to be immediately due and payable pursuant to Section
12.1, as the context requires.
.c.Section 9. Affirmative Covenants;.
The Company covenants that so long as any of the Notes are
outstanding:
.c2.Section 9.1. Compliance with Law;. The Company will, and will
cause each of its Subsidiaries to, comply with all laws, ordinances
or governmental rules or regulations to which each of them is
subject, including, without limitation, ERISA and applicable laws
in respect of Foreign Pension Plans and all Environmental Laws, and
will obtain and maintain in effect all licenses, certificates,
permits, franchises and other governmental authorizations necessary
to the ownership of their respective properties or to the conduct
of their respective businesses, in each case to the extent
necessary to ensure that non-compliance with such laws, ordinances
or governmental rules or regulations or failures to obtain or
maintain in effect such licenses, certificates, permits, franchises
and other governmental authorizations could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect.
.c2.Section 9.2. Insurance;. The Company will, and will cause each
of its Subsidiaries to, maintain, with financially sound and
reputable insurers, insurance with respect to their respective
properties and businesses against such casualties and
contingencies, of such types, on such terms and in such amounts
(including deductibles, co-insurance and self-insurance, if
adequate reserves are maintained with respect thereto) as is
customary in the case of entities of established reputations
engaged in the same or a similar business and similarly situated.
.c2.Section 9.3. Maintenance of Properties;. The Company will, and
will cause each of its Subsidiaries to, maintain and keep, or cause
28
to be maintained and kept, their respective properties in good
repair, working order and condition (other than ordinary wear and
tear), so that the business carried on in connection therewith may
be properly conducted at all times; provided that this Section
shall not prevent the Company or any Subsidiary from discontinuing
the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the
Company has concluded that such discontinuance could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
.c2.Section 9.4. Payment of Taxes and Claims;. The Company will,
and will cause each of its Subsidiaries to, file all tax returns
required to be filed in any jurisdiction and to pay and discharge
all taxes shown to be due and payable on such returns and all other
taxes, assessments, governmental charges, or levies imposed on them
or any of their properties, assets, income or franchises, to the
extent such taxes and assessments have become due and payable and
before they have become delinquent and all claim for which sums
have become due and payable that have or might become a Lien on
properties or assets of the Company or any Subsidiary; provided
that neither the Company nor any Subsidiary need pay any such tax
or assessment or claims if (a) the amount, applicability or
validity thereof is contested by the Company or such Subsidiary on
a timely basis in good faith and in appropriate proceedings, and
the Company or a Subsidiary has established adequate reserves
therefor in accordance with GAAP on the books of the Company or
such Subsidiary or (b) the nonpayment of all such taxes and
assessments in the aggregate could not reasonably be expected to
have a Material Adverse Effect.
.c2.Section 9.5. Corporate Existence, Etc;. The Company will at all
times preserve and keep in full force and effect its corporate
existence. Subject to Sections 10.4 and 10.5, the Company will at
all times preserve and keep in full force and effect the corporate
existence of each of its Subsidiaries (unless merged into the
Company or a Subsidiary) and all rights and franchises of the
Company and its Subsidiaries unless, in the good faith judgment of
the Company, the termination of or failure to preserve and keep in
full force and effect such corporate existence, right or franchise
could not, individually or in the aggregate, have a Material
Adverse Effect.
.c2.Section 9.6. Nature of Business;. Neither the Company nor any
Subsidiary will engage in any business other than (a) any business
conducted by the Company and its Subsidiaries on the date of this
Agreement (an "Existing Business"), (b) any business related,
ancillary or complementary to an Existing Business, (c) any
business reasonably developed, derived or extended from an Existing
Business, or (d) any business which would not be Material.
.c2.Section 9.7. Notes to Rank Pari Passu;. The Notes and all other
obligations under this Agreement of the Company are and at all
29
times shall remain direct and unsecured obligations of the Company
ranking pari passu as against the assets of the Company with all
other Notes from time to time issued and outstanding hereunder
without any preference among themselves and pari passu with all
other present and future unsecured Debt (actual or contingent) of
the Company which is not expressed to be subordinate or junior in
rank to any other unsecured Debt of the Company.
.c2.Section 9.8. Guaranty by Subsidiaries;. (a) The Company will
cause each Subsidiary Guarantor existing as of the date of the
Closing to execute and deliver to each holder of Notes, at the
Closing, the Subsidiary Guaranty.
(b) The Company will cause each other Subsidiary that
executes and delivers a Guaranty supporting Bank Debt to execute
and deliver to each holder of Notes a supplement to the Subsidiary
Guaranty in the form of Exhibit A to Exhibit 9.8, and within three
Business Days thereafter shall deliver to each of the holders of
the Notes the following items:
(i) an executed counterpart of such supplement to the
Subsidiary Guaranty;
(ii) such documents and evidence with respect to such
Subsidiary as any holder of the Notes may reasonably have
requested in order to establish the existence and good
standing of such Subsidiary and the authorization of the
transactions contemplated by the Subsidiary Guaranty; and
(iii) an opinion of counsel satisfactory to the Required
Holders to the effect that the supplement to the Subsidiary
Guaranty has been duly authorized, executed and delivered and
the Subsidiary Guaranty constitutes the legal, valid and
binding contract and agreement of such Subsidiary enforceable
in accordance with its terms, except as an enforcement of such
terms may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the
enforcement of creditors' rights generally and by general
equitable principles.
.c2.Section 9.9. Termination of Certain Obligations under Bank Credit
Agreement;. After October 18, 2001, neither the Company nor any
Subsidiary will enter into any Lien consisting of a pledge of all
or any part of the capital stock of any Subsidiary to secure Debt
outstanding under the Bank Credit Agreement, excepting only any
Lien consisting of such a stock pledge created or incurred within
the limitations of Section 10.3(n), and on or prior to October 18,
2001, the Company shall, and shall have caused each Subsidiary to,
have terminated any Lien pursuant to and within the limitations of
Section 10.3(m).
.c.Section 10. Negative Covenants;.
The Company covenants that so long as any of the Notes are
outstanding:
.c2.Section 10.1. Consolidated Net Worth;. The Company will not, at
any time, permit Consolidated Net Worth to be less than the sum of
30
(a) $245,000,000 plus (b) 50% of Consolidated Net Income computed
on a cumulative basis for each of the elapsed fiscal quarters
ending after March 31, 1998; provided that notwithstanding that
Consolidated Net Income for any such fiscal quarter may be a
deficit figure, no reduction as a result thereof shall be made in
the sum to be maintained pursuant hereto.
.c2.Section 10.2. Limitations on Funded Debt;. (a) The Company will
not, and will not permit any Subsidiary to, create, issue, assume,
guarantee or otherwise incur or in any manner be or become liable
in respect of any Funded Debt, except:
(i) Funded Debt evidenced by the Notes;
(ii) Funded Debt of the Company and its Subsidiaries
outstanding as of the date of the Closing and described on
Schedule 5.15 hereto, and any extension, renewal, replacement,
refinancing or refunding of any such Funded Debt; provided
that (1) such extension, renewal, replacement, refinancing or
refunding of such Funded Debt shall be without increase in the
principal amount thereof at the time of such extension,
renewal, replacement, refinancing or refunding (except to the
extent that any additional amounts incurred thereunder are
permitted by the provisions of Section 10.2(a)(iii)), (2) in
the case of secured Funded Debt, the related Lien shall attach
solely to the same such property, (3) in the case of Funded
Debt secured by any Lien described in Section 10.3(m), such
Lien shall have been discharged on or prior to October 18,
2001, and (4) at the time of such extension, renewal,
replacement, refinancing or refunding and after giving effect
thereto and to the application of the proceeds thereof, no
Default or Event of Default would exist;
(iii) additional Funded Debt of the Company and its
Subsidiaries, provided that at the time of creation, issuance,
assumption, guarantee or incurrence thereof and after giving
effect thereto and to the application of the proceeds thereof:
(1) Consolidated Funded Debt shall not exceed 55%
of Consolidated Total Capitalization, and
(2) in the case of the issuance of any Funded Debt
of the Company secured by Liens permitted by Section
10.3(n) and any Funded Debt of a Subsidiary the sum of
(1) the aggregate amount of all Funded Debt of the
Company secured by Liens permitted by Section 10.3(n)
plus (2) the aggregate amount of all Funded Debt of
Subsidiaries (other than the Subsidiary Guaranty and any
Funded Debt of a Subsidiary of the Company evidenced by
a Guaranty and relating to Debt of the Company owing
under the Bank Credit Agreement) shall not exceed 15% of
Consolidated Net Worth; and
(iv) Funded Debt of a Subsidiary to the Company or to a
Wholly-owned Subsidiary.
(b) The renewal, extension, replacement, refinancing or
31
refunding of any Funded Debt, issued, incurred or outstanding
pursuant to Section 10.2(a)(ii) shall constitute the issuance of
additional Funded Debt which is, in turn, subject to the
limitations of the provisions of Section 10.2(a)(ii).
(c) Any Person which becomes a Subsidiary after the date
hereof shall for all purposes of this Section 10.2 be deemed to
have created, assumed or incurred at the time it becomes a
Subsidiary all Funded Debt of such Person existing immediately
after it becomes a Subsidiary.
.c2.Section 10.3. Limitation on Liens;. The Company will not, and
will not permit any Subsidiary to, create or incur, or suffer to be
incurred or to exist, any Lien on its or their property or assets,
whether now owned or hereafter acquired, or upon any income or
rofits therefrom, or transfer any property for the purpose of
subjecting the same to the payment of obligations in priority to
the payment of its or their general creditors, or acquire or agree
to acquire, or permit any Subsidiary to acquire, any property or
assets upon conditional sales agreements or other title retention
devices, except:
(a) Liens for taxes, assessments or other governmental
charges or levies which are not yet due and payable or the
payment of which is not at the time required by Section 9.4;
(b) Liens created by or resulting from any litigation,
legal proceeding, judgment or appeal, the time for or petition
for rehearing of which shall not have expired or which are
being actively contested in good faith by appropriate
proceedings and with respect to which adequate reserves are
being maintained in accordance with GAAP;
statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other similar Liens,
in each case, incurred in the ordinary course of business for
sums not yet due and payable or the payment of which is not at
the time required by Section 9.4;
(d) leases or subleases granted to others, easements,
rights-of-way, restrictions and other similar charges or
encumbrances, in each case incidental to, and not interfering
with, the ordinary conduct of the business of the Company or
any of its Subsidiaries, provided that such Liens do not, in
the aggregate, detract in any Material respect from the value
of such property;
(e) other Liens incidental to the normal conduct of the
business of the Company or any Subsidiary or the ownership of
its property which are not incurred in connection with the
borrowing of money and which do not in the aggregate
materially impair the use of such property in the operation of
the business of the Company or any Subsidiary or materially
impair the value of such property for the purposes of such
business, including, but not limited to: (i) pledges or
deposits made to secure payment of obligations in connection
32
with workers compensation insurance, unemployment insurance,
pensions or social security programs; and (ii) Liens arising
from good faith deposits in connection with or to secure
performance of statutory obligations and surety and appeal
bonds;
(f) Liens on property of the Company or any of its
Subsidiaries securing Debt owing to the Company or to any of
its Wholly-owned Subsidiaries;
(g) Liens existing on the date of this Agreement and
reflected on Schedule 10.3; provided, however, that any Lien
incurred pursuant to and within the limitations of Section
10.3(m) shall have been discharged on or prior to October 18,
2001 and any Lien on any such stock of a Foreign Significant
Subsidiary thereafter shall only have been incurred pursuant
to and within the limitations of Section 10.3(n);
(h) any Lien renewing, extending, replacing,
refinancing or refunding any Lien permitted by paragraph (g)
of this Section 10.3, provided that (i) the principal amount
of Debt secured by such Lien immediately prior to such
extension, renewal, replacement, refinancing or refunding is
not increased or the maturity thereof reduced, (ii) such Lien
is not extended to any other property, and (iii) immediately
after such extension, renewal, replacement, refinancing or
refunding no Default or Event of Default would exist; and
provided further that any Lien incurred pursuant to and within
the limitations of Section 10.3(m) may not be renewed,
extended, replaced or refinanced pursuant to and within the
limitations of this Section 10.3(h);
(i) any Lien on property or equipment created to secure
all or any part of the purchase price, or to secure Debt
incurred or assumed to pay all or any part of the purchase
price or cost of construction, of such property or equipment
(or any improvement thereon or thereto) acquired or
constructed by the Company or a Subsidiary after the date of
the Closing, provided that
(1) any such Lien shall extend solely to the item
or items of such property or equipment (or improvement
thereon) so acquired or constructed and, if required by
the terms of the instrument originally creating such
Lien, other property or equipment (or improvement
thereon) which is an improvement to or is acquired for
specific use in connection with such acquired or
constructed property or equipment (or improvement
thereon) or which is real property or equipment being
improved by such acquired or constructed property and
equipment (or improvement thereon),
(2) the principal amount of the Debt secured by any
such Lien shall at no time exceed an amount equal to the
Fair Market Value (as determined in good faith by the
33
board of directors of the Company) of such property or
equipment (or improvement thereon) at the time of such
acquisition or construction, and
(3) any such Lien shall be created
contemporaneously with, or within 180 days after, the
acquisition or completion of construction of such
property or equipment;
(j) any Lien existing on property of a Person
immediately prior to its being consolidated with or merged
into the Company or a Subsidiary or its becoming a Subsidiary,
or any Lien existing on any property acquired by the Company
or any Subsidiary at the time such property is so acquired
(whether or not the Debt secured thereby shall have been
assumed), provided that (i) no such Lien shall have been
created or assumed in contemplation of such consolidation or
merger or such Person's becoming a Subsidiary or such
acquisition of property, (ii) each such Lien shall extend
solely to the item or items of property so acquired and, if
required by the terms of the instrument originally creating
such Lien, other property which is an improvement to or is
acquired for specific use in connection with such acquired
property and (iii) the principal amount of the Debt secured by
any such Lien shall at no time exceed an amount equal to the
Fair Market Value (as determined in good faith by the board of
directors of the Company) of such property (or such
improvement thereon) at the time of such acquisition;
(k) inchoate Liens on any property of KEMET de Mexico,
S.A. de C.V. securing customs claims of Mexico arising as a
result of such property being sold or otherwise disposed of in
Mexico, provided that payment thereof is not at the time
required by Section 9.4;
(l) Liens on Margin Stock; provided that any Debt
secured by any such Lien shall have been created, issued,
assumed, guaranteed or otherwise incurred by the Company for
the purpose of repurchase or other acquisition of its publicly
traded common stock and any such Lien shall be within the
applicable provisions of Regulation T, U or X, as the case may
be, of the Board of Governors of the Federal Reserve System;
(m) Liens consisting of the pledge of stock of any
Foreign Significant Subsidiary by the Company to the Banks as
security for the Bank Debt pursuant to the Bank Credit
Agreement, provided that any such Lien shall have been
discharged on or prior to October 18, 2001 and any Lien
consisting of a pledge of stock of any Foreign Significant
Subsidiary created or existing after October 18, 2001 shall
have been created or incurred within the limitations of
Section 10.3(n); and
(n) other Liens not otherwise permitted by paragraphs
(a) through (m) securing Funded Debt of the Company or any
34
Subsidiary, provided that all Funded Debt secured by such
Liens shall have been incurred pursuant to and within the
limitations provided in Sections 10.2(a)(iii)(1) and (2).
.c2.Section 10.4. Merger, Consolidation, etc;. The Company will not,
and will not permit any of its Subsidiaries to, consolidate with or
merge with any other corporation or convey, transfer or lease
substantially all of its assets in a single transaction or series
of transactions to any Person (except that (y) a Subsidiary of the
Company may consolidate with or merge with, or convey, transfer or
lease substantially all of its assets in a single transaction or
series of transactions to, the Company or another Wholly-owned
Subsidiary of the Company and (z) each of the Company and its
Subsidiaries may convey, transfer or lease all of its assets in
compliance with the provisions of Section 10.5), provided that the
foregoing restriction does not apply to the consolidation or merger
of the Company with, or the conveyance, transfer or lease of
substantially all of the assets of the Company in a single
transaction or series of transactions to, any Person so long as:
(a) the successor formed by such consolidation or the
survivor of such merger or the Person that acquires by conveyance,
transfer or lease substantially all of the assets of the Company as
an entirety, as the case may be (the "Successor Corporation"),
shall be a solvent corporation organized and existing under the
laws of the United States of America, any State thereof, the
District of Columbia, Canada, the United Kingdom, France, Spain,
Portugal, Ireland, Italy, Germany, Denmark, Finland, Belgium, the
Netherlands, Luxembourg, Norway, Switzerland, Sweden or Austria;
(b) if the Company is not the Successor Corporation,
such corporation shall have executed and delivered to each holder
of Notes its written assumption of the due and punctual performance
and observance of each covenant and condition of this Agreement and
the Notes (pursuant to such agreements and instruments as shall be
reasonably satisfactory to the Required Holders), and the Company
shall have caused to be delivered to each holder of Notes an
opinion of independent counsel, reasonably satisfactory to the
Required Holders, to the effect that all agreements or instruments
effecting such assumption are enforceable in accordance with their
terms and comply with the terms hereof; and
(c) immediately after giving effect to such transaction,
(i) no Default or Event of Default would exist and (ii) the Company
would be permitted by the provisions of Section 10.2(a)(iii)(1) to
incur at least $1.00 of additional Funded Debt owing to a Person
other than a Subsidiary of the Successor Corporation.
No such conveyance, transfer or lease of substantially all of the
assets of the Company shall have the effect of releasing the
Company or any Successor Corporation from its liability under this
Agreement or the Notes.
.c2.Section 10.5. Sale of Assets, etc;. Except as permitted under
Section 10.4, the Company will not, and will not permit any of its
35
Subsidiaries to, make any Asset Disposition unless:
(a) in the good faith opinion of the Company, the Asset
Disposition is in exchange for consideration having a Fair
Market Value at least equal to that of the property exchanged
and is in the best interest of the Company or such Subsidiary;
and
(b) immediately after giving effect to the Asset
Disposition, (i) no Default or Event of Default would exist
and (ii) the Company would be permitted by the provisions of
Section 10.2(a)(iii)(1) to incur at least $1.00 of additional
Funded Debt; and
(c) immediately after giving effect to the Asset
Disposition, the Disposition Value of all property that was
the subject of any Asset Disposition occurring in the 12-month
period ending on the last day of the fiscal quarter in which
such Asset Disposition occurred would not exceed 15% of
Consolidated Total Assets as of the end of the then most
recently ended fiscal quarter of the Company.
If the Net Proceeds Amount for any Transfer is applied to a Debt
Prepayment Application or a Property Reinvestment Application
within one year after such Transfer, then such Transfer, only for
the purpose of determining compliance with subsection (c) of this
Section 10.5 as of a date on or after the Net Proceeds Amount is so
applied, shall be deemed not to be an Asset Disposition.
.c2.Section 10.6. Transactions with Affiliates;. The Company will
not and will not permit any Subsidiary to enter into directly or
indirectly any transaction or Material group of related
transactions (including without limitation the purchase, lease,
sale or exchange of properties of any kind or the rendering of any
service) with any Affiliate (other than the Company or another
Subsidiary), except in the ordinary course and pursuant to the
reasonable requirements of the Company's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to
the Company or such Subsidiary than would be obtainable in a
comparable arm's-length transaction with a Person not an Affiliate.
.c.Section 11. Events of Default;.
An "Event of Default" shall exist if any of the following
conditions or events shall occur and be continuing:
(a) the Company defaults in the payment of any principal
or Make-Whole Amount, if any, on any Note when the same
becomes due and payable, whether at maturity or at a date
fixed for prepayment or by declaration or otherwise; or
(b) the Company defaults in the payment of any interest
on any Note for more than five Business Days after the same
becomes due and payable; or
(c) the Company defaults in the performance of or
compliance with any term contained in Sections 9.8 or 10.1
through 10.5; or
(d) the Company defaults in the performance of or
36
compliance with any term contained herein (other than those
referred to in paragraphs (a), (b) and (c) of this Section 11)
and such default is not remedied within 30 days after the
earlier of (i) a Responsible Officer obtaining actual
knowledge of such default and (ii) the Company receiving
written notice of such default from any holder of a Note (any
such written notice to be identified as a "notice of default"
and to refer specifically to this paragraph (d) of Section
11); or
(e) any representation or warranty made in writing by or
on behalf of the Company or any Subsidiary Guarantor or by any
officer of the Company or any Subsidiary Guarantor in this
Agreement, the Subsidiary Guaranty or in any writing furnished
in connection with the transactions contemplated hereby proves
to have been false or incorrect in any material respect on the
date as of which made; or
(f) (i) the Company or any Subsidiary is in default (as
principal or as guarantor or other surety) in the payment of
any principal of or premium or make-whole amount or interest
on any Debt that is outstanding in an aggregate principal
amount of at least $7,500,000 beyond any period of grace
provided with respect thereto, or (ii) the Company or any
Subsidiary is in default in the performance of or compliance
with any term of any evidence of any Debt in an aggregate
outstanding principal amount of at least $7,500,000 or of any
mortgage, indenture or other agreement relating thereto or any
other condition exists and as a consequence of such default or
condition such Debt has become, or has been declared due and
payable before its stated maturity or before its regularly
scheduled dates of payment, or (iii) as a consequence of the
occurrence or continuation of any event or condition in the
nature of or similar to a default or covenant violation (other
than the passage of time or the right of the holder of Debt to
convert such Debt into equity interests), (1) the Company or
any Subsidiary has become obligated to purchase or repay Debt
before its regular maturity or before its regularly scheduled
dates of payment in an aggregate outstanding principal amount
of at least $7,500,000, or (2) one or more Persons have the
right to require the Company or any Subsidiary so to purchase
or repay such Debt; or
(g) the Company or any Significant Subsidiary (i) is
generally not paying, or admits in writing its inability to
pay, its debts as they become due, (ii) files, or consents by
answer or otherwise to the filing against it of, a petition
for relief or reorganization or arrangement or any other
petition in bankruptcy, for liquidation or to take advantage
of any bankruptcy, insolvency, reorganization, moratorium or
other similar law of any jurisdiction, (iii) makes an
assignment for the benefit of its creditors, (iv) consents to
37
the appointment of a custodian, receiver, trustee or other
officer with similar powers with respect to it or with respect
to any substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes corporate action
for the purpose of any of the foregoing; or
(h) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by
the Company or any of its Significant Subsidiaries, a
custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial
part of its property, or constituting an order for relief or
approving a petition for relief or reorganization or any other
petition in bankruptcy or for liquidation or to take advantage
of any bankruptcy or insolvency law of any jurisdiction, or
ordering the dissolution, winding-up or liquidation of the
Company or any of its Significant Subsidiaries, or any such
petition shall be filed against the Company or any of its
Significant Subsidiaries and such petition shall not be
dismissed within 60 days; or
(i) a final judgment or judgments for the payment of
money aggregating in excess of $7,500,000 (excluding for
purposes of such determination such amount of any insurance
proceeds paid by or on behalf of the Company or any of its
Subsidiaries in respect of such judgment or judgments or
unconditionally acknowledged in writing to be payable by the
insurance carrier that issued the related insurance policy)
are rendered against one or more of the Company and its
Subsidiaries and which judgments are not, within 60 days after
entry thereof, bonded, discharged or stayed pending appeal, or
are not discharged within 60 days after the expiration of such
stay; or
(j) if (i) any Plan shall fail to satisfy the minimum
funding standards of ERISA or the Code for any plan year or
part thereof or a waiver of such standards or extension of any
amortization period is sought or granted under section 412 of
the Code, (ii) a notice of intent to terminate any Plan shall
have been or is reasonably expected to be filed with the PBGC
or the PBGC shall have instituted proceedings under ERISA
Section 4042 to terminate or appoint a trustee to administer
any Plan or the PBGC shall have notified the Company or any
ERISA Affiliate that a Plan may become a subject of any such
proceedings, (iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of Section 4001(a)(18) of
ERISA) under all Plans, determined in accordance with Title IV
of ERISA, shall exceed $60,000,000, (iv) the Company or any
ERISA Affiliate shall have incurred or is reasonably expected
to incur any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to
employee benefit plans, (v) the Company or any ERISA Affiliate
38
withdraws from any Multiemployer Plan, or (vi) the Company or
any Subsidiary establishes or amends any employee welfare
benefit plan that provides post-employment welfare benefits in
a manner that would increase the liability of the Company or
any Subsidiary thereunder; and any such event or events
described in clauses (i) through (vi) above, either
individually or together with any other such event or events,
could reasonably be expected to have a Material Adverse
Effect; or
(k) any Subsidiary Guarantor shall breach its
obligations under the Subsidiary Guaranty or the obligations
of any Subsidiary Guarantor contained in the Subsidiary
Guaranty shall cease to be in full force and effect for any
reason whatsoever, including, without limitation, the
determination by any Governmental Authority that the
Subsidiary Guaranty is invalid, void or unenforceable, in
whole or in part, or any Subsidiary Guarantor shall contest or
deny in writing the validity or enforceability of the
Subsidiary Guaranty.
As used in Section 11(j), the terms "employee benefit plan" and
"employee welfare benefit plan" shall have the respective meanings
assigned to such terms in Section 3 of ERISA.
.c.Section 12. Remedies on Default, Etc;.
.c2.Section 12.1. Acceleration;. (a) If an Event of Default with
respect to the Company described in paragraph (g) or (h) of Section
11 (other than an Event of Default described in clause (i) of
paragraph (g) or described in clause (vi) of paragraph (g) by
virtue of the fact that such clause encompasses clause (i) of
paragraph (g)) has occurred, all the Notes then outstanding shall
automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is
continuing, any holder or holders of more than 50% in principal
amount of the Notes at the time outstanding may at any time at its
or their option, by notice or notices to the Company, declare all
the Notes then outstanding to be immediately due and payable.
(c) If any Event of Default described in paragraph (a) or (b)
of Section 11 has occurred and is continuing, any holder or holders
of Notes at the time outstanding affected by such Event of Default
may at any time, at its or their option, by notice or notices to
the Company, declare all the Notes held by it or them to be
immediately due and payable.
Upon any Note becoming due and payable under this Section
12.1, whether automatically or by declaration, such Note will
forthwith mature and the entire unpaid principal amount of such
Note, plus (i) all accrued and unpaid interest thereon and (ii) the
Make-Whole Amount determined in respect of such principal amount
(to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without
presentment, demand, protest or further notice, all of which are
39
hereby waived. The Company acknowledges, and the parties hereto
agree, that each holder of a Note has the right to maintain its
investment in the Notes free from repayment by the Company (except
as herein specifically provided for), and that the provision for
payment of a Make-Whole Amount by the Company in the event that the
Notes are prepaid or are accelerated as a result of an Event of
Default, is intended to provide compensation for the deprivation of
such right under such circumstances.
.c2.Section 12.2. Other Remedies;. If any Default or Event of
Default has occurred and is continuing, and irrespective of whether
any Notes have become or have been declared immediately due and
payable under Section 12.1, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such
holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement
contained herein or in any Note, or for an injunction against a
violation of any of the terms hereof or thereof, or in aid of the
exercise of any power granted hereby or thereby or by law or
otherwise.
.c2.Section 12.3. Rescission;. At any time after any Notes have been
declared due and payable pursuant to clause (b) or (c) of Section
12.1, the holders of not less than 66-2/3% in principal amount of
the Notes then outstanding, by written notice to the Company, may
rescind and annul any such declaration and its consequences (a) if
the Company has paid all overdue interest on the Notes, all
principal of and Make-Whole Amount, if any, on any Notes that are
due and payable and are unpaid other than by reason of such
declaration, and all interest on such overdue principal and
Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at
the Default Rate, (b) if all Events of Default and Defaults, other
than non-payment of amounts that have become due solely by reason
of such declaration, have been cured or have been waived pursuant
to Section 17, (c) if no judgment or decree has been entered for
the payment of any monies due pursuant hereto or to the Notes and
(d) if any Note has been declared due and payable pursuant to
clause (c) of Section 12.1, then each holder which has so declared
the Notes held by it to be due and payable shall have concurred in
such decision to so rescind and annul such declaration and its
consequences and if any such holder which has so declared its Notes
to be due and payable has not so concurred in such rescission and
annulment, then the Notes held by such holder shall,
notwithstanding such rescission and annulment, remain due and
payable. No rescission and annulment under this Section 12.3 will
extend to or affect any subsequent Event of Default or Default or
impair any right consequent thereon.
.c2.Section 12.4. No Waivers or Election of Remedies, Expenses, Etc;.
No course of dealing and no delay on the part of any holder of any
Note in exercising any right, power or remedy shall operate as a
40
waiver thereof or otherwise prejudice such holder's rights, powers
or remedies. No right, power or remedy conferred by this Agreement
or by any Note upon any holder thereof shall be exclusive of any
other right, power or remedy referred to herein or therein or now
or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under Section 15,
the Company will pay to the holder of each Note on demand such
further amount as shall be sufficient to cover all costs and
expenses of such holder incurred in any enforcement or collection
under this Section 12, including, without limitation, reasonable
attorneys' fees, expenses and disbursements.
.c.'Section 13. Registration; Exchange; Substitution of Notes';.
.c2.Section 13.1. Registration of Notes;. The Company shall keep at
its principal executive office a register for the registration and
registration of transfers of Notes. The name and address of each
holder of one or more Notes, each transfer thereof and the name and
address of each transferee of one or more Notes shall be registered
in such register. Prior to due presentment for registration of
transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all
purposes hereof, and the Company shall not be affected by any
notice or knowledge to the contrary. The Company shall give to any
holder of a Note that is an Institutional Investor promptly upon
request therefor, a complete and correct copy of the names and
addresses of all registered holders of Notes.
.c2.Section 13.2. Transfer and Exchange of Notes;. Upon surrender
of any Note at the principal executive office of the Company for
registration of transfer or exchange (and in the case of a
surrender for registration of transfer, duly endorsed or
accompanied by a written instrument of transfer duly executed by
the registered holder of such Note or its attorney duly authorized
in writing and accompanied by the address for notices of each
transferee of such Note or part thereof), the Company shall execute
and deliver, at the Company's expense (except as provided below),
one or more new Notes (as requested by the holder thereof) in
exchange therefor, in an aggregate principal amount equal to the
unpaid principal amount of the surrendered Note. Each such new
Note shall be payable to such Person as such holder may request and
shall be substantially in the form of Exhibit 1. Each such new
Note shall be dated and bear interest from the date to which
interest shall have been paid on the surrendered Note or dated the
date of the surrendered Note if no interest shall have been paid
thereon. The Company may require payment of a sum sufficient to
cover any stamp tax or governmental charge imposed in respect of
any such transfer of Notes. Notes shall not be transferred in
denominations of less than $100,000; provided that if necessary to
enable the registration of transfer by a holder of its entire
holding of Notes, one Note may be in a denomination of less than
$100,000. Any transferee, by its acceptance of a Note registered
41
in its name (or the name of its nominee), shall be deemed to have
made the representation set forth in Section 6.2.
.c2.Section 13.3. Replacement of Notes;. Upon receipt by the Company
of evidence reasonably satisfactory to it of the ownership of and
the loss, theft, destruction or mutilation of any Note (which
evidence shall be, in the case of an Institutional Investor, notice
from such Institutional Investor of such ownership and such loss,
theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of
indemnity reasonably satisfactory to it (provided that if the
holder of such Note is, or is a nominee for, an original
Purchaser or another holder of a Note with a minimum net worth
of at least $50,000,000, such Person's own unsecured agreement
of indemnity shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and
cancellation thereof,
the Company at its own expense shall execute and deliver, in lieu
thereof, a new Note, dated and bearing interest from the date to
which interest shall have been paid on such lost, stolen, destroyed
or mutilated Note or dated the date of such lost, stolen, destroyed
or mutilated Note if no interest shall have been paid thereon.
.c.Section 14. Payments on Notes;.
.c2.Section 14.1. Place of Payment;. Subject to Section 14.2,
payments of principal, Make-Whole Amount, if any, and interest
becoming due and payable on the Notes shall be made at the
principal office of the Company in Simpsonville, South Carolina.
The Company may at any time, by notice to each holder of a Note,
change the place of payment of the Notes so long as such place of
payment shall be either the principal office of the Company in such
jurisdiction or the principal office of a bank or trust company in
such jurisdiction.
.c2.Section 14.2. Home Office Payment;. So long as you or your
nominee shall be the holder of any Note, and notwithstanding
anything contained in Section 14.1 or in such Note to the contrary,
the Company will pay all sums becoming due on such Note for
principal, Make-Whole Amount, if any, and interest by the method
and at the address specified for such purpose below your name in
Schedule A, or by such other method or at such other address as you
shall have from time to time specified to the Company in writing
for such purpose, without the presentation or surrender of such
Note or the making of any notation thereon, except that upon
written request of the Company made concurrently with or reasonably
promptly after payment or prepayment in full of any Note, you shall
surrender such Note for cancellation, reasonably promptly after any
such request, to the Company at its principal executive office or
at the place of payment most recently designated by the Company
pursuant to Section 14.1. Prior to any sale or other disposition
of any Note held by you or your nominee you will, at your election,
either endorse thereon the amount of principal paid thereon and the
42
last date to which interest has been paid thereon or surrender such
Note to the Company in exchange for a new Note or Notes pursuant to
Section 13.2. The Company will afford the benefits of this Section
14.2 to any Institutional Investor that is the direct or indirect
transferee of any Note purchased by you under this Agreement and
that has made the same agreement relating to such Note as you have
made in this Section 14.2.
.c.Section 15. Expenses, Etc;.
.c2.Section 15.1. Transaction Expenses;. Whether or not the
transactions contemplated hereby are consummated, the Company will
pay all costs and expenses (including reasonable attorneys' fees of
a special counsel and, if reasonably required, local or other
counsel) incurred by you and each Other Purchaser or holder of a
Note in connection with such transactions and in connection with
any amendments, waivers or consents under or in respect of this
Agreement, the Notes, the Subsidiary Guaranty or the Bank Credit
Agreement (whether or not such amendment, waiver or consent becomes
effective), including, without limitation: (a) the costs and
expenses incurred in enforcing or defending (or determining whether
or how to enforce or defend) any rights under this Agreement, the
Notes or the Subsidiary Guaranty or in responding to any subpoena
or other legal process or informal investigative demand issued in
connection with this Agreement, the Notes or the Subsidiary
Guaranty, or by reason of being a holder of any Note, and (b) the
costs and expenses, including financial advisors' fees, incurred in
connection with the insolvency or bankruptcy of the Company or any
Subsidiary or in connection with any work-out or restructuring of
the transactions contemplated hereby and by the Subsidiary Guaranty
or the Notes at any time after a Default or Event of Default has
occurred or is continuing or at any other time at the request of
the Company. The Company will pay, and will save you and each
other holder of a Note harmless from, all claims in respect of any
fees, costs or expenses, if any, of brokers and finders (other than
those retained by you).
.c2.Section 15.2. Survival;. The obligations of the Company under
this Section 15 will survive the payment or transfer of any Note,
the enforcement, amendment or waiver of any provision of this
Agreement or the Notes, and the termination of this Agreement.
.c.'Section 16. Survival of Representations and Warranties; Entire
Agreement';.
All representations and warranties contained herein shall
survive the execution and delivery of this Agreement and the Notes,
the purchase or transfer by you of any Note or portion thereof or
interest therein and the payment of any Note, and may be relied
upon by any subsequent holder of a Note, regardless of any
investigation made at any time by or on behalf of you or any other
holder of a Note. All statements contained in any certificate or
other instrument delivered by or on behalf of the Company pursuant
to this Agreement shall be deemed representations and warranties of
43
the Company under this Agreement. Subject to the preceding
sentence, this Agreement and the Notes embody the entire agreement
and understanding between you and the Company and supersede all
prior agreements and understandings relating to the subject matter
hereof.
.c.Section 17. Amendment and Waiver;.
.c2.Section 17.1. Requirements;. This Agreement and the Notes may
be amended, and the observance of any term hereof or of the Notes
may be waived (either retroactively or prospectively), with (and
only with) the written consent of the Company and the Required
Holders, except that (a) no amendment or waiver of any of the
provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined
term (as it is used therein), will be effective as to you unless
consented to by you in writing, and (b) no such amendment or waiver
may, without the written consent of the holder of each Note at the
time outstanding affected thereby, (i) subject to the provisions of
Section 12 relating to acceleration or rescission, change the
amount or time of any prepayment or payment of principal of, or
reduce the rate or change the time of payment or method of
computation of interest or of the Make-Whole Amount on, the Notes,
(ii) change the percentage of the principal amount of the Notes the
holders of which are required to consent to any such amendment or
waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or
20.
.c2.Section 17.2. Solicitation of Holders of Notes;.
(a) Solicitation. The Company will provide each holder of
the Notes (irrespective of the amount of Notes then owned by it)
with sufficient information, sufficiently far in advance of the
date a decision is required, to enable such holder to make an
informed and considered decision with respect to any proposed
amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true
and correct copies of each amendment, waiver or consent effected
pursuant to the provisions of this Section 17 to each holder of
outstanding Notes promptly following the date on which it is
executed and delivered by, or receives the consent or approval of,
the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay
or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, or grant any
security, to any holder of Notes as consideration for or as an
inducement to the entering into by any holder of Notes of any
waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is
concurrently granted, on the same terms, ratably to each holder of
Notes then outstanding even if such holder did not consent to such
waiver or amendment.
.c2.Section 17.3. Binding Effect, Etc;. Any amendment or waiver
consented to as provided in this Section 17 applies equally to all
44
holders of Notes and is binding upon them and upon each future
holder of any Note and upon the Company without regard to whether
such Note has been marked to indicate such amendment or waiver. No
such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly
amended or waived or impair any right consequent thereon. No
course of dealing between the Company and the holder of any Note
nor any delay in exercising any rights hereunder or under any Note
shall operate as a waiver of any rights of any holder of such Note.
As used herein, the term "this Agreement" and references thereto
shall mean this Agreement as it may from time to time be amended or
supplemented.
.c2.Section 17.4. Notes Held by Company, Etc;. Solely for the
purpose of determining whether the holders of the requisite
percentage of the aggregate principal amount of Notes then
outstanding approved or consented to any amendment, waiver or
consent to be given under this Agreement or the Notes, or have
directed the taking of any action provided herein or in the Notes
to be taken upon the direction of the holders of a specified
percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company or
any of its Affiliates shall be deemed not to be outstanding.
.c.Section 18. Notices;.
All notices and communications provided for hereunder shall be
in writing and sent (a) by telefacsimile if the sender on the same
day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), or (b) by registered
or certified mail with return receipt requested (postage prepaid),
or (c) by a recognized overnight delivery service (with charges
prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the
address specified for such communications in Schedule A, or at
such other address as you or it shall have specified to the
Company in writing,
(ii) if to any other holder of any Note, to such holder
at such address as such other holder shall have specified to
the Company in writing, or
(iii) if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of D. Ray Cash,
or at such other address as the Company shall have specified
to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when
actually received.
.c.Section 19. Reproduction of Documents;.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications that
may hereafter be executed, (b) documents received by you at the
Closing (except the Notes themselves), and (c) financial
statements, certificates and other information previously or
45
hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and you may destroy any
original document so reproduced. The Company agrees and stipulates
that, to the extent permitted by applicable law, any such
reproduction shall be admissible in evidence as the original itself
in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was
made by you in the regular course of business) and any enlargement,
facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 19 shall not
prohibit the Company or any other holder of Notes from contesting
any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the
inaccuracy of any such reproduction.
.c.Section 20. Confidential Information;.
For the purposes of this Section 20, "Confidential
Information" means information delivered to you by or on behalf of
the Company or any Subsidiary in connection with the transactions
contemplated by or otherwise pursuant to this Agreement that is
proprietary in nature and that was clearly marked or labeled or
otherwise adequately identified in writing when received by you as
being confidential information of the Company or such Subsidiary;
provided that such term does not include information that (a) was
publicly known or otherwise known to you prior to the time of such
disclosure, (b) subsequently becomes publicly known through no act
or omission by you or any Person acting on your behalf, (c)
otherwise becomes known to you other than through disclosure by the
Company or any Subsidiary or by any other Person of which you have
actual knowledge is subject to a confidentiality agreement with the
Company, or (d) constitutes financial statements delivered to you
under Section 7.1 that are otherwise publicly available. You will
maintain the confidentiality of such Confidential Information in
accordance with procedures adopted by you in good faith to protect
confidential information of third parties delivered to you;
provided that you may deliver or disclose Confidential Information
to (i) your directors, trustees, officers, employees, attorneys and
affiliates (to the extent such disclosure reasonably relates to the
administration of the investment represented by your Notes), (ii)
your financial advisors, other professional advisors or agents who
agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 20,
(iii) any other holder of any Note, (iv) any Institutional Investor
to which you sell or offer to sell such Note or any part thereof or
any participation therein (if such Person has agreed in writing
prior to its receipt of such Confidential Information to be bound
by the provisions of this Section 20), (v) any Person from which
you offer to purchase any security of the Company (if such Person
has agreed in writing prior to its receipt of such Confidential
46
Information to be bound by the provisions of this Section 20), (vi)
any federal or state regulatory authority having jurisdiction over
you, (vii) the National Association of Insurance Commissioners or
any similar organization, or any nationally recognized rating
agency that requires access to information about your investment
portfolio or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance
with any law, rule, regulation or order applicable to you, (x) in
response to any subpoena or other legal process, (y) in connection
with any litigation to which you are a party or (z) if an Event of
Default has occurred and is continuing, to the extent you may
reasonably determine such delivery and disclosure to be necessary
or appropriate in the enforcement or for the protection of the
rights and remedies under your Notes and this Agreement. Each
holder of a Note, by its acceptance of a Note, will be deemed to
have agreed to be bound by and to be entitled to the benefits of
this Section 20 as though it were a party to this Agreement. On
reasonable request by the Company in connection with the delivery
to any holder of a Note of information required to be delivered to
such holder under this Agreement or requested by such holder (other
than a holder that is a party to this Agreement or its nominee),
such holder will enter into an agreement with the Company embodying
the provisions of this Section 20.
.c.Section 21. Substitution of Purchaser;.
You shall have the right to substitute any one of your
Affiliates as the purchaser of the Notes that you have agreed to
purchase hereunder, by written notice to the Company, which notice
shall be signed by both you and such Affiliate, shall contain such
Affiliate's agreement to be bound by this Agreement and shall
contain a confirmation by such Affiliate of the accuracy with
respect to it of the representations set forth in Section 6. Upon
receipt of such notice, wherever the word "you" is used in this
Agreement (other than in this Section 21), such word shall be
deemed to refer to such Affiliate in lieu of you. In the event
that such Affiliate is so substituted as a purchaser hereunder and
such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of
such transfer, wherever the word "you" is used in this Agreement
(other than in this Section 21), such word shall no longer be
deemed to refer to such Affiliate, but shall refer to you, and you
shall have all the rights of an original holder of the Notes under
this Agreement.
.c.Section 22. Miscellaneous;.
.c2.Section 22.1. Successors and Assigns;. All covenants and other
agreements contained in this Agreement by or on behalf of any of
the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation,
any subsequent holder of a Note) whether so expressed or not.
.c2.Section 22.2. Payments Due on Non-Business Days;. Anything in
47
this Agreement or the Notes to the contrary notwithstanding, any
payment of principal of or Make-Whole Amount or interest on any
Note that is due on a date other than a Business Day shall be made
on the next succeeding Business Day without including the
additional days elapsed in the computation of the interest payable
on such next succeeding Business Day.
.c2.Section 22.3. Severability;. Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall (to the full extent permitted by law) not
invalidate or render unenforceable such provision in any other
jurisdiction.
.c2.Section 22.4. Construction;. Each covenant contained herein
shall be construed (absent express provision to the contrary) as
being independent of each other covenant contained herein, so that
compliance with any one covenant shall not (absent such an express
contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken
by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly
or indirectly by such Person.
.c2.Section 22.5. Counterparts;. This Agreement may be executed in
any number of counterparts, each of which shall be an original but
all of which together shall constitute one instrument. Each
counterpart may consist of a number of copies hereof, each signed
by less than all, but together signed by all, of the parties
hereto.
.c2.Section 22.6. Governing Law;. This Agreement shall be construed
and enforced in accordance with, and the rights of the parties
shall be governed by, the law of the State of New York, excluding
choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than
such State.
* * * * *
48
If you are in agreement with the foregoing, please sign the
form of agreement on the accompanying counterpart of this Agreement
and return it to the Company, whereupon the foregoing shall become
a binding agreement between you and the Company.
.c4.Signature;
Very truly yours,
KEMET Corporation
By
[Title]
Accepted as of May __, 1998.
[Variation]
By
Name:
Title:
49
Schedule A(to Note Purchase Agreement)
Information Relating to Purchasers
Principal
Amount of
Name and Address of Purchaser Notes to Be
Purchased
American United Life Insurance Company $2,000,000
One American Square $2,000,000
Post Office Box 368
Indianapolis, Indiana 46206
Attention: Christopher D. Pahlke, Securities Department
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "KEMET Corporation, 6.66% Senior Notes
due 2010, PPN 488360 A* 9" and identifying the breakdown of
principal and interest and the payment date) to:
Bank of New York
Attention: P&I Department
One Wall Street, 3rd Floor
Window A
New York, New York 10286
ABA #021000018, BNF:IOC566
Account #186683/AUL
Notices
All notices and communications, including notices with respect to
payments and written confirmation of each such payment, to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 35-0145825
50
Principal
Amount of
Name and Address of Purchaser Notes to Be
Purchased
Alexander Hamilton Life Insurance
$10,000,000
Company of America
P. O. Box 21008
Greensboro, North Carolina 27420
Attention: Securities Administration - 3630
Telefacsimile: (910) 691-3025
[For hand delivery: 100 North Greene Street,
Zip Code 27401]
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "KEMET Corporation, 6.66% Senior Notes
due 2010, PPN 488360 A* 9, principal, premium or interest") to:
Alexander Hamilton Life Insurance Company of America
c/o The Bank of New York
ABA #021 000 018 BNF: IOC566
Attention: P&I Department
Notices
All notices of payment on or in respect of the Notes and written
confirmation of each such payment, to be addressed to:
Alexander Hamilton Life Insurance Company of America
c/o The Bank of New York
P. O. Box 19266
Newark, NJ 07195
Attention: P&I Department
with duplicate notice to Alexander Hamilton Life Insurance Company
of America at the address first provided above.
All notices and communications other than those in respect to
payments to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 56-1311063
51
Principal
Amount of
Name and Address of Purchaser Notes to Be
Purchased
Jackson National Life Insurance Company
$25,000,000
5901 Executive Drive
Lansing, Michigan 48909
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "KEMET Corporation, 6.66% Senior Notes
due 2010, PPN 488360 A* 9, principal, premium or interest") to:
NORTHERN CHGO
ABA #0710-0015-2
For Credit to: Jackson National Life Insurance Company
Account Number 5186041000 [general ledger for all clients of
Northern Trust]
For further Credit to: Account Number 26-91241 [Jackson
National Life Insurance Company]
Attention: Oscell Owens
KEMET Private Placement
Notices
All notices and communications, including notices with respect to
payment and written confirmation of each such payment, to be
addressed to:
PPM America, Inc.
225 West Wacker Drive, Suite 1200
Chicago, Illinois 60606
Attention: Private Placement
Telephone Number: (312) 634-2500
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 38-1659835
52
Principal
Amount of
Name and Address of Purchaser Notes to Be
Purchased
Knights of Columbus $5,000,000
One Columbus Plaza
New Haven, Connecticut 06510-3326
Attention: Investment Department
Telecopier Number: (203) 772-0037
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "KEMET Corporation, 6.66% Senior Notes
due 2010, PPN 488360 A* 9, principal or interest") to:
Bank of New York (ABA #021-000-018)
One Wall Street
New York, New York 10286
for credit to: Knights of Columbus
General Account #8900300825
Notices
All notices and communications to be addressed as first provided
above, except notices with respect to payments and written
confirmation of each such payment, to be addressed:
Knights of Columbus
P. O. Box 2016
New Haven, Connecticut 06521-2016
Attention: Accounting Department
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 06-0416470
53
Principal
Amount of
Name and Address of Purchaser Notes to Be
Purchased
Modern Woodmen of America $3,000,000
1701 1st Avenue
Rock Island, Illinois 61201
Attention: Investment Department
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "KEMET Corporation, 6.66% Senior Notes
due 2010, PPN 488360 A* 9, principal, premium or interest") to:
The Northern Trust Company
50 South LaSalle Street
Chicago, IL 60675
ABA #071-000-152
Account Name: Modern Woodmen of America
Account No. 5186061000
Further credit to Account No. 26-36015
Notices
All notices and communications to be addressed as first provided
above, except notices with respect to payments and written
confirmation of each such payment, to be addressed Attention:
Investment Accounting Department
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 36-1493430
54
Principal
Amount of
Name and Address of Purchaser Notes to Be
Purchased
The Mutual Life Insurance Company
$10,000,000
of New York
1740 Broadway
New York, New York 10019
Attention: MONY Capital Management Unit
Telecopy Number: (212) 708-2491
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "KEMET Corporation, 6.66% Senior Notes
due 2010, PPN 488360 A* 9, principal, premium or interest") to:
Chase Manhattan Bank
ABA #021000021
for credit to Private Income Processing Account No.
544-755102
Notices
All notices of payment on or in respect of the Notes and written
confirmation of each such payment to:
If by Registered Mail, Certified Mail or Federal Express:
The Chase Manhattan Bank
4 New York Plaza, 13th Floor
New York, New York 10004
Attention: Income Processing - J. Piperato, 13th Floor
If by Regular Mail:
The Chase Manhattan Bank
Dept. 3492
P. O. Box 50000
Newark, New Jersey 07101-8006
With a Second Copy to:
Telecopy Confirms and Notices:
52
(212) 708-2152
Attention: Securities Custody Division M.D. 6-39A
Mailing Confirms and Notices:
55
The Mutual Life Insurance Company of New York
1740 Broadway
New York, New York 10019
Attention: Securities Custody Division M.D. 6-39A
All notices and communications other than those in respect to
payments to be addressed as first provided above.
Name of Nominee in which Notes are to be issued: J. ROMEO & Co.
Taxpayer I.D. Number: 13-1632487
56
Principal
Amount of
Name and Address of Purchaser Notes to Be
Purchased
New York Life Insurance Company $5,000,000
51 Madison Avenue
New York, New York 10010-1603
Attention: Investment Department, Private Finance Group, Room
206
Telefacsimile Number: (212) 447-4122
Payments
All payments on or in respect of the Notes to be by wire or
intrabank transfer of immediately available funds to:
Chase Manhattan Bank
New York, New York 10019
ABA #021000021
For the account of New York Life Insurance Company
General Account Number 008-9-00687
With sufficient information (including issuer, PPN number,
interest rate, maturity and whether payment is of principal,
premium, or interest) to identify the source and application
of such funds.
Notices
All notices with respect to payments and written confirmation of
each such payment, to be addressed:
New York Life Insurance Company
51 Madison Avenue
New York, New York 10010-1603
Attention: Treasury Department, Securities Income Section,
Room 209
Fax Number: (212) 447-4160
All other notices and communications to be addressed as first
provided above, with a copy of any notices regarding defaults or
Events of Default under the operative documents to: Office of the
General Counsel, Investment Section, Room 1104, Fax Number (212)
576-8340
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 13-5582869
57 Principal
Amount of
Name and Address of Purchaser Notes to Be
Purchased
New York Life Insurance and Annuity
$10,000,000
Corporation
c/o New York Life Insurance Company
51 Madison Avenue
New York, New York 10010-1603
Attention: Investment Department, Private Finance Group, Room
206
Telefacsimile Number: (212) 447-4122
Payments
All payments on or in respect of the Notes to be by wire or
intrabank transfer of immediately available funds to:
Chase Manhattan Bank
New York, New York 10019
ABA #021000021
For the account of New York Life Insurance and Annuity
Corporation
General Account Number 008-0-57001
With sufficient information (including issuer, PPN number,
interest rate, maturity and whether payment is of principal,
premium, or interest) to identify the source and application
of such funds.
Notices
All notices with respect to payments and written confirmation of
each such payment, to be addressed:
New York Life Insurance and Annuity Corporation
c/o New York Life Insurance Company
51 Madison Avenue
New York, New York 10010-1603
Attention: Treasury Department, Securities Income Section,
Room 209
Fax Number: (212) 447-4160
All other notices and communications to be addressed as first
provided above, with a copy of any notices regarding defaults or
Events of Default under the operative documents to: Office of the
General Counsel, Investment Section, Room 1104, Fax Number (212)
576-8340
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 13-3044743
58
Principal
Amount of
Name and Address of Purchaser Notes to Be
Purchased
Southern Farm Bureau Life Insurance $3,000,000
Company
1401 Livingston Lane
Jackson, Mississippi 39213
Attention: Carol Robertson
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "KEMET Corporation, 6.66% Senior Notes
due 2010, PPN 488360 A* 9, principal, premium or interest") to:
Wachovia Bank of North Carolina
301 North Main Street
Winston-Salem, North Carolina 27150-1013
ABA #053100494
For further credit to: Account #8730-007153
Southern Farm Bureau Life Insurance
Company
Notices
All notices of payment on or in respect of the Notes and written
confirmation of each such payment, to be addressed as first
provided above.
All other communications, including Waivers, Amendments, Consents
and financial information should be sent to:
Southern Farm Bureau Life Insurance Company
P. O. Box 78
Jackson, Mississippi 39205
Attention: Investment Department
or by overnight delivery to:
1401 Livingston Lane
Jackson, Mississippi 39213
Contact Person: Carol Robertson, CFA
Telephone: 601-981-7422 extension 506
Facsimile: 601-981-3605
or Dottie Carlisle
Telephone: 601-981-7422 extension 800
Facsimile: 601-981-3605
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 64-0283583
59
Principal
Amount of
Name and Address of Purchaser Notes to Be
Purchased
Teachers Insurance and Annuity
$15,000,000
Association
730 Third Avenue
New York, New York 10017
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "KEMET Corporation, 6.66% Senior Notes
due 2010, PPN 488360 A* 9, principal, premium or interest") to:
Chase Manhattan Bank
ABA #021000021
New York, New York
Account of: Teachers Insurance and Annuity Association
Account Number: 910-2-766475
On order of: KEMET Corporation PPN #488360 A* 9
Notices
All notices of payment on or in respect of the Notes and written
confirmation of each such payment to:
Teachers Insurance and Annuity Association
730 Third Avenue
New York, New York 10017
Attention: Securities Division
All other notices and communications to be addressed to:
Ms. Susan Sanford
TIAA-CREF
730 Third Avenue, 8th Floor
New York, New York 10017
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 13-1624203N
60
Principal
Amount of
Name and Address of Purchaser Notes to Be
Purchased
Transamerica Life Insurance and
$10,000,000
Annuity Company
c/o Transamerica Investment Services
1150 South Olive Street, Suite 2700
Los Angeles, California 90015
Attention: John Casparian
Payments
All payments on or in respect of the Notes to be by bank wire
transfer of Federal or other immediately available funds
(identifying each payment as "KEMET Corporation, 6.66% Senior Notes
due 2010, PPN 488360 A* 9, principal, premium or interest") to:
Federal Reserve Bank of Boston
Boston Safe Deposit & Trust
Boston, Massachusetts
ABA 011-001-234
DDA#: 12-526-1
FFC: Cost Center 1253
Re: Mellon Securities
Transamerica Life Insurance and Annuity Company
Account Segment: GIC
Account No. TRAF 1506302
Ref: Cusip and Description
Notices
All notices and communications to be addressed as first provided
above, except notices with respect to payments and written
confirmation of each such payment and all account statements, to:
Transamerica Life Companies
P. O. Box 2101 - Securities Accounting
Los Angeles, California 90051-0101
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 95-6140222
61
Schedule B(to Note Purchase Agreement)
Defined Terms
As used herein, the following terms have the respective
meanings set forth below or set forth in the Section hereof
following such term:
"Acquiring Person" means a "person" or "group of persons"
within the meaning of Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended; provided that notwithstanding the
foregoing, "Acquiring Person" shall not be deemed to include any
member of the Company Control Group unless such member has,
directly or indirectly, disposed of, sold or otherwise transferred
to, or encumbered or restricted (whether by means of voting trust
agreement or otherwise) for the benefit of, an Acquiring Person all
or any portion of the Voting Stock of the Company, directly or
indirectly owned or controlled by such member or such member
directly or indirectly votes all or any portion of the Voting Stock
of the Company directly or indirectly owned or controlled by such
member for the taking of any action which, directly or indirectly,
constitutes or would result in a Change of Control, in which event
such member of the Company Control Group shall be deemed to
constitute an Acquiring Person to the extent of the Voting Stock of
the Company owned or controlled by such member.
"Affiliate" means, at any time, and with respect to any
Person, (a) any other Person that at such time directly or
indirectly through one or more intermediaries Controls, or is
Controlled by, or is under common Control with, such first Person,
and (b) any Person beneficially owning or holding, directly or
indirectly, 10% or more of any class of voting or equity interests
of the Company or any Subsidiary or any corporation of which the
Company and its Subsidiaries beneficially own or hold, in the
aggregate, directly or indirectly, 10% or more of any class of
voting or equity interests. As used in this definition, "Control"
means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by
contract or otherwise. Unless the context otherwise clearly
requires, any reference to an "Affiliate" is a reference to an
Affiliate of the Company.
"Asset Disposition" means any Transfer except:
(a) any
(i) Transfer from a Subsidiary to the Company or a
Wholly-owned Subsidiary; and
(ii) Transfer from the Company to a Wholly-owned
Subsidiary;
(b) any Transfer made in the ordinary course of business
and involving only property that is either (i) inventory held
for sale (including without limitation transfers by the
Company of raw materials and work-in-process inventory to
KEMET de Mexico, S.A. de C.V., for purposes of completing
62
production of such inventory, the principal purpose of which
is to minimize the costs of processing such inventory and
which inventory in substantial part will be re-transferred to
the Company) or (ii) machinery and equipment no longer useful
in the operation of the business of the Company or any of its
Subsidiaries or that is obsolete;
(c) any Transfer by the Company or any Subsidiary of any
manufacturing equipment or related property of the Company or
such Subsidiary related to future tax advantaged
Fee-In-Lieu-Of-Tax ("FILOT") arrangements pursuant to
substantially the same terms and conditions as those found in
the Lease Agreement; provided that after giving effect to any
such Transfer such manufacturing equipment or related property
shall be shown as an asset on the balance sheet of the Company
or such Subsidiary in accordance with GAAP;
(d) any Transfer by the Company or any Subsidiary of
receivables of the Company (or any Subsidiary primarily
responsible for providing credit to the customers of the
Company or any Subsidiary), whether with or without recourse
to the Company or any other Subsidiary, provided that such
sale is an arm's-length transaction, not accounted for under
GAAP as a secured loan and, in the good faith opinion of a
Responsible Officer, such receivables were sold for the Fair
Market Value thereof; and
(e) any licensing or like customary or usual transfer by
the Company or any Subsidiary of any trade names or trademarks
to KRC Trade Corporation, a Subsidiary of the Company, and the
licensing or like transfer of such trade names and trademarks
by KRC Trade Corporation, a Subsidiary of the Company, to the
Company or any other Wholly-owned Subsidiary in the ordinary
course of business.
"Bank Credit Agreement" means that certain Credit Agreement
dated October 18, 1996, among the Company and the Banks and (i) for
purposes of Section 10.3(m) and the definition of "Foreign
Significant Subsidiary", as in effect on the date of the Closing,
without giving effect to any modification, amendment, extension,
renewal, supplement or replacement thereof, and (ii) for all other
purposes, as the same may be amended, modified, supplemented,
extended, renewed or replaced.
"Bank Debt" means the Debt of the Company outstanding under
the Bank Credit Agreement.
"Banks" means Wachovia Bank, N.A., as Agent, ABN Amro Bank,
N.V. Atlanta Agency, as Co-Agent, and the other financial
institutions from time to time parties to the Bank Credit
Agreement.
"Business Day" means (a) for the purposes of Section 8.7 only,
any day other than a Saturday, a Sunday or a day on which
commercial banks in New York City are required or authorized to be
closed, and (b) for the purposes of any other provision of this
63
Agreement, any day other than a Saturday, a Sunday or a day on
which commercial banks in New York, New York or South Carolina are
required or authorized to be closed.
"Capital Lease" means, at any time, a lease with respect to
which the lessee is required concurrently to recognize the
acquisition of an asset and the incurrence of a liability in
accordance with GAAP.
"Capital Lease Obligation" means, with respect to any Person
and a Capital Lease, the amount of the obligation of such Person as
the lessee under such Capital Lease which would, in accordance with
GAAP, appear as a liability on a balance sheet of such Person.
"Change of Control" means the earliest to occur of: (a) the
date a tender offer or exchange offer results in an Acquiring
Person, directly or indirectly, beneficially owning more than 50%
of the Voting Stock of the Company then outstanding, or (b) the
date an Acquiring Person becomes, directly or indirectly, the
beneficial owner of more than 50% of the Voting Stock of the
Company then outstanding, or (c) the date of a merger between the
Company and any other Person, a consolidation of the Company with
any other Person, a sale or other disposition of all or
substantially all of the assets of the Company to any other Person
or an acquisition of any other Person by the Company, if
immediately after such event, the Acquiring Person shall hold more
than 50% of the Voting Stock of the Company outstanding immediately
after giving effect to such merger, consolidation or acquisition.
"Change of Control Delayed Prepayment Date" is defined in
Section 8.3(b).
"Change of Control Prepayment Date" is defined in Section
8.3(a).
"Closing" is defined in Section 3.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the rules and regulations promulgated
thereunder from time to time.
"Company" means KEMET Corporation, a Delaware corporation.
"Company Control Group" shall mean and include (i) D.E.
Maguire, K.L. Martin, G.H. Spears, D.R. Cash, C.M. Culbertson and
H.L. Crowley, (ii) the spouses, lineal descendants and spouses of
the lineal descendants of the Persons named in clause (i); (iii)
the estates or legal representatives of the Persons named in
clauses (i) and (ii); and (iv) Citicorp Venture Capital, Ltd., a
New York corporation.
"Company Notice" is defined in Section 8.3.
"Confidential Information" is defined in Section 20.
"Consolidated Funded Debt" means all Funded Debt of the
Company and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP eliminating intercompany items.
"Consolidated Net Income" for any period means the gross
revenues of the Company and its Subsidiaries for such period less
all expenses and other proper charges (including taxes on income),
64
determined on a consolidated basis after eliminating earnings or
losses attributable to outstanding Minority Interests, but
excluding in any event:
(a) any gains or losses on the sale or other disposition
of investments or fixed or capital assets, and any taxes on
such excluded gains and any tax deductions or credits on
account of any such excluded losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Subsidiary accrued
prior to the date it became a Subsidiary;
(d) net earnings and losses of any corporation (other
than a Subsidiary), substantially all the assets of which have
been acquired in any manner by the Company or any Subsidiary,
realized by such corporation prior to the date of such
acquisition;
(e) net earnings and losses of any corporation (other
than a Subsidiary) with which the Company or a Subsidiary
shall have consolidated or which shall have merged into or
with the Company or a Subsidiary prior to the date of such
consolidation or merger;
(f) net earnings of any business entity (other than a
Subsidiary) in which the Company or any Subsidiary has an
ownership interest unless such net earnings shall have
actually been received by the Company or such Subsidiary in
the form of cash distributions;
(g) any portion of the net earnings of any Subsidiary
which for any reason is unavailable for payment of dividends
to the Company or any other Subsidiary;
(h) earnings resulting from any reappraisal, revaluation
or write-up of assets;
(i) any deferred or other credit representing any excess
of the equity in any Subsidiary at the date of acquisition
thereof over the amount invested in such Subsidiary;
(j) any gain arising from the acquisition of any
Securities of the Company or any Subsidiary;
(k) any reversal of any contingency reserve, except to
the extent that provision for such contingency reserve shall
have been made from income arising during such period;
(l) any gain arising as a result of any investment of
the Company or any of its Subsidiaries in industrial revenue
bonds issued by any Governmental Authority pursuant to any
FILOT arrangement of the character described in clause (c) of
the definition of "Asset Disposition"; and
(m) any other extraordinary gain.
"Consolidated Net Worth" means, at any time, the stockholders'
equity of the Company and its Subsidiaries determined on a
consolidated basis as of such time in accordance with GAAP.
"Consolidated Total Assets" means as of the date of any
determination thereof, total assets of the Company and its
65
Subsidiaries determined on a consolidated basis in accordance with
GAAP.
"Consolidated Total Capitalization" means as of the date of
any determination thereof, the sum of (a) Consolidated Funded Debt
plus (b) Consolidated Net Worth.
"Control Event" means:
(a) the execution by the Company or any of its
Subsidiaries or Affiliates of any agreement or letter of
intent with respect to any proposed transaction or event or
series of transactions or events which, individually or in the
aggregate, may reasonably be expected to result in a Change in
Control,
(b) the execution of any written agreement which, when
fully performed by the parties thereto, would result in a
Change in Control, or
(c) the making of any written offer by any person (as
such term is used in section 13(d) and section 14(d)(2) of the
Exchange Act as in effect on the date of the Closing) or
related persons constituting a group (as such term is used in
Rule 13d-5 under the Exchange Act as in effect on the date of
the Closing) to the holders of the common stock of the
Company, which offer, if accepted by the requisite number of
holders, would result in a Change in Control.
"Current Maturities of Funded Debt" means, at any time and
with respect to any item of Funded Debt, the portion of such Funded
Debt outstanding at such time which by the terms of such Funded
Debt or the terms of any instrument or agreement relating thereto
is due on demand or within one year from such time (whether by
sinking fund, other required prepayment or final payment at
maturity) and is not directly or indirectly renewable, extendible,
replaceable, refinancible or refundable at the option of the
obligor under an agreement or firm commitment in effect at such
time to a date one year or more from such time.
"Debt" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable
arising in the ordinary course of business but including,
without limitation, all liabilities created or arising under
any conditional sale or other title retention agreement with
respect to any such property);
(c) its Capital Lease Obligations;
(d) all liabilities for borrowed money secured by any
Lien with respect to any property owned by such Person
(whether or not it has assumed or otherwise become liable for
such liabilities);
(e) the maximum exposure in respect of letters of credit
issued for the account of such Person, including, but without
duplication, amounts required to be reimbursed by such Person
66
to the issuer of the letter of credit; and
(f) any Guaranty of such Person with respect to
liabilities of a type described in any of clauses (a) through
(e) hereof.
Debt of any Person shall include all obligations of such Person of
the character described in clauses (a) through (f) to the extent
such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be
extinguished under GAAP. Debt shall exclude (i) any such
liabilities, obligations or Guaranties referred to in clauses (a)
through (f) above if owed by the Company to a Wholly-owned
Subsidiary or by a Subsidiary to the Company or a Wholly-owned
Subsidiary, (ii) the obligation of a Person in its capacity as the
servicer, collection agent or similar party to forward amounts
collected with respect to Factor Receivables to the purchaser of
such Factor Receivables and (iii) any unfunded obligations that may
exist now or hereafter in any pension plan maintained by the
Company or any Subsidiary.
"Debt Prepayment Application" means, with respect to any
Transfer of property, the application by the Company or its
Subsidiaries of cash in an amount equal to all or a portion of the
Net Proceeds Amount with respect to such Transfer to Senior Funded
Debt of the Company (other than Senior Funded Debt owing to the
Company, any of its Subsidiaries or any Affiliate and Senior Funded
Debt in respect of any revolving credit or similar credit facility
providing the Company or any of its Subsidiaries with the right to
obtain loans or other extensions of credit from time to time,
except to the extent that in connection with such payment of Senior
Funded Debt the availability of credit under such credit facility
is permanently reduced by an amount not less than the amount of
such proceeds applied to the payment of such Senior Funded Debt),
provided that (a) in the course of making such application the
Company shall prepay each outstanding Note in accordance with
Section 8.2 in a principal amount which equals the Ratable Portion
for such Note and (b) if the Company or any such Subsidiary has
applied less than all of the proceeds from any such Transfer to the
related Debt Prepayment Application, then and in such event the
remainder of any such proceeds shall be applied to a related
Property Reinvestment Application. As used in this definition,
"Ratable Portion" for any Note means an amount equal to the product
of (x) the Net Proceeds Amount being so applied to the payment of
Senior Funded Debt multiplied by (y) a fraction the numerator of
which is the outstanding principal amount of such Note and the
denominator of which is the aggregate principal amount of Senior
Funded Debt of the Company and its Subsidiaries
"Default" means an event or condition the occurrence or
existence of which would, with the lapse of time or the giving of
notice or both, become an Event of Default.
"Default Rate" means that rate of interest that is the greater
67
of (i) 2% per annum above the rate of interest stated in clause (a)
of the first paragraph of the Notes or (ii) 2% over the rate of
interest publicly announced by Citibank, N.A. in New York, New York
as its "base" or "prime" rate.
"Disposition Value" means, at any time, with respect to any
property
(a) in the case of property that does not constitute
Subsidiary Stock, the book value thereof, valued at the time
of such disposition in good faith by the Company in accordance
with GAAP, and
(b) in the case of property that constitutes Subsidiary
Stock, an amount equal to that percentage of book value of the
assets of the Subsidiary that issued such stock as is equal to
the percentage that the book value of such Subsidiary Stock
represents of the book value of all of the outstanding capital
stock of such Subsidiary (assuming, in making such
calculations, that all Securities convertible into such
capital stock are so converted and giving full effect to all
transactions that would occur or be required in connection
with such conversion) determined at the time of the
disposition thereof, in good faith by the Company.
"Environmental Laws" means any and all Federal, state, local,
and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions
relating to pollution and the protection of the environment or the
release of any materials into the environment, including but not
limited to those related to hazardous substances or wastes, air
emissions and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the rules and regulations
promulgated thereunder from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with
the Company under Section 414 of the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Factor Receivables" means the outstanding amount of those
Foreign Trade Receivables from time to time sold by KEMET
Electronics, S.A., a corporation organized under the laws of
Switzerland, together with its successors and permitted assigns.
"Fair Market Value" means, at any time and with respect to any
property, the sale value of such property that would be realized in
an arm's-length sale at such time between an informed and willing
buyer and an informed and willing seller (neither being under a
compulsion to buy or sell); provided that the Fair Market Value of
an Asset Disposition shall be determined by the Board of Directors
of the Company if such Fair Market Value equals or exceeds
68
$10,000,000 and shall be determined by a Senior Financial Officer
if the Fair Market Value thereof is less than $10,000,000.
"Foreign Pension Plan" means any plan, fund, or other similar
program established or maintained outside the United States of
America by the Company or any one or more of the Subsidiaries
primarily for the benefit of employees of the Company or such
Subsidiaries residing outside the United States of America, which
plan, fund or other similar program provides for retirement income
for such employees or a deferral of income for such employees in
contemplation of retirement and is not subject to ERISA or the
Code.
"Foreign Significant Subsidiary" has the meaning defined in
the Bank Credit Agreement.
"Foreign Trade Receivables" means those trade receivables from
time to time generated from the sale of goods or services by the
Company and its Subsidiaries to any Non-U.S. Person.
"Funded Debt" means with respect to any Person but, without
duplication (i) all Debt of such Person which by its terms or by
the terms of any instrument or agreement relating thereto matures,
or which is otherwise payable or unpaid, one year or more from, or
is directly or indirectly renewable or extendible at the option of
the obligor in respect thereof to a date one year or more
(including, without limitation, an option of such obligor under a
revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of one year or more) from,
the date of the creation thereof, (ii) Capitalized Lease
Obligations (except those related to the Lease Agreement), (iii)
Current Maturities of Funded Debt, (iv) with respect to each
revolving credit or similar facility (regardless of the maturity of
such revolving credit facility), an amount equal to the lowest mean
of the principal amounts of Debt of such Person which were
outstanding under such revolving credit or similar facility as of
the close of each Business Day during any period of 30 consecutive
days during the period of 12 consecutive months ending with the
date of determination, and (v) all Guaranties of any of the
foregoing.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or
other political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or
which asserts jurisdiction over any properties of the
Company or any Subsidiary, or
(b) any entity exercising executive, legislative,
judicial, regulatory or administrative functions of, or
pertaining to, any such government.
69
"Guaranty" means, with respect to any Person, any obligation
(except the endorsement in the ordinary course of business of
negotiable instruments for deposit or collection) of such Person
guaranteeing or in effect guaranteeing any indebtedness, dividend
or other obligation of any other Person in any manner, whether
directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such
Person:
(a) to purchase such indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or
payment of such indebtedness or obligation, or (ii) to
maintain any working capital or other balance sheet condition
or any income statement condition of any other Person or
otherwise to advance or make available funds for the purchase
or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or
services primarily for the purpose of assuring the owner of
such indebtedness or obligation of the ability of any other
Person to make payment of the indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness
or obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the
obligor under any Guaranty, the indebtedness or other obligations
that are the subject of such Guaranty shall be assumed to be direct
obligations of such obligor.
"Hazardous Material" means any and all pollutants, toxic or
hazardous wastes or any other substances, including all substances
listed in or regulated in any Environmental Law that might pose a
hazard to health or safety, the removal of which may be required or
the generation, manufacture, refining, production, processing,
treatment, storage, handling, transportation, transfer, use,
disposal, release, discharge, spillage, seepage, or filtration of
which is or shall be restricted, regulated, prohibited or penalized
by any applicable law (including, without limitation, asbestos,
urea formaldehyde foam insulation and polychlorinated biphenyls).
"holder" means, with respect to any Note, the Person in whose
name such Note is registered in the register maintained by the
Company pursuant to Section 13.1.
"Institutional Investor" means (a) any original purchaser of
a Note, (b) any holder of a Note holding more than 5% of the
aggregate principal amount of the Notes then outstanding, and (c)
any bank, trust company, savings and loan association or other
financial institution, any pension plan, any investment company,
any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"Lease Agreement" means (a) that certain Lease Purchase and
Millage Rate Agreement, dated as of December 22, 1994, among
Greenville County, South Carolina, Greenwood County, South Carolina
70
and the Company, as the same may be amended, modified or
supplemented from time to time for the purpose and only for the
purpose of adding or deleting assets from the terms thereof and (b)
any like lease or rental agreement entered into by the Company or
any of its Subsidiaries in connection with any FILOT arrangement of
the character described in the clause (c) of the definition of
"Asset Disposition."
"Lien" means, with respect to any Person, any mortgage, lien,
pledge, charge, security interest or other encumbrance, or any
interest or title of any vendor, lessor, lender or other secured
party to or of such Person under any conditional sale or other
title retention agreement or Capital Lease, upon or with respect to
any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all
similar arrangements).
"Make-Whole Amount" is defined in Section 8.7.
"Margin Stock" means "margin stock" as defined in Regulation
T, U or X of the Board of Governors of the Federal Reserve System,
as in effect from time to time, together with all official rulings
and interpretations issued thereunder.
"Material" means material in relation to the business,
operations, affairs, financial condition, assets, properties, or
prospects of the Company and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on
(a) the business, operations, affairs, financial condition, assets
or properties of the Company and its Subsidiaries taken as a whole,
or (b) the ability of the Company or any Subsidiary Guarantor to
perform its obligations under this Agreement, the Subsidiary
Guaranty or the Notes, or (c) the validity or enforceability of
this Agreement, the Subsidiary Guaranty or the Notes.
"Memorandum" is defined in Section 5.3.
"Minority Interests" means any shares of stock of any class of
a Subsidiary (other than qualifying shares as required by law) that
are not owned by the Company and/or one or more of its
Subsidiaries. Minority Interests shall be valued by valuing
Minority Interests constituting preferred stock at the voluntary or
involuntary liquidating value of such preferred stock, whichever is
greater, and by valuing Minority Interests constituting common
stock at the book value of capital and surplus applicable thereto
adjusted, if necessary, to reflect any changes from the book value
of such common stock required by the foregoing method of valuing
Minority Interests in preferred stock.
"Multiemployer Plan" means any Plan that is a "multiemployer
plan" (as such term is defined in Section 4001(a)(3) of ERISA).
"Net Proceeds Amount" means, with respect to any Transfer of
any property by any Person, an amount equal to the difference of
(a) the aggregate amount of the consideration (valued at
the Fair Market Value of such consideration at the time of the
consummation of such Transfer) received by such Person in
71
respect of such Transfer, minus
(b) all ordinary and reasonable out-of-pocket costs and
expenses actually incurred by such Person in connection with
such Transfer and all taxes paid or payable as a result
thereof.
"Non-U.S. Person" means any Person who is not a resident of
any state of the United States of America or the District of
Columbia.
"Noteholder Notice" is defined in Section 8.3(a).
"Notes" is defined in Section 1.
"Officer's Certificate" means a certificate of a Senior
Financial Officer or of any other officer of the Company whose
responsibilities extend to the subject matter of such certificate.
"Other Agreements" is defined in Section 2.
"Other Purchasers" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA or any successor thereto.
"Person" means an individual, partnership, corporation,
limited liability company, association, trust, unincorporated
organization, or a government or agency or political subdivision
thereof.
"Plan" means an "employee benefit plan" (as defined in Section
3(3) of ERISA) that is or, within the preceding five years, has
been established or maintained, or to which contributions are or,
within the preceding five years, have been made or required to be
made, by the Company or any ERISA Affiliate or with respect to
which the Company or any ERISA Affiliate may have any liability.
"property" or "properties" means, unless otherwise
specifically limited, real or personal property of any kind,
tangible or intangible, choate or inchoate.
"Property Reinvestment Application" means, with respect to any
Transfer of property, the application of all or a portion of an
amount equal to the Net Proceeds Amount with respect to such
Transfer to the acquisition by the Company or any Subsidiary of
property of the same or a similar nature of the Company or any
Subsidiary to be used in the ordinary course of business of such
Person within the limitations of Section 9.6; provided that if less
than all of the Net Proceeds Amount arising as a result of any such
Transfer are applied to such Property Reinvestment Application,
then and in such event the remainder thereof shall be applied to a
Debt Prepayment Application.
"QPAM Exemption" means Prohibited Transaction Class Exemption
84-14 issued by the United States Department of Labor.
"Required Holders" means, at any time, the holders of at least
66-2/3% in principal amount of the Notes at the time outstanding
(exclusive of Notes then owned by the Company or any of its
Affiliates).
"Responsible Officer" means any Senior Financial Officer and
any other officer of the Company with responsibility for the
72
administration of the relevant portion of this Agreement.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Security" shall have the same meaning as in Section 2(1) of
the Securities Act.
"Senior Debt" means any Debt of a Subsidiary (other than
Subsidiary Subordinated Debt).
"Senior Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or comptroller of the
Company.
"Senior Funded Debt" means (a) any Funded Debt of the Company
(other than Subordinated Debt) and (b) any Funded Debt of any
Subsidiary.
"Significant Subsidiary" means any Subsidiary which as of the
date of any determination thereof: (a) has shareholders' equity
which constitutes more than 3% of Consolidated Net Worth as of the
end of the immediately preceding fiscal quarter of the Company or
(b) has contributed more than 3% of Consolidated Net Income of the
Company and its Subsidiaries for the immediately preceding four
fiscal quarters of the Company.
"Subordinated Debt" means any Debt that is in any manner
subordinated in right of payment or security in any respect to Debt
evidenced by the Notes.
"Subsidiary" means, as to any Person, any corporation,
association or other business entity in which such Person or one or
more of its Subsidiaries or such Person and one or more of its
Subsidiaries owns sufficient equity or voting interests to enable
it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons
performing similar functions) of such entity, and any partnership
or joint venture if more than a 50% interest in the profits or
capital thereof is owned by such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries
(unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one
or more of its Subsidiaries). Unless the context otherwise clearly
requires, any reference to a "Subsidiary" is a reference to a
Subsidiary of the Company.
"Subsidiary Guarantors" means KEMET Electronics Corporation,
KEMET Services Corporation, KRC Trade Corporation, each a Delaware
corporation, and each other Subsidiary required to execute and
deliver a supplement to the Subsidiary Guaranty pursuant to Section
9.8.
"Subsidiary Guaranty" means that certain Subsidiary Guaranty
of each Subsidiary Guarantor in the form attached hereto as Exhibit
9.8.
"Subsidiary Stock" means, with respect to any Person, the
stock (or any options or warrants to purchase stock or other
Securities exchangeable for or convertible into stock) of any
73
Subsidiary of such Person.
"Subsidiary Subordinated Debt" means any Debt that is in any
manner subordinated in right of payment or security in any respect
to Debt evidenced by the Subsidiary Guaranty.
"Successor Corporation" has the meaning set forth in Section
10.4.
"Transfer" means, with respect to any Person, any transaction
in which such Person sells, conveys, transfers or leases (as
lessor) any of its property, including, without limitation,
Subsidiary Stock. For purposes of determining the application of
the Net Proceeds Amount in respect of any Transfer, the Company may
designate any Transfer as one or more separate Transfers each
yielding a separate Net Proceeds Amount. In any such case, the
Disposition Value of any property subject to each such separate
Transfer shall be determined by ratably allocating the aggregate
Disposition Value of all property subject to all such separate
Transfers to each such separate Transfer on a proportionate basis.
"Voting Stock" means Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies,
entitled to elect a majority of the corporate directors (or Persons
performing similar functions).
"Wholly-owned Subsidiary" means, at any time, any Subsidiary
one hundred percent (100%) of all of the equity interests (except
qualifying shares) and voting interests of which are owned by any
one or more of the Company and the Company's other Wholly-owned
Subsidiaries at such time.
74
Schedule 5.4(to Note Purchase Agreement)
Company Subsidiaries
Name of Subsidiary
Jurisdiction
Share Owner
% Ownership
KEMET Electronics
Corporation
Delaware
KC(
100
*KEMET Services Corporation
Delaware
KC
100
*KEMET Electroncis S.A.
Switzerland
KEC(
97
KEMET Electronics GmbH
Germany
KESA(
100
KEMET Electronics SARL
France
KESAKEG(
982
KEMET Electronics Ltd.
United Kingdom
KESAKEG
99.980.02
KEMET Electronics Asia Ltd.
Hong Kong
KEC
99.8
KEMET Electronics Marketing
(S) Ptd Ltd.
Singapore
KEAL(
100
KEMET Electronics (Shanghai)
Co. Ltd.
China
KEAL
100
*KEMET de Mexico, S.A. de
C.V.
Mexico
KECKCKECKEC
99.98(0.02(f)
100(100(
KEMET Electronics (Canada)
Limited
Canada
KEC
100
*KRC Trade Corporation
Delaware
KEC
100
75
KEMET International Inc.
Barbados
KEC
100
76 Affiliates of the Company
Citicorp Venture Capital, Ltd.
Directors and Senior Officers of the Company
Board of Directors
David E. Maguire
Charles E. Volpe
Paul C. Schorr IV
E. Erwin Maddrey, II
Stewart A. Kohl
Senior Officers
David E. Maguire Chairman, Chief Executive Officer and
President
Glenn H. Spears Senior Vice President and Secretary
Kenneth L. Martin Senior Vice President of Engineering and
Quality
D. Ray Cash Senior Vice President of Administration
and Treasurer
Gary W. Robert Chief Information Officer
Larry W. Sheppard Vice President of Human Resources
Charles M. Culbertson Senior Vice President and General Manager,
Tantulum Capacitors
Harris L. Crowley, Jr. Senior Vice President and General
Manager,
Ceramic Capacitors
William W. Johnson Vice President, Sales Worldwide
Ronald L. Beck Vice President of Product Marketing
77
Schedule 5.5(to Note Purchase Agreement)
Financial Statements
The Company has delivered to each Purchaser a copy of the following
financial statements of the Company and its Subsidiaries:
Annual Report for Fiscal Year Ended March 31, 1997
Form 10-Q Quarterly Report for the Period Ended December 31, 1997
Form 10-K Annual Report for the Fiscal Year Ended March 31, 1996
Form 10-K Annual Report for the Fiscal Year Ended March 31, 1995
Form 10-K Annual Report for the Fiscal Year Ended March 31, 1994
Form 10-K Annual Report for the Fiscal Year Ended March 31, 1993
78
Schedule 5.14(to Note Purchase Agreement)
Use of Proceeds
Substantially all of the net proceeds from the sale of the Notes will
be used to repay existing indebtedness and the remainder of such proceeds will
beused for general corporate purposes. The existing indebtedness to be repaid
will consist primarily of certain amounts outstanding under the Company's Credit
Agreement dated as of October 18, 1996 by and among the Company, Wachovia Bank,
N.A., and the banks named therein and certain amounts outstanding under the
Company's Swing Line Note dated as of October 18, 1996 by and between the
Company and Wachovia Bank, N.A.
79
Schedule 5.15(to Note Purchase Agreement)
Existing Debt
(As of May 4, 1998)
Type of Debt
(000)Amount
Credit Agreement dated as of October
18, 1996 by and among the Company,
Wachovia Bank, N.A., and the banks
named therein
$134,000
Swing Line Note dated as of October 18,
1996by and between the Company and
Wachovia Bank, N.A.
$ 5,700
Guaranties of Employees Notes(1)
$ 218
Guaranties of Limited Recourse
Provision (2)
$ 2,729
Letters of Credit for Insurance Program
(3)
$ 980
Letters of Credit for Signapore GST (4)
$ 415
Guaranty Agreement dated as of October
18, 1996 by KEMET Electronics
Corporation, KEMET Services Corporation
and KRC Trade Corporation (as
Guarantors) of the obligations of the
Company under the Bank Credit Agreement
(5)
Guarantee Agreement dated as of October
18, 1996 by KEMET Electronics
Corporation (as Guarantor) of the
obligations of the Company under the
Swing Line Note dated as of October 18,
1996
(5)
Notes
(1) Notes for the three employees located in Mexico provided in conjunction
with their house purchases.
(2) Associated with accounts receivable discounting facilities.
(3) Associated with Workers Compensation insurance policies. No outstanding
claim against letters of credit. Amount shown is the face amount of the
letters of credit.
(4) Associated with Goods & Service Tax in Singapore. Allows for payment on
quarterly basis. No outstanding claim against letter of credit. Amount
shown is the face amount of the letter of credit.
(5) The amounts outstanding under the credit facilities being guaranteed are
listed above.
80
Schedule 10.3(to Note Purchase Agreement)
Existing Liens
Pursuant to the terms of a Pledge Agreement dated as of October 18,
1996, KEMET Electronics Corporation has pledged sixty-five (65) shares of the
common stock of its subsidiary company, KEMET Electronics, S.A. in order to
secure he prompt payment of its obligations as a guarantor under the Bank Credit
Agreement.
81
This Note has not been registered under the Securities Act of 1933, as amended,
and may not be transferred in violation of such Act.
Exhibit 1
(to Note Purchase Agreement)
[Form of Note]
KEMET Corporation
6.66% Senior Note due May 4, 2010
no. _________
Date$____________
PPN 488360 A* 9
For Value Received, the undersigned, KEMET Corporation (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to ________________, or registered assigns, the
principal sum of___________ Dollars on May 4, 2010, with interest (computed
on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid
balance thereof at the rate of 6.66% per annum from the date hereof, payable
semiannually,on the fourth day of May and November in each year, commencing with
the May 4 or November 4 next succeeding the date hereof, until the principal
hereof shall have become due and payable, and (b) to the extent permitted by law
on any overdue payment (including any overdue prepayment) of principal, any
overdue payment of interest and any overdue payment of any Make-Whole Amount
(as defined in the Note Purchase Agreements referred to below), payable
semiannually as aforesaid (or, at the option of the registered holder hereof, on
demand), at a rate per annum from time to time equal to the greater of (i) 8.66%
or (ii) 2% over the rate of interest publicly announced by Citibank, N.A. from
time to time in New York, New York as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the office of the Company in Simpsonville, South Carolina or at such
other place as the Company shall have designated by written notice to the holder
of this Note as provided in the Note Purchase Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, each dated as of
May 1, 1998 (as from time to time amended, the "Note Purchase Agreements"),
between the Company and the respective Purchasers named therein and is entitled
to the benefits thereof. Each holder of this Note will be deemed, by its
acceptance hereof, (i) to have agreed to the confidentiality provisions set
forth in Section 20 of the Note Purchase Agreements and (ii) to have made the
representation set forth in Section 6.2 of the Note Purchase Agreements.
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
82
The Company will make required prepayments of principal on the dates
and in the amounts specified in the Note Purchase Agreements. This Note is also
subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreements, but not
otherwise.If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements. This Note shall be construed and enforced in accordance with, and
the rights and parties shall be governed by, the law of the State of New York,
excluding choice-of-law principles of the law of such State which would require
application of the laws of the jurisdiction other than such State.
KEMET Corporation
By
[Title]
<Page 83>
Exhibit 4.4(a)
(to Note Purchase Agreement)
Form of Opinion of Special Counselto the Company
The closing opinion of Kirkland & Ellis, counsel for the Company,
which is called for by Section 4.4 of the Agreements, shall be dated the
date of the Closing and addressed to you and the Other Purchasers, shall
be satisfactory in scope and form to you and the Other Purchasers and shall
be to the effect that:
1. The Company is a corporation, duly incorporated, validly
sting and in good standing under the laws of the State of Delaware,
has the corporate power and the corporate authority to execute and
perform the Agreements and to issue the Notes and has the full
corporate power and the corporate authority to conduct the activities
in which it is now engaged and is duly licensed or qualified and is
in good standing as a foreign corporation in each jurisdiction in
which the character of the properties owned or leased by it or the
nature of the business transacted by it makes such licensing or
qualification necessary.
2. Each Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and is duly licensed or qualified and is in good
standing in each jurisdiction in which the character of the properties
owned or leased by it or the nature of the business transacted by it
makes such licensing or qualification necessary and all of the issued
and outstanding shares of capital stock of each such Subsidiary have
been duly issued, are fully paid and non-assessable and are owned by
the Company, by one or more Subsidiaries, or by the Company and one
or more Subsidiaries.
3. Each Agreement has been duly authorized by all necessary
corporate action on the part of the Company, has been duly executed
and delivered by the Company and constitutes the legal, valid and
binding contract of the Company enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent conveyance or
similar laws affecting creditors' rights generally, and except that
equitable remedies lie in the discretion of a court and may be
unenforceable.
4. The Notes have been duly authorized by all necessary
corporate action on the part of the Company, have been duly executed
and delivered by the Company and constitute the legal, valid and
binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent conveyance
or similar laws affecting creditors' rights generally, and except that
equitable remedies lie in the discretion of a court and may be
unenforceable.
5. The Subsidiary Guaranty has been duly authorized by all
necessary corporate action on the part of each Subsidiary Guarantor,
has been duly executed and delivered by each Subsidiary Guarantor and
constitutes the legal, valid and binding contract of each Subsidiary
84
Guarantor enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent conveyance and similar laws
affecting creditors' rights generally, and except that equitable
remedies lie in the discretion of a court and may be unenforceable.
6. No approval, consent or withholding of objection on the part
of, or filing, registration or qualification with, any governmental
body, Federal, state or local, is necessary in connection with the
execution, delivery and performance of the Agreements, the Notes or
the Subsidiary Guaranty.
7. The issuance and sale of the Notes and the execution,
delivery and performance by the Company of the Agreements do not
conflict with or result in any breach of any of the provisions of or
constitute a default under or result in the creation or imposition of
any Lien upon any of the property of the Company pursuant to the
provisions of the Certificate of Incorporation or By-laws of the
Company or any agreement or other instrument known to such counsel to
which the Company is a party or by which the Company may be bound.
8. The execution, delivery and performance by each Subsidiary
Guarantor of the Subsidiary Guaranty does not conflict with or result
in any breach of any of the provisions of or constitute a default
under or result in the creation or imposition of any Lien upon any of
the property of any Subsidiary Guarantor pursuant to the provisions
of the charter documents or By-laws of any Subsidiary Guarantor or any
agreement or other instrument known to such counsel to which any
Subsidiary Guarantor is a party or by which any Subsidiary Guarantor
may be bound.
9. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Agreements does not, under existing
law, require the registration of the Notes under the Securities Act
of 1933, as amended, or the qualification of an indenture under the
Trust Indenture Act of 1939, as amended.
10. The issuance of the Notes and the use of the proceeds of the
sale of the Notes in accordance with the provisions of and
contemplated by the Agreements do not violate or conflict with
Regulation T, U or X of the Board of Governors of the Federal Reserve
System.
11. There is no litigation pending or, to the best knowledge of
such counsel, threatened which in such counsel's opinion could
reasonably be expected to have a materially adverse effect on the
Company's business or assets or which would impair the ability of (i)
the Company to issue and deliver the Notes or to comply with the
provisions of the Agreements or (ii) any Subsidiary Guarantor to
comply with the provisions of the Subsidiary Guaranty.
12. The Company is not an "investment company," or a company
"controlled" by an "investment company," under the Investment Company
Act of 1940, as amended.
The opinion of Kirkland & Ellis shall cover such other matters relating to
the sale of the Notes as you and the Other Purchasers may reasonably
request. With respect to matters of fact on which such opinion is based,
85
such counsel shall be entitled to rely on appropriate certificates of
public officials and officers of the Company.
86
Exhibit 4.4(b)
(to Note Purchase Agreement)
Form of Opinion of Special Counselto the Purchasers
The closing opinion of Chapman and Cutler, special counsel to you and
the Other Purchasers, called for by Section 4.4 of the Agreements, shall
be dated the date of the Closing and addressed to you and the Other
Purchasers, shall be satisfactory in form and substance to you and the
Other Purchasers and shall be to the effect that:
1. The Company is a corporation, validly existing and in good
standing under the laws of the State of Delaware and has the corporate
power and the corporate authority to execute and deliver the
Agreements and to issue the Notes.
2. The Agreements have been duly authorized by all necessary
corporate action on the part of the Company, have been duly executed
and delivered by the Company and constitute the legal, valid and
binding contracts of the Company enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent conveyance or
similar laws affecting creditors' rights generally, and except that
equitable remedies lie in the discretion of a court and may be
unenforceable.
3. The Notes have been duly authorized by all necessary
corporate action on the part of the Company, have been duly executed
and delivered by the Company and constitute the legal, valid and
binding obligations of the Company enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent conveyance
or similar laws affecting creditors' rights generally, and except that
equitable remedies lie in the discretion of a court and may be
unenforceable.
4. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Agreements does not, under existing
law, require the registration of the Notes under the Securities Act
of 1933, as amended, or the qualification of an indenture under the
Trust Indenture Act of 1939, as amended.
The opinion of Chapman and Cutler shall also state that the opinion
of Kirkland & Ellis is satisfactory in scope and form to Chapman and Cutler
and that, in their opinion, you and the Other Purchasers are justified in
relying thereon.
In rendering the opinion set forth in paragraph 1 above, Chapman and
Cutler may rely solely upon an examination of the Certificate of
Incorporation certified by, and a certificate of good standing of the
Company from, the Secretary of State of the State of Delaware, the By-laws
of the Company and the general business corporation law of the State of
Delaware. The opinion of Chapman and Cutler is limited to the laws of the
State of New York, the general business corporation law of the State of
Delaware and the Federal laws of the United States.
With respect to matters of fact upon which such opinion is based,
Chapman and Cutler may rely on appropriate certificates of public officials
and officers of the Company.