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HUGHES SUPPLY, INC.
$19,000,000 8.27% Series A Senior Notes due November 30, 2003
$28,000,000 8.27% Series B Senior Notes due November 30, 2005
$103,000,000 8.42% Series C Senior Notes due November 30, 2007
NOTE PURCHASE AGREEMENT
Dated December 21, 2000
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TABLE OF CONTENTS
1. AUTHORIZATION OF NOTES....................................................1
2. SALE AND PURCHASE OF NOTES................................................1
3. CLOSING...................................................................2
4. CONDITIONS TO CLOSING.....................................................2
4.1 Representations and Warranties...................................2
4.2 Performance; No Default..........................................2
4.3 Compliance Certificates..........................................3
4.4 Opinions of Counsel..............................................3
4.5 Purchase Permitted by Applicable Law, etc........................3
4.6 Sale of Other Notes..............................................4
4.7 Payment of Special Counsel Fees..................................4
4.8 Private Placement Number.........................................4
4.9 Changes in Corporate Structure...................................4
4.10 Proceedings and Documents........................................4
4.11 Guarantees of Subsidiaries.......................................4
4.12 Copy of Bank Credit Agreements...................................5
4.13 Dismissal of Case/Affirmative Coverage Response..................5
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.............................5
5.1 Organization; Power and Authority................................5
5.2 Authorization, etc...............................................5
5.3 Disclosure.......................................................6
5.4 Organization and Ownership of Shares of Subsidiaries;
Affiliates.......................................................6
5.5 Financial Statements.............................................7
5.6 Compliance With Laws, Other Instruments, etc.....................7
5.7 Governmental Authorizations, etc.................................8
5.8 Litigation; Observance of Agreements, Statutes and Orders........8
5.9 Taxes............................................................8
5.10 Title to Property; Leases........................................9
5.11 Licenses, Permits, etc...........................................9
5.12 Compliance With ERISA............................................9
5.13 Private Offering by the Company.................................10
5.14 Use of Proceeds; Margin Regulations.............................10
5.15 Existing Debt; Future Liens.....................................11
5.16 Foreign Assets Control Regulations, etc.........................11
5.17 Status Under Certain Statutes...................................11
5.18 Environmental Matters...........................................12
5.19 Certain Matters.................................................12
6. REPRESENTATIONS OF THE PURCHASER.........................................13
6.1 Purchase for Investment.........................................13
6.2 Source of Funds.................................................13
7. INFORMATION AS TO COMPANY................................................15
7.1 Financial and Business Information..............................15
7.2 Officer's Certificate...........................................18
7.3 Inspection......................................................19
8. PREPAYMENT OF THE NOTES..................................................19
8.1(A) Series A Required Payments......................................19
8.1(B) Series B Required Prepayments...................................20
8.1(C) Series C Required Prepayments...................................20
8.2 Optional Prepayments With Make-Whole Amount.....................20
8.3 Allocation of Partial Prepayments...............................21
8.4 Maturity; Surrender, etc........................................21
8.5 Mandatory Offer to Prepay Upon Change of Control................21
8.6 Make-Whole Amount...............................................23
8.7 Purchase of Notes...............................................24
9. AFFIRMATIVE COVENANTS....................................................24
9.1 Compliance With Law.............................................25
9.2 Insurance.......................................................25
9.3 Maintenance of Properties.......................................25
9.4 Payment of Taxes and Claims.....................................25
ii
9.5 Corporate Existence, etc........................................26
9.6 Covenant To Secure Notes Equally................................26
9.7 Covenant Relating to Subsidiary Guarantees......................26
9.8 Ownership of Subsidiary Guarantors..............................27
10. NEGATIVE COVENANTS.......................................................27
10.1 Funded Debt.....................................................27
10.2 Current Debt....................................................27
10.3(A) Minimum Net Worth...............................................28
10.3(B) Adjusted Interest Coverage Ratio................................28
10.4 Restricted Payments.............................................28
10.5 Liens...........................................................28
10.6 Priority Debt...................................................30
10.7 Merger or Consolidation.........................................30
10.8 Sale of Assets..................................................31
10.9 Transactions With Related Party.................................35
10.10 Nature of Business..............................................35
10.11 Limitation on Dividend and Other Payment Restrictions Affecting
Subsidiaries....................................................35
11. EVENTS OF DEFAULT........................................................36
12. REMEDIES ON DEFAULT, ETC.................................................38
12.1 Acceleration....................................................38
12.2 Other Remedies..................................................39
12.3 Rescission......................................................39
12.4 No Waivers or Election of Remedies, Expenses, etc...............40
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES............................40
13.1 Registration of Notes...........................................40
13.2 Transfer and Exchange of Notes..................................40
13.3 Replacement of Notes............................................41
14. PAYMENTS ON NOTES........................................................41
14.1 Place of Payment................................................41
14.2 Home Office Payment.............................................41
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15. EXPENSES, ETC............................................................42
15.1 Transaction Expenses............................................42
15.2 Survival........................................................42
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.............43
17. AMENDMENT AND WAIVER.....................................................43
17.1 Requirements....................................................43
17.2 Solicitation of Holders of Notes................................43
17.3 Binding Effect, etc.............................................44
17.4 Notes Held by Company, etc......................................44
18. NOTICES..................................................................44
19. REPRODUCTION OF DOCUMENTS................................................45
20. CONFIDENTIAL INFORMATION.................................................45
21. SUBSTITUTION OF PURCHASER................................................47
22. MISCELLANEOUS............................................................47
22.1 Successors and Assigns..........................................47
22.2 Payments Due on Non-Business Days...............................47
22.3 Severability....................................................47
22.4 Construction....................................................48
22.5 Counterparts....................................................48
22.6 Governing Law...................................................48
SCHEDULE A -- Information Relating to Purchasers
SCHEDULE B -- Defined Terms
SCHEDULE 4.9 -- Changes in Corporate Structure
SCHEDULE 4.11 -- Material Subsidiaries Executing and Delivering Guarantees
on Date of closing
SCHEDULE 5.3 -- Disclosure Materials
iv
SCHEDULE 5.4 -- Subsidiaries of the Company and Ownership of
Subsidiary Stock; Company's Affiliates; Company's
Directors and Senior Officers
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.8 -- Certain Litigation
SCHEDULE 5.11 -- Patents, etc.
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Existing Debt
SCHEDULE 10.5 -- Liens
EXHIBIT 1 -- Form of Senior Note
EXHIBIT 4.4(a) -- Matters To Be Covered by Opinion of General
Counsel for the Company
EXHIBIT 4.4(b) -- Matters To Be Covered by Opinion of Special
Counsel to the Purchasers
EXHIBIT 4.11(a) -- Form of Guarantee
EXHIBIT 4.11(b) -- Form of Contribution Agreement
v
$19,000,000 8.27% Series A Senior Notes due November 30, 2003
$28,000,000 8.27% Series B Senior Notes due November 30, 2005
$103,000,000 8.42% Series C Senior Notes due November 30, 2007
December 21, 2000
TO EACH OF THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
Hughes Supply, Inc., a Florida corporation (the "Company"), agrees with
you as follows:
1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of (i) Nineteen Million
Dollars ($19,000,000) aggregate principal amount of its 8.27% Senior Notes due
November 30, 2003 (the "Series A Notes"), (ii) Twenty-Eight Million Dollars
($28,000,000) aggregate principal amount of its 8.27% Senior Notes due November
30, 2005 (the "Series B Notes"), and (iii) One Hundred-Three Million Dollars
($103,000,000) aggregate principal amount of its 8.42% Senior Notes due November
30, 2007 (the "Series C Notes"; the Series A Notes, the Series B Notes and the
Series C Notes shall be collectively referred to herein as the "Notes" and each
referred to herein as a "Note" and the term "Note" shall 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.
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 of a given Series in the principal amounts
specified opposite your respective names 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 respective obligations 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 non-performance by any Other
Purchaser thereunder.
3. CLOSING.
The sale and purchase of the Notes to be purchased by you and the Other
Purchasers shall occur at the offices of Alston & Bird LLP, 1201 West Peachtree
Street, Atlanta, Georgia, at 9:00 a.m., Atlanta time, at a closing (the
"Closing") on December 21, 2000, or on such other Business Day thereafter 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 for each series (or such greater number of Notes in denominations
of at least $500,000 as you may request) dated the date of the Closing and
registered in your name (or in the name of your nominee), against delivery by
you to the 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 Wachovia Bank, N.A., ABA Number 061000010, Account
Number 13028327, Account Name "Hughes Supply, Inc.," Atlanta, Georgia,
Reference: Private Placement Disbursement . 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.
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:
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.
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
2
Subsidiary shall have entered into any transaction since the date of the
Memorandum that would have been prohibited by Sections 10.1 through 10.10 hereof
had such Sections applied since such date.
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 Certificates. The Company and each Subsidiary executing
the Guarantee referenced in Section 4.11 shall have delivered to you a
certificate from the Secretary or an Assistant Secretary certifying as to the
resolutions attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of, in the case of the Company, the Notes
and the Agreements and, in the case of such Subsidiaries, the Guarantee and
Contribution Agreement referenced in Section 4.11.
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 Benjamin P. Butterfield, General
Counsel for the Company, 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 (b) from Alston & Bird LLP, your
special counsel in connection with such transactions, covering the matters set
forth in Exhibit 4.4(b) and covering such other matters incident to such
transactions as you may reasonably request.
4.5 Purchase Permitted by Applicable Law, etc.
On the date of the Closing your purchase of Notes shall (i) 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, (ii) 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 (iii) 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.
3
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.
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 reasonable fees, charges and disbursements of
your special counsel referred to in Section 4.4 to the extent reflected in a
statement of such counsel rendered to the Company at least one Business Day
prior to the Closing.
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 each Series
of Notes.
4.9 Changes in Corporate Structure.
Except as specified in Schedule 4.9, the Company shall not have changed
its jurisdiction of incorporation or been a party to any merger or consolidation
and shall not have succeeded to all or any substantial part of the liabilities
of any other entity, at any time following the date of the most recent financial
statements referred to in Schedule 5.5.
4.10 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.
4.11 Guarantees of Subsidiaries.
Each of the Material Subsidiaries specified in Schedule 4.11 shall have
executed and delivered a Guarantee in the form set forth in Exhibit 4.11(a) and
the Company and each such Material Subsidiary shall have executed and delivered
a Contribution Agreement in the form set forth in Exhibit 4.11(b).
4
4.12 Copy of Bank Credit Agreements.
The Company shall have delivered to each Purchaser a copy of each
existing Bank Credit Agreement, including all amendments thereto, certified as
true and correct by a Senior Financial Officer.
4.13 Dismissal of Case/Affirmative Coverage Response
The Company shall have delivered to counsel to the Purchasers a copy of
the Order dated December 14, 2000 issued by the Superior Court of Washington for
King County by which the Company is dismissed, with prejudice, from the Case
referred to in Section 5.19 hereof. The Company shall have delivered to counsel
to the Purchasers a copy of the affirmative coverage response of the
CNA-affiliated insurance companies referred to in Section 5.19 hereof.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
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.
5.2 Authorization, etc.
This Agreement and the Other Agreements and the Notes have been duly
authorized by all necessary corporate action on the part of the Company, and
this Agreement constitutes, and upon execution and delivery thereof each Note
will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
5
5.3 Disclosure.
The Company, through its agent, Banc of America Securities LLC, has
delivered to you and each Other Purchaser a copy of a Private Placement
Memorandum, dated October 2000 (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. Except as disclosed in Schedule 5.3, this Agreement, the
Memorandum, the documents, certificates or other writings 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
or as expressly described in Schedule 5.3, or in one of the documents,
certificates or other writings identified therein, or in the financial
statements listed in Schedule 5.5, since July 31, 2000January 28, 2000, there
has been no change in the financial condition, operations, business, properties
or prospects of the Company or any Subsidiary except changes that individually
or in the aggregate could not reasonably be expected to have a Material Adverse
Effect. There is no fact known to the Company that could 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 writings delivered
to you by or on behalf of the Company specifically for use in connection with
the transactions contemplated hereby.
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) 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 Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 5.4). All of the entities set forth
in Schedule 5.4 are Consolidated. Schedule 4.11 sets forth all Material
Subsidiaries of the Company as of the date hereof.
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good
6
standing could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. Each such Subsidiary has the corporate or other
power and authority to own or hold under lease the properties it purports to own
or hold under lease and to transact the business it transacts and proposes to
transact. The Guarantee and Contribution Agreement to be executed and delivered
by each Material Subsidiary referenced in Section 4.11 have been duly authorized
by all necessary corporate action on the part of each such Material Subsidiary
and such Guarantee and Contribution Agreement will constitute a legal, valid and
binding obligation of such Material Subsidiary enforceable against such Material
Subsidiary except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(d) No 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 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 Subsidiary.
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 Schedule and the consolidated results of their operations and
cash flows for the respective periods so specified and have been prepared in
accordance with GAAP consistently applied throughout the periods involved except
as set forth in the notes thereto (subject, in the case of any interim financial
statements, to normal year-end adjustments).
5.6 Compliance With Laws, Other Instruments, etc.
The execution, delivery and performance by the Company of this
Agreement and the Notes and by the Material Subsidiaries referenced in Section
4.11 of the Guarantee and Contribution Agreement referenced therein will not (i)
contravene, result in any breach of, or constitute a default under, or result in
the creation of any Lien in respect of any property of 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, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator
7
or Governmental Authority applicable to the Company or any Subsidiary or (iii)
violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary.
5.7 Governmental Authorizations, etc.
No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the
execution, delivery or performance by the Company of this Agreement or the Notes
or of the Guarantee and the Contribution Agreement referenced in Section 4.11 by
the Material Subsidiaries referenced therein.
5.8 Litigation; Observance of Agreements, Statutes and Orders.
(a) Except as disclosed in Schedule 5.8, 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.
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 (i) the amount of which is not
individually or in the aggregate Material or (ii) the amount, applicability or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which the Company or a Subsidiary, as the case
may be, has established adequate reserves in accordance with GAAP. The Company
knows of no basis for any other tax or assessment that 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 returns
liabilities of the Company and its Subsidiaries have been audited by the
Internal Revenue Service for certain fiscal years up to and including the fiscal
year
8
ended 1996 and any resulting deficiencies, additional assessments, fines,
penalties, interest or other charge have either been paid for or adequately
reserved for in the financial statements. Other than certain ordinary course
audits of state sales and income tax returns, neither the Company nor any
Subsidiary is presently under, nor has any of them received notice of, any
investigation or audit by any national, regional, provincial, local or other
agency concerning any fiscal year or period ended prior to the date hereof. All
taxes required to be withheld from employees of the Company and its Subsidiaries
for income and social security taxes have been properly withheld.
5.10 Title to Property; Leases.
The Company and its Subsidiaries have good and sufficient title to
their respective owned properties that individually or in the aggregate are
Material, including all such properties reflected in the most recent audited
balance sheet referred to in Section 5.5 or purported to have been acquired by
the Company or any Subsidiary after said date (except as sold or otherwise
disposed of in the ordinary course of business), in each case free and clear of
Liens prohibited by this Agreement. All leases that individually or in the
aggregate are Material are valid and subsisting and are in full force and effect
in all material respects.
5.11 Licenses, Permits, etc.
Except as disclosed in Schedule 5.11,
(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.
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
9
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 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.
(c) 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.
(d) 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(d) 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.
5.13 Private Offering by the Company.
Neither the Company nor anyone acting on its behalf has offered the
Notes or any similar securities for sale to, or solicited any offer to buy any
of the same from, or otherwise approached or negotiated in respect thereof with,
any person other than you, the Other Purchasers and not more than 50 other
Institutional Investors, each of which has been offered the Notes at a private
sale for investment. Neither the Company, nor, to the best knowledge of the
Company, 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.
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
10
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 the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). Margin stock does not
constitute more than 5% of the value of the Consolidated Assets of the Company
and its Subsidiaries and the Company does not have any present intention that
margin stock will constitute more than 5% of the value of such assets. As used
in this Section, the terms "margin stock" and "purpose of buying or carrying"
shall have the meanings assigned to them in said Regulation U.
5.15 Existing Debt; Future Liens.
(a) Except as described therein, Schedule 5.15 sets forth a complete
and correct list of all outstanding Debt of the Company and its Subsidiaries as
of November 30, 2000, since which date there has been no Material change in the
amounts, interest rates, sinking funds, installment payments or maturities of
the Debt of the Company or its Subsidiaries. Neither the Company nor any
Subsidiary is in default and no waiver of default is currently in effect, in the
payment of any principal or interest on any Debt of the Company or such
Subsidiary and no event or condition exists with respect to any Debt of the
Company or any Subsidiary that would permit (or that with notice or the lapse of
time, or both, would permit) one or more Persons to cause such Debt to become
due and payable before its stated maturity or before its regularly scheduled
dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company nor any
Subsidiary has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien not permitted by Section 10.5.
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.
5.17 Status Under Certain Statutes.
Neither the Company nor any Subsidiary is subject to regulation under
the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, the Interstate Commerce Act, as amended, or the
Federal Power Act, as amended.
11
5.18 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 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 and has not 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.
5.19 Certain Matters.
Pursuant to an Asset Purchase Agreement dated as of November 30, 1999
(the "Asset Purchase Agreement") by and between the Company and Western
Utilities Supply Co. (the "Seller"), the Company purchased substantially all of
the assets of the Seller on February 1, 2000. The asset purchase was negotiated
at arm's length and the Company paid the Seller fair value for the assets
purchased. The Asset Purchase Agreement sets forth substantially all material
terms of the asset purchase and neither the Company nor any Subsidiary has any
continuing obligation to purchase products or services from, or otherwise deal
with, the Seller.
Pursuant to Section 2(b) of the Asset Purchase Agreement, the Company
assumed no liabilities (including any tort liabilities) of the Seller other than
certain ledger accounts. Pursuant to Section 7(b)(iv) of the Asset Purchase
Agreement, the Seller has agreed to indemnify the Company for all Losses (as
defined in the Asset Purchase
12
Agreement) suffered or incurred by the Company by reason of, or in connection
with, any claim or cause of action of any third party to the extent arising out
of any action, inaction, event, condition, liability or obligation of the Seller
occurring prior to the consummation of the acquisition including, but not
limited to, any Loss arising out of a cause of action entitled Miller, et. ux.
v. Hughes Supply, Inc., King County, Washington, Superior Court Case No.
00-2-20913-4SEA (the "Case") or any similar claim or cause of action; provided,
however, that such indemnification obligation terminates on the first
anniversary date of the closing.
The Company further represents that neither the Company nor any of its
Subsidiaries has, at any time, distributed or sold to, or manufactured,
warehoused or otherwise dealt with any of the products or materials on behalf
of, Persons engaged in the shipbuilding industry in the State of Washington or
any other jurisdiction other than certain high-alloy and stainless steel
products. The Seller's insurance companies, certain insurance company affiliates
of CNA Financial Corporation, have issued an affirmative coverage response to
the Seller indicating that coverage would be afforded to the Seller with respect
to the Case within the limits and other terms of the applicable policies;
provided, however, that the coverage would not extend to the Company as such
Persons are not insureds under such policies. However, and in any event,
pursuant to an Order issued by the Superior Court of Washington for King County
dated December 21, 2000, the Company has been dismissed from the Case with
prejudice.
6. REPRESENTATIONS OF THE PURCHASER.
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 register the Notes.
6.2 Source of Funds.
You represent that at least one of the following statements is an
accurate representation as to each source of funds (a "Source") to be used by
you to pay the purchase price of the Notes to be purchased by you hereunder:
(a) the Source is an "insurance company general account" as defined in
Department of Labor Prohibited Transaction Exemption ("PTE") 95-60 (60 FR
35925, July 12, 1995) and in respect thereof you represent that there is no
13
"employee benefit plan" (as defined in Section 3(3) of ERISA and Section
4975(e)(1) of the Code, treating as a single plan all plans maintained by
the same employer or employee organization or affiliate thereof) with
respect to which the amount of the general account reserves and liabilities
of 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 and that such acquisition is
eligible for and satisfies the other requirements of such exemption; 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 I(c) and (g) of the QPAM Exemption are satisfied,
neither the QPAM nor a person controlling or controlled by the QPAM
(applying the definition of "control" 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 is an insurance company separate account maintained
solely in connection with fixed contractual obligations of the insurance
company under which the amounts payable, or credited, to any employee
benefit plan (or its related trust) and to any participant or beneficiary
of such plan (including any
14
annuitant) are not affected in any manner by the investment performance of
the separate account; or
(g) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms "employee benefit plan", "governmental
plan", "party in interest" and "separate account" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
7. INFORMATION AS TO COMPANY.
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 the requirements of this Section
7.1(a) so long as such requirements of the Securities and Exchange
Commission continue to require that Form 10-Q include the financial
statements described in subparagraphs (i) and (ii) above;
15
(b) Annual Statements -- within 105 days after the end of 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:
(A) 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;
(B) a certificate of such accountants stating that they have
reviewed this Agreement and stating further whether, in making their
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 shall be deemed to satisfy the requirements of this Section
7.1(b) so long as such requirements of the Securities and Exchange
Commission continue to require that Form 10-K include the financial
statements described in subparagraphs (i) and (ii) above.
(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, and (ii) each
16
regular or periodic report, each registration statement (without exhibits
except as expressly requested by such holder), and each prospectus and all
amendments thereto filed by the Company or any Subsidiary with the
Securities and Exchange Commission and of all press releases and other
statements made available generally by the Company or any Subsidiary to
the public concerning developments that are Material;
(d) Notice of Default or Event of Default -- promptly, and in any
event within five days after a Responsible Officer becoming aware of the
existence of any Default or Event of Default or that any Person has given
any notice or taken any action with respect to a claimed default hereunder
or that any Person has given any notice or taken any action with respect
to a claimed default of the type referred to in Section 11(f), a written
notice specifying the nature and period of existence thereof and what
action the Company is taking or proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within five days after
a Responsible Officer becoming aware of any of the following, a written
notice setting forth the nature thereof and the action, if any, that the
Company or an ERISA Affiliate proposes to take with respect thereto:
(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; or
(iv) if at any time the aggregate "amount of unfunded benefit
liabilities" (within the meaning of section 4001(a)(18) of ERISA)
17
under all Plans, determined in accordance with Title IV of ERISA,
shall exceed $1,000,000;
(f) Notices From Governmental Authority -- promptly, and in any
event within 30 days of receipt thereof, copies of any notice to the
Company or any Subsidiary from any Federal or state Governmental
Authority relating to any order, ruling, statute or other law or
regulation that could reasonably be expected to have a Material
Adverse Effect;
(g) New Material Subsidiaries -- within 60 days after the end of
each quarterly fiscal period in each fiscal year of the Company in
which a Material Subsidiary has been formed or acquired, or any other
event resulting in the creation of a new Material Subsidiary, notice
of the formation or acquisition of such Material Subsidiary or such
occurrence, including a description of the assets of such entity, the
activities in which it will be engaged, and such other information as
an Institutional Investor may request;
(h) Bank Credit Agreements -- promptly, and in any event within
30 days after the execution thereof, a copy of a Bank Credit Agreement
entered into after the date hereof by the Company or any Subsidiary
and of each amendment of, other modification to, or waiver granted
under, a Bank Credit Agreement;
(i) 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.
7.2 Officer's Certificate.
Each set of financial statements delivered to a holder of Notes
pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a
certificate of a Senior Financial Officer setting forth:
(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Company was
in compliance with the requirements of Sections 10.1, 10.2, 10.3,
10.4, 10.5, 10.6 and 10.8 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
18
(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, specifying the nature and
period of existence thereof and what action the Company shall have
taken or proposes to take with respect thereto.
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; 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 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.
8. PREPAYMENT OF THE NOTES.
8.1(A) Series A Required Payments.
There shall be no required prepayment of Series A Notes. The Company
shall repay the entire outstanding principal amount of all Series A Notes at par
and without payment of the Make-Whole Amount or any premium in a single
installment on November 30, 2003, together with all accrued but unpaid interest
thereon.
19
8.1(B) Series B Required Prepayments.
The Company shall prepay, and there shall become due and payable,
$5,600,000 in aggregate principal amount of Series B Notes on November 30 of
each year commencing on November 30, 2001 and ending on November 30, 2004,
inclusive. The Company shall make a final payment of the remaining principal
amount of the Series B Notes of $5,600,000 (or such amount as shall be the
remaining principal amount of Series B Notes outstanding) on November 30, 2005.
Each such payment shall be accompanied by all accrued but unpaid interest to
date and each such payment of the Series B Notes pursuant to this Section 8.1(B)
shall be at par and without payment of the Make-Whole Amount or any premium,
provided that, upon any partial prepayment of Series B Notes pursuant to Section
8.2 or purchase of Series B Notes permitted by Section 8.7, the principal amount
of each required prepayment of Series B Notes becoming due under this Section
8.1(B) on and after the date of such prepayment or purchase shall be reduced in
the same proportion as the aggregate unpaid principal amount of Series B Notes
is reduced as a result of such prepayment or purchase.
8.1(C) Series C Required Prepayments
The Company shall prepay, and there shall become due and payable,
$20,600,000 in aggregate principal amount of Series C Notes on November 30 of
each year commencing on November 30, 2003 and ending on November 30, 2006,
inclusive. The Company shall make a final payment of the remaining principal
amount of the Series C Notes of $20,600,000 (or such amount as shall be the
remaining principal amount of Series C Notes outstanding) on November 30, 2007.
Each such payment shall be accompanied by all accrued but unpaid interest to
date and each such payment of the Series C Notes pursuant to this Section 8.1(C)
shall be at par and without payment of the Make-Whole Amount or any premium,
provided that, upon any partial prepayment of Series C Notes pursuant to Section
8.2 or purchase of Series C Notes permitted by Section 8.7, the principal amount
of each required prepayment of Series C Notes becoming due under this Section
8.1(C) on and after the date of such prepayment or purchase shall be reduced in
the same proportion as the aggregate unpaid principal amount of Series C Notes
is reduced as a result of such prepayment or purchase.
8.2 Optional Prepayments With Make-Whole Amount.
The Company may, at its option, upon notice as provided below, prepay
the Notes in whole at any time, or from time to time in part in an amount not
less than $5,000,000, at 100% of the principal amount so prepaid plus all
accrued interest on the principal amount of Notes so prepaid, plus the
Make-Whole Amount determined for the prepayment date with respect to such
principal amount. Any such optional payment shall be on a Business Day and the
Company will give each holder of Notes written notice of each optional
prepayment under this Section 8.2 not less than 30 days and not more than 60
days prior to the Business Day fixed for such prepayment. Each such notice shall
specify such date, the aggregate principal amount of the Notes to be prepaid on
such date,
20
the principal amount of each Note held by such holder to be prepaid (determined
in accordance with Section 8.3), and the interest to be paid on the prepayment
date with respect to such principal amount being prepaid, and shall be
accompanied by a certificate of a Senior Financial Officer as to the estimated
Make-Whole Amount due in connection with such prepayment (calculated as if the
date of such notice were the date of the prepayment), setting forth the details
of such computation. Two Business Days prior to such prepayment, the Company
shall deliver to each holder of Notes a certificate via facsimile transmission
of a Senior Financial Officer specifying the calculation of such Make-Whole
Amount as of the specified prepayment date.
8.3 Allocation of Partial Prepayments.
In the case of any partial prepayment of the Notes, the principal
amount of the Notes to be prepaid shall be allocated among all Notes of all
Series then outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts of all Notes not theretofore called for
prepayment.
8.4 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.
8.5 Mandatory Offer to Prepay upon Change of Control.
(a) Notice and Offer. In the event of either:
(i) a Change of Control, or
(ii) the obtaining of knowledge of a Control Event by any officer
of the Company (including, without limitation, via the receipt of
notice of a Control Event from any holder of Notes),
the Company will, within three Business Days of the occurrence of either of such
events (or, in the case of any Change of Control, the consummation or
finalization of which would involve any action of the Company, at least thirty
days prior to such Change of Control), give written notice of such Change of
Control or Control Event to each holder of outstanding Notes by registered mail
and, simultaneously with the sending of such outstanding written notice, send a
copy of such notice to each such holder via an
21
overnight courier of national reputation. Such written notice shall contain, and
such written notice shall constitute, an irrevocable offer to prepay all, but
not less than all, the Notes held by such holder on a date specified in such
notice (the "Control Prepayment Date") that is not less than 30 days and not
more than 60 days after the date of such notice. If the Control Prepayment Date
shall not be specified in such notice, the Control Prepayment Date shall be the
30th day after the date of such holder's first receipt of such notice. If the
Company shall not have received a written response to such notice from each
holder of Notes within 10 days after the date of posting of such notice to such
holder of Notes, then the Company shall immediately send a second written notice
via an overnight courier of national reputation to each such holder of Notes who
shall have not previously responded to the Company. In no event will the Company
take any action to consummate or finalize a Change of Control unless
contemporaneously with such action the Company prepays all Notes required to be
prepaid in accordance with Section 8.5(b) hereof.
(b) Acceptance and Payment. To accept such offered prepayment, a holder
of Notes shall cause a notice of such acceptance to be delivered to the Company
not later than 15 days after the date of receipt by such holder of the latest
written offer of such prepayment (it being understood that the failure by a
holder to respond to such written offer of prepayment within such period of 15
days shall be deemed to constitute a rejection of such offer). If so accepted,
such offered prepayment shall be due and payable on the Control Prepayment Date.
Such offered prepayment shall be made at one hundred percent (100%) of the
principal amount of such Notes, together with interest on the Notes then being
prepaid accrued to the Control Prepayment Date. The Company shall not be
required to pay any Make-Whole Amount upon any prepayment of Notes pursuant to
this Section 8.5.
(c) Officer's Certificate. Each offer to prepay the Notes pursuant to
this Section 8.5 shall be accompanied by a certificate, executed by a Senior
Financial Officer of the Company and dated the date of such offer, specifying:
(i) the Control Prepayment Date;
(ii) the Section hereof under which such offer is made;
(iii) the principal amount of each Note offered to be prepaid;
(iv) the interest that would be due on each such Note offered to
be prepaid, accrued to the Control Prepayment Date;
(v) that the conditions of this Section 8.5 have been fulfilled;
and
(vi) in reasonable detail, the nature and date or proposed date
of the Change of Control.
22
(d) Notice Concerning Status of Holders of Notes. Promptly after each
Control Prepayment Date and the making of all prepayments contemplated on such
Control Prepayment Date under this Section 8.5 (and, in any event, within thirty
days thereafter), the Company shall deliver to each remaining holder of Notes a
certificate signed by a Senior Financial Officer of the Company containing a
list of the then current holders of Notes (together with their addresses) and
setting forth as to each such holder the outstanding principal amount of Notes
held by each such holder at such time.
8.6 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 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) based on the Reinvestment Yield with
respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called
Principal of any Note, 0.50% plus the yield to maturity implied by (i)
the yields reported (offer side), 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, as set forth on page "USD" of the Bloomberg
Financial Markets Service (or, if not available, any other nationally
recognized trading screen reporting on-line intraday trading in United
States Treasury fixed interest rate 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
(ii) 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.
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Such implied yield in (i) and (ii) above will be determined, if
necessary, by (a) converting U.S. Treasury bill quotations to
bond-equivalent yields in accordance with accepted financial practice
and (b) interpolating linearly between (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 (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (b) the number of years (calculated to the nearest one-twelfth
year) that will elapse between the Settlement Date with respect to
such Called Principal and the scheduled due date of such Remaining
Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called
Principal were made prior to its scheduled due date, provided that if
such Settlement Date is not a date on which interest payments are due
to be made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on
such Settlement Date pursuant to Section 8.2 or 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.
8.7 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.
9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
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9.1 Compliance With Law.
The Company shall, and shall 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, Environmental Laws, and shall
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.
9.2 Insurance.
The Company shall, and shall 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.
9.3 Maintenance of Properties.
The Company shall, and shall cause each of its Subsidiaries to,
maintain and keep, or cause to be maintained and kept, their respective
properties in good repair, working order and condition (other than ordinary wear
and tear), so that the business carried on in connection therewith may be
properly conducted at all times, provided that this Section shall not prevent
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.
9.4 Payment of Taxes and Claims.
The Company shall, and shall cause each of its Subsidiaries to, file
all tax returns required to be filed in any jurisdiction and to pay and
discharge all taxes shown to be due and payable on such returns and all other
taxes, assessments, governmental charges, or levies imposed on them or any of
their properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent
and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of the Company or any Subsidiary, provided
that neither the Company nor any Subsidiary need pay any such tax
25
or assessment or claims if (i) the amount, applicability or validity thereof is
contested bythe 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 (ii) the nonpayment of all such taxes and assessments in
the aggregate could not reasonably be expected to have a Material Adverse
Effect.
9.5 Corporate Existence, etc.
The Company shall at all times preserve and keep in full force and
effect its corporate existence. Subject to Sections 10.7 and 10.8, the Company
shall 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 of any
Subsidiary, right or franchise could not, individually or in the aggregate, have
a Material Adverse Effect.
9.6 Covenant To Secure Notes Equally
The Company covenants that, if it or any Subsidiary shall create or
assume any Lien upon any of its property or assets, whether now owned or
hereafter acquired, other than Liens permitted by the provisions of Section 10.5
and 10.6 hereof (unless prior written consent to the creation or assumption
thereof shall have been obtained pursuant to Section 17), the Company will make
or cause to be made effective provision whereby the Notes will be secured by
such Lien equally and ratably with any and all other Debt thereby secured so
long as any such other Debt shall be so secured. This Section 9.6 shall not be
deemed a consent to any Lien or Liens not otherwise permitted by Section 10.5 or
Section 10.6.
9.7 Covenant Relating to Subsidiary Guarantees.
Within 60 days after the end of each quarterly fiscal period in each
fiscal year of the Company after: (i) the formation or acquisition of any
Material Subsidiary not listed on Schedule 4.11; (ii) the transfer of assets
from the Company or any Subsidiary to another Subsidiary and as a result thereof
the recipient of such assets becomes a Material Subsidiary; (iii) the occurrence
of any other event creating a new Material Subsidiary; or (iv) the execution and
delivery by a Subsidiary (a "Bank Guaranty Subsidiary") (whether or not a
Material Subsidiary) of a guaranty of the indebtedness and obligations of the
Company under a Bank Credit Agreement the Company shall cause to be executed and
delivered a guarantee of the obligations of the Company hereunder and under the
Notes from such Material Subsidiary or Bank Guaranty Subsidiary (as the case may
be) in substantially the form of Exhibit 4.11(a) and a Contribution Agreement
from such Material Subsidiary or Bank Guaranty Subsidiary (as the case may be)
in substantially the form of Exhibit 4.11(b), together with an opinion of
counsel of the General Counsel to
26
the Company covering the matters described in Section 5.4(c), and copies of any
accompanying resolutions of the board of directors of such Material Subsidiary
or Bank Guaranty Subsidiary (as the case may be), good standing certificates and
the like, all in form and substance satisfactory to your special counsel.
9.8 Ownership of Subsidiary Guarantors.
The Company shall maintain its percentage of ownership existing as of
the date hereof of all Material Subsidiaries that execute the Guarantee
referenced in Section 4.11, and shall not decrease its ownership percentage in
each Material Subsidiary that executes a Guarantee pursuant to Section 9.7 after
the date hereof, as such ownership exists at the time such Subsidiary so
executes such Guarantee.
10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
10.1 Funded Debt.
The Company shall not, and shall not permit any Subsidiary to, directly
or indirectly, create, incur, assume, guarantee, or otherwise become directly or
indirectly liable with respect to any Funded Debt unless, on the date the
Company or such Subsidiary becomes liable with respect to such Debt and
immediately after giving effect thereto and the concurrent retirement of any
other Debt, (i) no Default or Event of Default exists and (ii) Consolidated
Funded Debt outstanding at such time does not exceed 60% of Consolidated Total
Capitalization at such time. For purposes of this Section 10.1, any Person
becoming a Subsidiary after the date hereof shall be deemed, at the time it
becomes a Subsidiary, to have incurred all of its then outstanding Debt, and any
Person extending, renewing or refunding any Debt shall be deemed to have
incurred such Debt at the time of such extension, renewal or refunding. Further,
it is hereby understood that the restrictions against the incurrence of Funded
Debt by Subsidiaries contained in this Section 10.1 shall be in addition to, and
not in derogation of, the restrictions contained in Section 10.6 hereof.
10.2 Current Debt.
Neither the Company nor any Subsidiary shall at any time have or suffer
to exist Current Debt unless, during the preceding 365-day period, there shall
be at least 45 consecutive days on each of which there shall have been no
Consolidated Current Debt outstanding in excess of the amount of additional
Funded Debt that the Company would have been permitted to incur on each such day
under Section 10.1.
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10.3(A) Minimum Net Worth
The Company shall not permit Consolidated Net Worth to be less than
$445,000,000 at any time.
10.3(B) Adjusted Interest Coverage Ratio
The Company shall not permit, as at the end of each fiscal quarter of
the Company, the Adjusted Interest Coverage Ratio to be less than 1.50 to 1.00.
10.4 Restricted Payments.
The Company shall not:
(i) pay or declare any cash dividend on account of or with
respect to any Capital Stock or make any other cash distribution on
account of or with respect to any class of its Capital Stock; or
(ii) redeem, purchase or otherwise acquire, directly or
indirectly, any shares of the Company's Capital Stock
(all of the foregoing described in these subparagraphs (i) and (ii) hereof being
herein called "Restricted Payments") unless (A) the aggregate amount of all
Restricted Payments made since July 31, 2000 would not exceed the sum of (x)
$40,000,000 plus (y) 60% of cumulative Consolidated Net Income since July 31,
2000 (less 100% of cumulative Consolidated Net Income incurred for such period
if such Consolidated Net Income for such period is a loss) plus (z) the
aggregate net cash proceeds of any issuance or sale of the Company's Capital
Stock and (B) no Default or Event of Default shall have occurred and be
continuing, or a Default or Event of Default would occur, as a result of such
Restricted Payment.
10.5 Liens
The Company shall not, and shall not permit any Subsidiary to, create,
assume or suffer to exist any Lien upon any of its property or assets, whether
now owned or hereafter acquired except:
(i) Liens existing on the Date of Closing and specified on
Schedule 10.5;
(ii) any Lien on tangible fixed assets acquired, constructed or
improved by the Company after the date hereof to secure or provide for
all or a portion of the purchase price of such assets or a portion of
the indebtedness of such assets provided (A) any such Lien shall
extend solely to the item or items of
28
such assets so acquired or constructed and, if required by the terms
of the instrument originally creating such Lien, other assets which
constitute an improvement to or is acquired for specific use in
connection with such acquired or constructed assets or which is real
property being improved by such acquired or constructed assets, (B)
the principal amount of the Debt secured by any such Lien shall at no
time exceed an amount equal to the lesser of (1) the cost to the
Company or such Subsidiary of the assets so acquired or constructed
and (2) the Fair Market Value of such assets at the time of such
acquisition or construction and (C) any such Lien shall be created
contemporaneously with, or within 180 days after, the acquisition or
construction of such assets;
(iii) Liens (A) for taxes (including ad valorem and property
taxes) and assessments or governmental charges or levies not yet due
or (B) for taxes due or (C) resulting from any judgment or award, and
in the case of clause (B) and (C), are being actively contested in
good faith by appropriate proceedings and with respect to which
adequate reserves are being maintained;
(iv) landlord liens and statutory liens of carriers,
warehousemen, mechanics, material men and other liens imposed by law,
created in the ordinary course of business for amounts not yet due or
which are being contested in good faith by appropriate proceedings or
with respect to which adequate reserves are being maintained, and
which were not incurred in connection with the borrowing of money;
(v) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security or to secure the
performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, performance and return of
money bonds and similar obligations;
(vi) easements, rights-of-way, zoning and similar restrictions
and other similar charges or encumbrances not materially interfering
with the ordinary conduct of the business of the Company or any of its
Subsidiaries;
(vii) other Liens incidental to the conduct of its business or
the ownership of its property and assets which were not incurred in
connection with the borrowing of money, and which do not in the
aggregate materially detract from the value of property or assets of
the Company and its Subsidiaries taken as a whole or materially impair
the use of such property or assets in the operation of the business of
the Company or any of its Subsidiaries;
(viii) Liens provided for in equipment leases that are not
Capitalized Lease Obligations (including financing statements and
undertakings to file financing statements); provided that they are
limited to the equipment subject to such leases and the proceeds
thereof;
29
(ix) leases, subleases, licenses and sublicenses granted to third
parties not interfering in any material respect with the business of
the Company or any of its Subsidiaries;
(x) any lien renewing, extending, or refunding any Lien described
in subparagraphs (i) through (ix) above, provided that the principal
amount secured is not increased and that such lien is not extended to
other property (other than pursuant to its original terms);
(xi) Liens on property or assets of a Subsidiary of the Company
to secure obligations of such Subsidiary to the Company or another
Wholly-Owned Subsidiary;
(xii) any right of set off or banker's lien (whether by common
law, statute, contract or otherwise) in favor of any bank (other than
Liens securing Debt); and
(xiii) Liens of any Subsidiary that arose prior to the time that
such Subsidiary became a Subsidiary of the Company, provided that (A)
any such Lien was not incurred in anticipation of such acquisition,
(B) the assets of such acquired Subsidiary subject to such Lien shall
only be those assets subject to such Lien at the time of the closing
of the acquisition of such Subsidiary and (C) the principal amount of
Debt secured by such Lien shall not exceed the amount of Debt so
secured by such Lien at the time of the closing of the acquisition of
such Subsidiary; and
(xiv) Liens securing Priority Debt described in clause (ii) of
the definition of Priority Debt; provided, however, that after giving
effect to the Debt secured by such Liens, Priority Debt shall not
exceed 20% of Consolidated Net Worth at any time.
10.6 Priority Debt.
The Company will not at any time permit Priority Debt to exceed 20% of
Consolidated Net Worth.
10.7 Merger or Consolidation.
The Company shall not, and shall not permit any Subsidiary to, merge,
consolidate or exchange shares with any other Person, except that:
(i) any Subsidiary may merge or consolidate with and into the
Company or with a Subsidiary that is a Wholly-Owned Subsidiary or if
not a Wholly-Owned Subsidiary in which the ownership interest of the
Company is not
30
reduced or diluted in connection with or as a result of such merger or
consolidation; and
(ii) the Company may merge or consolidate with any other
corporation so long as:
(A) the surviving corporation shall be the Company or
another corporation organized under the laws of the United States
or a State thereof or the District of Columbia;
(B) the surviving corporation (if not the Company) shall
assume the obligations of the Company hereunder pursuant to an
agreement reasonably acceptable to the Required Holders
(C) immediately after giving effect to such merger or
consolidation, no Default or Event of Default shall have occurred
or exist; and
(D) immediately after giving effect to such merger or
consolidation, the Company (or the surviving corporation, if not
the Company) could incur at least $1 of Funded Debt under Section
10.1; and
(iii) the Company or any Subsidiary may acquire any other Person
provided such acquisition does not otherwise result in an Event of
Default hereunder.
(iv) Any assumption agreement executed and delivered pursuant to
subparagraph (B) hereof shall be accompanied by a favorable opinion of
counsel to such surviving corporation stating that such assumption
agreement has been duly authorized, executed and delivered by such
surviving corporation, that the execution and delivery of such
assumption agreement does not violate or contravene any agreement or
instrument to which such surviving corporation is a party and covering
the other matters described in Exhibit 4.4(a) hereto and such other
matters as counsel to the Required Holders shall reasonably request,
together with copies of accompanying board resolutions, good standing
certificates and the like as counsel to the Required Holders shall
reasonably request.
10.8 Sale of Assets.
The Company will not, and will not permit any Subsidiary to, Dispose of
any property or assets (other than marketable securities), except, so long as no
Default or Event of Default shall exist and be continuing:
(i) any Subsidiary (the "Transferor Subsidiary") may Dispose of
its assets to the Company or another Subsidiary (the "Transferee
Subsidiary") so long
31
as, in the case of a Disposition to another Subsidiary, the ownership
interest of the Company in the Transferee
Subsidiary is at least equal to, or greater than, the Company's
ownership interest in the Transferor Subsidiary;
(ii) the Company or any Subsidiary may Dispose of any equipment
that it in its good faith opinion determines to be obsolete, worn out
or no longer useful in its business, as determined in good faith by
the Company;
(iii) the Company or any Subsidiary may Dispose of inventory in
the ordinary course of business;
(iv) the Company or any Subsidiary may Dispose of any other of
its assets so long as immediately after giving effect to such proposed
Disposition;
(A) the consideration for such assets represents the Fair
Market Value of such assets at the time of such Disposition;
(B) at least 85% of the consideration therefor received by
the Company or such Subsidiary is in the form of cash; and
(C) the cumulative net book value of all assets Disposed of
by the Company and its Subsidiaries during any period of twelve
consecutive calendar months does not exceed 15% of Consolidated
Assets determined as of the most recently completed fiscal year;
provided, however, that the Company or a Subsidiary may Dispose
of assets in excess of 15% of Consolidated Assets during any
consecutive twelve-month period if, within 180 days after the
receipt by the Company or such Subsidiary of any Net Proceeds of
any Disposition in excess of 15% of Consolidated Assets (such
excess Net Proceeds referred to as "Excess Proceeds"), the
Company applies such Excess Proceeds at its option:
(x) to make a capital expenditure or acquire other
long-term assets that are used or useful in a business or
businesses conducted by the Company on the date of such
application or otherwise permitted by Section 10.10 hereof;
or
(y) to consummate an Asset Sale Offer (as defined
below) with respect to all Holders of Notes and all holders
of other Debt that is pari passu with the Notes as
contemplated in paragraph (3) below; or
(z) a combination of (x) and (y).
Pending final application of any Excess Proceeds as required
above, the Company shall invest such Excess Proceeds in cash or cash
equivalents.
32
For purposes of this Section 10.8:
(1) "Disposition" means the sale, lease, transfer or other
disposition of property but shall not include any public taking or
condemnation, and "Dispose of" and "Disposed of" shall have a
corresponding meaning to Disposition. The term "Disposition" shall not
include an exchange of assets, provided that the assets involved in
such exchange are similar in function in that after giving effect to
such exchange there has not been (A) a Materially Adverse Effect upon
the Company and its Subsidiaries taken as a whole, (B) any material
deterioration of cash flow generation from or in connection with such
assets, or (C) any material deterioration in the overall quality of
plant, property and equipment of the Company and its Subsidiaries taken
as a whole. An "exchange" shall be deemed to have occurred if each of
the transactions involved shall have been consummated within a
six-month period.
(2) Calculation of Net Book Value. The net book value of any
assets shall be determined as of the respective date of Disposition of
those assets.
(3) Asset Sale Offer. On the 180th day after a Disposition of
assets giving rise to Excess Proceeds, or such earlier date, if any, as
the Board of Directors of the Company or of such Subsidiary determines
not to apply the Excess Proceeds relating to such Disposition
exclusively as set forth in subparagraph (x) of Section 10.8(iv)(C)
above (each, an "Asset Sale Offer Trigger Date"), such aggregate amount
of Excess Proceeds which have not been applied on or before such Asset
Sale Offer Trigger Date as set forth in subparagraph (x) of Section
10.8(iv)(C) above (each, an "Excess Proceeds Offer Amount") shall be
applied by the Company or such Subsidiary to make an offer to purchase
(the "Asset Sale Offer") on a date (the "Asset Sale Offer Payment
Date") not less than 30 nor more than 45 days following the applicable
Asset Sale Offer Trigger Date, from all Holders of Notes and all
holders of other Debt that is pari passu with the Notes (the Notes and
such other Debt referred to herein collectively as "Senior Debt") on a
pro rata basis that amount of Senior Debt equal to the Excess Proceeds
Offer Amount at a price equal to 100% of the principal amount of Senior
Debt to be purchased, plus accrued and unpaid interest thereon, if any,
to the date of purchase; provided, however, that if at any time any
non-cash consideration received by the Company or any Subsidiary of the
Company, as the case may be, in connection with any Disposition is
converted into or sold or otherwise disposed of for cash or cash
equivalents (other than interest received with respect to any such
non-cash consideration), then such conversion or disposition shall be
deemed to constitute a Disposition hereunder and the Excess Proceeds
thereof shall be applied in accordance with this Section 10.8.
33
Each Asset Sale Offer shall be mailed to the holders of Senior
Debt within 10 days following the Asset Sale Offer Trigger Date. The
notice shall be executed by a Senior Financial Officer and shall
contain all instructions and materials necessary to enable such holders
to elect that Senior Debt held by them may be purchased pursuant to the
Asset Sale Offer and shall state the following terms:
(A) that the Asset Sale Offer is being made pursuant to this
Section 10.8 and that all Senior Debt tendered will be accepted
for payment;
(B) the purchase price (including the amount of accrued
interest) and the Asset Sale Offer Payment Date (which shall be
20 Business Days from the date such notice is mailed, or such
longer period as may be required by law);
(C) that any Senior Debt not elected to be purchased will
continue to accrue interest if interest is then accruing;
(D) that, unless the Company defaults in making payment
therefor, any Senior Debt accepted for payment pursuant to the
Asset Sale Offer shall cease to accrue interest after the Asset
Sale Offer Payment Date;
(E) that Holders may elect to have the Senior Debt held by
them purchased pursuant to an Asset Sale Offer by delivering
written notice of such election to the Company at the address
specified in the Asset Sale Offer setting forth the name of the
holder and the principal amount of Senior Debt that such holder
elects to be so purchased and that holders must deliver such
election notice within two Business Days prior to the Asset Sale
Offer Payment Date (it being understood that the failure by a
holder to respond to an Asset Sale Offer within such period shall
be deemed to constitute a rejection of such Asset Sale Offer);
and
(F) that holders of Senior Debt will be entitled to withdraw
their election if the Company receives, not later than the date
two Business Days prior to the Asset Sale Offer Payment Date, a
written notice setting forth the name of the holder, the
principal amount of Senior Debt the holder thereof has elected to
have purchased, and a statement that such holder is withdrawing
its election to have such Senior Debt purchased.
On the Asset Sale Offer Payment Date, the Company shall deliver to such
holder via wire transfer in immediately available funds the amount of Senior
Debt so elected to be repurchased, plus accrued but unpaid interest thereon,
subject to adjustment as contemplated by subparagraph (A) above.
34
To the extent that the aggregate amount of Senior Debt elected to be
repurchased pursuant to an Asset Sale Offer is less than the Excess Proceeds
Offer Amount, the Company shall commence a second Asset Sale Offer to holders of
Senior Debt that elected to have the Senior Debt held by them purchased pursuant
to the first Asset Sale Offer but whose Senior Debt was not purchased in full by
reason of the pro rata nature of such first Asset Sale Offer. Such second Asset
Sale Offer shall be conducted on substantially the same terms as the first Asset
Sale Offer. To the extent that Excess Proceeds are not used to purchase Senior
Debt after conducting the second Asset Sale Offer, the Company may use any
remaining Excess Proceeds for general corporate purposes.
10.9 Transactions With Related Party
The Company shall not, and shall not permit any Subsidiary to, effect
or permit to exist any transaction with any Affiliate by which any asset or
services of the Company or a Subsidiary is transferred to such Affiliate, or
enter into any other transaction with an Affiliate on terms less favorable to
the Company or such Subsidiaries than would be reasonably expected in a similar
transaction with an unrelated entity.
10.10 Nature of Business.
Neither the Company nor any Subsidiary shall engage in any business, if
as a result, when taken as a whole, the general nature of the business then
engaged in by the Company and its Subsidiaries would be substantially changed
from the nature of the business of the Company and its Subsidiaries on the date
hereof.
10.11 Limitation on Dividend and Other Payment Restrictions Affecting
Subsidiaries.
The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or permit to
exist or become effective any encumbrance or restriction on the ability of any
Subsidiary of the Company to: (i) pay dividends or make any other distributions
on or in respect of its Capital Stock; (ii) make loans or advances or to pay or
guarantee any Debt or other obligation owed to the Company or any other
Subsidiary of the Company; or (iii) transfer any of its property or assets to
the Company or any other Subsidiary of the Company, except for such encumbrances
or restrictions existing under or by reason of (1) applicable law; (2) this
Agreement or a Bank Credit Agreement as in effect on the date hereof; (3)
customary non-assignment provisions of any contract or any lease governing a
leasehold interest of any Subsidiary of the Company; (4) any instrument
governing Acquired Debt, which encumbrance or restriction is not applicable to
any Person, or the properties or assets of any Subsidiary thereof, other than
the Person (or the properties or assets of the Person) so acquired or any
Subsidiary thereof; (5) purchase money obligations for property acquired that
impose restrictions of the nature described in clause (4) above on the property
so acquired; (6) an agreement governing Debt incurred to refinance or replace
the Debt
35
issued, assumed or incurred pursuant to an agreement referred to in clause (2),
(4) or (5) above; provided, however, that the provisions relating to such
encumbrance or restriction contained in any such refinancing or replacement Debt
are no less favorable to the Company in any material respect than the provisions
relating to such encumbrance or restriction contained in agreements referred to
in such clause (2), (4) or (5); or (7) restrictions contained in any purchase or
sale agreement relating to the purchase or sale of a Subsidiary, provided that
such restriction does not extend to any assets other than those being acquired
or sold.
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 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.7, 10.8
or 10.9; or
(d) the Company defaults in the performance of or 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 by any officer of the Company in this Agreement 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 $5,000,000 beyond any period of
grace provided with respect thereto, or (ii) the Company or any Subsidiary
is in default in the performance of
36
or compliance with any term of any evidence of any Debt in an aggregate
outstanding principal amount of at least $5,000,000 or of any mortgage,
indenture or other agreement relating thereto or any other condition
exists, and as a consequence of such default or condition such Debt has
become, or has been declared (or one or more Persons are entitled to
declare such Debt to be), due and payable before its stated maturity or
before its regularly scheduled dates of payment, or (iii) as a consequence
of the occurrence or continuation of any event or condition (other than the
passage of time or the right of the holder of Debt to convert such Debt
into equity interests), (x) 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 $5,000,000, or (y) 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 Subsidiary (i) is generally not paying, or
admits in writing its inability to pay, its debts as they become due, (ii)
files, or consents by answer or otherwise to the filing against it of, a
petition for relief or reorganization or arrangement or any other petition
in bankruptcy, for liquidation or to take advantage of any bankruptcy,
insolvency, reorganization, moratorium or other similar law of any
jurisdiction, (iii) makes an assignment for the benefit of its creditors,
(iv) consents to the appointment of a custodian, receiver, trustee or other
officer with similar powers with respect to it or with respect to any
substantial part of its property, (v) is adjudicated as insolvent or to be
liquidated, or (vi) takes corporate action for the purpose of any of the
foregoing; or
(h) a court or governmental authority of competent jurisdiction enters
an order appointing, without consent by the Company or any of its
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 Subsidiaries, or any such petition shall be filed
against the Company or any of its 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 $5,000,000 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
37
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 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, (iv) the Company or any
ERISA Affiliate withdraws from any Multiemployer Plan, (v) 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, or (vi) 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 at any time exceed $5,000,000; and any such
event or events described in clauses (i) through (v) above, either
individually or together with any other such event or events, could
reasonably be expected to have a Material Adverse Effect.
As used in Section 11(j), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
12. REMEDIES ON DEFAULT, ETC.
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 51% in principal amount of the Notes at the time
outstanding may at any time at its or their option, by notice or notices to the
Company, declare all the Notes then outstanding to be immediately due and
payable.
(c) If any Event of Default described in 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.
38
Upon any Notes becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, plus (x) all accrued and
unpaid interest thereon and (y) the Make-Whole Amount determined in respect of
such principal amount (to the full extent permitted by applicable law), shall
all be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The 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.
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.
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 51% in
principal amount of the Notes then outstanding, by written notice to the
Company, may rescind and annul any such declaration and its consequences if (a)
the Company has paid all overdue interest on the Notes, all principal of and
Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid
other than by reason of such declaration, and all interest on such overdue
principal and Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at the Default
Rate, (b) all Events of Default and Defaults, other than non-payment of amounts
that have become due solely by reason of such declaration, have been cured or
have been waived pursuant to Section 17, and (c) no judgment or decree has been
entered for the payment of any monies due pursuant hereto or to the Notes. No
rescission and annulment under this Section 12.3 will extend to or affect any
subsequent Event of Default or Default or impair any right consequent thereon.
39
12.4 No Waivers or Election of Remedies, Expenses, etc.
No course of dealing and no delay on the part of any holder of any Note
in exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under Section 15, the Company
will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all reasonable 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 and the fees
and disbursements of any financial advisor retained by the holders of Notes
after the occurrence of an Event of Default.
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
13.1 Registration of Notes.
The Company shall keep at its principal executive office a register for
the registration of Notes 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.
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
his 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
40
stamp tax or governmental charge imposed in respect of any such transfer of
Notes. Notes shall not be transferred in denominations of less than $500,000,
provided that if necessary to enable the registration of transfer by a holder of
its entire holding of Notes, one Note may be in a denomination of less than
$500,000. Any transferee, by its acceptance of a Note registered in its name (or
the name of its nominee), shall be deemed to have made the representation set
forth in Sections 6.1 and 6.2. Transfers hereunder shall only be made by the
Company to the extent such transfers are permitted by applicable law.
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 $100,000,000, such Person's own unsecured
agreement of indemnity shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof, 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.
14. PAYMENTS ON NOTES.
14.1 Place of Payment.
Subject to Section 14.2, payments of principal, Make-Whole Amount, if
any, and interest becoming due and payable on the Notes shall be made in New
York, New York, at the principal office of The Chase Manhattan Bank (or
successor entity) in such jurisdiction. The Company may at any time, by notice
to each holder of a Note, change the place of payment of the Notes so long as
such place of payment shall be either the principal office of the Company in
such jurisdiction or the principal office of a bank or trust company in such
jurisdiction.
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
41
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 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.
15. EXPENSES, ETC.
15.1 Transaction Expenses.
Whether or not the transactions contemplated hereby are consummated,
the Company will pay all reasonable 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 or the Notes (whether or not
such amendment, waiver or consent becomes effective), including, without
limitation: (a) the reasonable costs and expenses incurred in enforcing or
defending (or determining whether or how to enforce or defend) any rights under
this Agreement or the Notes or in responding to any subpoena or other legal
process or informal investigative demand issued in connection with this
Agreement or the Notes, or by reason of being a holder of any Note, and (b) the
reasonable 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 Notes. 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).
15.2 Survival.
The obligations of the Company under Section 15.1 shall survive the
payment or transfer permitted pursuant to Section 13.2 of any Note, the
enforcement,
42
amendment or waiver of any provision of this Agreement or the
Notes, and the termination of this Agreement.
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 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.
17. AMENDMENT AND WAIVER.
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.
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
43
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 or 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.
17.3 Binding Effect, etc.
Any amendment or waiver consented to as provided in this Section 17
applies equally to all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the Company without regard to whether such
Note has been marked to indicate such amendment or waiver. No such amendment or
waiver will extend to or affect any obligation, covenant, agreement, Default or
Event of Default not expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Company and the holder of any Note nor
any delay in exercising any rights hereunder or under any Note shall operate as
a waiver of any rights of any holder of such Note. As used herein, the term
"this Agreement" and references thereto shall mean this Agreement as it may from
time to time be amended or supplemented.
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.
18. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) via fax 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 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,
44
(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 J. Stephen Zepf, Treasurer and
Chief Financial Officer of the Company, 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.
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 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.
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 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, (d) constitutes financial statements delivered to you under Section
7.1 that are otherwise publicly available, or (e) is independently developed by
you, your Affiliates or your professional advisors without the use of
Confidential Information. You will maintain the confidentiality of such
Confidential Information in accordance with procedures adopted by you in good
faith to protect confidential information of third parties delivered to you,
provided that you may deliver or disclose Confidential Information to (i) your
directors, officers, employees, agents, attorneys and affiliates (to the extent
such disclosure reasonably relates to the administration of the investment
represented by your Notes), (ii) your financial advisors and other professional
45
advisors who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 20, (iii) any other
holder of any Note, (iv) any Institutional Investor to which you sell or offer
to sell such Note or any part thereof or any participation therein (if such
Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20), (v) any Person
from which you offer to purchase any security of the Company (if such Person has
agreed in writing prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 20), (vi) any federal or state
regulatory authority having jurisdiction over you, (vii) the 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.
46
21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your Affiliates or
Subsidiaries (a "Permitted Purchaser") 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 Permitted Purchaser, shall contain
such Permitted Purchaser's agreement to be bound by this Agreement and shall
contain a confirmation by such Permitted Purchaser 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 Permitted Purchaser in
lieu of you. In the event that such Permitted Purchaser is so substituted as a
purchaser hereunder and such Permitted Purchaser thereafter transfers to you all
of the Notes then held by such Permitted Purchaser, 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 Permitted Purchaser, but shall refer to you, and you shall have all the
rights of an original holder of the Notes under this Agreement.
47
22. MISCELLANEOUS.
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.
22.2 Payments Due on Non-Business Days.
Anything in 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.
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.
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.
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.
47
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 laws 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.
[Signatures on Following Pages]
48
[Hughes Supply Note Purchase Agreement dated December 21, 2000]
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.
Very truly yours,
HUGHES SUPPLY, INC.
By:_______________________________________
J. Stephen Zepf
Treasurer and Chief Financial Officer
The foregoing is hereby
agreed to as of the
date hereof:
Purchasers of Series A Notes:
PACIFIC LIFE INSURANCE COMPANY
By: _______________________
Name:__________________
Title:_________________
By: _______________________
Name:__________________
Title:_________________
PACIFIC LIFE AND ANNUITY COMPANY
By: _______________________
Name:__________________
Title:_________________
By: _______________________
Name:__________________
Title:_________________
49
Purchasers of Series B Notes:
GENERAL ELECTRIC CAPITAL
ASSURANCE COMPANY
By: _______________________
Name:__________________
Title:_________________
GE LIFE AND ANNUITY ASSURANCE COMPANY
By: _______________________
Name:__________________
Title:_________________
GE CAPITAL LIFE ASSURANCE COMPANY
OF NEW YORK
By: _______________________
Name:__________________
Title:_________________
ALLSTATE LIFE INSURANCE COMPANY
By: _______________________
Name:__________________
Title:_________________
By: _______________________
Name:__________________
Title:_________________
(Authorized Signatories)
50
AMERICAN UNITED LIFE INSURANCE COMPANY
By: _______________________
Name:__________________
Title:_________________
PIONEER MUTUAL LIFE INSURANCE COMPANY
By: _______________________
Name:__________________
Title:_________________
Purchasers of Series C Notes:
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By: CIGNA Investments, Inc.
By: _______________________
Name:__________________
Title:_________________
LIFE INSURANCE COMPANY OF NORTH AMERICA
By: CIGNA Investments, Inc.
By: _______________________
Name:__________________
Title:_________________
JEFFERSON-PILOT LIFE INSURANCE COMPANY
By: _______________________
Name:__________________
Title:_________________
51
TEACHERS INSURANCE AND ANNUITY ASSOCIATION
OF AMERICA
By: _______________________
Name:__________________
Title:_________________
SUNAMERICA LIFE INSURANCE COMPANY
By: _______________________
Name:__________________
Title:_________________
AMERICAN GENERAL LIFE INSURANCE COMPANY
and
AMERICAN GENERAL ANNUITY INSURANCE COMPANY
By: _______________________
Name:__________________
Title:_________________
NATIONWIDE LIFE INSURANCE COMPANY
By: _______________________
Name:__________________
Title:_________________
NATIONWIDE LIFE AND ANNUITY INSURANCE
COMPANY
By: _______________________
Name:__________________
Title:_________________
NEW YORK LIFE INSURANCE COMPANY
By: _______________________
Name:__________________
Title:_________________
52
NEW YORK LIFE INSURANCE AND
ANNUITY CORPORATION
By: New York Life Investment Management, LLC,
its Investment Manager
By: _______________________
Name:__________________
Title:_________________
THE CANADA LIFE ASSURANCE COMPANY
By: _______________________
Name:__________________
Title:_________________
THE OHIO NATIONAL LIFE INSURANCE COMPANY
By: _______________________
Name:__________________
Title:_________________
MODERN WOODMEN OF AMERICA
By: _______________________
Name:__________________
Title:_________________
53
SCHEDULE A TO NOTE PURCHASE AGREEMENT
Information as to Purchasers
- --------------------------------------------------------------------------------
PURCHASER NAME PACIFIC LIFE
INSURANCE COMPANY
- --------------------------------------------------------------------------------
Taxpayer Identification Number 95-1079000
- --------------------------------------------------------------------------------
Name in which to register Note(s) Mac & Co.
- --------------------------------------------------------------------------------
Series Series A
- --------------------------------------------------------------------------------
Note registration number R-1
- --------------------------------------------------------------------------------
Amount $9,000,000.00
- --------------------------------------------------------------------------------
Payment on account of Note(s)
Method Immediately available funds, via
federal funds wire transfer
Account Information Federal Reserve Bank of Boston
ABA# 0110-0123-4/BOS SAFE DEP
DDA 125261
Attn: MBS Income CC: 1253
A/C Name: Pacific Life General
Account
PLCF1810132
Re: Security Description & PPN
- --------------------------------------------------------------------------------
Accompanying Information Hughes Supply, Inc.; 8.27% Series A
Senior Notes due November 30, 2003;
CUSIP 44482 C# 8
[insert due date and application as
among principal, premium and
interest]
- --------------------------------------------------------------------------------
Address for notices related to payments Mellon Trust
Attn: Pacific Life Accounting Team
One Mellon Bank Center
Room 0930
Pittsburgh, PA 15258-0001
AND
Pacific Life Insurance Company
Attn: Securities Administration-Cash
Team
700 Newport Center Drive
Newport Beach, CA 92660-6397
- --------------------------------------------------------------------------------
Address for all other communications Pacific Life Insurance Company
and notices Attn: Securities Department
700 Newport Center Drive
Newport Beach, CA 92660-6397
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PURCHASER NAME PACIFIC LIFE
AND ANNUITY COMPANY
- --------------------------------------------------------------------------------
Taxpayer Identification Number 95-3760914
- --------------------------------------------------------------------------------
Name in which to register Note(s) Mac & Co.
- --------------------------------------------------------------------------------
Series Series A
- --------------------------------------------------------------------------------
Note registration number R-2; R-3
- --------------------------------------------------------------------------------
Amount R-2 = $5,000,000.00
R-3 = $5.000,000.00
- --------------------------------------------------------------------------------
Payment on account of Note(s)
Method Immediately available funds, via
federal funds wire transfer
Account Information Federal Reserve Bank of Boston
ABA# 0110-0123-4/BOS SAFE DEP
DDA 12561
Attn: MBS Income CC: 1253
A/C Name: Pacific Life General
Account
PLCF1811612
Re: Security Description & PPN
- --------------------------------------------------------------------------------
Accompanying Information Hughes Supply, Inc.; 8.27% Series A
Senior Notes due November 30, 2003;
CUSIP 44482 C# 8
[insert due date and application as
among principal, premium and
interest]
- --------------------------------------------------------------------------------
Address for notices related to payments Mellon Trust
Attn: Pacific Life Accounting Team
One Mellon Bank Center
Room 0930
Pittsburgh, PA 15258-0001
AND
Pacific Life Insurance Company
Attn: Securities Administration-Cash
Team
700 Newport Center Drive
Newport Beach, CA 92660-6397
- --------------------------------------------------------------------------------
Address for all other communications Pacific Life Insurance Company
and notices Attn: Securities Department
700 Newport Center Drive
Newport Beach, CA 92660-6397
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PURCHASER NAME GENERAL ELECTRIC CAPITAL
ASSURANCE COMPANY
- --------------------------------------------------------------------------------
Taxpayer Identification Number 91-6027719
- --------------------------------------------------------------------------------
Name in which to register Note(s) SALKELD & CO.
- --------------------------------------------------------------------------------
Series Series B
- --------------------------------------------------------------------------------
Note registration number R-1
- --------------------------------------------------------------------------------
Amount $12,000,000.00
- --------------------------------------------------------------------------------
Payment on account of Note(s)
Method Immediately available funds, via
federal funds wire transfer
Account Information Bankers Trust Company
14 Wall Street
New York, NY 10005
SWIFT Code: BKTR US 33
ABA #021-001-033
Account Number 99-911-145
FCC #097833
- --------------------------------------------------------------------------------
Accompanying Information Hughes Supply, Inc.; 8.27% Series B
Senior Notes due November 30, 2005;
CUSIP 444482 D* 1
[insert due date and application as
among principal, premium and
interest]
- --------------------------------------------------------------------------------
Address for notices related to payments GE Financial Assurance
Account: General Electric Capital
Assurance Company
Two Union Square, 601 Union Street
Seattle, WA 98101
Attn: Investment Accounting
Tel.: (206) 516-2871
Fax: (206) 516-4740
- --------------------------------------------------------------------------------
Address for all other communications GE Financial Assurance
and notices Account: General Electric Capital
Assurance Company
Two Union Square, 601 Union Street
Seattle, WA 98101
Attn: Investment Dept., Private
Placements
Tel: (206) 516-4954
Fax: (206) 516-4863
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PURCHASER NAME GE LIFE AND ANNUITY
ASSURANCE COMPANY
- --------------------------------------------------------------------------------
Taxpayer Identification Number 54---0283385
- --------------------------------------------------------------------------------
Name in which to register Note(s) SALKELD & CO.
- --------------------------------------------------------------------------------
Series Series B
- --------------------------------------------------------------------------------
Note registration number R-2
- --------------------------------------------------------------------------------
Amount $2,000,000.00
- --------------------------------------------------------------------------------
Payment on account of Note(s)
Method Immediately available funds, via
federal funds wire transfer
Account Information Bankers Trust Company
14 Wall Street
New York, NY 10005
SWIFT Code: BKTR US 33
ABA #021-001-033
Account Number 99-911-145
FCC #097828
- --------------------------------------------------------------------------------
Accompanying Information Hughes Supply, Inc.; 8.27% Series B
Senior Notes due November 30, 2005;
CUSIP 444482 D* 1
[insert due date and application as
among principal, premium and
interest]
- --------------------------------------------------------------------------------
Address for notices related to payments GE Financial Assurance
Account: General Electric Capital
Assurance Company
Two Union Square, 601 Union Street
Seattle, WA 98101
Attn: Investment Accounting
Tel.: (206) 516-2871
Fax: (206) 516-4740
- --------------------------------------------------------------------------------
Address for all other communications GE Financial Assurance
and notices Account: General Electric Capital
Assurance Company
Two Union Square, 601 Union Street
Seattle, WA 98101
Attn: Investment Dept., Private
Placements
Tel: (206) 516-4954
Fax: (206) 516-4863
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PURCHASER NAME GE CAPITAL LIFE ASSURANCE
COMPANY OF NEW YORK
- --------------------------------------------------------------------------------
Taxpayer Identification Number 22-2882416
- --------------------------------------------------------------------------------
Name in which to register Note(s) SALKELD & CO.
- --------------------------------------------------------------------------------
Series Series B
- --------------------------------------------------------------------------------
Note registration number R-3
- --------------------------------------------------------------------------------
Amount $2,000,000.00
- --------------------------------------------------------------------------------
Payment on account of Note(s)
Method Immediately available funds, via
federal funds wire transfer
Account Information Bankers Trust Company
14 Wall Street
New York, NY 10005
SWIFT Code: BKTR US 33
ABA #021-001-033
Account Number 99-911-145
FCC #097836
- --------------------------------------------------------------------------------
Accompanying Information Hughes Supply, Inc.; 8.27% Series B
Senior Notes due November 30, 2005;
CUSIP 444482 D* 1
[insert due date and application as
among principal, premium and
interest]
- --------------------------------------------------------------------------------
Address for notices related to payments GE Financial Assurance
Account: General Electric Capital
Assurance Company
Two Union Square, 601 Union Street
Seattle, WA 98101
Attn: Investment Accounting
Tel: (206) 516-2871
Fax: (206) 516-4740
- --------------------------------------------------------------------------------
Address for all other communications GE Financial Assurance
and notices Account: General Electric Capital
Assurance Company
Two Union Square, 601 Union Street
Seattle, WA 98101
Attn: Investment Dept., Private
Placements
Tel: (206) 516-4954
Fax: (206) 516-4863
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PURCHASER NAME ALLSTATE LIFE
INSURANCE COMPANY
- --------------------------------------------------------------------------------
Taxpayer Identification Number 36-2554642
- --------------------------------------------------------------------------------
Name in which to register Note(s) Allstate Life Insurance Company
- --------------------------------------------------------------------------------
Series Series B
- --------------------------------------------------------------------------------
Note registration number R-4
- --------------------------------------------------------------------------------
Amount $8,000,000.00
- --------------------------------------------------------------------------------
Payment on account of Note(s)
Method Immediately available funds, via
federal funds wire transfer
Account Information Harris Trust and Savings Bank
ABA #071000288
BNF Allstate Life Insurance
Company Collection Account
#168-117-0
ORG (Enter Issuer Name)
OBI DPP - (Enter Private Placement
No., if available
Payment Due Date (MM/DD/YY)
P_____ (Enter "P"
and amount of principal
being remitted; for example,
P5000000.00) I_____
(Enter "I" and amount of
interest being remitted; for
example, I225000.00)
- --------------------------------------------------------------------------------
Accompanying Information Hughes Supply, Inc.; 8.27% Series B
Senior Notes due November 30, 2005;
CUSIP 444482 D* 1
[insert due date and application as
among principal, premium and
interest]
- --------------------------------------------------------------------------------
Address for notices related to payments Allstate Insurance Company
Investment Operations - Private
Placements
3075 Sanders Road, Suite G4A
Northbrook, IL 60062-7127
Telephone: (847) 402-2769
Fax: (847) 326-5040
- --------------------------------------------------------------------------------
Address for all other communications Allstate Insurance Company
and notices Private Placements Department
3075 Sanders Road, Suite G3A
Northbrook, IL 60062-7127
Telephone: (847) 402-8922
Fax: (847) 402-3092
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PURCHASER NAME AMERICAN UNITED LIFE
INSURANCE COMPANY
- --------------------------------------------------------------------------------
Taxpayer Identification Number 35-0145825
- --------------------------------------------------------------------------------
Name in which to register Note(s) American United Life Insurance Company
- --------------------------------------------------------------------------------
Series Series B
- --------------------------------------------------------------------------------
Note registration numbers R-5; R-6
- --------------------------------------------------------------------------------
Amount R-5 = $2,000,000.00
R-6 = $1,500,000.00
- --------------------------------------------------------------------------------
Payment on account of Note(s)
Method Immediately available funds, via
federal funds wire transfer
Account Information Bank of New York
Attn: P&I Department
One Wall Street, 3rd Floor
Window A
New York, NY 10286
ABA #021000018, BNF:IOC566
- --------------------------------------------------------------------------------
Accompanying Information Hughes Supply, Inc.; 8.27% Series B
Senior Notes due November 30, 2005;
CUSIP 444482 D* 1
[insert due date and application as
among principal, premium and
interest]
- --------------------------------------------------------------------------------
Address for notices related to payments American United Life Insurance
Company
Attn: Christopher D. Palke,
Securities Department
Post Office Box 368
Indianapolis, IN 46206-0368
- --------------------------------------------------------------------------------
Address for all other communications American United Life Insurance
and notices Company
Attn: Christopher D. Palke,
Securities Department
Post Office Box 368
Indianapolis, IN 46206-0368
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PURCHASER NAME PIONEER MUTUAL LIFE INSURANCE
COMPANY
- --------------------------------------------------------------------------------
Taxpayer Identification Number 45-0220640
- --------------------------------------------------------------------------------
Name in which to register Note(s) Pioneer Mutual Life Insurance Company
- --------------------------------------------------------------------------------
Series Series B
- --------------------------------------------------------------------------------
Note registration numbers R-7
- --------------------------------------------------------------------------------
Amount $500,000.00
- --------------------------------------------------------------------------------
Payment on account of Note(s)
Method Immediately available funds, via
federal funds wire transfer
Account Information Bank of New York
Attn: P&I Department
One Wall Street, 3rd Floor
Window A
New York, NY 10286
ABA #021000018, BNF:IOC566
Pioneer Mutual, c/o American United
Life
- --------------------------------------------------------------------------------
Accompanying Information Hughes Supply, Inc.; 8.27% Series B
Senior Notes due November 30, 2005;
CUSIP 444482 D* 1
[insert due date and application as
among principal, premium and
interest]
- --------------------------------------------------------------------------------
Address for notices related to payments American United Life Insurance
Company
Attn: Christopher D. Palke,
Securities Department
Post Office Box 368
Indianapolis, IN 46206-0368
- --------------------------------------------------------------------------------
Address for all other communications American United Life Insurance
and notices Company
Attn: Christopher D. Palke,
Securities Department
Post Office Box 368
Indianapolis, IN 46206-0368
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PURCHASER NAME CONNECTICUT GENERAL LIFE INSURANCE
COMPANY
- --------------------------------------------------------------------------------
Taxpayer Identification Number 13-3574027
- --------------------------------------------------------------------------------
Name in which to register Notes CIG & Co.
- --------------------------------------------------------------------------------
Series Series C
- --------------------------------------------------------------------------------
Note registration numbers R-1 through R-5
- --------------------------------------------------------------------------------
Amount R-1 = $3,200,000.00
R-2 = $5,000,000.00
R-3 = $3,800,000.00
R-4 = $3,000,000.00
R-5 = $4,000,000.00
- --------------------------------------------------------------------------------
Payment on account of Notes
Method Immediately available funds, via
federal funds wire transfer
Account Information Chase NYC/CTR
BNF=CIGNA Private Placements
AC=9009001802
ABA#021000021
- --------------------------------------------------------------------------------
Accompanying Information Hughes Supply, Inc.; 8.42% Series C
Senior Notes due November 30, 2007
CUSIP 444482 D@ 9
[insert due date and application as
among principal, premium and
interest]
- --------------------------------------------------------------------------------
Address for notices related to payments CIG & Co.
c/o CIGNA Investments, Inc.
Attn: Securities Processing S-309
900 Cottage Grove Road
Hartford, CT 06152-2309
CIG & Co.
c/o CIGNA Investments, Inc.
Attn: Private Securities -S307
Operations Group
900 Cottage Grove Road
Hartford, CT 06152-2307
Fax: 860-726-7203
with a copy to:
Chase Manhattan Bank
Private Placement Servicing
P.O. Box 1508
Bowling Green Station
New York, NY 10081
Attn: CIGNA Private Placements
Fax: 212-552-3107/1005
- --------------------------------------------------------------------------------
Address for all other communications CIG & Co., c/o CIGNA Investments, Inc.
and notices Attention: Private Securities
Division - S-307
900 Cottage Grove Road
Hartford, CT 06152-2307
Fax: 860-726-7203
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PURCHASER NAME LIFE INSURANCE COMPANY
OF NORTH AMERICA
- --------------------------------------------------------------------------------
Taxpayer Identification Number 13-3574027
- --------------------------------------------------------------------------------
Name in which to register Note(s) CIG & Co.
- --------------------------------------------------------------------------------
Series Series C
- --------------------------------------------------------------------------------
Note registration number R-6
- --------------------------------------------------------------------------------
Amount $3,000,000.00
- --------------------------------------------------------------------------------
Payment on account of Note(s)
Method Immediately available funds, via
federal funds wire transfer
Account Information Chase NYC/CTR
BNF=CIGNA Private Placements
AC=9009001802
ABA#021000021
- --------------------------------------------------------------------------------
Accompanying Information Hughes Supply, Inc.; 8.42% Series C
Senior Notes due November 30, 2007;
CUSIP 444482 D@ 9
[insert due date and application as
among principal, premium and interest]
- --------------------------------------------------------------------------------
Address for notices related to payments CIG & Co.
c/o CIGNA Investments, Inc.
Attn: Securities Processing S-309
900 Cottage Grove Road
Hartford, CT 06152-2309
CIG & Co.
c/o CIGNA Investments, Inc.
Attn: Private Securities -S307
Operations Group
900 Cottage Grove Road
Hartford, CT 06152-2307
Fax: 860-726-7203
with a copy to:
Chase Manhattan Bank
Private Placement Servicing
P.O. Box 1508
Bowling Green Station
New York, NY 10081
Attn: CIGNA Private Placements
Fax: 212-552-3107/1005
- --------------------------------------------------------------------------------
Address for all other communications CIG & Co., c/o CIGNA Investments, Inc.
and notices Attention: Private Securities- S-307
900 Cottage Grove Road
Hartford, CT 06152-2307
Fax: 860-726-7203
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PURCHASER NAME JEFFERSON-PILOT LIFE
INSURANCE COMPANY
- --------------------------------------------------------------------------------
Taxpayer Identification Number 56-0359860
- --------------------------------------------------------------------------------
Name in which to register Note(s) Jefferson-Pilot Life Insurance Company
- --------------------------------------------------------------------------------
Series Series C
- --------------------------------------------------------------------------------
Note registration number R-7
- --------------------------------------------------------------------------------
Amount $17,000,000.00
- --------------------------------------------------------------------------------
Payment on account of Note(s)
Method Immediately available funds, via
federal funds wire transfer
Account Information Jefferson-Pilot Life Insurance
Company
c/o The Bank of New York
ABA#021 000 018 BNF: IOC566
Attn: P&I Department
- --------------------------------------------------------------------------------
Accompanying Information Hughes Supply, Inc.; 8.42% Series C
Senior Notes due November 30, 2007;
CUSIP 444482 D@ 9
[insert due date and application as
among principal, premium and
interest]
- --------------------------------------------------------------------------------
Address for notices related to payments Jefferson-Pilot Life Insurance
Company
c/o The Bank of New York
Attention: P&I Department
P.O. Box 19266
Newark, NJ 07195
- --------------------------------------------------------------------------------
Address for all other communications Jefferson-Pilot Life Insurance
and notices Company
P.O. Box 21008
Greensboro, NC 27420
Attn: Securities Administration -
3630
Fax: 336-691-3717
For hand delivery:
100 North Greene Street
(ZIP 27401)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PURCHASER NAME TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
- --------------------------------------------------------------------------------
Taxpayer Identification Number 13-1624203
- --------------------------------------------------------------------------------
Name in which to register Note(s) Teachers Insurance and Annuity
Association of America
- --------------------------------------------------------------------------------
Series Series C
- --------------------------------------------------------------------------------
Note registration number R-8
- --------------------------------------------------------------------------------
Amount $17,000,000.00
- --------------------------------------------------------------------------------
Payment on account of Note(s)
Method Immediately available funds, via
federal funds wire transfer
Account Information Chase Manhattan Bank
ABA #021-000-021
Account of Teachers Insurance and
Annuity Association of America
Account No. 900-9-000200
For further credit to the TIAA
Account Number G07040
- --------------------------------------------------------------------------------
Accompanying Information Hughes Supply, Inc.; 8.42% Series C
Senior Notes due November 30, 2007;
CUSIP 444482 D@ 9
[insert due date and application as
among principal, premium and
interest; identify name of bank from
which payment was sent]
- --------------------------------------------------------------------------------
Address for notices related to payments Teachers Insurance and Annuity
Association of America
730 Third Avenue
New York, NY 10017-3206
Attn: Securities Accounting Division
212-916-6004 Phone
212-916-6955 Fax
- --------------------------------------------------------------------------------
Address for all other communications Teachers Insurance and Annuity
and notices Association of America
730 Third Avenue
New York, NY 10017-3206
Attn: Securities Accounting Division
212-916-5695 Greg MacCordy
212-916-6329 Margie Ello-Satin
212-490-9000 (General Number)
212-916-6583 (Team Fax Number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PURCHASER NAME SUNAMERICA LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Taxpayer Identification Number 52-0502540
- --------------------------------------------------------------------------------
Name in which to register Note(s) OKGBD & Co.
- --------------------------------------------------------------------------------
Series Series C
- --------------------------------------------------------------------------------
Note registration number R-9
- --------------------------------------------------------------------------------
Amount $12,000,000.00
- --------------------------------------------------------------------------------
Payment on account of Note(s)
Method Immediately available funds, via
federal funds wire transfer
Account Information Bankers Trust Company
ABA #021-001-033
Account #99-911-145
For further credit to Account #099530
Ref: Hughes Supply
- --------------------------------------------------------------------------------
Accompanying Information Hughes Supply, Inc.; 8.42% Series C
Senior Notes due November 30, 2007;
CUSIP 444482 D@ 9
[insert due date and application as
among principal, premium and
interest]
- --------------------------------------------------------------------------------
Address for notices related to payments SunAmerica Financial
Attn: Investment Accounting
- 36th Floor
1 SunAmerica Center
Los Angeles, CA 90067-6022
310-772-6486 Phone
310-772-6596 Fax
- --------------------------------------------------------------------------------
Address for all other communications SunAmerica Investments
and notices c/o AIG Global Investment Corp.
175 Water Street - 25th Floor
New York, NY 10038
Attn: Private Placements/G. Herman
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PURCHASER NAME NATIONWIDE LIFE
INSURANCE COMPANY
- --------------------------------------------------------------------------------
Taxpayer Identification Number 31-4156830
- --------------------------------------------------------------------------------
Name in which to register Note(s) Nationwide Life Insurance Company
- --------------------------------------------------------------------------------
Series Series C
- --------------------------------------------------------------------------------
Note registration number R-10
- --------------------------------------------------------------------------------
Amount $7,500,000.00
- --------------------------------------------------------------------------------
Payment on account of Note(s)
Method Immediately available funds, via
federal funds wire transfer
Account Information The Bank of New York
ABA #021-000-108
BNF: IOC566
F/A/O Nationwide Life Insurance
Company
Attn: P & I Department
- --------------------------------------------------------------------------------
Accompanying Information Hughes Supply, Inc.; 8.42% Series C
Senior Notes due November 30, 2007;
CUSIP 444482 D@ 9
[insert due date and application as
among principal, premium and interest]
- --------------------------------------------------------------------------------
Address for notices related to payments Nationwide Life Insurance Company
c/o The Bank of New York
P.O. Box 19266
Attn: P & I Department
Newark, NJ 07195
with a copy to:
Nationwide Life Insurance Company
Attn: Investment Accounting
One Nationwide Plaza (1-32-05)
Columbus, OH 43215-2220
- --------------------------------------------------------------------------------
Address for all other communications Nationwide Life Insurance Company
and notices One Nationwide Plaza (1-33-07)
Columbus, OH 43215-2220
Attn: Corporate Fixed-Income
Securities
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PURCHASER NAME NATIONWIDE LIFE AND ANNUITY
INSURANCE COMPANY
- --------------------------------------------------------------------------------
Taxpayer Identification Number 31-1000740
- --------------------------------------------------------------------------------
Name in which to register Note(s) Nationwide Life and Annuity
Insurance Company
- --------------------------------------------------------------------------------
Series Series C
- --------------------------------------------------------------------------------
Note registration number R-11
- --------------------------------------------------------------------------------
Amount $2,000,000.00
- --------------------------------------------------------------------------------
Payment on account of Note(s)
Method Immediately available funds, via
federal funds wire transfer
Account Information The Bank of New York
ABA #021-000-018
BNF: IOC566
F/A/O Nationwide Life and Annuity
Insurance Company
Attn: P & I Department
- --------------------------------------------------------------------------------
Accompanying Information Hughes Supply, Inc.; 8.42% Series C
Senior Notes due November 30, 2007;
CUSIP 444482 D@ 9
[insert due date and application as
among principal, premium and interest]
- --------------------------------------------------------------------------------
Address for notices related to payments Nationwide Life and Annuity Insurance
Company
c/o The Bank of New York
P. O. Box 19266
Attn: P & I Department
Newark, NJ 07195
with a copy to:
Nationwide Life and Annuity Insurance
Company
Attn: Investment Accounting
One Nationwide Plaza (1-32-05)
Columbus, OH 43215-2220
- --------------------------------------------------------------------------------
Address for all other communications Nationwide Life and Annuity Insurance
and notices Company
One Nationwide Plaza (1-33-07)
Columbus, OH 43215-2220
Attn: Corporate Fixed-Income
Securities
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PURCHASER NAME THE CANADA LIFE ASSURANCE COMPANY
- --------------------------------------------------------------------------------
Taxpayer Identification Number 38-0397420
- --------------------------------------------------------------------------------
Name in which to register Note(s) J. Romeo & Co.
- --------------------------------------------------------------------------------
Series Series C
- --------------------------------------------------------------------------------
Note registration number R-12
- --------------------------------------------------------------------------------
Amount $9,500,000.00
- --------------------------------------------------------------------------------
Payment on account of Note(s)
Method Immediately available funds, via
federal funds wire transfer
Account Information Chase Manhattan Bank
ABA 021-000-021
A/C 900-9-000200
Trust Account No. G52708
- --------------------------------------------------------------------------------
Accompanying Information Hughes Supply, Inc.; 8.42% Series C
Senior Notes due November 30, 2007;
CUSIP 444482 D@ 9
[insert due date and application as
among principal, premium and interest]
- --------------------------------------------------------------------------------
Address for notices related to payments Chase Manhattan Bank
North American Insurance
3 Chase MetroTech Centre, 6th Floor
Brooklyn, NY 11245
Attn: Doll Balbadar
with a copy to:
The Canada Life Assurance Company
330 University Avenue, SP-12
Securities Accounting
Toronto, ON M5G 1R8
- --------------------------------------------------------------------------------
Address for all other communications Canada Life Assurance Company
and notices 330 University Avenue, SP-11
Toronto, ON M5G 1R8
Attn: Paul English, US Investments
Division
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PURCHASER NAME NEW YORK LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Taxpayer Identification Number 13-5582869
- --------------------------------------------------------------------------------
Name in which to register Note(s) New York Life Insurance Company
- --------------------------------------------------------------------------------
Series Series C
- --------------------------------------------------------------------------------
Note registration number R-13
- --------------------------------------------------------------------------------
Amount $2,500,000.00
- --------------------------------------------------------------------------------
Payment on account of Note(s)
Method Immediately available funds, via
federal funds wire transfer
Account Information Chase Manhattan Bank
New York, NY 10019
ABA #021-000-021
Credit: New York Life Insurance
Company
General Account No. 008-9-00687
- --------------------------------------------------------------------------------
Accompanying Information Hughes Supply, Inc.; 8.42% Series C
Senior Notes due November 30, 2007;
CUSIP 444482 D@ 9
[insert due date and application as
among principal, premium and interest]
- --------------------------------------------------------------------------------
Address for notices related to payments New York Life Insurance Company
51 Madison Avenue
New York, NY 10010-1603
Attn: Treasury Department
Securities Income Section
Room 209
Fax: 212-447-4160
- --------------------------------------------------------------------------------
Address for all other communications New York Life Insurance Company
and notices 51 Madison Avenue
New York, NY 10010-1603
Attn: Investment Department
Private Finance Group
Room 206
Fax: 212-447-4122
with a copy of any notices
regarding defaults or Events of
Default under the operative
documents to:
Attn: Office of General Counsel
Investment Section, Room 1107
Fax: 212-576-8340
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PURCHASER NAME NEW YORK LIFE INSURANCE AND
ANNUITY CORPORATION
- --------------------------------------------------------------------------------
Taxpayer Identification Number 13-3044743
- --------------------------------------------------------------------------------
Name in which to register Note(s) New York Life Insurance and
Annuity Corporation
- --------------------------------------------------------------------------------
Series Series C
- --------------------------------------------------------------------------------
Note registration number R-14
- --------------------------------------------------------------------------------
Amount $5,000,000.00
- --------------------------------------------------------------------------------
Payment on account of Note(s)
Method Immediately available funds, via
federal funds wire transfer
Account Information Chase Manhattan Bank
New York, NY 10019
ABA #021-000-021
Credit: New York Life Insurance
and Annuity Corporation
General Account No. 323-8-47382
- --------------------------------------------------------------------------------
Accompanying Information Hughes Supply, Inc.; 8.42% Series C
Senior Notes due November 30, 2007;
CUSIP 444482 D@ 9
[insert due date and application as
among principal, premium and interest]
- --------------------------------------------------------------------------------
Address for notices related to payments New York Life Insurance and
Annuity Corporation
51 Madison Avenue
New York, NY 10010-1603
Attn: Treasury Department
Securities Income Section
Room 209
Fax: 212-447-4160
- --------------------------------------------------------------------------------
Address for all other communications New York Life Insurance Company
and notices 51 Madison Avenue
New York, NY 10010-1603
Attn: Investment Department
Private Finance Group
Room 206
Fax: 212-447-4122
with a copy of any notices
regarding defaults or Events of
Default under the operative
documents to:
Attn: Office of General Counsel
Investment Section, Room 1107
Fax: 212-576-8340
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PURCHASER NAME THE OHIO NATIONAL LIFE INSURANCE COMPANY
- --------------------------------------------------------------------------------
Taxpayer Identification Number 31-0397080
- --------------------------------------------------------------------------------
Name in which to register Note(s) The Ohio National Life Insurance Company
- --------------------------------------------------------------------------------
Series Series C
- --------------------------------------------------------------------------------
Note registration number R-15
- --------------------------------------------------------------------------------
Amount $4,500,000.00
- --------------------------------------------------------------------------------
Payment on account of Note(s)
Method Immediately available funds, via
federal funds wire transfer
Account Information Firstar Bank, N.A.
ABA #042-000013
5th & Walnut Streets
Cincinnati, OH 45202
For credit to The Ohio National Life
Insurance
Company: Account No. 910-275-7
- --------------------------------------------------------------------------------
Accompanying Information Hughes Supply, Inc.; 8.42% Series C
Senior Notes due November 3, 2007;
CUSIP 444482 D@ 9
[insert due date and application as
among principal, premium and interest]
- --------------------------------------------------------------------------------
Address for notices related to payments The Ohio National Life Insurance
Company
P.O. Box 237
Cincinnati, OH 45201
Attn: Investment Department
- --------------------------------------------------------------------------------
Address for all other communications The Ohio National Life Insurance
and notices Company
One Financial Way
Cincinnati, OH 45242
Attn: Investment Department
Fax: 513-794-4506
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PURCHASER NAME MODERN WOODMEN OF AMERICA
- --------------------------------------------------------------------------------
Taxpayer Identification Number 36-1493430
- --------------------------------------------------------------------------------
Name in which to register Note(s) Modern Woodmen of America
- --------------------------------------------------------------------------------
Series Series C
- --------------------------------------------------------------------------------
Note registration number R-16
- --------------------------------------------------------------------------------
Amount $4,000,000.00
- --------------------------------------------------------------------------------
Payment on account of Note(s)
Method Immediately available funds, via
federal funds wire transfer
Account Information The Northern Trust Company
50 South LaSalle Street
Chicago, IL 60675
ABA #071-000-152
Account Name: Modern Woodmen
of America
Account No. 84352
- --------------------------------------------------------------------------------
Accompanying Information Hughes Supply, Inc.; 8.42% Series C
Senior Notes due November 30, 2007;
CUSIP 444482 D@ 9
[insert due date and application as
among principal, premium and interest]
- --------------------------------------------------------------------------------
Address for notices related to payments Modern Woodmen of America
Attn: Investment Accounting Department
1701 First Avenue
Rock Island, IL 61201
- --------------------------------------------------------------------------------
Address for all other communications Modern Woodmen of America
and notices Attn: Investment Department
1701 First Avenue
Rock Island, IL 61201
- --------------------------------------------------------------------------------
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:
"Acquired Debt" shall mean, with respect to any specified Person: (i)
Debt of any other Person existing at the time such other Person is merged with
or into, or became a Subsidiary of, such specified Person, whether or not such
Debt is incurred in connection with, or in contemplation of, such other Person
merging with or into, or becoming a Subsidiary of, such specified Person; and
(ii) Debt secured by a Lien encumbering any asset acquired by such specified
Person.
"Adjusted Interest Coverage Ratio" shall mean, with respect to the
Company and its Subsidiaries on a Consolidated basis, the ratio of: (i)
Consolidated EBITDAR for the Four-Quarter Period ending on the date of
computation thereof to (ii) the sum of: (a) Consolidated Interest Expense for
such Four-Quarter Period plus (b) Consolidated Rental Expense for such
Four-Quarter Period.
"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.
"Bank Credit Agreement" shall mean (i) that certain Line of Credit
Agreement dated as of January 26, 1999 by and among the Company, the Lenders
named therein and SunTrust Bank, Central Florida, National Association, as
Administrative Agent, as amended and as the same may be further modified,
amended, renewed, extended or supplemented from time to time, (ii) that certain
Revolving Credit Agreement dated as of January 26, 1999 by and among the
Company, the Lenders named therein and SunTrust Bank, Central Florida, national
Association, as Administrative Agent, and as the same may be further modified,
amended, renewed, extended or supplemented from time to time, (iii) any other
committed revolving and/or term credit facility, note purchase agreement,
indenture or other instrument or line of credit having a maturity of greater
than one year and evidencing Funded Debt equal to or in excess of $25,000,000,
and (iv) all replacements, extensions, substitutions, refinancings and
refundings thereof.
"Beneficial Owner" shall have the meaning assigned to such term in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular "person" (as such term is used in Section
13(d)(3) of the
Exchange Act), such "person" shall be deemed to have beneficial ownership of all
securities that such "person" has the right to acquire, whether such right is
currently exercisable or is exercisable only upon the occurrence of a subsequent
condition.
"Board of Directors" means the board of directors of the Company (or
such other group of individuals designated to perform a similar function).
"Business Day" shall mean 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.
"Capital Lease" means 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 Stock" shall mean, with respect to any Person, the outstanding
capital stock (including all common, preferred or other equity securities and
any options or warrants to purchase capital stock or other securities
exchangeable for or convertible into capital stock) of such Person.
"Capitalized Lease Obligation" shall mean, with respect to any Person,
any rental obligation which, under GAAP, is or will be required to be
indebtedness (net of interest expense) in accordance with such principles.
"Change of Control" means the occurrence of any of the following:
(i) the sale, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the assets of the Company
and its Subsidiaries, taken as a whole, to any "person" (as such term
is used in Section 13(d)(3) of the Exchange Act);
(ii) the adoption of a plan relating to the liquidation or
dissolution of the Company;
(iii) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that
any "person" (as defined above) becomes the Beneficial Owner, directly
or indirectly, of more than 30% of the Voting Stock of the Company,
measured by voting power rather than number of shares;
(iv) the first day on which a majority of the members of the
Board of Directors of the Company are not Continuing Directors; or
(v) the Company consolidates with, or merges with or into, any
Person, or any Person consolidates with, or merges with or into, the
Company, in any such event pursuant to a transaction in which a
majority of the Voting Stock of the Company is converted into or
exchanged for cash, securities or other property.
"Closing" is defined in Section 3.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations promulgated thereunder from time to
time.
"Company" shall mean Hughes Supply, Inc., a Florida corporation, or any
successor thereto that shall have become such in the manner prescribed in
Section 10.7.
"Confidential Information" is defined in Section 20.
"Consolidated" shall mean the consolidated financial information of the
Company and its Subsidiaries under generally accepted accounting principles.
"Consolidated Assets" shall mean, at any time, the total assets of the
Company and its Subsidiaries on a Consolidated basis under GAAP.
"Consolidated Current Debt" shall mean, at any time, the amount of
Current Debt of the Company and its Subsidiaries on a Consolidated basis under
GAAP at such time.
"Consolidated EBITR" shall mean, for any period, an amount equal to the
sum of Consolidated Net Income for such period plus, to the extent deducted in
determining Consolidated Net Income (i) provisions for taxes based on income for
such period, (ii) Consolidated Interest Expense for such period, and (iii)
Consolidated Rental Expense for such period.
"Consolidated EBITDAR" shall mean, for any period, an amount equal to
the sum of Consolidated EBITR for such period plus, to the extent deducted in
determining Consolidated Net Income, depreciation and amortization expense of
the Company and its Subsidiaries on a Consolidated basis (as determined in
accordance with GAAP) for such period.
"Consolidated Funded Debt" shall mean, at any time but without
duplication, the amount of Funded Debt of the Company and its Subsidiaries on a
Consolidated basis under GAAP at such time.
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including without limitation, interest expense attributable to
capitalized leases in accordance with generally accepted accounting principles)
of the Company and its Subsidiaries on a Consolidated basis under GAAP.
"Consolidated Net Income" shall mean, for any period, the consolidated
net income (or loss) of the Company and its Subsidiaries for such period (taken
as a single accounting period) determined in conformity with GAAP, but excluding
therefrom (to the extent otherwise included therein) (i) any extraordinary gains
or losses, together with any related provision for taxes, realized upon any sale
of assets outside the ordinary course of business, and (ii) undistributed net
income of a Subsidiary to the extent that such distribution is prohibited by
agreement, judgment or regulation; provided, however, that all earnings from
acquisitions will accrue to the benefit of the Company in accordance with GAAP.
"Consolidated Net Worth" shall mean, at any time, on a Consolidated
basis, shareholders' equity of the Company and its Subsidiaries at such time
determined in accordance with GAAP.
"Consolidated Rental Expense" shall mean, for any period, total
operating lease expense of the Company and its Subsidiaries on a Consolidated
basis under GAAP.
"Consolidated Total Capitalization" shall mean, at any time, the sum of
Consolidated Net Worth and Consolidated Funded Debt.
"Continuing Director" means, as of any date of determination, any
member of the Board of Directors of the Company who:
(i) was a member of such Board of Directors on the date hereof;
or
(ii) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors
who were members of such Board at the time of such nomination or
election.
"Control Event" means the execution of any written agreement that, when
fully performed by the parties thereto, would result in a Change of Control.
"Current Debt" shall mean all Debt with an original maturity of one
year or less. For the avoidance of doubt, Debt incurred under a Bank Credit
Agreement shall not constitute "Current Debt".
"Debt" shall mean, without duplication, with respect to any Person, as
at any date of determination:
(i) all indebtedness for borrowed money which such Person has
directly or indirectly created, incurred or assumed (including,
without limitation, all Capitalized Lease Obligations);
(ii) all indebtedness, whether or not for borrowed money, secured
by any Lien on any property or asset owned or held by such Person
subject thereto, whether or not the indebtedness secured thereby shall
have been assumed by such Person;
(iii) any indebtedness, whether or not for borrowed money, with
respect to which such Person has become directly or indirectly liable
and which represents or has been incurred to finance the purchase
price (or a portion thereof) of any property or services or business
acquired by such Person, whether by purchase, consolidation, merger or
otherwise other than any payables and accrued expenses in the ordinary
course of business that are current liabilities under GAAP; and
(iv) any indebtedness of any other Person of the character
referred to in clauses (i), (ii), or (iii) of this definition with
respect to which the Person whose Debt is being determined has become
liable by way of a Guarantee;
all as determined in accordance with GAAP; provided, however, Debt shall not
include endorsement of negotiable instruments for collection in the ordinary
course of business.
"Default" shall mean 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" shall mean that rate of interest that is the greater 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 The Chase Manhattan Bank as its "base" or "prime" rate.
"Environmental Laws" shall mean 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" shall mean 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" shall mean 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" shall mean the Securities Exchange Act of 1934, as
amended.
"Fair Market Value" shall mean, at any time, the sale value of 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, under no compulsion to
buy or sell, respectively.
"Four-Quarter Period" shall mean the rolling, previous consecutive four
fiscal-quarter period ending on the date of any computation of any ratio
contained herein.
"Funded Debt" shall mean (i) all Debt with an original maturity of
greater than one year (including Debt incurred under a Bank Credit Agreement),
including current maturities of such Debt, and all Debt which is renewable
solely at the option of the Company or a Subsidiary, (ii) all Debt with an
original maturity of less than one year, including commercial paper issued by
the Company, if a direct or secondary source of
repayment of such Debt is, or such Debt is credit enhanced by, a line of credit
or other financial accommodation having a maturity of greater than one year and
(iii) all other Debt that is now or hereafter characterized by the Company or
any Subsidiary in its financial statements as "Funded Debt".
"GAAP" shall mean generally accepted accounting principles as in effect
from time to time in the United States of America.
"Governmental Authority" shall mean
(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.
"Guarantee" shall mean, with respect to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
Debt, lease, dividend or other obligation of another, including, without
limitation, any such obligation directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary course of business) or
discounted or sold with recourse by such Person, or in respect of which such
Person is otherwise directly or indirectly liable, including, without
limitation, any such obligation in effect guaranteed by such Person through any
agreement (contingent or otherwise) to purchase, repurchase or otherwise acquire
such obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) in any such case if the purpose
or intent of such agreement is to provide assurance that such obligation will be
paid or discharged, or that any agreements relating thereto will be complied
with, or that the holders of such obligation will be protected against loss in
respect thereof. The amount of any Guarantee shall be equal to the outstanding
principal amount of the obligation guaranteed or such lesser amount to which the
maximum exposure of the guarantor shall have been specifically limited.
"Hazardous Material" shall mean any and all pollutants, toxic or
hazardous wastes or any other substances 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, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"Holder" shall mean, 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" shall mean (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.
"Lien" shall mean, 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 8.6.
"Material" shall mean 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" shall mean a material adverse effect on (a)
the business, operations, affairs, financial condition, assets or properties of
the Company and its Subsidiaries taken as a whole, or (b) the ability of the
Company to perform its obligations under this Agreement and the Notes, or (c)
the validity or enforceability of this Agreement or the Notes.
"Material Subsidiary" shall mean (i) each Subsidiary set forth on
Schedule 4.11 and (ii) each other Subsidiary of the Company, now existing or
hereinafter established or acquired, that has or acquires total assets in excess
of $1,000,000 or that accounted for or produced more than 5% of the Consolidated
EBITR of the Company on a Consolidated basis during any of the three most
recently completed fiscal years of the Company.
"Memorandum" is defined in Section 5.3.
"Multiemployer Plan" shall mean any Plan that is a "multiemployer plan"
(as such term is defined in section 4001(a)(3) of ERISA).
"Net Proceeds" shall mean the aggregate cash proceeds received by the
Company or any of its Subsidiaries in respect of any Disposition (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Disposition), net of the direct costs
relating to such Disposition, including, without limitation, legal, accounting
and investment banking fees, and sales commissions, and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof, in each
case after taking into account any available tax credits or deductions and any
tax-sharing arrangements.
"Notes" is defined in Section 1.
"Officer's Certificate" shall mean 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" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA or any successor thereto.
"Person" shall mean an individual, corporation, company, limited
liability company, voluntary association, partnership, limited liability
partnership, trust, unincorporated organization or joint venture or a government
or any agency, instrumentality or political subdivision thereof, and for the
purpose of the definition of "ERISA Affiliate", a trade or business.
"Plan" shall mean 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.
"Preferred Stock" shall mean any class of Capital Stock of a
corporation that is preferred over any other class of Capital Stock of such
corporation as to the payment of dividends or the payment of any amount upon
liquidation or dissolution of such corporation.
"Priority Debt" shall mean with respect to any Person, at any time,
without duplication, the sum of:
(i) Unsecured Debt of each Subsidiary (other than such Debt held
by the Company or a Wholly-Owned Subsidiary thereof);
(ii) Debt of the Company and any Subsidiary secured by any Lien
unless such Lien is otherwise permitted by subparagraphs (i)
through (xiii) of Section 10.5 (other than such Debt held by
the Company or a Wholly-Owned Subsidiary thereof); and
(iii) All Preferred Stock of Subsidiaries owned by a Person other
than the Company or a Wholly-Owned Subsidiary thereof.
"Property" or "Properties" shall mean, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.
"QPAM Exemption" shall mean Prohibited Transaction Class Exemption
84-14 issued by the United States Department of Labor.
"Required Holders" shall mean the holders of at least 51% in the
principal amount of the Notes at the time outstanding.
"Responsible Officer" shall mean any Senior Financial Officer and any
other officer of the Company with responsibility for the administration of the
relevant portion of this agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Senior Financial Officer" shall mean the chief financial officer,
principal accounting officer, treasurer or comptroller of the Company.
"Series A Notes," "Series B Notes" and "Series C Notes" shall have the
meaning set forth in Section 1 and any reference to a particular "Series" shall
be a reference to either the Series A Notes, Series B Notes or Series C 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 or joint venture 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 Debt" shall mean all Debt of which the direct obligor is a
subsidiary of the Company.
"Voting Stock" of any Person as of any date shall mean the Capital
Stock of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.
"Wholly-Owned Subsidiary" means, at any time, any Subsidiary one
hundred percent (100%) of all of the equity interests (except directors'
qualifying shares) and voting interests of which are owned by any one or more of
the Company and the Company's other Wholly-Owned Subsidiaries at such time.
SCHEDULE 4.9 TO NOTE PURCHASE AGREEMENT
Changes in Corporate Structure
(i) Closed Acquisitions:
- bestroute.com, LLC, a New York limited liability company -
closed September 27, 2000
- Kingston Pipe Industries, Inc., a Rhode Island corporation -
closed August 30, 2000 Does not include asset purchase
acquisitions where the acquiring entity is an existing
subsidiary of the Company
(ii) Pending Acquisitions:
None
SCHEDULE 4.11 TO NOTE PURCHASE AGREEMENT
Material Subsidiaries Executing and Delivering Guarantees
on Date of Closing
Each of the following is a Material Subsidiary of the Company:
Atlantic Pump & Equipment Company of Miami, Inc., a Florida corp.
Atlantic Pump & Equipment Company of West Palm Beach, Inc., a Florida corp.
Bestroute.com, LLC, a New York limited liability company (99% owned subsidiary)
Carolina Pump & Supply Corp., a Rhode Island corp.
Cayesteel, Inc., a Georgia corp. (100% owned by WCC Merger Corporation)
Chad Supply, Inc., a Florida corp.
Coastal Wholesale, Inc., a Florida corp.
Dominion Pipe Fabricators, Incorporated, a Virginia corp.
Dominion Pipe & Supply Co., a Virginia corp.
Douglas Leonhardt & Associates, a North Carolina corp.
Elasco Agency Sales, Inc., an Illinois corp.
Elec-Tel Supply Company, a Georgia corp.
Electric Laboratories and Sales Corporation, a Delaware corp.
FES Merger Corp., Inc., a Florida corp.
Gayle Supply Company, an Alabama corp.
Gilleland Concrete Products, Inc., a Georgia corp.
HSI Acquisition Corporation, an Ohio corp.
HSI Bestroute Investment, Inc., a Florida corp.
HSI Fusion Services, Inc., a Florida corp.
Hughes Supply Management Services, Inc., a Delaware corporation
Hughes Water & Sewer Company, a West Virginia corp.
H Venture Corporation, a Florida corp.
Juno Industries, Inc., a Florida corp.
Kamen Supply Company, Inc., a Kansas corp.
Kingston Pipe Industries, Inc., a Rhode Island corp.
Merex Corporation, a Texas corp.
Metals Incorporated, an Oklahoma corp.
Metals, Inc. - Gulf Coast Division, an Oklahoma corp.
Mills & Lupton Supply Company, a Tennessee corp.
Moore Electric Supply, Inc., a North Carolina corp.
Mountain Country Supply, Inc., an Arizona corp.
Olander & Brophy, Incorporated, a Pennsylvania corp.
One Stop Supply, Inc., a Tennessee corp.
Paine Supply of Jackson, Inc., a Mississippi corp.
[Listing of Material Subsidiaries Continued on Next Page]
[Continuation of Listing of Material Subsidiaries]
Palm Pool Products, Inc., a Michigan corp.
Panhandle Pipe & Supply Co., Inc., a West Virginia corp.
Port City Electrical Supply, Inc., a Georgia corp.
R & G Plumbing Supply, Inc., an Alabama corp.
Reaction Supply Corporation, a California corp.
Shrader Holding Company, Inc., an Arkansas corp.
Southwest Stainless, L. P., a Delaware limited partnership
Stainless Tubular Products, Inc., an Oklahoma corp.
USCO Incorporated, a North Carolina corp.
Union Merger Corporation, a North Carolina corp.
U.S. Fusion Services, Inc., a Louisiana corp.
Virginia Water & Waste Supply Company, Inc., a Virginia corp.
WCC Merger Corporation, a Georgia corp.
Wholesale Electric Supply Corporation, a New York corp.
Z&L Acquisition Corp., a Delaware corp.
SCHEDULE 5.3 TO NOTE PURCHASE AGREEMENT
Disclosure Materials
No Exceptions.
SCHEDULE 5.4 TO NOTE PURCHASE AGREEMENT
Subsidiaries of the Company
and Ownership of Subsidiary Stock; Company's
Affiliates; Company's Directors and Senior Officers
(i) Subsidiaries of the Company
Legal Entities
SUBSIDIARIES:
(updated as of April 23, 2001)
Atlantic Pump & Equipment Company of Miami, Inc., a Florida corp.
Atlantic Pump & Equipment Company of West Palm Beach, Inc., a Florida corp.
Bestroute.com, LLC, a New York limited liability company (99%) owned)
Carolina Pump & Supply Corp., a Rhode Island corp.
Cayesteel, Inc., a Georgia corp. (100% owned by WCC Merger Corporation)
CF Fluid Controls, Inc., a Texas corp.
Chad Supply, Inc., a Florida corp.
Coastal Wholesale, Inc., a Florida corp.
Dominion Pipe Fabricators, Incorporated, a Virginia corp.
Dominion Pipe & Supply Co., a Virginia corp.
Douglas Leonhardt & Associates, a North Carolina corp.
Elasco Agency Sales, Inc., an Illinois corp.
Elec-Tel Supply Company, a Georgia corp.
Electric Laboratories and Sales Corporation, a Delaware corp.
FES Merger Corp., Inc., a Florida corp.
Gayle Supply Company, an Alabama corp.
Gilleland Concrete Products, Inc., a Georgia corp.
HHH, Inc., a Delaware corp.
HSI Acquisition Corporation, an Ohio corp.
HSI Bestroute Investment, Inc., a Florida corp.
HSI Corp., a Delaware corp.
HSI Fusion Services, Inc., a Florida corp.
Hughes Supply Foundation, Inc., a Florida not-for-profit corporation
Hughes Supply Management Services, Inc., a Delaware corporation
Hughes Water & Sewer Company, a West Virginia corp.
H Venture Corporation, a Florida corp.
Juno Industries, Inc., a Florida corp.
Kamen Supply Company, Inc., a Kansas corp.
[Listing of Subsidiaries Continued on Next Page]
[Listing of Subsidiaries Continued]
Kingston Pipe Industries, Inc., a Rhode Island corp.
L&T of Delaware, Inc., a Delaware corp.
Merex Corporation, a Texas corp.
Merex de Mexico, S.A. De C.V., a Mexican corp. (75% owned)
Merex Diesel Power, S.A. De C.V., a Mexican corp. (75% owned)
Metals Incorporated, an Oklahoma corp.
Metals, Inc. - Gulf Coast Division, an Oklahoma corp.
Mills & Lupton Supply Company, a Tennessee corp.
Moore Electric Supply, Inc., a North Carolina corp.
Mountain Country Supply, Inc., an Arizona corp.
Olander & Brophy, Incorporated, a Pennsylvania corp.
One Stop Supply, Inc., a Tennessee corp.
Paine Supply of Jackson, Inc., a Mississippi corp.
Palm Pool Products, Inc., a Michigan corp.
Panhandle Pipe & Supply Co., Inc., a West Virginia corp.
Port City Electrical Supply, Inc., a Georgia corp.
R & G Plumbing Supply, Inc., an Alabama corp.
Reaction Supply Corporation, a California corp.
Shrader Holding Company, Inc., an Arkansas corp.
Southwest Stainless, L. P., a Delaware limited partnership
Stainless Tubular Products, Inc., an Oklahoma corp.
USCO Incorporated, a North Carolina corp.
Union Merger Corporation, a North Carolina corp.
U.S. Fusion Services, Inc., a Louisiana corp.
Virginia Water & Waste Supply Company, Inc., a Virginia corp.
WCC Merger Corporation, a Georgia corp.
Wholesale Electric Supply Corporation, a New York corp.
Z&L Acquisition Corp., a Delaware corp.
Except as noted above, all Subsidiaries are Wholly-Owned Subsidiaries
(ii) Affiliates of the Company:
(a) No Person holds 10% or more of the Company's common stock as
of the date of this Agreement.
(b) Except for the Subsidiaries of the Company, there are no
other Affiliates of the Company.
(iii) Directors and Senior Officers of the Company:
Directors:
David H. Hughes
Vincent S. Hughes
A. Stewart Hall, Jr.
John D. Baker II
Robert N. Blackford
H. Corbin Day
William P. Kennedy
Officers:
David H. Hughes, Chairman of the Board and Chief Executive Officer
A. Stewart Hall, Jr., President
Vincent S. Hughes, Vice President
Sidney J. Strickland, Vice President
Gradie Winstead, Group President
Jim Holland, Group President
Skip Hughes, Group President
Mike Stanwood, Group President
Bob Machaby, Group President
Tom Ward, Vice President - Chief Technology Officer
Jack Clark, Vice President - Corporate Credit Manager
Jim Plyler, Vice President
Kenny Stephens, Vice President
J. Stephen Zepf, Treasurer and Chief Financial Officer
Benjamin P. Butterfield, Secretary
Jay Clark, Assistant Secretary and Treasurer
SCHEDULE 5.5 TO NOTE PURCHASE AGREEMENT
Financial Statements
(i) The Company's Annual Reports to Shareholders for the Fiscal Years
1996, 1997, 1998 and 1999.
(ii) The Company's Annual Reports on Form 10-K for the fiscal years
ended January 30, 1998 and January 29, 1999.
(iii) The Company's Quarterly Report on Form 10-Q for the fiscal
quarter ending July 31, 2000.
SCHEDULE 5.8 TO NOTE PURCHASE AGREEMENT
Certain Litigation
None.
SCHEDULE 5.11 TO NOTE PURCHASE AGREEMENT
Patents, Etc.
No Exceptions.
SCHEDULE 5.14 TO NOTE PURCHASE AGREEMENT
Use of Proceeds
The proceeds received by the Company shall be used for the repayment of
existing indebtedness of the Company and its Subsidiaries and general corporate
purposes.
SCHEDULE 5.15 TO NOTE PURCHASE AGREEMENT
Existing Debt; Unpermitted Liens
(i) Existing Debt:
Maximum Current Principal
Principal Amount Outstanding as of
Amount November 30, 2000
7.96% Senior Notes due May 30, 2011
Metropolitan Life Insurance Company $40,000,000 $40,000,000
CM Life Insurance Company $1,000,000 $1,000,000
Massachusetts Mutual Life Insurance Company $23,000,000 $23,000,000
Massachusetts Mutual Life Insurance Company $6,000,000 $6,000,000
Massachusetts Mutual Life Insurance Company $3,000,000 $3,000,000
American General Life and Accident Insurance $3,000,000 $3,000,000
Company
American General Life and Accident Insurance $7,000,000 $7,000,000
Company
Independent Life and Accident Insurance Company $3,000,000 $3,000,000
The Variable Annuity Life Insurance Company $12,000,000 $12,000,000
7.19% Senior Notes Due May 30, 2012
Nationwide Mutual Insurance Co. SAOH $1,500,000 $1,500,000
Nationwide Mutual Insurance Co. $8,500,000 $8,500,000
Anchor National Life Insurance Company $5,000,000 $5,000,000
SunAmerican Life Insurance Company $10,000,000 $10,000,000
Hartford Life Insurance Company $7,000,000 $7,000,000
Hartford Life Insurance Company $8,000,000 $8,000,000
7.19% Senior Notes Due May 30, 2012
Allstate Life Insurance Company $20,000,000 $20,000,000
The Mutual Life Insurance Company of NY $20,000,000 $20,000,000
6.74% Senior Notes Due May 1, 2013
New York Life Insurance Company $22,500,000 $22,500,000
New York Life Insurance and Annuity Corporation $7,500,000 $7,500,000
Allstate Life Insurance Company $10,000,000 $10,000,000
Jefferson-Pilot Life Insurance Company $10,000,000 $10,000,000
Bank Revolving Credit Agreement
First Union $45,833,333 $44,166,667
Bank of America $50,833,333 $48,984,849
SouthTrust bank $30,000,000 $28,909,091
SunTrust Bank $58,750,000 $56,613,636
PNC Bank $18,750,000 $18,068,182
ABN AMRO Bank $22,916,667 $22,083,333
The Fifth Third Bank $13,750,000 $13,250,000
Hibernia National Bank $11,250,000 $10,840,909
Wachovia Bank $22,916,667 $22,083,333
Bank Line of Credit Agreement
First Union $12,500,000 $0.00
Bank of America $12,500,000 $0.00
Southtrust Bank $10,000,000 $0.00
SunTrust Bank $13,750,000 $0.00
PNC Bank $6,250,000 $0.00
ABN AMRO Bank $6,250,000 $0.00
The Fifth Third Bank $3,750,000 $0.00
Wachovia Bank $10,000,000 $0.00
Commercial Paper $75,000,000 $73,835,964
SunTrust Swing Line $10,000,000 $2,674,248
SunTrust Bank Guidance Line $15,000,000 $0.00
Bank of America Short Term Credit Agreement $10,000,000 $0.00
The Company has a $40,000,000 interest rate hedging agreement (the "Agreement")
between First Union National Bank and Hughes Supply, Inc. effective August 27,
1997. The Agreement will mature on May 30, 2012, however First Union National
Bank has the option to terminate the Agreement at six month intervals.
The Company entered into an eighteen month, $1.00 purchase option, capital lease
for a Kronos time management system on August 30, 1999. Monthly payments of
$58,232 per month began September 1, 1999 with the final payment due on February
1, 2001. Remaining payments due as of November 30, 2000 totaled $174,696.
- -------------------
(ii) Unpermitted Liens.
None
See also "Schedule 10.5 to Note Purchase Agreement - Liens."
SCHEDULE 10.5 TO NOTE PURCHASE AGREEMENT
Liens
The Company entered into an eighteen month, $1.00 purchase option, capital lease
for a Kronos time management system on August 30, 1999. Monthly payments of
$58,232 per month began September 1, 1999 with the final payment due on February
1, 2001. Remaining payments due as of October 31, 2000 totaled $232,928.
EXHIBIT 1 TO NOTE PURCHASE AGREEMENT
Form of Senior Note
HUGHES SUPPLY, INC.
____% SENIOR NOTE SERIES [A] [B] [C] DUE NOVEMBER 30, 200_
[Series A]
[Series B]
[Series C]
No. [R-_____]
$[_______] December 21, 2000
FOR VALUE RECEIVED, the undersigned, HUGHES SUPPLY, INC. (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Florida, hereby promises to pay to [ ], or registered assigns, the principal
sum of [ ] DOLLARS on November 30, 200[3] [5] [7], 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 [__%] per annum from the date hereof, payable
semiannually, on the 30th day of May and November in each year, commencing with
the May 30 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) [____%] or (ii) 2%
over the rate of interest publicly announced by The Chase Manhattan Bank (or
successor entity) from time to time in New York, New York as its "base" or
"prime" rate.
Subject to Section 14.2 of each Note Purchase Agreement (as defined
below), 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 Chase Manhattan Bank, 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.
This Note is one of the Series [A][B][C] Senior Notes (herein called
the "Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 21, 2000 (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 Sections 6.1 and 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.
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 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 is governed by and is to be construed in accordance with the
terms of the Note Purchase Agreement, the terms of which are incorporated herein
by reference. All capitalized terms not otherwise defined herein shall have the
same meanings attributed to them as are set forth in the Note Purchase
Agreement.
HUGHES SUPPLY, INC.
By:_____________________________________
J. Stephen Zepf
Treasurer and Chief Financial Officer
EXHIBIT 4.4(a) TO NOTE PURCHASE AGREEMENT
Matters To Be Covered by Opinion of General Counsel for the Company
1. Each of the Company and its Subsidiaries being duly incorporated,
validly existing and in good standing and having requisite corporate power and
authority to, in the case of the Company, execute and deliver the Note Purchase
Agreement and to execute, deliver and issue the Notes and, in the case of the
Subsidiaries, the Subsidiary Guarantee Agreement and the Contribution Agreement
(the Note Purchase Agreement, the Notes, the Subsidiary Guarantee Agreement and
the Contribution Agreement collectively referred to as the "Operative
Documents"), to issue and sell the Notes and to execute and deliver the
documents.
2. Each of the Company and its Subsidiaries being duly qualified and in
good standing as a foreign corporation in appropriate jurisdictions.
3. Due authorization and execution by the Company and the Subsidiaries
of all Operative Documents and, if governed by the laws of the State of Florida,
all such documents would be legal, valid, binding and enforceable.
4. Execution and delivery of all Operative Documents and issuance of
Notes do not conflict with charter documents, laws or other agreements of the
Company and its Subsidiaries.
5. All consents required to issue and sell the Notes and to execute and
deliver all Operative Documents having been obtained.
6. No litigation questioning validity of Operative Documents.
7. No litigation against the Company or its Subsidiaries or in which
the Company or any Subsidiary is a party that could, if adversely determined,
reasonably be expected to have a Material Adverse Effect.
8. The Notes not requiring registration under the Securities Act of
1933, as amended; no need to qualify an indenture under the Trust Indenture Act
of 1939, as amended.
9. No violation of Regulations T, U or X of the Federal Reserve Board.
10. Company not an "investment company", or a company "controlled" by
an "investment company", under the Investment Company Act of 1940, as amended.
11. A Florida state court, or a federal court sitting in Florida,
would, under Florida conflict of laws principles, recognize the choice of New
York law to govern the operative documents.
The opinion shall be subject to standard and customary qualification of
counsel with respect to transactions of this nature.
EXHIBIT 4.4(b) TO NOTE PURCHASE AGREEMENT
Matters To Be Covered by Opinion of Special Counsel to the Purchasers
1. Existence and good standing of the Company and corporate authority of the
Company to execute and deliver the Note Purchase Agreement and to issue the
Notes.
2. Existence and good standing of the Guarantors and corporate authority of
the Guarantors to execute and deliver the Subsidiary Guarantee Agreement
and the Contribution Agreement (the Note Purchase Agreement, the Notes, the
Subsidiary Guarantee Agreement and the Contribution Agreement collectively
referred to as the "Operative Documents").
3. The Operative Documents are in commercially acceptable legal form.
4. Due authorization and execution of all Operative Documents.
5. The Operative Documents constitute the legal, valid and binding
obligations, enforceable against the Company and the Guarantors, as
applicable, in accordance with their respective terms.
6. The Notes not requiring registration under the Securities Act of 1933, as
amended; no need to qualify an indenture under the Trust Indenture Act of
1939, as amended.
Opinions subject to standard and customary qualifications and exceptions.
EXHIBIT 4.11(a) TO NOTE PURCHASE AGREEMENT
Form of Guarantee
SUBSIDIARY GUARANTEE AGREEMENT
This SUBSIDIARY GUARANTEE AGREEMENT, dated as of December 21, 2000
(this "Guarantee"), made by the undersigned signatories hereto as Guarantors
(each of the undersigned individually a "Guarantor" and collectively the
"Guarantors"), in favor of PACIFIC LIFE INSURANCE COMPANY, PACIFIC LIFE AND
ANNUITY COMPANY, GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY, GE LIFE AND ANNUITY
ASSURANCE COMPANY, GE CAPITAL LIFE ASSURANCE COMPANY OF NEW YORK, ALLSTATE LIFE
INSURANCE COMPANY, AMERICAN UNITED LIFE INSURANCE COMPANY, PIONEER MUTUAL LIFE
INSURANCE COMPANY, CONNECTICUT GENERAL LIFE INSURANCE COMPANY, LIFE INSURANCE
COMPANY OF NORTH AMERICA, JEFFERSON-PILOT LIFE INSURANCE COMPANY, TEACHERS
INSURANCE AND ANNUITY ASSOCIATION OF AMERICA, SUNAMERICA LIFE INSURANCE COMPANY,
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY, NEW YORK LIFE INSURANCE COMPANY,
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION, THE CANADA LIFE ASSURANCE
COMPANY, THE OHIO NATIONAL LIFE INSURANCE COMPANY and MODERN WOODMEN OF AMERICA,
the foregoing, together with their successors and assigns, individually a
"Guaranteed Party" and collectively the "Guaranteed Parties");
W I T N E S S E T H:
WHEREAS, Hughes Supply, Inc., a corporation organized and existing
under the laws of the State of Florida ("Hughes") and the Guaranteed Parties
have entered into those certain identical (except for the names of the
purchasers and the amounts of Notes, as defined below, to be purchased) Note
Purchase Agreements dated as of December 21, 2000 (together the "Agreements" and
separately each an "Agreement"), pursuant to which Hughes has issued to the
Guaranteed Parties its 8.27% Series A Senior Notes due November 30, 2003, its
8.27% Series B Senior Notes due November 30, 2005, and its 8.42% Series C Senior
Notes due November 30, 2007;
WHEREAS, Hughes owns, directly or indirectly, all or a majority of the
outstanding capital stock of each of the Guarantors;
WHEREAS, Hughes and Guarantors share an identity of interest as members
of a consolidated group of companies engaged in substantially similar businesses
with Hughes
providing certain centralized financial, accounting and management services to
each of the Guarantors by virtue of intercompany advances and loans such that
financial accommodations extended to Hughes shall inure to the direct and
material benefit of Guarantors; and
WHEREAS, consummation of the transactions pursuant to the Agreements
will facilitate expansion and enhance the overall financial strength and
stability of Hughes's entire corporate group, including the Guarantors; and
WHEREAS, it is a condition precedent to the Guaranteed Parties'
obligations to enter into the Agreements and to purchase the Notes thereunder
that Guarantors execute and deliver this Guarantee, and Guarantors desire to
execute and deliver this Guarantee to satisfy such condition precedent;
NOW, THEREFORE, in consideration of the premises and in order to induce
the Guaranteed Parties to enter into and perform their obligations under the
Agreements, the Guarantors hereby jointly and severally agree as follows:
SECTION 1. Guarantee. The Guarantors hereby, jointly and severally,
irrevocably, absolutely and unconditionally guarantee the due and punctual
payment of all principal of, premium, if any, and interest on, the Notes and all
other obligations owing by Hughes to the Guaranteed Parties, or any of them,
jointly or severally under the Agreements, the Notes and the other documents,
instruments and agreements relating to the transactions contemplated by the
Agreements, and all renewals, extensions, modifications and refinancings
thereof, now or hereafter owing, whether for principal, interest, make-whole or
yield maintenance premium or other fees, expenses or otherwise, and any and all
reasonable out-of-pocket expenses (including reasonable attorneys' fees and
expenses actually incurred) incurred by the Guaranteed Parties in enforcing any
rights under this Guarantee (collectively, the "Guaranteed Obligations")
including, without limitation, all interest which, but for the filing of a
petition in bankruptcy with respect to Hughes, would accrue on any principal
portion of the Guaranteed Obligations. Any and all payments by the Guarantors
hereunder shall be made free and clear of and without deduction for any set-off,
counterclaim, or withholding so that, in each case, each Guaranteed Party will
receive, after giving effect to any withholding or other tax, assessment or
charge of any kind or nature imposed by an governmental agency or authority, but
excluding taxes imposed on overall net income of any Guaranteed Party ("Taxes"),
the full amount that it would otherwise be entitled to receive with respect to
the Guaranteed Obligations (but without duplication of amounts for Taxes already
included in the Guaranteed Obligations). The Guarantors acknowledge and agree
that this is a guarantee of payment when due, and not of collection, and that,
subject to Section 13 hereof, this Guarantee may be enforced up to the full
amount of the Guaranteed Obligations without proceeding against Hughes, against
any security for the Guaranteed Obligations, against any other Guarantor or
under any other guaranty covering any portion of the Guaranteed Obligations.
SECTION 2. Guarantee Absolute. The Guarantors guarantee that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
documents, instruments and agreements evidencing any Guaranteed Obligations,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of any Guaranteed Party
with respect thereto. The liability of each Guarantor under this Guarantee shall
be absolute and unconditional in accordance with its terms and shall remain in
full force and effect without regard to, and shall not be released, suspended,
discharged, terminated or otherwise affected by, any circumstance or occurrence
whatsoever, including, without limitation, the following (whether or not such
Guarantor consents thereto or has notice thereof):
(a) any change in the time, place or manner of payment
of, or in any other term of, all or any of the Guaranteed
Obligations, any waiver, indulgence, renewal, extension,
amendment or modification of or addition, consent or
supplement to or deletion from or any other action or
inaction under or in respect of the Agreements, or any other
documents, instruments or agreements relating to the
Guaranteed Obligations or any other instrument or agreement
referred to therein or any assignment or transfer of any
thereof;
(b) any lack of validity or enforceability of the
Agreement or the Notes or any illegality or impossibility of
performance of the Agreements or the Notes or any other
document, instrument or agreement referred to therein or any
assignment or transfer of any thereof;
(c) any furnishing to the Guaranteed Parties of any
additional security for the Guaranteed Obligations, or any
sale, exchange, release or surrender of, or realization on,
any security for the Guaranteed Obligations;
(d) any settlement or compromise of any of the
Guaranteed Obligations, any security therefor, or any
liability of any other party with respect to the Guaranteed
Obligations, or any subordination of the payment of the
Guaranteed Obligations to the payment of any other liability
of Hughes;
(e) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other
like proceeding relating to any Guarantor or Hughes, or any
action taken with respect to this Guarantee by any trustee
or receiver, or by any court, in any such proceeding;
(f) any nonperfection of any security interest or lien
on any collateral, or any amendment or waiver of or consent
to departure from any guaranty or security, for all or any
of the Guaranteed Obligations;
(g) any application of sums paid by Hughes or any other
Person with respect to the liabilities of Hughes to the
Guaranteed Parties, regardless of what liabilities of Hughes
remain unpaid;
(h) any act or failure to act by any Guaranteed Party
which may adversely affect a Guarantor's subrogation rights,
if any, against Hughes to recover payments made under this
Guarantee; and
(i) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, any
Guarantor.
If claim is ever made upon any Guaranteed Party for repayment or recovery of any
amount or amounts received in payment or on account of any of the Guaranteed
Obligations, and any Guaranteed Party repays all or part of said amount by
reason of (a) any judgment, decree or order of any court or administrative body
having jurisdiction over the Guaranteed Party or any of its property, or (b) any
settlement or compromise of any such claim effected by the Guaranteed Party with
any such claimant (including Hughes or a trustee in bankruptcy for Hughes), then
and in such event the Guarantors agree that any such judgment, decree, order,
settlement or compromise shall be binding on it, notwithstanding any revocation
hereof or the cancellation of the Agreements or the other documents, instruments
and agreements evidencing any Guaranteed Obligations, and the Guarantors shall
be and remain liable to the Guaranteed Party for the amounts so repaid or
recovered to the same extent as if such amount had never originally been paid to
the Guaranteed Party.
The obligations of each Guarantor shall be joint and several and the
release or discharge of the obligations of one Guarantor shall not modify,
affect, release or discharge the obligations of the other Guarantors hereunder.
SECTION 3. Waiver. The Guarantors hereby waive notice of acceptance of
this Guarantee, notice of any liability to which it may apply, and further waive
presentment, demand of payment, protest, notice of dishonor or nonpayment of any
such liabilities, suit or taking of other action by the Guaranteed Parties
against, and any other notice to, Hughes or any other party liable with respect
to the Guaranteed Obligations (including the Guarantors or any other Person
executing a guaranty of the obligations of Hughes).
SECTION 4. Waiver of Subrogation. No Guarantor will exercise any rights
against Hughes which it may acquire by way of subrogation or contribution, by
any payment made hereunder or otherwise. Each Guarantor hereby expressly waives
any claim, right or remedy which such Guarantor may now have or hereafter
acquire against Hughes that arises hereunder and/or from the performance by any
Guarantor hereunder, including, without limitation, any claim, right or remedy
of the Guaranteed Parties against Hughes or any security which the Guaranteed
Parties now have or hereafter acquire, whether or not such claim, right or
remedy arises in equity, under contract, by statute, under color of law or
otherwise.
SECTION 5. Severability. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 6. Amendments, Etc. No amendment or waiver of any provision of
this Guarantee nor consent to any departure by a Guarantor therefrom shall in
any event be effective unless the same shall be in writing executed by the
Guaranteed Parties.
SECTION 7. Notices. All notices and other communications provided for
hereunder shall be given in the manner specified in the Agreements (i) in the
case of the Guaranteed Parties, at the address specified for the Guaranteed
Parties in the Agreements, and (ii) in the case of the Guarantors, at the
respective addresses specified for such Guarantors in this Guarantee.
SECTION 8. No Waiver; Remedies. No failure on the part of the
Guaranteed Parties to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. No notice to or demand on any Guarantor in any case
shall entitle such Guarantor to any other further notice or demand in any
similar or other circumstances or constitute a waiver of the rights of the
Guaranteed Parties to any other or further action in any circumstances without
notice or demand. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.
SECTION 9. Right of Set-Off. In addition to and not in limitation of
all rights of offset that the Guaranteed Parties may have under applicable law,
the Guaranteed Parties shall, upon the occurrence of any Event of Default and
whether or not the Guaranteed Parties have made any demand or the Guaranteed
Obligations are matured, have the right to appropriate and apply to the payment
of the Guaranteed Obligations, all indebtedness or property then or thereafter
owing by the Guaranteed Parties to any Guarantor, whether or not related to this
Guarantee or any transaction hereunder. The Guaranteed Parties shall promptly
notify the relevant Guarantor of any offset hereunder.
SECTION 10. Continuing Guarantee; Transfer of Obligations. This
Guarantee is a continuing guaranty and shall (i) remain in full force and effect
until payment in full of the Guaranteed Obligations and all other amounts
payable under this Guarantee and the termination of the Agreements, (ii) be
binding upon each Guarantor, its successors and assigns, and (iii) inure to the
benefit of and be enforceable by the Guaranteed Parties.
SECTION 11. Governing Law. THIS GUARANTEE AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER, SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF).
SECTION 12. Subordination of Hughes's Obligations to the Guarantors. As
an independent covenant, each Guarantor hereby expressly covenants and agrees
for the benefit of the Guaranteed Parties that all obligations and liabilities
of Hughes to such Guarantor of whatsoever description including, without
limitation, all intercompany receivables of such Guarantor from Hughes ("Junior
Claims") shall be subordinate and junior in right of payment to all obligations
of Hughes to the Guaranteed Parties under the terms of the Agreements and the
other documents, instruments and agreements evidencing any Guaranteed
Obligations ("Senior Claims").
If an Event of Default shall occur, then, unless and until such Event
of Default shall have been cured, waived, or shall have ceased to exist, no
direct or indirect payment (in cash, property, securities by setoff or
otherwise) shall be made by Hughes to any Guarantor on account of or in any
manner in respect of any Junior Claim except such payments and distributions the
proceeds of which shall be applied to the payment of Senior Claims.
In the event of a Proceeding (as hereinafter defined), all Senior
Claims shall first be paid in full before any direct or indirect payment or
distribution (in cash, property, securities by setoff or otherwise) shall be
made to any Guarantor on account of or in any manner in respect of any Junior
Claim except such payments and distributions the proceeds of which shall be
applied to the payment of Senior Claims. For the purposes of the previous
sentence, "Proceeding" means Hughes or any Guarantor shall commence a voluntary
case concerning itself under the Bankruptcy Code of 1978, as amended (the
"Bankruptcy Code"), or any other applicable bankruptcy laws; or any involuntary
case is commenced against Hughes or any Guarantor; or a custodian (as defined in
the Bankruptcy Code or any other applicable bankruptcy laws) is appointed for,
or takes charge of, all or any substantial part of the property of Hughes or any
Guarantor, or Hughes or any Guarantor commences any other proceedings under any
reorganization arrangement, adjustment of debt, relief of debtor, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to Hughes or any Guarantor, or any such proceeding
is commenced against Hughes or any Guarantor, or Hughes or any Guarantor is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or Hughes or any Guarantor
suffers any appointment of any custodian or the like for it or any substantial
part of its property; or Hughes or any Guarantor makes a general assignment for
the benefit of creditors; or Hughes or any Guarantor shall fail to pay, or shall
state that it is unable to pay, or shall be unable to pay, its debts generally
as they become due; or Hughes or any Guarantor shall call a meeting of its
creditors with a view to arranging a composition or adjustment of its debts; or
Hughes or any Guarantor shall by any act or failure to act indicate its consent
to, approval of or acquiescence in any of the foregoing; or any corporate action
shall be taken by Hughes or any Guarantor for the purpose of effecting any of
the foregoing.
In the event any direct or indirect payment or distribution is made to
a Guarantor in contravention of this Section 12, such payment or distribution
shall be deemed received in trust for the benefit of the Guaranteed Parties and
shall be immediately paid over to the Guaranteed Parties for application against
the Guaranteed Obligations in accordance with the terms of the Agreements.
Each Guarantor agrees to execute such additional documents as the
Guaranteed Parties may reasonably request to evidence the subordination provided
for in this Section 12.
SECTION 13. Savings Clause. (a) It is the intent of each Guarantor and
the Guaranteed Parties that each Guarantor's maximum obligations hereunder shall
be, but not in excess of:
(i) in a case or proceeding commenced by or against
such Guarantor under the Bankruptcy Code on or within one
year from the date on which any of the Guaranteed
Obligations are incurred, the maximum amount which would not
otherwise cause the Guaranteed Obligations (or any other
obligations of such Guarantor to the Guaranteed Parties) to
be avoidable or unenforceable against such Guarantor under
(A) Section 548 of the Bankruptcy Code or (B) any state
fraudulent transfer or fraudulent conveyance act or statute
applied in such case or proceeding by virtue of Section 544
of the Bankruptcy Code; or
(ii) in a case or proceeding commenced by or against
such Guarantor under the Bankruptcy Code subsequent to one
year from the date on which any of the Guaranteed
Obligations are incurred, the maximum amount which would not
otherwise cause the Guaranteed Obligations (or any other
obligations of the Guarantor to the Guaranteed Parties) to
be avoidable or unenforceable against such Guarantor under
any state fraudulent transfer or fraudulent conveyance act
or statute applied in any such case or proceeding by virtue
of Section 544 of the Bankruptcy Code; or
(iii) in a case or proceeding commenced by or against
such Guarantor under any law, statute or regulation other
than the Bankruptcy Code (including, without limitation, any
other bankruptcy, reorganization, arrangement, moratorium,
readjustment of debt, dissolution, liquidation or similar
debtor relief laws), the maximum amount which would not
otherwise cause the Guaranteed Obligations (or any other
obligations of such Guarantor to the Guaranteed Parties) to
be avoidable or unenforceable against such Guarantor under
such law, statute or regulation including, without
limitation, any state fraudulent transfer or fraudulent
conveyance act or statute applied in any such case or
proceeding.
(The substantive laws under which the possible avoidance or unenforceability of
the Guaranteed Obligations (or any other obligations of such Guarantor to the
Guaranteed Parties) shall be determined in any such case or proceeding shall
hereinafter be referred to as the "Avoidance Provisions").
(b) To the end set forth in Section 13(a), but only to
the extent that the Guaranteed Obligations would otherwise
be subject to avoidance under the Avoidance Provisions if
such Guarantor is not deemed to have received valuable
consideration, fair value or reasonably equivalent value for
the Guaranteed Obligations, or if the Guaranteed Obligations
would render the Guarantor insolvent, or leave the Guarantor
with an unreasonably small capital to conduct its business,
or cause the Guarantor to have incurred debts (or to have
intended to have incurred debts) beyond its ability to pay
such debts as they mature, in each case as of the time any
of the Guaranteed Obligations are deemed to have been
incurred under the Avoidance Provisions and after giving
effect to contribution as among Guarantors, the maximum
Guaranteed obligations for which such Guarantor shall be
liable hereunder shall be reduced to that amount which,
after giving effect thereto, would not cause the Guaranteed
Obligations (or any other obligations of such Guarantor to
the Guaranteed Parties), as so reduced, to be subject to
avoidance under the Avoidance Provisions. This Section 13(b)
is intended solely to preserve the rights of the Guaranteed
Parties hereunder to the maximum extent that would not cause
the Guaranteed Obligations of any Guarantor to be subject to
avoidance under the Avoidance Provisions, and neither such
Guarantor nor any other Person shall have any right or claim
under this Section 13 as against the Guaranteed Parties that
would not otherwise be available to such Person under the
Avoidance Provisions.
SECTION 14. Information. Each of the Guarantors assumes all
responsibility for being and keeping itself informed of Hughes' financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope and extent of the
risks that such Guarantor assumes and incurs hereunder, and agrees that none of
the Guaranteed Parties will have any duty to advise any of the Guarantors of
information known to it or any of them regarding such circumstances or risks.
SECTION 15. Survival of Agreement. All agreements, representations and
warranties made herein shall survive the execution and delivery of this
Guarantee.
SECTION 16. Counterparts. This Guarantee and any amendments, waivers,
consents or supplements may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered
shall be deemed an original, but all such counterparts together shall constitute
but one and the same instrument.
SECTION 17. Additional Guarantors. Upon execution and delivery by any
Material Subsidiary of Hughes of an instrument in the form of this Guarantee,
such Material Subsidiary of Hughes shall become a Guarantor hereunder with the
same force and effect as if originally named a Guarantor herein (each an
"Additional Guarantor"). The execution and delivery of any such instrument shall
not require the consent of any Guarantor hereunder. The rights and obligations
of each Guarantor hereunder shall remain in full force and effect
notwithstanding the addition of any Additional Guarantor as a party to this
Guarantee.
SECTION 18. Successors and Assigns. This Guarantee shall be binding
upon the successors and assigns of the Guarantors. This Guarantee shall inure to
the benefit of the successors and assigns of the Guaranteed Parties including
any subsequent holder of any Notes. No Guarantor may assign its obligations
hereunder to any other Person.
SECTION 19. Defined Terms. All capitalized terms used herein and not
otherwise defined herein shall have their respective defined meanings as set
forth in the Agreements.
IN WITNESS WHEREOF, each Guarantor and Hughes caused this Guarantee to
be duly executed and delivered by their respective duly authorized officers as
of the date first above written.
THE GUARANTORS
ATLANTIC PUMP & EQUIPMENT SUPPLY COMPANY
OF MIAMI, INC.
ATLANTIC PUMP & EQUIPMENT SUPPLY COMPANY
OF WEST PALM BEACH, INC.
BESTROUTE.COM, LLC (99% OWNED)
CAROLINA PUMP & SUPPLY CORP.
CAYESTEEL, INC.
CHAD SUPPLY, INC.
COASTAL WHOLESALE, INC.
DOMINION PIPE & SUPPLY CO.
DOMINION PIPE FABRICATORS, INCORPORATED
DOUGLAS LEONHARDT & Associates, Inc.
[Continuation of Guarantors on next
page]
[Continuation of Listing of Guarantors]
ELASCO AGENCY SALES, INC.
ELEC-TEL SUPPLY COMPANY
ELECTRIC LABORATORIES AND SALES
CORPORATION
FES MERGER CORP., INC.
GAYLE SUPPLY COMPANY, INC.
GILLELAND CONCRETE PRODUCTS, INC.
HSI ACQUISITION CORPORATION
HSI BESTROUTE INVESTMENT, INC.
HSI FUSION SERVICES, INC.
HUGHES SUPPLY MANAGEMENT SERVICES
HUGHES WATER & SEWER COMPANY
H VENTURE CORP.
JUNO INDUSTRIES, INC.
KAMEN SUPPLY COMPANY, INC.
KINGSTON PIPE INDUSTRIES, INC.
MEREX CORPORATION
METALS INCORPORATED
METALS, INC. - GULF COAST DIVISION
MILLS & LUPTON SUPPLY COMPANY
MOORE ELECTRIC SUPPLY, INC.
MOUNTAIN COUNTRY SUPPLY, INC.
OLANDER & BROPHY, INCORPORATED
ONE STOP SUPPLY, INC.
PAINE SUPPLY OF JACKSON, INC.
PALM POOL PRODUCTS, INC.
PANHANDLE PIPE & SUPPLY CO., INC.
PORT CITY ELECTRICAL SUPPLY, INC.
R&G PLUMBING SUPPLY, INC.
REACTION SUPPLY CORPORATION
SHRADER HOLDING COMPANY, INC.
STAINLESS TUBULAR PRODUCTS, INC.
USCO INCORPORATED
UNION MERGER CORPORATION
U.S. FUSION SERVICES, INC.
VIRGINIA WATER & WASTE SUPPLY
COMPANY, INC.
[Listing of Guarantors Continued on Next Page]
[Continuation of Listing of Guarantors]
WCC MERGER CORPORATION
WHOLESALE ELECTRIC SUPPLY CORPORATION
By: _________________________
Title: ______________________
SOUTHWEST STAINLESS, L.P.
By: Z&L Acquisition Corp.,
as General Partner
By: _________________________
Title: ______________________
Z&L ACQUISITION CORP., IN ITS
INDIVIDUAL CAPACITY
By: _________________________
Title: ______________________
Address for Notices for all Guarantors:
[Insert Guarantor]
c/o Hughes Supply, Inc.
20 North Orange Avenue
Orlando, Florida 32801
Attention: General Counsel
SECTION 12 OF THE
FOREGOING GUARANTEE
ACKNOWLEDGED AND
AGREED TO:
HUGHES SUPPLY, INC.
By: __________________
Name: J. Stephen Zepf
Title: Treasurer and Chief Financial Officer
EXHIBIT 4.11(b) TO NOTE PURCHASE AGREEMENT
Form of Contribution Agreement
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT, dated as of December 21, 2000 (this
"Contribution Agreement"), by and among HUGHES SUPPLY, INC. ("Hughes"), a
corporation organized and existing under the laws of the State of Florida and
each of the undersigned signatories hereto as Guarantors (each of such
undersigned referred to herein as a "Guarantor" and collectively the
"Guarantors") for the purpose of establishing rights and obligations of
contribution among the Guarantors in connection with the Guarantee Agreement (as
such term is defined below).
R E C I T A L S
WHEREAS, Hughes Supply, Inc., a corporation organized and existing
under the laws of the State of Florida ("Hughes"), and PACIFIC LIFE INSURANCE
COMPANY, PACIFIC LIFE AND ANNUITY COMPANY, GENERAL ELECTRIC CAPITAL ASSURANCE
COMPANY, GE LIFE AND ANNUITY ASSURANCE COMPANY, GE CAPITAL LIFE ASSURANCE
COMPANY OF NEW YORK, ALLSTATE LIFE INSURANCE COMPANY, AMERICAN UNITED LIFE
INSURANCE COMPANY, PIONEER MUTUAL LIFE INSURANCE COMPANY, CONNECTICUT GENERAL
LIFE INSURANCE COMPANY, LIFE INSURANCE COMPANY OF NORTH AMERICA, JEFFERSON-PILOT
LIFE INSURANCE COMPANY, TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA,
SUNAMERICA LIFE INSURANCE COMPANY, NATIONWIDE LIFE INSURANCE COMPANY, NATIONWIDE
LIFE AND ANNUITY INSURANCE COMPANY, NEW YORK LIFE INSURANCE COMPANY, NEW YORK
LIFE INSURANCE AND ANNUITY CORPORATION, THE CANADA LIFE ASSURANCE COMPANY, THE
OHIO NATIONAL LIFE INSURANCE COMPANY and MODERN WOODMEN OF AMERICA, the
foregoing corporations, together with their successors and assigns, individually
a "Guaranteed Party" and collectively the "Guaranteed Parties") have entered
into those certain identical (except for the names of the purchasers and the
amounts of Notes, as defined below, to be purchased) Note Purchase Agreements
dated as of December 21, 2000 (together the "Agreements" and separately each an
"Agreement"), pursuant to which Hughes has issued to the Guaranteed Parties its
8.27% Series A Senior Notes due November 30, 2003, its 8.27% Series B Senior
Notes due November 30, 2005 and its 8.42% Series C Senior Notes due November 30,
2007;
WHEREAS, the obligation of Guaranteed Parties to purchase the Notes
under the Agreements is conditioned on, among other things, the provision of a
Contribution Agreement in the form hereof;
WHEREAS, the Guarantors have entered into the Subsidiary Guarantee
Agreement dated as of even date herewith (the "Guarantee Agreement") pursuant to
which such Guarantors have agreed to guarantee all the obligations of Hughes
pursuant to the Agreements and all other Guaranteed Obligations;
WHEREAS, as a result of transactions contemplated by the Agreements,
Guarantors will benefit from the Guaranteed Obligations and in consideration
thereof desire to enter into this Contribution Agreement to provide a fair and
equitable arrangement to make contributions in the event payments are made under
the Guarantee Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Hughes, each Guarantor hereby agrees as follows:
SECTION 1. Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as the Guarantors may have under applicable law (but
subject to Section 3), Hughes agrees that in the event a payment shall be made
by any Guarantor under the Guarantee Agreement in respect of any Guaranteed
Obligations, Hughes shall indemnify such Guarantor for the full amount of such
payment. Each Guarantor has waived its rights to subrogation, pursuant to
Section 4 of the Guarantee Agreement.
SECTION 2. Contribution and Subrogation. Each Guarantor agrees (subject
to Section 3) that in the event a payment shall be made by any Guarantor under
the Guarantee Agreement or assets of any Guarantor shall be sold to satisfy a
claim of any Guaranteed Party, and such Guarantor (the "Claiming Guarantor")
shall not have been indemnified by Hughes as provided in Section 1, each other
Guarantor (a "Contributing Guarantor") shall indemnify the Claiming Guarantor in
an amount equal to the amount of such payment or the greater of the book value
or the fair market value of such assets, as the case may be, multiplied by a
fraction, the numerator of which shall be the net worth of the Contributing
Guarantor on the date hereof, and the denominator of which shall be the sum of
the net worth of all the Guarantors on the date hereof. Any Contributing
Guarantor making any payment to a Claiming Guarantor pursuant to this Section 2
shall be subrogated to the rights of such Claiming Guarantor under Section 1 to
the extent of such payment.
SECTION 3. Subordination. Notwithstanding any provision of this
Agreement to the contrary, (i) all rights of the Guarantors under Sections 1 and
2 and all other rights of indemnity or contribution under applicable law or
otherwise shall be fully subordinated to the indefeasible payment in full in
cash of the Guaranteed Obligations, and (ii) no such rights shall be exercised
until all of the Guaranteed Obligations shall
have been irrevocably paid in full in cash and the Agreements shall have been
irrevocably terminated. If any amount shall be paid to any Guarantor on account
of such indemnity or contribution rights at any time when all of the Guaranteed
Obligations shall not have been paid in full in cash, such amount shall be held
in trust for the benefit of the Guaranteed Parties and shall forthwith be paid
to the Guaranteed Parties to be credited and applied upon the Guaranteed
Obligations in accordance with the terms of the Agreements. No failure on the
part of Hughes or any Guarantor to make the payments required by Sections 1 and
2 (or any other payments required under applicable law or otherwise) shall in
any respect limit the obligations and liabilities of any Guarantor with respect
to the Guarantee Agreement, and each Guarantor shall remain liable for the full
amount of the obligations of such Guarantor under such Guarantee Agreement.
SECTION 4. Allocation. If at any time there exists more than one
Claiming Guarantor with respect to the Guarantee Agreement, then payment from
other Guarantors pursuant to this Contribution Agreement shall be allocated
among such Claiming Guarantors in proportion to the total amount of money paid
for or on account of the Guaranteed Obligations by each such Claiming Guarantor
pursuant to the Guarantee Agreement.
SECTION 5. Preservation of Rights. This Contribution Agreement shall
not limit or affect any right which any Guarantor may have against any other
Person that is not a party hereto.
SECTION 6. Subsidiary Payment. The amount of contribution payable under
this Contribution Agreement by any Guarantor with respect to the Guarantee
Agreement shall be reduced by the amount of any contribution paid hereunder by a
Subsidiary of such Guarantor with respect to the Guarantee Agreement.
SECTION 7. Asset Sale. If all of the stock of any Guarantor shall be
sold or otherwise disposed of (including by merger or consolidation) in an asset
sale not prohibited by the Agreements or otherwise consented to by the
Guaranteed Parties under the Agreements, the agreements of such Guarantor
hereunder shall automatically be discharged and released without any further
action by such Guarantor and shall be assumed in full by the corporation which
prior to such asset sale or consent owned the stock of such Guarantor, effective
as of the time of such asset sale or consent. Hughes shall cause any such
corporation which is not a Guarantor to become a party to this Contribution
Agreement and the Guarantee Agreement unless otherwise agreed in writing by the
Guaranteed Parties.
SECTION 8. Equitable Allocation. If as a result of any reorganization,
recapitalization or other corporate change in Hughes or any of its Subsidiaries,
or as a result of any amendment, waiver or modification of the terms and
conditions governing the Guarantee Agreement or any of the Guaranteed
Obligations, or for any other reason, the contributions under this Contribution
Agreement become inequitable, the parties hereto shall promptly modify and amend
this Contribution Agreement to provide for an
equitable allocation of contributions. All such modifications and amendments
shall be in writing and signed by all parties hereto.
SECTION 9. Asset of Party to Which Contribution and Indemnification Are
Owing. The parties hereto acknowledge that the right to contribution and
indemnification hereunder shall each constitute an asset in favor of the party
to which such contribution or indemnification is owing.
SECTION 10. Successors and Assigns; Amendments. This Contribution
Agreement shall be binding upon each party hereto and its respective successors
and assigns and shall inure to the benefit of the parties hereto and their
respective successors and assigns. None of any Guarantor's rights or any
interest therein under this Contribution Agreement may be assigned or
transferred without the written consent of the Guaranteed Parties. In the event
of any such transfer or assignment of rights by any Guarantor, the rights and
privileges herein conferred upon that Guarantor shall automatically extend to
and be vested in such transferee or assignee, all subject to the terms and
conditions hereof. This Contribution Agreement shall not be amended without the
prior written consent of the Guaranteed Parties.
SECTION 11. Termination. This Contribution Agreement, as it may be
modified or amended from time to time, shall remain in effect, and shall not be
terminated as to the Guarantee Agreement, until the Guarantee Agreement has been
discharged or otherwise satisfied in accordance with its terms.
SECTION 12. CHOICE OF LAW. THIS CONTRIBUTION AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
SECTION 13. Counterparts. This Contribution Agreement and any
amendments, waivers, consents or supplements may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts shall constitute but one and the same instrument.
SECTION 14. Additional Guarantors. Upon execution and delivery, after
the date hereof, by a Material Subsidiary of Hughes of an instrument in the form
of this Contribution Agreement, such Material Subsidiary of Hughes shall become
a Guarantor hereunder with the same force and effect as if originally named as a
Guarantor hereunder. The rights and obligations of each Guarantor hereunder
shall remain in full force and effect notwithstanding the addition of any new
Guarantor as a party to this Contribution Agreement.
SECTION 15. Severability. In case any provision in or obligation under
this Contribution Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality or enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 16. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing (including telegraphic or telecopy
communication) and mailed, telegraphed, telecopied or delivered, if to any
Guarantor, addressed to it at the address set forth for such party in the
Guarantee Agreement, and if to any other party, at the address set forth for
such party in the Agreements. All such notices and other communications shall be
given and deemed to have been received as provided by the terms of the
Agreements.
SECTION 17. Defined Terms. All capitalized terms used herein and not
defined herein shall have their respective defined meanings as set forth or used
in the Guarantee Agreement.
IN WITNESS WHEREOF, Hughes and the Guarantors have duly executed this
Contribution Agreement as of the day and year first above written.
HUGHES SUPPLY, INC.
By:________________________________________
Title:_______________________________
THE GUARANTORS:
ATLANTIC PUMP & Equipment SUPPLY COMPANY OF
MIAMI, INC.
ATLANTIC PUMP & EQUIPMENT SUPPLY COMPANY OF
WEST PALM BEACH, INC.
BESTROUTE.COM, LLC (99% OWNED)
CAROLINA PUMP & SUPPLY CORP.
CAYESTEEL, INC.
CHAD SUPPLY, INC.
COASTAL WHOLESALE, INC.
DOMINION PIPE & SUPPLY CO.
DOMINION PIPE FABRICATORS, INCORPORATED
DOUGLAS LEONHARDT & ASSOCIATES, INC.
ELASCO AGENCY SALES, INC.
ELEC-TEL SUPPLY COMPANY
[Listing of Guarantors Continued on Next Page]
[Continuation of Listing of Guarantors]
ELECTRIC LABORATORIES AND SALES CORPORATION
FES MERGER CORP., INC.
GAYLE SUPPLY COMPANY, INC.
GILLELAND CONCRETE PRODUCTS, INC.
HSI ACQUISITION CORPORATION
HSI BESTROUTE INVESTMENT, INC.
HSI FUSION SERVICES, INC.
HUGHES SUPPLY MANAGEMENT SERVICES
HUGHES WATER & SEWER COMPANY
H VENTURE CORP.
JUNO INDUSTRIES, INC.
KAMEN SUPPLY COMPANY, INC.
KINGSTON PIPE INDUSTRIES, INC.
MEREX CORPORATION
METALS INCORPORATED
METALS, INC. - GULF COAST DIVISION
MILLS & LUPTON SUPPLY COMPANY
MOORE ELECTRIC SUPPLY, INC.
MOUNTAIN COUNTRY SUPPLY, INC.
OLANDER & BROPHY, INCORPORATED
ONE STOP SUPPLY, INC.
PAINE SUPPLY OF JACKSON, INC.
PALM POOL PRODUCTS, INC.
PANHANDLE PIPE & SUPPLY CO., INC.
PORT CITY ELECTRICAL SUPPLY, INC.
R&G PLUMBING SUPPLY, INC.
REACTION SUPPLY CORPORATION
SHRADER HOLDING COMPANY, INC.
STAINLESS STEEL TUBULAR PRODUCTS, INC.
USCO INCORPORATED
UNION MERGER CORPORATION
U.S. FUSION SERVICES, INC.
VIRGINIA WATER & WASTE SUPPLY COMPANY, INC.
WCC MERGER CORPORATION
[Listing of Guarantors Continued on Next Page]
[Continuation of Listing of Guarantors]
WHOLESALE ELECTRIC SUPPLY
CORPORATION
By: _____________________________
Title: __________________________
SOUTHWEST STAINLESS, L.P.
By: Z&L Acquisition Corp.,
as General Partner
By: _____________________________
Title: ______________________
Z&L ACQUISITION CORP., in its
individual capacity
By: _____________________________
Title: ______________________
Address for Notices for all
Guarantors:
[Insert Guarantor]
c/o Hughes Supply, Inc.
20 North Orange Avenue
Orlando, Florida 32801
Attention: General Counsel
FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT dated as of January 19,
2001 by and among HUGHES SUPPLY, INC. (the "Company") and the Purchasers set
forth on the signature pages below (each a "Purchaser" and collectively the
"Purchasers").
WHEREAS, the Company and each Purchaser entered into a Note Purchase
Agreement dated as of December 21, 2000 (each a "Note Purchase Agreement"; terms
used herein and not defined herein have their respective meanings as set forth
in the Note Purchase Agreement);
WHEREAS, the Company and each Purchaser desires to amend the Note
Purchase Agreement to which they are a party on the terms and conditions set
forth herein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the parties hereto, the parties
hereto hereby agree as follows:
Section 1. Specific Amendments to Note Purchase Agreement
(a) Section 10.8(iv) of each Note Purchase Agreement is hereby amended
by deleting subparagraph (B) thereof in its entirety.
(b) Subparagraph (C) of Section 10.8(iv) of each Note Purchase
Agreement is hereby amended by inserting the following immediately after the
word "if," appearing therein:
"(1) at least 85% of the consideration received by the Company or
such Subsidiary in connection with Dispositions in excess of 15% of
Consolidated Assets is in the form of cash and (2)".
Section 2. Full Force and Effect. Except as modified hereby, each Note
Purchase Agreement remains in full force and effect without modification.
Section references in the Note Purchase Agreement shall remain the same
notwithstanding the deletion of a subparagraph in its entirety. Upon the
effectiveness of this First Amendment, all references to a Note Purchase
Agreement shall be deemed to be references to each Note Purchase Agreement as
amended by this First Amendment.
Section 3. Effectiveness of Amendment. This First Amendment shall be
effective upon the execution and delivery of this First Amendment by the Company
and the Required Holders.
Section 4. Fees and Expenses. Pursuant to Section 15.1 of each Note
Purchase Agreement, the Company shall pay all fees and expenses of special
counsel to the Purchasers in connection with the preparation, execution and
delivery of this First Amendment.
Section 5. Governing Law. This First Amendment shall be governed by,
and construed in accordance with, the laws 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.
Section 6. Headings. Headings of sections are for the convenience of
the parties and shall not be used to interpret or affect the meaning of any
provision contained herein.
Section 7. Counterparts. This First Amendment 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. Any signature hereto may be transmitted via
facsimilie transmission and such signature shall have the same effect as
original signature thereof.
[Signatures on Following Pages]
[Signature Page to First Amendment to Hughes Supply Note Purchase Agreement]
IN WITNESS WHEREOF, this First Amendment is hereby duly executed and
delivered by the parties hereto as of the date and year first written above.
THE COMPANY:
HUGHES SUPPLY, INC.
By: ___________________________
Title: ________________________
Purchasers of Series A Notes:
PACIFIC LIFE INSURANCE COMPANY
By: ___________________________
Name: _____________________
Title: ____________________
By: ___________________________
Name: _____________________
Title: ____________________
PACIFIC LIFE AND ANNUITY COMPANY
By: ___________________________
Name: _____________________
Title: ____________________
By: ___________________________
Name: _____________________
Title: ____________________
Signatures Continued on Following Pages]
[Signature Page to First Amendment to Hughes Supply Note Purchase Agreement]
Purchasers of Series B Notes:
GENERAL ELECTRIC CAPITAL
ASSURANCE COMPANY
By: ___________________________
Name: _____________________
Title: ____________________
GE LIFE AND ANNUITY ASSURANCE COMPANY
By: ___________________________
Name: _____________________
Title: ____________________
GE CAPITAL LIFE ASSURANCE COMPANY OF
NEW YORK
By: ___________________________
Name: _____________________
Title: ____________________
ALLSTATE LIFE INSURANCE COMPANY
By: ___________________________
Name: _____________________
Title: ____________________
By: ___________________________
Name: _____________________
Title: ____________________
(Authorized Signatories)
[Signatures Continued on Following Pages]
[Signature Page to First Amendment to Hughes Supply Note Purchase Agreement]
AMERICAN UNITED LIFE INSURANCE
COMPANY
By: ___________________________
Name: _____________________
Title: ____________________
PIONEER MUTUAL LIFE INSURANCE COMPANY
By: ___________________________
Name: _____________________
Title: ____________________
Purchasers of Series C Notes:
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY
By: CIGNA Investments, Inc.
By: ___________________________
Name: _____________________
Title: ____________________
LIFE INSURANCE COMPANY OF NORTH AMERICA
By: CIGNA Investments, Inc.
By: ___________________________
Name: _____________________
Title: ____________________
[Signatures Continued on Following Pages]
[Signature Page to First Amendment to Hughes Supply Note Purchase Agreement]
JEFFERSON-PILOT LIFE INSURANCE COMPANY
By: ___________________________
Name: _____________________
Title: ____________________
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: ___________________________
Name: _____________________
Title: ____________________
SUNAMERICA LIFE INSURANCE COMPANY
By: ___________________________
Name: _____________________
Title: ____________________
NATIONWIDE LIFE INSURANCE COMPANY
By: ___________________________
Name: _____________________
Title: ____________________
[Signatures Continued on Following Pages]
[Signature Page to First Amendment to Hughes Supply Note Purchase Agreement]
NATIONWIDE LIFE AND ANNUITY INSURANCE
COMPANY
By: ___________________________
Name: _____________________
Title: ____________________
NEW YORK LIFE INSURANCE COMPANY
By: ___________________________
Name: _____________________
Title: ____________________
NEW YORK LIFE INSURANCE AND
ANNUITY CORPORATION
By: New York Life Investment
Management, LLC,
its Investment Manager
By: ___________________________
Name: _____________________
Title: ____________________
THE CANADA LIFE ASSURANCE COMPANY,
as beneficial owner
By: ___________________________
Name: _____________________
Title: ____________________
[Signatures Continued on Following Pages]
[Signature Page to First Amendment to Hughes Supply Note Purchase Agreement]
THE OHIO NATIONAL LIFE INSURANCE
COMPANY
By: ___________________________
Name: _____________________
Title: ____________________
MODERN WOODMEN OF AMERICA
By: ___________________________
Name: _____________________
Title: ____________________