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JOHNSON OUTDOORS INC.
NOTE AGREEMENT
Dated as of December 13, 2001
Re: $50,000,000 7.82% Senior Notes
Due December 13, 2008
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TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT.....................1
Section 1.1. Description of Notes....................................1
Section 1.2. Subsidiary Guaranty.....................................1
Section 1.3. Commitment, Closing Date................................2
SECTION 2. PREPAYMENT OF NOTES.....................................2
Section 2.1. Required Prepayments....................................2
Section 2.2. Optional Prepayments of Notes...........................3
Section 2.3. Prepayment of Notes upon Change of Control..............3
Section 2.4. Notice of Optional Prepayments..........................4
Section 2.5. Allocation of Prepayments...............................5
Section 2.6. Direct Payment..........................................5
SECTION 3. REPRESENTATIONS.........................................5
Section 3.1. Representations of the Company..........................5
Section 3.2. Purchase for Investment.................................5
Section 3.3. Source of Funds.........................................5
SECTION 4. CLOSING CONDITIONS......................................7
Section 4.1. Closing Certificate.....................................7
Section 4.2. Legal Opinions..........................................7
Section 4.3. Company's Existence and Authority.......................7
Section 4.4. Consent of Holders of Other Securities..................7
Section 4.5. Legality of Investment..................................8
Section 4.6. Satisfactory Proceedings................................8
Section 4.7. Waiver of Conditions....................................8
Section 4.8. Private Placement Numbers...............................8
Section 4.9. Subsidiary Guaranty.....................................8
Section 4.10. Intercreditor Agreement.................................8
Section 4.11. Payment of Closing Costs................................8
SECTION 5. COMPANY COVENANTS.......................................9
Section 5.1. Corporate Existence, Etc................................9
Section 5.2. Insurance...............................................9
Section 5.3. Taxes, Claims for Labor and Materials,
Compliance with Laws..................................9
Section 5.4. Maintenance, Etc.......................................10
Section 5.5. Nature of Business.....................................10
Section 5.6. Limitations on Indebtedness............................10
Section 5.7. Limitation on Liens....................................11
Section 5.8. Mergers, Consolidations, Sales of Assets, Etc..........13
Section 5.9. Consolidated Net Worth.................................17
Section 5.10. Fixed Charge Coverage Ratio............................17
Section 5.11. Distributions..........................................17
Section 5.12. Investment.............................................18
Section 5.13. Repurchase of Notes....................................20
Section 5.14. Transactions with Affiliates...........................20
Section 5.15. ERISA Compliance.......................................20
Section 5.16. Reports and Rights of Inspection.......................21
Section 5.17. Subsidiary Guaranty....................................24
Section 5.18. Restrictions on Subsidiaries...........................25
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR................25
Section 6.1. Events of Default......................................25
Section 6.2. Notice to Holders......................................27
Section 6.3. Acceleration of Maturities.............................27
Section 6.4. Rescission of Acceleration.............................27
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.......................28
Section 7.1. Consent Required.......................................28
Section 7.2. Effect of Amendment or Waiver..........................28
Section 7.3. Solicitation of Holders................................28
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS...............29
Section 8.1. Definitions............................................29
Section 8.2. Accounting Principles..................................37
Section 8.3. Directly or Indirectly.................................37
SECTION 9. MISCELLANEOUS..........................................37
Section 9.1. Registration of Notes..................................37
Section 9.2. Exchange of Notes......................................37
Section 9.3. Loss, Theft, Etc. of Notes.............................37
Section 9.4. Expenses, Stamp Tax Indemnity..........................38
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative......38
Section 9.6. Notices................................................38
Section 9.7. Successors and Assigns.................................39
Section 9.8. Survival of Covenants and Representations..............39
Section 9.9. Severability...........................................39
Section 9.10. Reproduction of Documents..............................39
Section 9.11. Governing Law; Waiver of Jury Trial....................39
Section 9.12. Captions...............................................40
Signature....................................................................41
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ATTACHMENTS TO NOTE AGREEMENT:
Schedule I -- Names and Addresses of Purchasers
Schedule II -- Description of Subsidiaries and Indebtedness of the
Company and its Restricted Subsidiaries
Exhibit A -- Form of 7.82% Senior Note
Exhibit B -- Closing Certificate of the Company
Exhibit C -- Description of Closing Opinion of Special Counsel
Exhibit D -- Description of Closing Opinion of Independent Counsel
to Company
Exhibit E -- Form of Subsidiary Guaranty
Exhibit F -- Form of Intercreditor Agreement
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JOHNSON OUTDOORS INC.
1326 Willow Road
P.O. Box 901
Sturtevant, Wisconsin 53177-0901
NOTE AGREEMENT
Re: $50,000,000 7.82% Senior Notes
Due December 13, 2008
Dated as of December 13, 2001
To the Purchasers Named
in Schedule I Hereto which
are signatories to this Agreement
Ladies and Gentlemen:
The undersigned, JOHNSON OUTDOORS INC., a Wisconsin corporation, its
successors and assigns (the "Company"), agrees with the purchasers named in
Schedule I to the Agreement (the "Purchasers") as follows:
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT.
Section 1.1. Description of Notes. The Company will authorize the issue
and sale of $50,000,000 aggregate principal amount 7.82% Senior Notes due
December 13, 2008 (the "Notes") to be dated the date of issue, to bear interest
from such date at the rate of 7.82% per annum, payable semiannually on the
thirteenth day of June and December in each year (commencing June 13, 2002) and
at maturity and to bear interest on overdue principal (including any overdue
required or optional prepayment of principal) and Make-Whole Amount, if any, and
(to the extent legally enforceable) on any overdue installment of interest at
the Overdue Rate (as hereinafter defined) after the due date thereof, whether by
acceleration or otherwise, until paid, to be expressed to mature on December 13,
2008, and to be substantially in the form attached hereto as Exhibit A.
Interest on the Notes shall be computed on the basis of a 360-day year
of twelve 30-day months. The Notes are not subject to prepayment or redemption
at the option of the Company prior to their express maturity dates except on the
terms and conditions and in the amounts and with the Make-Whole Amount, if any,
set forth in ss.2 of this Agreement. The terms which are capitalized herein
shall have the meanings set forth in ss.8.l hereof unless the context shall
otherwise require.
Section 1.2. Subsidiary Guaranty. The payment by the Company of all
amounts due with respect to the Notes and the performance by the Company of its
obligations under this Agreement will be absolutely and unconditionally
guaranteed by the Subsidiary Guarantors
pursuant to the Subsidiary Guaranty (the "Subsidiary Guaranty"), which shall be
in substantially the form attached hereto as Exhibit E.
Payments under the Subsidiary Guaranties shall be subject to the terms
of an Intercreditor Agreement dated as of December 13, 2001 (the "Intercreditor
Agreement") which shall be in substantially the form attached hereto as Exhibit
F among the Purchasers, the banks which are parties to the Bank Credit Agreement
and certain other creditors of the Company which are beneficiaries of Guaranties
by Subsidiary Guarantors.
Section 1.3. Commitment, Closing Date. Subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue Notes in the aggregate
principal amount of $50,000,000 and sell to each Purchaser, and each Purchaser,
severally and not jointly, agrees to purchase from the Company, on the Closing
Date mentioned below, Notes in the principal amount set forth opposite such
Purchaser's name on Schedule I hereto at a price of 100% of the principal amount
thereof.
Delivery of the Notes to be purchased by each Purchaser will be made at
the offices of Chapman and Cutler, 111 West Monroe, Chicago, Illinois 60603,
against payment therefor by such Purchaser by wire transfer of Federal or other
funds current and immediately available at the principal office of Bank One NA,
in Chicago, Illinois, ABA 071000013 for the account of the Company Account No.
5529069, in the amount of the purchase price, at or about 10:00 A.M., on
December 18, 2001 (the "Closing Date"). The Notes delivered to any Purchaser on
the Closing Date will be delivered to such Purchaser in the form of a single
registered Note in the form attached hereto as Exhibit A (unless different
denominations are specified by such Purchaser), registered in such Purchaser's
name or in the name of such Purchaser's nominee, all as such Purchaser may
specify at any time prior to the date fixed for delivery.
SECTION 2. PREPAYMENT OF NOTES.
No prepayment of the Notes may be made except to the extent and in the
manner expressly provided in this Agreement.
Section 2.1. Required Prepayments.
(a) Required Prepayment of Notes. In addition to paying the entire
remaining outstanding principal amount and the interest due on the Notes on the
maturity date thereof, the Company agrees to prepay and apply and there shall
become due and payable on December 13, 2004 and on each December 13 thereafter,
to and including December 13, 2007, on the principal indebtedness evidenced by
the Notes an amount equal to the lesser of (i) $10,000,000, or (ii) the
aggregate principal amount of the Notes outstanding.
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(b) Effects of Required Prepayments. No Make-Whole Amount shall be
payable in connection with any required prepayment made pursuant to ss.2.1(a).
Except as set forth in the next succeeding paragraph, any payment of less than
all the Notes pursuant to the provisions of ss.2.2 shall not relieve the Company
of the obligation to make required payments or prepayments on the Notes in
accordance with the terms of ss.2.1(a).
In the event the Company shall prepay less than all of the Notes
pursuant to ss.2.2 or repurchase any Notes in accordance with ss.5.13, the
amount of the prepayments required by ss.2.1(a) shall be reduced by an amount
which is the same percentage of such required prepayment as the percentage that
the principal amount of Notes so prepaid or repurchased is of the aggregate
principal amount of outstanding Notes immediately prior to such prepayment or
repurchase.
Section 2.2. Optional Prepayments of Notes. In addition to the
prepayments required by ss.2.1(a) and ss.2.3, the Company shall have the
privilege at any time of prepaying the then outstanding Notes, either in whole
or in part (but if in part then in units of $1,000,000 in the aggregate or an
integral multiple of $100,000 in the aggregate in excess thereof) by payment of
the principal amount of the Notes and accrued interest thereon to the date of
such prepayment, together with an amount equal to the then applicable Make-Whole
Amount, determined as of three business days prior to the date of such
prepayment pursuant to this ss.2.2.
Section 2.3. Prepayment of Notes upon Change of Control. In the event
that any Change of Control (as hereinafter defined) shall occur, the Company
will give written notice (the "Company Notice") of such fact in the manner
provided in ss.9.6 of this Agreement to the holders of the Notes. The Company
Notice shall be delivered promptly and in any event no later than three business
days following the occurrence of any Change of Control. The Company Notice shall
(a) describe the facts and circumstances of such Change of Control in reasonable
detail, (b) make reference to this ss.2.3 and the right of the holders of the
Notes to require payment on the terms and conditions provided for in this
ss.2.3, (c) offer in writing to prepay the outstanding Notes, together with
accrued interest to the date of prepayment and an amount equal to the then
applicable Make-Whole Amount and (d) specify the date for such prepayment (the
"Change of Control Prepayment Date") which Change of Control Prepayment Date
shall be no earlier than fifteen (15) days after the receipt of the Company
Notice and no later than thirty (30) days after the date the Change of Control
occurred. The holders of at least 40% in aggregate principal amount of
outstanding Notes shall have the right, by written notice given to the Company
not later than three business days prior to the Change of Control Prepayment
Date, to demand that the Company prepay all (but not less than all) of the Notes
then held by such holders on such Change of Control Prepayment Date. If no such
request shall be made by a holder, such holder shall be deemed to have declined
the Company's offer of prepayment. The prepayment price of any Notes payable
upon the Change of Control Prepayment Date shall be an amount equal to 100% of
the principal amount of the Notes so to be prepaid and accrued interest thereon
to the date of such prepayment, together with an amount equal to the then
applicable Make-Whole Amount, determined as of three business days prior to the
date of such prepayment pursuant to this ss.2.3.
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Without limiting the foregoing, notwithstanding any failure on the part
of the Company to give the Company Notice herein required as a result of the
occurrence of a Change of Control, each holder of the Notes shall have the right
by delivery of written notice to the Company to require the Company to prepay,
and the Company will prepay, such holder's Notes in full, together with accrued
interest thereon to the date of prepayment and an amount equal to the Make-Whole
Amount at any time within ninety days after such holder has actual knowledge of
any such Change of Control. Notice of any required prepayment pursuant to this
ss.2.3 shall be delivered by any holder of Notes which was entitled to, but did
not receive, such Company Notice to the Company after such holder has actual
knowledge of such Change of Control. On the date (the "Delayed Prepayment Date")
designated in such holder's notice (which shall be not earlier than 10 business
days after the date of such holder's notice), the Company shall prepay in full
all Notes held by such holder together with accrued interest thereon to the date
of prepayment and an amount equal to the Make-Whole Amount, determined as of
three business days prior to the date of such prepayment pursuant to this
ss.2.3. If the holder of any Note gives any notice pursuant to this second
paragraph of ss.2.3, the Company shall give a Company Notice within two business
days of receipt of such notice and identify the Delayed Prepayment Date to all
holders of the Notes and each of such holders shall then and thereupon have the
rights with respect to the prepayment of its Notes as set forth in this ss.2.3;
provided only that any date for prepayment of such holder's Notes shall be the
Delayed Prepayment Date.
As used in this ss.2.3, a "Change of Control" of the Company shall be
deemed to have occurred at such time or times as the Johnson Family (as
hereinafter defined), shall fail to own, directly or indirectly, with full power
to vote or to direct the voting of, more than 51% of the voting power of the
Voting Stock of the Company.
The term "Johnson Family" shall mean, collectively, (i) Samuel C.
Johnson, his spouse, their children or grandchildren; (ii) any trust directly or
indirectly controlled by any one or more of such persons described in (i) or any
corporation described in (iii) below or any present or former officer of any
such corporation; (iii) any corporation or partnership in which voting control
as to such entity is held, directly or indirectly, by any one or more of such
persons described in (i) or such trusts described in (ii) or by the executor or
administrator of the estate or other legal representative of any such person
described in (i); and (iv) the executor or administrator of the estate or other
legal representative of any person described in (i).
Section 2.4. Notice of Optional Prepayments. The Company will give
notice of any prepayment of the Notes pursuant to ss.2.2 to each holder thereof
not less than 30 days nor more than 60 days before the date fixed for such
optional prepayment specifying (a) such date, (b) the principal amount of the
holder's Notes to be prepaid on such date, (c) that a Make-Whole Amount may be
payable, (d) the date when such Make-Whole Amount will be calculated which shall
be the date three business days prior to the prepayment date, (e) the estimated
Make-Whole Amount and (f) the accrued interest applicable to such prepayment.
Notice of prepayment having been so given, the aggregate principal amount of the
Notes specified in such notice, together with the Make-Whole Amount, if any, and
accrued interest thereon shall become due and payable on the prepayment date.
Not later than two business days prior to the prepayment date specified in such
notice, the Company shall provide each holder of a Note written notice of
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the Make-Whole Amount, if any, payable in connection with such prepayment and,
whether or not any Make-Whole Amount is payable, a reasonably detailed
computation thereof.
Section 2.5. Allocation of Prepayments. All partial prepayments of
Notes shall be applied on all outstanding Notes being prepaid ratably in
accordance with the unpaid principal amounts thereof.
Section 2.6. Direct Payment. Notwithstanding anything to the contrary
in this Agreement or the Notes, in the case of any Note owned by any Purchaser
or such Purchaser's nominee or owned by any other Institutional Holder or its
nominee which has given written notice to the Company requesting that the
provisions of this ss.2.6 shall apply, the Company will promptly and punctually
pay when due the principal thereof and the Make-Whole Amount, if any, and
interest thereon, without any presentment thereof directly to such Purchaser,
such Purchaser's nominee or any such subsequent Institutional Holder or its
nominee at its address or such nominee's address set forth in Schedule I or at
such other address as such Purchaser, any such Purchaser's nominee or any such
subsequent Institutional Holder may from time to time designate in writing to
the Company or, if an account with a United States bank is designated for such
Purchaser or such Purchaser's nominee on Schedule I hereto or in any written
notice to the Company from such Purchaser, such Purchaser's nominee or any such
subsequent Institutional Holder, the Company will make such payments in
immediately available funds to such bank account before 10:00 A.M., marked for
attention as indicated, or in such other manner or to such other account in any
bank in the United States as such Purchaser, such Purchaser's nominee or any
such subsequent Institutional Holder may from time to time direct in writing.
SECTION 3. REPRESENTATIONS.
Section 3.1. Representations of the Company. The Company represents and
warrants that all representations set forth in the form of Closing Certificate
attached hereto as Exhibit B are true and correct as of the date of the
execution and delivery hereof by the Company and are incorporated herein by
reference with the same force and effect as though herein set forth in full.
Section 3.2. Purchase for Investment. (a) Each Purchaser represents,
and in entering into this Agreement the Company understands, that such Purchaser
is acquiring the Notes for the purpose of investment and not with a view to the
distribution thereof; provided that the disposition of such Purchaser's property
shall at all times be and remain within its control. Each Purchaser acknowledges
that the Notes have not and will not be registered under the Act and hereby
agrees that it will not reoffer, resell, pledge or otherwise transfer the Notes
purchased by it under this Agreement except pursuant to any available exemption
from the requirements of Section 5 of the Act and in accordance with any
applicable state securities laws.
Section 3.3. Source of Funds. Each Purchaser represents that at least
one of the following statements is an accurate representation as to each source
of funds (a "Source") to be used by it to pay the purchase price of the Notes to
be purchased by it hereunder:
(a) the Source is an "insurance company general account"
within the meaning of Department of Labor Prohibited Transaction
Exemption ("PTE") 95-60 (issued
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July 12, 1995) and there is no employee benefit plan, treating as a
single plan all plans maintained by the same employer or employee
organization, with respect to which the amount of the general account
reserves and liabilities for all contracts held by or on behalf of such
plan, exceeds ten percent (10%) of the total reserves and liabilities
of such general account (exclusive of separate account liabilities)
plus surplus, as set forth in the NAIC Annual Statement for such
Purchaser most recently filed with such Purchaser's state of domicile;
or
(b) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
the PTE 91-38 (issued July 12, 1991) and, except as such Purchaser
prior to the execution and delivery of this Agreement has 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) prior to the execution and delivery of this Agreement; 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 prior to the execution and delivery of
this Agreement has been identified to the Company in writing pursuant
to this paragraph (e); or
(f) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA; or
(g) the Source is an insurance company separate account
maintained solely in connection with the 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
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any participant or beneficiary of such plan (including any annuitant)
are not affected in any manner by the investment performance of the
separate account.
If any Purchaser or any subsequent transferee of the Notes indicates that such
Purchaser or such transferee is relying on any representation contained in
paragraph (b), (c) or (e) above, the Company shall deliver on the date of
issuance of such Notes and on the date of any applicable transfer a certificate,
which shall either state that (i) it is neither a party in interest nor a
"disqualified person" (as defined in Section 4975(e)(2) of the Code), with
respect to any plan identified pursuant to paragraphs (b) or (e) above, or (ii)
with respect to any plan, identified pursuant to paragraph (c) above, neither it
nor any "affiliate" (as defined in Section V(c) of the QPAM Exemption) has at
such time, and during the immediately preceding one year, exercised the
authority to appoint or terminate said QPAM as manager of any plan identified in
writing pursuant to paragraph (c) above or to negotiate the terms of said QPAM's
management agreement on behalf of any such identified plan. As used in this
ss.3.3, 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.
SECTION 4. CLOSING CONDITIONS.
The obligation of each Purchaser to purchase the Notes on the Closing
Date shall be subject to the performance by the Company of its agreements
hereunder which by the terms hereof are to be performed at or prior to the time
of delivery of the Notes and to the following further conditions precedent:
Section 4.1. Closing Certificate. Concurrently with the delivery of
Notes to such Purchaser on the Closing Date, such Purchaser shall have received
a Closing Certificate dated the Closing Date, signed by the Chief Financial
Officer of the Company, substantially in the form attached hereto as Exhibit B,
the truth and accuracy of which on the Closing Date shall be a condition to such
Purchaser's obligation to purchase the Notes proposed to be purchased by such
Purchaser.
Section 4.2. Legal Opinions. Concurrently with the delivery of Notes to
such Purchaser on the Closing Date, such Purchaser shall have received from
Chapman and Cutler, who is acting as special counsel to the Purchaser in this
transaction and from Foley & Lardner, independent counsel to the Company, their
respective opinions dated the Closing Date, in form and substance satisfactory
to such Purchaser, and covering the matters set forth in Exhibits C and D,
attached hereto.
Section 4.3. Company's Existence and Authority. On or prior to the
Closing Date, such Purchaser shall have received, in form and substance
reasonably satisfactory to such Purchaser, such documents and evidence with
respect to the Company as such Purchaser may reasonably request in order to
establish the existence and good standing of the Company and the authorization
of the transactions contemplated by this Agreement.
Section 4.4. Consent of Holders of Other Securities. Any consents or
approvals required to be obtained from any holder or holders of any outstanding
Security of the Company and any
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amendments of agreements pursuant to which any Securities may have been issued
which will be necessary to permit the consummation of the transactions
contemplated hereby on the Closing Date shall have been obtained and all such
consents or amendments shall be satisfactory in form and substance to such
Purchaser.
Section 4.5. Legality of Investment. The Notes to be purchased by any
Purchaser shall be a legal investment for such Purchaser under the laws of each
jurisdiction to which such Purchaser may be subject (without resort to any
so-called basket provisions to such laws).
Section 4.6. Satisfactory Proceedings. All proceedings taken in
connection with the transactions contemplated by this Agreement, and all
documents necessary to the consummation thereof, shall be satisfactory in form
and substance to such Purchaser, and such Purchaser shall have received a copy
(executed or certified as may be appropriate) of all legal documents or
proceedings taken in connection with the consummation of such transactions.
Section 4.7. Waiver of Conditions. If on the Closing Date the Company
fails to tender to any Purchaser the Notes to be issued to any Purchaser on such
date or if the conditions specified in this ss.4 have not been fulfilled, any
Purchaser may thereupon elect to be relieved of all further obligations under
this Agreement. Without limiting the foregoing, if the conditions specified in
this ss.4 have not been fulfilled, such Purchaser may waive compliance by the
Company with any such condition to such extent as such Purchaser may in its sole
discretion determine. Nothing in this ss.4.7 shall operate to relieve the
Company of any of its obligations hereunder or to waive such Purchaser's rights
against the Company.
Section 4.8. Private Placement Numbers. The Company shall have obtained
for the Notes a Private Placement Number issued by Standard & Poor's CUSIP
Bureau (in cooperation with the Securities Valuation office of the National
Association of Insurance Commissioners).
Section 4.9. Subsidiary Guaranty. The Subsidiary Guaranty shall have
been duly authorized, executed and delivered by each Subsidiary Guarantor, shall
constitute the legal, valid and binding contract and agreement of each
Subsidiary Guarantor and such Purchaser shall have received a true, correct and
complete copy thereof.
Section 4.10. Intercreditor Agreement. The Intercreditor Agreement
shall have been duly authorized, executed and delivered by each of the
Purchasers and the administrative agent on behalf of the banks which are parties
to the Bank Credit Agreement and any other creditors which are beneficiaries of
Guaranties by Subsidiary Guarantors.
Section 4.11. Payment of Closing Costs. The Company shall have paid the
costs, expenses and disbursements of the Purchasers' special counsel which are
reflected in statements of such counsel rendered prior to the Closing pursuant
to ss.9.4; and thereafter (without limiting the provisions of ss.9.4) the
Company will pay, promptly upon receipt of any supplemental statements therefor,
additional costs or fees, if any, and expenses and disbursements of the
Purchasers' counsel in connection with the Closing (including disbursements
unposted as of the Closing Date) and attention to post-Closing matters.
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SECTION 5. COMPANY COVENANTS.
From and after the date of this Agreement and continuing so long as any
amount remains unpaid on any date:
Section 5.1. Corporate Existence, Etc. The Company will preserve and
keep in force and effect, and will cause each Restricted Subsidiary to preserve
and keep in force and effect, its corporate existence. The Company will preserve
and keep in force and effect, and will cause each Restricted Subsidiary to
preserve and keep in force and effect, all franchises, licenses and permits
necessary to the proper conduct of its business. The foregoing provisions of
this ss.5.1 shall not, however, prevent any transaction not prohibited by
ss.5.8.
Section 5.2. Insurance. The Company will maintain, and will cause each
Restricted Subsidiary to maintain, insurance coverage by financially sound and
reputable insurers consistent with such forms and amounts and against such risks
as are presently maintained by the Company and its Restricted Subsidiaries
provided that, notwithstanding the foregoing, the Company and its Restricted
Subsidiaries shall maintain insurance coverage in such forms and amounts and
against such risks as are customary for business entities of established
reputation engaged in the same or a similar business and owning and operating
similar properties.
Section 5.3. Taxes, Claims for Labor and Materials, Compliance with
Laws. (a) The Company will promptly pay and discharge, and will cause each
Restricted Subsidiary promptly to pay and discharge, all lawful taxes,
assessments and governmental charges or levies imposed upon it or upon or in
respect of all or any part of its property or business, all trade accounts
payable in accordance with usual and customary business terms, and all claims
for work, labor or materials, which if unpaid might become a Lien or charge upon
any of its property; provided the Company or such Restricted Subsidiary shall
not be required to pay any such tax, assessment, charge, levy, account payable
or claim if (1) the validity, applicability or amount thereof is being contested
in good faith by appropriate actions or proceedings which will prevent the
forfeiture or sale of any property of the Company or such Restricted Subsidiary
or any material interference with the use thereof by the Company or such
Restricted Subsidiary, (2) the Company or such Restricted Subsidiary shall set
aside on its books, reserves deemed by the Company to be adequate with respect
thereto and (3) the nonpayment of all such taxes and assessments in the
aggregate could not reasonably be expected to have a material adverse effect on
the Company and its Restricted Subsidiaries.
(b) The Company will promptly comply, and will cause each Restricted
Subsidiary to comply, in all material respects with all laws, ordinances or
governmental rules and regulations to which it is subject, including without
limitation, the Occupational Safety and Health Act of 1970, as amended, ERISA,
and all laws, ordinances, governmental rules and regulations relating to
environmental protection in all applicable jurisdictions, the violation of which
would materially and adversely affect the properties, business, prospects,
profits or condition of the Company and its Restricted subsidiaries, taken as
whole, or would result in any Lien not permitted under ss.5.7.
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Section 5.4. Maintenance, Etc. The Company will maintain, preserve and
keep, and will cause each Restricted Subsidiary to maintain, preserve and keep,
its material properties which are used or useful in the conduct of its business
(whether owned in fee or a leasehold interest) in good repair and working order,
ordinary wear and tear excepted, and from time to time will make all necessary
repairs, replacements, renewals and additions so that at all times the
efficiency thereof shall be maintained.
Section 5.5. Nature of Business. Neither the Company nor any Restricted
Subsidiary will engage in any business if, as a result, the general nature of
the business, taken on a consolidated basis, which would then be engaged by the
Company and its Restricted Subsidiaries would be substantially changed from the
general nature of the business engaged by the Company and its Restricted
Subsidiaries on the date of this Agreement.
Section 5.6. Limitations on Indebtedness. (a) The Company will not, and
will not permit any Restricted Subsidiary to, create, issue, assume, guarantee
or otherwise incur or in any manner become liable in respect of any additional
Current Debt or Funded Debt except:
(1) the Notes;
(2) Current Debt and Funded Debt of the Company and its
Restricted Subsidiaries outstanding as of the date of this Agreement
and described on Schedule II attached hereto;
(3) Current Debt or Funded Debt of the Company and its
Restricted Subsidiaries; provided that at the time of creation,
issuance, assumption, guarantee or incurrence thereof and after giving
effect thereto and to the application of the proceeds thereof,
Consolidated Funded Debt would not exceed 55% of Consolidated Total
Capitalization, provided that for purposes of any determination of
additional Funded Debt to be issued or incurred within the limitation
of this ss.5.6(a)(3), the Average Outstanding Balance of Consolidated
Current Debt (as defined in ss.5.6(e) below) computed for the
Compliance Period (as defined in ss.5.6(e) below) preceding the date of
any such determination shall be deemed to constitute outstanding Funded
Debt of the Company incurred as of the last day of such Compliance
Period and, except to the extent that any such Current Debt was
refinanced with Funded Debt, in which case such Current Debt, to the
extent it was refinanced with Funded Debt, will not be deemed to
constitute Funded Debt, shall be deemed outstanding at all times prior
to the end of the next Compliance Period; and
(4) additional Current Debt or Funded Debt of a Restricted
Subsidiary to the Company or to an Eighty Percent-Owned Restricted
Subsidiary.
(b) The Company will not at any time permit the sum of (i) Current Debt
and Funded Debt of Restricted Subsidiaries (other than Current Debt and Funded
Debt owed to the Company or an Eighty Percent-Owned Restricted Subsidiary and
Excluded Subsidiary Obligations), plus (ii) Funded Debt of the Company and
Restricted Subsidiaries secured by Liens permitted by ss.5.7(a)(9) to exceed 25%
of Consolidated Tangible Assets.
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(c) Any Person which becomes a Restricted Subsidiary after the date
hereof shall for all purposes of this ss.5.6 be deemed to have created, assumed
or incurred or issued at the time it becomes a Restricted Subsidiary all Current
Debt and Funded Debt of such Person existing immediately after it becomes a
Restricted Subsidiary.
(d) The renewal, extension or refunding of any Current Debt or Funded
Debt issued or incurred in accordance with the limitations of this ss.5.6 shall
constitute the issue of additional Current Debt or Funded Debt, as the case may
be, which is, in turn, subject to the limitations of the applicable provisions
of this ss.5.6.
(e) For the purposes of ss.5.6(a) hereof, the following terms shall
have the meanings ascribed to them below:
"Average Outstanding Balance of Consolidated Current Debt"
shall mean the average of the aggregate unpaid principal amounts of
Consolidated Current Debt outstanding on each of the Company's July
fiscal month-end, August 15, the Company's August fiscal month-end,
September 15 and the Company's September fiscal month-end for each
Compliance Period.
"Compliance Period" shall mean the period beginning on the
date of the Company's July fiscal month-end and ending on the date of
the Company's September fiscal month-end in each calendar year.
(f) The Company will not at any time permit Indebtedness of Foreign
Subsidiaries outstanding pursuant to the Bank Credit Agreement to exceed 10.5%
of Consolidated Tangible Assets.
(g) The Company will not permit any Restricted Subsidiary to become a
direct borrower , co-obligor or guarantor under the Bank Credit Agreement;
provided that (i) Foreign Subsidiaries may become direct borrowers under the
Bank Credit Agreement within the limitations of this ss.5.6, and (ii) subject to
ss.5.17, Subsidiary Guarantors may be obligated on the subsidiary guaranties
under the Bank Credit Agreement.
Section 5.7. Limitation on Liens. (a) The Company will not, and will
not permit any Restricted Subsidiary to, create or incur, or suffer to be
incurred or to exist, any Lien on its or their property or assets, whether now
owned or hereafter acquired, or upon any income or profits therefrom, or
transfer any property for the purpose of subjecting the same to the payment of
obligations in priority to the payment of its or their general creditors, or
acquire or agree to acquire or permit any Restricted Subsidiary to acquire any
property or assets pursuant to conditional sales agreements or other title
retention devices, except:
(1) Liens for property taxes and assessments or governmental
charges or levies and Liens securing claims or demands of mechanics and
materialmen; provided that payment thereof is not at the time required
by ss.5.3;
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(2) Liens of or resulting from any judgment or award, the time
for the appeal or petition for rehearing of which shall not have
expired, or in respect of which the Company or a Restricted Subsidiary
shall at any time in good faith be prosecuting an appeal or proceeding
for a review and in respect of which a stay of execution pending such
appeal or proceeding for review shall have been secured;
(3) Liens incidental to the conduct of business or the
ownership of properties and assets (including, without limitation,
warehousemen's and attorneys' liens, statutory landlords' liens,
workers' compensation liens and ERISA liens) and deposits, pledges or
Liens to secure the performance of bids, tenders or trade contracts, or
to secure statutory obligations, surety or appeal bonds or other Liens
of like general nature incurred in the ordinary course of business and
not in connection with the borrowing of money; provided that the
aggregate amount of the obligations so secured will not materially
impair the value of the assets so secured or the use thereof in the
ordinary course of business and provided, further, that in each case,
the obligation so secured will not exceed $1,000,000 and is not overdue
or, if overdue, is being contested in good faith by appropriate actions
or proceedings;
(4) minor survey exceptions or minor encumbrances, easements
or reservations, or rights of others for rights-of-way, utilities and
other similar purposes, or zoning or other restrictions as to the use
of real properties, which are necessary for the conduct of the
activities of the Company and its Restricted Subsidiaries or which
customarily exist on properties of Persons engaged in similar
activities and similarly situated and which do not in any event
materially impair their use in the operation of the business of the
Company and its Restricted Subsidiaries;
(5) Liens securing Indebtedness of a Restricted Subsidiary to
the Company or to an Eighty Percent-Owned Restricted Subsidiary;
(6) Liens existing as of the date of this Agreement securing
Indebtedness of the Company or any Restricted Subsidiary outstanding on
such date and described on Schedule II attached to this Agreement;
(7) Liens incurred after the date of this Agreement given to
secure the payment of the cost of the acquisition or construction of
fixed assets useful and intended to be used in carrying on the business
of the Company or a Restricted Subsidiary; provided that (i) the Lien
shall attach solely to the fixed assets acquired or constructed, (ii)
the Lien shall have been created or incurred within twelve (12) months
of the date of acquisition or the date of completion of construction,
as the case may be, of such fixed assets, (iii) at the time of the
acquisition or construction of such fixed assets the aggregate amount
remaining unpaid on all Indebtedness secured by Liens on such fixed
assets whether or not assumed by the Company or a Restricted Subsidiary
shall not exceed an amount equal to the lesser of the total cost or
fair market value at the time of acquisition or completion of
construction of such fixed assets (as determined in good faith by the
Board of Directors of the Company) and (iv) all such Indebtedness shall
have been incurred within the applicable limitations of ss.5.6;
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(8) Liens existing on any assets at the time of acquisition
thereof or at the time of acquisition by the Company or a Restricted
Subsidiary of any business entity then owning such assets, whether or
not such existing Liens were given to secure the payment of the
purchase price of the assets to which they attach, so long as they were
not incurred, extended or renewed in contemplation of such acquisition;
provided that (i) any such Lien shall attach solely to the assets
acquired or the assets of such business entity and (ii) at the time of
the acquisition of the assets or business entity, as the case may be,
the aggregate amount remaining unpaid on all Indebtedness secured by
Liens on such assets (whether or not assumed by the Company or such
Restricted Subsidiary) shall not be in excess of the fair market value
of such assets at the time of such acquisition (as determined in good
faith by the Board of Directors of the Company);
(9) Liens incurred after the date of this Agreement given to
secure Funded Debt of the Company or any Restricted Subsidiary in
addition to the Liens permitted by the preceding clauses (1) through
(8) hereof; provided that all Indebtedness secured by such Liens shall
have been incurred within the applicable limitations of ss.5.6; and
(10) any extension, renewal or replacement of any Lien
permitted by the preceding clauses (6), (7) and (8) of this ss.5.7 in
respect of the same property theretofore subject to such Lien in
connection with the extension, renewal or refunding of the Indebtedness
secured thereby; provided that (i) such Lien shall attach solely to the
same such property and (ii) such extension, renewal or refunding of
such Indebtedness shall have been incurred within the applicable
limitations of ss.5.6.
(b) In the event any property or assets of the Company or any
Restricted Subsidiary are subjected to a Lien not otherwise permitted by this
ss.5.7, the Company will make or cause to be made provision whereby the Notes
will be secured, to the full extent permitted under applicable law, equally and
ratably with all other obligations secured thereby, and in any case the Notes
shall (but only in such event) have the benefit, to the full extent that the
holders may be entitled thereto under applicable law, of an equitable Lien on
such property or assets equally and ratably securing the Notes. Compliance with
the provisions of this paragraph shall not be deemed to constitute a waiver of,
or consent to, any Default or Event of Default caused by any violation of the
provisions of this ss.5.7.
Section 5.8. Mergers, Consolidations, Sales of Assets, Etc. (a) The
Company will not, and will not permit any Restricted Subsidiary to, consolidate
with or be a party to a merger with or liquidate into any other Person;
provided, however, that:
(1) any Restricted Subsidiary may merge or consolidate with or
liquidate into the Company, any Wholly-Owned Subsidiary or any
Restricted Subsidiary that is the direct or indirect parent of such
Restricted Subsidiary and any Restricted Subsidiary (other than a
Principal Subsidiary) may merge or consolidate with or liquidate into
any other Restricted Subsidiary so long as (i) in any merger or
consolidation involving the Company, the Company shall be the surviving
corporation and (ii) in any merger, consolidation or liquidation
involving a Domestic Restricted Subsidiary and a non-
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Domestic Restricted Subsidiary, the Domestic Restricted Subsidiary
shall be the surviving corporation; and
(2) the Company or any Restricted Subsidiary may consolidate
or merge with any other corporation if (i) (in the case of a merger or
consolidation involving the Company) the surviving or acquiring
corporation (if other than the Company) (A) is organized and existing
under the laws of any State of the United States of America or the
District of Columbia, (B) shall expressly assume in writing the due and
punctual performance of all obligations of the Company under this
Agreement and the due and punctual payment of the principal of and
Make-Whole Amount if any, and interest on all the Notes, according to
their tenor, and (C) the Company or such surviving or acquiring
corporation shall furnish to the holders of the Notes an opinion of
counsel satisfactory to such holders to the effect that the instrument
of assumption has been duly authorized, executed and delivered and
constitutes the legal, valid and binding contract and agreement of the
surviving or acquiring corporation enforceable in accordance with its
terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally, and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law), or (ii) (in the case of a
merger or consolidation involving a Restricted Subsidiary) such
Restricted Subsidiary shall be the surviving corporation and (iii) in
the case of any consolidation or merger described in either (i) or
(ii), at the time of such consolidation or merger, and after giving
effect thereto (A) no Default or Event of Default shall have occurred
and be continuing and (B) the Company, such surviving or acquiring
corporation or such Restricted Subsidiary, as the case may be, would be
permitted to incur at least $1 of additional Funded Debt under the
applicable provisions of ss.5.6.
(b) The Company will not, and will not permit any Restricted Subsidiary
to, sell, lease, transfer, abandon or otherwise dispose of, assets (other than
(x) sales of goods, products, inventory or services in the ordinary course of
business to customers, (y) the sale, lease, transfer or disposition of assets to
the Company or a Domestic Restricted Subsidiary if a merger between such
transferor and such Domestic Restricted Subsidiary would be permitted under
ss.5.8(a)(1), and (z) sales or other dispositions of assets, having a fair
market value (as determined in good faith by the chief financial officer of the
Company) in any single sale or disposition of not greater than $250,000 which
the Company determines have become inadequate, obsolete, worn out, unsuitable,
undesirable or unnecessary in the conduct of its business); provided that the
foregoing restrictions do not apply to the sale of assets for cash or property
to a Person or Persons if all of the following conditions are met:
(1) either (i) the net book value of such assets, when added
to the net book value of all other assets sold, leased, transferred or
otherwise disposed of by the Company and its Restricted Subsidiaries
pursuant to this ss.5.8(b)(1) during the immediately preceding
twelve-month period do not constitute 10% of Consolidated Total Assets
(determined as of the end of the immediately preceding fiscal quarter)
or (ii) the sum of the portions of Consolidated Net Income contributed
for the immediately preceding twelve-month period (each as determined
in good faith by the chief financial
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officer of the Company) by (A) such assets, (B) each Restricted
Subsidiary (or portion thereof) disposed of during such period and (C)
other assets of the Company and its Restricted Subsidiaries disposed of
during such period pursuant to this ss.5.8(b)(1) do not constitute 10%
of Consolidated Net Income for such period; and
(2) immediately after the consummation of the transaction and
after giving effect thereto, (i) no Default or Event of Default would
exist and (ii) the Company would be permitted to incur at least $1 of
additional Funded Debt under the provisions of ss.5.6(a)(3).
Computations made pursuant to ss.5.8(b)(1) shall include dispositions
made pursuant to ss.ss.5.8(c)(3) and 5.8(c)(4) and computations pursuant to
ss.ss.5.8(c)(3) and 5.8(c)(4) shall include dispositions made pursuant to
ss.5.8(b)(1).
(c) The Company will not, and will not permit any Restricted Subsidiary
to, sell, transfer or otherwise dispose of any shares of capital stock
(including as "stock" for the purposes of this ss.5.8(c), any warrants, rights
or options to purchase or otherwise acquire stock or other Securities
exchangeable for or convertible into such stock) of any Restricted Subsidiary,
and the Company will not permit any Restricted Subsidiary to issue any shares of
stock of such Restricted Subsidiary (except for any sale, transfer, issuance or
other disposition of stock to the Company or a Restricted Subsidiary if a merger
between such transferor or issuer and such Restricted Subsidiary would be
permitted under ss.5.8(a)(1)); provided that the foregoing restrictions do not
apply to:
(1) the sale, transfer or issuance of directors' qualifying
shares of capital stock;
(2) the sale, transfer or issuance of any de minimis number of
shares of capital stock to foreign domiciliaries as may be required by
law;
(3) the sale, transfer or other disposition of all or any part
of the shares of capital stock of any Restricted Subsidiary (other than
a Principal Subsidiary);
(4) the sale, transfer or other disposition of all shares of
capital stock of a Principal Subsidiary held by the Company and its
Restricted Subsidiaries if all of the following conditions are met:
(i) simultaneously with such sale, transfer, or
disposition, all shares of stock and all Indebtedness of such
Principal Subsidiary at the time owned by the Company and by
every other Restricted Subsidiary shall be sold, transferred
or disposed of as an entirety;
(ii) the Board of Directors of the Company shall have
determined, as evidenced by a resolution thereof, that the
proposed sale, transfer or disposition of said shares of stock
and Indebtedness is in the best interests of the Company;
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(iii) said shares of stock and Indebtedness are sold,
transferred or otherwise disposed of to a Person or Persons,
for cash and/or tangible assets and on terms reasonably deemed
by the Board of Directors of the Company to be adequate and
satisfactory; and
(iv) the Principal Subsidiary being disposed of shall
not have any continuing investment in the Company or any other
Restricted Subsidiary not being simultaneously disposed of;
(5) the sale, transfer or issuance of shares of capital stock
of a Restricted Subsidiary in connection with the purchase or other
acquisition by the Company or a Restricted Subsidiary of all or
substantially all of the capital stock, properties or assets of any
Person or all or substantially all of the properties or assets of any
Person which constitute a distinct product line, division or other
operating segment; provided that:
(i) after giving effect to such sale, transfer or
issuance and such purchase or other acquisition, no Default or
Event of Default would then exist;
(ii) the aggregate fair value of all such capital
stock, properties or assets so acquired attributable to the
issuance, sale or transfer of such shares of capital stock in
each sale, transfer or issuance of such shares shall equal or
exceed the fair value of such shares (in each case as
determined in good faith by the Board of Directors of the
Company at the time of such acquisition taking into
consideration the terms of any written agreement described in
ss.5.8(c)(5)(iii) below); and
(iii) the shares of capital stock are sold,
transferred or issued pursuant to a written agreement which
(A) contemplates the subsequent purchase or redemption of such
shares by the Company or the Restricted Subsidiary whose
shares have been so sold, transferred or issued or any direct
or indirect parent of such Restricted Subsidiary upon request
of the transferee of such shares or upon demand by the Company
or such Restricted Subsidiary or any direct or indirect parent
of such Restricted Subsidiary made pursuant to the terms of
such written agreement at a price or prices computed by
reference to such formulas or indices or other references as
are determined in good faith by the Board of Directors of the
Company at the time of such acquisition to be in the best
interests of the Company and its Restricted Subsidiaries and
(B) prohibits the transfer of such shares to any Person other
than the Company or the Restricted Subsidiary whose shares
have been so sold, transferred or issued or any direct or
indirect parent of such Restricted Subsidiary; and
(6) the sale, transfer or issuance of capital stock to
employees of Restricted Subsidiaries as part of any incentive stock
arrangement other than any incentive stock agreement entered into in
connection with any purchase or acquisition contemplated by
ss.5.8(c)(5) provided that:
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(i) after giving effect to such issuance no
Restricted Subsidiary shall cease to be a Restricted
Subsidiary; and
(ii) the aggregate fair value (in each case
determined in good faith at the time of such issuance by the
Board of Directors of the Company or such person or committee
as the Board of Directors of the Company may authorize to make
such determination pursuant to the terms of any such incentive
stock arrangement) of all shares of capital stock of such
Restricted Subsidiaries issued to such employees shall not
exceed $2,000,000;
provided, however, that notwithstanding the foregoing, any sale, transfer,
issuance or other disposition of shares pursuant to ss.ss.5.8(c)(3) or 5.8(c)(4)
may not be consummated if either (y) the net book value of the assets of such
Restricted Subsidiary attributable to such sale, transfer, issuance or other
disposition of shares when added to the net book value of all other assets sold,
leased, transferred or otherwise disposed of by the Company and its Restricted
Subsidiaries during the immediately preceding twelve-month period would
constitute more than 10% of Consolidated Total Assets (determined as of the end
of the immediately preceding fiscal quarter) or (z) the portions of Consolidated
Net Income for the immediately preceding twelve-month period contributed (each
as determined in good faith by the chief financial officer of the Company) by
(1) such assets, (2) each Restricted Subsidiary (or portion thereof) disposed of
during such period and (3) other assets of the Company and its Restricted
Subsidiaries sold, leased, transferred or otherwise disposed of by the Company
and its Restricted Subsidiaries during such period would exceed 10% of
Consolidated Net Income for such period.
Computations made with respect to ss.ss.5.8(c)(3) and 5.8(c)(4) as
contemplated by this ss.5.8(c) shall include dispositions made within the
provisions of ss.ss.5.8(b)(1) and computations made pursuant to ss.ss.5.8(b)(1)
shall include dispositions made pursuant to ss.ss.5.8(c)(3) and 5.8(c)(4).
Section 5.9. Consolidated Net Worth. The Company will at all times keep
and maintain Consolidated Net Worth at an amount not less than the sum of (a)
$93,435,000, plus (b) an aggregate amount equal to 25% of its Consolidated Net
Income (but, in each case, only if a positive number) for each completed fiscal
year beginning with the fiscal year ended September 30, 2002.
Section 5.10. Fixed Charge Coverage Ratio. The Company will keep and
maintain the Fixed Charge Coverage Ratio at not less than 1.5 to 1; provided
that on not more than one occasion the Fixed Charge Coverage Ratio can be less
than 1.5 to 1 so long as it is greater than 1.2 to 1.
Section 5.11. Distributions. (a) The Company will not, and will not
permit any Restricted Subsidiary to, except as hereinafter provided:
(1) declare or pay any dividends, either in cash or property,
on any shares of its capital stock of any class (except dividends or
other distributions payable solely in shares of capital stock of the
Company and dividends paid by Restricted Subsidiaries to
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the Company or other Restricted Subsidiaries in respect of capital
stock of Restricted Subsidiaries owned by the Company or such other
Restricted Subsidiaries); or
(2) directly or indirectly, or through any Subsidiary,
purchase, redeem or retire any shares of its capital stock of any class
or any warrants, rights or options to purchase or acquire any shares of
its capital stock (other than (i) in exchange for or out of the net
cash proceeds to the Company obtained within three months of such
purchase, redemption or retirement from the issue or sale of other
shares of capital stock of the Company or warrants, rights or options
to purchase or acquire any shares of its capital stock, or (ii) in
connection with any purchase or redemption of any shares of capital
stock sold, transferred or issued in accordance with ss.ss.5.8(c)(1),
5.8(c)(2) or 5.8(c)(5)); or
(3) make any other payment or distribution, either directly or
indirectly or through any Subsidiary, in respect of its capital stock;
(such declarations or payments of dividends, purchases, redemptions or
retirements of capital stock and warrants, rights or options and all such other
payments or distributions being herein collectively called "Distributions"),
unless after giving effect thereto no Default or Event of Default would exist
and the aggregate amount of Distributions made during the period from and after
September 29, 2001 to and including the date of the making of the Distributions
in question would not exceed the sum of (1) $16,412,000, plus (2) 50% of
Consolidated Net Income for such period, computed on a cumulative basis for said
entire period (or if such Consolidated Net Income is a deficit figure, then
minus 100% of such deficit).
(b) For the purposes of this ss.5.11, the amount of any Distribution
declared, paid or distributed in property shall be deemed to be the greater of
the book value or fair market value (as determined in good faith by the Board of
Directors of the Company) of such property at the time of the making of the
Distribution in question.
(c) The Company will not authorize or make a Distribution on its
capital stock if after giving effect to the proposed Distribution:
(1) a Default or Event of Default would exist, or
(2) the Company could not incur at least $1.00 of additional
Funded Debt pursuant to ss.5.6(a)(3).
Section 5.12. Investments. The Company will not, and will not permit
any Restricted Subsidiary to, make any Investments, other than:
(a) Investments by the Company or a Restricted Subsidiary in
and to Restricted Subsidiaries, including any Investment in a Person
which, after giving effect to such Investment, will become a Restricted
Subsidiary;
(b) Investments in property or assets to be used in the usual
and ordinary course of business of the Company or its Restricted
Subsidiaries; provided that, after
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giving effect to any such Investment, the Company remains in compliance
with ss.5.5 hereof;
(c) Investments in commercial paper maturing in 270 days or
less from the date of issuance which, at the time of acquisition by the
Company or any Restricted Subsidiary, is accorded the highest rating by
Standard & Poor's Rating Group, a division of The McGraw-Hill
Companies, Inc., Moody's Investors Service, Inc. or another credit
rating agency of recognized national standing;
(d) Investments in direct obligations of the federal
governments of the United States of America, Canada or England and
Wales or any direct agency or instrumentality of any thereof, the
payment or guarantee of which constitutes a full faith and credit
obligation of the federal governments of the United States of America,
Canada or England and Wales or any direct agency or instrumentality of
any thereof, as the case may be, in each case, maturing in twelve
months or less from the date of acquisition thereof;
(e) Term Federal funds and banker's acceptances maturing
within 180 days from the date of acquisition thereof and issued by a
bank organized under the laws of the United States, Canada, or England
and Wales, having capital, surplus and undivided profits aggregating at
least U.S. $l00,000,000; provided that the issuing institution has a
rating of A- or better by Keefe Bank Watch Service;
(f) Investments in certificates of deposit maturing within one
year from the date of acquisition thereof, issued by a bank or trust
company organized under the laws of the United States, having capital,
surplus and undivided profits aggregating at least $100,000,000 and
whose long-term certificates of deposit are, at the time of acquisition
thereof by the Company or a Restricted Subsidiary, rated A or better by
Standard & Poor's Rating Group, a division of The McGraw-Hill
Companies, Inc. or by Moody's Investors Service, Inc.;
(g) loans or advances in the usual and ordinary course of
business to officers, directors, and employees incidental to carrying
on the business of the Company or any Restricted Subsidiary;
(h) receivables arising from the sale of goods and services in
the ordinary course of business of the Company and its Restricted
Subsidiaries; and
(i) other Investments (in addition to those permitted by the
foregoing provisions of this ss.5.12); provided that (1) all such other
Investments shall not exceed in the aggregate 25% of Consolidated
Tangible Net Worth Available for Investments and (2) after giving
effect to such other Investments, no Default or Event of Default would
exist.
In valuing any Investments for the purpose of applying the limitations
set forth in this ss.5.12, such Investments shall be taken at the original cost
thereof, without allowance for any
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subsequent write-offs or appreciation or depreciation therein, but less any
amount repaid or recovered on account of capital or principal.
For purposes of this ss.5.12, at any time when a Person becomes a
Restricted Subsidiary, all Investments of such Person at such time shall be
deemed to have been made by such Person, as a Restricted Subsidiary, at such
time.
Section 5.13. Repurchase of Notes. Neither the Company nor any
Subsidiary or Affiliate, directly or indirectly, may repurchase or make any
offer to repurchase any Notes unless the offer has been made in writing to
repurchase Notes, pro rata, from all holders of the Notes at the same time and
upon the same terms. In case the Company or any Subsidiary repurchases any
Notes, such Notes shall thereafter be canceled and no Notes shall be issued in
substitution therefor.
Section 5.14. Transactions with Affiliates. The Company will not, and
will not permit any Restricted Subsidiary to, enter into or be a party to any
material transaction or arrangement with any Affiliate (including, without
limitation, the purchase from, sale to or exchange of property with, or the
rendering of any service by or for, any Affiliate), except transactions
reasonably deemed by the Company in good faith to be in the best business
interests of the Company or the concerned Restricted Subsidiary and upon fair
and reasonable terms no less favorable to the Company or such Restricted
Subsidiary than would obtain in a comparable arm's-length transaction with a
Person other than an Affiliate.
Section 5.15. ERISA Compliance. The Company will not, and will not
permit any Subsidiary to:
(a) permit any Plans at any time maintained by the Company or
any such Subsidiary to have any Unfunded Vested Pension Liabilities in
excess of $1,000,000 in the aggregate. As used herein, "Unfunded Vested
Pension Liability" shall mean an excess of the actuarial present value
of accumulated vested Plan benefits as at the end of the immediately
preceding Plan year of such Plans (or as of any more recent valuation
date) over the net assets allocated to such Plans which are available
for benefits, all as determined and disclosed in the most recent
actuarial valuation report for such Plans;
(b) cause any Plan which it or any Subsidiary maintains or in
which it or any Subsidiary participates at any time to:
(1) engage in any "prohibited transaction" (as such
term is defined in ERISA);
(2) incur any "accumulated funding deficiency" (as
such term is defined in ERISA) whether or not waived; or
(3) terminate any such Plan in a manner which could
result in the imposition of a lien on any property of the
Company or any of its Subsidiaries pursuant to ERISA;
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(c) permit any condition to exist in connection with any Plan
which might constitute grounds for the PBGC to institute proceedings to
have such Plan terminated or a trustee appointed to administer such
Plan; or
(d) withdraw from any Multiemployer Plan if such withdrawal
shall subject the Company or any Subsidiary to withdrawal liability (as
described under Part 1 of Subtitle E of Title IV of ERISA) in excess of
$100,000.
All assumptions and methods used to determine the actuarial valuation
of vested employee benefits under any Plan at any time maintained by the Company
or any Subsidiary and the present value of assets of such Plans shall be
reasonable in the good faith judgment of the Company and shall comply with all
requirements of law.
Section 5.16. Reports and Rights of Inspection. The Company will keep,
and will cause each Restricted Subsidiary to keep, proper books of record and
account in which full and correct entries will be made of all dealings or
transactions of or in relation to its business and affairs, in accordance with
relevant accounting principles consistently applied and in the case of the
Company and any Domestic Restricted Subsidiaries in accordance with GAAP (except
for changes disclosed in the financial statements furnished to the Holders
pursuant to this ss.5.16 and concurred in by the independent public accountants
referred to in ss.5.16(b)), and will furnish to each Institutional Holder of the
outstanding Notes (in duplicate if so specified below or otherwise requested)
and, in the case of the financial statements delivered pursuant to paragraph (b)
of this ss.5.16, to the Securities Valuation Office, National Association of
Insurance Commissioners, 67 Wall Street, New York, New York 10005:
(a) Quarterly Statements. As soon as available and in any
event within 45 days after the end of each quarterly fiscal period
(except the last) of each fiscal year, duplicate copies of:
(1) a consolidated balance sheet of the Company and
its Restricted Subsidiaries as of the close of such quarterly
period, setting forth in comparative form the consolidated
figures for the corresponding period for the preceding fiscal
year,
(2) a consolidated statement of income of the Company
and its Restricted Subsidiaries for such quarterly fiscal
period and for the portion of the fiscal year ending with such
quarterly fiscal period, in each case setting forth in
comparative form the consolidated figures for the
corresponding periods of the preceding fiscal year, and
(3) a consolidated statement of cash flows of the
Company and its Restricted Subsidiaries for the portion of the
fiscal year ending with such quarterly fiscal period, setting
forth in comparative form the consolidated figures for the
corresponding period of the preceding fiscal year, all in
reasonable detail and certified as complete and correct by an
authorized financial officer of the Company;
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(b) Annual Statements. As soon as available and in any event
within 90 days after the close of each fiscal year of the Company,
duplicate copies of:
(1) consolidated balance sheets of the Company and
its Restricted Subsidiaries as of the close of such fiscal
year, and
(2) consolidated statements of income and retained
earnings and cash flows of the Company and its Restricted
Subsidiaries for such fiscal year,
in each case setting forth in comparative form the consolidated figures
for the preceding fiscal year, all in reasonable detail and accompanied
by an opinion thereon of a firm of independent public accountants of
recognized national standing selected by the Company, unqualified as to
scope, to the effect that the consolidated financial statements present
fairly, in all material respects, the consolidated financial position
of the Company and its Restricted Subsidiaries as of the end of the
fiscal year being reported on and the consolidated results of the
operations and cash flows for said year in conformity with GAAP and
that the examination of such accountants in connection with such
financial statements has been conducted in accordance with generally
accepted auditing standards and included such tests of the accounting
records and such other auditing procedures as were considered necessary
in the circumstances;
(c) Audit Reports. Promptly upon initiation thereof, written
notice of each interim or special audit to be made by independent
accountants of the books of the Company or any Restricted Subsidiary
and any management letter to be delivered from such accountants in
connection therewith;
(d) SEC and Other Reports. Promptly (and in any event within
30 days) upon their becoming available, one copy of each financial
statement, report, notice, press release or proxy statement sent by the
Company to stockholders generally or made available to the public and
one copy of each regular or periodic report, registration statement or
prospectus filed by the Company or any Restricted Subsidiary with any
securities exchange or the Securities and Exchange Commission or any
successor agency, and, if the Purchaser or any such Institutional
Holder so requests, one copy of any material order in any proceedings
to which the Company or any of its Restricted Subsidiaries is a party,
issued by any governmental agency, Federal or state, having
jurisdiction over the Company or any of its Restricted Subsidiaries;
(e) Officers' Certificates. Within the periods provided in
paragraphs (a) and (b) above, a certificate of an authorized financial
officer of the Company stating that such officer has reviewed the
provisions of this Agreement and setting forth: (1) the information and
computations (in sufficient detail) required in order to establish
whether the Company was in compliance with the applicable requirements
of ss.ss.5.6 through 5.12 hereof at the end of the period covered by
the financial statements then being furnished and (2) whether, to the
best of his knowledge based on such review, there existed as of the
date of such financial statements or there exists on the date of the
certificate or existed at any time during the period covered by such
financial statements any Default or Event
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of Default and, if any such condition or event exists on the date of
the certificate or existed during such period, specifying the nature
and extent thereof and the action the Company is taking, has taken or
proposes to take with respect thereto; provided further, that such
certificates as are delivered with respect to (i) the period provided
for in paragraph (b) above, shall include a list of any changes in
Restricted Subsidiaries as at the end of such period, and (ii) the
periods provided for in paragraphs (a) and (b) above shall set forth
for each Restricted Subsidiary, the amount of Indebtedness of such
Restricted Subsidiary outstanding at the end of such period together
with a brief description of such Indebtedness;
(f) Accountants' Certificates. Within the period provided in
paragraph (b) above, a certificate of the accountants who are reporting
upon such financial statements, stating that they have reviewed this
Agreement and, stating further, whether in making their audit such
accountants (1) have not become aware that the Company and the
Restricted Subsidiaries have failed to comply with the terms,
covenants, provisions, or conditions contained in ss.5 hereof and (2)
have examined the schedules to such reports or other certificates or
documents containing calculations of the financial covenants required
to be performed or observed pursuant to ss.ss.5.6 through 5.12 hereof,
and in their opinion, the information set forth in such schedules or
other certificates or documents is fairly stated in all material
respects in relation to the annual consolidated financial statements
taken as a whole;
(g) ERISA Notices. Promptly upon learning of the occurrence of
any of the following, written notice thereof, describing the same and
the steps being taken by the Company or any Subsidiary affected with
respect thereto, and when known, any action taken or threatened by the
Internal Revenue Service, Department of Labor or the PBGC with respect
thereto: (1) a Reportable Event with respect to any Plan; (2) the
institution of any steps by the Company, any ERISA Affiliate, the PBGC
or any other person to terminate any Plan other than a "standard
termination" under Section 4041(b) of ERISA; (3) the institution of any
steps by the Company or any ERISA Affiliate to withdraw from any
Multiemployer Plan; (4) a "prohibited transaction" within the meaning
of Section 406 of ERISA in connection with any Plan; or (5) any
material increase in the contingent liability of the Company or any
subsidiary with respect to any post-retirement welfare liability; and
(h) Requested Information. With reasonable promptness, such
other data and information as any Purchaser or any such Institutional
Holder may reasonably request, including, without limitation, such
financial or other information as any holder of the Notes or any Person
designated by such holder may reasonably determine as required to
permit such holder to comply with requirements of Rule 144A promulgated
under the Act in connection with the resale by it of the Notes.
Without limiting the foregoing, the Company will permit any Purchaser, so long
as such Purchaser is the holder of a Note, and each Institutional Holder of the
then outstanding Notes (or such agent(s) as either such Purchaser or such
Institutional Holder may designate) to visit and inspect, under the Company's
guidance, any of the properties of the Company or any Restricted
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Subsidiary, and to examine all of their books of account, records, reports and
other papers, to make copies and extracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective officers,
employees, and independent public accountants (and by this provision the Company
authorizes such accountants to discuss with such Purchaser the finances and
affairs of the Company and its Restricted Subsidiaries) all at such reasonable
times and as often as may be reasonably requested. The Company shall be required
to pay or reimburse any such Purchaser or any such Institutional Holder for
reasonable expenses which such Purchaser or any such Institutional Holder may
incur in connection with any such visitation or inspection occurring at such
time as any Event of Default shall have occurred and be continuing.
All information which is furnished to or obtained by any holder of
Notes pursuant to this ss.5.16 or otherwise pursuant to this Agreement shall, if
so requested in writing by the Company, be received and held in confidence
unless or until the same has been publicly disclosed by the Company; provided,
however, nothing herein contained shall limit or impair the right or obligation
of any Institutional Holder of the Notes to disclose such information: (a) to
its auditors, trustees, advisors, attorneys, employees or agents, (b) when
required by any law, ordinance or governmental order, regulation, rule, policy,
investigation or any regulatory authority request, (c) as may be required or
appropriate in any report, statement or testimony submitted to any municipal,
state, provincial or Federal regulatory body having or claiming to have
jurisdiction over such Institutional Holder or to the United States National
Association of Insurance Commissioners or similar organizations or their
successors, (d) which is publicly available or readily ascertainable from public
sources, or which is received by any Institutional Holder of the Notes from a
third Person who or which is not bound to keep the same confidential, (e) in
connection with any proceeding, case or matter pending (or on its face purported
to be pending) before any court, tribunal, arbitration board or any governmental
agency, commission, authority, board or similar entity, (f) in connection with
the enforcement by an Institutional Holder of its rights under or in respect of
this Agreement or the Notes after the occurrence of a Default or Event of
Default, or (g) to the extent necessary in connection with any contemplated
transfer of any of the Notes by an Institutional Holder thereof (it being
understood and agreed that any such transferee which purchases such Notes shall
itself be bound by the terms and provisions hereof.)
Section 5.17. Subsidiary Guaranty. The Company will cause each
Subsidiary which is, or becomes, a guarantor of Indebtedness under the Bank
Credit Agreement (excluding any Foreign Subsidiary which borrows amounts
denominated in its local currency (and Guaranties of such borrowings by other
Foreign Subsidiaries))to be a party to the Subsidiary Guaranty. In the case of
any such Subsidiary which becomes a guarantor under the Bank Credit Agreement
after the Closing Date, concurrently with such Subsidiary becoming a guarantor
under the Bank Credit Agreement, the Company will deliver to each holder of the
Notes the following items:
(i) a joinder agreement in respect of the Subsidiary Guaranty
which shall have been duly executed by such Subsidiary;
(ii) a certificate signed by the President, a Vice President
or Treasurer of the Company making representations and warranties to
the effect of those contained in
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Paragraphs 10 and 12 of Exhibit B, with respect to such Subsidiary and
the Subsidiary Guaranty, as applicable; and
(iii) an opinion of counsel (who may be in-house counsel for
the Company) addressed to each of the holders of the Notes satisfactory
to the holders of a majority in principal amount of the Notes
outstanding at the time, to the effect that the joinder to the
Subsidiary Guaranty has been duly authorized, executed and delivered by
such Subsidiary and that the Subsidiary Guaranty constitutes the legal,
valid and binding contract and agreement of such Subsidiary Guarantor
enforceable in accordance with its terms, except as an enforcement of
such terms may be limited by bankruptcy, insolvency, fraudulent
conveyance and similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles.
Section 5.18. Restrictions on Subsidiaries. The Company will not, and
will not permit any Restricted Subsidiary to, agree to or otherwise permit to
exist any contractual limitation on the payment of dividends or other
distributions to the Company.
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
Section 6.1. Events of Default. Any one or more of the following shall
constitute an "Event of Default" as the term is used herein:
(a) Default shall occur in the payment of interest on any Note
when the same shall have become due and such default shall continue for
more than five days; or
(b) Default shall occur in the making of any required
prepayment on any of the Notes as provided inss.2; or
(c) Default shall occur in the making of any other payment of
the principal of any Note or the premium thereon at the expressed or
any accelerated maturity date or at any date fixed for prepayment; or
(d) Default shall be made in the payment of the principal of
or interest on Indebtedness for borrowed money of the Company or any
Restricted Subsidiary (other than the Notes) aggregating more than
$3,000,000 as and when the same shall become due and payable by the
lapse of time, by declaration, by call for redemption or otherwise, and
such default shall continue beyond the period of grace, if any, allowed
with respect thereto; or
(e) Default or the happening of any event shall occur under
any indentures, agreements or other instruments (other than the
Agreement) under which any Indebtedness for borrowed money of the
Company or any Restricted Subsidiary aggregating more than $3,000,000
may be issued and such defaults or events shall continue for a period
of time sufficient to permit the acceleration of the maturity of such
Indebtedness of the Company or such Restricted Subsidiaries, as the
case may be, outstanding thereunder; or
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(f) Default shall occur in the observance or performance of
any covenant or agreement contained inss.5.6 throughss.5.12 hereof; or
(g) Default shall occur in the observance or performance of
any other provision of this Agreement which is not remedied or waived
within 30 days after the chief executive officer or the chief operating
officer or the chief financial officer of the Company first has actual
knowledge of such default; or
(h) if any representation or warranty made by the Company
herein, or made by the Company in any statement or certificate
furnished by the Company or any Subsidiary in connection with the
consummation of the issuance and delivery of the Notes or furnished by
the Company or any Subsidiary pursuant hereto, is untrue in any
material respect as of the date of the issuance or making thereof; or
(i) the Subsidiary Guaranty ceases to be in full force and
effect or any Subsidiary Guarantor shall contest or deny in writing the
validity or enforceability of any of its obligations under the
Subsidiary Guaranty; or
(j) final judgment or judgments for the payment of money
aggregating in excess of $1,000,000 is or are outstanding against the
Company or any Restricted Subsidiary or against any property or assets
of either and any one of such judgments has remained unpaid, unvacated,
unbonded or unstayed by appeal or otherwise for a period of 60 days
from the date of its entry; provided, however, that the existence of
such judgment or judgments shall not constitute an Event of Default if
(1) the aggregate amount of such judgment or judgments shall be fully
covered by insurance issued by financially sound and reputable insurers
and (2) within such 60 day period, the Company shall have caused such
insurers to provide the holders of the Notes with written confirmation
that such coverage (i) equals or exceeds the amount of such judgment or
judgments and (ii) is not being contested as to amount or coverage by
such insurers; or
(k) a custodian, receiver, liquidator or trustee of the
Company or any Principal Subsidiary, or of any of the property of
either, is appointed or takes possession and such appointment or
possession remains uncontested or in effect for more than 60 days; or
the Company or any Principal Subsidiary generally fails to pay its
debts as they become due or admits in writing its inability to pay its
debts as they mature; or the Company or any Principal Subsidiary is
adjudicated bankrupt or insolvent; or an order for relief is entered
under the Federal Bankruptcy Code against the Company or any Principal
Subsidiary; or any of the material property of either is sequestered by
court order and the order remains in effect for more than 60 days; or a
petition is filed against the Company or any Principal Subsidiary under
any bankruptcy, reorganization, arrangement, insolvency, readjustment
of debt, dissolution or liquidation law of any jurisdiction, whether
now or subsequently in effect, and is not stayed or dismissed within 60
days after filing; or
(l) the Company or any Principal Subsidiary files a petition
in voluntary bankruptcy or seeking relief under any provision of any
bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation law of any
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jurisdiction, whether now or subsequently in effect; or consents to the
filing of any petition against it under any such law; or consents to
the appointment of or taking possession by a custodian, receiver,
trustee or liquidator of the Company, any Principal Subsidiary, or any
of the property of either.
Section 6.2. Notice to Holders. When any Event of Default described in
ss.6.1 has occurred, or if the holder of any Note or of any other evidence of
Indebtedness of the Company gives any notice or takes any other action with
respect to a claimed default, the Company agrees to give notice within three
business days of such event to all holders of the Notes then outstanding.
Section 6.3. Acceleration of Maturities. When any Event of Default
described in paragraph (a), (b) or (c) of ss.6.1 has happened and is continuing,
any holder of any Note may, and when any Event of Default described in
paragraphs (d) through (j), inclusive, of ss.6.1 has happened and is continuing,
the holder or holders of 70% or more of the principal amount of Notes at the
time outstanding may, in addition to any other rights and remedies available at
law or in equity, by notice in writing sent in the manner provided in ss.9.6
hereof to the Company, declare the entire principal and all interest accrued on
all Notes to be, and all Notes shall thereupon become, forthwith due and
payable, without any presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived. When any Event of Default described in
paragraph (k) or (l) of ss.6.1 has occurred, then all outstanding Notes shall
immediately become due and payable without presentment, demand or notice of any
kind. Upon the Notes becoming due and payable as a result of any Event of
Default as aforesaid, the Company will forthwith pay to the holders of the Notes
the entire principal and interest accrued on the Notes plus, to the extent not
prohibited by law, an amount as liquidated damages for the loss of the bargain
evidenced hereby (and not as a penalty) equal to the applicable Make-Whole
Amount determined as of the date on which the Notes shall so become due and
payable. No course of dealing on the part of any holder of the Notes nor any
delay or failure on the part of any holder of the Notes to exercise any right
shall operate as a waiver of such right or otherwise prejudice such holder's
rights, powers and remedies. The Company further agrees, to the extent permitted
by law, to pay to the holder or holders of the Notes all reasonable costs and
expenses incurred by them in the collection of any Notes upon any default
hereunder or thereon, including reasonable compensation to such holder's or
holders' attorneys for all services rendered in connection therewith.
Section 6.4. Rescission of Acceleration. The provisions of ss.6.3 are
subject to the condition that if the principal of and accrued interest on all or
any outstanding Notes have been declared immediately due and payable by reason
of the occurrence of any Event of Default described in paragraphs (a) through
(k), inclusive, of ss.6.1, the holders of not less than 75% in aggregate
principal amount of the Notes then outstanding may, by written instrument filed
with the Company, rescind and annul such declaration and the consequences
thereof; provided that at the time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the payment of
any monies due pursuant to the Notes or the Agreement;
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(b) all arrears of interest on all the Notes and all other
sums payable under the Notes and under the Agreement (except any
principal, interest or premium on the Notes which has become due and
payable solely by reason of such declaration under ss.6.3) shall have
been duly paid; and
(c) each and every other Default and Event of Default shall
have been made good, cured or waived pursuant toss.7.1;
and provided further that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereto.
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS
Section 7.1. Consent Required. Any term, covenant, agreement or
condition of this Agreement may, with the consent of the Company, be amended or
compliance therewith may be waived (either generally or in a particular instance
and either retroactively or prospectively), if the Company shall have obtained
the consent in writing of the holders of at least 70% in aggregate principal
amount of outstanding Notes; provided that without the written consent of the
holders of all of the Notes then outstanding, no such amendment or waiver shall
be effective (a) which will change the time of payment (including any prepayment
required by ss.2.1) of the principal of or the interest on any Note or reduce
the principal amount thereof or change the rate of interest thereon, or (b)
which will change any of the provisions with respect to optional prepayments, or
(c) which will change the percentage of holders of the Notes required to consent
to any such amendment or waiver of any of the provisions of this ss.7 or ss.6.
Section 7.2. Effect of Amendment or Waiver. Any such amendment or
waiver shall apply equally to all of the holders of the Notes and shall be
binding upon them, upon each future holder of any Note and upon the Company,
whether or not such Note shall have been marked to indicate such amendment or
waiver. No such amendment or waiver shall extend to or affect any obligation not
expressly amended or waived or impair any right consequent thereon.
Section 7.3. Solicitation of Holders. The Company will not solicit,
request or negotiate for or with respect to any proposed waiver or amendment of
any of the provisions of the Agreement or the Notes unless each holder of the
Notes shall be informed thereof by the Company and shall be afforded the
opportunity of considering the same and shall be supplied by the Company with
sufficient information to enable it to make an informed decision with respect
thereto. Executed or true and correct copies of any waiver or amendment effected
pursuant to the provisions of ss.7.1 shall be delivered by the Company to each
registered holder of outstanding Notes following the date on which the same
shall have been executed and delivered by the holder or holders of the requisite
percentage of outstanding Notes. The Company will not, directly or indirectly,
pay or cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, to any holder of the Notes as
consideration for or as an inducement to the entering into by any holder of the
Notes of any waiver or amendment of any of the terms and provisions of this
Agreement unless such remuneration is concurrently paid, on the same terms,
ratably to the holders of all the Notes then outstanding.
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SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS
Section 8.1. Definitions. Unless the context otherwise requires, the
terms hereinafter set forth when used herein shall have the following meanings
and the following definitions shall be equally applicable to both the singular
and plural forms of any of the terms herein defined:
"Act" shall mean the Securities Act of 1933, as amended from time to
time.
"Affiliate" shall mean any Person (other than a Restricted Subsidiary)
(a) which directly or indirectly through one or more intermediaries controls, or
is controlled by, or is under common control with, the Company, (b) which
beneficially owns or holds 5% or more of any class of the Voting Stock of the
Company or (c) 5% or more of the Voting Stock (or in the case of a Person which
is not a corporation, 5% or more of the equity interest) of which is
beneficially owned or held by the Company or a Subsidiary. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of Voting Stock, by contract or otherwise.
"Agreement" shall mean this Note Agreement.
"Bank Credit Agreement" means that certain Three Year Revolving Credit
Agreement dated as of August 31, 2001, by and among the Company, and the
financial institutions named therein, as amended, supplemented, renewed or
restated and any replacement facility which constitutes the primary bank credit
facility of the Company.
"Capitalized Lease" shall mean any lease the obligation for Rentals
with respect to which is required to be capitalized on a balance sheet of the
lessee in accordance with GAAP.
"Capitalized Rentals" of any Person shall mean as of the date of any
determination the amount at which the aggregate Rentals due and to become due
under all Capitalized Leases under which such Person is a lessee would be
reflected as a liability on a consolidated balance sheet of such Person and its
subsidiaries prepared in accordance with GAAP.
"Company" shall mean Johnson Outdoors Inc., a Wisconsin corporation,
and any Person who succeeds to all, or substantially all, of the assets and
business of Johnson Outdoors Inc.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"Consolidated Current Debt" shall mean, without duplication, Current
Debt of the Company and its Restricted Subsidiaries determined on a consolidated
basis eliminating intercompany items.
"Consolidated Funded Debt" shall mean, without duplication, Funded Debt
of the Company and its Restricted Subsidiaries determined on a consolidated
basis eliminating intercompany items.
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"Consolidated Net Income" for any period shall mean net income of the
Company, and its Restricted Subsidiaries from continuing operations determined
on a consolidated basis in accordance with GAAP consistently applied, and
excluding net earnings and losses of any Person (other than a Restricted
Subsidiary) with which the Company or a Restricted Subsidiary shall have
consolidated or which shall have merged or liquidated into or with the Company
or a Restricted Subsidiary prior to the date of such consolidation, merger or
liquidation.
"Consolidated Net Worth" shall mean as of the date of any determination
thereof the amount of the par or stated value of all outstanding capital stock,
capital surplus, and retained earnings of the Company and its Restricted
Subsidiaries, net of all cumulative translation adjustments and contingent
compensation adjustments determined on a consolidated basis in accordance with
GAAP.
"Consolidated Tangible Assets" shall mean as of the date of any
determination thereof the total amount of all Tangible Assets of the Company and
its Restricted Subsidiaries on a consolidated basis after deducting therefrom
all Investments incurred pursuant to and within the limitations of ss.5.12(i).
"Consolidated Tangible Net Worth" shall mean as of the date of any
determination thereof Consolidated Net Worth less (a) all assets of the Company
and its Restricted Subsidiaries that are properly classified as "intangible
assets" all determined in accordance with GAAP and (b) all Investments incurred
pursuant to and within the limitations of ss.5.12(i).
"Consolidated Tangible Net Worth Available for Investments" shall mean
as of the date of any determination thereof the sum of (a) Consolidated Tangible
Net Worth and (b) all Investments incurred pursuant to and within the
limitations of ss.5.12(i) hereof.
"Consolidated Total Assets" of the Company and its Restricted
Subsidiaries shall mean as of the date of any determination thereof the total
assets of the Company and its Restricted Subsidiaries as of such date determined
on a consolidated basis in accordance with GAAP.
"Consolidated Total Capitalization" shall mean as of the date of any
determination thereof the sum of (a) Consolidated Net Worth and (b) Consolidated
Funded Debt.
"Current Debt" of any Person shall mean as of the date of any
determination thereof (a) all Indebtedness for borrowed money or which has been
incurred in connection with the acquisition of property or assets other than
Funded Debt, provided that any portion of such obligations incurred in
connection with the acquisition of property or assets specifically including,
without limitation, obligations which have been incurred by such Person in
connection with any sale, transfer or issuance of stock pursuant to and in
compliance with ss.5.8(c)(5) and which are at the date of any determination of
Current Debt contingent as to amount or as to payment shall not be treated as
Current Debt on such date, (b) Guaranties of Current Debt of others and (c) all
obligations of such Person with respect to receivables sold or otherwise
discounted with recourse which would not constitute Funded Debt pursuant to the
terms of the definition thereof.
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"Default" shall mean any event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute an
Event of Default.
"Domestic Restricted Subsidiary" shall mean any Restricted Subsidiary
(a) which is organized under the laws of the United States or any State thereof
and (b) which conducts substantially all of its business and has substantially
all of its assets within the United States.
"Eighty Percent-Owned Restricted Subsidiary" shall mean a Subsidiary of
which 80% or more (by number of votes) of the Voting Stock shall be beneficially
owned, directly or indirectly, by the Company.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA shall be construed to also refer to any successor sections.
"ERISA Affiliate" shall mean any corporation, trade or business that
is, along with the Company, a member of a controlled group of corporations or a
controlled group of trades or businesses, as described in Section 414(b) and
414(c), respectively, of the Code or Section 4001 of ERISA.
"Excluded Subsidiary Obligations" shall mean (a) the Subsidiary
Guaranty and any other Guaranty of Indebtedness of the Company or another
Restricted Subsidiary by a Subsidiary Guarantor, and (b) obligations of a
Subsidiary Guarantor as co-obligor with the Company or another Restricted
Subsidiary on Indebtedness under note agreements, loan agreements or credit
agreements (other than the Bank Credit Agreement); provided that each creditor
which is the beneficiary of any such Guaranty or which is a party to any such
note agreement, loan agreement or credit agreement (or an agent acting on its
behalf) shall have become a party to the Intercreditor Agreement.
"Event of Default" is defined in ss.6.1.
"Fixed Charges" for any period shall mean on a consolidated basis the
sum of (i) all Rentals (other than Rentals on Capitalized Leases) payable during
such period by the Company and its Restricted Subsidiaries, and (ii) all
Interest Charges on all Indebtedness (including the interest component of
Rentals on Capitalized Leases) of the Company and its Restricted Subsidiaries.
"Fixed Charge Coverage Ratio" shall mean the ratio of (i) Net Income
Available for Fixed Charges to (ii) Fixed Charges determined as of the end of
each fiscal quarter for the period consisting of the immediately preceding four
fiscal quarters (each such rolling four fiscal quarter period being treated as a
single accounting period).
"Foreign Subsidiary" means any Subsidiary of the Company organized
under the laws of a jurisdiction other than the United States or any
jurisdiction thereof.
-31-
"Funded Debt" of any Person shall mean (a) all Indebtedness for or in
respect of borrowed money or which has been incurred in connection with the
acquisition of property or assets, in each case having a final maturity of more
than one year from the date of origin thereof (or which is renewable or
extendible at the option of the obligor for a period or periods of more than one
year from the date of origin), including all payments in respect thereof that
are required to be made within one year from the date of any determination of
Funded Debt, whether or not the obligation to make such payment shall constitute
a current liability of the obligor under GAAP, provided that any portion of such
obligations incurred in connection with the acquisition of property or assets
specifically including, without limitation, obligations which have been incurred
by such Person in connection with any sale, transfer or issuance of capital
stock pursuant to and in compliance with ss.5.8(c)(5) and which are at the date
of any determination of Funded Debt contingent as to amount or as to payment
shall not be treated as Funded Debt on such date, (b) all Capitalized Rentals,
(c) all Guaranties by such Person of Funded Debt of others and (d) all
obligations of such Person with respect to receivables sold or otherwise
discounted with recourse. For purposes of any determination of under this
Agreement, revolving credit Indebtedness under the Bank Credit Agreement shall
not be deemed to be Funded Debt except to the extent that such Indebtedness
shall be included in the Average Outstanding Balance of Consolidated Current
Debt determined in accordance with ss.5.6.
"GAAP" shall mean United States generally accepted accounting
principles as in effect from time to time. Notwithstanding the foregoing, in the
event that any Accounting Changes (as defined below) shall occur, all financial
covenants, standards and terms in this Agreement shall continue to be calculated
or construed as if such Accounting Changes had not occurred. "Accounting
Changes" means: changes in accounting principles required by the promulgation of
any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board or the American Institute of Certified Public Accountants or, if
applicable, the Securities and Exchange Commission (or successors thereto or
agencies with similar functions).
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation, of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent or
otherwise, by such Person: (a) to purchase such Indebtedness or obligation or
any property or assets constituting security therefor, (b) to advance or supply
funds (1) for the purchase or payment of such Indebtedness or obligation, (2) to
maintain working capital or other balance sheet condition or otherwise to
advance or make available funds for the purchase or payment of such Indebtedness
or obligation, or (c) to lease property or to purchase Securities or other
property or services primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of the primary obligor to make payment
of the Indebtedness or obligation, or (d) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purposes of all computations made under this Agreement, a
Guaranty in respect of any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such Indebtedness for borrowed
money which has been guaranteed, and a Guaranty in respect of any other
obligation or any dividend shall be deemed to be Indebtedness equal to the
maximum aggregate amount of such obligation or dividend.
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"Indebtedness" of any Person shall mean and include (a) obligations of
such Person for borrowed money or which have been incurred in connection with
the acquisition of property or assets (except for obligations under bona fide
employment, consulting, non-competition, lease and similar agreements), provided
that any portion of such obligations which have been incurred in connection with
the acquisition of property or assets specifically including, without
limitation, obligations which have been incurred by such Person in connection
with any sale, transfer or issuance of stock pursuant to and in compliance with
ss.5.8(c)(5) and which are at the date of any determination of Indebtedness
contingent as to amount or as to payment shall not be treated as Indebtedness on
such date, (b) obligations secured by any Lien upon property or assets owned by
such Person, even though such Person has not assumed or become liable for the
payment of such obligations, (c) obligations created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person, notwithstanding the fact that the rights and remedies
of the seller, lender or lessor under such agreement in the event of default are
limited to repossession or sale of property, (d) all Guaranties by such Person
of obligations of others of the character referred to in this definition, (e)
Capitalized Rentals, and (f) all obligations of such Person with respect to
receivables sold or otherwise discounted with recourse.
"Institutional Holder" shall mean any of the following Persons: (a) any
bank or any savings and loan association, savings institution, trust company or
other institution acting for its own account or in a fiduciary capacity, (b) any
insurance company, (c) any pension, retirement or profit sharing trust or fund
within the meaning of Title I of ERISA or for which any bank, trust company,
national banking association or investment adviser registered under the
Investment Advisers Act of 1940, as amended, is acting as trustee or agent, (d)
any investment company or business development company, as defined in the
Investment Company Act of 1940, as amended, (e) any broker or dealer registered
under the Securities Exchange Act of 1934, as amended, who is a member of a
national securities exchange or any investment adviser registered under the
Investment Adviser Act of 1940, as amended, (f) any government, any public
employees' pension or retirement system, or any other governmental agency
supervising the investment of public funds, (g) any other entity all of the
equity owners of which are Institutional Holders or (h) any other Person which
may be within the definition of "qualified institutional buyer" as such term is
used in Rule 144A, as from time to time in effect, promulgated under the Act.
"Intercreditor Agreement" is defined in Section 1.2.
"Interest Charges" for any period shall mean all interest and all
amortization of debt discount and expense on any particular Indebtedness for
which such calculations are being made.
"Investments" of any Person shall mean all investments, in cash or by
delivery of property made, directly or indirectly in any Person, whether by
acquisition of shares of capital stock, indebtedness or any other obligations or
Securities or by loan, advance, capital contributions or otherwise.
"Lien" shall mean any interest in property securing an obligation owed
to, or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law,
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statute or contract, including, without limitation, the security interest
arising from a mortgage, encumbrance, pledge, conditional sale or trust receipt
or a lease, consignment or bailment for security purposes and including any
Capitalized Lease. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
lease and other similar title exceptions and encumbrances affecting real
property. For the purpose of this Agreement, the Company or a Restricted
Subsidiary shall be deemed to be the owner of any property which it has acquired
or holds subject to a conditional sale agreement or other arrangement pursuant
to which title to the property has been retained by or vested in another Person
for security purposes.
"Make-Whole Amount" shall mean an amount equal to the excess, if any,
of the Discounted Value of the Remaining Scheduled Payments with respect to the
Called Principal of the 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 a Note, the
principal of the Note that is to be prepaid pursuant to ss.2.2 or 2.3
or has become or is declared to be immediately due and payable pursuant
to ss.6.3, as the context requires.
"Discounted Value" means, with respect to the Called Principal
of a 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 Note is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called
Principal of a Note, 0.50% plus the yield to maturity implied by (i)
the yields reported, as of 10:00 A.M. (New York City time) on the
second Business Day preceding the Settlement Date with respect to such
Called Principal, on the display designated as "PX-1" on the Bloomberg
Financial Market Screen (or such other display as may replace "PX-1" on
the Bloomberg Financial Market Screen) 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. Such implied yield 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 on a straight line
basis 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.
-34-
"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 a 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 Note, 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 ss.2.2 or 2.3 or 6.3.
"Settlement Date" means, with respect to the Called Principal
of a Note, the date on which such Called Principal is to be prepaid
pursuant to ss.2.2, 2.3 or has become or is declared to be immediately
due and payable pursuant to ss.6.2, as the context requires.
"Multiemployer Plan" shall have the meaning as in ERISA.
"Net Income Available for Fixed Charges" for any period shall mean the
sum of (i) Consolidated Net Income during such period plus (to the extent
deducted in determining Consolidated Net Income), (ii) all provisions for any
Federal, state or other income taxes made by the Company and its Restricted
Subsidiaries during such period, and (iii) Fixed Charges of the Company and its
Restricted Subsidiaries during such period.
"Overdue Rate" shall mean as of the date of any determination thereof
the lesser of (a) the maximum rate permitted by law and (b) 9.82% per annum.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, and a government or agency or political subdivision
thereof.
"Plan" shall mean a plan that is both a "pension plan," as such term is
defined in Section 3(2) of ERISA, and a "defined benefit pension plan" as
defined in Section 414(j) of the Internal Revenue Code of 1986 which is
established or maintained by the Company or any ERISA Affiliate or as to which
the Company or any ERISA Affiliate contributed or is a member or otherwise may
have any liability.
"Principal Subsidiary" shall mean any Restricted Subsidiary which had
(a) total assets, on a consolidating basis, as of the last day of the most
recently ended fiscal quarter of the
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Company, of an amount equal to or greater than 2% of Consolidated Total Assets
of the Company as of the last day of such fiscal quarter, or (b) net income, on
a consolidating basis, for the Company's most recent fiscal year, equal to or
greater than 2% of Consolidated Net Income of the Company for such year.
"Rentals" of any Person shall mean and include all fixed rents
(including as such all payments which the lessee is obligated to make to the
lessor on termination of the lease or surrender of the property) payable by such
Person, as lessee or sublessee under a lease of real or personal property, but
shall be exclusive of any amounts required to be paid by such Person (whether or
not designated as rents or additional rents) on account of maintenance, repairs,
insurance, taxes and similar charges. Fixed rents under any so-called
"percentage leases" shall be computed solely on the basis of the minimum rents,
if any, required to be paid by the lessee regardless of sales volume or gross
revenues.
"Reportable Event" shall have the same meaning as in ERISA.
"Restricted Subsidiary" shall mean any Subsidiary of which more than
50% (by number of votes) of the Voting Stock is beneficially owned, directly or
indirectly, by the Company.
"Security" shall have the same meaning as in Section 2(l) of the
Securities Act of 1933, as amended.
The term "subsidiary" shall mean, as to any particular parent
corporation, any corporation of which more than 50% (by number of votes) of the
Voting Stock shall be owned by such parent corporation and/or one or more
corporations which are themselves subsidiaries of such parent corporation. The
term "Subsidiary" shall mean a subsidiary of the Company.
"Subsidiary Guarantor" means each of the domestic Subsidiaries of the
Company on the date of this Agreement and each other Subsidiary of the Company
that subsequent to the date of this Agreement becomes a party to the Subsidiary
Guaranty in accordance with ss.5.17 of this Agreement.
"Subsidiary Guaranty" is defined in ss.1.2.
"Tangible Assets" of any Person shall mean, as of the date of any
determination thereof, the total amount of all assets of such Person (less
depreciation, depletion, and other properly deductible valuation reserves) after
deducting the following: good will, patents, trade names, trade marks,
copyrights, franchises, experimental expense, organization expense, unamortized
debt discount and expense, deferred charges, the excess of cost of shares
acquired over book value of related assets, any write up in the book value of
any asset resulting from a revaluation thereof subsequent to March 29, 1991
(except in connection with the acquisition of such assets) and such other assets
as are properly classified as "intangible assets" in accordance with GAAP.
"Voting Stock" shall mean Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or Persons performing similar
functions).
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"Wholly-owned" when used in connection with any Subsidiary shall mean a
Subsidiary of which all of the issued and outstanding shares of stock (other
than directors' qualifying shares or shares owned by foreign domiciliaries as
required by law) shall be owned by the Company and/or one or more of its
Wholly-Owned Restricted Subsidiaries.
Section 8.2. Accounting Principles. Where the character or amount of
any asset or liability or item of income or expense is required to be determined
or any consolidation or other accounting computation is required to be made for
the purposes of this Agreement, the same shall be done in accordance with GAAP,
to the extent applicable, except where such principles are inconsistent with the
specific provisions of this Agreement.
Section 8.3. Directly or Indirectly. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether the action in
question is taken directly or indirectly by such Person.
SECTION 9. MISCELLANEOUS.
Section 9.1. Registration of Notes. The Company shall cause to be kept
at its principal office a register for the registration and transfer of the
Notes (hereinafter called the "Note Register"), and the Company will register or
transfer or cause to be registered or transferred, as hereinafter provided any
Note issued pursuant to this Agreement.
The Person in whose name any registered Note shall be registered shall
be deemed and treated as the owner and holder thereof for all purposes of this
Agreement. Payment of or on account of the principal, premium, if any, and
interest on any registered Note shall be made to or upon the written order of
such registered holder.
Section 9.2. Exchange of Notes. At any time and from time to time, upon
not less than ten days' notice to that effect given by the holder of any Note
initially delivered or of any Note substituted therefor pursuant to ss.9.1, this
ss.9.2 or ss.9.3, and upon surrender of such Note at its office, the Company
will deliver in exchange therefor, without expense to the holder, except as set
forth below, Notes, in registered form, for the same aggregate principal amount
as the then unpaid principal amount of the Note so surrendered, in the
denomination of $3,000,000 or any multiple of $100,000 in excess thereof as such
holder shall specify, dated as of the date to which interest has been paid on
the Note so surrendered or, if such surrender is prior to the payment of any
interest thereon, then dated as of the date of issue, payable to such Person or
Persons, as may be designated by such holder, and otherwise of the same form and
tenor as the Notes so surrendered for exchange; provided that, notwithstanding
the foregoing, any Note issued on the Closing Date or any Note substituted
therefor in a denomination of less than $3,000,000 may be exchanged in whole by
any holder thereof.
Section 9.3. Loss, Theft, Etc. of Notes. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of any
Note, and in the case of any such loss, theft or destruction upon delivery of a
bond or indemnity in such form and amount as shall be reasonably satisfactory to
the Company, or in the event of such mutilation upon surrender and cancellation
of the Note, the Company will make and deliver, without expense to the holder
-37-
thereof, a new Note, of like tenor, in lieu of such lost, stolen, destroyed or
mutilated Note. If any Purchaser or any subsequent Institutional Holder is the
owner of any such lost, stolen or destroyed Note, then the affidavit of an
authorized officer of such owner, setting forth the fact of loss, theft or
destruction and of its ownership of the Note at the time of such loss, theft or
destruction, shall be accepted as satisfactory evidence thereof and no further
indemnity shall be required as a condition to the execution and delivery of a
new Note other than the written agreement of such owner to indemnify the
Company.
Section 9.4. Expenses, Stamp Tax Indemnity. Whether or not the
transactions herein contemplated shall be consummated, the Company agrees to pay
directly all reasonable costs and expenses in connection with the preparation,
execution and delivery of this Agreement and the transactions contemplated
hereby, including but not limited to all investment banking and similar fees,
the reasonable charges and disbursements of Chapman and Cutler, special counsel
to the Purchasers, duplicating and printing costs and charges for shipping the
Notes, adequately insured to such Purchaser's home office or at such other place
as such Purchaser may designate, and all reasonable out-of-pocket costs and
expenses relating to any amendments, waivers or consents pursuant to the
provisions hereof (whether or not the same are actually executed and delivered),
including, without limitation, any amendments, waivers or consents resulting
from any work-out, renegotiation or restructuring relating to the performance by
the Company of its obligations under this Agreement and the Notes. The Company
also agrees that it will pay and save such Purchaser harmless against any and
all liability with respect to obtaining a "private placement number" for the
Notes from Standard & Poor's Corporation in accordance with the requirements of
the National Association of Insurance Commissioners and with respect to stamp
and other taxes, if any, which may be payable or which may be determined to be
payable in connection with the execution and delivery of this Agreement or the
initial issuance of the Notes, whether or not any Notes are then outstanding.
The Company agrees to protect and indemnify each Purchaser against any liability
for any and all brokerage fees and commissions payable or claimed to be payable
to any Person in connection with the transactions contemplated by this
Agreement, other than any such fees or commissions claimed by any Person engaged
by such Purchaser. Each Purchaser hereby represents to the Company that no
broker or finder was employed or retained by it in connection with its purchase
of the Notes.
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative. No
delay or failure on the part of the holder of any Note in the exercise of any
power or right shall operate as a waiver thereof; nor shall any single or
partial exercise of the same preclude any other or further exercise thereof, or
the exercise of any other power or right, and the rights and remedies of the
holder of any Note are cumulative to and are not exclusive of any rights or
remedies any such holder would otherwise have, and no waiver or consent, given
or extended pursuant to ss.7, shall extend to or affect any obligation or right
not expressly waived or consented to.
Section 9.6. Notices. All communications provided for hereunder shall
be in writing and, if to the Purchasers, delivered or mailed by overnight
courier or by facsimile communication, in each case addressed to each Purchaser
at such Purchaser's address appearing on Schedule I to this Agreement or such
other address as such Purchaser or the subsequent holder of any Note initially
issued to such Purchaser may designate to the Company in writing, and, if to the
Company, delivered or mailed by prepaid overnight courier or by facsimile
-38-
communication to the Company at the address specified on page 1 hereof,
Attention: Treasurer, or to such other address as the Company may in writing
designate to the Purchasers or to a subsequent holder of the Note initially
issued to the Purchasers; provided, however, that a notice to any Purchaser by
overnight courier shall only be effective if delivered to such Purchaser at a
street address designated for such purpose in Schedule I attached hereto, and a
notice to any Purchaser by facsimile communication shall only be effective if
confirmed by prepaid overnight courier, or, in either case, as such Purchaser or
a subsequent holder of any Note initially issued to such Purchaser may designate
to the Company in writing.
Section 9.7. Successors and Assigns. This Agreement shall be binding
upon the Company and its successors and assigns and shall inure to the benefit
of each Purchaser and to the benefit of its successors and assigns, including
each successive holder or holders of any Notes; provided, however, that
notwithstanding any other provisions of this Agreement or the Notes, the Notes
shall not be transferable to any Person that is not an Institutional Holder.
Section 9.8. Survival of Covenants and Representations. All covenants,
representations and warranties made by the Company herein and in any
certificates delivered pursuant hereto, whether or not in connection with the
Closing Date, shall survive the closing and the delivery of this Agreement and
the Notes.
Section 9.9. Severability. Should any part of this Agreement for any
reason be declared invalid by a court of competent jurisdiction, such decision
shall not affect the validity of any remaining portion, which remaining portion
shall remain in force and effect as if this Agreement had been executed with the
invalid portion thereof eliminated and it is hereby declared the intention of
the parties hereto that they would have executed the remaining portion of this
Agreement without including therein any such part which may, for any reason, be
declared invalid.
Section 9.10. Reproduction of Documents. This Agreement and all
documents relating thereto, including without limitation, (a) consents, waivers
and modifications which may hereafter be executed, (b) documents received by the
Purchasers at the closing of their respective purchases of the Notes (except the
Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to the Purchasers, may be
reproduced by the Purchasers by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process and each such
Purchaser may destroy any original document so reproduced. The Company agrees
and stipulates that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made by such
Purchaser in the regular course of business) and that any enlargement, facsimile
or further reproduction of such reproduction shall likewise be admissible in
evidence.
Section 9.11. Governing Law; Waiver of Jury Trial. (a) This Agreement
and the Notes issued and sold hereunder shall be governed by and construed in
accordance with Wisconsin law. Notwithstanding the preceding sentence, nothing
in this Agreement shall be construed to subject the holder of any Notes that is
an insurance company to the laws of the State of Wisconsin.
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(b) The Company and the Purchasers each hereby irrevocably and
unconditionally waive trial by jury.
Section 9.12. Captions. The descriptive headings of the various
Sections or parts of this Agreement are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
-40-
The execution hereof by the Purchasers shall constitute a contract
between the Company and the Purchasers for the uses and purposes hereinabove set
forth, and this Agreement may be executed in any number of counterparts, each
executed counterpart constituting an original but all together only one
agreement.
JOHNSON OUTDOORS INC.
By: /s/ Wade T. Neuharth
-----------------------------------
Wade T. Neuharth
Its: Treasurer
-41-
Accepted as of the first date written above.
JOHN HANCOCK LIFE INSURANCE COMPANY
By: /s/ Kathleen E. McDonough
-----------------------------------
Name: Kathleen E. McDonough
Its: Director
-42-
Accepted as of the first date written above.
JOHN HANCOCK VARIABLE LIFE INSURANCE
COMPANY
By: /s/ Kathleen E. McDonough
-----------------------------------
Name: Kathleen E. McDonough
Authorized Signatory
-43-
Accepted as of the first date written above.
MELLON BANK, N.A., solely in its
capacity as Trustee for the Bell
Atlantic Master Trust (as directed
by John Hancock Life Insurance
Company), and not in its individual
capacity
By: /s/ Bernadette Rist
-----------------------------------
Name: Bernadette Rist
Authorized Signatory
THE DECISION TO PARTICIPATE IN THE INVESTMENT, ANY REPRESENTATIONS MADE HEREIN
BY THE PARTICIPANT, AND ANY ACTIONS TAKEN HEREUNDER BY THE PARTICIPANT HAS/HAVE
BEEN MADE SOLELY AT THE DIRECTION OF THE INVESTMENT FIDUCIARY WHO HAS SOLE
INVESTMENT DISCRETION WITH RESPECT TO THIS INVESTMENT.
-44-
Accepted as of the first date written above.
CLARICA LIFE INSURANCE COMPANY-U.S.
By: /s/ Constance L. Keller
-----------------------------------
Name: Constance L. Keller
Title: Executive Director,
Private Placements
-45-
Accepted as of the first date written above.
AMERICAN FAMILY LIFE INSURANCE COMPANY
By: /s/ Phillip Hannifan
-----------------------------------
Name: Phillip Hannifan
Title: Investment Director
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Accepted as of the first date written above.
STATE OF WISCONSIN INVESTMENT BOARD
By: /s/ Monica A. Jaehnig
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Name: Monica A. Jaehnig
Title: Porfolio Manager-Private
Placements
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