JABIL CIRCUIT, INC.
NOTE PURCHASE AGREEMENT
Dated as of May 30, 1996
$50,000,000 6.89% Senior Notes Due May 30, 2004
THIS NOTE PURCHASE AGREEMENT AND THE NOTES MAY BE SUBJECT TO
THE TERMS OF AN INTERCREDITOR AGREEMENT, DATED AS OF MAY 30,
1996, AS MAY BE AMENDED, RESTATED OR OTHERWISE MODIFIED FROM
TIME TO TIME, AMONG CERTAIN LENDERS AND NBD BANK AS COLLATERAL
AGENT. BY ACCEPTANCE OF A NOTE, THE HOLDER THEREOF MAY BECOME
BOUND BY THE PROVISIONS OF SUCH INTERCREDITOR AGREEMENT, WHETHER
OR NOT SUCH HOLDER BECOMES A PARTY THERETO.
TABLE OF CONTENTS
PAGE
1. AUTHORIZATION OF NOTES . . . . . . . . . . . . . . . . . .
. . . 1
2. SALE AND PURCHASE OF NOTES . . . . . . . . . . . . . . . .
. . . 1
3. CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 2
4. CONDITIONS TO CLOSING. . . . . . . . . . . . . . . . .2
4.1 Representations and Warranties . . . . . . . . .2
4.2 Performance; No Default. . . . . . . . . . . . .2
4.3 Compliance Certificates. . . . . . . . . . . . .2
4.4 Opinions of Counsel . . . . . . . . . . . . . . 3
4.5 PurchasePermitted By Applicable Law, etc. . . . 3
4.6 Sale of Other Notes . . . . . . . . . . . . . . 3
4.7 Payment of Special Counsel Fees. . . . . . . . .3
4.8 Private Placement Number . . . . . . . . . . . .4
4.9 Guaranty Agreement . . . . . . . . . . . . . . .4
4.10 Stock Pledge . . . . . . . . . .
. . . . . . . . . . . . . 4 4.11 Bank Loan Agreement. . .
. . . . . . . . . . . . . . . . . 4 4.12 Intercreditor
Agreement. . . . . . . . . . . . . . . . . . 4 4.13
Changes in Corporate Structure . . . . . . . . . . . . . . 4
4.14 Lien Releases. . . . . . . . . . . . . . . . . . . . . .
. 4 4.15 Proceedings and Documents. . . . . . . . . . . .
. . . . . 5
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. . . . . . .
. . . 5 5.1 Organization; Power and Authority. . . . . .
. . . . . . . 5 5.2 Authorization, etc.. . . . . . . . .
. . . . . . . . . . . 5 5.3 Disclosure . . . . . . . . .
. . . . . . . . . . . . . . . 5 5.4 Organization and
Ownership of Shares of Subsidiaries; Affiliates 6 5.5
Financial Statements . . . . . . . . . . . . . . . . . . . 7
5.6 Compliance with Laws, Other Instruments, etc.. . . . . .
. 7 5.7 Governmental Authorizations, etc.. . . . . . . .
. . . . . 7 5.8 Litigation; Observance of Agreements,
Statutes and Orders. 7 5.9 Taxes. . . . . . . . . . . . .
. . . . . . . . . . . . . . 8 5.10 Title to Property;
Leases. . . . . . . . . . . . . . . . . 8 5.11 Licenses,
Permits, etc.. . . . . . . . . . . . . . . . . . 8 5.12
Compliance with ERISA. . . . . . . . . . . . . . . . . . . 9
5.13 Private Offering by the Company. . . . . . . . . . . . .
. 10 5.14 Use of Proceeds; Margin Regulations. . . . . . .
. . . . . 10 5.15 Existing Debt; Future Liens. . . . . . .
. . . . . . . . . 10 5.16 Foreign Assets Control
Regulations, etc. . . . . . . . . . 11 5.17 Status under
Certain Statutes. . . . . . . . . . . . . . . 11 5.18
Environmental Matters. . . . . . . . . . . . . . . . . . . 11
6. REPRESENTATIONS OF THE PURCHASER . . . . . . . . . . . . .
. . . 12 6.1 Purchase for Investment. . . . . . . . . . .
. . . . . . . 12 6.2 Source of Funds. . . . . . . . . . .
. . . . . . . . . . . 12
7. INFORMATION AS TO COMPANY. . . . . . . . . . . . . . . . .
. . . 13 7.1 Financial and Business Information . . . . .
. . . . . . . 13 7.2 Officer's Certificate. . . . . . . .
. . . . . . . . . . . 16 7.3 Inspection . . . . . . . . .
. . . . . . . . . . . . . . . 17
8. PREPAYMENT OF THE NOTES, ETC.. . . . . . . . . . . . . . .
. . . 18 8.1 Required Prepayments; Payment at Maturity. .
. . . . . . . 18 8.2 Optional Prepayments with Make-Whole
Amount. . . . . . . . 18 8.3 Prepayment Upon Change in
Control. . . . . . . . . . . . . 18 8.4 Allocation of
Partial Prepayments. . . . . . . . . . . . . 20 8.5
Maturity; Surrender, etc.. . . . . . . . . . . . . . . . . 20
8.6 Purchase of Notes. . . . . . . . . . . . . . . . . . . .
. 20 8.7 Make-Whole Amount. . . . . . . . . . . . . . . .
. . . . . 21
9. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . .
. . . 22 9.1 Compliance with Law. . . . . . . . . . . . .
. . . . . . . 22 9.2 Insurance. . . . . . . . . . . . . .
. . . . . . . . . . . 22 9.3 Maintenance of Properties. .
. . . . . . . . . . . . . . . 22 9.4 Payment of Taxes and
Claims. . . . . . . . . . . . . . . . 23 9.5 Corporate
Existence, etc.. . . . . . . . . . . . . . . . . 23 9.6
Guaranty Agreement . . . . . . . . . . . . . . . . . . . . 23
9.7 Pari Passu . . . . . . . . . . . . . . . . . . . . . . .
. 24 9.8 Incorporated Covenants . . . . . . . . . . . . .
. . . . . 24 9.9 Additional Covenants.. . . . . . . . . .
. . . . . . . . . 24
10. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . .
. . . 25 10.1 Transactions with Affiliates . . . . . . . .
. . . . . . . 25 10.2 Line of Business.. . . . . . . . . .
. . . . . . . . . . . 25 10.3 Consolidated Tangible Net
Worth. . . . . . . . . . . . . . 25 10.4 Pro Forma
Consolidated Fixed Charges Coverage Ratio. . . . 25 10.5
Limitation on Debt.. . . . . . . . . . . . . . . . . . . . 25
10.6 Limitation on Priority Debt. . . . . . . . . . . . . . .
. 26 10.7 Liens. . . . . . . . . . . . . . . . . . . . . .
. . . . . 26 10.8 Merger, Consolidation, etc.. . . . . . .
. . . . . . . . . 30 10.9 Sale of Assets, etc. . . . . . .
. . . . . . . . . . . . . 31
11. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . .
. . . 33
12. REMEDIES ON DEFAULT, ETC.. . . . . . . . . . . . . . . . .
. . . 36 12.1 Acceleration . . . . . . . . . . . . . . . .
. . . . . . . 36 12.2 Other Remedies . . . . . . . . . . .
. . . . . . . . . . . 37 12.3 Rescission . . . . . . . . .
. . . . . . . . . . . . . . . 37 12.4 No Waivers or
Election of Remedies, Expenses, etc. . . . . 37
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES. . . . . . .
. . . 38 13.1 Registration of Notes. . . . . . . . . . . .
. . . . . . . 38 13.2 Transfer and Exchange of Notes . . .
. . . . . . . . . . . 38 13.3 Replacement of Notes . . . .
. . . . . . . . . . . . . . . 38
14. PAYMENTS ON NOTES. . . . . . . . . . . . . . . . . . . . .
. . . 39 14.1 Place of Payment . . . . . . . . . . . . . .
. . . . . . . 39 14.2 Home Office Payment. . . . . . . . .
. . . . . . . . . . . 39
15. EXPENSES, ETC. . . . . . . . . . . . . . . . . . . . . . .
. . . 39 15.1 Transaction Expenses . . . . . . . . . . . .
. . . . . . . 39 15.2 Survival . . . . . . . . . . . . . .
. . . . . . . . . . . 40
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . .
40
17. AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . . . .
. . . 40 17.1 Requirements . . . . . . . . . . . . . . . .
. . . . . . . 40 17.2 Solicitation of Holders of Notes . .
. . . . . . . . . . . 42 17.3 Binding Effect, etc. . . . .
. . . . . . . . . . . . . . . 42 17.4 Notes held by
Company, etc.. . . . . . . . . . . . . . . . 42
18. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . .
. . . 43
19. REPRODUCTION OF DOCUMENTS. . . . . . . . . . . . . . . . .
. . . 43
20. CONFIDENTIAL INFORMATION . . . . . . . . . . . . . . . . .
. . . 43
21. SUBSTITUTION OF PURCHASER. . . . . . . . . . . . . . . . .
. . . 45
22. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . .
. . . 45 22.1 Additional Notes . . . . . . . . . . . . . .
. . . . . . . 45 22.2 Successors and Assigns . . . . . . .
. . . . . . . . . . . 45 22.3 Payments Due on Non-Business
Days. . . . . . . . . . . . . 45 22.4 Severability . . . .
. . . . . . . . . . . . . . . . . . . 46 22.5 Construction
. . . . . . . . . . . . . . . . . . . . . . . 46 22.6
Counterparts . . . . . . . . . . . . . . . . . . . . . . . 46
22.7 Governing Law. . . . . . . . . . . . . . . . . . . . . .
. 46
SCHEDULE A -- Information Relating to Purchasers
SCHEDULE B -- Defined Terms
SCHEDULE 3 -- Payment Instructions
SCHEDULE 4.13 -- Changes in Corporate Structure
SCHEDULE 5.3 -- Disclosure Materials
SCHEDULE 5.4 -- Subsidiaries of the Company and Ownership
of Subsidiary Stock
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.8 -- Certain Litigation
SCHEDULE 5.11 -- Patents, etc.
SCHEDULE 5.12 -- ERISA
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Existing Debt
SCHEDULE 9.8 -- Incorporated Covenants
SCHEDULE 10.3 -- Certain Definitions Used in Tangible Net
Worth Covenant
EXHIBIT 1 -- Form of 6.89% Senior Note due May 30, 2004
EXHIBIT 4.4(a) -- Form of Opinion of General Counsel of the
Company
EXHIBIT 4.4(b) -- Form of Opinion of Special Counsel for
the Purchasers
EXHIBIT 4.9 -- Form of Guaranty Agreement
EXHIBIT 4.10 -- Form of Pledge Agreement
EXHIBIT 4.12 -- Form of Intercreditor Agreement
JABIL CIRCUIT, INC.
10800 Roosevelt Boulevard St. Petersburg, Florida 33716
$50,000,000 6.89% Senior Notes due May 30,
2004
Dated as of May
30, 1996
[Separately addressed to each of the Purchasers listed in
Schedule A hereto]
Ladies and Gentlemen:
JABIL CIRCUIT, INC., a Delaware corporation (together with
its successors and assigns, the "Company"), agrees with you as
follows:
1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of
$50,000,000 aggregate principal amount of its 6.89% Senior Notes
due May 30, 2004 (the "Notes", such term to include any such
notes issued in substitution therefor pursuant to Section 13 of
this Agreement or the Other Agreements (as hereinafter
defined)). The Notes shall be substantially in the form set out
in Exhibit 1, with such changes therefrom, if any, as may be
approved by you and the Company. Certain capitalized terms used
in this Agreement are defined in Schedule B; references to a
"Schedule" or an "Exhibit" are, unless otherwise specified, to a
Schedule or an Exhibit attached to this Agreement.
2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the
Company will issue and sell to you and you will purchase from
the Company, at the Closing provided for in Section 3, Notes in
the principal amount specified opposite your name in Schedule A
at the purchase price of 100% of the principal amount thereof.
Contemporaneously with entering into this Agreement, the Company
is entering into separate Note Purchase Agreements (the "Other
Agreements") identical with this Agreement with each of the
other purchasers named in Schedule A (the "Other Purchasers"),
providing for the sale at such Closing to each of the Other
Purchasers of Notes in the principal amount specified opposite
its name in Schedule A. Your obligation hereunder and the
obligations of the Other Purchasers under the Other Agreements
are several and not joint obligations and you shall have no
obligation under any Other Agreement and no liability to any
Person for the performance or non-performance by any Other
Purchaser thereunder.
3. CLOSING.
The sale and purchase of the Notes to be purchased by you
and the Other Purchasers shall occur at the offices of Hebb &
Gitlin, One State Street, Hartford, Connecticut 06103, at 10:00
a.m., eastern time, at a closing (the "Closing") on May 30,
1996. At the Closing, the Company will deliver to you one or
more Notes (as set forth below your name on Schedule A), in the
denominations indicated in Schedule A, in the aggregate
principal amount of your purchase, dated the date of the Closing
and payable to you or payable as indicated in Schedule A,
against payment by federal funds wire transfer in immediately
available funds of the purchase price thereof, as directed by
the Company in Schedule 3. If at the Closing the Company shall
fail to tender such Notes to you as provided above in this
Section 3, or any of the conditions specified in Section 4 shall
not have been fulfilled to your satisfaction, you shall, at your
election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights you may have by
reason of such failure or such nonfulfillment.
4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be
sold to you at the Closing is subject to the fulfillment to your
satisfaction, prior to or at the Closing, of the following
conditions:
4.1 Representations and Warranties.
The representations and warranties of the Obligors in the
Financing Documents shall be correct when made and at the time
of the Closing.
4.2 Performance; No Default.
The Obligors shall have performed and complied with all
agreements and conditions contained in the Financing Documents
required to be performed or complied with by them prior to or at
the Closing and after giving effect to the issue and sale of the
Notes (and the application of the proceeds thereof as
contemplated by Schedule 5.14) no Default or Event of Default
shall have occurred and be continuing. Neither the Company nor
any Subsidiary shall have entered into any transaction since the
date of the Memorandum that would have been prohibited by any of
Sections 10.1, 10.5, 10.6, 10.7, 10.8 and 10.9 had such Sections
applied since such date.
4.3 Compliance Certificates.
(a) Company Officer's Certificate. The Company
shall have delivered to you an Officer's Certificate, dated
the date of the Closing, certifying that the conditions
specified in Sections 4.1, 4.2 and 4.13 have been fulfilled.
(b) Company Secretary's Certificate. The Company
shall have delivered to you a certificate of the Secretary
or an Assistant Secretary of the Company, dated the date of
the Closing, certifying as to the resolutions attached thereto
and other corporate proceedings relating to the
authorization, execution and delivery of the Financing
Documents.
(c) Secretary's Certificate of Initial Guarantor.
The Initial Guarantor shall have delivered to you a
certificate of the Secretary or an Assistant Secretary of such
Subsidiary, dated the date of the Closing, certifying as to
the resolutions attached thereto and other corporate
proceedings relating to the authorization, execution and
delivery of the Guaranty Agreement.
4.4 Opinions of Counsel.
You shall have received opinions in form and substance
satisfactory to you, dated the date of the Closing,
(a) from Linda V. Moore, Esq., the General Counsel
of the Company, substantially in the form of Exhibit 4.4(a)
and covering such other matters incident to the transactions
contemplated hereby as you or your counsel may reasonably
request (and the Company hereby instructs its counsel to
deliver such opinion to you), and
(b) from Hebb & Gitlin, your special counsel in
connection with such transactions, substantially in the form
of Exhibit 4.4(b) and covering such other matters incident
to such transactions as you may reasonably request.
4.5 Purchase Permitted By Applicable Law, etc.
On the date of the Closing your purchase of Notes shall (a)
be permitted by the laws and regulations of each jurisdiction to
which you are subject, without recourse to provisions (such as
section 1405(a)(8) of the New York Insurance Law) permitting
limited investments by insurance companies without restriction
as to the character of the particular investment, (b) not
violate any applicable law or regulation (including, without
limitation, Regulation G, T or X of the Board of Governors of
the Federal Reserve System) and (c) not subject you to any tax,
penalty or liability under or pursuant to any applicable law or
regulation, which law or regulation was not in effect on the
date of your execution and delivery of this Agreement. If
requested by you, you shall have received an Officer's
Certificate certifying as to such matters of fact as you may
reasonably specify to enable you to determine whether such
purchase is so permitted.
4.6 Sale of Other Notes.
Contemporaneously with the Closing the Company shall sell
to the Other Purchasers, and the Other Purchasers shall
purchase, the Notes to be purchased by them at the Closing as
specified in Schedule A.
4.7 Payment of Special Counsel Fees.
Without limiting the provisions of Section 15.1, the
Company shall have paid on or before the Closing the fees,
charges and disbursements of your special counsel referred to in
Section 4.4 to the extent reflected in a statement of such
counsel rendered to the Company at least one Business Day prior
to the date of the Closing.
4.8 Private Placement Number.
A private placement number issued by Standard & Poor's
CUSIP Service Bureau (in cooperation with the Securities
Valuation Office of the National Association of Insurance
Commissioners) shall have been obtained for the Notes.
4.9 Guaranty Agreement.
You shall have received a counterpart of the Guaranty
Agreement, duly executed and delivered by the Initial Guarantor,
substantially in the form of Exhibit 4.9 (as amended or
supplemented from time to time, the "Guaranty Agreement"), and
the Guaranty Agreement shall be in full force and effect.
4.10 Stock Pledge.
The Company and the Collateral Agent shall have entered
into the Pledge Agreement and Irrevocable Proxy, substantially
in the form of Exhibit 4.10 (as amended or supplemented from
time to time, the "Pledge Agreement"), and the Pledge Agreement
shall be in full force and effect. The Lien of the Collateral
Agent contemplated by the Pledge Agreement shall have been
perfected.
4.11 Bank Loan Agreement.
The Company, Jabil Circuit Ltd. and the Banks shall have
entered into the Bank Loan Agreement, in form and substance
satisfactory to you, and the Company shall have delivered to you
copies of the Bank Loan Agreement and each other document
executed in connection therewith requested by you, certified as
true and correct by a Responsible Officer.
4.12 Intercreditor Agreement.
The Banks, you and the Other Purchasers and the Collateral
Agent shall have executed and delivered (and the Obligors shall
have executed and delivered the consent and agreement thereto)
the Intercreditor Agreement, substantially in the form of
Exhibit 4.12 (as amended from time to time, the "Intercreditor
Agreement"), and the Intercreditor Agreement shall be in full
force and effect.
4.13 Changes in Corporate Structure.
Except as specified in Schedule 4.13, the Company shall not
have changed its jurisdiction of incorporation or been a party
to any consolidation or merger and shall not have succeeded to
all or any substantial part of the liabilities of any other
entity, at any time following the date of the most recent
financial statements referred to in Schedule 5.5.
4.14 Lien Releases.
You shall have received written evidence, in form and
substance satisfactory to you, that the Company's bank lenders
(or their agent acting on their behalf) under the credit
facility of the Company to be replaced by the Bank Loan
Agreement shall have released all Liens that such banks or such
agent may have on any property of the Company and its
Subsidiaries.
4.15 Proceedings and Documents.
All corporate and other proceedings in connection with the
transactions contemplated by the Financing Documents and all
documents and instruments incident to such transactions shall be
satisfactory to you and your special counsel, and you and your
special counsel shall have received all such counterpart
originals or certified or other copies of such documents as you
or they may reasonably request.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
5.1 Organization; Power and Authority.
Each Obligor is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction
of incorporation, and is duly qualified as a foreign corporation
and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing
could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each Obligor has
the corporate power and authority to own or hold under lease the
properties it purports to own or hold under lease, to transact
the business it transacts, to execute and deliver the Financing
Documents to which it is or is to be a party and to perform the
provisions thereof.
5.2 Authorization, etc.
The Financing Documents have been duly authorized by all
necessary corporate action on the part of the Obligors, and each
of this Agreement, the Pledge Agreement, the Guaranty Agreement
and the Intercreditor Agreement constitutes, and upon execution
and delivery thereof each Note will constitute, a legal, valid
and binding obligation of each Obligor party thereto enforceable
against each such Obligor in accordance with its terms, except
as such enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights
generally and (b) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in
equity or at law).
5.3 Disclosure.
The Company, through its agents, SPP Hambro & Co. and NBD
Bank, N.A. Capital Markets Division, has delivered to you and
each Other Purchaser a copy of a Direct Placement Memorandum,
dated February 1996 (the "Memorandum"), relating to the
transactions contemplated hereby. The Memorandum fairly
describes, in all material respects, the general nature of the
business and principal properties of the Company and its
Subsidiaries. Except as disclosed in Schedule 5.3, the
Financing Documents, the Memorandum, the documents, certificates
or other writings delivered to you by or on behalf of the
Company in connection with the transactions contemplated by the
Financing Documents and the financial statements listed in
Schedule 5.5, taken as a whole, do not contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading in light
of the circumstances under which they were made. Except as
disclosed in the Memorandum or as expressly described in
Schedule 5.3, or in one of the documents, certificates or other
writings identified therein, or in the financial statements
listed in Schedule 5.5, since August 31, 1995, there has been no
change in the business, operations, affairs, financial
condition, assets or properties of the Company or any Subsidiary
except changes that individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. There
is no fact known to the Company that could reasonably be
expected to have a Material Adverse Effect that has not been set
forth herein or in the Memorandum or in the other documents,
certificates and other writings delivered to you by or on behalf
of the Company specifically for use in connection with the
transactions contemplated hereby.
5.4 Organization and Ownership of Shares of Subsidiaries;
Affiliates.
(a) Schedule 5.4 contains (except as noted therein)
complete and correct lists (i) of the Company's
Subsidiaries, showing, as to each Subsidiary, the correct
name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its capital stock or
similar equity interests outstanding owned by the Company
and each other Subsidiary, (ii) of the Company's Affiliates,
other than Subsidiaries, and (iii) of the Company's
directors and senior officers.
(b) All of the outstanding shares of capital stock
or similar equity interests of each Subsidiary shown in
Schedule 5.4 as being owned by the Company and its
Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Company or another
Subsidiary free and clear of any Lien (except as otherwise
disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a
corporation or other legal entity duly organized, validly
existing and in good standing under the laws of its
jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in
each jurisdiction in which such qualification is required by
law, other than those jurisdictions as to which the failure to
be so qualified or in good standing could not, individually
or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Subsidiary has the corporate
or other power and authority to own or hold under lease the
properties it purports to own or hold under lease and to
transact the business it transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise
subject to any legal restriction or any agreement (other
than this Agreement, the agreements listed in Schedule 5.4
and customary limitations imposed by corporate law statutes)
restricting the ability of such Subsidiary to pay dividends
out of profits or make any other similar distributions of
profits to the Company or any of its Subsidiaries that owns
outstanding shares of capital stock or similar equity
interests of such Subsidiary.
5.5 Financial Statements.
The Company has delivered to each Purchaser copies of the
financial statements of the Company and its Subsidiaries listed
in Schedule 5.5. All of said financial statements (including in
each case the related schedules and notes) fairly present in all
material respects the consolidated financial position of the
Company and its Subsidiaries as of the respective dates
specified in such Schedule and the consolidated results of their
operations and cash flows for the respective periods so
specified and have been prepared in accordance with GAAP
consistently applied throughout the periods involved except as
set forth in the notes thereto (subject, in the case of any
interim financial statements, to normal year-end adjustments).
5.6 Compliance with Laws, Other Instruments, etc.
The execution, delivery and performance by the Obligors of
the Financing Documents will not
(a) contravene, result in any breach of, or
constitute a default under, or result in the creation of any
Lien in respect of any property of the Company (other than
as contemplated by the Pledge Agreement) or any Subsidiary
under, any indenture, mortgage, deed of trust, loan,
purchase or credit agreement, lease, corporate charter or
by-laws, or any other agreement or instrument to which the
Company or any Subsidiary is bound or by which the Company or
any Subsidiary or any of their respective properties may be
bound or affected,
(b) conflict with or result in a breach of any of
the terms, conditions or provisions of any order, judgment,
decree, or ruling of any court, arbitrator or Governmental
Authority applicable to the Company or any Subsidiary, or
(c) violate any provision of any statute or other
rule or regulation of any Governmental Authority applicable
to the Company or any Subsidiary.
5.7 Governmental Authorizations, etc.
No consent, approval or authorization of, or registration,
filing or declaration with, any Governmental Authority is
required in connection with the execution, delivery or
performance by the Obligors of the Financing Documents.
5.8 Litigation; Observance of Agreements, Statutes and
Orders.
(a) Except as disclosed in Schedule 5.8, there are
no actions, suits or proceedings pending or, to the
knowledge of the Company, threatened against or affecting
the Company or any Subsidiary or any property of the Company or
any Subsidiary in any court or before any arbitrator of any
kind or before or by any Governmental Authority that,
individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in
default under any term of any agreement or instrument to
which it is a party or by which it is bound, or any order,
judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable
law, ordinance, rule or regulation (including without
limitation Environmental Laws) of any Governmental Authority,
which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material
Adverse Effect.
5.9 Taxes.
The Company and its Subsidiaries have filed all tax returns
that are required to have been filed in any jurisdiction, and
have paid all taxes shown to be due and payable on such returns
and all other taxes and assessments levied upon them or their
properties, assets, income or franchises, to the extent such
taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and
assessments (i) the amount of which is not individually or in
the aggregate Material or (ii) the amount, applicability or
validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or
a Subsidiary, as the case may be, has established adequate
reserves in accordance with GAAP. The Company knows of no basis
for any other tax or assessment that could reasonably be
expected to have a Material Adverse Effect. The charges,
accruals and reserves on the books of the Company and its
Subsidiaries in respect of Federal, state or other taxes for all
fiscal periods are adequate. The Federal income tax liabilities
of the Company and its Subsidiaries have been determined by the
Internal Revenue Service and paid for all fiscal years up to and
including the fiscal year ended August 31, 1995.
5.10 Title to Property; Leases.
The Company and its Subsidiaries have good and sufficient
title to their respective properties that individually or in the
aggregate are Material, including all such properties reflected
in the most recent audited balance sheet referred to in Section
5.5 or purported to have been acquired by the Company or any
Subsidiary after said date (except as sold or otherwise disposed
of in the ordinary course of business), in each case free and
clear of Liens prohibited by this Agreement. All leases that
individually or in the aggregate are Material are valid and
subsisting and are in full force and effect in all material
respects.
5.11 Licenses, Permits, etc.
Except as disclosed in Schedule 5.11,
(a) the Company and its Subsidiaries own or possess
all licenses, permits, franchises, authorizations, patents,
copyrights, service marks, trademarks and trade names, or
rights thereto, that individually or in the aggregate are
Material, without known conflict with the rights of others;
(b) to the best knowledge of the Company, no product
of the Company or any Subsidiary infringes in any material
respect any license, permit, franchise, authorization,
patent, copyright, service mark, trademark, trade name or other
right owned by any other Person; and
(c) to the best knowledge of the Company, there is
no Material violation by any Person of any right of the
Company or any of its Subsidiaries with respect to any
patent, copyright, service mark, trademark, trade name or other
right owned or used by the Company or any of its
Subsidiaries.
5.12 Compliance with ERISA.
(a) The Company and each ERISA Affiliate have
operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance
as have not resulted in and could not reasonably be expected to
result in a Material Adverse Effect. Neither the Company nor
any ERISA Affiliate has incurred any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans (as
defined in section 3 of ERISA), and no event, transaction or
condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by
the Company or any ERISA Affiliate, or in the imposition of
any Lien on any of the rights, properties or assets of the
Company or any ERISA Affiliate, in either case pursuant to
Title I or IV of ERISA or to such penalty or excise tax
provisions or to section 401(a)(29) or 412 of the Code,
other than such liabilities or Liens as would not be
individually or in the aggregate Material.
(b) The present value of the aggregate benefit
liabilities under each of the Plans (other than
Multiemployer Plans), determined as of the end of such Plan's
most recently ended plan year on the basis of the actuarial
assumptions specified for funding purposes in such Plan's
most recent actuarial valuation report, did not exceed the
aggregate current value of the assets of such Plan allocable to
such benefit liabilities. The term "benefit liabilities"
has the meaning specified in section 4001 of ERISA and the
terms "current value" and "present value" have the meaning
specified in section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not
incurred withdrawal liabilities (and are not subject to
contingent withdrawal liabilities) under section 4201 or
4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The expected postretirement benefit obligation
(determined as of the last day of the Company's most
recently ended fiscal year in accordance with Financial
Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated
by section 4980B of the Code) of the Company and its
Subsidiaries is not Material.
(e) Schedule 5.12 sets forth all ERISA Affiliates
and all "employee benefit plans" maintained by the Company
(or any "affiliate" thereof) or in respect of which the
Notes could constitute an "employer security" ("employee benefit
plan" has the meaning specified in section 3 of ERISA,
"affiliate" has the meaning specified in section 407(d) of
ERISA and section V of the Department of Labor Prohibited
Transaction Exemption 95-60 (60 FR 35925, July 12, 1995) and
"employer security" has the meaning specified in section
407(d) of ERISA).
(f) The execution and delivery of the Financing
Documents and the issuance and sale of the Notes hereunder
will not involve any transaction that is subject to the
prohibitions of section 406 of ERISA or in connection with which
a tax could be imposed pursuant to section 4975(c)(1)(A)-(D)
of the Code. The representation by the Company in the first
sentence of this Section 5.12(f) is made in reliance upon
and subject to the accuracy of your representation in Section
6.2 as to the sources of the funds used to pay the purchase
price of the Notes to be purchased by you.
5.13 Private Offering by the Company.
Neither the Company nor anyone acting on its behalf has
offered the Notes or any similar securities for sale to, or
solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any person
other than you, the Other Purchasers and not more than 65 other
Institutional Investors, each of which has been offered the
Notes at a private sale for investment. Neither the Company nor
anyone acting on its behalf has taken, or will take, any action
that would subject the issuance or sale of the Notes to the
registration requirements of section 5 of the Securities Act.
For purposes of this Section 5.13 only, each reference to the
Notes shall be deemed to include a reference to the Guaranty
Agreement.
5.14 Use of Proceeds; Margin Regulations.
The Company will apply the proceeds of the sale of the
Notes as set forth in Schedule 5.14. No part of the proceeds
from the sale of the Notes hereunder will be used, directly or
indirectly, for the purpose of buying or carrying any margin
stock within the meaning of Regulation G of the Board of
Governors of the Federal Reserve System (12 CFR 207), or for the
purpose of buying or carrying or trading in any securities under
such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker
or dealer in a violation of Regulation T of said Board (12 CFR
220). Margin stock does not constitute more than 1% of the
value of the consolidated assets of the Company and its
Subsidiaries and the Company does not have any present intention
that margin stock will constitute more than 1% of the value of
such assets. As used in this Section, the terms "margin stock"
and "purpose of buying or carrying" shall have the meanings
assigned to them in said Regulation G.
5.15 Existing Debt; Future Liens.
(a) Except as described therein, Schedule 5.15 sets
forth a complete and correct list of all outstanding Debt of
the Company and its Subsidiaries as of May 6, 1996 (and
specifying, as to each such Debt, whether it is secured or
unsecured), since which date there has been no Material
change in the amounts, interest rates, sinking funds,
instalment payments or maturities of the Debt of the Company or
its Subsidiaries. Neither the Company nor any Subsidiary is
in default and no waiver of default is currently in effect,
in the payment of any principal or interest on any Debt of
the Company or such Subsidiary and no event or condition exists
with respect to any Debt of the Company or any Subsidiary
that would permit (or that with notice or the lapse of time,
or both, would permit) one or more Persons to cause such Debt to
become due and payable before its stated maturity or before
its regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither
the Company nor any Subsidiary has agreed or consented to
cause or permit in the future (upon the happening of a
contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien not permitted
by Section 10.7.
5.16 Foreign Assets Control Regulations, etc.
Neither the sale of the Notes by the Company hereunder nor
its use of the proceeds thereof, nor any other transaction
contemplated by the Financing Documents, will violate the
Trading with the Enemy Act, as amended, or any of the foreign
assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any
enabling legislation or executive order relating thereto.
NO&C Status under Certain Statutes.
Neither the Company nor any Subsidiary is subject to
regulation under the Investment Company Act of 1940, as amended,
the Public Utility Holding Company Act of 1935, as amended, the
Transportation Acts (49 U.S.C.), as amended, or the Federal
Power Act, as amended.
5.18 Environmental Matters.
Neither the Company nor any Subsidiary has knowledge of any
claim or has received any notice of any claim, and no proceeding
has been instituted raising any claim against the Company or any
of its Subsidiaries or any of their respective real properties
now or formerly owned, leased or operated by any of them or
other assets, alleging any damage to the environment or
violation of any Environmental Laws, except, in each case, such
as could not reasonably be expected to result in a Material
Adverse Effect. Except as otherwise disclosed to you in writing,
(a) neither the Company nor any Subsidiary has
knowledge of any facts that would give rise to any claim,
public or private, of violation of Environmental Laws or
damage to the environment emanating from, occurring on or in any
way related to real properties now or formerly owned, leased
or operated by any of them or to other assets or their use,
except, in each case, such as could not reasonably be expected
to result in a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries
has stored any Hazardous Materials on real properties now or
formerly owned, leased or operated by any of them and has
not disposed of any Hazardous Materials in a manner contrary to
any Environmental Laws in each case in any manner that could
reasonably be expected to result in a Material Adverse
Effect; and
(c) all buildings on all real properties now owned,
leased or operated by the Company or any of its Subsidiaries
are in compliance with applicable Environmental Laws, except
where failure to comply could not reasonably be expected to
result in a Material Adverse Effect.
6. REPRESENTATIONS OF THE PURCHASER.
6.1 Purchase for Investment.
You represent that you are purchasing the Notes for your
own account or for one or more separate accounts maintained by
you or for the account of one or more pension or trust funds and
not with a view to the distribution thereof, provided that the
disposition of your or their property shall at all times be
within your or their control. You understand that the Notes
have not been registered under the Securities Act and may be
resold only if registered pursuant to the provisions of the
Securities Act or if an exemption from registration is
available, except under circumstances where neither such
registration nor such an exemption is required by law, and that
the Company is not required to register the Notes.
6.2 Source of Funds.
You represent, with respect to the funds with which you are
acquiring the Notes, that all of such funds are from or are
attributable to one or more of the following:
(a) General Account -- your general account assets
or from assets of one or more segments of such general
account, and that, solely for purposes of determining
whether such acquisition is a "prohibited transaction" (as
provided for in section 406 of ERISA or section 4975 of the
Code) and in reliance on the representations of the Company
set forth in Section 5.12 and the related disclosure of
"employee benefit plans" set forth in Schedule 5.12, all
requirements for an exemption under Department of Labor
Prohibited Transaction Exemption 95-60 (60 FR 35925, July
12, 1995) in respect of such "employee benefit plans" have been
satisfied; or
(b) Separate Account -- a "separate account" (as
defined in section 3 of ERISA):
(i) 10% Pooled Separate Account -- in respect
of which all requirements for an exemption under
Department of Labor Prohibited Transaction Class
Exemption 90-1 are met with respect to the use of such
funds to purchase the Notes; or
(ii) Identified Plan Assets -- that is
comprised of employee benefit plans identified by you
in writing and with respect to which the Company
hereby warrants and represents that, as of the date of the
Closing, neither the Company nor any ERISA Affiliate
is a "party in interest" (as defined in section 3 of
ERISA) or a "disqualified person" (as defined in section 4975 of
the Code) with respect to any plan so identified; or
(iii) Guaranteed Separate Account -- that is
maintained solely in connection with fixed contractual
obligations of an insurance company, under which any
amounts payable, or credited, to any employee benefit plan
having an interest in such account and to any
participant or beneficiary of such plan (including an
annuitant) are not affected in any manner by the investment
performance of the separate account (as provided by 29
C.F.R. SECTION 2510.3- 101(h)(1)(iii)); or
(c) Qualified Professional Asset Manager -- an
"investment fund" managed by a "qualified professional asset
manager" (as such terms are defined in Part V of Department
of Labor Prohibited Transaction Class Exemption 84-14) and all
the requirements for an exemption under such Exemption are met
with respect to the use of funds to purchase the Notes; or
(d) Excluded Plan -- an employee benefit plan that
is excluded from the provisions of section 406 of ERISA by
virtue of section 4(b) of ERISA; or
(e) Exempt Funds -- a separate investment account
that is not subject to ERISA and no funds of which come from
assets of an "employee benefit plan" or a "plan" or any
other entity that is deemed to hold assets of an "employee
benefit plan" or a "plan" ("employee benefit plan" is
defined in section 3 of ERISA, and "plan" is defined in
section 4975(e)(1) of the Code).
7. INFORMATION AS TO COMPANY.
7.1 Financial and Business Information.
The Company shall deliver to each holder of Notes that is
an Institutional Investor:
(a) Quarterly Statements -- concurrently with the
filing of the Company's Quarterly Report on Form 10-Q with
the Securities and Exchange Commission after the end of each
quarterly fiscal period in each fiscal year of the Company
(other than the last quarterly fiscal period of each such
fiscal year) but in any event within 60 days after the end
of each quarterly fiscal period in each fiscal year of the
Company (other than the last quarterly fiscal period of each
such fiscal year), duplicate copies of
(i) consolidated balance sheets of the Company
and its Subsidiaries, and of the Company and its
Restricted Subsidiaries, and consolidating balance
sheets of the Company and its Restricted Subsidiaries,
as at the end of such quarter, and
(ii) consolidated statements of operations and
cash flows of the Company and its Subsidiaries, and of
the Company and its Restricted Subsidiaries, and
consolidating statements of operations and cash flows of the
Company and its Restricted Subsidiaries, for such quarter
and (in the case of the second and third quarters) for
the portion of the fiscal year ending with such
quarter,
setting forth in each case in comparative form the figures
for the corresponding periods in the previous fiscal year,
all in reasonable detail, prepared in accordance with GAAP
applicable to quarterly financial statements generally, and
certified by a Senior Financial Officer as fairly
presenting, in all material respects, the financial position
of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from
year-end adjustments;
(b) Annual Statements -- concurrently with the
filing of the Company's Annual Report on Form 10-K with the
Securities and Exchange Commission after the end of each
fiscal year of the Company but in any event within 90 days after
the end of each fiscal year of the Company, duplicate copies
of
(i) consolidated balance sheets of the Company
and its Subsidiaries, and of the Company and its
Restricted Subsidiaries, and consolidating balance
sheets of the Company and its Restricted Subsidiaries,
as at the end of such year,
consolidated statements of operations and
cash flows of the Company and its Subsidiaries, and of
the Company and its Restricted Subsidiaries, and
consolidating statements of operations and cash flows of the
Company and its Restricted Subsidiaries, for such year, and
(iii) a consolidated statement of changes in
stockholders' equity of the Company and its
Subsidiaries, and of the Company and its Restricted
Subsidiaries, for such year,
setting forth in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP, and accompanied by
(A) in the case of such consolidated
financial statements, an opinion thereon of
independent certified public accountants of
recognized national standing, which opinion shall state that
such financial statements present fairly, in all
material respects, the financial position of the
companies being reported upon and their results of
operations and cash flows and have been prepared in conformity
with GAAP, and that the examination of such
accountants in connection with such financial
statements has been made in accordance with generally
accepted auditing standards, and that such audit provides a
reasonable basis for such opinion in the
circumstances,
(B) a certification by a Senior Financial
Officer that such consolidated and consolidating
financial statements fairly present, in all
material respects, the financial position of the companies being
reported on and their results of operations and
cash flows, and
(C) a certificate of such accountants
stating that they have reviewed the Financing
Documents and stating further whether, in making
their audit, they have become aware of any condition or event
that then constitutes a Default or an Event of
Default, and, if they are aware that any such
condition or event then exists, specifying the
nature and period of the existence thereof (it being understood
that such accountants shall not be liable,
directly or indirectly, for any failure to obtain
knowledge of any Default or Event of Default unless such
accountants should have obtained knowledge thereof in
making an audit in accordance with generally
accepted auditing standards or did not make such
an audit);
(c) SEC and Other Reports -- promptly upon their
becoming available, one copy of (i) each financial
statement, report, notice or proxy statement sent by the
Company or any Subsidiary to public securities holders
generally, and (ii) each regular or periodic report, each
registration statement (without exhibits except as expressly
requested by such holder), and each prospectus and all
amendments thereto filed by the Company or any Subsidiary
with the Securities and Exchange Commission and of all press
releases and other statements made available generally by the
Company or any Subsidiary to the public concerning
developments that are Material;
(d) Notice of Default or Event of Default --
promptly, and in any event within five days after a
Responsible Officer becoming aware of the existence of any
Default or Event of Default or that any Person has given any
notice or taken any action with respect to a claimed default
hereunder or that any Person has given any notice or taken
any action with respect to a claimed default of the type
referred to in Section 11(f), a written notice specifying
the nature and period of existence thereof and what action
the Company is taking or proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event
within five days after a Responsible Officer becoming aware
of any of the following, a written notice setting forth the
nature thereof and the action, if any, that the Company or an
ERISA Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable
event, as defined in section 4043(b) of ERISA and the
regulations thereunder, for which notice thereof has
not been waived pursuant to such regulations as in effect on the
date of the Closing; or
(ii) the taking by the PBGC of steps to
institute, or the threatening by the PBGC of the
institution of, proceedings under section 4042 of ERISA for
the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Company or
any ERISA Affiliate of a notice from a Multiemployer
Plan that such action has been taken by the PBGC with respect
to such Multiemployer Plan; or
(iii) any event, transaction or condition that
could result in the incurrence of any liability by the
Company or any ERISA Affiliate pursuant to Title I or
IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans, or in the
imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA or such penalty or
excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then
existing, could reasonably be expected to have a
Material Adverse Effect;
(f) Notices from Governmental Authority -- promptly,
and in any event within 30 days of receipt thereof, copies
of any notice to the Company or any Subsidiary from any
Federal or state Governmental Authority relating to any order,
ruling, statute or other law or regulation that could
reasonably be expected to have a Material Adverse Effect;
(g) Information Furnished to Banks, etc. -- not
later than the time furnished to any of the Banks or the
Collateral Agent, copies of each report, statement,
document, notice or other item furnished to any of the Banks or
the Collateral Agent pursuant to Section 5.1(d) or Section
5.1(g) (or any similar successor provisions) of the Bank
Loan Agreement or, upon request of any holder of Notes,
pursuant to any other provision of the Bank Loan Agreement or
any related instrument, agreement or other document, and,
promptly following effectiveness thereof, a copy of each
amendment of, supplement to or waiver with respect to the
Bank Loan Agreement or any related instrument, agreement or
other document;
(h) Termination or Reduction of Commitments Under
Bank Loan Agreement -- within three Business Days of its
delivery to any of the Banks or the agent under the Bank
Loan Agreement, a copy of any request or notice by the
Company to the Banks or such agent to terminate or reduce the
Commitments (as such term is defined in the Intercreditor
Agreement) under the Bank Loan Agreement;
(i) Names and Addresses of Holders of Notes --
promptly following a request therefor by any holder of Notes
that is an Institutional Holder, a list of the names and
addresses of, and principal amount of Notes held by each of, the
holders of Notes (as required to be reflected in the
register maintained by the Company pursuant to Section
13.1); and
(j) Requested Information -- with reasonable
promptness, such other data and information relating to the
business, operations, affairs, financial condition, assets
or properties of the Company or any of its Subsidiaries or
relating to the ability of the Obligors to perform their
obligations under the Financing Documents as from time to
time may be reasonably requested by any such holder of Notes,
including, without limitation, information required by 17
C.F.R. SECTION 230.144A, as amended from time to time.
7.2 Officer's Certificate.
Each set of financial statements delivered to a holder of
Notes pursuant to Section 7.1(a) or Section 7.1(b) shall be
accompanied by a certificate of a Senior Financial Officer
setting forth:
(a) Covenant Compliance -- the information
(including detailed calculations) required in order to
establish whether the Company was in compliance with the
requirements of Section 9.8 and Section 10.3 through Section
10.9, inclusive, during the quarterly or annual period
covered by the statements then being furnished (including
with respect to each such Section, where applicable, the
calculations of the maximum or minimum amount, ratio or
percentage, as the case may be, permissible under the terms
of such Sections, and the calculation of the amount, ratio or
percentage then in existence); and
(b) Event of Default -- a statement that such
officer has reviewed the relevant terms of the Financing
Documents and has made, or caused to be made, under his or
her supervision, a review of the transactions and conditions of
the Company and its Subsidiaries from the beginning of the
quarterly or annual period covered by the statements then
being furnished to the date of the certificate and that such
review shall not have disclosed the existence during such period
of any condition or event that constitutes a Default or an
Event of Default or, if any such condition or event existed
or exists (including, without limitation, any such event or
condition resulting from the failure of the Company or any
Subsidiary to comply with any Environmental Law), specifying
the nature and period of existence thereof and what action
the Company shall have taken or proposes to take with respect
thereto.
7.3 Inspection.
The Company shall permit the representatives of each holder
of Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default
then exists, at the expense of such holder and upon
reasonable prior notice to the Company, to visit the
principal executive office of the Company, to discuss the
affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and (with the
consent of the Company, which consent will not be unreasonably
withheld) its independent public accountants, and (with the
consent of the Company, which consent will not be
unreasonably withheld) to visit the other offices and properties
of the Company and each Subsidiary, all at such reasonable
times and as often as may be reasonably requested in
writing; and
(b) Default -- if a Default or Event of Default then
exists, at the expense of the Company to visit and inspect
any of the offices or properties of the Company or any
Subsidiary, to examine all their respective books of account,
records, reports and other papers, to make copies and
extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and
independent public accountants (and by this provision the
Company authorizes said accountants to discuss the affairs,
finances and accounts of the Company and its Subsidiaries), all
at such times and as often as may be requested.
8. PREPAYMENT OF THE NOTES, ETC.
8.1 Required Prepayments; Payment at Maturity.
On May 30, 1999 and on each May 30 thereafter to and
including May 30, 2003, the Company will prepay $8,333,333.33
principal amount (or such lesser principal amount as shall then
be outstanding) of the Notes at par and without payment of the
Make-Whole Amount or any premium, and the Company will pay all
of the principal amount of the Notes remaining outstanding, if
any, on May 30, 2004.
8.2 Optional Prepayments with Make-Whole Amount.
The Company may, at its option, upon notice as provided
below, prepay at any time all, or from time to time any part of,
the Notes (but if in part, in an amount not less than
$1,000,000), at 100% of the principal amount so prepaid, plus
the Make-Whole Amount determined for the prepayment date with
respect to such principal amount. The Company will give each
holder of Notes written notice of each optional prepayment under
this Section 8.2 not less than 30 days and not more than 60 days
prior to the date fixed for such prepayment. Each such notice
shall specify such date, the aggregate principal amount of the
Notes to be prepaid on such date, the principal amount of each
Note held by such holder to be prepaid (determined in accordance
with Section 8.4), and the interest to be paid on the prepayment
date with respect to such principal amount being prepaid, and
shall be accompanied by a certificate of a Senior Financial
Officer as to the estimated Make-Whole Amount due in connection
with such prepayment (calculated as if the date of such notice
were the date of the prepayment), setting forth the details of
such computation. Two Business Days prior to such prepayment,
the Company shall deliver to each holder of Notes a certificate
of a Senior Financial Officer specifying the calculation of such
Make-Whole Amount as of the specified prepayment date.
Each partial prepayment of the Notes pursuant to this
Section 8.2 will be applied first, to the amount due on the
maturity date of the Notes and second, to the mandatory
prepayments applicable to the Notes, as set forth in Section
8.1, in the inverse order of the maturity thereof.
8.3 Prepayment Upon Change in Control.
(a) Notice and Offer. In the event of
(i) a Change in Control or
(ii) the obtaining of knowledge of a Control
Notice Event by a Senior Financial Officer (including,
without limitation, via the receipt of a notice of a
Control Notice Event from any holder of Notes),
the Company shall, within three Business Days of the
occurrence of either of such events, give written notice of
such Change in Control or Control Notice Event to each
holder of Notes via an overnight courier of national reputation
and, simultaneously with the sending of such written notice,
give telephonic advice of such Change in Control or Control
Notice Event to an investment officer or other similar
representative or agent of each such holder specified in
Schedule A at the telephone number specified therein, or to
such other Person at such other number as any holder of a Note
may specify to the Company in writing. In the event of a
Change in Control, such written notice shall contain, and
such written notice shall constitute, an irrevocable offer to
prepay all, but not less than all, the Notes held by such
holder on a date specified in such notice (the "Control
Prepayment Date") that is not less than 30 days and not more
than 60 days after the date of such notice. (If the Control
Prepayment Date shall not be specified in such notice, the
Control Prepayment Date shall be the first Business Day on
or following the 30th day after such notice.) With respect to
any written notice given by the Company in respect of a
Change in Control, if the Company shall not have received a
written response to such written notice from any holder of
Notes within five Business Days after the date of initially
sending via overnight courier such notice to such holder,
the Company shall immediately send a second written notice
via an overnight courier of national reputation to such holder
of Notes.
(b) Acceptance and Payment; Rejection.
(i) Acceptance and Payment. To accept such
offered prepayment, a holder of Notes shall cause a
notice of such acceptance to be delivered to the
Company not later than the fifth Business Day preceding the
applicable Control Prepayment Date. If so accepted,
such offered prepayment shall be due and payable on
the Control Prepayment Date. Such offered prepayment
shall be made at 100% of the principal amount of such Notes,
together with interest on the principal amount of the
Notes then being prepaid accrued to the Control
Prepayment Date. No Make-Whole Amount shall be payable in
respect of any such Notes.
(ii) Rejection. A failure by any holder of
Notes to respond in writing to all written offers of
prepayment referred to in Section 8.3(a) shall be deemed
to constitute a rejection of such offer by such holder.
(c) Officer's Certificate. Each offer to prepay the
Notes pursuant to this Section 8.3 shall be accompanied by
an Officer's Certificate, dated the date of such offer,
(i) stating the principal amount of each Note
offered to be prepaid;
(ii) specifying the Control Prepayment Date;
(iii) stating the interest to be paid on each
such Note, accrued to the Control Prepayment Date;
(iv) certifying that the conditions of this
Section 8.3 have been fulfilled; and
(v) specifying, in reasonable detail, the
nature and date or proposed date of the Change in
Control.
(d) Notice Concerning Status of Holders of Notes.
Following each Control Prepayment Date, the Company shall,
at the request of any then remaining holder of Notes,
provide to such holder a certificate signed by a Responsible
Officer containing a list of the then current holders of
Notes (together with their addresses) and setting forth as
to each such holder the outstanding principal amount of Notes
held by such holder at such time.
(e) Effect on Mandatory Prepayments. Any partial
prepayment of the Notes pursuant to this Section 8.3 shall
reduce the principal amount of each required prepayment of
the Notes becoming due under Section 8.1 on and after the date
of such prepayment and the principal amount of the required
payment due on May 30, 2004 in the same proportion as the
aggregate unpaid principal amount of the Notes is reduced as
a result of such prepayment.
8.4 Allocation of Partial Prepayments.
In the case of each partial prepayment of the Notes
pursuant to Section 8.1 or Section 8.2, the principal amount of
the Notes to be prepaid shall be allocated among all of the
Notes at the time outstanding in proportion, as nearly as
practicable, to the respective unpaid principal amounts thereof
not theretofore called for prepayment.
8.5 Maturity; Surrender, etc.
In the case of each payment or prepayment of Notes pursuant
to this Section 8 or Section 10.9(c), the principal amount of
each Note to be paid or prepaid, as the case may be, shall
mature and become due and payable on the date fixed for such
payment or prepayment, together with interest on such principal
amount accrued to such date and the applicable Make-Whole
Amount, if any. From and after such date, unless the Company
shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount, if any, as
aforesaid, interest on such principal amount shall cease to
accrue. Any Note paid or prepaid in full shall be surrendered
to the Company and cancelled and shall not be reissued, and no
Note shall be issued in lieu of any prepaid principal amount of
any Note.
8.6 Purchase of Notes.
The Company will not and will not permit any Affiliate to
purchase, redeem, pay, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except upon the payment
or prepayment of the Notes in accordance with the terms of this
Agreement and the Notes. The Company will promptly cancel all
Notes acquired by it or any Affiliate pursuant to any payment,
prepayment or purchase of Notes pursuant to any provision of
this Agreement and no Notes may be issued in substitution or
exchange for any such Notes.
8.7 Make-Whole Amount.
The term "Make-Whole Amount" means, with respect to any
Note, an amount equal to the excess, if any, of the Discounted
Value of the Remaining Scheduled Payments with respect to the
Called Principal of such Note over the amount of such Called
Principal, provided that the Make-Whole Amount may in no event
be less than zero. For the purposes of determining the
Make-Whole Amount, the following terms have the following
meanings:
"Called Principal" means, with respect to any Note,
the principal of such Note that is to be prepaid pursuant to
Section 8.2 or Section 10.9(c), or has become or is declared
to be immediately due and payable pursuant to Section 12.1, as
the context requires.
"Discounted Value" means, with respect to the Called
Principal of any Note, the amount obtained by discounting
all Remaining Scheduled Payments with respect to such Called
Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on
which interest on the Notes is payable) equal to the
Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" means, with respect to the
Called Principal of any Note, 0.50% over 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 "Page 500" on the Telerate Access
Service (or such other display as may replace Page 500 on the
Telerate Access Service) for actively traded U.S. Treasury
securities having a maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date, or
(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 between (1) the actively traded U.S.
Treasury security with the maturity closest to and greater
than the Remaining Average Life and (2) the actively traded
U.S. Treasury security with the maturity closest to and less
than the Remaining Average Life.
"Remaining Average Life" means, with respect to any
Called Principal, the number of years (calculated to the
nearest one-twelfth year) obtained by dividing (i) such
Called Principal into (ii) the sum of the products obtained by
multiplying (a) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by
(b) the number of years (calculated to the nearest one-twelfth
year) that will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to
the Called Principal of any Note, all payments of such
Called Principal and interest thereon that would be due
after the Settlement Date with respect to such Called Principal
if no payment of such Called Principal were made prior to
its scheduled due date, provided that if such Settlement
Date is not a date on which interest payments are due to be made
under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the
amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to Section
8.2, Section 10.9(c) or Section 12.1.
"Settlement Date" means, with respect to the Called
Principal of any Note, the date on which such Called
Principal is to be prepaid pursuant to Section 8.2 or
Section 10.9(c), or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context
requires.
9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
9.1 Compliance with Law.
The Company will and will cause each of its Subsidiaries to
comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without
limitation, Environmental Laws, and will obtain and maintain in
effect all licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their
respective properties or to the conduct of their respective
businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules
or regulations or failures to obtain or maintain in effect such
licenses, certificates, permits, franchises and other
governmental authorizations could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
9.2 Insurance.
The Company will and will cause each of its Subsidiaries to
maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and
businesses against such casualties and contingencies, of such
types, on such terms and in such amounts (including deductibles,
co-insurance and self-insurance, if adequate reserves are
maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a
similar business and similarly situated.
9.3 Maintenance of Properties.
The Company will and will cause each of its Subsidiaries to
maintain and keep, or cause to be maintained and kept, their
respective properties in good repair, working order and
condition (other than ordinary wear and tear), so that the
business carried on in connection therewith may be properly
conducted at all times, provided that this Section shall not
prevent the Company or any Subsidiary from discontinuing the
operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and
the Company has concluded that such discontinuance could not,
individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.
9.4 Payment of Taxes and Claims.
The Company will and will cause each of its Subsidiaries to
file all tax returns required to be filed in any jurisdiction
and to pay and discharge all taxes shown to be due and payable
on such returns and all other taxes, assessments, governmental
charges, or levies imposed on them or any of their properties,
assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have
become delinquent and all claims for which sums have become due
and payable that have or might become a Lien on properties or
assets of the Company or any Subsidiary, provided that neither
the Company nor any Subsidiary need pay any such tax or
assessment or claims if (a) the amount, applicability or
validity thereof is contested by the Company or such Subsidiary
on a timely basis in good faith and in appropriate proceedings,
and the Company or a Subsidiary has established adequate
reserves therefor in accordance with GAAP on the books of the
Company or such Subsidiary or (b) the nonpayment of all such
taxes and assessments in the aggregate could not reasonably be
expected to have a Material Adverse Effect.
9.5 Corporate Existence, etc.
The Company will at all times preserve and keep in full
force and effect its corporate existence. Subject to Sections
10.8 and 10.9, the Company will at all times preserve and keep
in full force and effect the corporate existence of each of its
Restricted Subsidiaries (unless merged with or into the Company
or a Wholly-Owned Restricted Subsidiary) and all rights and
franchises of the Company and its Restricted Subsidiaries
unless, in the good faith judgment of the Company, the
termination of or failure to preserve and keep in full force and
effect such corporate existence, right or franchise could not,
individually or in the aggregate, have a Material Adverse
Effect.
9.6 Guaranty Agreement.
The Company will cause each Subsidiary that at any time
becomes liable in respect of any Guaranty of any of the
obligations under the Bank Loan Agreement or of any related
agreement, instrument or other document after the date of the
Closing to become (simultaneously or prior to becoming liable in
respect of such Guaranty of any of the obligations under the
Bank Loan Agreement or such other related obligations) a
Guarantor under the Guaranty Agreement by executing and
delivering to each holder of Notes a Joinder Agreement in the
form attached to the Guaranty Agreement as Annex 2. Each such
Joinder Agreement shall be accompanied by copies of the
constitutive documents of such Subsidiary and corporate
resolutions (or equivalent) authorizing such transaction, in
each case certified as true and correct by a Responsible Officer
of the Company and an officer of such Subsidiary.
9.7 Pari Passu.
The Company covenants that its obligations under the Notes
and under this Agreement and the Other Agreements do and will
rank at least pari passu with all its other present and future
unsecured Senior Debt including, without limitation, the Bank
Debt.
9.8 Incorporated Covenants.
The Company will, and will cause each Subsidiary to, comply
with the covenants set forth in Schedule 9.8 (as such covenants
may be amended from time to time in accordance with Section
17.1, the "Incorporated Covenants"). The Incorporated
Covenants, and certain related definitions also set forth in
such Schedule, are (with certain modifications) based upon
certain provisions of the Bank Loan Agreement as in effect on
the date of Closing. Nothing in this Section 9.8, in Schedule
9.8 or elsewhere in this Agreement with respect to any of the
Incorporated Covenants shall be deemed to excuse, waive, or
otherwise affect the obligation of the Company to comply with,
each and every other covenant or agreement contained in this
Agreement, it being understood and agreed that the Company is
obligated to comply in all respects with both the Incorporated
Covenants and all such other covenants and agreements.
9.9 Additional Covenants.
If at any time the Company shall enter into, be a party to
or otherwise be bound by the provisions of any instrument or
agreement under or in respect of which Debt of the Company has
been issued, or any agreement relating thereto, whether now or
hereafter existing (including, without limitation, the Bank Loan
Agreement), and such instrument or agreement contains covenants
or other provisions that either are not substantially provided
for in this Agreement, or are more favorable to the lenders or
other creditors thereunder or are more onerous to the Company
than the covenants or other provisions provided for in this
Agreement (provided that this Section 9.9 shall not apply to the
covenant set forth in Section 5.2(c) of the Bank Loan Agreement
as in effect on the date of Closing or as may otherwise be in
effect after the date of Closing so long as such covenant is no
more onerous to the Company than as in effect on the date of
Closing), then the Company shall provide prompt written notice
of such fact to each holder of Notes. The Company agrees, upon
written request therefor delivered by the Required Holders, to
enter into one or more amendments of this Agreement providing
for substantially the same covenants and provisions (as such
covenants or other provisions may be amended from time to time
in accordance with Section 17.1, the "Most Favored Covenants")
as those provided for in such other instrument or agreement
(with such modifications thereof as may be necessary to give the
holders of Notes substantially the same benefits and protections
afforded the lenders or other creditors under such other
instrument or agreement) to the extent required and as may be
selected by the Required Holders in their sole and absolute
discretion.
10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
10.1 Transactions with Affiliates.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, enter into directly or indirectly
any transaction or Material group of related transactions
(including without limitation the purchase, lease, sale or
exchange of properties of any kind or the rendering of any
service) with any Affiliate (other than the Company or another
Restricted Subsidiary), except in the ordinary course and
pursuant to the reasonable requirements of the Company's or such
Restricted Subsidiary's business and upon fair and reasonable
terms no less favorable to the Company or such Restricted
Subsidiary than would be obtainable in a comparable arm's-length
transaction with a Person not an Affiliate.
10.2 Line of Business.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, engage in any business if, as a
result, the general nature of the business in which the Company
and its Restricted Subsidiaries, taken as a whole, would then be
engaged would be substantially changed from the general nature
of the business in which the Company and its Restricted
Subsidiaries, taken as a whole, are engaged on the date of this
Agreement as described in the Memorandum.
10.3 Consolidated Tangible Net Worth.
The Company will not permit or suffer Consolidated Tangible
Net Worth at any time to be less than the sum of (a) $80,000,000
plus (b) 75% of the Net Cash Proceeds of Capital Stock of the
Company offered or otherwise sold after the date of Closing,
plus (c) an aggregate amount equal to 50% of Consolidated Net
Income (but in each case, only if a positive number) for each
completed fiscal year of the Company commencing with the fiscal
year ending August 31, 1996. As used in this Section 10.3, the
terms "Consolidated Tangible Net Worth," "Net Cash Proceeds,"
"Capital Stock" and "Consolidated Net Income" have the meanings
specified in Schedule 10.3.
10.4 Pro Forma Consolidated Fixed Charges Coverage Ratio.
The Company will not, at the end of any fiscal quarter of
the Company, permit the Pro Forma Consolidated Fixed Charges
Coverage Ratio in respect of the 12-month period then ended to
be less than 3.00 to 1.00.
10.5 Limitation on Debt.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, create, assume, incur, guaranty or
otherwise become obligated in respect of any Debt, except:
(a) Debt evidenced by the Notes and the Guaranty
Agreement;
(b) Debt of any Restricted Subsidiary owing to the
Company or a Wholly- Owned Restricted Subsidiary;
(c) Debt in existence as of the date of the Closing
(after giving effect to the application of the proceeds of
the Notes pursuant to Section 5.14) and described in
Schedule 5.15;
(d) additional Debt of the Company and its
Restricted Subsidiaries, not otherwise permitted under
clause (a), clause (b) or clause (c) above, provided that at
the time of the incurrence thereof and after giving effect
thereto and to the application of the proceeds thereof,
Consolidated Debt shall not exceed 60% of Consolidated Total
Capitalization; and
(e) Debt of the Company or any Restricted Subsidiary
extending, renewing or refunding any then existing Debt that
was originally incurred in compliance with clause (a),
clause (b), clause (c) or clause (d) of this Section 10.5,
provided that the principal amount of such new Debt does not
exceed the principal amount of such extended, renewed or
refunded Debt outstanding immediately prior to the incurrence
of such new Debt.
10.6 Limitation on Priority Debt.
The Company will not
(a) create, assume, incur, guaranty or otherwise
become obligated in respect of any Debt secured by any Lien
on any property of the Company or any Restricted Subsidiary
that would constitute a portion of Priority Debt,
(b) permit any Restricted Subsidiary to create,
assume, incur, guaranty or otherwise become obligated in
respect of any Debt that would constitute a portion of
Priority Debt, or
(c) permit the creation of any Lien on property of
the Company or any Restricted Subsidiary to secure any Debt
of the Company or any Restricted Subsidiary that would
constitute a portion of Priority Debt,
unless at the time of the incurrence thereof and after giving
effect thereto and to the application of the proceeds thereof,
and immediately after giving effect to the creation of any such
Lien, Priority Debt would not exceed 10% of Consolidated
Adjusted Net Worth at such time.
10.7 Liens.
(a) Negative Pledge. The Company will not, and will
not permit any of its Restricted Subsidiaries to, directly
or indirectly create, assume, incur or suffer to be created,
assumed or incurred or to exist (upon the happening of a
contingency or otherwise), any Lien on or with respect to
any property or asset (including, without limitation, any
document or instrument in respect of goods or accounts
receivable) of the Company or any such Restricted
Subsidiary, whether now owned or held or hereafter acquired,
or any income or profits therefrom, or assign or otherwise
convey any right to receive income or profits, except:
(i) Liens for taxes, assessments or other
governmental charges that are not yet due and payable
or the payment of which is not at the time required by
Section 9.4;
(ii) Liens
(A) arising from judicial attachments and
judgments,
(B) securing appeal bonds, supersedeas
bonds, and
(C) arising in connection with court
proceedings (including, without limitation,
surety bonds and letters of credit or any other
instrument serving a similar purpose),
provided that the execution or other enforcement of
such Liens is effectively stayed and the claims
secured thereby are being actively contested in good
faith and by appropriate proceedings, and provided further that
the aggregate amount so secured will not at any time
exceed $10,000,000;
Liens (other than any Lien imposed by
ERISA) incurred or deposits made in the ordinary
course of business
(A) in connection with workers'
compensation, unemployment insurance, social
security and other like laws,
(B) to secure (or to obtain letters of
credit that secure) the performance of tenders,
statutory obligations, surety and performance
bonds (of a type other than set forth in Section 10.7(a)(ii)),
bids, leases (other than Capital Leases),
purchase, construction or sales contracts and
other similar obligations, in each case not incurred or made in
connection with the borrowing of money, the
obtaining of advances or credit or the payment of
the deferred purchase price of property,
(C) to secure the claims or demands of
materialmen, mechanics, carriers, warehousemen,
vendors, repairmen, landlords, lessors and other
like Persons, arising in the ordinary course of
business, and
(D) in the nature of reservations,
exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases and
other similar title exceptions or encumbrances
affecting real property,
provided that (1) any amounts secured by such Liens
are not overdue and (2) such Liens do not, in the
aggregate, materially detract from the value of such
property or materially impair the use of such property in the
conduct of the business of the Company, or the conduct
of the business of the Company and its Restricted
Subsidiaries taken as a whole;
(iv) (A) Liens in existence as of the date of
the Closing securing Debt and listed in Schedule
5.15, and
(B) Liens securing renewals, extensions
(as to time) and refinancings of Debt secured by
the Liens listed in Schedule 5.15, provided that
the amount of Debt secured by each such Lien is not
increased in excess of the amount of Debt outstanding on the
date of such renewal, extension or refinancing,
and none of such Liens is extended to include any
additional property of the Company or any
Restricted Subsidiary;
(v) Liens on property of a Restricted
Subsidiary, provided that such Liens secure only
obligations owing to the Company or a Restricted
Subsidiary;
(vi) Liens on property acquired or constructed
by the Company or any Restricted Subsidiary after the
date of the Closing to secure Debt of the Company or
such Restricted Subsidiary incurred in connection with such
acquisition or construction, provided that
(A) no such Lien shall extend to or cover
any property other than the property being
acquired or constructed,
(B) the amount of Debt secured by any
such Lien shall not exceed an amount equal to the
Fair Market Value (as determined in good faith by
the Company) of the property being acquired or
constructed, determined at the time of such acquisition or at
the time of substantial completion of such
construction,
(C) such Lien shall be created
concurrently with or within 180 days after such
acquisition or the substantial completion of such
construction, and
no Default or Event of Default shall
exist at the time of, or after giving effect to,
the creation, incurrence or assumption of such
Lien;
(vii) Liens existing on property at the time of
the acquisition thereof, including Liens existing on
property of a corporation at the time such property is
acquired as an entirety or substantially as an entirety by the
Company or a Restricted Subsidiary, or at the time
such corporation becomes a Restricted Subsidiary or is
merged or consolidated with or into the Company or a
Restricted Subsidiary, provided that
(A) no such Lien shall extend to or cover
any property other than the property subject to
such Lien at the time of any such transaction,
(B) the amount of Debt secured by any
such Lien shall not exceed the Fair Market Value
(as determined in good faith by the Company) of
the property subject thereto, determined at the time of any
such transaction,
(C) such Lien was not created in
contemplation of any such transaction, and
(D) no Default or Event of Default shall
exist at the time of, or after giving effect to,
any such transaction;
(viii)the Lien of the Collateral Agent under the
Pledge Agreement (but, unless otherwise agreed by the
Required Holders, only with respect to collateral
relating to shares in Jabil Circuit Ltd.); and
(ix) Liens securing Debt (other than any Bank
Debt) of the Company or any Restricted Subsidiary and
not otherwise permitted by clauses (i) through (viii),
inclusive, of this Section 10.7(a), but only to the extent that
the Debt secured by each such Lien is, at the time of
the incurrence of such Debt, permitted to be incurred
under Section 10.5(d) or Section 10.5(e), as the case
may be, and Section 10.6.
(b) Equal and Ratable Lien; Equitable Lien. In case
any property shall be subjected to a Lien in violation of
this Section 10.7, the Company will forthwith make or cause
to be made, to the fullest extent permitted by applicable law,
provision whereby the Notes will be secured equally and
ratably with all other obligations secured thereby pursuant
to such agreements and instruments as shall be approved by
the Required Holders, and the Company will cause to be delivered
to each holder of a Note an opinion of independent counsel
to the effect that such agreements and instruments are
enforceable in accordance with their terms, and in any such case
the Notes shall have the benefit, to the full extent that,
and with such priority as, the holders of Notes may be
entitled under applicable law, of an equitable Lien on such
property securing the Notes. Such violation of this Section
10.7 will constitute an Event of Default hereunder, whether
or not any such provision is made pursuant to this Section
10.7(b).
(c) Financing Statements. The Company will not, and
will not permit any of its Restricted Subsidiaries to, sign
or file a financing statement under the Uniform Commercial
Code of any jurisdiction that names the Company or such
Restricted Subsidiary as debtor, or sign any security
agreement authorizing any secured party thereunder to file
any such financing statement, except, in any such case, a
financing statement filed or to be filed to perfect or
protect a security interest that the Company or such
Restricted Subsidiary is entitled to create, assume or incur, or
permit to exist, under the foregoing provisions of this
Section 10.7 or to evidence for informational purposes a
lessor's interest in property leased to the Company or any such
Restricted Subsidiary.
(d) Liens of Restricted Subsidiaries. Each Person
that becomes a Restricted Subsidiary after the date of the
Closing will be deemed to have granted on the date such
Person becomes a Restricted Subsidiary all the Liens in
existence on its property on such date.
(e) Negative Pledge Limitation. The Company will
not, and will not permit any Restricted Subsidiary to, enter
into any agreement (other than the Financing Documents and
the Bank Loan Agreement) with any Person that prohibits or
limits the ability of the Company or any Restricted
Subsidiary (other than Jabil Malaysia) to create, incur,
assume or suffer to exist any Lien upon any of its assets,
rights, revenues or property, real, personal or mixed,
tangible or intangible, whether now owned or hereafter
acquired.
10.8 Merger, Consolidation, etc.
The Company will not, and will not permit any of its
Restricted Subsidiaries to, consolidate or merge with or into
any other Person or convey, transfer or lease all or
substantially all of its assets in a single transaction or
series of transactions to any Person (except that a Restricted
Subsidiary of the Company may (x) merge into, or convey,
transfer or lease all or substantially all of its assets in a
single transaction or series of transactions to, the Company
(if, in the case of a merger, the Company is the survivor of
such merger), (y) consolidate or merge with or into, or convey,
transfer or lease all or substantially all of its assets in a
single transaction or series of transactions to, a Wholly-Owned
Restricted Subsidiary of the Company and (z) convey, transfer or
lease all of its assets in compliance with the provisions of
Section 10.9), provided that the foregoing restriction does not
apply to the consolidation or merger of the Company with or
into, or the conveyance, transfer or lease of all or
substantially all of the assets of the Company in a single
transaction or series of transactions to, any Person so long as:
(a) the successor formed by such consolidation or
the survivor of such merger or the Person that acquires by
conveyance, transfer or lease all or substantially all of
the assets of the Company as an entirety, as the case may be
(the "Successor Corporation"), shall be a solvent
corporation organized and existing under the laws of the
United States of America, any state thereof or the District of
Columbia;
(b) if the Company is not the Successor Corporation,
such corporation shall have executed and delivered to each
holder of Notes its assumption of the due and punctual
performance and observance of each covenant and condition of the
Financing Documents (pursuant to such agreements and
instruments as shall be reasonably satisfactory to the
Required Holders), and the Company shall have caused to be
delivered to each holder of Notes an opinion of independent
counsel reasonably satisfactory to the Required Holders, to
the effect that all agreements or instruments effecting such
assumption are enforceable in accordance with their terms and
comply with the terms hereof; and
(c) immediately after giving effect to such
transaction:
(i) no Default or Event of Default would
exist, and
(ii) the Successor Corporation would be
permitted by the provisions of Section 10.5(d) to
incur at least $1.00 of additional Debt owing to a Person
other than a Restricted Subsidiary.
No such conveyance, transfer or lease of all or substantially
all of the assets of the Company shall have the effect of
releasing the Company or any successor corporation that shall
theretofore have become such in the manner prescribed in this
Section 10.8 from its liability under the Financing Documents.
10.9 Sale of Assets, etc.
(a) Sale of Assets, etc. The Company will not, and
will not permit any of its Restricted Subsidiaries to, make
any Asset Disposition, unless:
(i) in the good faith opinion of the Company,
the Asset Disposition is in exchange for consideration
having a Fair Market Value at least equal to that of
the property exchanged; and
(ii) immediately after giving effect to the
Asset Disposition,
(A) no Default or Event of Default would
exist,
(B) the Company would be permitted by the
provisions of Section 10.5(d) to incur at least
$1.00 of additional Debt owing to a Person other
than a Restricted Subsidiary and the Company would be
permitted by the provisions of Section 10.6 to incur at
least $1.00 of additional Priority Debt,
(C) the Disposition Value of all property
that was the subject of any Asset Disposition
occurring in the then current fiscal year of the
Company would not exceed 10% of Consolidated Total Assets as of
the end of the then most recently ended fiscal
quarter of the Company, and
(D) the Disposition Value of all property
that was the subject of any Asset Disposition
occurring on or after the date of the Closing
would not exceed 25% of Consolidated Total Assets as of the end
of the then most recently ended fiscal quarter of
the Company.
If the Net Proceeds Amount for any Transfer is applied to a
Debt Prepayment Application, as more particularly provided
in subsection (c) of this Section 10.9, or a Property
Reinvestment Application, in each case within 12 months after
such Transfer, then such Transfer, only for the purpose of
determining compliance with subsections (a)(ii)(C) and
(a)(ii)(D) of this Section 10.9 as of any date, shall be deemed
not to be an Asset Disposition.
(b) Sale of Subsidiary Stock. The Company will not,
and will not permit any of its Restricted Subsidiaries to,
sell or otherwise dispose of any shares of Subsidiary Stock
of any Restricted Subsidiary, nor will the Company permit any
such Restricted Subsidiary to issue, sell or otherwise
dispose of any shares of its own Subsidiary Stock; provided
that the foregoing restrictions do not apply to:
(i) the issue of directors' qualifying shares
by any such Restricted Subsidiary;
(ii) any such Transfer of Subsidiary Stock of a
Restricted Subsidiary constituting a Transfer
described in clause (a) of the definition of "Asset
Disposition"; and
(iii) the Transfer of all of the Subsidiary
Stock of a Restricted Subsidiary owned by the Company
and its other Restricted Subsidiaries if:
<u such Transfer satisfies the
requirements of Section 10.9(a),
(B) in connection with such Transfer the
entire investment (whether represented by stock,
Debt, claims or otherwise) of the Company and its
other Restricted Subsidiaries in such Restricted
Subsidiary is sold, transferred or otherwise disposed of to a
Person other than (1) the Company, (2) another
Restricted Subsidiary not being simultaneously
disposed of, or (3) an Affiliate, and
(C) the Restricted Subsidiary being
disposed of has no continuing investment in (1)
any other Restricted Subsidiary not being
simultaneously disposed of, or (2) the Company.
(c) Debt Prepayment Offer. In connection with any
Transfer consummated after the date of the Closing and any
Debt Prepayment Application by the Company pursuant to
subsection (a) of this Section 10.9 with respect thereto, the
following procedure will apply:
(i) The Company shall provide written notice
to each holder of Notes of, and such written notice
shall constitute, an irrevocable offer by the Company
to prepay the Notes of each such holder with such holder's
Ratable Portion of the Net Proceeds Amount with
respect to such Transfer. Such holder's Ratable
Portion of the Net Proceeds Amount shall be applied to the
prepayment of principal of such holder's Notes, plus accrued
interest with respect to such principal amount being
prepaid, plus the Make-Whole Amount with respect to
such principal amount. Such written notice shall be given to
each holder of Notes not less than 30 days and not more
than 60 days prior to the actual date of prepayment
(the "Debt Prepayment Application Date"), and shall
set forth:
(A) the Debt Prepayment Application Date,
(B) the principal amount of the Notes to
be so prepaid, the amount of accrued interest
thereon being paid, and the estimated Make-Whole
Amount due in connection with such prepayment
(calculated as if the date of such notice were the date of the
prepayment), setting forth the details of such
computation, and
(C) a statement describing the Transfer
in respect of such prepayment and a calculation
of the Net Proceeds Amount in respect thereof.
(ii) Each holder of a Note that fails to
respond to such offer in writing at least 10 days
prior to the Debt Prepayment Application Date shall be
deemed to have rejected such offer. The Company may retain for
its own purposes the Ratable Portion of any rejecting
holder.
(iii) Any partial prepayment of the Notes
pursuant to this Section 10.9 shall reduce the
principal amount of each required prepayment of the
Notes becoming due under Section 8.1 on and after the date of
such prepayment and the principal amount of the
required payment due on the maturity date of the Notes
in the same proportion as the aggregate unpaid
principal amount of the Notes is reduced as a result of such
partial prepayment.
11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following
conditions or events shall occur and be continuing:
(a) the Company defaults in the payment of any
principal or Make-Whole Amount, if any, on any Note when the
same becomes due and payable, whether at maturity or at a
date fixed for prepayment or by declaration or otherwise; or
(b) the Company defaults in the payment of any
interest on any Note for more than five Business Days after
the same becomes due and payable; or
(c) (i) the Company defaults in the performance of
or compliance with any term contained in Section
7.1(d) or any of Sections 10.3 through 10.9,
inclusive, or in any Incorporated Covenant in Section 5.2 of
Schedule 9.8, or
(ii) the Company defaults in the performance of
or compliance with any term contained in any
Incorporated Covenant (other than those referred to in
paragraph (c)(i) of this Section 11) and such default is not
remedied within 15 calendar days; or
(d) any Obligor defaults in the performance of or
compliance with any term contained in any Financing Document
(other than those referred to in paragraphs (a), (b) and (c)
of this Section 11) and such default is not remedied within 30
Business Days after the earlier of (i) a Responsible Officer
obtaining actual knowledge of such default and (ii) the
Company receiving written notice of such default from any holder
of a Note; or
(e) any representation or warranty made in writing
by or on behalf of any Obligor or by any officer of such
Obligor in any Financing Document or in any writing
furnished in connection with the transactions contemplated by
any Financing Document proves to have been false or
incorrect in any material respect on the date as of which
made; or
(f) any Obligor or any of their respective
Subsidiaries shall fail to pay any part of the principal of,
the premium or make-whole amount, if any, or the interest on,
or any other payment of money due under any of its Indebtedness
(other than Indebtedness under this Agreement and the
Notes), beyond any period of grace provided with respect
thereto, that individually or together with other such
Indebtedness as to which any such failure exists has an
aggregate outstanding principal amount in excess of
$500,000; or any Obligor or any of their respective
Subsidiaries shall fail to perform or observe any other term,
covenant or agreement contained in any agreement, document
or instrument evidencing or securing any such Indebtedness
having in excess of such aggregate outstanding principal amount,
or under which any such Indebtedness was issued or created,
beyond any period of grace, if any, provided with respect
thereto and any such Obligor or Subsidiary has been notified
by the creditor of such default, or any other event or condition
shall occur or exist, and the effect of any such failure, or
as a consequence of the occurrence or existence of any such
event or condition, is (i) to cause, or permit the holders
of such Indebtedness (or a trustee or other representative on
behalf of such holders) to cause, any payment of such
Indebtedness to become due prior to its regularly scheduled
due date, (ii) that any such Obligor or Subsidiary has become
obligated to purchase or repay any such Indebtedness prior to
its regularly scheduled due date or one or more Persons have
the right to require any such Obligor or Subsidiary so to
purchase or repay such Indebtedness prior to its regularly
scheduled due date or (iii) to permit the holders of such
Indebtedness (or a trustee or other representative on behalf
of such holders) to elect a majority of the board of directors
of any such Obligor or Subsidiary; provided that if an Event
of Default would exist under the foregoing provisions of
this clause (f) solely as a result of a failure by the
Company to perform or observe Section 5.2(c) of the Bank Loan
Agreement, then such failure shall not constitute an Event
of Default unless, as a consequence of such failure, any
such Indebtedness, which Indebtedness individually or together
with other such Indebtedness as to which any such failure
exists has an aggregate outstanding principal amount in
excess of $1,000,000, shall have become due prior to its
regularly scheduled due date, or any such Obligor or
Subsidiary has become obligated to purchase or repay in
excess of such amount of any such Indebtedness prior to its
regularly scheduled due date, or the holders of in excess of
such amount of such Indebtedness (or a trustee on behalf of
such holders) shall have exercised a right to elect a
majority of the board of directors of any such Obligor or
Subsidiary; or
(g) any Obligor or any Restricted Subsidiary (i) is
generally not paying, or admits in writing its inability to
pay, its debts as they become due, (ii) files, or consents
by answer or otherwise to the filing against it of, a petition
for relief or reorganization or arrangement or any other
petition in bankruptcy, for liquidation or to take advantage
of any bankruptcy, insolvency, reorganization, moratorium or
other similar law of any jurisdiction, (iii) makes an
assignment for the benefit of its creditors, (iv) consents
to the appointment of a custodian, receiver, trustee or other
officer with similar powers with respect to it or with
respect to any substantial part of its property, (v) is
adjudicated as insolvent or to be liquidated, or (vi) takes
corporate action for the purpose of any of the foregoing; or
(h) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by
any Obligor or any Restricted Subsidiary, a custodian,
receiver, trustee or other officer with similar powers with
respect to any Obligor or any Restricted Subsidiary or with
respect to any substantial part of the property of any
Obligor or any Restricted Subsidiary, or constituting an order
for relief or approving a petition for relief or
reorganization or any other petition in bankruptcy or for
liquidation or to take advantage of any bankruptcy or insolvency
law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of any Obligor or any Restricted
Subsidiary, or any such petition shall be filed against any
Obligor or any Restricted Subsidiary and such petition shall
not be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of
money aggregating in excess of $10,000,000 are rendered
against one or more of the Obligors and the Restricted
Subsidiaries and which judgments are not, within 45 days after
entry thereof, bonded, discharged or stayed pending appeal,
or are not discharged within 45 days after the expiration of
such stay; or
(j) (i) the Guaranty Agreement shall cease to be
in full force and effect or shall be declared by a
court or governmental authority of competent
jurisdiction to be void, voidable or unenforceable against any
Guarantor,
(ii) the validity or enforceability of the
Guaranty Agreement against any Guarantor shall be
contested by such Guarantor, the Company or any
Affiliate, or
(iii) any Guarantor, the Company or any
Affiliate shall deny that such Guarantor has any
further liability or obligation under the Guaranty Agreement;
or
(k) (i) any Plan shall fail to satisfy the minimum
funding standards of ERISA or the Code for any plan
year or part thereof or a waiver of such standards or
extension of any amortization period is sought or granted under
section 412 of the Code, a notice of intent to terminate any Plan
shall have been or is reasonably expected to be filed
with the PBGC or the PBGC shall have instituted
proceedings under ERISA section 4042 to terminate or appoint a
trustee to administer any Plan or the PBGC shall have
notified the Company or any ERISA Affiliate that a
Plan may become a subject of any such proceedings,
(iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of section
4001(a)(18) of ERISA) under all Plans, determined in
accordance with Title IV of ERISA, shall exceed $100,000,
(iv) the Company or any ERISA Affiliate shall
have incurred or is reasonably expected to incur any
liability pursuant to Title I or IV of ERISA or the
penalty or excise tax provisions of the Code relating to
employee benefit plans,
(v) the Company or any ERISA Affiliate
withdraws from any Multiemployer Plan, or
(vi) the Company or any Restricted Subsidiary
establishes or amends any employee welfare benefit
plan that provides post-employment welfare benefits in
a manner that would increase the liability of the Company or
any Restricted Subsidiary thereunder; and any such event
or events described in clauses (i) through (vi) above,
either individually or together with any other such
event or events, could reasonably be expected to have a Material
Adverse Effect.
As used in Section 11(k), the terms "employee benefit plan"
and "employee welfare benefit plan" shall have the
respective meanings assigned to such terms in section 3 of
ERISA.
12. REMEDIES ON DEFAULT, ETC.
12.1 Acceleration.
(a) If an Event of Default with respect to the
Company described in paragraph (g) or (h) of Section 11
(other than an Event of Default described in clause (i) of
paragraph (g) or described in clause (vi) of paragraph (g) by
virtue of the fact that such clause encompasses clause (i)
of paragraph (g)) has occurred, all the Notes then
outstanding shall automatically become immediately due and
payable.
(b) If any other Event of Default has occurred and
is continuing, any holder or holders of more than 60% in
principal amount of the Notes at the time outstanding may at
any time at its or their option, by notice or notices to the
Company, declare all the Notes then outstanding to be
immediately due and payable.
(c) If any Event of Default described in paragraph
(a) or (b) of Section 11 has occurred and is continuing, any
holder or holders of Notes at the time outstanding affected
by such Event of Default may at any time, at its or their
option, by notice or notices to the Company, declare all the
Notes held by it or them to be immediately due and payable.
Upon any Notes becoming due and payable under this Section
12.1, whether automatically or by declaration, such Notes will
forthwith mature and the entire unpaid principal amount of such
Notes, plus (x) all accrued and unpaid interest thereon and (y)
the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall
all be immediately due and payable, in each and every case
without presentment, demand, protest or further notice, all of
which are hereby waived. The Company acknowledges, and the
parties hereto agree, that each holder of a Note has the right
to maintain its investment in the Notes free from repayment by
the Company (except as herein specifically provided for) and
that the provision for payment of a Make-Whole Amount by the
Company in the event that the Notes are prepaid or are
accelerated as a result of an Event of Default, is intended to
provide compensation for the deprivation of such right under
such circumstances.
12.2 Other Remedies.
If any Default or Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section
12.1, the holder of any Note at the time outstanding may proceed
to protect and enforce the rights of such holder by an action at
law, suit in equity or other appropriate proceeding, whether for
the specific performance of any agreement contained in any
Financing Document, or for an injunction against a violation of
any of the terms thereof, or in aid of the exercise of any power
granted thereby or by law or otherwise.
12.3 Rescission.
At any time after any Notes have been declared due and
payable pursuant to clause (b) or (c) of Section 12.1, the
holders of not less than 60% in principal amount of the Notes
then outstanding, by written notice to the Company, may rescind
and annul any such declaration and its consequences if (a) the
Company has paid all overdue interest on the Notes, all
principal of and Make-Whole Amount, if any, on any Notes that
are due and payable and are unpaid other than by reason of such
declaration, and all interest on such overdue principal and
Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at
the Default Rate, (b) all Events of Default and Defaults, other
than non-payment of amounts that have become due solely by
reason of such declaration, have been cured or have been waived
pursuant to Section 17, and (c) no judgment or decree has been
entered for the payment of any monies due pursuant hereto or to
the Notes. No rescission and annulment under this Section 12.3
will extend to or affect any subsequent Event of Default or
Default or impair any right consequent thereon.
12.4 No Waivers or Election of Remedies, Expenses, etc.
No course of dealing and no delay on the part of any holder
of any Note in exercising any right, power or remedy shall
operate as a waiver thereof or otherwise prejudice such holder's
rights, powers or remedies. No right, power or remedy conferred
by any Financing Document upon any holder of any Note shall be
exclusive of any other right, power or remedy referred to herein
or therein or now or hereafter available at law, in equity, by
statute or otherwise. Without limiting the obligations of the
Company under Section 15, the Company will pay to the holder of
each Note on demand such further amount as shall be sufficient
to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including,
without limitation, reasonable attorneys' fees, expenses and
disbursements.
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
13.1 Registration of Notes.
The Company shall keep at its principal executive office a
register for the registration and registration of transfers of
Notes. The name and address of each holder of one or more
Notes, each transfer thereof and the name and address of each
transferee of one or more Notes shall be registered in such
register. Prior to due presentment for registration of
transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for
all purposes hereof, and the Company shall not be affected by
any notice or knowledge to the contrary. The Company shall give
to any holder of a Note that is an Institutional Investor
promptly upon request therefor, a complete and correct copy of
the names and addresses of all registered holders of Notes.
13.2 Transfer and Exchange of Notes.
Upon surrender of any Note at the principal executive
office of the Company for registration of transfer or exchange
(and in the case of a surrender for registration of transfer,
duly endorsed or accompanied by a written instrument of transfer
duly executed by the registered holder of such Note or his
attorney duly authorized in writing and accompanied by the
address for notices of each transferee of such Note or part
thereof), the Company shall execute and deliver, at the
Company's expense (except as provided below), one or more new
Notes (as requested by the holder thereof) in exchange therefor,
in an aggregate principal amount equal to the unpaid principal
amount of the surrendered Note. Each such new Note shall be
payable to such Person as such holder may request and shall be
substantially in the form of Exhibit 1. Each such new Note
shall be dated and bear interest from the date to which interest
shall have been paid on the surrendered Note or dated the date
of the surrendered Note if no interest shall have been paid
thereon. The Company may require payment of a sum sufficient to
cover any stamp tax or governmental charge imposed in respect of
any such transfer of Notes. Notes shall not be transferred in
denominations of less than $100,000, provided that if necessary
to enable the registration of transfer by a holder of its entire
holding of Notes, one Note may be in a denomination of less than
$100,000. Any transferee, by its acceptance of a Note
registered in its name (or the name of its nominee), shall be
deemed to have made the representation set forth in Section 6.2.
13.3 Replacement of Notes.
Upon receipt by the Company of evidence reasonably
satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be,
in the case of an Institutional Investor, notice from such
Institutional Investor of such ownership and such loss, theft,
destruction or mutilation), and
(a) in the case of loss, theft or destruction, of
indemnity reasonably satisfactory to it (provided that if
the holder of such Note is, or is a nominee for, an original
Purchaser or another Institutional Investor, such Person's own
unsecured agreement of indemnity shall be deemed to be
satisfactory), or
(b) in the case of mutilation, upon surrender and
cancellation thereof,
the Company at its own expense shall execute and deliver, in
lieu thereof, a new Note, dated and bearing interest from the
date to which interest shall have been paid on such lost,
stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall
have been paid thereon.
14. PAYMENTS ON NOTES.
14.1 Place of Payment.
Subject to Section 14.2, payments of principal, Make-Whole
Amount, if any, and interest becoming due and payable on the
Notes shall be made in St. Petersburg, Florida at the principal
office of the Company in such jurisdiction. The Company may at
any time, by notice to each holder of a Note, change the place
of payment of the Notes so long as such place of payment shall
be either the principal office of the Company located in the
United States or the principal office of a bank or trust company
located in the United States.
14.2 Home Office Payment.
So long as you or your nominee shall be the holder of any
Note, and notwithstanding anything contained in Section 14.1 or
in such Note to the contrary, the Company will pay all sums
becoming due on such Note for principal, Make-Whole Amount, if
any, and interest by the method and at the address specified for
such purpose below your name in Schedule A, or by such other
method or at such other address as you shall have from time to
time specified to the Company in writing for such purpose,
without the presentation or surrender of such Note or the making
of any notation thereon, except that upon written request of the
Company made concurrently with or reasonably promptly after
payment or prepayment in full of any Note, you shall surrender
such Note for cancellation, reasonably promptly after any such
request, to the Company at its principal executive office or at
the place of payment most recently designated by the Company
pursuant to Section 14.1. Prior to any sale or other
disposition of any Note held by you or your nominee you will, at
your election, either endorse thereon the amount of principal
paid thereon and the last date to which interest has been paid
thereon or surrender such Note to the Company in exchange for a
new Note or Notes pursuant to Section 13.2. The Company will
afford the benefits of this Section 14.2 to any Institutional
Investor that is the direct or indirect transferee of any Note
purchased by you under this Agreement and that has made the same
agreement relating to such Note as you have made in this Section
14.2.
15. EXPENSES, ETC.
15.1 Transaction Expenses.
Whether or not the transactions contemplated by the
Financing Documents are consummated, the Company will pay all
costs and expenses (including reasonable attorneys' fees of a
special counsel and, if reasonably required, local or other
counsel) incurred by you and each Other Purchaser or holder of a
Note in connection with such transactions and in connection with
any amendments, waivers or consents under or in respect of any
of the Financing Documents (whether or not such amendment,
waiver or consent becomes effective), including, without
limitation: (a) the costs and expenses incurred in enforcing or
defending (or determining whether or how to enforce or defend)
any rights under the Financing Documents or in responding to any
subpoena or other legal process or informal investigative demand
issued in connection with the Financing Documents, or by reason
of being a holder of any Note, and (b) the costs and expenses,
including financial advisors' fees, incurred in connection with
the insolvency or bankruptcy of the Company or any Subsidiary or
in connection with any work-out or restructuring of the
transactions contemplated hereby and by the Notes. The Company
will pay, and will save you and each other holder of a Note
harmless from, all claims in respect of any fees, costs or
expenses if any, of brokers and finders (other than those
retained by you).
15.2 Survival.
The obligations of the Company under this Section 15 will
survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of each of the Financing
Documents, and the termination of each of the Financing
Documents.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT.
All representations and warranties contained herein shall
survive the execution and delivery of the Financing Documents,
the purchase or transfer by you of any Note or portion thereof
or interest therein and the payment of any Note, and may be
relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any
other holder of a Note. All statements contained in any
certificate or other instrument delivered by or on behalf of the
Company pursuant to any Financing Document shall be deemed
representations and warranties of the Company under this
Agreement. Subject to the preceding sentence, the Financing
Documents embody the entire agreement and understanding between
you and the Company and supersede all prior agreements and
understandings relating to the subject matter hereof.
17. AMENDMENT AND WAIVER.
17.1 Requirements.
(a) Requirements Generally. This Agreement and the
Notes may be amended, and the observance of any term hereof
or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the
Company and the Required Holders, except that (a) no
amendment or waiver of any of the provisions of Section 1,
2, 3, 4, 5, 6 or 21, or any defined term (as it is used
therein), will be effective as to you unless consented to by you
in writing, and (b) no such amendment or waiver may, without
the written consent of the holder of each Note at the time
outstanding affected thereby, (i) subject to the provisions of
Section 12 relating to acceleration or rescission, change the
amount or time of any prepayment or payment of principal of,
or reduce the rate or change the time of payment or method
of computation of interest or of the Make-Whole Amount on, the
Notes, (ii) change the percentage of the principal amount of
the Notes the holders of which are required to consent to
any such amendment or waiver, or (iii) amend any of Sections
8, 11(a), 11(b), 12, 17 or 20.
(b) Incorporated Covenants. Notwithstanding the
provisions of Section 17.1(a), each Purchaser agrees, and
each other holder of Notes by its acceptance of any Note
shall be deemed to have agreed, to grant its written consent,
promptly following its receipt of written request by the
Company for such consent, to any amendment of, or waiver
with respect to, (prospectively only) any of the Incorporated
Covenants and related defined terms set forth in Schedule 9.8
in a manner consistent with any one or more amendments of,
or waivers with respect to, the covenants and related
defined terms in the Bank Loan Agreement that correspond to the
Incorporated Covenants and related defined terms, provided
that (A) the Company shall have delivered to each holder of
Notes a copy of such amendment or waiver relating to the
Bank Loan Agreement, together with a certificate of a
Responsible Officer of the Company to the effect that such
copy is true and complete and that such amendment or waiver
relating to the Bank Loan Agreement has become effective in
accordance with the terms of the Bank Loan Agreement and (B)
the effect of the requested amendment or waiver relating to
the Incorporated Covenants shall be no less favorable (and
no more onerous) to the holders of Notes than the corresponding
amendment or waiver relating to the Bank Loan Agreement is to
the Banks.
(c) Most Favored Covenants. Notwithstanding the
provisions of Section 17.1(a), if at any time
(i) this Agreement shall have been amended to
provide for one or more Most Favored Covenants
contemplated by Section 9.9, and
(ii) the Company shall have obtained an
amendment of, or waiver with respect to, the covenant
corresponding to any such Most Favored Covenant
pursuant to the terms of each other agreement at the time having
the benefit thereof, and
(iii) the Company shall have delivered to each
holder of Notes a copy of each such amendment or
waiver referred to in clause (ii) above, together with
a certificate of a Responsible Officer of the Company to the
effect that each such copy is true and complete and
that each such amendment or waiver has become
effective in accordance with the terms of the agreement to
which it relates,
each Purchaser agrees, and each other holder of Notes by
its acceptance of any Note shall be deemed to have agreed,
to grant its written consent, promptly following its receipt
of written request by the Company for such consent to any
amendment of, or waiver with respect to, (prospectively
only) each of such Most Favored Covenants in a manner no
less favorable (and no more onerous) to the holders of the Notes
than the corresponding amendment or waiver relating to such
other agreements with respect to which such waivers or
amendments have been so obtained.
17.2 Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each
holder of the Notes (irrespective of the amount of Notes
then owned by it) with sufficient information, sufficiently
far in advance of the date a decision is required, to enable
such holder to make an informed and considered decision with
respect to any proposed amendment, waiver or consent in
respect of any of the provisions hereof or of the Notes. The
Company will deliver executed or true and correct copies of
each amendment, waiver or consent effected pursuant to the
provisions of this Section 17 to each holder of outstanding
Notes promptly following the date on which it is executed and
delivered by, or receives the consent or approval of, the
requisite holders of Notes.
(b) Payment. The Company will not directly or
indirectly pay or cause to be paid any remuneration, whether
by way of supplemental or additional interest, fee or
otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into
by any holder of Notes or any waiver or amendment of any of
the terms and provisions hereof unless such remuneration is
concurrently paid, or security is concurrently granted, on the
same terms, ratably to each holder of Notes then outstanding
even if such holder did not consent to such waiver or
amendment.
17.3 Binding Effect, etc.
Any amendment or waiver consented to as provided in this
Section 17 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and
upon the Company without regard to whether such Note has been
marked to indicate such amendment or waiver. No such amendment
or waiver will extend to or affect any obligation, covenant,
agreement, Default or Event of Default not expressly amended or
waived or impair any right consequent thereon. No course of
dealing between the Company and the holder of any Note nor any
delay in exercising any rights hereunder or under any Note shall
operate as a waiver of any rights of any holder of such Note.
As used herein, the term "this Agreement" and references thereto
shall mean this Agreement as it may from time to time be amended
or supplemented.
17.4 Notes held by Company, etc.
Solely for the purpose of determining whether the holders
of the requisite percentage of the aggregate principal amount of
Notes then outstanding approved or consented to any amendment,
waiver or consent to be given under any of the Financing
Documents, or have directed the taking of any action provided in
any of the Financing Documents to be taken upon the direction of
the holders of a specified percentage of the aggregate principal
amount of Notes then outstanding, Notes directly or indirectly
owned by the Company or any of its Affiliates shall be deemed
not to be outstanding.
18. NOTICES.
All notices and communications provided for hereunder shall
be in writing and sent (a) by telecopy if the sender on the same
day sends a confirming copy of such notice by a recognized
overnight delivery service (charges prepaid), or (b) by
registered or certified mail with return receipt requested
(postage prepaid), or (c) by a recognized overnight delivery
service (with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the
address specified for such communications in Schedule A, or
at such other address as you or it shall have specified to
the Company in writing,
(ii) if to any other holder of any Note, to such
holder at such address as such other holder shall have
specified to the Company in writing, or
(iii)if to the Company, to the Company at its address
set forth at the beginning hereof to the attention of Chris
A. Lewis, or at such other address as the Company shall have
specified to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when
actually received.
19. REPRODUCTION OF DOCUMENTS.
The Financing Documents and all documents relating thereto,
including, without limitation, (a) consents, waivers and
modifications that may hereafter be executed, (b) documents
received by you at the Closing (except the Notes themselves),
and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by
you by any photographic, photostatic, microfilm, microcard,
miniature photographic or other similar process and you may
destroy any original document so reproduced. The Company agrees
and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not
such reproduction was made by you in the regular course of
business) and any enlargement, facsimile or further reproduction
of such reproduction shall likewise be admissible in evidence.
This Section 19 shall not prohibit the Company or any other
holder of Notes from contesting any such reproduction to the
same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such
reproduction.
20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential
Information" means information delivered to you by or on behalf
of the Company or any Subsidiary in connection with the
transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when
received by you as being confidential information of the Company
or such Subsidiary, provided that such term does not include
information that
(a) was publicly known or otherwise known to you
prior to the time of such disclosure,
(b) subsequently becomes publicly known through no
act or omission by you or any person acting on your behalf,
(c) otherwise becomes known to you other than
through disclosure by the Company or any Subsidiary or
(d) constitutes financial statements delivered to
you under Section 7.1 that are otherwise publicly available.
You will maintain the confidentiality of such Confidential
Information in accordance with procedures adopted by you in good
faith to protect confidential information of third parties
delivered to you, provided that you may deliver or disclose
Confidential Information to
(i) your directors, officers, employees, agents,
attorneys and affiliates (to the extent such disclosure
reasonably relates to the administration of the investment
represented by your Notes),
(ii) your financial advisors and other professional
advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of
this Section 20,
(iii)any other holder of any Note,
(iv) any Institutional Investor to which you sell or
offer to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing
prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 20),
(v) any Person from which you offer to purchase any
security of the Company (if such Person has agreed in
writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20),
(vi) any federal or state regulatory authority having
jurisdiction over you,
(vii)the National Association of Insurance
Commissioners or any similar organization, or any nationally
recognized rating agency that requires access to information
about your investment portfolio or
(viii)any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect
compliance with any law, rule, regulation or order
applicable to you, (x) in response to any subpoena or other
legal process, (y) in connection with any litigation to
which you are a party or (z) if an Event of Default has
occurred and is continuing, to the extent you may reasonably
determine such delivery and disclosure to be necessary or
appropriate in the enforcement or for the protection of the
rights and remedies under the Financing Documents.
Each holder of a Note, by its acceptance of a Note, will be
deemed to have agreed to be bound by and to be entitled to the
benefits of this Section 20 as though it were a party to this
Agreement. On reasonable request by the Company in connection
with the delivery to any holder of a Note of information
required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to
this Agreement or its nominee), such holder will enter into an
agreement with the Company embodying the provisions of this
Section 20.
21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your
Affiliates as the purchaser of the Notes that you have agreed to
purchase hereunder, by written notice to the Company, which
notice shall be signed by both you and such Affiliate, shall
contain such Affiliate's agreement to be bound by this Agreement
and shall contain a confirmation by such Affiliate of the
accuracy with respect to it of the representations set forth in
Section 6. Upon receipt of such notice, wherever the word "you"
is used in this Agreement (other than in this Section 21), such
word shall be deemed to refer to such Affiliate in lieu of you.
In the event that such Affiliate is so substituted as a
purchaser hereunder and such Affiliate thereafter transfers to
you all of the Notes then held by such Affiliate, upon receipt
by the Company of notice of such transfer, wherever the word
"you" is used in this Agreement (other than in this Section 21),
such word shall no longer be deemed to refer to such Affiliate,
but shall refer to you, and you shall have all the rights of an
original holder of the Notes under this Agreement.
22. MISCELLANEOUS.
22.1 Additional Notes.
Subject to the terms and provisions hereof (including, but
not limited to, Sections 10.5 and 10.6), the Company may, from
time to time, issue and sell additional promissory notes
pursuant to agreements which may incorporate by reference all or
certain of the provisions of this Agreement and the Other
Agreements. Such incorporation by reference shall not have the
effect of constituting such promissory notes as Notes for any
purpose, whether for acceleration of the Notes, rescission of
such acceleration, or the exercise of any other amendments or
waivers of the provisions hereof or of the Other Agreements, or
otherwise.
22.2 Successors and Assigns.
All covenants and other agreements contained in this
Agreement by or on behalf of any of the parties hereto bind and
inure to the benefit of their respective successors and assigns
(including, without limitation, any subsequent holder of a Note)
whether so expressed or not.
22.3 Payments Due on Non-Business Days.
Anything in the Financing Documents to the contrary
notwithstanding, any payment of principal of or Make-Whole
Amount or interest on any Note that is due on a date other than
a Business Day shall be made on the next succeeding Business Day
without including the additional days elapsed in the computation
of the interest payable on such next succeeding Business Day.
22.4 Severability.
Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability
in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any
other jurisdiction.
22.5 Construction.
Each covenant contained herein shall be construed (absent
express provision to the contrary) as being independent of each
other covenant contained herein, so that compliance with any one
covenant shall not (absent such an express contrary provision)
be deemed to excuse compliance with any other covenant. Where
any provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision
shall be applicable whether such action is taken directly or
indirectly by such Person.
22.6 Counterparts.
This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of
which together shall constitute one instrument. Each
counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the
parties hereto.
22.7 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED
BY, THE LAW OF THE STATE OF NEW YORK, EXCLUDING CHOICE-OF-LAW
PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE
APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
[Remainder of page intentionally blank. Next page is signature
page.] If you are in agreement with the foregoing, please
sign the form of agreement on the accompanying counterpart of
this Agreement and return it to the Company, whereupon the
foregoing shall become a binding agreement between you and the
Company.
Very truly yours,
JABIL CIRCUIT, INC.
By
Name:
Title:
The foregoing is hereby agreed to.
[PURCHASER]
By Name: Title: SCHEDULE A
INFORMATION RELATING TO PURCHASERS
Purchaser NameCONNECTICUT GENERAL LIFE INSURANCE COMPANYName in
Which to Register Note(s)CIG & Co.Note Registration Number;
Principal AmountR-1; $9,100,000 R-2; $5,700,000 R-3; $3,400,000
R-4; $3,400,000Payment on Account of Note
Method
Account Information
Federal Funds Wire Transfer
Chase Manhattan Bank, N.A. Chase NYC/CTR/ BNF=CIGNA Private
Placements/AC=9009001802 ABA# 021000021
OBI=[name of company; description of security; interest rate;
maturity date; PPN; due date and application (as among
principal, premium and interest of the payment being made);
contact name and phone.]Accompanying InformationName of
Company:JABIL CIRCUIT, INC. Description of Security:
6.89% Senior Notes due May 30, 2004 PPN:
466313 A* 4 Due Date and
Application (as among principal, Make-Whole Amount and interest)
of the payment being made:Address for Notices Related to
PaymentsCIG & Co. c/o CIGNA Investments, Inc. 900 Cottage Grove
Road Hartford, CT 06152-2206 Attention: Securities Processing
S-206
with a copy to:
Chase Manhattan Bank, N.A. Private Placement Servicing P.O. Box
1508 Bowling Green Station New York, NY 10081 Attention: CIGNA
Private Placements FAX: 212-552-3107/1005Contact for Telephonic
Notices Pursuant to Section 8.3(a)CIG & Co. Attention: Edward
Lewis, Private Securities Division S-307 Tel:
860/726-6868Address for All other NoticesCIG & Co. 900 Cottage
Grove Road Hartford, CT 06152-2307 Attention: Private
Securities Division S-307
FAX: 860/726-7203Signature Page FormatCONNECTICUT GENERAL LIFE
INSURANCE COMPANY By CIGNA Investments, Inc.
By______________________________Tax Identification
Number13-3574027Purchaser NameLIFE INSURANCE COMPANY OF NORTH
AMERICAName in Which to Register Note(s)CIG & Co.Note
Registration Number; Principal AmountR-5; $3,400,000Payment on
Account of Note
Method
Account Information
Federal Funds Wire Transfer
Chase Manhattan Bank, N.A. Chase NYC/CTR/ BNF=CIGNA Private
Placements/AC=9009001802 ABA# 021000021
OBI=[name of company; description of security; interest rate;
maturity date; PPN; due date and application (as among
principal, premium and interest of the payment being made);
contact name and phone.]Accompanying InformationName of
Company:JABIL CIRCUIT, INC. Description of Security:
6.89% Senior Notes due May 30, 2004 PPN:
466313 A* 4 Due Date and
Application (as among principal, Make-Whole Amount and interest)
of the payment being made:Address for Notices Related to
PaymentsCIG & Co. c/o CIGNA Investments, Inc. 900 Cottage Grove
Road Hartford, CT 06152-2206 Attention: Securities Processing
S-206
with a copy to:
Chase Manhattan Bank, N.A. Private Placement Servicing P.O. Box
1508 Bowling Green Station New York, NY 10081 Attention: CIGNA
Private Placements FAX: 212-552-3107/1005Contact for Telephonic
Notices Pursuant to Section 8.3(a)CIG & Co. Attention: Edward
Lewis, Private Securities Division S-307 Tel:
860/726-6868Address for All other NoticesCIG & Co. 900 Cottage
Grove Road Hartford, CT 06152-2307 Attention: Private
Securities Division S-307
FAX: 860/726-7203Signature Page FormatLIFE INSURANCE COMPANY OF
NORTH AMERICA By CIGNA Investments, Inc.
By______________________________Tax Identification
Number13-3574027Purchaser NameMETROPOLITAN LIFE INSURANCE
COMPANYName in Which Note is RegisteredMETROPOLITAN LIFE
INSURANCE COMPANYNote Registration Number, Principal AmountR-6
$25,000,000Payment on Account of Note
Method
Account Information
Federal Funds Wire Transfer
The Chase Manhattan Bank, N.A. 33 East 23rd Street ABA No.
021000021 Account No. 002-2-410591Accompanying InformationName
of Company:JABIL CIRCUIT, INC. Description of Security:
6.89% Senior Notes due May 30, 2004 PPN:
466313 A* 4 Due Date and
Application (as among principal, Make-Whole Amount and interest)
of the payment being made:Address for Notices Related to
PaymentsMetropolitan Life Insurance Company One Madison Avenue
New York, NY 10010 Attention: Treasurer
with a copy to:
Metropolitan Life Insurance Company 334 Madison Avenue P.O. Box
633 Convent Station, NJ 07961-0633 Attention: Vice President
Tel: 201/254-3222Contact for Telephonic Notices Pursuant to
Section 8.3(a)Metropolitan Life Insurance Company Attention:
Vice President Tel: 201/254-3222Address for All other
NoticesMetropolitan Life Insurance Company One Madison Avenue
New York, NY 10010 Attention: Treasurer
with a copy to:
Metropolitan Life Insurance Company 334 Madison Avenue P.O. Box
633 Convent Station, NJ 07961-0633 Attention: Vice President
Tel: 201/254-3222Signature Page FormatMETROPOLITAN LIFE
INSURANCE COMPANY
By__________________________ Name:
Title:Tax Identification
Number13-5581829 SCHEDULE B
DEFINED TERMS
As used herein, the following terms have the respective
meanings set forth below or set forth in the Section hereof
following such term:
Acquisition -- means any acquisition, directly or
indirectly, by the Company or any Restricted Subsidiary, after
the date of the Closing, of
(a) any Capital Stock or other equity interests of a
Person that concurrently with such acquisition becomes a
Restricted Subsidiary, or
(b) all or substantially all of the assets of a
Person.
Affiliate -- means, at any time, and with respect to any
Person,
(a) any other Person that at such time directly or
indirectly through one or more intermediaries Controls, or
is Controlled by, or is under common Control with, such
first Person, and
(b) any Person beneficially owning or holding,
directly or indirectly, 10% or more of any class of voting
or equity interests of the Company or any Subsidiary or any
corporation of which the Company and its Subsidiaries
beneficially own or hold, in the aggregate, directly or
indirectly, 10% or more of any class of voting or equity
interests.
As used in this definition, "Control" means the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or
otherwise. Unless the context otherwise clearly requires, any
reference to an "Affiliate" is a reference to an Affiliate of
the Company.
Agreement, this -- is defined in Section 17.3.
Asset Disposition -- means any Transfer except:
(a) any Transfer from a Restricted Subsidiary to the
Company or a Wholly- Owned Restricted Subsidiary, or
(b) any Transfer made in the ordinary course of
business and involving only property that is either (i)
inventory held for sale or (ii) equipment, fixtures, supplies or
materials no longer required in the operation of the
business of the Company or any of its Restricted
Subsidiaries or that is obsolete.
Bank Debt -- means any Debt of the Company or any of its
Subsidiaries owed to any of the Banks under the Bank Loan
Agreement or any related agreement, instrument or other document.
Bank Loan Agreement -- means the Loan Agreement dated as of
May 30, 1996, among the Company, the Banks set forth on the
signature pages thereof, and NBD Bank, as agent for such Banks,
as may be amended, restated or otherwise modified from time to
time, or replaced by a new agreement in which the Banks acting
as lenders as of the date of Closing hold more than 50% of the
commitments (measured by principal amount) to lend under such
new agreement; provided that if any such new agreement shall at
any time be entered into by the Company, then concurrently
therewith the Company shall, unless otherwise agreed by the
Required Holders, cause the Banks under such new agreement to
enter into a new intercreditor agreement with the holders of the
Notes substantially in the form of the Intercreditor Agreement.
Banks -- means the banks initially party to the Bank Loan
Agreement (namely, NBD Bank, Sun Bank of Tampa Bay, Barnett Bank
of Pinellas County and The First National Bank of Boston) and
each other bank or other Person from time to time acting as a
lender or other provider of financial accommodations to the
Company or any Subsidiary under the Bank Loan Agreement.
Business Day -- means any day other than a Saturday, a
Sunday or a day on which commercial banks in New York City are
required or authorized to be closed.
Capital Lease -- means a lease with respect to which the
lessee is required concurrently to recognize the acquisition of
an asset and the incurrence of a liability in accordance with
GAAP.
Capital Lease Obligation -- means, with respect to any
Person and a Capital Lease, the amount of the obligation of such
Person as the lessee under such Capital Lease that would, in
accordance with GAAP, appear as a liability on a balance sheet
of such Person.
Capital Stock -- means any class of capital stock, share
capital or similar equity interest of a Person, provided that as
used in Section 10.3 such term shall have the meaning specified
in Schedule 10.3.
Change in Control -- means, at any time, the acquisition or
holding, directly or indirectly, by
(a) any person (as such term is used in section
13(d) and section 14(d)(2) of the Exchange Act as in effect
on the date of the Closing), or
(b) related Persons constituting a group (as such
term is used in Rule 13d- 5 under the Exchange Act as in
effect on the date of the Closing),
other than Acceptable Control Persons, of the beneficial or
record ownership of more than 50% of the Voting Stock of the
Company. For purposes of this definition and the definition of
"Acceptable Control Persons," "group of Persons" shall mean two
or more Persons that are acting together as a partnership,
limited partnership, syndicate or other group for the purpose of
acquiring, holding or disposing of Securities of an issuer.
As used in this definition, "Acceptable Control Persons" means
any group of Persons that includes each of William D. Morean,
Thomas A. Sansone and Ronald J. Rapp, provided that Mr. Morean,
Mr. Sansone and Mr. Rapp at all times (i) hold the positions of
Chief Executive Officer, President and Chief Financial Officer,
respectively, of the Company, or positions with another title
but equal or greater responsibilities, and (ii) are actively
involved in the day-today management of the Company.
Closing -- is defined in Section 3.
Code -- means the Internal Revenue Code of 1986, as amended
from time to time, and the rules and regulations promulgated
thereunder from time to time.
Collateral Agent -- means NBD Bank, as collateral agent
under the Pledge Agreement and the Intercreditor Agreement, and
any successor or assign appointed in accordance with the
provisions of the Intercreditor Agreement.
Company -- is defined in the introductory sentence.
Confidential Information -- is defined in Section 20.
Consolidated Adjusted Net Worth -- means, at any time,
stockholders' equity of the Company and its Restricted
Subsidiaries as would be shown on a consolidated balance sheet
for such Persons at such time in accordance with GAAP, excluding
therefrom, however, any Preferred Stock that is mandatorily
redeemable.
Consolidated Debt -- means, as of any date of
determination, the total of all Debt of the Company and its
Restricted Subsidiaries outstanding on such date, after
eliminating all offsetting debits and credits between the
Company and its Restricted Subsidiaries and all other items
required to be eliminated in the course of the preparation of
consolidated financial statements of the Company and its
Restricted Subsidiaries in accordance with GAAP.
Consolidated Fixed Charges -- means, with respect to any
period, the sum of (a) Consolidated Interest Charges for such
period plus (b) Consolidated Lease Rentals for such period.
Consolidated Interest Charges -- means, with respect to any
period, the sum (without duplication) of the following (in each
case, eliminating all offsetting debits and credits between the
Company and its Restricted Subsidiaries and all other items
required to be eliminated in the course of the preparation of
consolidated financial statements of the Company and its
Restricted Subsidiaries in accordance with GAAP): (a) all
interest in respect of Debt of the Company and its Restricted
Subsidiaries (including imputed interest on Capital Lease
Obligations) deducted in determining Consolidated Net Earnings
for such period, together with all interest capitalized or
deferred during such period and not deducted in determining
Consolidated Net Earnings for such period, plus (b) all debt
discount and expense amortized or required to be amortized in
the determination of Consolidated Net Earnings for such period.
Consolidated Lease Rentals -- means, with respect to any
period, the sum of the rental and other obligations required to
be paid during such period by the Company or any Restricted
Subsidiary as lessee under all leases of real or personal
property (other than Capital Leases), excluding any amount
required to be paid by the lessee (whether or not therein
designated as rental or additional rental) on account of
maintenance and repairs, insurance, taxes, assessments, water
rates and similar charges, provided that if, at the date of
determination, any such rental or other obligations are
contingent or not otherwise definitely determinable by the terms
of the related lease, the amount of such obligations (a) shall
be assumed to be equal to the amount of such obligations for the
period of 12 consecutive calendar months immediately preceding
the date of determination or (b) if the related lease was not in
effect during such preceding 12-month period, shall be the
amount estimated by a Senior Financial Officer on a reasonable
basis and in good faith.
Consolidated Net Earnings -- means, with reference to any
period, the net earnings (or loss) of the Company and its
Restricted Subsidiaries for such period (taken as a cumulative
whole), as determined in accordance with GAAP, after eliminating
all offsetting debits and credits between the Company and its
Restricted Subsidiaries and all other items required to be
eliminated in the course of the preparation of consolidated
financial statements of the Company and its Restricted
Subsidiaries in accordance with GAAP, provided that there shall
be excluded:
(a) the income (or loss) of any Person accrued prior
to the date it becomes a Restricted Subsidiary or is
consolidated or merged with or into the Company or a
Restricted Subsidiary, and the income (or loss) of any Person,
all or substantially all of the assets of which have been
acquired in any manner, realized by such other Person prior
to the date of acquisition,
(b) the income (or loss) of any Person (other than a
Restricted Subsidiary) in which the Company or any
Restricted Subsidiary has an ownership interest, except to
the extent that any such income has been actually received by
the Company or such Restricted Subsidiary in the form of
cash dividends or similar cash distributions,
(c) the undistributed earnings of any Restricted
Subsidiary to the extent that the declaration or payment of
dividends or similar distributions by such Restricted
Subsidiary is not at the time permitted by the terms of its
charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable
to such Restricted Subsidiary,
(d) any restoration to income of any contingency
reserve, except to the extent that provision for such
reserve was made out of income accrued during such period,
(e) any aggregate net gain (but not any aggregate
net loss) during such period arising from the sale,
conversion, exchange or other disposition of capital assets
(such term to include, without limitation, (i) all non-current
assets and, without duplication, (ii) the following, whether
or not current: all fixed assets, whether tangible or
intangible, all inventory sold in conjunction with the
disposition of fixed assets, and all Securities),
(f) any gains resulting from any write-up of any
assets (but not any loss resulting from any write-down of
any assets),
(g) any net gain from the collection of the proceeds
of life insurance policies,
(h) any net income or gain (but not any net loss)
during such period from (i) any change in accounting
principles in accordance with GAAP, (ii) any prior period
adjustments resulting from any change in accounting principles
in accordance with GAAP, (iii) any extraordinary items, or
(iv) any discontinued operations or the disposition thereof,
(i) any deferred credit representing the excess of
equity in any Restricted Subsidiary at the date of
acquisition over the cost of the investment in such Restricted
Subsidiary,
(j) in the case of a successor to the Company by
consolidation or merger or as a transferee of its assets,
any earnings of the successor corporation prior to such
consolidation, merger or transfer of assets,
(k) any portion of such net income that cannot be
freely converted into United States dollars, and
(l) any extraordinary, unusual or nonrecurring gains
or losses.
Consolidated Net Earnings Available for Fixed Charges --
means, with respect to any period, Consolidated Net Earnings for
such period plus all amounts deducted in the computation thereof
on account of (a) Consolidated Fixed Charges, (b) taxes imposed
on or measured by income or excess profits and (c) depreciation
and amortization (for purposes of this clause (c), it is agreed
that the foregoing reference to "amortization" shall exclude
amortization of grants from the Scottish government of the type
described in note 1.f. to the consolidated financial statements
of the Company and its subsidiaries for the fiscal year ended
August 31, 1995).
Consolidated Net Income -- is defined in Schedule 10.3.
Consolidated Tangible Net Worth -- is defined in Schedule
10.3.
Consolidated Total Assets -- means, at any time, the total
assets of the Company and its Restricted Subsidiaries that would
be shown as assets on a consolidated balance sheet of the
Company and its Restricted Subsidiaries as of such time prepared
in accordance with GAAP, after eliminating all amounts properly
attributable to minority interests, if any, in the stock and
surplus of Restricted Subsidiaries.
Consolidated Total Capitalization -- means, at any time,
the sum of (a) Consolidated Adjusted Net Worth at such time plus
(b) Consolidated Debt at such time.
Control Notice Event -- means
(a) the execution by the Company or any Subsidiary
or Affiliate of any letter of intent or similar agreement
with respect to any proposed transaction or event or series
of transactions or events that, individually or in the
aggregate, could reasonably be expected to result in a
Change in Control,
(b) the execution of any written agreement that,
when fully performed by the parties thereto, would result in
a Change in Control, or
(c) the making of any written offer by any person
(as such term is used in section 13(d) and section 14(d)(2)
of the Exchange Act as in effect on the date of the Closing)
or related persons constituting a group (as such term is used in
Rule 13d-5 under the Exchange Act as in effect on the date
of the Closing) to the holders of the Voting Stock of the
Company which offer, if accepted by the requisite number of such
holders, would result in a Change in Control.
Control Prepayment Date -- is defined in Section 8.3(a).
Debt -- means with respect to any Person, at any time,
without duplication,
(a) its liabilities for borrowed money and its
redemption obligations in respect of mandatorily redeemable
Preferred Stock;
(b) its liabilities for the deferred purchase price
of property acquired by such Person (excluding accounts
payable arising in the ordinary course of business but
including all liabilities created or arising under any
conditional sale or other title retention agreement with
respect to any such property);
(c) all liabilities in respect of Capital Leases of
such Person;
(d) all liabilities secured by any Lien with respect
to any property owned by such Person (whether or not it has
assumed or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of
credit or instruments serving a similar function issued or
accepted for its account by banks and other financial
institutions (whether or not representing obligations for
borrowed money), but only to the extent that such
liabilities at such time constitute liabilities in accordance
with GAAP;
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to
liabilities of a type described in any of clauses (a)
through (f) hereof;
provided that in no event shall Debt include any unfunded
obligations of the Company in respect of any Plan. Debt of any
Person shall include all obligations of such Person of the
character described in clauses (a) through (g) above to the
extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be
extinguished under GAAP.
For the purposes of this Agreement, including, without
limitation, Sections 10.5 and 10.6, (i) any Person becoming a
Restricted Subsidiary after the date of the Closing shall be
deemed, at the time it shall become a Restricted Subsidiary, to
have incurred all of its then outstanding Debt and (ii) with
respect to any property acquired by the Company or any
Restricted Subsidiary that is encumbered by a Lien securing Debt
(whether or not the Company or such Restricted Subsidiary shall
have assumed such Debt), the Company or such Restricted
Subsidiary shall be deemed to have incurred such Debt at the
time of the acquisition of such property. If, at any time, any
Wholly-Owned Restricted Subsidiary shall cease to qualify under
this Agreement as a "Wholly-Owned Restricted Subsidiary," the
Company and/or any Restricted Subsidiary shall be deemed to have
incurred any Debt owing by such Person to such former
Wholly-Owned Restricted Subsidiary on the first date on which
such former Wholly-Owned Restricted Subsidiary ceased to be a
Wholly-Owned Restricted Subsidiary.
Debt Prepayment Application -- means, with respect to any
Transfer of property, the application by the Company or its
Restricted Subsidiaries of cash in an amount equal to the Net
Proceeds Amount with respect to such Transfer to pay Senior Debt
(other than Senior Debt owing to any of the Restricted
Subsidiaries or any Affiliate and Senior Debt in respect of any
revolving credit or similar facility providing the Company with
the right to obtain loans or other extensions of credit from
time to time, except to the extent that in connection with such
payment of Senior Debt the availability of credit under such
credit facility is permanently reduced by an amount not less
than the amount of such proceeds applied to the payment of such
Senior Debt), provided that in the course of making such
application the Company shall offer to prepay each outstanding
Note in accordance with Section 10.9(c) in a principal amount
that equals the Ratable Portion for such Note. If any holder of
a Note fails to accept such offer of prepayment, then, for
purposes of the preceding sentence only, the Company
nevertheless will be deemed to have paid Senior Debt in an
amount equal to the Ratable Portion for such Note.
Debt Prepayment Application Date -- is defined in Section
10.9(c).
Default -- means an event or condition the occurrence or
existence of which would, with the lapse of time or the giving
of notice or both, become an Event of Default.
Default Rate -- means that rate of interest that is the
greater of (i) 2.00% per annum above the rate of interest stated
in clause (a) of the first paragraph of the Notes or (ii) 2.00%
over the rate of interest publicly announced by The First
National Bank of Chicago in Chicago, Illinois (or its successor)
from time to time as its "base" or "prime" rate.
Disposition Value -- means, at any time, with respect to
any property
(a) in the case of property that does not constitute
Subsidiary Stock, the book value thereof, valued at the time
of such disposition in good faith by the Company, and
(b) in the case of property that constitutes
Subsidiary Stock, an amount equal to that percentage of book
value of the assets of the Restricted Subsidiary that issued
such stock as is equal to the percentage that the book value of
such Subsidiary Stock represents of the book value of all of
the outstanding capital stock of such Restricted Subsidiary
(assuming, in making such calculations, that all Securities
convertible into such capital stock are so converted and giving
full effect to all transactions that would occur or be
required in connection with such conversion) determined at
the time of the disposition thereof, in good faith by the
Company.
Environmental Laws -- means any and all Federal, state,
local, and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions
relating to pollution and the protection of the environment or
the release of any materials into the environment, including,
but not limited to, those related to hazardous substances or
wastes, air emissions and discharges to waste or public systems.
ERISA -- means the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the rules and
regulations promulgated thereunder from time to time in effect.
ERISA Affiliate -- means any trade or business (whether or
not incorporated) that is treated as a single employer together
with the Company under section 414 of the Code.
Event of Default -- is defined in Section 11.
Exchange Act -- means the Securities Exchange Act of 1934,
as amended.
Fair Market Value -- means, at any time and with respect to
any property, the sale value of such property that would be
realized in an arm's-length sale at such time between an
informed and willing buyer and an informed and willing seller
(neither being under a compulsion to buy or sell).
Financing Documents -- means, collectively, this Agreement,
the Notes, the Guaranty Agreement, the Pledge Agreement, the
Intercreditor Agreement and any other Collateral Document (as
defined in the Intercreditor Agreement) entered into from time
to time.
GAAP -- means generally accepted accounting principles as
in effect from time to time in the United States of America.
Governmental Authority -- means
(a) the government of
(i) the United States of America or any state
or other political subdivision thereof, or
(ii) any jurisdiction in which the Company or
any Subsidiary conducts all or any part of its
business, or that asserts jurisdiction over any
properties of the Company or any Subsidiary, or
(b) any entity exercising executive, legislative,
judicial, regulatory or administrative functions of, or
pertaining to, any such government.
Guarantor -- means, at any time, each Person (including,
without limitation, the Initial Guarantor) that at such time is
a guarantor under the Guaranty Agreement.
Guaranty -- means, with respect to any Person, any
obligation (except the endorsement in the ordinary course of
business of negotiable instruments for deposit or collection) of
such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person
in any manner, whether directly or indirectly, including,
without limitation, obligations incurred through an agreement,
contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or
any property constituting security therefor;
(b) to advance or supply funds (i) for the purchase
or payment of such indebtedness or obligation, or (ii) to
maintain any working capital or other balance sheet
condition or any income statement condition of any other Person
or otherwise to advance or make available funds for the
purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or
services primarily for the purpose of assuring the owner of
such indebtedness or obligation of the ability of any other
Person to make payment of the indebtedness or obligation; or
(d) otherwise to assure the owner of such
indebtedness or obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of
the obligor under any Guaranty, the indebtedness or other
obligations that are the subject of such Guaranty shall be
assumed to be direct obligations of such obligor.
Guaranty Agreement -- is defined in Section 4.9.
Hazardous Material -- means any and all pollutants, toxic
or hazardous wastes or any other substances that might pose a
hazard to health or safety, the removal of which may be required
or the generation, manufacture, refining, production,
processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage,
or filtration of which is or shall be restricted, prohibited or
penalized by any applicable law (including, without limitation,
asbestos, urea formaldehyde foam insulation and polychlorinated
biphenyls).
holder -- means, with respect to any Note, the Person in
whose name such Note is registered in the register maintained by
the Company pursuant to Section 13.1.
Incorporated Covenants -- is defined in Section 9.8.
Indebtedness -- means, with respect to any Person, all Debt
of such Person and, without duplication, all "Indebtedness" (as
such term is defined in Schedule 9.8 as in effect on the date of
Closing) of such Person.
Initial Guarantor -- means Jabil Circuit of Michigan, Inc.
Institutional Investor -- means (a) any original purchaser
of a Note, (b) any holder of a Note holding more than 5% of the
aggregate principal amount of the Notes then outstanding, and
(c) any bank, trust company, savings and loan association or
other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any
other similar financial institution or entity, regardless of
legal form.
Intercreditor Agreement -- is defined in Section 4.12.
Jabil Malaysia -- means Jabil Circuit, Sdn Bhd.
Lien -- means, with respect to any Person, any mortgage,
lien, pledge, charge, security interest or other encumbrance, or
any interest or title of any vendor, lessor, lender or other
secured party to or of such Person under any conditional sale or
other title retention agreement or Capital Lease, upon or with
respect to any property or asset of such Person (including in
the case of stock, stockholder agreements, voting trust
agreements and all similar arrangements).
Make-Whole Amount -- is defined in Section 8.7.
Material -- means material in relation to the business,
operations, affairs, financial condition, assets or properties
of the Company and its Restricted Subsidiaries taken as a whole.
Material Adverse Effect -- means a material adverse effect
on (a) the business, operations, affairs, financial condition,
assets or properties of the Company and its Restricted
Subsidiaries taken as a whole, or (b) the ability of any Obligor
to perform its obligations under any of the Financing Documents,
or (c) the validity or enforceability of any of the Financing
Documents.
Memorandum -- is defined in Section 5.3.
Most Favored Covenants -- is defined in Section 9.9.
Multiemployer Plan -- means any Plan that is a
"multiemployer plan" (as such term is defined in section
4001(a)(3) of ERISA).
Net Cash Proceeds -- is defined in Schedule 10.3.
Net Proceeds Amount -- means, with respect to any Transfer
of any property by any Person, an amount equal to the difference
of
(a) the aggregate amount of the consideration
(valued at the Fair Market Value of such consideration at
the time of the consummation of such Transfer) received by
such Person in respect of such Transfer, minus
(b) all ordinary and reasonable out-of-pocket costs
and expenses actually incurred by such Person in connection
with such Transfer.
Notes -- is defined in Section 1.
Obligors -- means the Company and each Guarantor.
Officer's Certificate -- means a certificate of a Senior
Financial Officer or of any other officer of the Company whose
responsibilities extend to the subject matter of such
certificate.
Other Agreements -- is defined in Section 2.
Other Purchasers -- is defined in Section 2.
PBGC -- means the Pension Benefit Guaranty Corporation
referred to and defined in ERISA or any successor thereto.
Person -- means an individual, partnership, corporation,
limited liability company, association, trust, unincorporated
organization, or a government or agency or political subdivision
thereof.
Plan -- means an "employee benefit plan" (as defined in
section 3(3) of ERISA) that is or, within the preceding five
years, has been established or maintained, or to which
contributions are or, within the preceding five years, have been
made or required to be made, by the Company or any ERISA
Affiliate or with respect to which the Company or any ERISA
Affiliate may have any liability.
Pledge Agreement -- is defined in Section 4.10.
Preferred Stock -- means any class of Capital Stock of a
Person that is preferred over any other class of Capital Stock
of such Person as to the payment of dividends or other equity
distributions or the payment of any amount upon liquidation or
dissolution of such corporation.
Priority Debt -- means, at any time, without duplication,
the sum of
(a) all Debt of the Company secured by any Lien on
any property of the Company or any Restricted Subsidiary,
other than any such Debt secured by Liens permitted by any
one or more of clauses (a)(i) through (a)(viii), inclusive, of
Section 10.7, plus
(b) all Debt of Restricted Subsidiaries,
provided that there shall be excluded from Priority Debt (i)
unsecured Debt of Jabil Malaysia guarantied by the Company in an
amount not exceeding $30,000,000, (ii) Debt of any Guarantor
under the Guaranty Agreement, (iii) unsecured Debt of any
Guarantor referred to in the foregoing clause (ii) under such
Guarantor's guaranty of obligations under the Bank Loan
Agreement or any related agreement, instrument or other
document, so long as such obligations of such Guarantor are
subject to the sharing provisions of the Intercreditor
Agreement, and (iv) any Debt of any Restricted Subsidiary under
clause (b) above owing solely to the Company or any Wholly-Owned
Restricted Subsidiary. Without limitation of the foregoing, it
is agreed that any Debt of Jabil Circuit Ltd., or of any other
"Borrowing Subsidiary" (as such term is defined in the Bank Loan
Agreement), under the Bank Loan Agreement shall constitute
Priority Debt.
Pro Forma Consolidated Fixed Charges Coverage Ratio --
means, at any time, the ratio of (a) Consolidated Net Earnings
Available for Fixed Charges for the immediately preceding period
of four consecutive fiscal quarters of the Company (for purposes
of this definition, a "One Year Retrospective Period"), after
giving effect to the assumptions set forth in the last paragraph
of this definition, to (b) Consolidated Fixed Charges for such
One Year Retrospective Period, after giving effect to the
assumptions set forth in the last paragraph of this definition.
For purposes of determining "Consolidated Net Earnings
Available for Fixed Charges" and "Consolidated Fixed Charges" in
this definition, any Acquisition or Asset Disposition by the
Company or any Restricted Subsidiary that is consummated during
the One Year Retrospective Period shall be deemed to have been
consummated as of the first day of such One Year Retrospective
Period (and the earnings and other results of operations during
such period in respect of the property acquired or disposed of
shall accordingly be included in the case of an Acquisition, or
excluded in the case of an Asset Disposition, for purposes of
such determinations) and any Debt incurred in connection with
any such Acquisition shall be deemed to be outstanding as of
such first day. For purposes of this paragraph, an Acquisition
shall include any acquisition of a Person (including, without
limitation, an acquisition of Capital Stock of any Subsidiary
that, immediately prior to such acquisition, was not a
Restricted Subsidiary) that becomes a Restricted Subsidiary or
the acquisition of all or substantially all of the assets of any
Person.
property or properties -- means, unless otherwise
specifically limited, any kind of property or asset, whether
real, personal or mixed, tangible or intangible, choate or
inchoate.
Property Reinvestment Application -- means, with respect to
any Transfer of property, the satisfaction of each of the
following conditions:
(a) an amount equal to the Net Proceeds Amount with
respect to such Transfer shall have been applied to the
acquisition by the Company, or any of its Restricted
Subsidiaries making such Transfer, of property that upon such
acquisition is unencumbered by any Lien (other than Liens
described in clauses (a)(i) through (a)(ix), inclusive, of
Section 10.7) and that
(i) constitutes property that is (x) properly
classifiable under GAAP as non-current to the extent
that such proceeds are derived from the transfer of
property that was properly classifiable as non-current, and
otherwise properly classifiable as either current or
non-current, (y) of a similar nature and of at least
equivalent value as the property that was the subject of such
Transfer, and (z) to be used in the ordinary course of
business of the Company and its Restricted
Subsidiaries, or
(ii) constitutes equity interests of a Person
that shall be, on or prior to the time of such
acquisition, a Restricted Subsidiary of the Company, and
that shall invest the proceeds of such acquisition in property
of the nature described in the immediately preceding
clause (i); and
(b) the Company shall have delivered a certificate
of an officer of the Company to each holder of a Note
referring to Section 10.9 and generally identifying the
property that was the subject of such Transfer, the Disposition
Value of such property, and the nature, terms, amount and
application of the proceeds from the Transfer.
Ratable Portion -- for any Note means, with respect to any
Transfer of property, an amount equal to the product of (x) the
Net Proceeds Amount of such Transfer multiplied by (y) a
fraction the numerator of which is the outstanding principal
amount of such Note and the denominator of which is the
aggregate outstanding principal amount of Senior Debt (excluding
Senior Debt owing to any of the Restricted Subsidiaries or any
Affiliate and Senior Debt in respect of any revolving credit or
similar facility providing the Company with the right to obtain
loans or other extensions of credit from time to time, except to
the extent that in connection with such payment of Senior Debt
the availability of credit under such credit facility is
permanently reduced by an amount not less than the amount of
such proceeds applied to the payment of such Senior Debt).
Required Holders -- means, at any time, the holders of at
least 66-_% in principal amount of the Notes at the time
outstanding (exclusive of Notes then owned by the Company or any
of its Affiliates).
Responsible Officer -- means the chief executive officer,
the President, any Senior Financial Officer and any other
officer of the Company with responsibility for the
administration of the relevant portion of this agreement.
Restricted Subsidiary -- means, at any time, each and every
Subsidiary at least 80% (by number of votes) of the Voting Stock
of which is legally and beneficially owned by the Company and
its Wholly-Owned Restricted Subsidiaries at such time.
Securities Act -- means the Securities Act of 1933, as
amended from time to time.
Security -- has the meaning set forth in section 2(1) of
the Securities Act. Senior Debt -- means any Debt of the
Company that is not in any manner subordinated in right of
payment or security to the Notes or to any other Debt of the
Company.
Senior Financial Officer -- means the chief financial
officer, principal accounting officer, treasurer or comptroller
of the Company.
Subsidiary -- means, as to any Person, any corporation,
association or other business entity in which such Person or one
or more of its Subsidiaries or such Person and one or more of
its Subsidiaries owns sufficient equity or voting interests to
enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons
performing similar functions) of such entity, and any
partnership or joint venture if more than a 50% interest in the
profits or capital thereof is owned by such Person or one or
more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily
take major business actions without the prior approval of such
Person or one or more of its Subsidiaries). Unless the context
otherwise clearly requires, any reference to a "Subsidiary" is a
reference to a Subsidiary of the Company.
Subsidiary Stock -- means, with respect to any Person, the
Capital Stock (or any options or warrants to purchase stock or
other Securities exchangeable for or convertible into any
Capital Stock) of any Subsidiary of such Person.
Swaps -- means, with respect to any Person, payment
obligations with respect to interest rate swaps, currency swaps
and similar obligations obligating such Person to make payments,
whether periodically or upon the happening of a contingency.
For the purposes of this Agreement, the amount of the obligation
under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of
such Person, based on the assumption that such Swap had
terminated at the end of such fiscal quarter, and in making such
determination, if any agreement relating to such Swap provides
for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the
simultaneous payment of amounts by and to such Person, then in
each such case, the amount of such obligation shall be the net
amount so determined.
Transfer -- means, with respect to any Person, any
transaction in which such Person sells, conveys, transfers or
leases (as lessor) any of its property, including, without
limitation, Subsidiary Stock.
Voting Stock -- means, with respect to any Person, any
Capital Stock of such Person whose holders are entitled under
ordinary circumstances to vote for the election of directors (or
Persons performing similar functions) of such Person
(irrespective of whether at the time Capital Stock of any other
class or classes shall have or might have voting powers by
reason of the happening of any contingency).
Wholly-Owned Restricted Subsidiary -- means, at any time,
any Restricted Subsidiary 100% of all of the equity interests
(except directors' qualifying shares) and voting interests of
which are owned by any one or more of the Company and the
Company's other WhollyOwned Restricted Subsidiaries at such
time. SCHEDULE 3
PAYMENT INSTRUCTIONS
Account Name: Jabil Circuit, Inc.
Account #: 59869-04
ABA #: 072000326
NBD Bank
611 Woodward Avenue
Detroit, Michigan 48278
Contact: Rick Ellis
(313) 225-3743
SCHEDULE 4.13
CHANGES IN CORPORATE STRUCTURE
None. SCHEDULE 5.3
DISCLOSURE MATERIALS
None. SCHEDULE 5.4
SUBSIDIARIES OF THE COMPANY AND OWNERSHIP OF SUBSIDIARY
STOCK
Subsidiaries Ownership %
Jabil Circuit of Michigan 100%
Jabil Circuit, Ltd. 100%
Jabil Circuit Sdn Bhd 100%
SCHEDULE 5.5
FINANCIAL STATEMENTS
Jabil Circuit, Inc. Annual Report for the fiscal years ended
August 31, 1993, 1994 and 1995
Jabil Circuit, Inc. 10-K for the fiscal year ended August 31,
1995
Jabil Circuit, Inc. 10-Q for the fiscal quarter ended February
29, 1996 SCHEDULE 5.8
CERTAIN LITIGATION
Jabil Circuit, Inc. v. Epson America, Inc. (Case number
95-57-CIV-T-23E).
Commercial Transaction/Breach of Contract suit. Case in
late stages of discovery as of the effective date. The
parties are presently involved in settlement negotiations
the likely outcome of which will not have a Material Adverse
Effect.
SCHEDULE 5.11
PATENTS, ETC.
Jabil Circuit, Inc. presently has several patents primarily
related to the initial business when the Company started
operations in Michigan in the 1970's- 1980's. None of the
patents is valued on the balance sheet. The Company does
not derive revenue of any significance from patented technology.
SCHEDULE 5.12
ERISA
The following plans are administered under ERISA:
Jabil Circuit, Inc. Welfare Benefit Plan
Restated Cash or Deferred Profit Sharing Plan of
Jabil Circuit, Inc.
SCHEDULE 5.14
USE OF PROCEEDS
Approximately $24 million will be used to pay off term debt
with existing banks. Approximately $26 million will be used
to paydown Jabil Circuit, Inc.'s short- term borrowings, or
revolving credit facility.
SCHEDULE 5.15
EXISTING DEBT
SCHEDULE 9.8
INCORPORATED COVENANTS
(Note:Certain capitalized terms used in the covenants contained
in this Schedule are defined below in this Schedule under
the heading "CERTAIN DEFINED TERMS USED IN THIS SCHEDULE;"
other capitalized terms used in this Schedule shall have the
meanings ascribed to them in Schedule B to the Note Purchase
Agreement of which this Schedule is a part. The number and
letter designations of the covenants contained in this
Schedule correspond (with some modifications) to those used in
the corresponding provisions of the Bank Loan Agreement.)
********
5.1 Affirmative Covenants.
(a) Preservation of Corporate Existence, Etc. The
Company will, and will cause each Subsidiary to, do or cause to
be done all things necessary to preserve, renew and keep in full
force and effect its legal existence, except to the extent
permitted by Section 5.2(g) of this Schedule, and its
qualification as a foreign corporation in good standing in each
jurisdiction in which such qualification is necessary under
applicable law.
(b) Compliance with Laws, Etc. The Company will,
and will cause each Subsidiary to, comply in all material
respects with all applicable laws, rules, regulations and orders
of any governmental authority, whether federal, state, local or
foreign (including without limitation ERISA, the Code and
Environmental Laws), in effect from time to time; and pay and
discharge promptly when due all taxes, assessments and
governmental charges or levies imposed upon it or upon its
income, revenues or property, before the same shall become
delinquent or in default, as well as all lawful claims for
labor, materials and supplies or otherwise, which, if unpaid,
would give rise to Liens upon such properties or any portion
thereof, except to the extent that payment of any of the
foregoing is then being contested in good faith by appropriate
legal proceedings and with respect to which adequate financial
reserves have been established on the books and records of the
Company and its Subsidiaries.
(c) Maintenance of Properties; Insurance. The
Company will, and will cause each Subsidiary to, maintain,
preserve and protect all property that is material to the
conduct of the business of the Company or any of its
Subsidiaries and keep such property in good repair, working
order and condition and from time to time make, or cause to be
made all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that
the business carried on in connection therewith may be properly
conducted at all times in accordance with customary and prudent
business practices for similar businesses; and, maintain in full
force and effect insurance with responsible and reputable
insurance companies or associations in such amounts, on such
terms and covering such risks, as is usually carried by
companies engaged in similar businesses and owning similar
properties similarly situated and maintain in full force and
effect public liability insurance, insurance against claims for
personal injury or death or property damage occurring in
connection with any of its activities or any properties owned,
occupied or controlled by it, in such amount as it shall
reasonably deem necessary.
(d) [Reserved.]
(e) Accounting; Access to Records, Books, Etc. The
Company will, and will cause each Subsidiary to, maintain a
system of accounting established and administered in accordance
with sound business practices to permit preparation of financial
statements in accordance with GAAP and to comply with the
requirements of the Financing Documents and, at any reasonable
time during normal business hours and from time to time, (i)
permit any holder of Notes or any agents or representatives
thereof to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of,
the Company and its Subsidiaries, and to discuss the affairs,
finances and accounts of the Company and its Subsidiaries with
their respective directors, officers, employees and independent
auditors, provided that representatives of the Company selected
by the Company are present during any such visit or discussion,
and by this provision the Company does hereby authorize such
Persons to discuss such affairs, finances and accounts with any
holder of Notes subject to the above terms and conditions and
(ii) permit any holder of Notes and any of its agents or
representative to conduct a comprehensive field audit of its
books, records, property and assets, which audits shall be
performed once per year (unless an Event of Default has
occurred, in which case audits may be performed more frequently)
and which audits shall be at the expense of the Company. In
connection with any activities of any holder of Notes pursuant
to this Section 5.1(e), prior to any Default or Event of
Default, any holder of Notes: (i) shall endeavor to give the
Company three Business Days notice of any audit or visit, (ii)
shall follow the Company's standard security procedures, and
(iii) agrees that inventory will not be audited unless the
Company has relied on inventory in the "Borrowing Base" (as
defined in the Bank Loan Agreement) during the twelve months
prior to any such audit.
(f) Stamp Taxes. The Company will pay all stamp
taxes and similar taxes, if any, including interest and
penalties, if any, payable in respect of the Notes. The
efficacy of this subsection shall survive the payment in full of
the Notes.
(g) [Reserved.]
(h) Further Assurances. The Company will execute
and deliver, within 30 days after request therefor by the
Required Holders, all further instruments and documents and take
all further action that may be necessary, in order to give
effect to, and to aid in the exercise and enforcement of the
rights and remedies of the holders of Notes under, the Financing
Documents.
5.2 Negative Covenants.
(a) Current Ratio. The Company will not permit or
suffer the Consolidated Current Ratio to be less than 1.40 to
1.00 at any time.
(b) Fixed Charge Coverage Ratio. The Company will
not permit or suffer the Consolidated Fixed Charge Coverage
Ratio to be less than, at any time, 3.0 to 1.0; calculated as of
the end of each fiscal quarter for the four immediately
preceding fiscal quarters.
(c) [Reserved.]
(d) Funded Indebtedness to Total Capitalization.
The Company will not permit or suffer the ratio of Consolidated
Funded Indebtedness to Consolidated Total Capitalization at any
time to exceed 0.60 to 1.0.
(e) Indebtedness. The Company will not, and will
not permit any Subsidiary to, create, incur, assume or in any
manner become liable in respect of, or suffer to exist, any
Indebtedness other than:
(i) Indebtedness under the Financing Documents;
(ii) The Indebtedness described in Schedule
5.2(e) to the Bank Loan Agreement as in effect on the date of
Closing, having the same terms as those existing on the date of
Closing, but no extension or renewal thereof shall be permitted;
(iii) Indebtedness of any Subsidiary of the
Company owing to the Company or to any other Subsidiary of the
Company;
(iv) Interest rate or currency swaps, rate caps
or other similar transactions with any Bank (valued in an amount
equal to the highest termination payment, if any, that would be
payable by such Person upon termination for any reason on the
date of determination), so long as such Indebtedness is incurred
in compliance with the other provisions of the Note Purchase
Agreement of which this Schedule is a part (including, without
limitation, Sections 10.5 and 10.6 thereof);
(v) Indebtedness incurred under the Bank Loan
Agreement and related instruments, agreements or other
documents, so long as such Indebtedness is incurred in
compliance with the other provisions of the Note Purchase
Agreement of which this Schedule is a part (including, without
limitation, Sections 10.5 and 10.6 thereof); and
(vi) Unsecured Indebtedness of Jabil Malaysia
in an aggregate amount not exceeding $30,000,000 and a guaranty
by the Company of such Indebtedness; provided, however, the
aggregate amount of Indebtedness of Jabil Malaysia shall not
exceed the book value of its accounts receivable, inventory and
fixed assets as reported in the books of Jabil Malaysia and the
terms and conditions of such Indebtedness, including the form of
guaranty to be executed by the Company, shall be satisfactory to
the Required Holders.
(f) Liens. The Company will not, and will not
permit any Subsidiary to, create, incur or suffer to exist any
Lien on any of the assets, rights, revenues or property, real,
personal or mixed, tangible or intangible, whether now owned or
hereafter acquired, of the Company or any of its Subsidiaries,
other than:
(i) Liens for taxes not delinquent or for
taxes being contested in good faith by appropriate proceedings
and as to which adequate financial reserves have been
established on its books and records;
(ii) Liens (other than any Lien imposed by
ERISA) created and maintained in the ordinary course of business
which are not material in the aggregate and which constitute (A)
pledges or deposits under worker's compensation laws,
unemployment insurance laws or similar legislation, (B) good
faith deposits in connection with bids, tenders, contracts or
leases to which the Company or any of its Subsidiaries is a
party for a purpose other than borrowing money or obtaining
credit, including rent security deposits, (C) liens imposed by
law, such as those of carriers, warehousemen and mechanics, if
payment of the obligation secured thereby is not yet due, (D)
Liens securing taxes, assessments or other governmental charges
or levies not yet subject to penalties for nonpayment, and (E)
pledges or deposits to secure public or statutory obligations of
the Company or any of its Subsidiaries, or surety, customs or
appeal bonds to which the Company or any of its Subsidiaries is
a party;
(iii) Liens affecting real property which
constitute minor survey exceptions or defects or irregularities
in title, minor encumbrances, easements or reservations of, or
rights of others for, rights of way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, or
zoning or other restrictions as to the use of such real
property, provided that all of the foregoing, in the aggregate,
do not at any time materially detract from the value of said
properties or materially impair their use in the operation of
the businesses of the Company or any of its Subsidiaries;
(iv) Liens existing on the date of Closing upon
the same terms as the date of Closing, but no extensions,
renewals and replacements thereof shall be permitted, with each
existing Lien described in Schedule 5.2(f) to the Bank Loan
Agreement as in effect on the date of Closing;
(v) Liens granted by a Subsidiary in favor of
the Company;
(vi) The interest or title of a lessor under
any lease otherwise permitted under the Financing Documents with
respect to the property subject to such lease to the extent
performance of the obligations of the Company or its Subsidiary
thereunder is not delinquent; and
(vii) Liens in favor of the Collateral Agent for
the benefit of the holders of the Notes and the Banks as
contemplated by the Intercreditor Agreement.
(g) Merger; Acquisitions; Etc. The Company will
not, and will not permit any Subsidiary to, subject to Section
5.2(j) of this Schedule, purchase or otherwise acquire, whether
in one or a series of transactions, all or a substantial portion
of the business, assets, rights, revenues or property, real,
personal or mixed, tangible or intangible, of any Person, or all
or a substantial portion of the capital stock of or other
ownership interest in any other Person; nor merge or consolidate
or amalgamate with any other Person or take any other action
having a similar effect, nor enter into any joint venture or
similar arrangement with any other Person, provided, however,
that this Section 5.2(g) shall not prohibit any merger,
acquisition or joint venture if (i) the Company shall be the
surviving or continuing corporation thereof, (ii) immediately
before and after such merger or acquisition, no Default or Event
of Default shall exist or shall have occurred and be continuing
and the representations and warranties contained in Section 5 of
the Note Purchase Agreements shall be true and correct on and as
of the date thereof (both before and after such merger or
acquisition is consummated) as if made on the date such merger
or acquisition is consummated, (iii) the aggregate amount paid
or payable in cash for all such mergers, acquisitions or joint
ventures by the Company and its Subsidiaries after the date of
Closing does not exceed $10,000,000, and (iv) prior to the
consummation of such merger or acquisition, the Company shall
have provided to each holder of Notes an opinion of counsel and
a certificate of the chief financial officer of the Company
(attaching computations and pro forma financial statements to
demonstrate compliance with all financial covenants hereunder
both before and after such merger, acquisition or joint venture
has been completed), each stating that such merger or
acquisition complies with this Section 5.2(g) and that any other
conditions under the Financing Documents relating to such
transaction have been satisfied.
(h) Disposition of Assets; Etc. The Company will
not, and will not permit any Subsidiary to, sell, lease,
license, transfer, assign or otherwise dispose of all or a
substantial portion of its business, assets, rights, revenues or
property, real, personal or mixed, tangible or intangible,
whether in one or a series of transactions, other than inventory
sold in the ordinary course of business upon customary credit
terms and sales of scrap or obsolete material or equipment,
provided, however, that this Section 5.2(h) shall not prohibit
any such sale, lease, license, transfer, assignment or other
disposition if the aggregate book value (disregarding any
write-downs of such book value other than ordinary depreciation
and amortization) of all of the business, assets, rights,
revenues and property disposed of after the date of Closing
shall be less than $5,000,000 in the aggregate and if,
immediately before and after such transaction, no Default or
Event of Default shall exist or shall have occurred and be
continuing.
(i) Nature of Business. The Company will not, and
will not permit any Subsidiary to, make any substantial change
in the nature of its business from that engaged in on the date
of Closing or engage in any other businesses other than the
design, development and manufacturing of computer-grade
electronic products.
(j) Investments, Loans and Advances. The Company
will not, and will not permit any Subsidiary to, subject to
Section 5.2(g) of this Schedule, purchase or otherwise acquire
any capital stock of or other ownership interest in, or debt
securities of or other evidences of Indebtedness of, any other
Person; nor make any loan or advance of any of its funds or
property or make any other extension of credit to, or make any
investment or acquire any interest whatsoever in, any other
Person; nor incur any Contingent Liability; other than (i)
extensions of trade credit made in the ordinary course of
business on customary credit terms and commission, travel and
similar advances made to officers and employees in the ordinary
course of business, and (ii) commercial paper of any United
States issuer having the highest rating then given by Moody's
Investors Service, Inc., or Standard & Poor's, a division of
McGraw-Hill, Inc., direct obligations of and obligations fully
guaranteed by the United States of America or any agency or
instrumentality thereof, or certificates of deposit of any
commercial bank which is a member of the Federal Reserve System
and which has capital, surplus and undivided profit (as shown on
its most recently published statement of condition) aggregating
not less than $100,000,000, provided, however, that each of the
foregoing investments has a maturity date not later than 365
days after the acquisition thereof by the Company or any of its
Subsidiaries, (iii) those investments, loans, advances and other
transactions described in Schedule 5.2(j) to the Bank Loan
Agreement as in effect on the date of Closing, having the same
terms as existing on the date of Closing, but no extension or
renewal thereof shall be permitted, and (iv) investments, loans
and advances to any Subsidiary; provided, that, the aggregate
amount of such investments, loans and advances outstanding at
any time to Subsidiaries who are not Guarantors shall not exceed
$30,000,000 and the aggregate amount of such investments, loans
and advances to Jabil Ltd. shall not exceed $15,000,000.
(k) Transactions with Affiliates. The Company will
not, and will not permit any Subsidiary to, enter into, become a
party to, or become liable in respect of, any contract or
undertaking with any Affiliate except in the ordinary course of
business and on terms not less favorable to the Company or any
Subsidiary than those which could be obtained if such contract
or undertaking were an arms length transaction with a Person
other than an Affiliate.
(l) Sale and Leaseback Transactions. The Company
will not, and will not permit any Subsidiary to, become or
remain liable in any way, whether directly or by assignment or
as a guarantor or other contingent obligor, for the obligations
of the lessee or user under any lease or contract for the use of
any real or personal property if such property is owned on the
date of Closing or thereafter acquired by the Company or any of
its Subsidiaries and has been or is to be sold or transferred to
any other Person and was, is or will be used by the Company or
any such Subsidiary for substantially the same purpose as such
property was used by the Company or such Subsidiary prior to
such sale or transfer.
(m) Lease Rentals and Use Payments. The Company
will not, and will not permit any Subsidiary to, become or
remain liable in any way, whether directly or by assignment or
as a guarantor or other contingent obligor, for the obligations
of any lessee or user under any lease (other than a Capital
Lease) of real or personal property if the highest annual rent
and other amounts (exclusive of property taxes, property and
liability insurance premiums and maintenance costs), which may
be payable by the lessee or user thereunder in any fiscal year
of the Company during the term thereof when added to the
aggregate of all such rents and other amounts in respect of
which the Company and its Subsidiaries are liable which may be
payable in such fiscal year, shall exceed $10,000,000.
(n) [Reserved.]
(o) Inconsistent Agreements. The Company will not,
and will not permit any Subsidiary to, enter into any agreement
containing any provision which would be violated or breached by
the Financing Documents or any of the transactions contemplated
thereby or by performance by the Company or any of its
Subsidiaries of its obligations in connection therewith.
(p) Accounting Changes. The Company will not, and
will not permit any Subsidiary to, change its fiscal year or
make any significant changes (i) in accounting treatment and
reporting practices except as permitted by GAAP and disclosed to
each holder of Notes, or (ii) in tax reporting treatment except
as permitted by law and disclosed to each holder of Notes.
(q) [Reserved.]
(r) [Reserved.]
********
CERTAIN DEFINED TERMS USED IN THIS SCHEDULE:
For purposes of this Schedule 9.8, the following terms have
the respective meanings set forth below:
"Balloon Payments" shall have the meaning specified
in the Bank Loan Agreement.
"Consolidated" shall mean, when used with reference
to any financial term in this Schedule, the aggregate for the
Company and its consolidated Subsidiaries of the amounts
signified by such term for all such Persons determined on a
consolidated basis in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" of any
Person shall mean, as of any date, the ratio of (a) Consolidated
EBITDA as calculated for the four most recently ended
consecutive fiscal quarters of the Company plus all payments
relating to operating leases of such Person during such period
to (b) all consolidated interest expense during such period for
such Person, plus all payments relating to operating leases of
such Person during such period.
"Contingent Liabilities" of any Person shall mean, as
of any date, all obligations of such Person or of others for
which such Person is contingently liable, as obligor, guarantor,
surety or in any other capacity, or in respect of which
obligations such Person assures a creditor against loss or
agrees to take any action to prevent any such loss (other than
endorsements of negotiable instruments for collection in the
ordinary course of business), including without limitation all
reimbursement obligations of such Person in respect of any
letters of credit, surety bonds or similar obligations and all
obligations of such Person to advance funds to, or to purchase
assets, property or services from, any other Person in order to
maintain the financial condition of such other Person.
"Current Assets" and "Current Liabilities" of any
Person shall mean, as of any date, all assets or liabilities,
respectively, of such Person which, in accordance with GAAP,
should be classified as current assets or current liabilities,
respectively, on a balance sheet of such Person; provided,
however, that, regardless of proper classification under GAAP,
the Balloon Payments shall be excluded from the calculation of
Current Liabilities and the aggregate amount of outstanding
Revolving Credit Advances shall be included in the calculation
of Current Liabilities hereunder.
"Current Ratio" shall mean, as of any date, the ratio
of (a) Consolidated Current Assets to (b) Consolidated Current
Liabilities.
"EBIT" shall mean, with respect to any Person, for
any period, the sum of (a) Net Income or loss plus (b) all
amounts deducted in determining such Net Income or loss on
account of (i) interest expense and (ii) taxes based on or
measured by income, all as determined in accordance with GAAP.
"EBITDA" shall mean, with respect to any Person, for
any period, EBIT for such period plus, to the extent deducted in
determining such EBIT, depreciation and positive amortization
expense, all as determined in accordance with GAAP.
"Funded Indebtedness" of any Person shall mean, as of
any date, all Indebtedness of such Person for borrowed money,
including without limitation, all obligations under any Capital
Lease, other than Subordinated Debt.
"Indebtedness" of any Person shall mean (i)
indebtedness for borrowed money, (ii) obligations evidenced by
bonds, debentures, notes or other similar instruments, (iii)
obligations to pay the deferred purchase price of property or
services, except for trade accounts payable arising in the
ordinary course of business that are not more than 90 days past
due or as are reasonably being contested, (iv) obligations as
lessee under leases which have been in accordance with GAAP,
recorded as Capital Leases, (v) obligations to purchase property
or services if payment is required regardless of whether such
property is delivered or services are performed (generally
called "take or pay" contracts), (vi) obligations in respect of
currency or interest rate swaps or comparable transactions
valued at the maximum termination payment payable by the
obligor, (vii) all obligations of others similar in character to
those described in clauses (i) through (iv) of this definition
for which such Person is contingently liable, as guarantor,
surety, accommodation party, partner or in any other capacity,
or in respect of which obligations such Person assures a
creditor against loss or agrees to take any action to prevent
any such loss (other than endorsements of negotiable instruments
for collection in the ordinary course of business), including
without limitation all reimbursement obligations of such Person
in respect of letters of credit, surety bonds or similar
obligations and all obligations of such Person to advance funds
to, or to purchase assets, property or services from, any other
Person in order to maintain the financial condition of such
other Person and (viii) liabilities in respect of unfunded
vested benefits under plans covered by Title IV of ERISA.
"Revolving Credit Advance" shall have the meaning
specified in the Bank Loan Agreement.
"Subordinated Debt" of any Person shall mean, as of
any date, that Indebtedness of such Person for borrowed money
which is expressly subordinate and junior in right and priority
of payment to the Indebtedness owed to the holders of the Notes
under the Financing Documents in a manner and by one or more
agreements satisfactory in form and substance to the Required
Holders and as approved by the Required Holders in writing.
"Subsidiary" of any Person shall mean any other
Person (whether now existing or hereafter organized or acquired)
in which (other than directors' qualifying shares required by
law) at least a majority of the securities or other ownership
interests of each class having ordinary voting power or
analogous right (other than securities or other ownership
interests which have such power or right only by reason of the
happening of a contingency), at the time as of which any
determination is being made, are owned, beneficially and of
record, by such Person or by one or more of the other
Subsidiaries of such Person or by any combination thereof.
Unless otherwise specified, reference to "Subsidiary" shall mean
a Subsidiary of the Company.
"Total Capitalization" of any Person shall mean the
sum of (a) Tangible Net Worth (as defined in Schedule 10.3) plus
(b) Funded Indebtedness plus (c) deferred income taxes of such
Person. SCHEDULE 10.3
CERTAIN DEFINITIONS USED IN TANGIBLE NET WORTH COVENANT
For purposes of Section 10.3, the following terms have the
respective meanings set forth below:
"Capital Stock" shall include all capital stock and any
securities exchangeable for or convertible into capital stock
and any warrants, rights or other options to purchase or
otherwise acquire capital stock or such securities or any other
form of equity securities.
"Consolidated" shall mean, when used with reference to any
financial term in this Schedule, the aggregate for the Company
and its consolidated Subsidiaries of the amounts signified by
such term for all such Persons determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income" shall have the meaning provided
for by the definitions of "Consolidated" and "Net Income" in
this Schedule.
"Consolidated Tangible Net Worth" shall have the meaning
provided for by the definitions of "Consolidated" and "Tangible
Net Worth" in this Schedule.
"Net Cash Proceeds" shall mean, in connection with any
issuance or sale of any Capital Stock, the cash proceeds
received from such issuance, net of investment banking fees,
reasonable and documented attorneys' fees, accountants' fees,
underwriting discounts and commissions and other customary fees
and other costs and expenses actually incurred in connection
therewith.
"Net Income" of any Person shall mean, for any period, the
net income (after deduction for income and other taxes of such
Person determined by reference to income or profits of such
Person) of such Person for such period, all as determined in
accordance with GAAP.
"Tangible Net Worth" of any Person shall mean, as of any
date, (a) the amount of any capital stock, paid in capital and
similar equity accounts plus (or minus in the case of a deficit)
the capital surplus and retained earnings of such Person and the
amount of any foreign currency translation adjustment account
shown as a capital account of such Person, less (b) the net book
value of all items of the following character which are included
in the assets of such Person: (i) goodwill, including, without
limitation, the excess of cost over book value of any asset,
(ii) organization or experimental expenses, (iii) unamortized
debt discount and expense, (iv) patents, trademarks, trade names
and copyrights, (v) treasury stock, (vi) franchises, licenses
and permits, and (vii) other assets which are deemed intangible
assets under GAAP.
EXHIBIT 1
[FORM OF NOTE]
THIS NOTE AND THE NOTE PURCHASE AGREEMENTS REFERRED TO BELOW
MAY BE SUBJECT TO THE TERMS OF AN INTERCREDITOR AGREEMENT, DATED
AS OF MAY 30, 1996, AS MAY BE AMENDED, RESTATED OR OTHERWISE
MODIFIED FROM TIME TO TIME, AMONG CERTAIN LENDERS AND NBD BANK
AS COLLATERAL AGENT. BY ACCEPTANCE OF THIS NOTE, THE HOLDER
HEREOF MAY BECOME BOUND BY THE PROVISIONS OF SUCH INTERCREDITOR
AGREEMENT, WHETHER OR NOT SUCH HOLDER BECOMES A PARTY THERETO.
JABIL CIRCUIT, INC.
6.89% SENIOR NOTE DUE MAY 30, 2004
No. R-__
[Date] $__________
PPN 466313 A* 4
FOR VALUE RECEIVED, the undersigned, JABIL CIRCUIT, INC.
(herein called the "Company"), a corporation organized and
existing under the laws of the State of Delaware, hereby
promises to pay to , or registered
assigns, the principal sum of
DOLLARS ($__________) on May 30, 2004, with interest (computed
on the basis of a 360-day year of twelve 30-day months) (a) on
the unpaid balance thereof at the rate of 6.89% per annum from
the date hereof, payable semiannually, on the 30th day of May
and November in each year, commencing with the May 30 or
November 30 next succeeding the date hereof, until the principal
hereof shall have become due and payable, and (b) to the extent
permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and
any overdue payment of any Make-Whole Amount (as defined in the
Note Purchase Agreements referred to below), payable
semiannually as aforesaid (or, at the option of the registered
holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 6.89% or (ii) 2.00% over the rate of
interest publicly announced by The First National Bank of
Chicago (or its successor) from time to time in Chicago,
Illinois as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole
Amount with respect to this Note are to be made in lawful money
of the United States of America at the address shown in the
register maintained by the Company for such purpose or at such
other place as the Company shall have designated by written
notice to the holder of this Note as provided in the Note
Purchase Agreements referred to below.
This Note is one of a series of Senior Notes (herein called
the "Notes") issued pursuant to separate Note Purchase
Agreements, dated as of May 30, 1996 (as from time to time
amended, the "Note Purchase Agreements"), between the Company
and the respective Purchasers named therein and is entitled to
the benefits thereof. This Note is also entitled to the
benefits of the Pledge Agreement (as such term is defined in the
Note Purchase Agreements). Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the
confidentiality provisions set forth in Section 20 of the Note
Purchase Agreements and (ii) to have made the representation set
forth in Section 6.2 of the Note Purchase Agreements.
This Note is a registered Note and, as provided in the Note
Purchase Agreements, upon surrender of this Note for
registration of transfer, duly endorsed, or accompanied by a
written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued
to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat
the Person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other
purposes, and the Company will not be affected by any notice to
the contrary.
The Company will make required prepayments of principal on
the dates and in the amounts specified in the Note Purchase
Agreements. This Note is also subject to optional prepayment,
in whole or from time to time in part, at the times and on the
terms specified in the Note Purchase Agreements, but not
otherwise.
If an Event of Default, as defined in the Note Purchase
Agreements, occurs and is continuing, the principal of this Note
may be declared or otherwise become due and payable in the
manner, at the price (including any applicable Make-Whole
Amount) and with the effect provided in the Note Purchase
Agreements.
THIS NOTE AND THE NOTE PURCHASE AGREEMENTS ARE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH
STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A
JURISDICTION OTHER THAN SUCH STATE.
JABIL CIRCUIT, INC.
By
Name:
Title:
EXHIBIT 4.4(a)
[FORM OF OPINION OF GENERAL COUNSEL OF THE COMPANY]
[Letterhead of Jabil Circuit, Inc.]
[Closing Date]
To the Persons Listed on Annex 1 hereto
Re: Jabil Circuit, Inc. (the "Company")
Ladies and Gentlemen:
Reference is made to the separate Note Purchase Agreements,
each dated as of May 30, 1996 (collectively, the "Note Purchase
Agreement"), between the Company and each of the purchasers
listed on Schedule A attached thereto (the "Purchasers"), which
provide, among other things, for the issuance and sale by the
Company of its 6.89% Senior Notes due May 30, 2004, in the
aggregate principal amount of $50,000,000. The capitalized
terms used herein and not defined herein have the meanings
specified in the Note Purchase Agreement.
I am the General Counsel of the Company and have acted as
counsel to the Company in connection with the transactions
contemplated by the Note Purchase Agreement. The opinion is
delivered to you pursuant to Section 4.4(a) of the Note Purchase
Agreement. In acting as such counsel, I have examined:
(a) the Note Purchase Agreement;
(b) the Company's 6.89% Senior Notes due May 30,
2004, dated the date hereof, in the form of Exhibit 1 to the
Note Purchase Agreement and registered in the names, in the
principal amounts and with the registration numbers set forth on
Schedule A to the Note Purchase Agreement (the "Notes");
(c) the Guaranty Agreement;
(d) the Pledge Agreement;
(e) the Intercreditor Agreement;
(f) the documents executed and delivered by the
Company and the Guarantor in connection with the
transactions contemplated by the Financing Documents;
(g) the bylaws and minute books of the Company and a
certified copy of the certificate of incorporation of the
Company, as in effect on the date hereof;
(h) the bylaws and minute books of the Guarantor and
a certified copy of the articles of incorporation of the
Guarantor, as in effect on the date hereof;
(i) a long-form good standing certificate of the
Company from the State of Delaware and foreign good standing
certificates for the Company from each of the states set
forth on Annex 2 hereto;
(j) a good standing certificate of the Guarantor
from the State of Michigan;
(k) a letter from SPP Hambro & Co. and NBD Bank,
dated the date hereof, making certain representations with
respect to the manner in which the Notes were offered (the
"Offeree Letter");
(l) the opinion of Hebb & Gitlin, special counsel to
the Purchasers, dated the date hereof; and
(m) originals, or copies certified or otherwise
identified to my satisfaction, of such other documents,
records, instruments and certificates of public officials as I
have deemed necessary or appropriate to enable me to render
this opinion.
The documents referred to in clauses (a) through (e), inclusive,
above are hereinafter referred to collectively as the "Financing
Documents;" the documents referred to in clauses (a), (b), (d)
and (e) above are hereinafter referred to collectively as the
"Company Financing Documents;" and the documents referred to in
clauses (c) and (e) above are hereinafter referred to
collectively as the "Guarantor Financing Documents."
In rendering my opinion, I have relied, to the extent I
deem necessary and proper, on:
(a) warranties and representations as to certain
factual matters contained in the Note Purchase Agreement;
(b) the Offeree Letter; and
(c) such opinion of Hebb & Gitlin with respect to
all matters governed by New York law.
I have no actual knowledge of any of the facts contained in the
documents listed in item (a) or item (b) of the immediately
preceding sentence.
My opinion is based upon the federal laws of the United
States of America and the laws of the State of Florida, the
State of Delaware (with respect to corporate law), the State of
Michigan and, in reliance upon the opinion of Hebb & Gitlin, the
State of New York. If the Financing Documents were governed by
the laws of the State of Florida, my opinion would not vary
materially from that set forth below.
Based on the foregoing, I am of the following opinions:
1. (a) The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and
authority to carry on its business and own its property.
(b) The Guarantor is a corporation duly
incorporated, validly existing and in good standing under
the laws of the State of Michigan and has all requisite
corporate power and authority to carry on its business and
own its property.
2. (a) The Company has duly qualified and is in good
standing as a foreign corporation in each jurisdiction where
the character of its properties or the nature of its
activities makes such qualification necessary, except where the
failure to so qualify and be in good standing would not have
a material adverse effect on the ability of the Company to
perform its obligations under the Company Financing Documents.
(b) The Guarantor has duly qualified and is in good
standing as a foreign corporation in each jurisdiction where
the character of its properties or the nature of its
activities makes such qualification necessary, except where the
failure to so qualify and be in good standing would not have
a material adverse effect on the ability of the Guarantor to
perform its obligations under the Guarantor Financing Documents.
3. To the best of my knowledge after due inquiry, there
is no default or existing condition that with the passage of
time or the giving of notice, or both, would result in a default
by the Company or the Guarantor under any contract, lease or
commitment known to me to which the Company or the Guarantor is
a party or any of their respective properties may be bound,
except where such default would not have a material adverse
effect on the ability of the Company or the Guarantor to perform
their respective obligations set forth in the Financing
Documents.
4. To the best of my knowledge after due inquiry, there
is no judgment, order, action, suit, proceeding, inquiry, order
or investigation, at law or in equity, before any court or
Governmental Authority, arbitration board or tribunal, pending
or threatened against the Company or the Guarantor that, in the
aggregate, could have a material adverse effect on the business,
operations, affairs, financial condition, assets or properties
of the Company and its Subsidiaries, taken as a whole, or the
ability of the Company or the Guarantor to perform their
respective obligations under the Financing Documents.
5. (a) The Company has the requisite corporate power
and authority to execute and deliver the Company Financing
Documents, to issue and sell the Notes, and to perform its
obligations set forth in each of the Company Financing Documents.
(b) The Guarantor has the requisite corporate power
and authority to execute and deliver the Guarantor Financing
Documents and to perform its obligations thereunder.
6. (a) Each of the Company Financing Documents has been
duly authorized by all necessary corporate action on the
part of the Company (no action on the part of the
stockholders of the Company being required in respect thereof),
has been executed and delivered by a duly authorized officer
of the Company, and constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company
in accordance with its terms.
(b) Each of the Guarantor Financing Documents has
been duly authorized by all necessary corporate action on
the part of the Guarantor (no action on the part of the
stockholders of the Guarantor being required in respect
thereof), has been executed and delivered by a duly
authorized officer of the Guarantor, and constitutes a
legal, valid and binding obligation of the Guarantor,
enforceable against the Guarantor in accordance with its
terms.
7. (a) The execution and delivery by the Company of the
Company Financing Documents, the issue and sale of the Notes
by the Company, and the performance by the Company of its
obligations thereunder will not conflict with, constitute a
violation of, result in a breach of any provision of,
constitute a default under, or result in the creation or
imposition of any Lien upon any of its properties (other than
the Liens granted pursuant to the Pledge Agreement) pursuant
to the certificate of incorporation or bylaws of the
Company, any applicable statute, rule or regulation to which the
Company is subject, or, to the best of my knowledge after
due inquiry, any agreement or instrument to which the
Company is a party or by which its properties may be bound.
(b) The execution and delivery by the Guarantor of
the Guarantor Financing Documents and the performance by the
Guarantor of its obligations thereunder will not conflict
with, constitute a violation of, result in a breach of any
provision of, constitute a default under, or result in the
creation or imposition of any Lien upon any of its
properties pursuant to the articles of incorporation or bylaws
of the Guarantor, any applicable statute, rule or regulation
to which the Guarantor is subject, or, to the best of my
knowledge after due inquiry, any agreement or instrument to
which the Guarantor is a party or by which its properties
may be bound.
8. All consents, approvals and authorizations of, and
all designations, declarations, filings, registrations,
qualifications and recordations with, Governmental Authorities,
required on the part of the Company and the Guarantor in
connection with the execution and delivery of each of the
Financing Documents and the issue and sale of the Notes and the
use of the proceeds thereof, have been obtained.
9. Under existing law, the Notes are not subject to the
registration requirements under the Securities Act of 1933, as
amended, and the Company is not required to qualify an indenture
with respect thereto under the Trust Indenture Act of 1939, as
amended.
10. The Company is the record and beneficial owner of
100% of the shares of the common stock of Jabil Circuit Limited
and has not granted any security interest in such common stock
other than the security interests granted pursuant to the Pledge
Agreement.
11. The Pledge Agreement, together with the delivery to
the Collateral Agent of the certificates evidencing the shares
of stock identified on Schedule 1 to the Pledge Agreement (the
"Pledged Shares") and stock powers executed by the Company in
blank, will create under the Michigan Uniform Commercial Code a
perfected security interest in the Pledged Shares in favor of
the Collateral Agent for the benefit of the holders of the Notes
and the other Persons specified in the Pledge Agreement. The
Collateral Agent will acquire such security interest in the
Pledged Shares free of any adverse claims.
12. The Company
(a) is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended,
and
(b) is not a "holding company" or an "affiliate" of
a "holding company," or a "subsidiary company" of a "holding
company," or a "public utility" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
All opinions herein contained with respect to the
enforceability of documents and instruments are qualified to the
extent that:
(a) the availability of equitable remedies,
including, without limitation, specific enforcement and
injunctive relief, is subject to the discretion of the court
before which any proceedings therefor may be brought; and
(b) the enforceability of certain terms provided in
the Financing Documents may be limited by applicable
bankruptcy, reorganization, arrangement, insolvency,
moratorium or similar laws affecting the enforcement of
creditors' rights generally as at the time in effect.
I acknowledge that this opinion is being issued at the
request of the Company pursuant to Section 4.4(a) of the Note
Purchase Agreement and I agree that the parties listed on Annex
1 hereto may rely and are relying hereon in connection with the
consummation of the transactions contemplated by the Note
Purchase Agreement. Hebb & Gitlin may rely on this opinion for
the sole purpose of rendering their opinion to be rendered
pursuant to Section 4.4(b) of the Note Purchase Agreement.
Subsequent holders of the Notes may rely on this opinion as if
it were addressed to them.
Very truly yours,
Linda V. Moore
General Counsel
ANNEX 1 Addressees
Jabil Circuit, Inc. 10800 Roosevelt Boulevard St. Petersburg,
Florida 33716
Connecticut General Life Insurance Company c/o CIGNA
Investments, Inc. 900 Cottage Grove Road Hartford, CT 06152
Life Insurance Company of North America c/o CIGNA Investments,
Inc. 900 Cottage Grove Road Hartford, CT 06152
Metropolitan Life Insurance Company One Madison Avenue New York,
NY 10010
Hebb & Gitlin One State Street Hartford, CT 06103
ANNEX 2 Foreign Good
Standing Certificates
States in which qualified as a foreign corporation
California
Florida
Michigan
EXHIBIT 4.4(b)
[FORM OF OPINION OF SPECIAL COUNSEL TO THE PURCHASERS]
[Letterhead of Hebb & Gitlin]
[Closing Date]
To the Persons Listed on Annex 1 hereto
Re: Jabil Circuit, Inc. (the "Company")
Ladies and Gentlemen:
Reference is made to the separate Note Purchase Agreements,
each dated as of May 30, 1996 (collectively, the "Note Purchase
Agreement"), between the Company and each of the purchasers
listed on Schedule A attached thereto (the "Purchasers"), which
provide, among other things, for the issuance and sale by the
Company of its 6.89% Senior Notes due May 30, 2004, in the
aggregate principal amount of $50,000,000. The capitalized
terms used herein and not defined herein have the meanings
specified in the Note Purchase Agreement.
We have acted as special counsel to the Purchasers in
connection with the transactions contemplated by the Note
Purchase Agreement. This opinion is delivered to you pursuant
to Section 4.4(b) of the Note Purchase Agreement. In acting as
such counsel, we have examined:
(a) the Note Purchase Agreement;
the Company's 6.89% Senior Notes due May 30,
2004, dated the date hereof, in the form of Exhibit 1 to the
Note Purchase Agreement and registered in the names, in the
principal amounts and with the registration numbers set forth on
Schedule A to the Note Purchase Agreement (the "Notes");
(c) the Guaranty Agreement;
(d) the Pledge Agreement;
(e) the Intercreditor Agreement;
(f) an Officer's Certificate of the Company, dated
the date hereof, delivered pursuant to Section 4.3(a) of the
Note Purchase Agreement;
(g) a certificate of the Secretary of the Company,
dated the date hereof, delivered pursuant to Section 4.3(b)
of the Note Purchase Agreement;
(h) a certificate of the Secretary of the Initial
Guarantor, dated the date hereof, delivered pursuant to
Section 4.3(c) of the Note Purchase Agreement;
(i) a letter from SPP Hambro & Co. and NBD Bank,
dated the date hereof, making certain representations with
respect to the manner in which the Notes were offered (the
"Offeree Letter");
(j) the opinion of Linda V. Moore, Esq., General
Counsel of the Company, dated the date hereof, delivered
pursuant to Section 4.4(a) of the Note Purchase Agreement;
and
(k) originals, or copies certified or otherwise
identified to our satisfaction, of such other documents,
records, instruments and certificates of public officials as we
have deemed necessary or appropriate to enable us to render
this opinion.
The documents referred to in clauses (a) through (e), inclusive,
above are hereinafter referred to collectively as the "Financing
Documents" and the documents referred to in clauses (a), (b),
(d) and (e) above are hereinafter referred to collectively as
the "Company Financing Documents."
We have assumed the genuineness of all signatures and
documents submitted to us as originals, that all copies
submitted to us conform to the originals, the legal capacity of
all natural Persons, and, as to documents executed by the
Purchasers and other Persons other than the Company and the
Initial Guarantor, that each such Person executing documents had
the power to enter into and perform its obligations under such
documents, and that such documents have been duly authorized,
executed and delivered by, and are binding on and enforceable
against, such Persons. We have further assumed that the Initial
Guarantor has received fair consideration and reasonably
equivalent value in consideration for executing the Guaranty
Agreement.
In rendering our opinion, we have relied, to the extent we
deem necessary and proper, on:
(a) warranties and representations as to certain
factual matters contained in the Financing Documents;
(b) the Offeree Letter; and
(c) such opinion of Linda V. Moore, Esq. with
respect to all questions governed by Florida law, Delaware
law and Michigan law and with respect to all questions
concerning the due incorporation, valid existence and good
standing of, and the authorization, execution and delivery
of agreements and instruments by, the Company and the
Initial Guarantor, and our conclusions as to such matters are
subject to the same assumptions and qualifications as are
contained in such opinion; based on such investigation as we
have deemed appropriate, such opinion is satisfactory in
form and scope to us and in our opinion the Purchasers and we
are justified in relying thereon.
Based on the foregoing, we are of the following opinions:
1. (a) The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the
State of Delaware.
(b) The Initial Guarantor is a corporation duly
incorporated, validly existing and in good standing under
the laws of the State of Michigan.
2. (a) The Company has the requisite corporate power
and authority to execute and deliver the Company Financing
Documents, to issue and sell the Notes, and to perform its
obligations set forth in each of the Company Financing Documents.
(b) The Initial Guarantor has the requisite
corporate power and authority to execute and deliver the
Guaranty Agreement and to perform its obligations thereunder.
3. (a) Each of the Company Financing Documents has been
duly authorized by all necessary corporate action on the
part of the Company, has been executed and delivered by a
duly authorized officer of the Company, and constitutes a legal,
valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.
(b) The Guaranty Agreement has been duly authorized
by all necessary corporate action on the part of the Initial
Guarantor, has been executed and delivered by a duly
authorized officer of the Initial Guarantor, and constitutes a
legal, valid and binding obligation of the Initial
Guarantor, enforceable against the Initial Guarantor in
accordance with its terms.
4. (a) The execution and delivery of the Company
Financing Documents, and the issuance and sale of the Notes,
by the Company and the performance by the Company of its
obligations thereunder will not conflict with, result in a
breach of any provision of, constitute a default under, or
result in the creation or imposition of any Lien upon any of
its properties (other than the Liens granted pursuant to the
Pledge Agreement) pursuant to, the certificate of
incorporation or bylaws of the Company.
(b) The execution and delivery of the Guaranty
Agreement by the Initial Guarantor and the performance by
the Initial Guarantor of its obligations thereunder will not
conflict with, result in a breach of any provision of,
constitute a default under, or result in the creation or
imposition of any Lien upon any of its properties pursuant
to, the articles of incorporation or bylaws of the Initial
Guarantor.
5. No consents, approvals or authorizations of
governmental authorities are required on the part of the Company
or the Initial Guarantor under the laws of the United States of
America or the State of New York in connection with (a) the
execution and delivery by the Company of any of the Company
Financing Documents, or the offer, issuance, sale and delivery
of the Notes or (b) the execution and delivery by the Initial
Guarantor of the Guaranty Agreement. Our opinion in this
paragraph 5 is based solely on a review of generally applicable
laws of the United States of America and the State of New York,
and not on any search with respect to, or review of, any orders,
decrees, judgments or other determinations specifically
applicable to the Company or the Initial Guarantor.
6. Neither the issuance of the Notes nor the intended
use of the proceeds of the Notes (as set forth in Section 5.14
of the Note Purchase Agreement) will violate Regulations G, T or
X of the Federal Reserve Board.
7. Under existing law, the Notes are not subject to the
registration requirements under the Securities Act of 1933, as
amended, or the "blue sky" laws of the State of New York, and
the Company is not required to qualify an indenture with respect
thereto under the Trust Indenture Act of 1939, as amended.
All opinions contained herein with respect to the
enforceability of agreements and instruments are qualified to
the extent that:
(a) the availability of equitable remedies,
including, without limitation, specific enforcement and
injunctive relief, is subject to the discretion of the court
before which any proceedings therefor may be brought; and
(b) the enforceability of certain terms provided in
the Financing Documents may be limited by applicable
bankruptcy, reorganization, arrangement, insolvency,
moratorium or similar laws affecting the enforcement of
creditors' rights generally as at the time in effect.
Except in reliance on the opinion of Linda V. Moore, Esq.
as expressly set forth above, we express no opinion as to the
law of any jurisdiction other than the law of the State of New
York and United States federal law. Without limiting the
foregoing, we express no opinion with respect to any matter of
Scottish law, including, without limitation, any matter with
respect to Scottish conflicts of laws principles or creation or
perfection of the security interest contemplated by the Pledge
Agreement to the extent that it may be affected by Scottish law.
Subsequent holders of the Notes may rely on this opinion as
if it were addressed to them. Linda V. Moore, Esq. may rely on
this opinion as to matters of New York law for the sole purpose
of rendering her opinion referred to above.
Very truly yours,
ANNEX 1
Addressees
Connecticut General Life Insurance Company c/o CIGNA
Investments, Inc. 900 Cottage Grove Road Hartford, CT 06152
Life Insurance Company of North America c/o CIGNA Investments,
Inc. 900 Cottage Grove Road Hartford, CT 06152
Metropolitan Life Insurance Company One Madison Avenue New York,
NY 10010
EXHIBIT 4.9
[FORM OF GUARANTY AGREEMENT]
GUARANTY AGREEMENT
Dated as of May 30, 1996
Re:
$50,000,000 6.89% Senior Notes Due May 30, 2004
Issued by Jabil Circuit, Inc.
THIS GUARANTY AGREEMENT MAY BE SUBJECT TO THE TERMS OF AN
INTERCREDITOR AGREEMENT, DATED AS OF MAY 30, 1996, AS MAY BE
AMENDED, RESTATED OR OTHERWISE MODIFIED FROM TIME TO TIME, AMONG
CERTAIN LENDERS AND NBD BANK AS COLLATERAL AGENT.
TABLE OF CONTENTS
PAGE
1. PRELIMINARY STATEMENT. . . . . . . . . . . . . . . .
.Exhibit 4.9-1
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS . . . . .
.Exhibit 4.9-1 2.1 Guarantied Obligations . . . . . . . .
. . . . .Exhibit 4.9-1 2.2 Waivers and Other Agreements .
. . . . . . . . .Exhibit 4.9-2 2.3 Nature of Guaranty . .
. . . . . . . . . . . . .Exhibit 4.9-3 2.4 Obligations
Absolute . . . . . . . . . . . . . .Exhibit 4.9-4 2.5 No
Investigation by Noteholders. . . . . . . . .Exhibit 4.9-5
2.6 Indemnity. . . . . . . . . . . . . . . . . . . .Exhibit
4.9-5 2.7 Subordination, Subrogation, Etc. . . . . . . .
.Exhibit 4.9-5 2.8 Waiver . . . . . . . . . . . . . . . .
. . . . .Exhibit 4.9-5 2.9 Limitation on Guarantied
Obligations . . . . . .Exhibit 4.9-6 2.10 Marshaling . . .
. . . . . . . . . . . . . . . .Exhibit 4.9-6 2.11 Setoff,
Counterclaim or Other Deductions . . . .Exhibit 4.9-6 2.12
No Election of Remedies by Noteholders . . . . .Exhibit 4.9-6
2.13 Separate Action; Other Enforcement Rights. . . .Exhibit
4.9-6 2.14 Noteholder Setoff. . . . . . . . . . . . . . .
.Exhibit 4.9-7 2.15 Delay or Omission; No Waiver . . . . .
. . . . .Exhibit 4.9-7 2.16 Restoration of Rights and
Remedies . . . . . . .Exhibit 4.9-7 2.17 Cumulative
Remedies. . . . . . . . . . . . . . .Exhibit 4.9-7
3. INTERPRETATION OF THIS AGREEMENT . . . . . . . . . .
.Exhibit 4.9-7 3.1 Terms Defined. . . . . . . . . . . . .
. . . . .Exhibit 4.9-7 3.2 Section Headings and
Construction. . . . . . . .Exhibit 4.9-8
4. WARRANTIES AND REPRESENTATIONS . . . . . . . . . . .
.Exhibit 4.9-8
5. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . .
.Exhibit 4.9-9 5.1 Successors and Assigns . . . . . . . .
. . . . .Exhibit 4.9-9 5.2 Severability . . . . . . . . .
. . . . . . . . .Exhibit 4.9-9 5.3 Communications . . . .
. . . . . . . . . . . . .Exhibit 4.9-9 5.4 Governing Law.
. . . . . . . . . . . . . . . . Exhibit 4.9-10 5.5
Benefits of Guaranty Restricted to Noteholders Exhibit 4.9-10
5.6 Survival of Representations and Warranties; Entire
AgreementExhibit 4.9-10 5.7 Amendment. . . . . . . . . . .
. . . . . . . . Exhibit 4.9-10 5.8 Joinder Agreement. . .
. . . . . . . . . . . . Exhibit 4.9-10 5.9 Survival . . .
. . . . . . . . . . . . . . . . Exhibit 4.9-10 5.10
Execution in Counterpart . . . . . . . . . . . Exhibit 4.9-11
Annex 1 -- Addresses of Guarantors Annex 2 -- Form of
Joinder Agreement GUARANTY AGREEMENT
GUARANTY AGREEMENT, dated as of May 30, 1996 (as amended,
restated or otherwise modified from time to time, this
"Agreement"), by JABIL CIRCUIT OF MICHIGAN, INC. (together with
each other Person that becomes a party hereto from time to time
by execution and delivery of a Joinder Agreement, and including
their respective successors and assigns, the "Guarantors"), in
favor of each of the Noteholders (as such term is hereinafter
defined).
1. PRELIMINARY STATEMENTS
1.1 Jabil Circuit, Inc. (together with its successors and
assigns, the "Company"), a Delaware corporation, has authorized
the issuance of its 6.89% Senior Notes due May 30, 2004 (as may
be amended, restated or otherwise modified from time to time,
the "Notes"), in the aggregate principal amount of $50,000,000,
pursuant to the separate Note Purchase Agreements (collectively,
as may be amended, restated or otherwise modified from time to
time, the "Note Purchase Agreement"), each dated as of May 30,
1996, entered into by the Company with each of the purchasers of
the Notes named on Schedule A to the Note Purchase Agreement
(the "Purchasers").
1.2 In order to induce the Purchasers to purchase the
Notes, Jabil Circuit of Michigan, Inc. has agreed to become a
Guarantor hereunder and the Company has agreed, pursuant to the
Note Purchase Agreement, that each other Subsidiary that at any
time becomes liable in respect of any Guaranty of any of the
obligations under the Bank Loan Agreement or any related
agreement, instrument or other document, will be required to
become a Guarantor hereunder.
1.3 Each Guarantor will receive direct and indirect
economic, financial and other benefits from the indebtedness
incurred under the Note Purchase Agreement and the Notes by the
Company, and under this Agreement, and the incurrence of such
indebtedness is in the best interests of such Guarantor.
1.4 All acts and proceedings required by law and by the
constitutive documents of each Guarantor necessary to constitute
this Agreement a valid and binding agreement for the uses and
purposes set forth herein in accordance with its terms have been
done and taken, and the execution and delivery hereof have been
in all respects duly authorized.
2. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
2.1 Guarantied Obligations.
(a) Each Guarantor, in consideration of the
execution and delivery of the Note Purchase Agreement, the
purchase of the Notes by the Purchasers and other
consideration, hereby irrevocably, unconditionally and
absolutely guaranties, on a continuing basis, to each
Noteholder, as and for such Guarantor's own debt:
(i) the prompt payment of the principal of the
Notes and any and all accrued and unpaid interest
(including, without limitation, interest which
otherwise may cease to accrue by operation of any insolvency
law, rule, regulation or interpretation thereof) and
Make-Whole Amount on the Notes and all other
obligations of the Company to the Noteholders under the Note
Purchase Agreement when due, whether by mandatory or
optional prepayment, acceleration or otherwise, all in
accordance with the terms of the Note Purchase
Agreement and the Notes, including, without limitation, overdue
interest, indemnification payments and all reasonable
costs and expenses incurred by the Noteholders and the
Collateral Agent in connection with enforcing any
obligations of the Company under the Note Purchase Agreement
and the Notes, including, without limitation, the
reasonable fees and disbursements of Noteholders'
special counsel,
(ii) the prompt and punctual performance and
observance of each and every term, covenant or
agreement contained in the Note Purchase Agreement and
the Notes to be performed or observed on the part of the
Company, and
(iii) the prompt and complete payment, on
demand, of any and all reasonable costs and expenses
incurred by the Noteholders in connection with
enforcing the obligations of such Guarantor hereunder,
including, without limitation, the reasonable fees and
disbursements of Noteholders' special counsel.
All of the obligations set forth in subsections (i), (ii)
and (iii) of this Section 2.1 are referred to herein as the
"Guarantied Obligations" and the guaranty thereof contained
herein is a primary, original and immediate obligation of each
Guarantor and is an absolute, unconditional, continuing and
irrevocable guaranty of payment and performance and shall
remain in full force and effect until the full, final and
indefeasible payment of the Guarantied Obligations.
(b) If for any reason any duty, agreement or
obligation of the Company contained in the Note Purchase
Agreement shall not be performed or observed by the Company
as provided therein, or if any amount payable under or in
connection with the Note Purchase Agreement or the Notes shall
not be paid in full when the same becomes due and payable,
each Guarantor undertakes to perform or cause to be
performed promptly each of such duties, agreements and
obligations and to pay forthwith each such amount to the
Noteholders regardless of any defense or setoff or
counterclaim which the Company may have or assert, and
regardless of any other condition or contingency.
2.2 Waivers and Other Agreements.
Each Guarantor hereby unconditionally
(a) waives any requirement that the Noteholders,
upon the occurrence of an Event of Default, first make
demand upon, or seek to enforce remedies against, the
Company before demanding payment under or seeking to enforce the
obligations of such Guarantor under this Agreement,
(b) agrees that the obligations of such Guarantor
under this Agreement will not be discharged except by
complete performance of all obligations of the Company
contained in the Note Purchase Agreement, the Notes and the
other Financing Documents,
(c) agrees that the obligations of such Guarantor
under this Agreement shall remain in full force and effect
without regard to, and shall not be affected or impaired,
without limitation, by any invalidity, irregularity or
unenforceability in whole or in part of the Note Purchase
Agreement, the Notes or any other Financing Document, or any
limitation on the liability of any Guarantor under this
Agreement, or any limitation on the method or terms of
payment under the Note Purchase Agreement, the Notes or any
other Financing Document which may at any time be caused or
imposed in any manner whatsoever (including, without
limitation, usury laws),
(d) waives diligence, presentment and protest with
respect to, and any notice of default or dishonor in the
payment of any amount at any time payable by the Company
under or in connection with the Note Purchase Agreement, the
Notes or any other Financing Document, and further waives
any requirement of notice of acceptance of, or other
formality relating to, the obligations of such Guarantor under
this Agreement, and
(e) agrees that to the extent the Company makes a
payment or payments to any Noteholder, which payment or
payments or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or
required, for any of the foregoing reasons or for any other
reason, to be repaid or paid over to a custodian, trustee,
receiver or any other party or officer under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction, state or
federal law, or any common law or equitable cause, then to
the extent of such payment or repayment, the obligation or part
thereof intended to be satisfied shall be revived and
continued in full force and effect as if said payment had
not been made and each Guarantor shall be primarily liable for
such obligation.
2.3 Nature of Guaranty.
The obligations of each Guarantor under this Agreement
constitute an absolute and unconditional and irrevocable
guaranty of payment and not a guaranty of collection and are
wholly independent of and in addition to other rights and
remedies of the Noteholders and are not contingent upon the
pursuit by the Noteholders of any such rights and remedies, such
pursuit being hereby waived by such Guarantor. Notwithstanding
anything to the contrary set forth in the Note Purchase
Agreement, the Notes or any other Financing Document, the
obligations of each Guarantor under this Agreement are joint and
several with the obligations of each other Guarantor and any
other guarantor of all or any part of the Guarantied Obligations.
2.4 Obligations Absolute.
The obligations, covenants, agreements and duties of each
Guarantor under this Agreement shall not be released, affected
or impaired by any of the following, whether or not undertaken
with notice to or consent of such Guarantor:
(a) any assignment or transfer, in whole or in part,
of any Note although made without notice to or consent of
such Guarantor, or
(b) any waiver by any Noteholder, or by any other
Person, of the performance or observance by the Company of
any of the agreements, covenants, terms or conditions
contained in the Note Purchase Agreement or in any other
Financing Document, or
(c) any indulgence in or the extension of the time
for payment by the Company of any amounts payable under or
in connection with the Note Purchase Agreement, the Notes or
any other Financing Document, or of the time for performance
by the Company of any other obligations under or arising out of
the Note Purchase Agreement, the Notes or any other
Financing Document, or the extension or renewal thereof, or
(d) the modification, amendment or waiver (whether
material or otherwise) of any duty, agreement or obligation
of the Company set forth in the Note Purchase Agreement, the
Notes or any other Financing Document (the modification,
amendment or waiver from time to time of the Note Purchase
Agreement, the Notes and the other Financing Documents being
expressly authorized without further notice to or consent of
such Guarantor), or
(e) the voluntary or involuntary liquidation, sale
or other disposition of all or substantially all of the
assets of the Company or any receivership, insolvency,
bankruptcy, reorganization or other similar proceedings
affecting the Company or any of its assets, or
(f) the merger or consolidation of the Company or
any Guarantor with any other Person, or
(g) the release or discharge of the Company from the
performance or observance of any agreement, covenant, term
or condition contained in the Note Purchase Agreement, the
Notes or any other Financing Document, by operation of law,
or
(h) any other cause, whether similar or dissimilar
to the foregoing, that would release, affect or impair the
obligations, covenants, agreements or duties of any
Guarantor under this Agreement.
2.5 No Investigation by Noteholders.
Each Guarantor hereby waives unconditionally any obligation
that, in the absence of such provision, the Noteholders might
otherwise have to investigate or to assure that there has been
compliance with the law of any jurisdiction with respect to the
Guarantied Obligations, recognizing that, to save both time and
expense, such Guarantor has requested that the Noteholders not
undertake such investigation. Each Guarantor hereby expressly
confirms that the obligations of such Guarantor hereunder shall
remain in full force and effect without regard to compliance or
noncompliance with any such law and irrespective of any
investigation or knowledge of any such law by any Noteholder.
2.6 Indemnity.
As a separate, additional and continuing obligation, each
Guarantor unconditionally and irrevocably undertakes and agrees
with the Noteholders that, should the Guarantied Obligations not
be recoverable from such Guarantor under Section 2.1 for any
reason whatsoever (including, without limitation, by reason of
any provision of the Note Purchase Agreement or the Notes or any
other agreement or instrument executed in connection therewith
being or becoming void, unenforceable or otherwise invalid under
any applicable law) then, notwithstanding any knowledge thereof
by any Noteholder at any time, such Guarantor as sole, original
and independent obligor, upon demand by the Required Holders,
will make payment of the Guarantied Obligations to the
Noteholders by way of a full indemnity in such currency and
otherwise in such manner as is provided in the Note Purchase
Agreement and the Notes.
2.7 Subordination, Subrogation, Etc.
Each Guarantor agrees that any present or future
indebtedness, obligations or liabilities of the Company to such
Guarantor shall be fully subordinate and junior in right and
priority of payment to any present or future indebtedness,
obligations or liabilities of the Company to the Noteholders.
Each Guarantor waives any right of subrogation to the rights of
the Noteholders against the Company or any other Person
obligated for payment of the Guarantied Obligations and any
right of reimbursement, contribution or indemnity whatsoever
(including, without limitation, any such right as against any
other Guarantor) arising or accruing out of any payment that
such Guarantor may make pursuant to this Agreement, and any
right of recourse to security for the debts and obligations of
the Company, unless and until the entire amount of the
Guarantied Obligations shall have been paid in full.
2.8 Waiver.
To the extent that it lawfully may, each Guarantor agrees
that it will not at any time insist upon or plead, or in any
manner whatsoever claim or take any benefit or advantage of any
applicable present or future stay, extension or moratorium law,
which may affect observance or performance of the provisions of
this Agreement, the Note Purchase Agreement, the Notes or any
other Financing Document; nor will it claim, take or insist upon
any benefit or advantage of any present or future law providing
for the evaluation or appraisal of any security for its
obligations hereunder or the Company under the Note Purchase
Agreement, the Notes or any other Financing Document prior to
any sale or sales thereof which may be made under or by virtue
of any instrument governing the same; nor will it, after any
such sale or sales, claim or exercise any right, under any
applicable law, to redeem any portion of such security so sold.
2.9 Limitation on Guarantied Obligations.
Notwithstanding anything in Section 2.1 or elsewhere in
this Agreement or any other Financing Document to the contrary,
the obligations of each Guarantor under this Agreement shall at
each point in time be limited to an aggregate amount equal to
the greatest amount that would not result in such obligations
being subject to avoidance, or otherwise result in such
obligations being unenforceable, at such time under applicable
law (including, without limitation, to the extent, and only to
the extent, applicable to any such Guarantor, Section 548 of the
Bankruptcy Code of the United States of America and any
comparable provisions of the law of any other jurisdiction, any
capital preservation law of any jurisdiction and any other law
of any jurisdiction that at such time limits the enforceability
of the obligations of such Guarantor under this Agreement).
2.10 Marshaling.
Neither any Noteholder nor any Person acting for the
benefit of any Noteholder shall be under any obligation to
marshal any assets in favor of any Guarantor or against or in
payment of any or all of the Guarantied Obligations.
2.11 Setoff, Counterclaim or Other Deductions.
Except as otherwise required by law, each payment by each
Guarantor shall be made without setoff, counterclaim or other
deduction.
2.12 No Election of Remedies by Noteholders.
No election to proceed in one form of action or proceeding,
or against any party, or on any obligation, shall constitute a
waiver of such Noteholder's right to proceed in any other form
of action or proceeding or against other parties unless such
Noteholder has expressly waived such right in writing.
Specifically, but without limiting the generality of the
foregoing, no action or proceeding by any Noteholder against the
Company or any Guarantor under any document or instrument
evidencing obligations of the Company or any Guarantor to such
Noteholder shall serve to diminish the liability of any
Guarantor under this Agreement, except to the extent that such
Noteholder finally and unconditionally shall have realized
payment by such action or proceeding in respect of the
Guarantied Obligations.
2.13 Separate Action; Other Enforcement Rights.
Each of the rights and remedies granted under this
Agreement to each Noteholder in respect of the Notes held by
such Noteholder may be exercised by such Noteholder without
notice by such Noteholder to, or the consent of or any other
action by, any other Noteholder. Each Noteholder may proceed to
protect and enforce this Agreement by suit or suits or
proceedings in equity, at law or in bankruptcy, and whether for
the specific performance of any covenant or agreement contained
herein or in execution or aid of any power herein granted or for
the recovery of judgment for the obligations hereby guarantied
or for the enforcement of any other proper, legal or equitable
remedy available under applicable law.
2.14 Noteholder Setoff.
Each Noteholder shall have, to the fullest extent permitted
by law and this Agreement, a right of set-off against any and
all credits and any and all other property of each Guarantor now
or at any time whatsoever,with or in the possession of such
Noteholder, or anyone acting for such Noteholder, to ensure the
full performance of any and all obligations of each Guarantor
hereunder.
2.15 Delay or Omission; No Waiver.
No course of dealing on the part of any Noteholder and no
delay or failure on the part of any such Person to exercise any
right hereunder shall impair such right or operate as a waiver
of such right or otherwise prejudice such Person's rights,
powers and remedies hereunder. Every right and remedy given by
this Agreement or by law to any Noteholder may be exercised from
time to time as often as may be deemed expedient by such Person.
2.16 Restoration of Rights and Remedies.
If any Noteholder shall have instituted any proceeding to
enforce any right or remedy under this Agreement or under any
Note held by such Noteholder, and such proceeding shall have
been dismissed, discontinued or abandoned for any reason, or
shall have been determined adversely to such Noteholder, then
and in every such case each such Noteholder, the Company and
each Guarantor shall, except as may be limited or affected by
any determination (including, without limitation, any
determination in connection with any such dismissal) in such
proceeding, be restored severally and respectively to its
respective former positions hereunder and thereunder, and
thereafter, subject as aforesaid, the rights and remedies of
such Noteholders shall continue as though no such proceeding had
been instituted.
2.17 Cumulative Remedies.
No remedy under this Agreement, the Note Purchase
Agreement, the Notes or any other Financing Document is intended
to be exclusive of any other remedy, but each and every remedy
shall be cumulative and in addition to any and every other
remedy given pursuant to this Agreement, the Note Purchase
Agreement, the Notes or any other Financing Document.
3. INTERPRETATION OF THIS AGREEMENT
3.1 Terms Defined.
As used in this Agreement, the capitalized terms have the
meaning specified in the Note Purchase Agreement unless
otherwise specified below or set forth in the section of this
Agreement referred to immediately following such term (such
definitions, unless otherwise expressly provided, to be equally
applicable to both the singular and plural forms of the terms
defined):
Agreement, this -- has the meaning assigned to such term in
the first paragraph hereof.
Company -- Section 1.1.
Guarantied Obligations -- Section 2.1.
Guarantor -- has the meaning assigned to such term in the
first paragraph hereof.
Note Purchase Agreement -- Section 1.1.
Noteholder -- means, at any time, each Person that is the
holder of any Note at such time.
Notes -- Section 1.1.
Person -- means an individual, partnership, corporation,
limited liability company, association, trust, unincorporated
organization, or a government or agency or political subdivision
thereof.
Purchasers -- Section 1.1.
3.2 Section Headings and Construction.
(a) Section Headings, etc. The titles of the
Sections appear as a matter of convenience only, do not
constitute a part hereof and shall not affect the construction
hereof. The words "herein," "hereof," "hereunder" and
"hereto" refer to this Agreement as a whole and not to any
particular Section or other subdivision.
(b) Construction. Each covenant contained herein
shall be construed (absent express provision to the
contrary) as being independent of each other covenant
contained herein, so that compliance with any one covenant shall
not (absent such an express contrary provision) be deemed to
excuse compliance with any other covenant. Where any
provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision
shall be applicable whether such action is taken directly or
indirectly by such Person.
4. WARRANTIES AND REPRESENTATIONS
Each Guarantor warrants and represents, as of the date such
Guarantor becomes a Guarantor hereunder, that each of the
warranties and representations made by the Company in Section 5
of the Note Purchase Agreement with respect to Subsidiaries,
Restricted Subsidiaries or the Guarantors generally are true
with respect to such Guarantor on the date that such Guarantor
becomes a Guarantor, with the same effect as though such
warranties and representations were made on and as of such date
rather than on and as of the date of this Agreement.
5. MISCELLANEOUS
5.1 Successors and Assigns.
(a) All covenants and other agreements contained in
this Agreement by or on behalf of any of the parties hereto
shall bind and inure to the benefit of their respective
successors and assigns (including, without limitation, any
subsequent holder of a Note) whether so expressed or not.
(b) Each Guarantor agrees to take such action as may
be reasonably requested by any Noteholder to confirm such
Guarantor's guaranty of the Guarantied Obligations in
connection with the transfer of the Notes of such Noteholder.
5.2 Severability.
Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability
in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any
other jurisdiction.
5.3 Communications.
All communications hereunder shall be in writing, shall be
delivered in the manner required by the Note Purchase Agreement,
and shall be addressed, if to any Guarantor, at the applicable
address set forth on Annex 1 hereto, and if to any of the
Noteholders:
(a) if such Noteholder is a Purchaser, at the
address for such Noteholder set forth on Schedule A to the
Note Purchase Agreement, and further including any parties
referred to on such Schedule A which are required to receive
notices in addition to such Noteholder, and
(b) if such Noteholder is not a Purchaser, at the
address for such Noteholder set forth in the register for
the registration and transfer of Notes maintained pursuant
to Section 13.1 of the Note Purchase Agreement,
or to any such party at such other address as such party may
designate by notice duly given in accordance with this Section
5.3.
Notices shall be deemed given only when actually received.
5.4 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED
BY, THE LAW OF THE STATE OF NEW YORK, EXCLUDING CHOICE-OF-LAW
PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE
APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
5.5 Benefits of Guaranty Restricted to Noteholders.
Nothing express or implied in this Agreement is intended or
shall be construed to give to any Person other than the
Guarantors and the Noteholders any legal or equitable right,
remedy or claim under or in respect hereof or any covenant,
condition or provision therein or herein contained, and all such
covenants, conditions and provisions are and shall be held to be
for the sole and exclusive benefit of the Guarantors and the
Noteholders.
5.6 Survival of Representations and Warranties; Entire
Agreement.
All representations and warranties contained herein or made
in writing by any Guarantor in connection herewith shall survive
the execution and delivery of this Agreement.
5.7 Amendment.
This Agreement may be amended in accordance with Section
5.8 and this Agreement may be further amended, and the
observance of any term hereof may be waived (either
retroactively or prospectively), with (and only with) the
written consent of each Guarantor and the Required Holders,
except that no amendment or waiver of any of the provisions of
Section 2, or any defined term as it is used therein, will be
effective unless consented to by each Guarantor and each
Noteholder in writing; provided that this Agreement may, in the
manner specified in Section 5.7, be amended to add one or more
new Guarantors hereunder without the consent of any other
Guarantor or any holder of Notes.
5.8 Joinder Agreement.
Upon execution and delivery by any Person of a counterpart
of a Joinder Agreement substantially in the form attached to
this Agreement as Annex 2, this Agreement shall for all
purposes, without further action, be deemed to have been amended
to add such Person as a Guarantor hereunder with the same effect
as if such Person had been an original party hereto.
5.9 Survival.
So long as the Guarantied Obligations and all payment
obligations of each Guarantor hereunder shall not have been
fully and finally performed and indefeasibly paid, the
obligations of each Guarantor hereunder shall survive the
transfer and payment of any Note and the payment in full of all
the Notes.
5.10 Execution in Counterpart.
This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of
which together shall constitute one instrument. Each
counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the
parties hereto.
[Remainder of page intentionally blank. Next page is signature
page.] IN WITNESS WHEREOF, each Guarantor has caused this
Agreement to be executed on its behalf by one of its duly
authorized officers.
JABIL CIRCUIT OF
MICHIGAN, INC.
By
Name:
Title:
Annex 1
Addresses of Guarantors
Jabil Circuit of Michigan, Inc. c/o Jabil Circuit, Inc.
10800 Roosevelt Blvd. St. Petersburg, Florida 33716
Attention: Chris A. Lewis
(addresses of any other Guarantors to be added
pursuant to Joinder Agreement)
Annex 2
[FORM OF JOINDER AGREEMENT]
Joinder Agreement
[Date]
To each of the Noteholders (as defined in the Guaranty
Agreement hereinafter referred to)
Ladies and Gentlemen:
Reference is made to the Guaranty Agreement, dated as of
May 30, 1996 (as amended, restated or otherwise modified from
time to time, the "Guaranty Agreement"), by Jabil Circuit of
Michigan, Inc., a Michigan corporation (together with its
successors and assigns, "Jabil Michigan"; together each other
Person that at any time becomes or has become a party to the
Guaranty Agreement, the "Guarantors"), in favor of each of the
Noteholders (as defined in the Agreement). Capitalized terms
used herein and not otherwise defined have the meanings ascribed
to such terms in the Guaranty Agreement.
[NEW GUARANTOR], a ________________________ (the "New
Guarantor"), agrees with you as follows:
1. Guaranty. The New Guarantor hereby unconditionally
and expressly agrees to become, and by execution and delivery of
this Agreement does become, a "Guarantor" under and as defined
in the Guaranty Agreement. Without limitation of the foregoing
or of anything in the Guaranty Agreement, by such execution and
delivery hereof the New Guarantor does become fully liable, as a
Guarantor, for the payment of the Guarantied Obligations as
further provided in Section 2 of the Guaranty Agreement. As
provided in Section 5.8 of the Guaranty Agreement, the Guaranty
Agreement is hereby amended, without any further action, to add
the New Guarantor as a Guarantor thereunder as if the New
Guarantor had been an original party to the Guaranty Agreement.
Annex 1 to the Guaranty Agreement is hereby amended by adding
the following address of the New Guarantor for purposes of
communications pursuant to Section 5.3 of the Guaranty
Agreement: [insert name and address of New Guarantor].
2. Further Assurances. The New Guarantor agrees to
cooperate with the Noteholders and execute such further
instruments and documents as the Required Holders shall
reasonably request to effect, to the reasonable satisfaction of
the Required Holders, the purposes of this Agreement.
3. Binding Effect. This Agreement shall be binding upon
the New Guarantor and shall inure to the benefit of the
Noteholders and their respective successors and assigns.
4. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL
BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK, EXCLUDING
CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD
REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN
SUCH STATE.
IN WITNESS WHEREOF, the New Guarantor has caused this
Agreement to be executed on its behalf by one of its duly
authorized officers.
[NEW GUARANTOR]
By
Name:
Title:
EXHIBIT 4.10
[FORM OF PLEDGE AGREEMENT]
[Prepared by counsel for NBD Bank]
EXHIBIT 4.12
[FORM OF INTERCREDITOR AGREEMENT]
[Prepared by counsel for NBD Bank]