EXHIBIT 10.4
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SCHAWK, INC.
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NOTE PURCHASE AND PRIVATE SHELF AGREEMENT
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$10,000,000 4.81% SERIES C SENIOR NOTES DUE JANUARY 28, 2010
$20,000,000 4.99% SERIES D SENIOR NOTES DUE JANUARY 28, 2011
$20,000,000 5.17% SERIES E SENIOR NOTES DUE JANUARY 28, 2012
AND
$25,000,000
PRIVATE SHELF FACILITY
DATED AS OF JANUARY 28, 2005
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TABLE OF CONTENTS
PAGE
SECTION 1. AUTHORIZATION OF NOTES................................................................................1
Section 1.1. Authorization of Issue of Series C Notes...................................................1
Section 1.2. Authorization of Issue of Series D Notes...................................................2
Section 1.3. Authorization of Issue of Series E Notes...................................................2
Section 1.4. Authorization of Issue of Shelf Notes......................................................2
SECTION 2. SALE AND PURCHASE OF NOTES............................................................................3
Section 2.1. Purchase and Sale of Series C, Series D and Series E Notes.................................3
Section 2.2. Purchase and Sale of Shelf Notes...........................................................3
Section 2.3. Subsidiary Guaranty........................................................................7
SECTION 3. CLOSING...............................................................................................7
SECTION 4. CONDITIONS TO CLOSING.................................................................................8
Section 4.1. Representations and Warranties.............................................................8
Section 4.2. Performance; No Default....................................................................8
Section 4.3. Compliance Certificates....................................................................8
Section 4.4. Opinions of Counsel........................................................................9
Section 4.5. Purchase Permitted by Applicable Law, Etc..................................................9
Section 4.6. Acquisition of Seven Worldwide; Related Equity Financing...................................9
Section 4.7. Payment of Special Counsel Fees............................................................9
Section 4.8. Private Placement Number..................................................................10
Section 4.9. Changes in Corporate Structure............................................................10
Section 4.10. Subsidiary Guaranty......................................................................10
Section 4.11. Payment of Fees..........................................................................10
Section 4.12. Material Adverse Change..................................................................10
Section 4.13. Amendment to 1995 Note Agreement.........................................................10
Section 4.14. Bank Credit Agreement....................................................................10
Section 4.15. Amendment to 2003 Note Agreement.........................................................10
Section 4.16. Proceedings and Documents................................................................11
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................................................11
Section 5.1. Organization; Power and Authority.........................................................11
Section 5.2. Authorization, Etc........................................................................11
Section 5.3. Disclosure................................................................................11
Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates..........................12
Section 5.5. Financial Statements......................................................................12
Section 5.6. Compliance with Laws, Other Instruments, Etc..............................................13
Section 5.7. Governmental Authorizations, Etc..........................................................13
Section 5.8. Litigation; Observance of Statutes and Orders.............................................13
Section 5.9. Taxes.....................................................................................13
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TABLE OF CONTENTS
(continued)
PAGE
Section 5.10. Title to Property; Leases................................................................14
Section 5.11. Licenses, Permits, Etc...................................................................14
Section 5.12. Compliance with ERISA....................................................................14
Section 5.13. Private Offering by the Company..........................................................15
Section 5.14. Use of Proceeds; Margin Regulations......................................................15
Section 5.15. Existing Debt; Future Liens..............................................................16
Section 5.16. Foreign Assets Control Regulations, Etc..................................................16
Section 5.17. Status under Certain Statutes............................................................16
Section 5.18. Environmental Matters....................................................................16
Section 5.19. Notes Rank Pari Passu....................................................................17
Section 5.20. Share Repurchase Obligations.............................................................17
SECTION 6. REPRESENTATIONS OF THE PURCHASER.....................................................................17
Section 6.1. Purchase for Investment...................................................................17
Section 6.2. Source of Funds...........................................................................17
SECTION 7. INFORMATION AS TO COMPANY............................................................................19
Section 7.1. Financial and Business Information........................................................19
Section 7.2. Officer's Certificate.....................................................................21
Section 7.3. Inspection................................................................................22
SECTION 8. PAYMENT OF THE NOTES.................................................................................22
Section 8.1. Required Prepayments......................................................................22
Section 8.2. Optional Prepayments with Make-Whole Amount...............................................22
Section 8.3. Allocation of Partial Prepayments.........................................................23
Section 8.4. Maturity; Surrender, Etc..................................................................23
Section 8.5. Purchase of Notes.........................................................................23
Section 8.6. Make-Whole Amount.........................................................................23
Section 8.7. Offer to Prepay Notes in the Event of Asset Sale..........................................25
SECTION 9. AFFIRMATIVE COVENANTS................................................................................26
Section 9.1. Compliance with Law.......................................................................26
Section 9.2. Insurance.................................................................................26
Section 9.3. Maintenance of Properties.................................................................26
Section 9.4. Payment of Taxes and Claims...............................................................26
Section 9.5. Corporate Existence, Etc..................................................................27
Section 9.6. Additional Subsidiary Guarantors..........................................................27
Section 9.7. Designation of Subsidiaries...............................................................28
Section 9.8. Notes to Rank Pari Passu..................................................................28
SECTION 10. NEGATIVE COVENANTS..................................................................................28
Section 10.1. Consolidated Net Worth...................................................................28
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Section 10.2. Limitations on Debt......................................................................29
Section 10.3. Limitation on Liens......................................................................29
Section 10.4. Sales of Assets..........................................................................31
Section 10.5. Merger and Consolidation.................................................................32
Section 10.6. Nature of Business.......................................................................32
Section 10.7. Transactions with Affiliates.............................................................32
Section 10.8. Restricted Payments......................................................................33
Section 10.9. Share Repurchase Obligations.............................................................33
SECTION 11. EVENTS OF DEFAULT...................................................................................33
SECTION 12. REMEDIES ON DEFAULT, ETC............................................................................35
Section 12.1. Acceleration.............................................................................35
Section 12.2. Other Remedies...........................................................................36
Section 12.3. Rescission...............................................................................36
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc........................................36
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.......................................................37
Section 13.1. Registration of Notes....................................................................37
Section 13.2. Transfer and Exchange of Notes...........................................................37
Section 13.3. Replacement of Notes.....................................................................37
SECTION 14. PAYMENTS ON NOTES...................................................................................38
Section 14.1. Place of Payment.........................................................................38
Section 14.2. Home Office Payment......................................................................38
SECTION 15. EXPENSES, ETC.......................................................................................38
Section 15.1. Transaction Expenses.....................................................................38
Section 15.2. Survival.................................................................................39
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT........................................39
SECTION 17. AMENDMENT AND WAIVER................................................................................39
Section 17.1. Requirements.............................................................................39
Section 17.2. Solicitation of Holders of Notes.........................................................40
Section 17.3. Binding Effect, Etc......................................................................40
Section 17.4. Notes Held by Company, Etc...............................................................40
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SECTION 18. NOTICES.............................................................................................41
SECTION 19. REPRODUCTION OF DOCUMENTS...........................................................................41
SECTION 20. CONFIDENTIAL INFORMATION............................................................................42
SECTION 21. SUBSTITUTION OF PURCHASER...........................................................................43
SECTION 22. MISCELLANEOUS.......................................................................................43
Section 22.1. Successors and Assigns...................................................................43
Section 22.2. Payments Due on Non-Business Days........................................................43
Section 22.3. Severability.............................................................................43
Section 22.4. Construction.............................................................................43
Section 22.5. Counterparts.............................................................................44
Section 22.6. Governing Law............................................................................44
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EXHIBITS AND SCHEDULES
INFORMATION SCHEDULE
SCHEDULE A -- PURCHASER SCHEDULE
SCHEDULE B -- DEFINITIONS
EXHIBIT A-1 -- FORM OF SERIES C NOTE
EXHIBIT A-2 -- FORM OF SERIES D NOTE
EXHIBIT A-3 -- FORM OF SERIES E NOTE
EXHIBIT A-4 -- FORM OF SHELF NOTE
EXHIBIT B -- FORM OF DISBURSEMENT DIRECTION LETTER
EXHIBIT C -- FORM OF REQUEST FOR PURCHASE
EXHIBIT D -- FORM OF CONFIRMATION OF ACCEPTANCE
EXHIBIT E -- FORM OF SUBSIDIARY GUARANTY
EXHIBIT F -- FORM OF OPINION OF COMPANY AND GUARANTORS
COUNSEL
SCHEDULE 4.9 -- CHANGES IN CORPORATE STRUCTURE
SCHEDULE 5.4 -- SUBSIDIARIES AND AFFILIATES
SCHEDULE 5.5 -- FINANCIAL STATEMENTS
SCHEDULE 5.11 -- LICENSES AND PERMITS
SCHEDULE 5.15 -- EXISTING DEBT
SCHEDULE 10.3 -- EXISTING LIENS
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SCHAWK, INC.
1695 RIVER ROAD
DES PLAINES, ILLINOIS 60018
Dated as of January 28, 2005
Prudential Investment Management, Inc. ("PRUDENTIAL")
Each of the Purchasers named in
the Purchaser Schedule attached
hereto as purchasers of Series C
Notes, Series D Notes or Series E
Notes (the "INITIAL PURCHASERS")
Each other Prudential Affiliate (as
hereinafter defined) which becomes
bound by certain provisions of this
Agreement as hereinafter provided
c/o Prudential Capital Group
Two Prudential Plaza, Suite 5600
Chicago, Illinois 60601
Ladies and Gentlemen:
SCHAWK, INC., a Delaware corporation (the "COMPANY"), agrees with you
as follows:
SECTION 1. AUTHORIZATION OF NOTES.
SECTION 1.1. AUTHORIZATION OF ISSUE OF SERIES C NOTES. The Company will
authorize the issue of its senior promissory notes (the "SERIES C NOTES") in the
aggregate principal amount of $10,000,000, to be dated the date of issue
thereof, to mature January 28, 2010, to bear interest on the unpaid balance
thereof from the date thereof until the principal thereof shall have become due
and payable at the rate of 4.81% per annum (provided that, during any period
when an Event of Default shall be in existence, at the election of the Required
Holder(s) of the Series C Notes the outstanding principal balance of the Series
C Notes shall bear interest from and after the date of such Event of Default and
until such Event of Default ceases to be in existence at the rate per annum from
time to time equal to the Default Rate) and on overdue payments at the rate per
annum from time to time equal to the Default Rate, and to be substantially in
the form of Exhibit A-1 attached hereto. The terms "SERIES C NOTE" and "SERIES C
NOTES" as used herein shall include each Series C Note delivered pursuant to any
provision of this Agreement and each Series C Note delivered in substitution or
exchange for any other Series C Note pursuant to any such provision.
SECTION 1.2. AUTHORIZATION OF ISSUE OF SERIES D NOTES. The Company will
authorize the issue of its senior promissory notes (the "SERIES D NOTES") in the
aggregate principal amount of $20,000,000, to be dated the date of issue
thereof, to mature January 28, 2011, to bear interest on the unpaid balance
thereof from the date thereof until the principal thereof shall have become due
and payable at the rate of 4.99% per annum (provided that, during any period
when an Event of Default shall be in existence, at the election of the Required
Holder(s) of the Series D Notes the outstanding principal balance of the Series
D Notes shall bear interest from and after the date of such Event of Default and
until such Event of Default ceases to be in existence at the rate per annum from
time to time equal to the Default Rate) and on overdue payments at the rate per
annum from time to time equal to the Default Rate, and to be substantially in
the form of Exhibit A-2 attached hereto. The terms "SERIES D NOTE" and "SERIES D
NOTES" as used herein shall include each Series D Note delivered pursuant to any
provision of this Agreement and each Series D Note delivered in substitution or
exchange for any other Series D Note pursuant to any such provision.
SECTION 1.3. AUTHORIZATION OF ISSUE OF SERIES E NOTES. The Company will
authorize the issue of its senior promissory notes (the "SERIES E NOTES") in the
aggregate principal amount of $20,000,000, to be dated the date of issue
thereof, to mature January 28, 2012, to bear interest on the unpaid balance
thereof from the date thereof until the principal thereof shall have become due
and payable at the rate of 5.17% per annum (provided that, during any period
when an Event of Default shall be in existence, at the election of the Required
Holder(s) of the Series E Notes the outstanding principal balance of the Series
E Notes shall bear interest from and after the date of such Event of Default and
until such Event of Default ceases to be in existence at the rate per annum from
time to time equal to the Default Rate) and on overdue payments at the rate per
annum from time to time equal to the Default Rate, and to be substantially in
the form of Exhibit A-3 attached hereto. The terms "SERIES E NOTE" and "SERIES E
NOTES" as used herein shall include each Series E Note delivered pursuant to any
provision of this Agreement and each Series E Note delivered in substitution or
exchange for any other Series E Note pursuant to any such provision.
SECTION 1.4. AUTHORIZATION OF ISSUE OF SHELF NOTES. The Company will
authorize the issue of its senior promissory notes (the "SHELF NOTES") in the
aggregate principal amount of $25,000,000, to be dated the date of issue
thereof, to mature, in the case of each Shelf Note so issued, no more than 10
years after the date of original issuance thereof, to have an average life, in
the case of each Shelf Note so issued, of no more than 7 years after the date of
original issuance thereof, to bear interest on the unpaid balance thereof from
the date thereof at the rate per annum, and to have such other particular terms,
as shall be set forth, in the case of each Shelf Note so issued, in the
Confirmation of Acceptance with respect to such Shelf Note delivered pursuant to
Section 2.2(5), and to be substantially in the form of Exhibit A-4 attached
hereto. The terms "SHELF NOTE" and "SHELF NOTES" as used herein shall include
each Shelf Note delivered pursuant to any provision of this Agreement and each
Shelf Note delivered in substitution or exchange for any such Shelf Note
pursuant to any such provision. The terms "NOTE" and "NOTES" as used herein
shall include each Series C Note, each Series D Note, each Series E Note and
each Shelf Note. Notes which have (i) the same final maturity, (ii) the same
principal prepayment dates, (iii) the same principal prepayment amounts (as a
percentage of the original principal amount of each Note), (iv) the same
interest rate, (v) the same interest payment periods and (vi) the same date of
issuance (which, in the case of a Note issued in exchange for
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another Note, shall be deemed for these purposes the date on which such Note's
ultimate predecessor Note was issued), are herein called a "SERIES" of Notes.
SECTION 2. SALE AND PURCHASE OF NOTES.
SECTION 2.1. PURCHASE AND SALE OF SERIES C, SERIES D AND SERIES E
NOTES. The Company hereby agrees to sell to each Initial Purchaser and, subject
to the terms and conditions herein set forth, each Initial Purchaser agrees to
purchase from the Company the aggregate principal amount of Series C Notes,
Series D Notes and/or Series E Notes set forth opposite such Initial Purchaser's
name on the Purchaser Schedule attached hereto at 100% of such aggregate
principal amount. On January 28, 2005 (herein called the "SERIES C-E CLOSING
DATE"), the Company will deliver to each Initial Purchaser at the offices of
Schiff Hardin LLP, at 6600 Sears Tower, Chicago, Illinois, one or more Series C
Notes, Series D Notes and/or Series E Notes, as applicable, registered in such
Initial Purchaser's name (or, if specified in the Purchaser Schedule, in the
name of the nominee(s) for such Initial Purchaser specified in the Purchaser
Schedule), evidencing the aggregate principal amount of Series C Notes, Series D
Notes and/or Series E Notes to be purchased by such Initial Purchaser and in the
denomination or denominations specified with respect to such Initial Purchaser
in the Purchaser Schedule attached hereto, against payment of the purchase price
thereof by transfer of immediately available funds for credit to the account or
accounts as shall be specified in a letter on the Company's letterhead, in
substantially the form of Exhibit B attached hereto, from the Company to the
Initial Purchasers delivered prior to the Series C-E Closing Date.
SECTION 2.2. PURCHASE AND SALE OF SHELF NOTES.
SECTION 2.2(1). FACILITY. Prudential is willing to consider, in its
sole discretion and within limits which may be authorized for purchase by
Prudential Affiliates from time to time, the purchase of Shelf Notes pursuant to
this Agreement. The willingness of Prudential to consider such purchase of Shelf
Notes is herein called the "FACILITY". At any time, the aggregate principal
amount of Shelf Notes stated in Section 1.4, minus the aggregate principal
amount of Shelf Notes purchased and sold pursuant to this Agreement prior to
such time, minus the aggregate principal amount of Accepted Notes (as
hereinafter defined) which have not yet been purchased and sold hereunder prior
to such time, is herein called the "AVAILABLE FACILITY AMOUNT" at such time.
NOTWITHSTANDING THE WILLINGNESS OF PRUDENTIAL TO CONSIDER PURCHASES OF SHELF
NOTES BY PRUDENTIAL AFFILIATES, THIS AGREEMENT IS ENTERED INTO ON THE EXPRESS
UNDERSTANDING THAT NEITHER PRUDENTIAL NOR ANY PRUDENTIAL AFFILIATE SHALL BE
OBLIGATED TO MAKE OR ACCEPT OFFERS TO PURCHASE SHELF NOTES, OR TO QUOTE RATES,
SPREADS OR OTHER TERMS WITH RESPECT TO SPECIFIC PURCHASES OF SHELF NOTES, AND
THE FACILITY SHALL IN NO WAY BE CONSTRUED AS A COMMITMENT BY PRUDENTIAL OR ANY
PRUDENTIAL AFFILIATE.
SECTION 2.2(2). ISSUANCE PERIOD. Shelf Notes may be issued and sold
pursuant to this Agreement until the earlier of (i) the third anniversary of the
date of this Agreement (or if the date of such anniversary is not a Business
Day, the Business Day next preceding such anniversary), (ii) the 30th day after
Prudential shall have given to the Company, or the Company shall have given to
Prudential, a written notice stating that it elects to terminate the issuance
and
3
sale of Notes pursuant to this Agreement (or if such 30th day is not a Business
Day, the Business Day next preceding such 30th day), (iii) the last Closing Date
after which there is no Available Facility Amount, (iv) the termination of the
Facility under Section 12.1 of this Agreement, and (v) the acceleration of any
Shelf Note under Section 12.1 of this Agreement. The period during which Shelf
Notes may be issued and sold pursuant to this Agreement is herein called the
"ISSUANCE PERIOD".
SECTION 2.2(3). REQUEST FOR PURCHASE. The Company may from time to time
during the Issuance Period make requests for purchases of Shelf Notes (each such
request being herein called a "REQUEST FOR PURCHASE"). Each Request for Purchase
shall be made to Prudential by telecopier or overnight delivery service, and
shall (i) specify the aggregate principal amount of Shelf Notes covered thereby,
which shall not be less than $5,000,000 and not be greater than the Available
Facility Amount at the time such Request for Purchase is made, (ii) specify the
principal amounts, final maturities (which shall be no more than 10 years from
the date of issuance), average life (which shall be no more than 7 years from
the date of issuance), principal prepayment dates (if any) and amounts and
interest payment periods (quarterly or semi-annually in arrears) of the Shelf
Notes covered thereby, (iii) specify the use of proceeds of such Shelf Notes,
(iv) specify the proposed day for the closing of the purchase and sale of such
Shelf Notes, which shall be a Business Day during the Issuance Period not less
than 10 days and not more than 25 days after the making of such Request for
Purchase, (v) specify the number of the account and the name and address of the
depository institution to which the purchase prices of such Shelf Notes are to
be transferred on the Closing Date for such purchase and sale, (vi) certify that
the representations and warranties contained in Section 5 are true on and as of
the date of such Request for Purchase and that there exists on the date of such
Request for Purchase no Event of Default or Default, and (vii) be substantially
in the form of Exhibit C attached hereto. Each Request for Purchase shall be in
writing and shall be deemed made when received by Prudential.
SECTION 2.2(4). RATE QUOTES. Not later than five Business Days after
the Company shall have given Prudential a Request for Purchase pursuant to
Section 2.2(3), Prudential may, but shall be under no obligation to, provide to
the Company by telephone or telecopier, in each case between 9:30 A.M. and 1:30
P.M. New York City local time (or such later time as Prudential may elect)
interest rate quotes for the several principal amounts, maturities, principal
prepayment schedules and interest payment periods of Shelf Notes specified in
such Request for Purchase. Each quote shall represent the interest rate per
annum payable on the outstanding principal balance of such Shelf Notes at which
a Prudential Affiliate or Affiliates would be willing to purchase such Notes at
100% of the principal amount thereof.
SECTION 2.2(5). ACCEPTANCE. Within the Acceptance Window with respect
to any interest rate quotes provided pursuant to Section 2.2(4), the Company
may, subject to Section 2.2(6), elect to accept such interest rate quotes as to
not less than $5,000,000 aggregate principal amount of the Shelf Notes specified
in the related Request for Purchase. Such election shall be made by an
Authorized Officer of the Company notifying Prudential by telephone or
telecopier within the Acceptance Window that the Company elects to accept such
interest rate quotes, specifying the Shelf Notes (each such Shelf Note being
herein called an "ACCEPTED NOTE") as to which such acceptance (herein called an
"ACCEPTANCE") relates. The day the Company notifies Prudential of an Acceptance
with respect to any Accepted Notes is herein
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called the "ACCEPTANCE DAY" for such Accepted Notes. Any interest rate quotes as
to which Prudential does not receive an Acceptance within the Acceptance Window
shall expire, and no purchase or sale of Shelf Notes hereunder shall be made
based on such expired interest rate quotes. Subject to Section 2.2(6) and the
other terms and conditions hereof, the Company agrees to sell to a Prudential
Affiliate or Affiliates, and Prudential agrees to cause the purchase by a
Prudential Affiliate or Affiliates of, the Accepted Notes at 100% of the
principal amount of such Notes. As soon as practicable following the Acceptance
Day, the Company and each Prudential Affiliate which is to purchase any such
Accepted Notes will execute a confirmation of such Acceptance substantially in
the form of Exhibit D attached hereto (herein called a "CONFIRMATION OF
ACCEPTANCE"). If the Company should fail to execute and return to Prudential
within three Business Days following the Company's receipt thereof a
Confirmation of Acceptance with respect to any Accepted Notes, Prudential or any
Prudential Affiliate may at its election at any time prior to Prudential's
receipt thereof cancel the closing with respect to such Accepted Notes by so
notifying the Company in writing.
SECTION 2.2(6). MARKET DISRUPTION. Notwithstanding the provisions of
Section 2.2(5), if Prudential shall have provided interest rate quotes pursuant
to Section 2.2(4) and thereafter prior to the time an Acceptance with respect to
such quotes shall have been notified to Prudential in accordance with Section
2.2(5) the domestic market for U.S. Treasury securities or other financial
instruments shall have closed or there shall have occurred a general suspension,
material limitation, or significant disruption of trading in securities
generally on the New York Stock Exchange or in the domestic market for U.S.
Treasury securities or other financial instruments, then such interest rate
quotes shall expire, and no purchase or sale of Shelf Notes hereunder shall be
made based on such expired interest rate quotes. If the Company thereafter
notifies Prudential of the Acceptance of any such interest rate quotes, such
Acceptance shall be ineffective for all purposes of this Agreement, and
Prudential shall promptly notify the Company that the provisions of this Section
2.2(6) are applicable with respect to such Acceptance.
SECTION 2.2(7). FACILITY CLOSINGS. Not later than 11:30 A.M. (New York
City local time) on the Closing Date for any Accepted Notes, the Company will
deliver to each Purchaser listed in the Confirmation of Acceptance relating
thereto at the offices of Prudential Capital Group, 180 North Stetson Street,
Suite 5600, Chicago, Illinois 60601, Attention: Law Department, the Accepted
Notes to be purchased by such Purchaser in the form of one or more Notes in
authorized denominations as such Purchaser may request for each Series of the
Accepted Notes to be purchased on the Closing Date, dated the Closing Date and
registered in such Purchaser's name (or in the name of its nominee), against
payment of the purchase price thereof by transfer of immediately available funds
for credit to the Company's account specified in the Request for Purchase of
such Notes. If the Company fails to tender to any Purchaser the Accepted Notes
to be purchased by such Purchaser on the scheduled Closing Date for such
Accepted Notes as provided above in this Section 2.2(7), or any of the
conditions specified in Section 4 shall not have been fulfilled by the time
required on such scheduled Closing Date, the Company shall, prior to 1:00 P.M.,
New York City local time, on such scheduled Closing Date notify Prudential
(which notification shall be deemed received by each Purchaser) in writing
whether (i) such closing is to be rescheduled (such rescheduled date to be a
Business Day during the Issuance Period not less than one Business Day and not
more than 10 Business Days after such scheduled Closing Date (the "RESCHEDULED
CLOSING DATE")) and certify to Prudential (which certification shall be for the
benefit of each Purchaser) that the Company reasonably
5
believes that it will be able to comply with the conditions set forth in Section
4 on such Rescheduled Closing Date and that the Company will pay the Delayed
Delivery Fee in accordance with Section 2.2(8)(iii) or (ii) such closing is to
be canceled. In the event that the Company shall fail to give such notice
referred to in the preceding sentence, Prudential (on behalf of each Purchaser)
may at its election, at any time after 1:00 P.M., New York City local time, on
such scheduled Closing Date, notify the Company in writing that such closing is
to be canceled. Notwithstanding anything to the contrary appearing in this
Agreement, the Company may not elect to reschedule a closing with respect to any
given Accepted Notes on more than one occasion, unless Prudential shall have
otherwise consented in writing.
SECTION 2.2(8). FEES.
SECTION 2.2(8)(i). STRUCTURING FEE. On the Series C-E Closing Date, the
Company will pay to Prudential by wire transfer of immediately available funds a
fee (herein called the "STRUCTURING FEE") in the amount of $25,000.00.
SECTION 2.2(8)(ii). ISSUANCE FEE. The Company will pay to each
Purchaser in immediately available funds a fee (herein called the "ISSUANCE
FEE") on each Closing Date (other than the Series C-E Closing Date) in an amount
equal to 0.10% of the aggregate principal amount of Notes sold to such Purchaser
on such Closing Date.
SECTION 2.2(8)(iii). DELAYED DELIVERY FEE. If the closing of the
purchase and sale of any Accepted Note is delayed for any reason beyond the
original Closing Date for such Accepted Note, the Company will pay to the
Purchaser which shall have agreed to purchase such Accepted Note (a) on the
Cancellation Date or actual closing date of such purchase and sale and (b) if
earlier, the next Business Day following 90 days after the Acceptance Day for
such Accepted Note and on each Business Day following 90 days after the prior
payment hereunder, a fee (herein called the "DELAYED DELIVERY FEE") calculated
as follows:
(BEY - MMY) X DTS/360 X PA
where "BEY" means Bond Equivalent Yield, i.e., the bond equivalent yield per
annum of such Accepted Note; "MMY" means Money Market Yield, i.e., the yield per
annum on a commercial paper investment of the highest quality selected by
Prudential and having a maturity date or dates the same as, or closest to, the
Rescheduled Closing Date or Rescheduled Closing Dates for such Accepted Note (a
new alternative investment being selected by Prudential each time such closing
is delayed); "DTS" means Days to Settlement, i.e., the number of actual days
elapsed from and including the original Closing Date for such Accepted Note (in
the case of the first such payment with respect to such Accepted Note) or from
and including the date of the next preceding payment (in the case of any
subsequent Delayed Delivery Fee payment with respect to such Accepted Note) to
but excluding the date of such payment; and "PA" means Principal Amount, i.e.,
the principal amount of the Accepted Note for which such calculation is being
made. In no case shall the Delayed Delivery Fee be less than zero. Nothing
contained herein shall obligate any Purchaser to purchase any Accepted Note on
any day other than the Closing Date for such Accepted Note, as the same may be
rescheduled from time to time in compliance with Section 2.2(7).
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SECTION 2.2(8)(iv). CANCELLATION FEE. If the Company at any time
notifies Prudential in writing that the Company is canceling the closing of the
purchase and sale of any Accepted Note, or if Prudential notifies the Company in
writing under the circumstances set forth in the last sentence of Section 2.2(5)
or the penultimate sentence of Section 2.2(7) that the closing of the purchase
and sale of such Accepted Note is to be canceled, or if the closing of the
purchase and sale of such Accepted Note is not consummated on or prior to the
last day of the Issuance Period (the date of any such notification or the last
day of the Issuance Period, as the case may be, being herein called the
"CANCELLATION DATE"), the Company will pay to the Purchaser which shall have
agreed to purchase such Accepted Note in immediately available funds an amount
(the "CANCELLATION FEE") calculated as follows:
PI X PA
where "PI" means Price Increase, i.e., the quotient (expressed in decimals)
obtained by dividing (a) the excess of the ask price (as determined by
Prudential) of the Hedge Treasury Note(s) on the Cancellation Date over the bid
price (as determined by Prudential) of the Hedge Treasury Notes(s) on the
Acceptance Day for such Accepted Note by (b) such bid price; and "PA" has the
meaning ascribed to it in Section 2.2(8)(iii). The foregoing bid and ask prices
shall be as reported by TradeWeb LLC (or, if such data for any reason ceases to
be available through TradeWeb LLC, any publicly available source of similar
market data). Each price shall be rounded to the second decimal place. In no
case shall the Cancellation Fee be less than zero.
SECTION 2.3. SUBSIDIARY GUARANTY. (a) The payment by the Company of all
amounts due with respect to the Notes and the performance by the Company of its
obligations under this Agreement will be absolutely and unconditionally
guaranteed by the Subsidiary Guarantors pursuant to the Subsidiary Guaranty
Agreement dated as of even date herewith, which shall be substantially in the
form of Exhibit E attached hereto, and otherwise in accordance with the
provisions of Section 9.6 hereof (the "SUBSIDIARY GUARANTY").
(b) The holders of the Notes agree to discharge and release any
Subsidiary Guarantor from the Subsidiary Guaranty upon the written request of
the Company, provided that (i) such Subsidiary Guarantor has been released and
discharged (or will be released and discharged concurrently with the release of
such Subsidiary Guarantor under the Subsidiary Guaranty) as an obligor and
guarantor under and in respect of the Bank Credit Agreement and any other Debt
of the Company and the Company so certifies to the holders of the Notes in a
certificate of a Responsible Officer, (ii) at the time of such release and
discharge, the Company shall deliver a certificate of a Responsible Officer to
the holders of the Notes stating that no Default or Event of Default exists, and
(iii) if any fee or other form of consideration is given to any holder of Debt
of the Company in connection with such release, the holders of the Notes shall
receive the same consideration (a "COLLATERAL RELEASE").
SECTION 3. CLOSING.
The sale and purchase of any Notes to be purchased by each Purchaser
shall occur as provided in Section 2.1 or 2.2(7), as the case may be. If, on the
Closing Date for any Notes, the Company shall fail to tender the Notes to any
Purchaser as provided above in Section 2.1 or 2.2(7), as the case may be, or any
of the conditions specified in Section 4 shall not have been
7
fulfilled to any Purchaser's satisfaction, such Purchaser shall, at such
Purchaser's election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights such Purchaser may have by reason
of such failure or such nonfulfillment.
SECTION 4. CONDITIONS TO CLOSING.
The obligation of each Purchaser to purchase and pay for the Notes to
be sold to such Purchaser on any Closing Date is subject to the fulfillment to
such Purchaser's satisfaction, prior to or on such Closing Date, of the
following conditions:
SECTION 4.1. REPRESENTATIONS AND WARRANTIES.
(a) Representations and Warranties of the Company. The representations
and warranties of the Company in this Agreement shall be correct when made and
at the time of such Closing Date, both before and immediately after giving
effect to the issuance of the Notes on the closing Date and the consummation of
the transactions contemplated hereby.
(b) Representations and Warranties of the Subsidiary Guarantors. The
representations and warranties of the Subsidiary Guarantors in the Subsidiary
Guaranty shall be correct when made and at the time of such Closing Date.
SECTION 4.2. PERFORMANCE; NO DEFAULT. The Company and each Subsidiary
Guarantor shall have performed and complied with all agreements and conditions
contained in this Agreement and the Subsidiary Guaranty required to be performed
or complied with by the Company and each such Subsidiary Guarantor prior to or
on such Closing Date, and after giving effect to the issue and sale of the Notes
(and the application of the proceeds thereof as contemplated by Section 5.14)
and the consummation of the transactions contemplated hereby, 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 December 31, 2003
that would have been prohibited by Section 10 hereof had such Section applied
since such date.
SECTION 4.3. COMPLIANCE CERTIFICATES.
(a) Officer's Certificate of the Company. The Company shall have
delivered to such Purchaser an Officer's Certificate, dated such Closing Date,
certifying that the conditions specified in Sections 4.1(a), 4.2 and 4.9 have
been fulfilled.
(b) Secretary's Certificate of the Company. The Company shall have
delivered to such Purchaser a certificate, dated such Closing Date, certifying
as to the resolutions attached thereto and other corporate proceedings relating
to the authorization, execution and delivery of the Notes and this Agreement.
(c) Officer's Certificate of the Subsidiary Guarantors. Each Subsidiary
Guarantor shall have delivered to such Purchaser an Officer's Certificate, dated
such Closing Date, certifying that the conditions specified in Sections 4.1(b),
4.2 and 4.9 have been fulfilled.
(d) Secretary's Certificate of the Subsidiary Guarantors. Each
Subsidiary Guarantor shall have delivered to such Purchaser a certificate, dated
such Closing Date, certifying as to the
8
resolutions attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Subsidiary Guaranty.
SECTION 4.4. OPINIONS OF COUNSEL. Such Purchaser shall have received
opinions in form and substance satisfactory to such Purchaser, dated such
Closing Date (a) from Vedder, Price, Kaufman & Kammholz, special counsel for the
Company, covering the matters set forth in Exhibit F and covering such other
matters incident to the transactions contemplated hereby as such Purchaser or
such Purchaser's counsel may reasonably request (and the Company hereby
instructs its counsel to deliver such opinion to such Purchaser) and (b) from
Wiley S. Adams, Vice President and Corporate Counsel of Prudential or such other
counsel who is acting as special counsel for Prudential in connection with this
transaction, a favorable opinion satisfactory to Prudential as to such matters
incident to the matters herein contemplated as it may reasonably request.
SECTION 4.5. PURCHASE PERMITTED BY APPLICABLE LAW, ETC. On such Closing
Date each purchase of Notes shall (a) be permitted by the laws and regulations
of each jurisdiction to which each Purchaser is subject, without recourse to
provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting
limited investments by insurance companies without restriction as to the
character of the particular investment, (b) not violate any applicable law or
regulation (including, without limitation, Regulation T, U or X of the Board of
Governors of the Federal Reserve System) and (c) not subject any Purchaser to
any tax, penalty or liability under or pursuant to any applicable law or
regulation, which law or regulation was not in effect on the date hereof. If
requested by any Purchaser, such Purchaser shall have received an Officer's
Certificate certifying as to such matters of fact as such Purchaser may
reasonably specify to enable such Purchaser to determine whether such purchase
is so permitted.
SECTION 4.6. ACQUISITION OF SEVEN WORLDWIDE; RELATED EQUITY FINANCING.
With respect to the Series C-E Closing Date, the Stock Purchase Agreement dated
December 17, 2004, among the Company, Seven Worldwide, Inc., a Delaware
corporation, KAGT Holdings, Inc., a Delaware corporation ("SEVEN WORLDWIDE
HOLDINGS"), Kohlberg Investors IV, L.P., Kohlberg TE Investors IV, L.P.,
Kohlberg Offshore Investors IV, L.P., Kohlberg Partners IV, L.P., KOCO
Investors, L.P., Silver Point Capital Fund, L.P., Silver Point Capital Offshore
Fund, Limited, Hudson River Co. Investment Fund, L.P., and VOIII, LLC (the
"ACQUISITION AGREEMENT"), providing for the acquisition of stock of Seven
Worldwide Holdings for an aggregate purchase price not in excess of
$191,000,000, subject to the adjustment for working capital as set forth
therein, plus related fees and expenses, shall be in form and substance
satisfactory to such Purchaser, shall have been duly executed and delivered by
the parties thereto and shall be in full force and effect. Such Purchaser shall
have received a copy of the Acquisition Agreement and all instruments, documents
and agreements related thereto or to such equity financing, certified by an
Officer's Certificate of the Company, dated Series C-E Closing Date, as correct
and complete.
SECTION 4.7. PAYMENT OF SPECIAL COUNSEL FEES. Without limiting the
provisions of Section 15.1, the Company shall have paid on or before such
Closing Date, the reasonable fees, reasonable charges and reasonable
disbursements of Schiff Hardin LLP, Purchasers' special counsel, to the extent
reflected in a statement of such counsel rendered to the Company at least one
Business Day prior to such Closing Date.
9
SECTION 4.8. PRIVATE PLACEMENT NUMBER. A Private Placement Number
issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the
Securities Valuation Office of the National Association of Insurance
Commissioners) shall have been obtained for the Notes.
SECTION 4.9. CHANGES IN CORPORATE STRUCTURE. Neither the Company nor
any Subsidiary Guarantor shall have changed its jurisdiction of organization or,
except as reflected in Schedule 4.9, been a party to any merger or
consolidation, or shall 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.
SECTION 4.10. SUBSIDIARY GUARANTY. The Subsidiary Guaranty shall have
been duly authorized, executed and delivered by each Subsidiary Guarantor, shall
constitute the legal, valid and binding contract and agreement of each
Subsidiary Guarantor, such Purchaser shall have received a true, correct and
complete copy thereof and, with respect to each Closing Date subsequent to the
Series C-E Closing Date, each Subsidiary Guarantor shall have executed and
delivered to such Purchaser a Guaranty Ratification in the form attached to the
Subsidiary Guaranty.
SECTION 4.11. PAYMENT OF FEES. The Company shall have paid to
Prudential or such Purchaser in immediately available funds any fees due it
pursuant to or in connection with this Agreement, including the Structuring Fee
due pursuant to Section 2.2(8)(i), any Issuance Fee due pursuant to paragraph
2.2(8)(ii) and any Delayed Delivery Fee due pursuant to paragraph 2.2(8)(iii).
SECTION 4.12. MATERIAL ADVERSE CHANGE. No material adverse change in
the business, condition (financial or otherwise), operations or prospects of the
Company and its Subsidiaries, taken as a whole, or Seven Worldwide and its
Subsidiaries, taken as a whole, in either case since December 31, 2003 shall
have occurred or be threatened, as determined by such Purchaser in its sole
judgment.
SECTION 4.13. AMENDMENT TO 1995 NOTE AGREEMENT. With respect to the
Series C-E Closing Date, the Company shall have entered into an amendment to the
1995 Note Agreement which amends the 1995 Note Agreement to conform the
covenants therein to the covenants set forth herein, all in form and substance
satisfactory to such Purchaser, and all conditions precedent to the
effectiveness of such amendment shall have been satisfied.
SECTION 4.14. BANK CREDIT AGREEMENT. The Company, the Administrative
Agent and the other financial institutions parties to the Bank Credit Agreement
shall have entered into the Bank Credit Agreement, in form and substance
satisfactory such Purchaser, all conditions precedent to the making of loans
thereunder shall have been satisfied (other than the closing of the acquisition
referenced to in Section 4.6), and the Bank Credit Agreement shall be in full
force and effect. Such Purchaser shall have received copies of the Bank Credit
Agreement and such of the closing documents delivered thereunder as such
Purchaser may request.
SECTION 4.15. AMENDMENT TO 2003 NOTE AGREEMENT. The Company and the
holders of the 2003 Notes shall have entered into an amendment to the 2003 Note
Agreement which amends Sections 9.6, 10.2(b) and 10.4 of the 2003 Note Agreement
to conform those Sections to
10
Sections 9.6, 10.2(b) and 10.4 as set forth herein, all in form and substance
satisfactory to such Purchaser, all conditions precedent to the effectiveness of
such amendment shall have been satisfied and such amendment shall be in full
force and effect. Such Purchaser shall have received a copy of such amendment.
SECTION 4.16. PROCEEDINGS AND DOCUMENTS. All corporate or other
organizational proceedings in connection with the transactions contemplated by
this Agreement and all documents and instruments incident to such transactions
shall be satisfactory to such Purchaser and such Purchaser's special counsel,
and such Purchaser and such Purchaser's special counsel shall have received all
such counterpart originals or certified or other copies of such documents as
such Purchaser or such Purchaser's special counsel may reasonably request.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each Purchaser that:
SECTION 5.1. ORGANIZATION; POWER AND AUTHORITY. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and authority to own or hold under lease the properties
it purports to own or hold under lease, to transact the business it transacts
and proposes to transact, to execute and deliver this Agreement and the Notes
and to perform the provisions hereof and thereof.
SECTION 5.2. AUTHORIZATION, ETC. This Agreement and the Notes have been
duly authorized by all necessary corporate action on the part of the Company,
and this Agreement constitutes, and upon execution and delivery thereof each
Note will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
SECTION 5.3. DISCLOSURE. The Public Filings of the Company fairly
describes, in all material respects, the general nature of the business and
principal properties of the Company and its Restricted Subsidiaries. This
Agreement, the Public Filings of the Company, the documents, certificates or
other writings delivered to the Purchasers by or on behalf of the Company in
connection with the transactions contemplated hereby and the financial
statements listed in Schedule 5.5, taken as a whole, do not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading in light of the circumstances under
which they were made. Since December 31, 2003, there has been no change in the
financial condition, operations, business or properties of the Company or any of
its Restricted Subsidiaries 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
11
or in the Public Filings of the Company or in the other documents, certificates
and other writings delivered to each Purchaser by or on behalf of the Company
specifically for use in connection with the transactions contemplated hereby.
SECTION 5.4. ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES;
AFFILIATES. (a) Schedule 5.4 contains (except as noted therein) complete and
correct lists of (i) the Company's Restricted and Unrestricted Subsidiaries,
showing, as to each Subsidiary, the correct name thereof, the jurisdiction of
its organization, the percentage of shares of each class of its capital stock or
similar equity interests outstanding owned by the Company and each other
Subsidiary, and whether, as of the Series C-E Closing Date, such Subsidiary is a
Restricted or an Unrestricted Subsidiary, and all other Investments of the
Company and its Restricted Subsidiaries, (ii) the Company's Affiliates, other
than Subsidiaries, and (iii) the Company's directors and senior officers.
(b) Except with respect to De Minimis Subsidiaries, 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) Except with respect to De Minimis Subsidiaries, 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. Except with
respect to De Minimis Subsidiaries, 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) Except with respect to De Minimis Subsidiaries, no Subsidiary is a
party to, or otherwise subject to, any legal restriction or any agreement (other
than this Agreement, the agreements listed on Schedule 5.4 and customary
limitations imposed by corporate law statutes) restricting the ability of such
Subsidiary to pay dividends out of profits or make any other similar
distributions of profits to the Company or any of its Subsidiaries that owns
outstanding shares of capital stock or similar equity interests of such
Subsidiary.
SECTION 5.5. FINANCIAL STATEMENTS. The Company has delivered to each
Purchaser copies of the financial statements of the Company and its Subsidiaries
listed on Schedule 5.5. All of said financial statements (including in each case
the related schedules and notes), and any financial statements delivered
pursuant to Section 7.1, fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as of the
respective dates specified in such financial statements and the consolidated
results of their operations and cash flows for the respective periods so
specified and have been prepared in accordance with GAAP consistently applied
throughout the periods involved except as set forth in the notes thereto
(subject, in the case of any interim financial statements, to normal year-end
adjustments).
12
SECTION 5.6. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC. The
execution, delivery and performance by the Company of this Agreement and the
Notes will not (a) contravene, result in any breach of, or constitute a default
under, or result in the creation of any Lien in respect of any property of the
Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan,
purchase or credit agreement, lease, corporate charter or by-laws, or any other
agreement or instrument to which the Company or any Subsidiary is bound or by
which the Company or any Subsidiary or any of their respective properties may be
bound or affected, (b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any 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.
SECTION 5.7. GOVERNMENTAL AUTHORIZATIONS, ETC. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement or the Notes.
SECTION 5.8. LITIGATION; OBSERVANCE OF STATUTES AND ORDERS. (a) There
are no actions, suits or proceedings pending or, to the knowledge of the
Company, threatened against or affecting the Company or any Restricted
Subsidiary or any property of the Company or any Restricted 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 Restricted 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.
SECTION 5.9. TAXES. The Company and its Restricted Subsidiaries have
filed all tax returns that are required to have been filed in any jurisdiction
which the failure to file would result in a Material Adverse Effect, and have
paid all taxes shown to be due and payable on such returns and all other taxes
and assessments levied upon them or their properties, assets, income or
franchises, to the extent such taxes and assessments have become due and payable
and before they have become delinquent, except for any taxes and assessments (a)
the amount of which is not individually or in the aggregate Material or (b) the
amount, applicability or validity of which is currently being contested in good
faith by appropriate proceedings and with respect to which the Company or a
Subsidiary, as the case may be, has established adequate reserves in accordance
with GAAP. The Company knows of no basis for any other tax or assessment that
could reasonably be expected to have a Material Adverse Effect. The charges,
accruals and reserves on the books of the Company and its Subsidiaries in
respect of federal, state or other taxes for all fiscal periods are adequate.
The federal income tax liabilities of the Company and its Subsidiaries have been
determined by the Internal Revenue Service and paid for all fiscal years up to
and including the fiscal year ended December 31, 2000.
13
SECTION 5.10. TITLE TO PROPERTY; LEASES. The Company and its Restricted
Subsidiaries have good and sufficient title to their respective properties which
the Company and its Restricted Subsidiaries own or purport to own 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 Restricted 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.
SECTION 5.11. LICENSES, PERMITS, ETC. Except as disclosed in Schedule
5.11, (a) the Company and its Restricted 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 of its Restricted Subsidiaries 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 Restricted
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 Restricted
Subsidiaries.
SECTION 5.12. COMPLIANCE WITH ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in section 3 of ERISA), and no
event, transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company or any
ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not be individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan 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.
14
(c) The Company and its ERISA Affiliates have not incurred any
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer
Plans that individually or in the aggregate are Material.
(d) The expected post-retirement benefit obligation (determined as of
the last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Company and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the issuance and
sale of the Notes hereunder will not involve any transaction that is subject to
the prohibitions of Section 406 of ERISA or in connection with which a tax could
be imposed pursuant to Section 4975(c)(1)(A)-(D) of the Code. The representation
by the Company in the first sentence of this Section 5.12(e) is made in reliance
upon and subject to the accuracy of each Purchaser's representation in Section
6.2 as to the sources of the funds to be used to pay the purchase price of the
Notes to be purchased by such Purchaser.
SECTION 5.13. PRIVATE OFFERING BY THE COMPANY. Neither the Company nor
anyone acting on the Company's behalf has offered the Notes or any similar
securities for sale to, or solicited any offer to buy any of the same from, or
otherwise approached or negotiated in respect thereof with, any Person other
than the Purchasers and not more than ten (10) other Institutional Investors,
each of which has been offered the Notes in connection with 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.
SECTION 5.14. USE OF PROCEEDS; MARGIN REGULATIONS. The Company will
apply the proceeds of the sale of the Series C Notes, the Series D Notes and the
Series E Notes to pay a portion of the purchase price for the acquisition of the
stock described in Section 4.6, and will hold such proceeds in cash or cash
equivalent investments until the consummation of such closing. The Company will
not amend the Acquisition Agreement in any manner materially adverse to the
Company or the holders of the Notes prior to the consummation of the acquisition
thereunder without the consent of the Required Holders(s). The Company will
apply the proceeds of the sale of any Series of Shelf Notes as specified in the
Request for Purchase with respect to such Series. No part of the proceeds from
the sale of the Notes hereunder will be used, directly or indirectly, for the
purpose of buying or carrying any margin stock within the meaning of Regulation
U of the Board of Governors of the Federal Reserve System (12 CFR 221), 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 U. None of the proceeds of the
sale of any Notes will be used to finance a Hostile Tender Offer.
15
SECTION 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 Restricted Subsidiaries as of January 28, 2005,
since which date there has been no Material change in the amounts, interest
rates, sinking funds, installment payments or maturities of the Debt of the
Company or its Restricted Subsidiaries. Neither the Company nor any Restricted
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
Restricted Subsidiary, and no event or condition exists with respect to any Debt
of the Company or any Restricted 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
Restricted 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 10.4.
SECTION 5.16. FOREIGN ASSETS CONTROL REGULATIONS, ETC. Neither the sale
of the Notes by the Company hereunder nor its use of the proceeds thereof will
violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto, or is in violation of any federal statute or Presidential
Executive Order, including without limitation Executive Order 13224 66 Fed. Reg.
49079 (September 25, 2001) (Blocking Property and Prohibiting Transactions with
Persons who Commit, Threaten to Commit or Support Terrorism), or The USA Patriot
Act.
SECTION 5.17. STATUS UNDER CERTAIN STATUTES. Neither the Company nor
any Restricted Subsidiary is an "investment company" registered or required to
be registered under the Investment Company Act of 1940, as amended, or is
subject to regulation under the Public Utility Holding Company Act of 1935, as
amended, the ICC Termination Act of 1995, as amended, or the Federal Power Act,
as amended.
SECTION 5.18. ENVIRONMENTAL MATTERS. Neither the Company nor any
Restricted 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 Restricted Subsidiaries or any of their respective real
properties now or formerly owned, leased or operated by any of them, or other
assets, alleging damage to the environment or any 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 each Purchaser in
writing:
(a) neither the Company nor any Restricted Subsidiary has knowledge of
any facts which would give rise to any claim, public or private, for violation
of Environmental Laws or damage to the environment emanating from, occurring on
or in any way related to real properties or to other assets now or formerly
owned, leased or operated by any of them or their use, except, in each case,
such as could not reasonably be expected to result in a Material Adverse Effect;
16
(b) neither the Company nor any of its Restricted Subsidiaries has
stored any Hazardous Materials on real properties now or formerly owned, leased
or operated by any of them or has disposed of any Hazardous Materials in each
case in a manner contrary to any Environmental Laws and 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 Restricted 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.
SECTION 5.19. NOTES RANK PARI PASSU. The obligations of the Company
under this Agreement and the Notes rank pari passu in right of payment with all
other senior unsecured Debt (actual or contingent) of the Company, including,
without limitation, all senior unsecured Debt of the Company described in
Schedule 5.15 hereto.
SECTION 5.20. SHARE REPURCHASE OBLIGATIONS. Neither the Company nor any
Subsidiary is a party to any agreement requiring it to, or is otherwise
obligated to, repurchase any shares of the Company's capital stock issued in
connection with the acquisition described in Section 4.6.
SECTION 6. REPRESENTATIONS OF THE PURCHASER.
SECTION 6.1. PURCHASE FOR INVESTMENT. Each Purchaser represents that it
is an institutional "accredited investor," as such term is defined in Regulation
D under the Securities Act of 1933, as amended, and is purchasing the Notes for
its own account or for one or more separate accounts maintained by it 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 such Purchaser's or such
pension or trust funds' property shall at all times be within such Purchaser's
or such pension or trust funds' control. Each Purchaser understands 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.
SECTION 6.2. SOURCE OF FUNDS. Each Purchaser represents that at least
one of the following statements is an accurate representation as to each source
of funds (a "SOURCE") to be used by it to pay the purchase price of the Notes to
be purchased by it hereunder:
(a) the Source is an "insurance company general account" within the
meaning of Department of Labor Prohibited Transaction Exemption ("PTE") 95-60
(issued July 12, 1995) and there is no employee benefit plan, treating as a
single plan all plans maintained by the same employer or employee organization,
with respect to which the amount of the general account reserves and liabilities
for all contracts held by or on behalf of such plan, exceeds ten percent (10%)
of the total reserves and liabilities of such general account (exclusive of
separate account liabilities) plus surplus, as set forth in the NAIC Annual
Statement for such Purchaser most recently filed with such Purchaser's state of
domicile; or
17
(b) the Source is either (i) an insurance company pooled separate
account, within the meaning of PTE 90-1 (issued January 29, 1990), or (ii) a
bank collective investment fund, within the meaning of the PTE 91-38 (issued
July 12, 1991) and, except as such Purchaser prior to the execution and delivery
of this Agreement has disclosed to the Company in writing pursuant to this
paragraph (b), no employee benefit plan or group of plans maintained by the same
employer or employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment fund; or
(c) the Source constitutes assets of an "investment fund" (within the
meaning of Part V of the QPAM Exemption) managed by a "qualified professional
asset manager" or "QPAM" (within the meaning of Part V of the QPAM Exemption),
no employee benefit plan's assets that are included in such investment fund,
when combined with the assets of all other employee benefit plans established or
maintained by the same employer or by an affiliate (within the meaning of
Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client assets
managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption
are satisfied, neither the QPAM nor a person controlling or controlled by the
QPAM (applying the definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and (i) the identity of
such QPAM and (ii) the names of all employee benefit plans whose assets are
included in such investment fund have been disclosed to the Company in writing
pursuant to this paragraph (c) prior to the execution and delivery of this
Agreement; or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans, each of
which prior to the execution and delivery of this Agreement has been identified
to the Company in writing pursuant to this paragraph (e); or
(f) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA; or
(g) the Source is an insurance company separate account maintained
solely in connection with the fixed contractual obligations of the insurance
company under which the amounts payable, or credited, to any employee benefit
plan (or its related trust) and to any participant or beneficiary of such plan
(including any annuitant) are not affected in any manner by the investment
performance of the separate account.
If any Purchaser or any subsequent transferee of the Notes indicates
that such Purchaser or such transferee is relying on any representation
contained in paragraph (b), (c) or (e) above, the Company shall deliver on the
date of issuance of such Notes and on the date of any applicable transfer a
certificate, which shall either state that (i) it is neither a party in interest
nor a "disqualified person" (as defined in Section 4975(e)(2) of the Code), with
respect to any plan identified pursuant to paragraphs (b) or (e) above, or (ii)
with respect to any plan, identified pursuant to paragraph (c) above, neither it
nor any "affiliate" (as defined in Section V(c) of the QPAM Exemption) has at
such time, and during the immediately preceding one year, exercised the
authority to appoint or terminate said QPAM as manager of any plan identified in
writing
18
pursuant to paragraph (c) above or to negotiate the terms of said QPAM's
management agreement on behalf of any such identified plan. As used in this
Section 6.2, the terms "employee benefit plan", "governmental plan", "party in
interest" and "separate account" shall have the respective meanings assigned to
such terms in Section 3 of ERISA.
SECTION 7. INFORMATION AS TO COMPANY.
SECTION 7.1. FINANCIAL AND BUSINESS INFORMATION. The Company shall
deliver to Prudential and each holder of Notes that is an Institutional
Investor:
(a) Quarterly Statements -- within 60 days after the end of each
quarterly fiscal period in each fiscal year of the Company (other than the last
quarterly fiscal period of each such fiscal year), duplicate copies of,
(i) a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such quarter and (in the case of the second and third
quarters) for the portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial
position of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from year-end
adjustments, provided that delivery within the time period specified
above of copies of the Company's Quarterly Report on Form 10-Q prepared
in compliance with the requirements therefor and filed with the
Securities and Exchange Commission shall be deemed to satisfy the
requirements of this Section 7.1(a);
(b) Annual Statements -- within 105 days after the end of each fiscal
year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and its
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such year, setting forth in each case in comparative
form the figures for the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP, and accompanied by 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, provided that the delivery
within the time period specified above of the Company's Annual Report
on
19
Form 10-K for such fiscal year (together with the Company's annual
report to shareholders, if any, prepared pursuant to Rule 14a-3 under
the Exchange Act) prepared in accordance with the requirements therefor
and filed with the Securities and Exchange Commission shall be deemed
to satisfy the requirements of this Section 7.1(b);
(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 Business Days after a Responsible Officer becomes 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 Business
Days after a Responsible Officer becomes 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(c) of ERISA and the regulations thereunder, for which
notice thereof has not been waived pursuant to such regulations as in
effect on the date thereof; 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 imposition of a penalty or
excise tax under the provisions of the Code relating to employee
benefit plans, or 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;
20
(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; and
(g) Requested Information -- with reasonable promptness, such other
data and information relating to the business, operations, affairs, financial
condition, assets or properties of the Company or any of its Subsidiaries or
relating to the ability of the Company to perform its obligations hereunder and
under the Notes as from time to time may be reasonably requested by any such
holder of Notes.
Notwithstanding the foregoing, in the event that one or more
Unrestricted Subsidiaries shall either (i) own more than 10% of the total
consolidated assets of the Company and its Subsidiaries, or (ii) account for
more than 10% of the consolidated gross revenues of the Company and its
Subsidiaries, determined in each case in accordance with GAAP, then, within the
respective periods provided in Section 7.1(a) and (b) above, the Company shall
deliver to each holder of Notes that is an Institutional Investor, unaudited
financial statements of the character and for the dates and periods as in said
Sections 7.1(a) and (b) covering such group of Unrestricted Subsidiaries (on a
consolidated basis), together with a consolidating statement reflecting
eliminations or adjustments required to reconcile the financial statements of
such group of Unrestricted Subsidiaries to the financial statements delivered
pursuant to Sections 7.1(a) and (b).
SECTION 7.2. OFFICER'S CERTIFICATE. Each set of financial statements
delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b)
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth:
(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Section 10.1 through Section 10.4 hereof,
inclusive, during the quarterly or annual period covered by the statements then
being furnished (including with respect to each such Section, where applicable,
the calculations of the maximum or minimum amount, ratio or percentage, as the
case may be, permissible under the terms of such Sections, and the calculation
of the amount, ratio or percentage then in existence); and
(b) Event of Default -- a statement that such officer has reviewed the
relevant terms hereof and has made, or caused to be made, under his or her
supervision, a review of the transactions and conditions of the Company and its
Subsidiaries from the beginning of the quarterly or annual period covered by the
statements then being furnished to the date of the certificate and that such
review shall not have disclosed the existence during such period of any
condition or event that constitutes a Default or an Event of Default or, if any
such condition or event existed or exists (including, without limitation, any
such event or condition resulting from the failure of the Company or any
Subsidiary to comply with any Environmental Law), specifying the nature and
period of existence thereof and what action the Company shall have taken or
proposes to take with respect thereto.
21
SECTION 7.3. INSPECTION. The Company shall permit the representatives
of Prudential and 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 Restricted Subsidiary, all at
such reasonable times during normal business hours 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 Restricted 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.
SECTION 8. PAYMENT OF THE NOTES.
SECTION 8.1. REQUIRED PREPAYMENTS.
SECTION 8.1(1). NO REQUIRED PREPAYMENTS OF SERIES C NOTES, SERIES D
NOTES OR SERIES E NOTES. The Series C Notes, the Series D Notes and the Series E
Notes shall be subject to prepayment only with respect to the optional
prepayments permitted by Section 8.2.
SECTION 8.1(2). REQUIRED PREPAYMENTS OF SHELF NOTES. Each Series of
Notes shall be subject to required prepayments, if any, set forth in the Notes
of such Series (provided that upon any purchase of any Series of Shelf Notes
pursuant to Section 8.5 or 8.7 the principal amount of each required prepayment
of such Series of Shelf Notes becoming due under this Section 8.1(2) on and
after the date of such purchase shall be reduced in the same proportion as the
aggregate unpaid principal amount of such Series of Shelf Notes is reduced as
the result of such purchase).
SECTION 8.2. OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT. The Company
may, at its option, upon notice as provided below, prepay at any time all, or
from time to time any part of, the Notes of any Series, in an amount not less
than $2,000,000 in the aggregate principal amount of the Notes of such Series
then outstanding in the case of a partial prepayment, at 100% of the principal
amount so prepaid, together with interest accrued thereon to the date of such
prepayment, plus the Make-Whole Amount determined for the prepayment date with
respect to such principal amount of each Note then outstanding. The Company will
give each holder of Notes to be prepaid 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 of such Series held by such holder to be
prepaid (determined in accordance with Section 8.3), and the interest to be paid
on the prepayment date
22
with respect to such principal amount being prepaid, and shall be accompanied by
a certificate of a Senior Financial Officer as to the estimated respective
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 to be prepaid a certificate of a Senior
Financial Officer specifying the calculation of each such Make-Whole Amount as
of the specified prepayment date. Any partial prepayment of Notes of any Series
pursuant to this Section 8.2 shall be applied in satisfaction of any required
payments of principal thereof (including the required payment of principal of
principal due upon the maturity thereof) under Section 8.1 hereof in inverse
order of their scheduled due dates.
SECTION 8.3. ALLOCATION OF PARTIAL PREPAYMENTS. In the case of each
partial prepayment of the Notes of any Series pursuant to the provisions of
Section 8.2, the principal amount of the Notes to be prepaid shall be allocated
among all of the Notes of such Series at the time outstanding in proportion, as
nearly as practicable, to the respective unpaid principal amounts thereof.
SECTION 8.4. MATURITY; SURRENDER, ETC. In the case of each prepayment
of Notes pursuant to this Section 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such date
and the applicable Make-Whole Amount, if any. From and after such date, unless
the Company shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount, if any, as aforesaid, interest
on such principal amount shall cease to accrue. Any Note paid or prepaid in full
shall be surrendered to the Company and cancelled and shall not be reissued, and
no Note shall be issued in lieu of any prepaid principal amount of any Note.
SECTION 8.5. PURCHASE OF NOTES. The Company will not and will not
permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly
or indirectly, any of the outstanding Notes of any Series except (a) upon the
payment or prepayment of the Notes of such Series in accordance with the terms
of this Agreement and the Notes or (b) pursuant to a written offer to purchase
any outstanding Notes of such Series made by the Company or an Affiliate pro
rata to the holders of the Notes of such Series upon the same terms and
conditions. 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.
SECTION 8.6. MAKE-WHOLE AMOUNT. The term "MAKE-WHOLE AMOUNT" means with
respect to a 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 the
Note, over the amount of such Called Principal, provided that the Make-Whole
Amount may in no event be less than zero. For the purposes of determining the
Make-Whole Amount, the following terms have the following meanings:
"CALLED PRINCIPAL" means, with respect to a Note, the principal of the
Note that is to be prepaid pursuant to Section 8.2 or has become or is declared
to be immediately due and payable pursuant to Section 12.1, as the context
requires.
23
"DISCOUNTED VALUE" means, with respect to the Called Principal of a
Note, the amount obtained by discounting all Remaining Scheduled Payments with
respect to such Called Principal from their respective scheduled due dates to
the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Note is payable) equal to the
Reinvestment Yield with respect to such Called Principal.
"REINVESTMENT YIELD" means, with respect to the Called Principal of a
Note, 0.50% plus the yield to maturity implied by (i) the yields reported, as of
10:00 A.M. (New York City time) on the second Business Day preceding the
Settlement Date with respect to such Called Principal, on the display designated
as "PX-1" on the Bloomberg Financial Market Screen (or such other display as may
replace "PX-1" on the Bloomberg Financial Market Screen) for actively traded
U.S. Treasury securities having a maturity equal to the Remaining Average Life
of such Called Principal as of such Settlement Date, or (ii) if such yields are
not reported as of such time or the yields reported as of such time are not
ascertainable, the Treasury Constant Maturity Series Yields reported, for the
latest day for which such yields have been so reported as of the second Business
Day preceding the Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded U.S. Treasury securities having a constant
maturity equal to the Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield will be determined, if necessary, by (a)
converting U.S. Treasury bill quotations to bond-equivalent yields in accordance
with accepted financial practice and (b) interpolating linearly on a straight
line basis between (1) the actively traded U.S. Treasury security with the
maturity closest to and greater than the Remaining Average Life and (2) the
actively traded U.S. Treasury security with the maturity closest to and less
than the Remaining Average Life.
"REMAINING AVERAGE LIFE" means, with respect to any Called Principal,
the number of years (calculated to the nearest one-twelfth year) obtained by
dividing (i) such Called Principal into (ii) the sum of the products obtained by
multiplying (a) the principal component of each Remaining Scheduled Payment with
respect to such Called Principal by (b) the number of years (calculated to the
nearest one-twelfth year) that will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date of such Remaining
Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the Called
Principal of a Note, all payments of such Called Principal and interest thereon
that would be due after the Settlement Date with respect to such Called
Principal if no payment of such Called Principal were made prior to its
scheduled due date, provided that if such Settlement Date is not a date on which
interest payments are due to be made under the terms of the Note, then the
amount of the next succeeding scheduled interest payment will be reduced by the
amount of interest accrued to such Settlement Date and required to be paid on
such Settlement Date pursuant to Section 8.2 or 12.1.
"SETTLEMENT DATE" means, with respect to the Called Principal of a
Note, the date on which such Called Principal is to be prepaid pursuant to
Section 8.2 or has become or is declared to be immediately due and payable
pursuant to Section 12.1, as the context requires.
24
SECTION 8.7. OFFER TO PREPAY NOTES IN THE EVENT OF ASSET SALE.
(a) Notice of Offer to Prepay Notes From Asset Sale Proceeds. The
Company will, within sixty days prior to any application of any Net Proceeds to
prepay or retire Senior Debt of the Company and/or its Restricted Subsidiaries
pursuant to Section 10.4(2) hereof, give written notice of such application to
each holder of the Notes. Such notice shall contain and constitute an offer to
prepay the Notes as described in Section 8.7(c) and shall be accompanied by the
certificate described in Section 8.7(f).
(b) Notice of Acceptance of Offer under Section 8.7(a). If the Company
shall at any time receive an acceptance to an offer to prepay Notes under
Section 8.7(a) from some, but not all, of the holders of the Notes, then the
Company will, within two Business Days after the receipt of such acceptance,
give written notice of such acceptance to each other holder of the Notes which
has notified the Company that it requests to receive notices under this Section
8.7(b).
(c) Offer to Prepay Notes. The offer to prepay Notes contemplated by
Section 8.7(c) shall be an offer to prepay, in accordance with and subject to
this Section 8.7, on the date specified in such offer (the "PROPOSED SALE
PROCEEDS PREPAYMENT DATE"), a principal amount of the Notes of each Series held
by each holder (in this case only, "holder" in respect of any Note registered in
the name of a nominee for a disclosed beneficial owner shall mean such
beneficial owner) that is equal to the product of (x) the total amount of such
Net Proceeds which is to be used to pay Senior Debt of the Company and/or its
Restricted Subsidiaries pursuant to Section 10.4(2), and (y) a fraction, the
numerator of which is the outstanding principal amount of the Notes of such
Series held by such holder on the Proposed Sale Proceeds Prepayment Date and the
denominator of which is the outstanding principal amount of all Senior Debt on
the Proposed Sale Proceeds Prepayment Date. Such Proposed Sale Proceeds
Prepayment Date shall be not less than 30 days after the date of such offer and
not later than the date upon which any such Net Proceeds will be used to pay any
other Senior Debt (if the Proposed Sale Proceeds Prepayment Date shall not be
specified in such offer, the Proposed Sale Proceeds Prepayment Date shall be the
30th day after the date of such offer).
(d) Rejection; Acceptance. A holder of Notes may accept the offer to
prepay made pursuant to this Section 8.7 by causing a notice of such acceptance
to be delivered to the Company prior to the Proposed Sale Proceeds Prepayment
Date. A failure by a holder of Notes to so respond to an offer to prepay made
pursuant to this Section 8.7 shall be deemed to constitute a rejection of such
offer by such holder.
(e) Prepayment. Prepayment of the Notes to be prepaid pursuant to this
Section 8.7 shall be at 100% of the principal amount of such Notes, together
with interest on such Notes accrued to the date of prepayment. The prepayment
shall be made on the Proposed Sale Proceeds Prepayment Date.
(f) Officer's Certificate. Each offer to prepay the Notes pursuant to
this Section 8.7 shall be accompanied by a certificate, executed by a
Responsible Officer of the Company and dated the date of such offer, specifying
(i) the Proposed Sale Proceeds Prepayment Date, (ii) that such offer is made
pursuant to this Section 8.7, (iii) the principal amount of each Note offered to
25
be prepaid, (iv) the interest that would be due on each Note offered to be
prepaid, accrued to the Proposed Sale Proceeds Prepayment Date, (v) that the
conditions of this Section 8.7 have been fulfilled, and (vi) in reasonable
detail, a description of the property sold, leased or otherwise disposed of, the
Net Proceeds from such sale, lease or other disposition, and the details of the
determination of the amount of such Net Proceeds to be applied to each Note.
SECTION 9. AFFIRMATIVE COVENANTS.
The Company covenants that during the Issuance Period so long
thereafter as any of the Notes are outstanding:
SECTION 9.1. COMPLIANCE WITH LAW. The Company will, and will cause each
of its Subsidiaries to, comply with all laws, ordinances or governmental rules
or regulations to which each of them is subject, including, without limitation,
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.
SECTION 9.2. INSURANCE. The Company will, and will cause each of its
Restricted 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, except for any non-maintenance that could not
reasonably be expected to have a Material Adverse Effect.
SECTION 9.3. MAINTENANCE OF PROPERTIES. The Company will, and will
cause each of its Restricted 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 Restricted 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.
SECTION 9.4. PAYMENT OF TAXES AND CLAIMS. The Company will, and will
cause each of its Subsidiaries to, file all tax returns required to be filed in
any jurisdiction and to pay and discharge all taxes shown to be due and payable
on such returns and all other taxes, assessments, governmental charges, or
levies imposed on them or any of their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent and all 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 not
26
permitted by Section 10.4, provided that neither the Company nor any Subsidiary
need pay any such tax or assessment or claims if (i) 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 (ii) the non-filing or
nonpayment, as the case may be, of all such taxes and assessments in the
aggregate could not reasonably be expected to have a Material Adverse Effect.
SECTION 9.5. CORPORATE EXISTENCE, ETC. Subject to Sections 10.4 and
10.5, the Company will at all times preserve and keep in full force and effect
its corporate existence, and will at all times preserve and keep in full force
and effect the corporate existence of each of its Restricted Subsidiaries
(unless merged into the Company or a 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, to have a Material Adverse Effect.
SECTION 9.6. ADDITIONAL SUBSIDIARY GUARANTORS. The Company will cause
any Subsidiary which is required by the terms of the Bank Credit Agreement to
become a party to, or otherwise guarantee, Debt in respect of the Bank Credit
Agreement or which becomes a party to, or otherwise guaranties, any other Debt
of the Company, to enter into the Subsidiary Guaranty and deliver to Prudential
and each of the holders of the Notes (concurrently with the incurrence of any
such obligation pursuant to the Bank Credit Agreement or with respect to such
other Debt) the following items:
(a) a joinder agreement in respect of the Subsidiary Guaranty;
(b) a certificate signed by the President, a Vice President or another
authorized Responsible Officer of the Company making representations and
warranties to the effect of those contained in Sections 5.4, 5.6 and 5.7, with
respect to such Subsidiary and the Subsidiary Guaranty, as applicable; and
(c) an opinion of counsel (who may be in-house counsel for the Company)
addressed to each of the holders of the Notes satisfactory to the Required
Holders, to the effect that the Subsidiary Guaranty by such Person has been duly
authorized, executed and delivered and that the Subsidiary Guaranty constitutes
the legal, valid and binding contract and agreement of such Person enforceable
in accordance with its terms, except as an enforcement of such terms may be
limited by bankruptcy, insolvency, fraudulent conveyance and similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles.
Notwithstanding the foregoing, so long as the Intercreditor Agreement shall be
in effect and applicable thereto, any Subsidiary that becomes a party to the
Bank Credit Agreement solely to borrow loans in Canadian Dollars thereunder
shall not be required to enter into the Subsidiary Guaranty and make the
foregoing deliveries so long as the outstanding amount of all Debt of such
Subsidiary, and any other Subsidiary which is a party to the Bank Credit
Agreement as a borrower of loans in Canadian Dollars, does not exceed 105% of
the Maximum Canadian Amount (as defined in the Bank Credit Agreement) and any
Subsidiary that becomes a party to
27
the Bank Credit Agreement solely to borrow loans in Alternate Currencies (as
defined in the Bank Credit Agreement) other than Canadian Dollars thereunder
shall not be required to enter into the Subsidiary Guaranty and make the
foregoing deliveries so long as the outstanding United States Dollar equivalent
amount of all Debt of such Subsidiary, and any other Subsidiary which is a party
to the Bank Credit Agreement as a borrower of loans in such Alternate
Currencies, does not exceed 105% of the Maximum Eurocurrency Amount (as defined
in the Bank Credit Agreement). If at any time there are loans outstanding under
the Bank Credit Agreement in Canadian Dollars or Alternate Currencies to
Subsidiaries that are not Subsidiary Guarantors and are not excepted under the
preceding sentence, an Event of Default shall exist without any notice or the
expiration of the 30 day period provided for in Section 11(d).
SECTION 9.7. DESIGNATION OF SUBSIDIARIES. The Company may from time to
time cause any Subsidiary (other than a Subsidiary Guarantor) to be designated
as an Unrestricted Subsidiary or any Unrestricted Subsidiary to be designated a
Restricted Subsidiary; provided, however, that at the time of such designation
and immediately after giving effect thereto, (a) no Default or Event of Default
would exist under the terms of this Agreement, and (b) the Company and its
Restricted Subsidiaries would be in compliance with all of the covenants set
forth in this Section 9 and Section 10 if tested on the date of such action and
provided, further, that once a Subsidiary has been designated an Unrestricted
Subsidiary, it shall not thereafter be redesignated as a Restricted Subsidiary
on more than one occasion. Within ten (10) days following any designation
described above, the Company will deliver to Prudential and each holder of the
Notes a notice of such designation accompanied by a certificate signed by a
Senior Financial Officer of the Company certifying compliance with all
requirements of this Section 9.7 and setting forth all information required in
order to establish such compliance.
SECTION 9.8. NOTES TO RANK PARI PASSU. The Notes and all other
obligations under this Agreement of the Company are and at all times shall
remain direct and unsecured obligations of the Company ranking pari passu as
against the assets of the Company with all other Notes from time to time issued
and outstanding hereunder without any preference among themselves and pari passu
with all other present and future unsecured Debt (actual or contingent) of the
Company which is not expressed to be subordinate or junior in rank to any other
unsecured Debt of the Company.
SECTION 10. NEGATIVE COVENANTS.
The Company covenants that during the Issuance Period and thereafter so
long as any of the Notes are outstanding:
SECTION 10.1. CONSOLIDATED NET WORTH. The Company will not, at any
time, permit Consolidated Net Worth to be less than the sum of (a) $187,200,000,
plus (b) 25% of Consolidated Net Income (but only if a positive number) for each
fiscal quarter, beginning with the fiscal quarter ending March 31, 2005, ended
on or before the date of determination of compliance with this covenant, plus
(c) the aggregate amount of Net Proceeds received by the Company subsequent to
the Series C-E Closing Date from the sale or other issuance of any capital stock
of the Company.
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SECTION 10.2. LIMITATIONS ON DEBT.
(a) Consolidated Debt. The Company will not, at any time, permit the
ratio of Consolidated Debt to Consolidated EBITDA (Consolidated EBITDA to be
calculated as at the end of each fiscal quarter for the four consecutive fiscal
quarters then ended) to exceed 3.50 to 1.00.
(b) Priority Debt. The Company will not, at any time, permit the
aggregate amount of all Priority Debt to exceed 15% of Consolidated Total
Capitalization (Consolidated Total Capitalization to be determined as of the end
of the then most recently ended fiscal quarter of the Company), other than
Priority Debt consisting of (i) unsecured guaranties by Subsidiary Guarantors of
Debt of Company, which Debt when incurred by Company did not result in a
violation of Section 10.2(a) provided the Subsidiary Guaranty shall be in effect
or (ii) Debt of the Company under the Bank Agreement, evidenced by the 2003
Notes or the 1995 Notes, or constituting Hedging Obligations (as defined in the
Bank Credit Agreement) owed to a Bank Lender or an Affiliate thereof, and
guaranties by Subsidiary Guarantors of such Debt, but only if the Subsidiary
Guaranty shall be in effect, secured by security interests in Capital Stock of
Foreign Incorporated Subsidiaries granted to the Collateral Agent, but only if
the Intercreditor Agreement shall be in effect and applicable thereto.
SECTION 10.3. LIMITATION ON LIENS. The Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly create,
incur, assume or permit 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 (unless it makes, or
causes to be made, effective provision whereby the Notes will be equally and
ratably secured with any and all other obligations thereby secured, such
security to be pursuant to an agreement reasonably satisfactory to the Required
Holders and subject to an intercreditor agreement reasonably satisfactory to the
Required Holder(s) among the holders of the Notes and the holders of such other
obligations, and, in any such case, the Notes shall have the benefit, to the
fullest extent that, and with such priority as, the holders of the Notes may be
entitled under applicable law, of an equitable Lien on such property), except:
(a) 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;
(b) any attachment or judgment Lien, unless the judgment it secures
shall not, within 60 days after the entry thereof, have been discharged or
execution thereof stayed pending appeal, or shall not have been discharged
within 60 days after the expiration of any such stay;
(c) Liens incidental to the conduct of business or the ownership of
properties and assets (including landlords', carriers', warehousemen's,
mechanics', materialmen's and other similar Liens for sums not yet due and
payable) and Liens to secure the performance of bids, tenders, leases, or trade
contracts, or to secure statutory obligations (including obligations under
workers compensation, unemployment insurance and other social security
legislation), surety or
29
appeal bonds or other Liens incurred in the ordinary course of business and not
in connection with the borrowing of money;
(d) leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges or encumbrances, in each case incidental
to the ownership of property or assets or the ordinary conduct of the business
of the Company or any of its Restricted Subsidiaries, on Liens incidental to
minor survey exceptions and the like, provided that such Liens do not, in the
aggregate, materially detract from the value of such property;
(e) Liens securing Debt of a Restricted Subsidiary to the Company or to
a Restricted Subsidiary;
(f) Liens existing as of the Series C-E Closing Date and reflected in
Schedule 10.3;
(g) Liens incurred after the Series C-E Closing Date given to secure
the payment of the purchase price incurred in connection with the acquisition,
construction or improvement of property (other than accounts receivable or
inventory) useful and intended to be used in carrying on the business of the
Company or a Restricted Subsidiary, including Liens existing on such property at
the time of acquisition or construction thereof or Liens incurred within 365
days of such acquisition or completion of such construction or improvement,
provided that (i) the Lien shall attach solely to the property acquired,
purchased, constructed or improved; (ii) at the time of acquisition,
construction or improvement of such property, the aggregate amount remaining
unpaid on all Debt secured by Liens on such property, whether or not assumed by
the Company or a Restricted Subsidiary, shall not exceed the lesser of (y) the
cost of such acquisition, construction or improvement or (z) the Fair Market
Value of such property (as determined in good faith by one or more officers of
the Company to whom authority to enter into the transaction has been delegated
by the board of directors of the Company); and (iii) at the time of such
incurrence and after giving effect thereto, no Default or Event of Default would
exist;
(h) any Lien existing on property of a Person immediately prior to its
being consolidated with or merged into the Company or a Restricted Subsidiary
prior to its becoming a Restricted Subsidiary, or any Lien existing on any
property acquired by the Company or any Restricted Subsidiary at the time such
property is so acquired (whether or not the Debt secured thereby shall have been
assumed), provided that (i) no such Lien shall have been created or assumed in
contemplation of such consolidation or merger or such Person's becoming a
Restricted Subsidiary or such acquisition of property, (ii) each such Lien shall
extend solely to the item or items of property so acquired and, if required by
the terms of the instrument originally creating such Lien, other property which
is an improvement to or is acquired for specific use in connection with such
acquired property, and (iii) at the time of such incurrence and after giving
effect thereto, no Default or Event of Default would exist;
(i) any extensions, renewals or replacements of any Lien permitted by
the preceding subparagraphs (e), (f) and (g) of this Section 10.3, provided that
(i) no additional property shall be encumbered by such Liens, (ii) the unpaid
principal amount of the Debt or other obligations secured thereby shall not be
increased on or after the date of any extension, renewal or replacement, and
(iii) at such time and immediately after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing; and
30
(j) Liens securing Priority Debt of the Company or any Restricted
Subsidiary, provided that (1) the aggregate principal amount of any such
Priority Debt shall be permitted by Section 10.2 and (2) except as otherwise
provided in Section 10.2, no such Lien shall secure any Debt outstanding under
the Bank Credit Agreement.
SECTION 10.4. SALES OF ASSETS. The Company will not, and will not
permit any Restricted Subsidiary to, sell, lease or otherwise dispose of any
substantial part (as defined below) of the assets of the Company and its
Restricted Subsidiaries (including without limitation the sale or transfer of
assets in a sale and leaseback transaction or a securitization transaction or a
sale of equity interest in any Subsidiary); provided, however, that the Company
or any Restricted Subsidiary may sell, lease or otherwise dispose of assets
constituting a substantial part of the assets of the Company and its Restricted
Subsidiaries if such assets are sold in an arms length transaction and, at such
time and after giving effect thereto, no Default or Event of Default shall have
occurred and be continuing and an amount equal to the Net Proceeds received from
such sale, lease or other disposition shall be used within 365 days of such
sale, lease or disposition, in any combination:
(1) to acquire productive assets used or useful in carrying on the
business of the Company and its Restricted Subsidiaries and having a value at
least equal to the value of such assets sold, leased or otherwise disposed of;
or
(2) to prepay or retire Senior Debt of the Company and/or its
Restricted Subsidiaries, provided that the Company shall comply with the
provisions of Section 8.7 hereof; and
As used in this Section 10.4, a sale, lease or other disposition of
assets shall be deemed to be a "substantial part" of the assets of the Company
and its Restricted Subsidiaries if either (x) the book value of such assets,
when added to the book value of all other assets sold, leased or otherwise
disposed of by the Company and its Restricted Subsidiaries during the period of
12 consecutive months ending on the date of such sale, lease or other
disposition, exceeds 15% of the book value of Consolidated Total Assets,
determined as of the end of the fiscal quarter immediately preceding such sale,
lease or other disposition or (y) the book value of such assets, when added to
the book value of all other assets sold, leased or otherwise disposed of by the
Company and its Restricted Subsidiaries during the period of 36 consecutive
months ending on the date of such sale, lease or other disposition, exceeds 30%
of the book value of Consolidated Total Assets, determined as of the end of the
fiscal quarter immediately preceding such sale, lease or other disposition;
provided that there shall be excluded from any determination of a "substantial
part" any (i) sale or disposition of assets in the ordinary course of business
of the Company and its Restricted Subsidiaries and (ii) any transfer of assets
from the Company to any Restricted Subsidiary or from any Restricted Subsidiary
to the Company or a Restricted Subsidiary. For the avoidance of doubt, any sale,
lease or other dispositions of property by the Company or any Restricted
Subsidiary to an Unrestricted Subsidiary shall not be excluded from any
determination of a "substantial part" and the Company will not, and will not
permit any of its Restricted Subsidiaries to, make a sale, lease or other
disposition of property to an Unrestricted Subsidiary except in exchange for
consideration having a Fair Market Value at least equal to the Fair Market Value
of the property sold, leased or otherwise disposed of.
31
SECTION 10.5. MERGER AND CONSOLIDATION. The Company will not, and will
not permit any of its Restricted Subsidiaries to, consolidate with or merge with
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; provided
that:
(1) any Restricted Subsidiary of the Company may (x) consolidate with
or merge with, or convey, transfer or lease substantially all of its assets in a
single transaction or series of transactions to, (i) the Company or a Restricted
Subsidiary so long as in any merger or consolidation involving the Company, the
Company shall be the surviving or continuing corporation or (ii) any other
Person so long as the survivor is the Restricted Subsidiary, or (y) convey,
transfer or lease all of its assets in compliance with the provisions of Section
10.4 (and, if such conveyance, transfer or lease constitutes a conveyance,
transfer or lease of substantially all of the consolidated assets of the
Company, in compliance with the provisions of clause (2) of this Section 10.5);
and
(2) the foregoing restriction does not apply to the consolidation or
merger of the Company with, or the conveyance, transfer or lease of
substantially all of the assets of the Company in a single transaction or series
of transactions to, any Person so long as:
(a) the successor formed by such consolidation or the survivor of such
merger or the Person that acquires by conveyance, transfer or lease
substantially all of the assets of the Company as an entirety, as the case may
be (the "SUCCESSOR CORPORATION"), shall be a solvent corporation organized and
existing under the laws of the United States of America, any State thereof or
the District of Columbia;
(b) if the Company is not the Successor Corporation, such Successor
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 this Agreement and the Notes (pursuant to such agreements and
instruments as shall be reasonably satisfactory to the Required Holders), and
the Successor Corporation shall have caused to be delivered to each holder of
Notes (A) an opinion of nationally recognized independent counsel, to the effect
that all agreements or instruments effecting such assumption are enforceable in
accordance with their terms and (B) an acknowledgment from each Subsidiary
Guarantor that the Subsidiary Guaranty continues in full force and effect; and
(c) immediately after giving effect to such transaction no Default or
Event of Default would exist.
SECTION 10.6. NATURE OF BUSINESS. The Company and its Restricted
Subsidiaries will not engage in any business, if, as a result, when taken as a
whole, the general nature of the business of the Company and its Restricted
Subsidiaries would be substantially changed from the general nature of the
business conducted by the Company and its Restricted Subsidiaries on the date of
this Agreement as described in the Company's report on Form 10-K for the year
ending December 31, 2003.
SECTION 10.7. TRANSACTIONS WITH AFFILIATES. The Company will not and
will not permit any Restricted Subsidiary to enter into directly or indirectly
any Material transaction or Material
32
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 upon fair and reasonable terms that are not
materially 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.
SECTION 10.8. RESTRICTED PAYMENTS. The Company will not, and will not
permit any of its Restricted Subsidiaries to, declare or make, or incur any
liability to declare or make, any Restricted Payment, if, at the time such
Restricted Payment is declared or made, or after giving effect thereto, a
Default or an Event of Default exists.
SECTION 10.9. SHARE REPURCHASE OBLIGATIONS. The Company will not, and
will not permit any of its Restricted Subsidiaries to, enter into any agreement
requiring it to, or otherwise become obligated to, repurchase any shares of the
Company's capital stock issued in connection with the acquisition described in
Section 4.6, except repurchases (i) which do not exceed, in the aggregate for
any fiscal year, $10,000,000 (ii) are made at a time when no Default or Event of
Default exists or would exist after giving effect thereto.
SECTION 11. EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or Make-Whole
Amount, if any, on any Note when the same becomes due and payable, whether at
maturity or at a date fixed for prepayment or by declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any Note for
more than five Business Days after the same becomes due and payable; or
(c) the Company defaults in the performance of or compliance with any
term contained in Section 10.1 through Section 10.5, inclusive, or any
Subsidiary Guarantor defaults in the performance of or compliance with any term
of the Subsidiary Guaranty beyond any period of grace or cure period provided
with respect thereto; or
(d) the Company defaults in the performance of or compliance with any
term contained herein (other than those referred to in paragraphs (a), (b) and
(c) of this Section 11) and such default is not remedied within 30 days after
the earlier of (i) a Responsible Officer obtaining actual knowledge of such
default or (ii) the Company receiving written notice of such default from any
holder of a Note (any such written notice to be identified as a "notice of
default" and to refer specifically to this paragraph (d) of Section 11); or
(e) any Subsidiary Guaranty ceases to be a legally valid, binding and
enforceable obligation or contract of a Subsidiary Guarantor (other than upon a
release of any Subsidiary Guarantor from a Subsidiary Guaranty in accordance
with the terms of Section 2.3(b) hereof), or any Subsidiary Guarantor or any
party by, through or on account of any such Person, challenges the validity,
binding nature or enforceability of any such Subsidiary Guaranty; or
33
(f) any representation or warranty made in writing by or on behalf of
the Company or Subsidiary Guarantor or by any officer of the Company or any
Subsidiary Guarantor in any writing furnished in connection with the
transactions contemplated hereby or by any Subsidiary Guaranty proves to have
been false or incorrect in any material respect on the date as of which made; or
(g) (i) the Company or any Restricted Subsidiary is in default (as
principal or as guarantor or other surety) in the payment of any principal of or
premium or make-whole amount or interest (in the payment amount of at least
$100,000) on any Debt other than the Notes that is outstanding in an aggregate
principal amount of at least $5,000,000 beyond any period of grace provided with
respect thereto, or (ii) the Company or any Restricted Subsidiary is in default
in the performance of or compliance with any term of any instrument, mortgage,
indenture or other agreement relating to any Debt other than the Notes in an
aggregate principal amount of at least $5,000,000 or any other condition exists,
and as a consequence of such default or condition such Debt has become, or has
been declared, due and payable or one or more Persons has the right to declare
such Debt to be due and payable before its stated maturity or before its
regularly scheduled dates of payment, or (iii) as a consequence of the
occurrence or continuation of any event or condition (other than the passage of
time or the right of the holder of Debt to convert such Debt into equity
interests), the Company or any Restricted Subsidiary has become obligated to
purchase or repay Debt other than the Notes before its regular maturity or
before its regularly scheduled dates of payment in an aggregate outstanding
principal amount of at least $5,000,000 or one or more Persons have the right to
require the Company or any Restricted Subsidiary to purchase or repay such Debt;
or
(h) the Company, any Material Subsidiary or any Subsidiary Guarantor
(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
(i) a court or governmental authority of competent jurisdiction enters
an order appointing, without consent by the Company, any of its Material
Subsidiaries or any Subsidiary Guarantor, a custodian, receiver, trustee or
other officer with similar powers with respect to it or with respect to any
substantial part of its property, or constituting an order for relief or
approving a petition for relief or reorganization or any other petition in
bankruptcy or for liquidation or to take advantage of any bankruptcy or
insolvency law of any jurisdiction, or ordering the dissolution, winding-up or
liquidation of the Company, any of its Material Subsidiaries or any Subsidiary
Guarantor, or any such petition shall be filed against the Company, any of its
Material Subsidiaries or any Subsidiary Guarantor and such petition shall not be
dismissed within 60 days; or
(j) a final judgment or judgments at any one time outstanding for the
payment of money aggregating in excess of $5,000,000 are rendered against one or
more of the Company, its
34
Restricted Subsidiaries or any Subsidiary Guarantor and which judgments are not,
within 60 days after entry thereof, bonded, discharged or stayed pending appeal,
or are not discharged within 60 days after the expiration of such stay; or
(k) if (i) any Plan shall fail to satisfy the minimum funding standards
of ERISA or the Code for any plan year or part thereof or a waiver of such
standards or extension of any amortization period is sought or granted under
Section 412 of the Code, (ii) a notice of intent to terminate any Plan shall
have been or is reasonably expected to be filed with the PBGC or the PBGC shall
have instituted proceedings under Section 4042 of ERISA 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 $5,000,000, (iv) the Company or any ERISA
Affiliate shall have incurred or is reasonably expected to incur any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of
the Code relating to employee benefit plans, (v) the Company or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or any
Subsidiary establishes or amends any employee welfare benefit plan that provides
post-employment welfare benefits in a manner that could increase the liability
of the Company or any Subsidiary thereunder; and any such event or events
described in clauses (i) through (vi) above, either individually or together
with any other such event or events, could reasonably be expected to have a
Material Adverse Effect.
As used in Section 11(j), the terms "employee benefit plan" and
"employee welfare benefit plan" shall have the respective meanings assigned to
such terms in Section 3 of ERISA.
SECTION 12. REMEDIES ON DEFAULT, ETC.
SECTION 12.1. ACCELERATION. (a) If an Event of Default with respect to
the Company described in paragraph (h) or (i) of Section 11 (other than an Event
of Default described in clause (i) of paragraph (h) or described in clause (vi)
of paragraph (h) by virtue of the fact that such clause encompasses clause (i)
of paragraph (h)) has occurred, all the Notes of every Series then outstanding
shall automatically become immediately due and payable, and the Facility shall
automatically terminate.
(b) If any other Event of Default has occurred and is continuing, any
holder or holders of more than 50% in aggregate 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, and Prudential may, by notice to the Company, terminate the
Facility.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing with respect to any Notes, 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 such holder or holders to be immediately due and
payable.
35
Upon any Note becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Note will forthwith mature and the entire
unpaid principal amount of such Note, plus (i) all accrued and unpaid interest
thereon and (ii) the Make-Whole Amount or other premium 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 or other premium 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.
SECTION 12.2. OTHER REMEDIES. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 12.1, the holder of
any Note at the time outstanding may proceed to protect and enforce the rights
of such holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or in any Note, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.
SECTION 12.3. RESCISSION. At any time after the Notes have been
declared due and payable pursuant to clause (b) or (c) of Section 12.1, the
holders of not less than 51% in aggregate 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 or premium, 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 or premium, 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 any 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.
SECTION 12.4. NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC. No
course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under Section 15, the Company
will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including, without limitation,
reasonable attorneys' fees, expenses and disbursements.
36
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
SECTION 13.1. REGISTRATION OF NOTES. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of Notes.
SECTION 13.2. TRANSFER AND EXCHANGE OF NOTES. Upon surrender of any
Note at the principal executive office of the Company for registration of
transfer or exchange (and in the case of a surrender for registration of
transfer, duly endorsed or accompanied by a written instrument of transfer duly
executed by the registered holder of such Note or its attorney duly authorized
in writing and accompanied by the address for notices of each transferee of such
Note or part thereof) of the same Series, the Company shall execute and deliver
not more than 5 Business Days following surrender of such Note, 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 the Note of such Series originally issued hereunder. 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, provided that such holder may
(in reliance upon information provided by the Company, which shall not be
unreasonably withheld) make a representation to the effect that the purchase by
such holder of any Note will not constitute a non-exempt prohibited transaction
under Section 406(a) of ERISA.
The Notes have not been registered under the Securities Act or under
the securities laws of any state and may not be transferred or resold unless
registered under the Securities Act and all applicable state securities laws or
unless an exemption from the requirement for such registration is available.
SECTION 13.3. REPLACEMENT OF NOTES. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and
37
(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is a nominee
for, an original Purchaser or another holder of a Note with a minimum net worth
of at least $50,000,000, such Person's own unsecured agreement of indemnity
shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation thereof,
the Company at its own expense shall execute and deliver not more than five
Business Days following satisfaction of such conditions, in lieu thereof, a new
Note of the same Series, 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.
SECTION 14. PAYMENTS ON NOTES.
SECTION 14.1. PLACE OF PAYMENT. Subject to Section 14.2, payments of
principal, Make-Whole Amount or premium, if any, and interest becoming due and
payable on the Notes shall be made in New York, New York at the principal office
of The Bank of New York in such jurisdiction. The Company may at any time, by
notice to each holder of a Note, change the place of payment of the Notes so
long as such place of payment shall be either the principal office of the
Company in such jurisdiction or the principal office of a bank or trust company
in such jurisdiction.
SECTION 14.2. HOME OFFICE PAYMENT. So long as any Purchaser or such
Purchaser's 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 or
premium, if any, and interest by the method and at the address specified for
such purpose for such Purchaser on Purchaser Schedule attached hereto (in the
case of any Series C Note, Series D Note or Series E Note) or to the applicable
Confirmation of Acceptance to which it is a party (in the case of any Shelf
Notes), or by such other method or at such other address as such Purchaser 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, such
Purchaser 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 any Purchaser
or such Person's nominee, such Person will, at its 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.
SECTION 15. EXPENSES, ETC.
SECTION 15.1. TRANSACTION EXPENSES. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all reasonable costs
and expenses (including reasonable attorneys' fees of one special counsel for
the Purchasers and, if reasonably required,
38
local or other counsel) incurred by Prudential or each Purchaser and each other
holder of a Note in connection with such transactions and in connection with any
amendments, waivers or consents under or in respect of this Agreement or the
Notes (whether or not such amendment, waiver or consent becomes effective),
including, without limitation: (a) the reasonable out-of-pocket costs and
expenses incurred in enforcing or defending (or determining whether or how to
enforce or defend) any rights under this Agreement or the Notes or in responding
to any subpoena or other legal process or informal investigative demand by any
Governmental Authority issued in connection with this Agreement or the Notes, or
by reason of being a holder of any Note, and (b) the reasonable out-of-pocket
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 each Purchaser and
each other holder of a Note harmless from, all claims in respect of any
reasonable fees, costs or expenses if any, of brokers and finders (other than
those retained by the Purchasers).
SECTION 15.2. SURVIVAL. The obligations of the Company under this
Section 15 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement or the Notes, and the
termination of this Agreement.
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by any Purchaser of any such Note or portion thereof or interest therein and the
payment of any Note may be relied upon by any subsequent holder of any such
Note, regardless of any investigation made at any time by or on behalf of any
Purchaser or any other holder of any such Note. All statements contained in any
certificate or other instrument delivered by or on behalf of the Company
pursuant to this Agreement shall be deemed representations and warranties of the
Company under this Agreement. Subject to the preceding sentence, this Agreement
and the Notes embody the entire agreement and understanding between the
Purchasers and the Company and supersede all prior agreements and understandings
relating to the subject matter hereof.
SECTION 17. AMENDMENT AND WAIVER.
SECTION 17.1. REQUIREMENTS. This Agreement and the Notes may be
amended, and the observance of any term hereof or of the Notes may be waived
(either retroactively or prospectively), with (and only with) the written
consent of the Company, the Required Holders and Prudential, except that (i) no
amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21
hereof, or any defined term (as it is used in any such Section), will be
effective as to any holder of Notes unless consented to by such holder of Notes
in writing, (ii) no such amendment or waiver may, without the written consent of
all of the holders of Notes at the time outstanding affected thereby, (A)
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 or premium on, the Notes, (B) 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 (C)
39
amend any of Sections 8, 11(a), 11(b), 12, 17 or 20, (iii) with the written
consent of Prudential (and not without the written consent of Prudential) the
provisions of paragraph 2.2 may be amended or waived (except insofar as any such
amendment or waiver would affect any rights or obligations with respect to the
purchase and sale of Notes which shall have become Accepted Notes prior to such
amendment or waiver), and (iv) with the written consent of all of the Purchasers
which shall have become obligated to purchase Accepted Notes of any Series (and
not without the written consent of all such Purchasers), any of the provisions
of paragraphs 2.2 and 4 may be amended or waived insofar as such amendment or
waiver would affect only rights or obligations with respect to the purchase and
sale of the Accepted Notes of such Series or the terms and provisions of such
Accepted Notes.
SECTION 17.2. SOLICITATION OF HOLDERS OF NOTES.
(a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by such holder of
Notes of any waiver or amendment of any of the terms and provisions hereof or
any Supplement 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.
SECTION 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 Prudential or 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
Prudential or 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.
SECTION 17.4. NOTES HELD BY COMPANY, ETC. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal
40
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.
SECTION 18. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telefacsimile if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by a recognized overnight delivery service (with
charges prepaid). Any such notice must be sent:
(i) if to Prudential, to Prudential at the address specified for such
communications in Schedule A to this Agreement, or at such other address as
Prudential shall have specified to the Company in writing pursuant to this
Section 18;
(ii) if to a Purchaser or such Purchaser's nominee, to such Purchaser
or such Purchaser's nominee at the address specified for such communications in
the Purchaser Schedule attached hereto (in the case of the Series C Notes, the
Series D Notes or the Series E Notes) or attached to the applicable Confirmation
of Acceptance to which such Purchaser is a party (in the case of any Shelf
Notes), or at such other address as such Purchaser or such Purchaser's nominee
shall have specified to the Company in writing,
(iii) 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
pursuant to this Section 18, or
(iv) if to the Company, to the Company at its address set forth at the
beginning hereof to the attention of Chief Financial Officer, with a copy to
Vedder Price Kaufman & Kammholz, P.C., 222 North LaSalle, Suite 2600, Chicago,
Illinois 60601, Attn: John McEnroe, Telephone: 312/609-7885, Fax: 312/609-5005,
jmcenroe@vedderprice.com 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.
SECTION 19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by each Purchaser at any closing (except the
Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to each Purchaser, may be
reproduced by such Purchaser by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and such Purchaser
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 such Purchaser 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.
41
SECTION 20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "CONFIDENTIAL INFORMATION" means
information delivered to any Purchaser 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 such
Purchaser 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 such Purchaser prior to the time of such disclosure, (b)
subsequently becomes publicly known through no act or omission by such Purchaser
or any Person acting on such Purchaser's behalf, (c) otherwise becomes known to
such Purchaser other than through disclosure by the Company or any Subsidiary or
(d) constitutes financial statements delivered to such Purchaser under Section
7.1 that are otherwise publicly available. Each Purchaser will maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by such Purchaser in good faith to protect confidential information of
third parties delivered to such Purchaser, provided that such Purchaser may
deliver or disclose Confidential Information to (i) such Purchaser's directors,
trustees, officers, employees, agents, attorneys and affiliates who shall have
agreed in writing to be bound by the provisions contained in Section 20 prior to
its receipt of such Confidential Information (to the extent such disclosure
reasonably relates to the administration of the investment represented by such
Purchaser's Notes), (ii) such Purchaser's 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 such
Purchaser sells or offers 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 such Purchaser offers 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 such
Purchaser, (vii) the National Association of Insurance Commissioners or any
similar organization, or any nationally recognized rating agency that requires
access to information about such Purchaser's 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 such Purchaser, (x) in response to any subpoena or other legal
process, (y) in connection with any litigation to which such Purchaser is a
party or (z) if an Event of Default has occurred and is continuing, to the
extent such Purchaser 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 such Purchaser's Notes and this Agreement. Each holder
of a Note, by its acceptance of a Note, will be deemed to have agreed to be
bound by and to be entitled to the benefits of this Section 20 as though it were
a party to this Agreement. On reasonable request by the Company in connection
with the delivery to any holder of a Note of information required to be
delivered to such holder under this Agreement or requested by such holder (other
than a holder that is a party to this Agreement or its nominee), such holder
will enter into an agreement with the Company embodying the provisions of this
Section 20. Notwithstanding anything herein to the contrary, and to the extent
not otherwise prohibited by applicable securities laws, each Purchaser (and each
employee, representative or other agent of each Purchaser) may disclose to any
Person, without limitations of any kind, the "tax treatment" and "tax structure"
(in each case, within the meaning of Treasury Regulation Section 1.6011-4)
42
of the offering of the Notes and all materials of any kind (including opinions
or other tax analyses) that are or have been provided to each Purchaser relating
to such tax treatment or tax structure; provided that, with respect to any
document or similar item that in either case contains information concerning
such tax treatment or tax structure of the offering as well as other
information, such permitted disclosure shall apply solely to such facts and
relevant portions of the document or similar item that relate to such tax
treatment or tax structure.
SECTION 21. SUBSTITUTION OF PURCHASER.
Each Purchaser shall have the right to substitute any one of such
Purchaser's Affiliates as the purchaser of the Notes that such Purchaser has
agreed to purchase hereunder, by written notice to the Company, which notice
shall be signed by both such Purchaser and such Purchaser's 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 "PURCHASER" is used in this Agreement (other than in this
Section 21), such word shall be deemed to refer to such Affiliate in lieu of
such Purchaser. In the event that such Affiliate is so substituted as a
purchaser hereunder and such Affiliate thereafter transfers to such Purchaser
all of the Notes then held by such Affiliate, upon receipt by the Company of
notice of such transfer, wherever the word "PURCHASER" 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 such Purchaser, and such Purchaser shall have
all the rights of an original holder of the Notes under this Agreement.
SECTION 22. MISCELLANEOUS.
SECTION 22.1. SUCCESSORS AND ASSIGNS. All covenants and other
agreements contained in this Agreement by or on behalf of any of the parties
hereto bind and inure to the benefit of their respective successors and assigns
(including, without limitation, any subsequent holder of a Note) whether so
expressed or not.
SECTION 22.2. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of principal
of or Make-Whole Amount or interest on any Note that is due on a date other than
a Business Day shall be made on the next succeeding Business Day without
including the additional days elapsed in the computation of the interest payable
on such next succeeding Business Day.
SECTION 22.3. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 22.4. CONSTRUCTION. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to
43
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.
SECTION 22.5. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies hereof, each signed by less than all, but together signed by
all, of the parties hereto.
SECTION 22.6. GOVERNING LAW. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the law of the State of New York excluding choice-of-law principles of the law
of such State that would require the application of the laws of a jurisdiction
other than such State.
* * * * *
44
When this Agreement is executed and delivered by the Company and
Prudential and the other Initial Purchasers, it shall become a binding agreement
between the Company and Prudential and the other Initial Purchasers. This
Agreement shall also inure to the benefit of each Purchaser which shall have
executed and delivered a Confirmation of Acceptance and each such Purchaser
shall be bound by this Agreement to the extent provided in such Confirmation of
Acceptance. This Agreement may be executed in any number of counterparts, each
executed counterpart constituting an original but all together only one
agreement.
Very truly yours,
SCHAWK, INC.
By: /s/ James J. Patterson
--------------------------------
Name: James J. Patterson
Title: Senior Vice President &
Chief Financial Officer
The foregoing is hereby agreed to
as of the date hereof:
PRUDENTIAL INVESTMENT MANAGEMENT, INC.
By: /s/ Mathew Douglass
------------------------------------
Name: Mathew Douglass
Title: Vice President
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: /s/ Mathew Douglass
-----------------------------------
Vice President
45
RGA REINSURANCE COMPANY
By: Prudential Private Placement Investors, L.P.
(as Investment Advisor)
By: Prudential Private Placement Investors, Inc.
(as its General Partner)
By: /s/ Mathew Douglass
-----------------------------------
Vice President
46
PURCHASER SCHEDULE
PRUDENTIAL INVESTMENT MANAGEMENT, INC.
(1) All payments to Prudential shall be made by
wire transfer of immediately available funds
for credit to:
Account No. 890-0496-916
The Bank of New York
New York, New York
(ABA No.: 021-000-018)
(2) Address for all notices relating to payments:
Prudential Investment Management, Inc.
c/o The Prudential Insurance Company of America
Investment Operations Group
Gateway Center Two, 10th Floor
100 Mulberry Street
Newark, New Jersey 07102-4077
Attention: Manager
(3) Address for all other communications and notices:
Prudential Investment Management, Inc.
c/o Prudential Capital Group
Two Prudential Plaza, Suite 5600
Chicago, Illinois 60601
Attention: Managing Director
(4) Recipient of telephonic prepayment notices:
Manager, Trade Management Group
Telephone: (973) 367-3141
Facsimile: (800) 224-2278
(5) Tax Identification No.: 22-2540245
1
PURCHASER SCHEDULE
SCHAWK, INC.
4.81% SERIES C SENIOR NOTES DUE 2010
AGGREGATE PRINCIPAL
AMOUNT OF NOTES TO NOTE
BE PURCHASED DENOMINATION(S)
------------------- ------------------
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA $10,000,000 $5,000,000
(the "FIRST NOTE")
(1) All payments on account of Notes held by such purchaser shall be made
by wire transfer of immediately available funds for credit to: $5,000,000
(the "SECOND NOTE")
Account No.: P86188 (please do not include spaces) (in the
case of payments on account of the First Note)
Account No.: P86189 (please do not include spaces) (in the
case of payments on account of the Second Note)
JPMorgan Chase Bank
New York, NY
ABA No.: 021-000-021
Each such wire transfer shall set forth the name of the Company, a
reference to "4.81% Series C Senior Notes due 2010, Security No.
INV10155, PPN _____" and the due date and application (as among
principal, interest and Make-Whole Amount) of the payment being made.
(2) Address for all notices relating to payments:
The Prudential Insurance Company of America
c/o Investment Operations Group
Gateway Center Two, 10th Floor
100 Mulberry Street
Newark, NJ 07102-4077
Attention: Manager, Billings and Collections
(3) Address for all other communications and notices:
2
The Prudential Insurance Company of America
c/o Prudential Capital Group
Two Prudential Plaza, Suite 5600
180 N. Stetson Avenue
Chicago, IL 60601
Attention: Managing Director
(4) Recipient of telephonic prepayment notices:
Manager, Trade Management Group
Telephone: (973) 367-3141
Facsimile: (800) 224-2278
(5) Address for Delivery of Notes:
Send physical security by nationwide overnight delivery service to:
Prudential Capital Group
Two Prudential Plaza, Suite 5600
180 N. Stetson Avenue
Chicago, IL 60601
Attention: Wiley S. Adams
Telephone: (312) 540-4204
(6) Tax Identification No.: 22-1211670
3
PURCHASER SCHEDULE
SCHAWK, INC.
4.99% SERIES D SENIOR NOTES DUE 2011
AGGREGATE PRINCIPAL
AMOUNT OF NOTES TO NOTE
BE PURCHASED DENOMINATION(S)
------------------- ------------------
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA $11,600,000 $10,000,000
$1,600,000
(1) All payments on account of Notes held by such purchaser shall be made
by wire transfer of immediately available funds for credit to:
Account No.: P86188 (please do not include spaces) (in the
case of payments on account of the Note originally issued in
the principal amount of $10,000,000)
Account No.: P86189 (please do not include spaces) (in the
case of payments on account of the Note originally issued in
the principal amount of $1,600,000)
JPMorgan Chase Bank
New York, NY
ABA No.: 021-000-021
Each such wire transfer shall set forth the name of the Company, a
reference to "4.99% Series D Senior Notes due 2011, Security No.
INV10155, PPN _____" and the due date and application (as among
principal, interest and Make-Whole Amount) of the payment being made.
(2) Address for all notices relating to payments:
The Prudential Insurance Company of America
c/o Investment Operations Group
Gateway Center Two, 10th Floor
100 Mulberry Street
Newark, NJ 07102-4077
Attention: Manager, Billings and Collections
(3) Address for all other communications and notices:
4
The Prudential Insurance Company of America
c/o Prudential Capital Group
Two Prudential Plaza, Suite 5600
180 N. Stetson Avenue
Chicago, IL 60601
Attention: Managing Director
(4) Recipient of telephonic prepayment notices:
Manager, Trade Management Group
Telephone: (973) 367-3141
Facsimile: (800) 224-2278
(5) Address for Delivery of Notes:
Send physical security by nationwide overnight delivery service to:
Prudential Capital Group
Two Prudential Plaza, Suite 5600
180 N. Stetson Avenue
Chicago, IL 60601
Attention: Wiley S. Adams
Telephone: (312) 540-4204
(6) Tax Identification No.: 22-1211670
5
AGGREGATE PRINCIPAL
AMOUNT OF NOTES TO NOTE
BE PURCHASED DENOMINATION(S)
------------------- ------------------
RGA REINSURANCE COMPANY $8,400,000 $8,400,000
Notes/Certificates to be registered in the name of:
HARE & CO.
(1) All payments on account of Notes held by such purchaser shall be made
by wire transfer of immediately available funds for credit to:
Bank of New York
ABA No.: 021-000-018
Account No.: 128863
RGA Private Placement Account
Each such wire transfer shall set forth the name of the Company, a
reference to "4.99% Series D Senior Notes due 2011, PPN ____" and the
due date and application (as among principal, interest and Make-Whole
Amount) of the payment being made.
(2) All notices of payments and written confirmations of such wire
transfers:
RGA Reinsurance Company
Attn: Banking Dept.
1370 Timberlake Manor Parkway
Chesterfield, MO 63017-6039
6
(3) Address for all other communications and notices:
Prudential Private Placement Investors, L.P.
4 Gateway Center, 100 Mulberry Street
Newark, NJ 07102
Attention: Albert Trank, Managing Director
Telephone: (973) 802-8608
Facsimile: (973) 624-6432
(4) Address for Delivery of Notes:
(a) Send physical security by nationwide overnight delivery service
to:
Bank of New York
Securities Department
One Wall Street
3rd Floor - "A"
New York, NY 10286
Attention: Lucille Del Terzo
Telephone: (212) 437-6764
Facsimile: (212) 437-6602 or (212) 437-6603
E-mail: ldelterzo@bankofny.com
Please include in the cover letter accompanying the Notes a
reference to the Purchaser's account number (RGA Private Placement
Account; Account Number: 128863).
(b) Send copy by nationwide overnight delivery service to:
Prudential Capital Group
Gateway Center 4
100 Mulberry, 7th Floor
Newark, NJ 07102
Attention: Trade Management, Manager
Telephone: (973) 367-3141
(5) Tax Identification No.: 43-1235868
7
PURCHASER SCHEDULE
SCHAWK, INC.
5.17% SERIES E SENIOR NOTES DUE 2012
AGGREGATE PRINCIPAL
AMOUNT OF NOTES TO NOTE
BE PURCHASED DENOMINATION(S)
------------------- ------------------
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA $20,000,000 $10,000,000
(the "FIRST NOTE")
(1) All payments on account of Notes held by such purchaser shall be made
by wire transfer of immediately available funds for credit to: $10,000,000
(the "SECOND NOTE")
Account No.: P86188 (please do not include spaces) (in the
case of payments on account of the First Note)
Account No.: P86189 (please do not include spaces) (in the
case of payments on account of the Second Note)
JPMorgan Chase Bank
New York, NY
ABA No.: 021-000-021
Each such wire transfer shall set forth the name of the Company, a
reference to "5.17% Series D Senior Notes due 2012, Security No.
INV10155, PPN _____" and the due date and application (as among
principal, interest and Make-Whole Amount) of the payment being made.
(2) Address for all notices relating to payments:
The Prudential Insurance Company of America
c/o Investment Operations Group
Gateway Center Two, 10th Floor
100 Mulberry Street
Newark, NJ 07102-4077
Attention: Manager, Billings and Collections
8
(3) Address for all other communications and notices:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Two Prudential Plaza, Suite 5600
180 N. Stetson Avenue
Chicago, IL 60601
Attention: Managing Director
(4) Recipient of telephonic prepayment notices:
Manager, Trade Management Group
Telephone: (973) 367-3141
Facsimile: (800) 224-2278
(5) Address for Delivery of Notes:
Send physical security by nationwide overnight delivery service to:
Prudential Capital Group
Two Prudential Plaza, Suite 5600
180 N. Stetson Avenue
Chicago, IL 60601
Attention: Wiley S. Adams
Telephone: (312) 540-4204
(6) Tax Identification No.: 22-1211670
9
INFORMATION SCHEDULE
AUTHORIZED OFFICERS FOR PRUDENTIAL AND PRUDENTIAL AFFILIATES
------------------------------------------------------------
Marie L. Fioramonti P. Scott von Fischer
Managing Director Managing Director
Prudential Capital Group Prudential Capital Group
Two Prudential Plaza, Suite 5600 Two Prudential Plaza, Suite 5600
Chicago, Illinois 60601 Chicago, Illinois 60601
Telephone: (312) 540-4233 Telephone: (312) 540-4225
Facsimile: (312) 540-4222 Facsimile: (312) 540-4222
William S. Engelking Julia Buthman
Senior Vice President Senior Vice President
Prudential Capital Group Prudential Capital Group
Two Prudential Plaza, Suite 5600 Two Prudential Plaza, Suite 5600
Chicago, Illinois 60601 Chicago, Illinois 60601
Telephone: (312) 540-4214 Telephone: (312) 540-4237
Facsimile: (312) 540-4222 Facsimile: (312) 540-4222
Mathew Douglass Tan Vu
Vice President Vice President
Prudential Capital Group Prudential Capital Group
Two Prudential Plaza, Suite 5600 Two Prudential Plaza, Suite 5600
Chicago, Illinois 60601 Chicago, Illinois 60601
Telephone: (312) 540-5435 Telephone: (312) 540-5437
Facsimile: (312) 540-4222 Facsimile: (312) 540-4222
Charles J. Senner James J. McCrane
Director Vice President
Prudential Capital Group Prudential Capital Group
4 Gateway Center 4 Gateway Center
Newark, New Jersey 07102-4062 Newark, New Jersey 07102-4062
Telephone: (973) 802-6660 Telephone: (973) 802-4222
Facsimile: (973) 624-6432 Facsimile: (973) 624-6432
Managing Director
Central Credit
Prudential Capital Group
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Telephone: (973) 802-6429
Facsimile: (973) 624-6432
1
AUTHORIZED OFFICERS FOR THE COMPANY
-----------------------------------
Chief Financial Officer
Chief Operating Officer
Chief Executive Officer
2
SCHEDULE B
(to Private Shelf Agreement)
DEFINED TERMS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"ACCEPTANCE" shall have the meaning given in Section 2.2(5) hereof.
"ACCEPTANCE DAY" shall have the meaning given in Section 2.2(5) hereof.
"ACCEPTANCE WINDOW" shall mean, with respect to any interest rate
quotes provided by Prudential pursuant to Section 2.2(4), the time period after
the time Prudential shall have provided such interest rate quotes to the Company
designated by Prudential as the time period during which the Company may elect
to accept such interest rate quotes. If no such time period is designated by
Prudential with respect to any such interest rate quotes, then the Acceptance
Window for such interest rate quotes will be 10 minutes after the time
Prudential shall have provided such interest rate quotes to the Company.
"ACCEPTED NOTE" shall have the meaning given in Section 2.2(5) hereof.
"ACQUISITION AGREEMENT" is defined in Section 4.6.
"ADMINISTRATIVE AGENT" means JP Morgan Chase Bank, N.A. in its capacity
as administrative agent under the Bank Credit Agreement, together with its
successors and assigns in such capacity.
"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, (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 Person 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, and (c) with respect to
Prudential, shall include any managed account, investment fund or other vehicle
for which Prudential Financial, Inc. or any Affiliate of Prudential Financial,
Inc. acts as investment advisor or portfolio manager. 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.
"AUTHORIZED OFFICER" shall mean (i) in the case of the Company, its
chief executive officer, its chief financial officer, any vice president of the
Company designated as an "Authorized Officer" of the Company in the Information
Schedule attached hereto or any vice president of the Company designated as an
"Authorized Officer" of the Company for the purpose of this Agreement in an
Officer's Certificate executed by the Company's chief executive officer
Schedule B-1
or chief financial officer and delivered to Prudential, and (ii) in the case of
Prudential or any Prudential Affiliate, any Person designated as an "Authorized
Officer" of Prudential and Prudential Affiliates in the Information Schedule or
any Person designated as its "Authorized Officer" for the purpose of this
Agreement in a certificate executed by one of Prudential's Authorized Officers
or a lawyer in Prudential's law department. Any action taken under this
Agreement on behalf of the Company by any individual who on or after the date of
this Agreement shall have been an Authorized Officer of the Company and whom
Prudential or any Prudential Affiliate in good faith believes to be an
Authorized Officer of the Company at the time of such action shall be binding on
the Company even though such individual shall have ceased to be an Authorized
Officer of the Company, and any action taken under this Agreement on behalf of
Prudential or any Prudential Affiliate by any individual who on or after the
date of this Agreement shall have been an Authorized Officer of Prudential or
such Prudential Affiliate and whom the Company in good faith believes to be an
Authorized Officer of Prudential or such Prudential Affiliate at the time of
such action shall be binding on Prudential or such Prudential Affiliate even
though such individual shall have ceased to be an Authorized Officer of
Prudential or such Prudential Affiliate.
"AVAILABLE FACILITY AMOUNT" shall have the meaning given in Section
2.2(1) hereof.
"BANK CREDIT AGREEMENT" means the Credit Agreement, dated as of January
28, 2005, by and among the Company, certain Subsidiaries of the Company named
therein, the Administrative Agent, as administrative agent, and the other
financial institutions party thereto, as amended, restated, joined, supplemented
or otherwise modified from time to time, and any renewals, extensions or
replacements thereof, which constitute the primary bank credit facility of the
Company and its Subsidiaries.
"BANK LENDERS" means the banks and financial institutions party to the
Bank Credit Agreement.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
on which commercial banks in New York, New York are required or authorized to be
closed and, for purposes of Section 2.2(3) hereof only, a day on which
Prudential is not open for business.
"CANCELLATION DATE" shall have the meaning given in Section 2.2(8)(iv)
hereof.
"CANCELLATION FEE" shall have the meaning given in Section 2.2(8)(iv)
hereof.
"CAPITAL LEASE" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"CAPITAL LEASE OBLIGATION" means, with respect to any Person and a
Capital Lease, the amount of the obligation of such Person as the lessee under
such Capital Lease which would, in accordance with GAAP, appear as a liability
on a balance sheet of such Person.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or
Schedule B-2
other equivalents (however designated) of corporate stock, (iii) in the case of
a partnership, partnership interests (whether general or limited) and (iv) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person; provided, however, that "Capital Stock" shall not include any debt
securities convertible into equity securities prior to such conversion.
"CLOSING DATE" shall mean, with respect to the Series C Notes, the
Series D Notes and the Series E Notes, the Series C-E Closing Date and, with
respect to any Accepted Note, the Business Day specified for the closing of the
purchase and sale of such Accepted Note in the Request for Purchase of such
Accepted Note, provided that (i) if the Company and the Purchaser which is
obligated to purchase such Accepted Note agree on an earlier Business Day for
such closing, the "Closing Date" for such Accepted Note shall be such earlier
Business Day, and (ii) if the closing of the purchase and sale of such Accepted
Note is rescheduled pursuant to Section 2.2(7), the Closing Date for such
Accepted Note, for all purposes of this Agreement except references to "original
Closing Date" in Section 2.2(8)(iii), shall mean the Rescheduled Closing Date
with respect to such Accepted Note.
"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 JPMorgan Chase Bank N.A. in its capacity as
Collateral Agent under the Intercreditor Agreement and any successor Collateral
Agent appointed pursuant to the terms thereof.
"COMPANY" means Schawk, Inc., a Delaware corporation.
"CONFIDENTIAL INFORMATION" is defined in Section 20.
"CONFIRMATION OF ACCEPTANCE" shall have the meaning given in paragraph
2.2(5).
"CONSOLIDATED DEBT" means as of any date of determination the total
amount of all Debt of the Company and its Restricted Subsidiaries determined on
a consolidated basis in accordance with GAAP.
"CONSOLIDATED EBITDA" shall mean, for any period, Consolidated Net
Income for such period, plus, to the extent deducted in computing such
Consolidated Net Income and without duplication, (a) depreciation and
amortization expense for such period, (b) Consolidated Interest Expense for such
period, (c) income tax expense for such period, and (d) all other extraordinary
non cash expenses for such period, all as determined in accordance with GAAP
consistently applied. For purposes of calculating Consolidated EBITDA for any
period of four consecutive quarters, if during such period the Company or any
Restricted Subsidiary shall have acquired any Person which becomes a Restricted
Subsidiary or acquired all or substantially all of the operating assets of any
Person or disposed of any Restricted Subsidiary or all or substantially all of
the operating assets of any Restricted Subsidiary or disposed of any segment of
the business of the Company or a Restricted Subsidiary, Consolidated EBITDA for
such period shall be calculated after giving pro forma effect thereto as if such
acquisition or disposition occurred on the first day of such period.
Schedule B-3
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, the gross
interest expense of the Company and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP consistently applied.
"CONSOLIDATED NET INCOME" shall mean, for any period, the consolidated
net income (or loss) of the Company and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP consistently
applied.
"CONSOLIDATED NET WORTH" shall mean the consolidated stockholder's
equity of the Company and its Restricted Subsidiaries, as defined according to
GAAP.
"CONSOLIDATED TOTAL ASSETS" means, as of any date of determination, the
total amount of all assets of the Company and its Restricted Subsidiaries,
determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED TOTAL CAPITALIZATION" means, at any time, the sum of (i)
Consolidated Net Worth and (ii) Consolidated Debt.
"DEBT" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable and other accrued
liabilities arising in the ordinary course of business but including, without
limitation, all liabilities created or arising under any conditional sale or
other title retention agreement with respect to any such property);
(c) its Capital Lease Obligations;
(d) all liabilities for borrowed money secured by any Lien with respect
to any property owned by such Person (whether or not it has assumed or otherwise
become liable for such liabilities); and
(e) Guarantees of such Person with respect to liabilities of a type
described in any of clauses (a) through (d) hereof.
Debt of any Person shall include all obligations of such Person of the
character described in clauses (a) through (e) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
"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 with respect to any Series of Notes that rate of
interest that is 2% per annum above the rate of interest stated in such Series
of Notes.
Schedule B-4
"DE MINIMIS SUBSIDIARY" means any Unrestricted Subsidiary which has
total assets of less than $1,000,000 and total revenues during each of the last
three fiscal years of less than $1,000,000.
"DELAYED DELIVERY FEE" shall have the meaning given in Section
2.2(8)(iii) hereof.
"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.
"FACILITY" is defined in Section 2.2(1).
"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),
as reasonably determined in the good faith opinion of the Company's board of
directors.
"FOREIGN INCORPORATED SUBSIDIARY" means a Subsidiary of the Company
which is not organized under the laws of a jurisdiction located in the United
States of America.
"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
Schedule B-5
(ii) any jurisdiction in which the Company or any Restricted Subsidiary
conducts all or any part of its business, or which has jurisdiction over any
properties of the Company or any Restricted Subsidiary, or
(b) any entity exercising executive, legislative, judicial, regulatory
or administrative functions of, or pertaining to, any such government.
"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
Debt, 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 Debt or obligation or any property constituting
security therefor primarily for the purpose of assuring the owner of such Debt
or obligation of the ability of any other Person to make payment of the Debt or
obligation;
(b) to advance or supply funds (i) for the purchase or payment of such
Debt 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
Debt or obligation;
(c) to lease properties or to purchase properties or services primarily
for the purpose of assuring the owner of such Debt or obligation of the ability
of any other Person to make payment of the Debt or obligation; or
(d) otherwise to assure the owner of such Debt or obligation against
loss in respect thereof.
In any computation of the Debt or other liabilities of the obligor
under any Guaranty, the Debt or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor, provided
that the amount of such Debt outstanding for purposes of this Agreement shall
not exceed the maximum amount of Debt that is the subject of such Guaranty.
"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).
"HEDGE TREASURY NOTE(S)" shall mean, with respect to any Accepted Note,
the United States Treasury Note or Notes whose duration (as determined by
Prudential) most closely matches the duration of such Accepted Note.
"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.
Schedule B-6
"HOSTILE TENDER OFFER" shall mean, with respect to the use of proceeds
of any Note, any offer to purchase, or any purchase of, shares of capital stock
of any corporation or equity interests in any other entity, or securities
convertible into or representing the beneficial ownership of, or rights to
acquire, any such shares or equity interests, if such shares, equity interests,
securities or rights are of a class which is publicly traded on any securities
exchange or in any over-the-counter market, other than purchases of such shares,
equity interests, securities or rights representing less than 5% of the equity
interests or beneficial ownership of such corporation or other entity for
portfolio investment purposes, and such offer or purchase has not been duly
approved by the board of directors of such corporation or the equivalent
governing body of such other entity prior to the date on which the Company makes
the Request for Purchase of such Note.
"INITIAL PURCHASERS" shall have the meaning given in the address block
of this Agreement.
"INSTITUTIONAL INVESTOR" means (a) any original purchaser of a Note,
(b) any holder of more than $2,000,000 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.
"ISSUANCE FEE" shall have the meaning given in Section 2.2(8)(ii)
hereof.
"ISSUANCE PERIOD" shall have the meaning given in Section 2.2(2)
hereof.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement to be
entered into by the Administrative Agent, the Collateral Agent and the holders
of the Notes, the 1995 Notes and the 2003 Notes, in form and substance
satisfactory to the Required Holder(s), as the same may be amended, restated,
supplemented or otherwise modified from time to time.
"INVESTMENTS" shall mean all investments, in cash or by delivery of
property made, directly or indirectly in any Person, whether by acquisition of
shares of capital stock, Debt or other obligations or securities or by loan,
advance, capital contribution or otherwise.
"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 (other than an operating
lease) or Capital Lease, upon or with respect to any property or asset of such
Person (including, in the case of stock, shareholder agreements, voting trust
agreements and all similar arrangements).
"MAKE-WHOLE AMOUNT" shall have the meaning set forth in Section 8.6.
"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.
Schedule B-7
"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
the Company to perform its obligations under this Agreement and the Notes, (c)
the ability of any Subsidiary Guarantor to perform its obligations under the
Subsidiary Guaranty or (d) the validity or enforceability of this Agreement, the
Notes or the Subsidiary Guaranty.
"MATERIAL SUBSIDIARY" means, at any time, any Restricted Subsidiary of
the Company which, together with all other Restricted Subsidiaries of such
Restricted Subsidiary, accounts for more than (i) 5% of the consolidated assets
of the Company and its Restricted Subsidiaries at the end of either of the two
fiscal years immediately preceding the date of determination or (ii) 5% of
consolidated revenue of the Company and its Restricted Subsidiaries for either
of the two fiscal years immediately preceding the date of determination.
"MOODY'S" shall mean Moody Investors Service, Inc.
"MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan" (as
such term is defined in Section 4001(a)(3) of ERISA).
"1995 NOTE AGREEMENT" means the Note Agreement, dated August 18, 1995,
among the Company, as successor to Filtertek USA, Inc., the Company, Plastic
Molded Concepts, Inc., Tek Purchasing Group, Inc., and the purchasers named in
the Purchaser Schedule thereto, as amended from time to time.
"1995 NOTES" shall mean the Company's 6.98% Series B Senior Notes due
August 18, 2005 issued pursuant to the 1995 Note Agreement.
"NET PROCEEDS" means with respect to any sale of property or sale or
other issuance of any capital stock by any Person an amount equal to the
aggregate amount of the Fair Market Value of the consideration received by such
Person in respect of such sale or issuance, minus all out-of-pocket costs and
expenses actually incurred by such Person in connection with such sale or
issuance (but excluding all state, federal and foreign taxes incurred, or to be
incurred, by such Person in connection with such sale or issuance).
"NOTES" is defined in Section 1.4.
"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.
"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.
Schedule B-8
"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.
"PRIORITY DEBT" means (without duplication), as of the date of any
determination thereof, the sum of (i) all unsecured Debt of Restricted
Subsidiaries (including all Guaranties of Debt of the Company) but excluding (x)
Debt owing to the Company or any other Restricted Subsidiary and (y) Debt
outstanding at the time such Person became a Restricted Subsidiary (other than
an Unrestricted Subsidiary which is designated as a Restricted Subsidiary
pursuant to Section 9.7 hereof), provided that such Debt shall have not been
incurred in contemplation of such person becoming a Restricted Subsidiary, and
(ii) all Debt of the Company and its Restricted Subsidiaries secured by Liens
other than Debt secured by Liens permitted by subparagraphs (a) through (i),
inclusive, of Section 10.3.
"PROPERTY" or "PROPERTIES" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.
"PRUDENTIAL" shall have the meaning given in the address block of this
Agreement.
"PRUDENTIAL AFFILIATE" shall mean any Affiliate of Prudential.
"PUBLIC FILINGS" of any Person means each financial statement, notice
or proxy statement filed by such Person with the Securities and Exchange
Commission and each regular or periodic report, registration statement and
prospectus (and all amendments thereto) and all other filings of such Person
made with the Securities and Exchange Commission, including, without limitation,
Form 10-K, and Form 10-Q.
"PURCHASERS" shall mean, with respect to the Series C Notes, the Series
D Notes and the Series E Notes, the Initial Purchasers and, with respect to any
Accepted Notes, the Prudential Affiliate(s) which are purchasing such Accepted
Notes.
"QPAM EXEMPTION" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"QUALIFIED INSTITUTIONAL BUYER" means any Person who is a qualified
institutional buyer within the meaning of such term as set forth in Rule
144(a)(1) under the Securities Act.
"REQUEST FOR PURCHASE" shall have the meaning given in Section 2.2(3)
hereof.
"REQUIRED HOLDERS" means, at any time, the holders of not less than 51%
in principal amount of the Notes or Series of Notes, as the context may require,
at the time outstanding (exclusive of Notes then owned by the Company or any of
its Affiliates).
Schedule B-9
"RESCHEDULED CLOSING DATE" shall have the meaning given in Section
2.2(7) hereof.
"RESPONSIBLE OFFICER" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"RESTRICTED PAYMENT" means (a) any dividends or other distributions or
payments on the capital stock of or other equity interests in the Company or any
Subsidiary (excluding dividends or distributions in such stock or other equity
interests and excluding dividends on distributions by a Subsidiary to the
Company or to another Wholly-Owned Restricted Subsidiary), and (b) the
redemption or acquisition of any capital stock or other equity interests in the
Company or any Subsidiary (except when solely in exchange for such stock or
other equity interests or from the Company or a Wholly-Owned Restricted
Subsidiary). For the purposes hereof, "capital stock" shall include warrants,
rights or other options to purchase capital stock or other equity interests.
"RESTRICTED INVESTMENTS" shall mean all Investments except the
following:
(a) current assets arising from the sale of goods and services in the
ordinary course of business of the Company;
(b) property to be used in the ordinary course of business;
(c) Investments existing on the Series C-E Closing Date and described
in Schedule B;
(d) Investments in obligations issued by the United States of America
or an agency thereof, or Canada (or any province thereof), so long as such
agency obligations have been unconditionally guaranteed by the United States of
America or Canada, as the case may be, provided that such obligations mature
within 365 days from the date of acquisition thereof;
(e) Investments in certificates of deposit or banker's acceptances
issued by an Acceptable Bank, provided that such obligations mature within 365
days from the date of acquisition thereof;
(f) Investments in commercial paper rated A-1 or A-2 by S&P or P-1 or
P-2 by Moody's and maturing not more than 270 days from the date of creation
thereof;
(g) Investments in Repurchase Agreements;
(h) Investments in one or more Restricted Subsidiaries or any Person
that becomes a Restricted Subsidiary;
(i) Investments in tax-exempt obligations of any state of the United
States of America, or any municipality of any such state, in each case rated at
least A- by S&P or A-3 by Moody's or, provided that such obligations mature
within 365 days from the date of acquisition thereof;
Schedule B-10
(j) Investments in treasury stock; and
(k) Investments in money market instrument programs which are
classified as current assets in accordance with GAAP, which money market
instrument programs are administered by an "investment company" regulated under
the Investment Company Act of 1940 and which money market instrument programs
hold only Investments satisfying the criteria set forth in clauses (d), (e), (f)
and (g) above.
As used in this definition of "RESTRICTED INVESTMENTS":
"REPURCHASE AGREEMENT" shall mean any written agreement:
(a) that provides for (1) the transfer of one or more United States
Governmental Securities in an aggregate principal amount at least equal to the
amount of the Transfer Price (defined below) to the Company or any of its
Restricted Subsidiaries from an Acceptable Bank or an Acceptable Broker-Dealer
against a transfer of funds (the "Transfer Price") by the Company to such
Acceptable Bank or Acceptable Broker-Dealer, and (2) a simultaneous agreement by
the Company, in connection with such transfer of funds, to transfer to such
Acceptable Bank or Acceptable Broker-Dealer the same or substantially similar
United States Governmental Securities for a price not less than the Transfer
Price plus a reasonable return thereon at a date certain not later than 365 days
after such transfer of funds,
(b) in respect of which the Company shall have the right, whether by
contract or pursuant to applicable law, to liquidate such agreement upon the
occurrence of any default thereunder, and
(c) in connection with which the Company, or an agent thereof, shall
have taken all action required by applicable law or regulations to perfect a
Lien in such United States Governmental Securities.
"ACCEPTABLE BANK" shall mean any bank or trust company (i) which is
organized under the laws of the United States of America or any state thereof,
(ii) which has capital, surplus and undivided profits aggregating at least
$250,000,000, and (iii) whose long-term unsecured debt obligations (or the
long-term unsecured debt obligations of the bank holding company owning all of
the capital stock of such bank or trust company) shall have been given a rating
of "A" or better by S&P, "A2" or better by Moody's or an equivalent rating by
any other credit rating agency of recognized national standing.
"ACCEPTABLE BROKER-DEALER" shall mean any Person other than a natural
person (i) which is registered as a broker or dealer pursuant to the Exchange
Act and (ii) whose long-term unsecured debt obligations shall have been given a
rating of "A" or better by S&P, "A2" or better by Moody's or an equivalent
rating by any other credit rating agency of recognized national standing.
"RESTRICTED SUBSIDIARY" means any Subsidiary in which: (i) at least a
majority of the voting securities are owned by the Company and/or one or more
Restricted Subsidiaries and
Schedule B-11
(ii) the Company has not designated an Unrestricted Subsidiary by notice in
writing given to Prudential and the holders of the Notes.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw-Hill Companies, Inc.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time.
"SENIOR DEBT" means, as of the date of any determination thereof, all
Consolidated Debt, other than Subordinated Debt.
"SENIOR FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
"SERIES" shall have the meaning given in Section 1.4 hereof.
"SERIES C-E CLOSING DATE" shall have the meaning given in Section 2.1
hereof.
"SERIES C NOTE(S)" shall have the meaning given in Section 1.1 hereof.
"SERIES D NOTE(S)" shall have the meaning given in Section 1.2 hereof.
"SERIES E NOTE(S)" shall have the meaning given in Section 1.3 hereof.
"SEVEN WORLDWIDE HOLDINGS" is defined in Section 4.6.
"SHELF NOTES" shall have the meaning given in Section 1.4 hereof.
"STRUCTURING FEE" shall have the meaning given in Section 2.2(8)(i)
hereof.
"SUBORDINATED DEBT" means all unsecured Debt of the Company which shall
contain or have applicable thereto subordination provisions providing for the
subordination thereof to other Debt of the Company (including, without
limitation, the obligations of the Company under this Agreement or the Notes).
"SUBSIDIARY" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.
Schedule B-12
"SUBSIDIARY GUARANTOR" means each Subsidiary which is party to the
Subsidiary Guaranty.
"SUBSIDIARY GUARANTY" is defined in Section 2.3 of this Agreement.
"2003 NOTE AGREEMENT" means the Note Purchase Agreement, dated December
23, 2003, between the Company and the Purchasers named in the Purchaser Schedule
attached thereto, as amended from time to time.
"2003 NOTES" means the Company 4.90% Series 2003-A Senior Notes,
Tranche A, due December 31, 2013, and 4.98% Series 2003-A Senior Notes, Tranche
B, due April 30, 2014 issued pursuant to the 2003 Note Agreement.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary so designated by the
Company.
"WHOLLY-OWNED RESTRICTED SUBSIDIARY" means any Restricted Subsidiary
all of the equity interests and voting interests of which are owned by any one
or more of the Company and the Company's other Wholly-Owned Restricted
Subsidiaries.
Schedule B-13
EXHIBIT A-1
(to Private Shelf Agreement)
[FORM OF SERIES C NOTE]
SCHAWK, INC.
4.81% SERIES C SENIOR NOTE DUE JANUARY 28, 2010
No. _____ [Date]
$________
FOR VALUE RECEIVED, the undersigned, Schawk, Inc., a corporation
organized and existing under the laws of the State of Delaware (herein called
the "Company"), hereby promises to pay to ______________________, or registered
assigns, the principal sum of _______________ DOLLARS on January 28, 2010, with
interest (computed on the basis of a 360-day year--30-day month) (a) on the
unpaid balance thereof at the rate of 4.81% per annum (or during any period when
an Event of Default shall be in existence, at the election of the Required
Holder(s) of the Series C Notes, at the Default Rate (as defined below)) from
the date hereof, payable quarterly on the 28th day of April, July, October and
January in each year, commencing with the April 28, July 28, October 28, or
January 28 next succeeding the date hereof, until the principal hereof shall
have become due and payable, and (b) on any overdue payment (including any
overdue prepayment) of principal, any overdue payment of Yield-Maintenance
Amount and, to the extent permitted by applicable law, any overdue payment of
interest, payable quarterly 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
Default Rate. The "Default Rate" shall mean a rate per annum from time to time
equal to the greater of (i) 6.81% or (ii) 2.00% over the rate of interest
publicly announced by The Bank of New York from time to time in New York City as
its Prime Rate.
Payments of principal of, interest on and any Yield-Maintenance Amount
payable with respect to this Note are to be made at the main office of The Bank
of New York in New York City or at such other place as the holder hereof shall
designate to the Company in writing, in lawful money of the United States of
America.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to a Note Purchase and Private Shelf Agreement, dated
as of January 28, 2005 (herein called the "Agreement"), between the Company, on
the one hand, and Prudential Investment Management, Inc., the Initial Purchasers
named in the Purchaser Schedule attached thereto and each Prudential Affiliate
which becomes party thereto, on the other hand, and is entitled to the benefits
thereof.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for 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
Exhibit A-1-1
the person in whose name this Note is registered as the owner hereof for the
purpose of receiving payment and for all other purposes, and the Company shall
not be affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, on the terms specified in the Agreement.
The Company and any and all endorsers, guarantors and sureties
severally waive grace, demand, presentment for payment, notice of dishonor or
default, notice of intent to accelerate, notice of acceleration (except to the
extent required in the Agreement), protest and diligence in collecting in
connection with this Note, whether now or hereafter required by applicable law.
In case an Event of Default shall occur and be continuing, the
principal of this Note may be declared or otherwise become due and payable in
the manner and with the effect provided in the Agreement.
Capitalized terms used herein which are defined in the Agreement and
not otherwise defined herein shall have the meanings as defined in the
Agreement.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF SUCH STATE
(EXCLUDING ANY CONFLICTS OF LAW RULES WHICH WOULD OTHERWISE CAUSE THIS NOTE TO
BE CONSTRUED OR ENFORCED IN ACCORDANCE WITH THE LAWS OF ANY OTHER JURISDICTION).
SCHAWK, INC.
By:
---------------------------------
Title:
---------------------------
Schedule A-1-2
EXHIBIT A-2
(to Private Shelf Agreement)
[FORM OF SERIES D NOTE]
SCHAWK, INC.
4.99% SERIES D SENIOR NOTE DUE JANUARY 28, 2011
No. _____ [Date]
$________
FOR VALUE RECEIVED, the undersigned, Schawk, Inc., a corporation
organized and existing under the laws of the State of Delaware (herein called
the "Company"), hereby promises to pay to ______________________, or registered
assigns, the principal sum of _______________ DOLLARS on January 28, 2011, with
interest (computed on the basis of a 360-day year--30-day month) (a) on the
unpaid balance thereof at the rate of 4.99% per annum (or during any period when
an Event of Default shall be in existence, at the election of the Required
Holder(s) of the Series D Notes, at the Default Rate (as defined below)) from
the date hereof, payable quarterly on the 28th day of April, July, October and
January in each year, commencing with the April 28, July 28, October 28, or
January 28 next succeeding the date hereof, until the principal hereof shall
have become due and payable, and (b) on any overdue payment (including any
overdue prepayment) of principal, any overdue payment of Yield-Maintenance
Amount and, to the extent permitted by applicable law, any overdue payment of
interest, payable quarterly 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
Default Rate. The "Default Rate" shall mean a rate per annum from time to time
equal to the greater of (i) 6.99% or (ii) 2.00% over the rate of interest
publicly announced by The Bank of New York from time to time in New York City as
its Prime Rate.
Payments of principal of, interest on and any Yield-Maintenance Amount
payable with respect to this Note are to be made at the main office of The Bank
of New York in New York City or at such other place as the holder hereof shall
designate to the Company in writing, in lawful money of the United States of
America.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to a Note Purchase and Private Shelf Agreement, dated
as of January 28, 2005 (herein called the "Agreement"), between the Company, on
the one hand, and Prudential Investment Management, Inc., the Initial Purchasers
named in the Purchaser Schedule attached thereto and each Prudential Affiliate
which becomes party thereto, on the other hand, and is entitled to the benefits
thereof.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for 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
Exhibit A-2-1
the person in whose name this Note is registered as the owner hereof for the
purpose of receiving payment and for all other purposes, and the Company shall
not be affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, on the terms specified in the Agreement.
The Company and any and all endorsers, guarantors and sureties
severally waive grace, demand, presentment for payment, notice of dishonor or
default, notice of intent to accelerate, notice of acceleration (except to the
extent required in the Agreement), protest and diligence in collecting in
connection with this Note, whether now or hereafter required by applicable law.
In case an Event of Default shall occur and be continuing, the
principal of this Note may be declared or otherwise become due and payable in
the manner and with the effect provided in the Agreement.
Capitalized terms used herein which are defined in the Agreement and
not otherwise defined herein shall have the meanings as defined in the
Agreement.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF SUCH STATE
(EXCLUDING ANY CONFLICTS OF LAW RULES WHICH WOULD OTHERWISE CAUSE THIS NOTE TO
BE CONSTRUED OR ENFORCED IN ACCORDANCE WITH THE LAWS OF ANY OTHER JURISDICTION).
SCHAWK, INC.
By:
---------------------------------
Title:
---------------------------
Exhibit A-2-2
EXHIBIT A-3
(to Private Shelf Agreement)
[FORM OF SERIES E NOTE]
SCHAWK, INC.
5.17% SERIES E SENIOR NOTE DUE JANUARY 28, 2012
No. _____ [Date]
$________
FOR VALUE RECEIVED, the undersigned, Schawk, Inc., a corporation
organized and existing under the laws of the State of Delaware (herein called
the "Company"), hereby promises to pay to ______________________, or registered
assigns, the principal sum of _______________ DOLLARS on January 28, 2012, with
interest (computed on the basis of a 360-day year--30-day month) (a) on the
unpaid balance thereof at the rate of 5.17% per annum (or during any period when
an Event of Default shall be in existence, at the election of the Required
Holder(s) of the Series E Notes, at the Default Rate (as defined below)) from
the date hereof, payable quarterly on the 28th day of April, July, October and
January in each year, commencing with the April 28, July 28, October 28, or
January 28 next succeeding the date hereof, until the principal hereof shall
have become due and payable, and (b) on any overdue payment (including any
overdue prepayment) of principal, any overdue payment of Yield-Maintenance
Amount and, to the extent permitted by applicable law, any overdue payment of
interest, payable quarterly 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
Default Rate. The "Default Rate" shall mean a rate per annum from time to time
equal to the greater of (i) 7.17% or (ii) 2.00% over the rate of interest
publicly announced by The Bank of New York from time to time in New York City as
its Prime Rate.
Payments of principal of, interest on and any Yield-Maintenance Amount
payable with respect to this Note are to be made at the main office of The Bank
of New York in New York City or at such other place as the holder hereof shall
designate to the Company in writing, in lawful money of the United States of
America.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to a Note Purchase and Private Shelf Agreement, dated
as of January 28, 2005 (herein called the "Agreement"), between the Company, on
the one hand, and Prudential Investment Management, Inc., the Initial Purchasers
named in the Purchaser Schedule attached thereto and each Prudential Affiliate
which becomes party thereto, on the other hand, and is entitled to the benefits
thereof.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for 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
Exhibit A-3-1
the person in whose name this Note is registered as the owner hereof for the
purpose of receiving payment and for all other purposes, and the Company shall
not be affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, on the terms specified in the Agreement.
The Company and any and all endorsers, guarantors and sureties
severally waive grace, demand, presentment for payment, notice of dishonor or
default, notice of intent to accelerate, notice of acceleration (except to the
extent required in the Agreement), protest and diligence in collecting in
connection with this Note, whether now or hereafter required by applicable law.
In case an Event of Default shall occur and be continuing, the
principal of this Note may be declared or otherwise become due and payable in
the manner and with the effect provided in the Agreement.
Capitalized terms used herein which are defined in the Agreement and
not otherwise defined herein shall have the meanings as defined in the
Agreement.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF SUCH STATE
(EXCLUDING ANY CONFLICTS OF LAW RULES WHICH WOULD OTHERWISE CAUSE THIS NOTE TO
BE CONSTRUED OR ENFORCED IN ACCORDANCE WITH THE LAWS OF ANY OTHER JURISDICTION).
SCHAWK, INC.
By:
---------------------------------
Title:
---------------------------
Exhibit A-3-2
EXHIBIT A-4
(to Private Shelf Agreement)
[FORM OF NOTE]
SCHAWK, INC.
___% SENIOR NOTE DUE _____________
No.___
ORIGINAL PRINCIPAL AMOUNT:
ORIGINAL ISSUE DATE:
INTEREST RATE:
INTEREST PAYMENT DATES:
FINAL MATURITY DATE:
PRINCIPAL PREPAYMENT DATES AND AMOUNTS:
FOR VALUE RECEIVED, the undersigned, Schawk, Inc., a corporation
organized and existing under the laws of the State of Delaware (herein called
the "Company"), hereby promises to pay to ________________________, or
registered assigns, the principal sum of ____________________ DOLLARS [on the
Final Maturity Date specified above] [, payable on the Principal Prepayment
Dates and in the amounts specified above, and on the Final Maturity Date
specified above in an amount equal to the unpaid balance of the principal
hereof,] with interest (computed on the basis of a 360-day year--30-day month)
(a) on the unpaid balance thereof at the Interest Rate per annum specified above
(or, during any period when an Event of Default shall be in existence, at the
election of the Required Holder(s) of the Notes at the Default Rate (as defined
below)), from the date hereof, payable on each Interest Payment Date specified
above and on the Final Maturity Date specified above, commencing with the
Interest Payment Date next succeeding the date hereof, until the principal
hereof shall have become due and payable, and (b) on any overdue payment
(including any overdue prepayment) of principal, any overdue payment of
Make-Whole Amount and, to the extent permitted by applicable law, any overdue
payment of interest, payable on each Interest Payment Date as aforesaid (or, at
the option of the registered holder hereof, on demand), at a rate per annum from
time to time equal to the Default Rate. The "Default Rate" shall mean a rate per
annum from time to time equal to the greater of (i) 2.00% over the Interest Rate
specified above or (ii) 2.00% over the rate of interest publicly announced by
The Bank of New York from time to time in New York City as its Prime Rate.
Payments of principal of, interest on and any Make Whole Amount payable
with respect to this Note are to be made at the main office of The Bank of New
York in New York City or at such other place as the holder hereof shall
designate to the Company in writing, in lawful money of the United States of
America.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to a Note Purchase and Private Shelf Agreement, dated
as of January 28, 2005 (herein called the "Agreement"), between the Company, on
the one hand, and Prudential Investment Management,
Exhibit A-4-1
Inc., the Initial Purchasers named on the Purchaser Schedule attached thereto
and each Prudential Affiliate which becomes party thereto, on the other hand,
and is entitled to the benefits thereof.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder's attorney duly authorized in writing, a new Note
for 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 shall not be affected by any notice to the contrary.
[The Company agrees to make required prepayments of principal on the
dates and in the amounts specified above or in the Agreement.] This Note is
[also] subject to optional prepayment, in whole or from time to time in part, on
the terms specified in the Agreement.
The Company and any and all endorsers, guarantors and sureties
severally waive grace, demand, presentment for payment, notice of dishonor or
default, notice of intent to accelerate, notice of acceleration (except to the
extent required in the Agreement), protest and diligence in collecting in
connection with this Note, whether now or hereafter required by applicable law.
In case an Event of Default shall occur and be continuing, the
principal of this Note may be declared or otherwise become due and payable in
the manner and with the effect provided in the Agreement.
Capitalized terms used herein which are defined in the Agreement and
not otherwise defined herein shall have the meanings as defined in the
Agreement.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF SUCH STATE
(EXCLUDING ANY CONFLICTS OF LAW RULES WHICH WOULD OTHERWISE CAUSE THIS NOTE TO
BE CONSTRUED OR ENFORCED IN ACCORDANCE WITH THE LAWS OF ANY OTHER JURISDICTION).
SCHAWK, INC.
By:
---------------------------------
Title:
---------------------------
Exhibit A-4-2
EXHIBIT B
(to Private Shelf Agreement)
[FORM OF DISBURSEMENT DIRECTION LETTER]
[On Company Letterhead - place on one page]
[Date]
[Names and Addresses of
Initial Purchasers]
RE: 4.81% SERIES C SENIOR NOTES DUE JANUARY 28, 2010, 4.99% SERIES
D SENIOR NOTES DUE JANUARY 28, 2011 AND 5.17% SERIES E SENIOR
NOTES DUE JANUARY 28, 2012 (COLLECTIVELY, THE "NOTES")
Ladies and Gentlemen:
Reference is made to that certain Note Purchase and Private Shelf
Agreement (the "Note Agreement"), dated January 28, 2005, between Schawk, Inc.,
a Delaware corporation (the "Company"), Prudential Investment Management, Inc.,
and you. Capitalized terms used herein shall have the meanings assigned to such
terms in the Note Agreement.
You are hereby irrevocably authorized and directed to disburse the
$50,000,000 purchase price of the Notes by wire transfer of immediately
available funds to [bank name and address], ABA #______________, for credit to
the account of ______________, account no. _____________.
Disbursement when so made shall constitute payment in full of the
purchase price of the Notes and shall be without liability of any kind
whatsoever to you.
Very truly yours,
SCHAWK, INC.
By:
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Title:
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Exhibit B-1
EXHIBIT C
(to Private Shelf Agreement)
[FORM OF REQUEST FOR PURCHASE]
REQUEST FOR PURCHASE
SCHAWK, INC.
Reference is made to the Note Purchase and Private Shelf Agreement (the
"Agreement"), dated as of January 28, 2005, between Schawk, Inc. (the
"Company"), on the one hand, and Prudential Investment Management, Inc.
("Prudential"), the Initial Purchasers named in the Purchaser Schedule attached
thereto and each Prudential Affiliate which becomes party thereto, on the other
hand. Capitalized terms used and not otherwise defined herein shall have the
respective meanings specified in the Agreement.
Pursuant to Section 2.2(3) of the Agreement, the Company hereby makes
the following Request for Purchase:
1. Aggregate principal amount of the Notes covered hereby the
"Notes") $__________[1]
2. Individual specifications of the Notes:
Principal
Final Prepayment Interest
Principal Maturity Dates and Payment
Amount Date Amounts Period[2]
--------- -------- ---------- ---------
3. Use of proceeds of the Notes:
4. Proposed day for the closing of the purchase and sale of the
Notes:
5. The purchase price of the Notes is to be transferred to:
Name, Address
and ABA Routing Number of
Number of Bank Account
--------------- ---------
- --------------
1 Minimum principal amount of $5,000,000
2 Specify quarterly or semiannually
Exhibit C-1
6. The Company certifies (a) that the representations and
warranties contained in Section 5 of the Agreement are true on
and as of the date of this Request for Purchase, and (b) that
there exists on the date of this Request for Purchase no Event
of Default or Default.
Dated:
SCHAWK, INC.
By:
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Authorized Officer
Exhibit C-2
EXHIBIT D
(to Private Shelf Agreement)
[FORM OF CONFIRMATION OF ACCEPTANCE]
CONFIRMATION OF ACCEPTANCE
SCHAWK, INC.
Reference is made to the Note Purchase and Private Shelf Agreement (the
"Agreement"), dated as of January 28, 2005 between Schawk, Inc. (the "Company"),
on the one hand, and Prudential Investment Management, Inc. ("Prudential"), the
Initial Purchasers named in the Purchaser Schedule attached thereto and each
Prudential Affiliate which becomes party thereto, on the other hand. All terms
used herein that are defined in the Agreement have the respective meanings
specified in the Agreement.
Prudential or the Prudential Affiliate which is named below as a
Purchaser of Notes hereby confirms the representations as to such Notes set
forth in Section 6 of the Agreement, and agrees to be bound by the provisions of
Sections 2.2(5) and 2.2(7) of the Agreement relating to the purchase and sale of
such Notes.
Pursuant to Section 2.2(5) of the Agreement, an Acceptance with respect
to the following Accepted Notes is hereby confirmed:
I. Accepted Notes: Aggregate principal amount $__________________
(A) (a) Name of Purchaser:
(b) Principal amount:
(c) Final maturity date:
(d) Principal prepayment dates and amounts:
(e) Interest rate:
(f) Interest payment period:
(g) Payment and notice instructions: As set forth on
attached Purchaser Schedule
(B) (a) Name of Purchaser:
(b) Principal amount:
(c) Final maturity date:
(d) Principal prepayment dates and amounts:
(e) Interest rate:
(f) Interest payment period:
(g) Payment and notice instructions: As set forth on
attached Purchaser Schedule
[(C), (D) same information as above.]
II. Closing Day:
III. Issuance Fee:
Exhibit D-1
Dated:
SCHAWK, INC.
By:
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Title:
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[PRUDENTIAL AFFILIATE]
By:
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Vice President
Exhibit D-2