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EXHIBIT # 4(b)
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CONFORMED COPY
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SYSCO CORPORATION
NOTE AGREEMENT
DATED AS OF JUNE 1, 1989
$91,500,000 PRINCIPAL AMOUNT
9.95% SENIOR NOTES
DUE JUNE 15, 1999
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TABLE OF CONTENTS
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SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT
1.1 Description of Notes........................................ 1
1.2 Commitment; Closing Date.................................... 1
SECTION 2. PAYMENTS ON THE NOTES
2.1 Repayments.................................................. 1
2.2 Prepayment at Noteholder's Option Upon Change of Control.... 1
2.3 Surrender of Notes on Payment or Exchange................... 2
2.4 Direct Payment.............................................. 2
2.5 Payments Due on Saturdays, Sundays and Holidays............. 2
SECTION 3. REPRESENTATIONS
3.1 Representations of the Company.............................. 3
3.2 Representations of the Purchasers........................... 7
SECTION 4. CLOSING CONDITIONS
4.1 Representations and Warranties.............................. 7
4.2 Legal Opinions.............................................. 7
4.3 Events of Default........................................... 8
4.4 Legality of Investment...................................... 8
4.5 Sale of All Notes........................................... 8
4.6 Proceedings and Documents................................... 8
SECTION 5. INTERPRETATION OF AGREEMENT
5.1 Certain Terms Defined....................................... 8
5.2 Accounting Principles....................................... 11
5.3 Valuation Principles........................................ 11
5.4 Direct or Indirect Actions.................................. 11
SECTION 6. AFFIRMATIVE COVENANTS
6.1 Corporate Existence......................................... 11
6.2 Insurance................................................... 11
6.3 Taxes, Claims for Labor and Materials....................... 12
6.4 Maintenance of Properties................................... 12
6.5 Maintenance of Records...................................... 12
6.6 Financial Information and Reports........................... 12
6.7 Inspection of Properties and Records........................ 13
6.8 ERISA....................................................... 14
6.9 Compliance with Laws........................................ 14
6.10 Acquisition of Notes........................................ 14
6.11 Notification of Change in Control........................... 14
6.12 Private Placement Number.................................... 14
6.13 Disposition of Notes........................................ 14
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SECTION 7. NEGATIVE COVENANTS
7.1 Funded Debt................................................. 15
7.2 Liens....................................................... 15
7.3 Sales and Lease-Back Transaction............................ 16
7.4 Merger or Sale of Substantially All Assets.................. 16
7.5 Dealings with Affiliates.................................... 17
7.6 Consolidated Tax Returns.................................... 17
7.7 Purchase of Notes........................................... 17
SECTION 8. EVENTS OF DEFAULT AND REMEDIES THEREFOR
8.1 Nature of Events............................................ 17
8.2 Remedies on Default......................................... 18
8.3 Annulment of Acceleration of Notes.......................... 18
8.4 Other Remedies.............................................. 19
8.5 Conduct No Waiver; Collection Expenses...................... 19
8.6 Remedies Cumulative......................................... 19
8.7 Notice of Default........................................... 19
SECTION 9. AMENDMENTS, WAIVERS AND CONSENTS
9.1 Matters Subject to Modification............................. 19
9.2 Solicitation of Holders of Notes............................ 20
9.3 Binding Effect.............................................. 20
SECTION 10. FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT
10.1 Form of Notes............................................... 20
10.2 Note Register............................................... 20
10.3 Issuance of New Notes upon Exchange or Transfer............. 20
10.4 Replacement of Notes........................................ 21
SECTION 11. MISCELLANEOUS
11.1 Expenses.................................................... 21
11.2 Notices..................................................... 21
11.3 Reproduction of Documents................................... 21
11.4 Successors and Assigns...................................... 21
11.5 Law Governing............................................... 21
11.6 Headings.................................................... 22
11.7 Counterparts................................................ 22
11.8 Reliance on and Survival of Provisions...................... 22
11.9 Integration and Severability................................ 22
SCHEDULE I: Purchasers and Notes to be Purchased
ANNEX I: List of Subsidiaries
ANNEX II: List of Multi-Employer Plans
ANNEX III: Description of Outstanding Liens
ANNEX IV: Description of Open Tax Years
EXHIBIT A: 9.95% Senior Note, Due June 15, 1999
EXHIBIT B: Legal Opinions
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SYSCO CORPORATION
NOTE AGREEMENT
Dated as of June 1, 1989
To Each of the Purchasers
Named in Schedule I
Attached Hereto
Ladies and Gentlemen:
SYSCO CORPORATION, a Delaware corporation (the "Company"), agrees with each
of you as follows:
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT
1.1 Description of Notes. The Company has authorized the issuance of
$91,500,000 aggregate principal amount of its Senior Notes (the "Notes"), to
mature June 15, 1999, to be dated the date of issuance, to bear interest from
the date thereof at the rate of 9.95% per annum prior to maturity, such interest
being payable semi-annually on June 15 and December 15 of each year, commencing
December 15, 1989. The Notes will be substantially in the form attached hereto
as Exhibit A and shall have the other terms and provisions hereinafter set
forth. The term "Notes" as used herein shall include each Note delivered
pursuant to this Note Agreement (the "Agreement") and each Note delivered in
substitution or exchange therefor and, where applicable, shall include the
singular number as well as the plural. Any reference to you in this Agreement
shall in all instances be deemed to include any nominee of yours or any separate
account or other person on whose behalf you are purchasing Notes. You are
sometimes referred to herein as a "Purchaser" and, together with the other
purchasers, as the "Purchasers."
1.2 Commitment; Closing Dates. Subject to the terms and conditions hereof
and on the basis of the representations and warranties hereinafter set forth,
the Company agrees to issue and sell to each of you, and each of you agrees to
purchase from the Company, Notes in the aggregate principal amount set forth
opposite your name in Schedule I attached hereto at a price of 100% of the
principal amount thereof on the Closing Date (as hereinafter defined).
Delivery of and payment for the Notes shall be made on June 15, 1989, or on
such later date as may be mutually agreed upon by the Company and the Purchasers
at the offices of Gardner, Carton & Douglas, 321 North Clark Street, Chicago,
Illinois 60610, at 9:00 a.m. Chicago Time (the "Closing Date"). The Notes will
be delivered to each of you in the form of one or more Notes in fully registered
form, issued in your name or in the name of your nominee. Delivery of the Notes
to each of you shall be against payment of the purchase price thereof in Federal
Funds or other immediately available funds in U.S. dollars transmitted to First
City, Texas -- Houston, P.O. Box 2557, Houston, Texas 77001, ABA #113000010 for
deposit in the Company's Account No. 001-00-9549-4. If on the Closing Date the
Company shall fail to tender the Notes it is obligated to provide to you, you
shall be relieved of all remaining obligations under this Agreement. Nothing in
the preceding sentence shall relieve the Company of any liability occasioned by
such failure to deliver the Notes.
SECTION 2. PAYMENTS ON THE NOTES
2.1 Prepayments. Except as provided in Section 2.2, the Notes shall not be
prepayable in whole or in part.
2.2 Prepayment at Noteholder's Option Upon Change of Control.
(a) In the event that (i) a Change in Control shall occur and (ii) on
the date that such Change in Control shall occur or at any time during the
12-month period thereafter, the ratio of (A) Consolidated Short-Term Debt
plus Consolidated Funded Debt to (B) Consolidated Capitalization plus
Short-Term Debt exceeds 80%, (the occurrence of (i) and (ii) being referred
to hereinafter as a "Designated
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Event"), the Company shall, within ten days after the date of such
Designated Event, give written notice to you and each other holder of a
Note of such Designated Event, accompanied by a certificate of an
authorized officer of the Company certifying that the conditions of this
Section 2.2 have been fulfilled and specifying the nature of the Change of
Control, which notice (x) shall contain a written, irrevocable offer by the
Company to prepay, on a date specified in such notice by the Company which
shall be 90 days after the date of such notice, the Notes held by you and
each other holder in full (and not in part) at the price set forth in
paragraph (b) of this Section 2.2, and (y) shall advise you and each other
holder of Notes that notice of such holder's acceptance of the Company's
offer to prepay under this Section 2.2 must be delivered to the Company
within 60 days after its receipt of the notice of the Company delivered
pursuant to this Section 2.2.
(b) Notes to be prepaid pursuant to this Section 2.2 shall be prepaid
at a price of either (i) 100% of the principal amount to be prepaid, plus
interest accrued thereon to the date of prepayment, in the event that the
Reinvestment Yield shall, on the applicable Determination Date, equal or
exceed the interest rate payable on or in respect of the Notes, or (ii)
100% of the principal amount to be prepaid, plus interest accrued thereon
to the date of prepayment, plus a premium, in the event that the
Reinvestment Yield shall, on such Determination Date, be less than the
interest rate payable on or in respect of the Notes. The premium, if any,
shall equal the present value of each remaining scheduled payment of
principal and interest which would be required by Section 1.1 absent such
prepayment, determined by discounting (on the basis of a 360-day year
composed of twelve 30-day months) each such amount utilizing an interest
factor equal to the Reinvestment Yield, less the principal amount to be
prepaid.
2.3 Surrender of Notes on Payment or Exchange. Subject to Section 2.4, upon
any exchange of a Note pursuant to Section 10.3, such Note may, at the option of
the holder thereof, (i) be surrendered to the Company pursuant to Section 10.3
in exchange for a new Note equal to the principal amount remaining unpaid on the
surrendered Note, or (ii) be made available to the Company for notation thereon
of the portion of the principal so exchanged. In case the entire principal
amount of any Note is paid at maturity, such Note shall be surrendered to the
Company for cancellation and shall not be reissued, and no Note shall be issued
in lieu of such Note.
2.4 Direct Payment. Notwithstanding any other provision contained in the
Notes or this Agreement, the Company will pay all sums becoming due on each Note
held by you, at your election by wire transfer of Federal Funds to such account
in your name as you have designated in Schedule I hereto or as you may otherwise
designate to the Company in writing, without presentment and without notations
being made thereon, except that any such Note so paid in full shall be
surrendered to the Company for cancellation. Any wire transfer shall identify
such payment as "Sysco Corporation, 9.95% Senior Notes due June 15, 1999" and
shall identify the payment as principal, premium or interest. Before selling or
otherwise transferring any such Note, you agree that you will make a notation
thereon of the date to which interest has been paid. If the transferee of any
Note held by you is an Institutional Holder or its nominee and shall request the
Company to make all payments on account of such Note that are payable in cash by
wire transfer of immediately available funds at an address specified in such
request, the Company will make such payments in compliance with such request,
provided that such Institutional Holder undertakes in said request the same
obligations in respect of such Note as those undertaken by you in the
immediately preceding sentence.
2.5 Payments Due on Saturdays, Sundays and Holidays. In any case where any
interest payment date on the Notes or the date fixed for any other payment of
any Note or exchange of any Note shall be on a Saturday, Sunday or a legal
holiday or a day on which banking institutions are authorized by law to close in
New York, New York or Houston, Texas, then such payment or exchange need not be
made on such date but may be made on the next succeeding business day not a
Saturday, Sunday or a legal holiday or a day upon which banking institutions are
authorized by law to close in New York, New York or Houston, Texas, with the
same force and effect as if made on the due date.
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SECTION 3. REPRESENTATIONS
3.1 Representations of the Company. As an inducement to, and as part of
the consideration for, your purchase of the Notes pursuant to this Agreement,
the Company represents and warrants to you as follows:
(a) Corporate Organization and Authority. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, has full corporate power and authority to carry on its
business as now conducted, to enter into the Agreement and to issue and
sell the Notes as contemplated in the Agreement.
(b) Qualification to Do Business. The Company is duly licensed or
qualified and in good standing as a foreign corporation authorized to do
business in each jurisdiction where the nature of its business or the
character of its properties makes such qualification or licensing
necessary, except where such failure to be so qualified or licensed would
not have a material adverse effect on the operations or financial condition
of the Company and its Subsidiaries on a consolidated basis. The Company
represents that, in states in which qualification to do business is
required and the Company is not so qualified, it has filed such documents
and paid such fees as are necessary to obtain such qualification.
(c) Subsidiaries. As of June 1, 1989, the Company has no Subsidiaries,
as defined in Section 5.1, except those which are Wholly-Owned Consolidated
Subsidiaries and which are listed in Annex I hereto. Except as set forth in
Annex I hereto, each Subsidiary has been duly organized and is validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization and is qualified in each other jurisdiction
where the nature of its business or the character of its properties makes
such qualification necessary, except in those jurisdictions where the
failure to so qualify, either individually or in the aggregate, would not
have a material adverse affect on the condition, financial or otherwise, of
the Company and its Subsidiaries on a consolidated basis. Each Subsidiary
has full corporate power and authority to own its properties and to carry
on its business as now conducted. The Company and/or one or more
Subsidiaries have good and marketable title to all of the shares it
purports to own of the capital stock of each Subsidiary, free and clear in
each case of any lien or encumbrance, and all such shares have been validly
issued and are fully paid and nonassessable.
(d) Financial Statements. The audited consolidated balance sheets of
the Company and its Subsidiaries as of July 2, 1988 and June 27, 1987, and
the related audited consolidated statements of income, changes in financial
position and shareholders' equity for the fiscal years ended on such dates,
copies of which have heretofore been delivered to you, were prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved (except as otherwise noted therein)
and present fairly the financial position and results of operations of the
Company and its Subsidiaries for and as of the end of each of such fiscal
years. The unaudited consolidated balance sheets of the Company and its
Subsidiaries as of October 1, 1988 and September 26, 1987, as of December
31, 1988 and December 26, 1987 and as of April 1, 1989 and March 26, 1988
and the unaudited statements of consolidated income and consolidated
changes in financial position for the three, six and nine month periods
ended on those dates, copies of which have heretobefore been delivered to
you were prepared in accordance with generally accepted accounting
principles and present fairly the financial condition of the Company and
its Subsidiaries as of said dates and the results of their operations for
the fiscal periods then ended, subject to customary year-end audit
adjustments.
(e) No Contingent Liabilities or Adverse Changes. Except for
contingent liabilities previously disclosed to the Purchasers (reflected in
the Form 10-Q's of the Company provided to the Purchasers) as of the date
hereof, neither the Company nor any of its Subsidiaries has any contingent
liabilities which, individually or in the aggregate, are material to the
Company and its Subsidiaries on a consolidated basis and since July 2,
1988, there have been no material adverse changes in the condition,
financial or otherwise, of the Company and its Subsidiaries on a
consolidated basis nor any material and adverse changes to the Company and
its Subsidiaries on a consolidated basis except those occurring in the
ordinary course of business.
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(f) No Pending Litigation or Proceedings. There are no actions, suits
or proceedings pending and served upon the Company or any of its
Subsidiaries or, to the knowledge of the Company or any Subsidiary,
threatened and not served upon the Company or any Subsidiary, against or
affecting the Company or any of its Subsidiaries, at law or in equity or
before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic
or foreign, which if determined adversely to the Company or any Subsidiary,
either individually or collectively, would result in any material adverse
change in the business, properties, operations or condition, financial or
otherwise, of the Company and its Subsidiaries on a consolidated basis.
(g) Compliance with Law. (i) Neither the Company nor any of its
Subsidiaries is: (x) in default with respect to any order, writ, injunction
or decree of any court to which it is a named party; or (y) in default
under any law, rule, regulation, ordinance or order relating to its or
their respective businesses, the sanctions and penalties resulting from
which defaults described in clauses (x) and (y) would have a material
adverse effect, individually or in the aggregate, on the business,
properties, operations, assets or condition, financial or otherwise, of the
Company and its Subsidiaries on a consolidated basis.
(ii) Neither the Company nor any Subsidiary is a "national" of a
"designated foreign country", a Person defined as a "designated foreign
country", an entity defined as "Iran" or an "Iranian Entity," an entity
defined as "Nicaragua" or a "Nicaraguan," an "Entity controlled by the
South African Government," or an entity defined as the "Government of
Libya" or a "Libyan Person" within the definitions in the Foreign Assets
Control, Cuban Assets Control, Iranian Assets Control, Nicaraguan Control,
South African Transactions or Libyan Sanctions Regulations of the United
States Treasury Department, 31 C.F.R., Chapter V, as amended, or any
regulation or ruling issued thereunder.
(h) Pension Reform Act of 1974. Based upon your representations in
Section 3.2 of this Agreement, neither the purchase of the Notes by you nor
the consummation of any of the other transactions contemplated by this
Agreement is or will constitute a "prohibited transaction" within the
meaning of Section 4975 of the Internal Revenue Code of 1986, as amended
(the "Code"), or Section 406 of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"). The Internal Revenue Service has issued a
determination that each "employee pension benefit plan," as defined in
Section 3 of ERISA (a "Plan"), established, maintained or contributed to by
the Company or any Subsidiary (except for any Plan which is unfunded and
maintained primarily for the purpose of providing deferred compensation for
a select group of management or highly compensated employees) is qualified
under Section 401(a) and related provisions of the Code, as amended by
ERISA, and that each related trust or custodial account is exempt from
taxation under Section 501(a) of the Code. All Plans of the Company or any
Subsidiary comply in all material respects with ERISA and the Code. Except
as set forth in Annex II, there exist with respect to the Company or any
Subsidiary no "multi-employer plans," as defined in the Multiemployer
Pension Plan Amendments Act of 1980, for which a material withdrawal or
termination liability may be incurred. The Company has no knowledge of any
material liability existing with respect to any "multi-employer plans" in
which it participates, including but not limited to, withdrawal or
termination liability. There exist with respect to all Plans or trusts
established or maintained by the Company or any Subsidiary: (i) no
accumulated funding deficiency within the meaning of ERISA material to the
Company and its Subsidiaries on a consolidated basis; (ii) no termination
of any Plan or trust which would result in any liability to the Pension
Benefit Guaranty Corporation ("PBGC") material to the Company and its
Subsidiaries on a consolidated basis or any "reportable event," as that
term is defined in ERISA, which is likely to constitute grounds for
termination of any Plan or trust by the PBGC; and (iii) no "prohibited
transaction," as that term is defined in ERISA, which is likely to subject
any Plan, trust or party dealing with any such Plan or trust to any tax or
penalty material to the Company and its Subsidiaries on a consolidated
basis on prohibited transactions imposed by Section 4975 of the Code.
(i) Title to Properties. Except as disclosed on the consolidated
balance sheet as of June 2, 1988 delivered pursuant to Paragraph (d) of
this Section 3.1, the Company and its Subsidiaries have (i) good title in
fee simple or its equivalent under applicable law to all the real property
owned by it and (ii) good title to all the other property reflected in said
balance sheet or subsequently acquired by the Company or any Subsidiary
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(except as sold or otherwise disposed of in the ordinary course of
business), in each case free from all liens, charges, and encumbrances of
any kind, except (w) those securing Indebtedness of the Company or a
Subsidiary, which are listed in Annex III hereto; (x) liens for taxes which
are not now delinquent; (y) any mechanic's, laborer's or supplier's liens
if payment is not yet due under the contract in question or if payment is
being contested in good faith by the Company or any Subsidiary and with
respect to which adequate reserves are maintained by the Company; and (z)
other liens, charges and encumbrances that, in the aggregate, do not
materially detract from the value of said properties or materially impair
their use in the operation of the business of the Company and its
Subsidiaries on a consolidated basis.
(j) Leases The Company and each Subsidiary enjoy peaceful and
undisturbed possession under all material leases under which the Company or
such Subsidiary is a lessee or is operating. None of such leases contains
any provision which is reasonably likely to materially and adversely affect
the operation or the financial condition of the Company and its
Subsidiaries on a consolidated basis. All of such leases are valid and
subsisting and there are no defaults in such leases which would result in a
material adverse effect on the Company and it Subsidiaries on a
consolidated basis.
(k) Franchises, Patents, Trademarks and Other Rights The Company and
each Subsidiary have all franchises, permits, licenses and other authority
as are necessary to enable them to carry on their respective businesses as
now being conducted and as proposed to be conducted, and none of them is in
default under any of such franchises, permits, licenses or other authority
which are material to the business, properties, operations or condition,
financial or otherwise, of the Company and its Subsidiaries on a
consolidated basis. The Company and each Subsidiary own or possess all
patents, trademarks, service marks, trade names, copyrights, licenses and
rights with respect to the foregoing necessary for the present conduct of
their businesses, without any known conflict with the rights of others
which might result in any material adverse change in the business,
properties, operations or condition, financial or otherwise, of the Company
and its Subsidiaries on a consolidated basis.
(l) Status of Notes and Sale of Notes The Notes and this Agreement
have been duly authorized on the part of the Company and constitute the
legal, valid and binding obligations of the Company, enforceable in
accordance with their terms, except to the extent that enforcement of the
Notes and this Agreement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general
application relating to or affecting the enforcement of the rights of
creditors or secured parties or by equitable principles if equitable
remedies are sought. The sale of the Notes and compliance by the Company
with all of the provisions of this Agreement and of the Notes (i) are
within the corporate powers of the Company, (ii) have been duly authorized
by proper corporate action and (iii) are legal and will not result in any
breach of any of the provisions of, or constitute a default under, or
result in the creation of any lien or encumbrance upon any property of the
Company or any Subsidiary under the provisions of, any charter instrument,
by-law, loan agreement or other agreement or instrument to which the
Company or any Subsidiary is a party or by which any of them is bound.
(m) No Defaults No event has occurred and no condition exists which,
upon the issuance of the Notes, would constitute an Event of Default, or
with the lapse of time or the giving of notice or both would become an
Event of Default, under this Agreement. Neither the Company nor any
Subsidiary is in default (which default has not been waived by all
necessary parties) under any charter instrument, by-law, or any loan
agreement or other agreement or instrument to which it is a party or by
which it is bound which default would result in a material adverse effect
on the Company and its Subsidiaries on a consolidated basis.
(n) Governmental Consent Neither the nature of the Company or any of
its Subsidiaries, their respective businesses or properties, nor any
relationship between the Company or any of its Subsidiaries and any other
Person, nor any circumstances in connection with the offer, issue, sale or
delivery of the Notes is such as to require a consent, approval or
authorization of, or filing, registration or qualification with, any
governmental authority on the part of the Company in connection with the
execution and delivery of this Agreement or the offer, issue, sale or
delivery of the Notes.
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(o) Taxes. (i) All tax returns required to be filed by the Company or
any Subsidiary in any jurisdiction have in fact been filed. All taxes,
assessments, fees and other governmental charges upon the Company or any
Subsidiary, or upon any of their respective properties, income or
franchises, which are due and payable, and which the failure to pay would
have a material adverse effect on the Company and its Subsidiaries on a
consolidated basis, have been paid timely or within appropriate extension
periods or contested in good faith by appropriate proceedings. Neither the
Company nor any Subsidiary knows of any proposed additional tax assessment
against it nor of any basis for one which would have a materially adverse
effect on the Company and its Subsidiaries on a consolidated basis.
(ii) The respective Federal income tax liabilities of the Company and
its Subsidiaries have been finally determined by the Internal Revenue
Service and satisfied for all taxable years other than the taxable years
ended on the dates set forth in Annex IV hereto. The provisions for taxes
on the books of the Company and its Subsidiaries on a consolidated basis
are adequate for all open years and for the current fiscal period.
(p) Status under Certain Statutes. Neither the Company nor any
Subsidiary is: (i) a "public utility company" or a "holding company," or an
"affiliate" or a "subsidiary company" of a "holding company," or an
"affiliate" of such a "subsidiary company," as such terms are defined in
the Public Utility Holding Company Act of 1935, as amended, or (ii) a
"public utility" as defined in the Federal Power Act, as amended, or (iii)
an "investment company" or an "affiliated person" thereof or an "affiliated
person" of any such "affiliated person," as such terms are defined in the
Investment Company Act of 1940, as amended.
(q) Private Offering. Neither the Company nor Goldman, Sachs & Co.
(the only Person authorized or employed by the Company as agent, broker,
dealer or otherwise in connection with the offering of the Notes or any
similar security of the Company) has offered any of the Notes or any
similar security of the Company for sale to, or solicited offers to buy any
thereof from, or otherwise approached or negotiated with respect thereto
with, any prospective purchaser, other than not more than 54 institutional
investors, including the Purchasers, referred to in a letter from Goldman,
Sachs & Co. to the Company, dated June 2, 1989, a copy of which has been
delivered to your special counsel, each of whom was offered all or a
portion of the Notes at private sale for investment. With respect to the
actions of Goldman, Sachs & Co. described in this paragraph, the Company
has relied solely on the representations of Goldman, Sachs & Co. set forth
in the aforementioned letter. The Company agrees that neither the Company
nor anyone acting on its authorization will offer the Notes or any part
thereof or any similar securities for issue or sale to, or solicit any
offer to acquire any of the same from, anyone so as to bring the issuance
and sale of the Notes within the provisions of Section 5 of the Securities
Act of 1933, as amended.
(r) Effect of Other Instruments. Neither the Company nor any
Subsidiary is bound by any agreement or instrument or subject to any
charter or other corporate restriction which materially and adversely
affects the business, properties, operations, or condition, financial or
otherwise, of the Company and its Subsidiaries on a consolidated basis.
(s) Use of Proceeds. The Company will apply the proceeds from the sale
of the Notes to reduce outstanding Indebtedness resulting from the
Company's acquisition of the food service business of Staley Continental,
Inc. None of the transactions contemplated in this Agreement (including,
without limitation thereof, the use of the proceeds from the sale of the
Notes) will violate or result in a violation of Section 7 of the Securities
Exchange Act of 1934, as amended, or any regulations issued pursuant
thereto, including, without limitation, Regulations G, T and X of the Board
of Governors of the Federal Reserve System (12 C.F.R., Chapter II). Neither
the Company nor any Subsidiary owns or intends to carry or purchase any
"margin stock" within the meaning of Regulation G, and none of the proceeds
from the sale of the Notes will be used to purchase or carry or refinance
any borrowing the proceeds of which were used to purchase or carry any
"margin stock" or "margin security" in violation of Regulations G, T and X.
(t) Condition of Property. All of the facilities of the Company and
each of its Subsidiaries material to the operation or financial condition
of the Company and its Subsidiaries on a consolidated basis are in sound
operating condition and repair except for facilities being repaired in the
ordinary course of business.
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(u) Books and Records. The Company and each of its Subsidiaries (i)
maintain books, records and accounts which, in reasonable detail,
accurately and fairly reflect their respective transactions and business
affairs, and (ii) maintain a system of internal accounting controls
sufficient to provide reasonable assurances that transactions are executed
in accordance with management's general or specific authorization and to
permit preparation of financial statements in accordance with generally
accepted accounting principles.
(v) Change in Business. The Company and its Subsidiaries have no
present intention, directly or indirectly or through any Subsidiary, to
enter into any business which is substantially different from that being
conducted by them and that does not relate to products or services supplied
by or product markets served by the Company and its Subsidiaries.
(w) Full Disclosure. Neither the financial statements referred to in
Paragraph (d) of this Section 3.1, nor this Agreement, nor the Company's
Annual Report for the year ended July 2, 1988, nor its Annual Report on
Form 10-K for the years ended July 2, 1988, nor the Company's Quarterly
Reports on Form 10-Q for the quarters ended October 1, 1988, December 31,
1988, and April 1, 1989 furnished to you in connection with the placement
of the Notes, nor any other written statement or document furnished by the
Company to you in connection with the negotiation of the sale of the Notes,
taken together, contain any untrue statement of a material fact or omit a
material fact necessary to make the statements contained therein or herein
not misleading in light of the circumstances under which they were made.
There is no fact known, or which, after inquiry would be known, by the
Company which the Company has not disclosed to you in writing which has a
material adverse effect on or, so far as the Company can now reasonably
foresee, will have a material adverse effect on the business, property,
operations or condition, financial or otherwise, of the Company and its
Subsidiaries on a consolidated basis or the ability of the Company to
perform its undertakings under and in respect of this Agreement and the
Notes.
3.2 Representations of the Purchasers. As an inducement to, and as part of
the consideration for, the issuance by the Company of the Notes pursuant to this
Agreement, each of you represents and warrants to the Company that you are
acquiring the Notes being purchased by you for the purpose of investment and not
with a view to the resale or distribution thereof, and that you have no present
intention of selling, negotiating or otherwise disposing of the Notes; provided
that the disposition of your property shall at all times be and remain within
your control, subject, however, to compliance with federal and other applicable
laws. Each of you acknowledges that the Notes have not been registered under the
Securities Act of 1933, as amended, or any other applicable laws, and each of
you understands that the Notes must be held indefinitely unless (i) they are
subsequently registered under said Securities Act and any other applicable laws,
(ii) an exemption from such registration is available, or (iii) said Securities
Act and any other applicable laws do not apply to their disposition. Each of you
has been advised that the Company does not contemplate registering, and is not
legally required to register, the Notes under said Securities Act or any other
applicable laws.
SECTION 4. CLOSING CONDITIONS
Your obligation to purchase the Notes as herein provided on the Closing
Date shall be subject to the performance by the Company of its agreements
hereunder, which by the terms hereof are to be performed at or prior to the time
of delivery of the Notes, and to the following conditions to be satisfied on or
before such Closing Date:
4.1 Representations and Warranties. The representations and warranties of
the Company contained in this Agreement or otherwise made in writing in
connection herewith shall be true and correct on and as of the Closing Date and
you shall receive from the Company a Closing Certificate dated such Closing
Date, and executed by the Chairman, President, Vice President, Treasurer or
Assistant Treasurer of the Company to such effect.
4.2 Legal Opinions. You shall receive from Gardner, Carton & Douglas, who
are acting as your special counsel in this transaction, from Thomas Kurz,
General Counsel to the Company, and from Arnall Golden & Gregory, counsel for
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the Company, their respective opinions, dated the Closing Date, in form and
substance satisfactory to you and covering substantially the matters set forth
or provided in Exhibit B hereto.
4.3 Events of Default. No event shall have occurred and be continuing on
the Closing Date which would constitute an Event of Default, as defined in
Section 8.1 hereof, or with notice or lapse of time or both would become such an
Event of Default, and the Company shall have delivered to you on the Closing
Date a certificate signed by the Chairman, President, Vice President or
Treasurer or Assistant Treasurer of the Company to such effect.
4.4 Legality of Investment. Your acquisition of the Notes shall constitute
a legal investment as of the Closing Date under the laws and regulations of each
jurisdiction to which you may be subject (without resort to any "basket" or
"leeway" provision which permits the making of an investment without restriction
as to the character of the particular investment being made), and such
acquisition shall not subject you to any penalty or other onerous condition in
or pursuant to any such law or regulation; and you shall have received such
certificates or other evidence as to factual matters as you may reasonably
request from the Company to establish compliance with this condition.
4.5 Sale of All Notes. Contemporaneously with the sale of Notes to you,
the Company shall complete and close the sale of Notes being purchased by each
of the other Purchasers scheduled to purchase Notes on such Closing Date.
4.6 Proceedings and Documents. All proceedings taken in connection with
the transactions contemplated by this Agreement, and all documents necessary to
the consummation thereof shall be reasonably satisfactory in form and substance
to you and your special counsel, and you and your special counsel shall have
received copies (executed or certified as may be appropriate) of all legal
documents or proceedings which you and they may reasonably request in connection
with the consummation of said transactions.
SECTION 5. INTERPRETATION OF AGREEMENT
5.1 Certain Terms Defined. The terms hereinafter set forth when used
herein shall have the following meanings:
Affiliate -- Any Person (other than a Subsidiary) which directly or
indirectly through one or more intermediaries controls, or is controlled
by, or is under common control with, the Company. The term "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
Attributable Debt -- In connection with a Sale and Lease-Back
Transaction, the lesser of (i) the fair value of the assets subject thereto
or (ii) the total net amount of rent required to be paid under such lease
during the remaining term thereof (after giving effect to any extensions at
the option of the lessee), discounted annually from the respective due
dates thereof to such date at the rate of 11% per annum, compounded
semi-annually. The net amount of rent required to be paid under any such
lease for any such period shall be the amount of the rent payable by the
lessee with respect to such period, after excluding amounts required to be
paid on account of maintenance and repairs, insurance, taxes, assessments,
water rates and similar charges. In the case of any lease which is
terminable by the lessee, such net amount shall also include the amount of
any penalty payable by the lessee upon such termination, but no rent shall
be considered as required to be paid under such lease subsequent to the
first date upon which it may be so terminated.
Capitalized Lease -- Any lease of property, real or personal, which in
accordance with generally accepted accounting principles would be required
to be capitalized on a balance sheet of the lessee.
Change in Control -- The occurrence of any one or more of the
following:
(a) any Person shall purchase or otherwise acquire, directly or
indirectly, in one or more transactions, beneficial ownership of
securities representing 50% of the combined voting power of the
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Company's Voting Stock, determined on the date prior to the date of such
purchase or acquisition (or, if there be more than one, the date of the
last such purchase or acquisition);
(b) there shall occur, in any consecutive twenty-four month period,
a replacement of or change in a majority of the members of the Board of
Directors of the Company;
(c) (i) the Company shall merge into any other corporation (and the
Company shall not be the surviving corporation) or convey, transfer or
lease all or substantially all of its assets to any Person (other than a
Wholly-Owned Subsidiary of the Company), or (ii) any corporation or
corporations (other than a Wholly-Owned Subsidiary) shall consolidate
with or merge into the Company, pursuant to one or more transactions in
which Voting Stock of the Company representing 30% or more, in the
aggregate, of the combined voting power of the Company's Voting Stock,
determined on the date prior to the date, of such transaction (or if
there is more than one date, the date prior to the date of such last
transaction) is exchanged for cash, securities or other property.
(d) the Company or any Subsidiary shall purchase or otherwise
acquire, directly or indirectly, beneficial ownership of Voting Stock of
the Company, if, after giving effect to such purchase or acquisition,
the Company (together with all Subsidiaries) shall have acquired, during
any period of twelve consecutive months, beneficial ownership of an
aggregate of 30% or more of the Voting Stock of the Company outstanding
on the date immediately prior to the last such purchase or acquisition
during such period; or
(e) the Company shall make a distribution of cash, securities or
other properties (other than regular periodic cash dividends at a rate
which is substantially consistent with past practice, including with
respect to increases in dividends, and other than Common Stock or rights
to acquire Common Stock) to holders of capital stock (including by means
of dividend, reclassification, recapitalization or otherwise) which,
together with all other such distributions during the 365-day period
preceding the date of such distribution, has an aggregate fair market
value in excess of an amount equal to 30% of the fair market value of
the Voting Stock of the Company outstanding on the date immediately
prior to such distribution.
Consolidated Capitalization -- The sum of Consolidated Funded Debt and
Shareholder's Equity.
Consolidated Funded Debt -- Funded Debt of the Company and its
Consolidated Subsidiaries, determined on a consolidated basis in accordance
with generally accepted accounting principles.
Consolidated Net Tangible Assets -- The total of all assets (net of
depreciation and amortization) appearing on a consolidated balance sheet of
the Company and its Consolidated Subsidiaries prepared in conformity with
generally accepted accounting principles, after deducting therefrom
(without duplication of deductions) (i) all amounts shown on such
consolidated balance sheet in respect of good will, organizational
expenses, trademarks, tradenames, copyrights, patents, patent applications,
licenses and rights in any thereof, prepaid advertising, deferred costs and
charges and such other assets as are properly classified as "intangible
assets" in accordance with generally accepted accounting principles, (ii)
any unamortized debt discount and expense, (iii) any write-up in the book
value of any fixed asset after June 1, 1989 and (iv) all amounts appearing
as liabilities on such balance sheet other than (A) minority interests in
other Persons, (B) deferred taxes which are properly classified as
long-term liabilities and (C) Consolidated Funded Debt.
Consolidated Short-Term Debt -- Short-Term Debt of the Company and its
Consolidated Subsidiaries determined on a consolidated basis in accordance
with generally accepted accounting principles.
Consolidated Subsidiary -- Any Subsidiary, the financial statements of
which are consolidated with those of the Company in accordance with
generally accepted accounting principles.
Determination Date -- The day 10 days before the date fixed for
prepayment pursuant to a notice required by Section 2.2 or the day 10 days
before the date of declaration pursuant to Section 8.2.
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Exempted Debt -- The sum, as of the date of determination thereof, of
(without duplication) (i) Consolidated Funded Debt incurred after June 1,
1989 and secured by Liens not otherwise permitted by Section 7.2(a) through
(m), (ii) Attributable Debt of the Company and its Consolidated
Subsidiaries incurred subsequent to June 1, 1989 permitted by Section 7.3
and (iii) Funded Debt of Consolidated Subsidiaries incurred subsequent to
June 1, 1989.
Funded Debt -- Indebtedness for borrowed money which by its terms
matures more than one year from the date of determination thereof, or which
is extendible or renewable at the option of the obligor to a time more than
one year from the date of determination thereof, including any liability
with respect to Capitalized Leases, but without including any portion of
such indebtedness payable by its terms within one year from the date of
determination.
Indebtedness -- (i) All items of borrowings, including Capitalized
Leases, which, in accordance with generally accepted accounting principles,
would be included in determining total liabilities as shown on the
liability side of a balance sheet as of the date at which Indebtedness is
to be determined, and, without duplication, (ii) all guarantees, letters of
credit (other than letters of credit supporting the purchase of goods in
the ordinary course of business and letters of credit not in excess of $50
million in the aggregate at any time outstanding used for the purpose of
obtaining insurance in the ordinary course of business), support
agreements, maintenance agreements, and endorsements (other than of notes,
bills and checks presented to banks for collection or deposit in the
ordinary course of business), in each case to support Indebtedness of other
Persons.
Institutional Holder -- Any bank, trust company, insurance company,
pension fund, mutual fund or other similar financial institution which is
or becomes a holder of any Note.
Lien -- Any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind, including any agreement to give any of the foregoing,
any conditional sale or other title retention agreement, any Leases
pursuant to which security interests are granted, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code
of any jurisdiction in connection with any of the foregoing.
Person -- Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Reinvestment Yield -- With respect to Notes to be prepaid pursuant to
Section 2.2 or Notes the payment of which has been accelerated pursuant to
Section 8.2, the arithmetic mean of the rates, published for the 5 business
days preceding the applicable Determination Date, in the weekly statistical
release designated H.15(519) (or any successor publication) of the Board of
Governors of the Federal Reserve System under the caption "U.S. Government
Securities -- Treasury Constant Maturities" opposite the maturity
corresponding to the remaining maturity of the principal amount of the
Notes to be prepaid, plus .50%. If no maturity exactly corresponding to
such maturity shall appear therein, yields for the two most closely
corresponding published maturities shall be calculated pursuant to the
foregoing sentence and the Reinvestment Yield (including the .50% amount
referenced above) shall be interpolated from such yields on a straight-line
basis.
Sale and Lease-Back Transaction -- Any arrangement, directly or
indirectly, with any Person whereby a seller or a transferor shall sell or
otherwise transfer any real or personal property and then or thereafter
lease (whether or not a Capitalized Lease), or repurchase under an extended
purchase contract, the same or similar property from the purchaser or the
transferee of such property.
Shareholders' Equity -- The sum of all capital stock, capital in
excess of par value and retained earnings of the Company and its
Subsidiaries, determined on a consolidated basis in accordance with
generally accepted accounting principles.
Short-Term Debt -- Indebtedness which matures within one year from the
date of determination.
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Subsidiary -- Any corporation or other entity the majority of
outstanding Voting Stock of which is at the time owned (either alone or
through Subsidiaries or together with Subsidiaries) by the Company or
another Subsidiary.
Voting Stock -- Capital stock of any class or classes of a corporation
having power under ordinary circumstances to vote for the election of the
members of the Board of Directors of such corporation.
Wholly-Owned Consolidated Subsidiary -- A Consolidated Subsidiary, all
of the outstanding capital stock of which, other than directors' qualifying
shares, is at the time owned by the Company, another Wholly-Owned
Consolidated Subsidiary, or the Company and a Wholly-Owned Consolidated
Subsidiary.
Terms which are defined in other Sections of this Agreement shall have the
meanings specified therein.
5.2 Accounting Principles. Where the character or amount of any asset or
liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, the same shall be done in accordance with generally
accepted accounting principles in force at the time of such determination,
consolidation or computation to the extent applicable, except where such
principles are inconsistent with the requirements of this Agreement, in which
case the requirements of this Agreement shall govern.
5.3 Valuation Principles. Except when indicated expressly to the contrary
by the use of terms such as "fair value," "fair market value" or "market value,"
each asset, each liability and each capital item of any Person, and any quantity
derivable by a computation involving any of such assets, liabilities or capital
items, shall be taken at the net book value thereof for all purposes of this
Agreement. "Net book value" with respect to any asset, liability or capital item
of any Person shall mean the amount at which the same is recorded or, in
accordance with generally accepted accounting principles, should have been
recorded in the books of account of such Person, as reduced by any reserves
which have been or, in accordance with generally accepted accounting principles,
should have been set aside with respect thereto, but in every case (whether or
not permitted in accordance with generally accepted accounting principles)
without giving effect to any write-up, write-down or write-off relating thereto
which was made after the date of this Agreement.
5.4 Direct or Indirect Actions. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether the action in question
is taken directly or indirectly by such Person.
SECTION 6. AFFIRMATIVE COVENANTS
The Company agrees that, so long as any amount remains unpaid on any Note:
6.1 Corporate Existence. The Company will maintain and preserve, and will
cause each Subsidiary to maintain and preserve, its corporate existence and
right to carry on its business and duly procure all necessary renewals and
extensions thereof and use, and cause each Subsidiary to use, its best efforts
to maintain, preserve and renew all of its rights, powers, privileges and
franchises which in the reasonable opinion of the Board of Directors or senior
management of the Company continue to be advantageous to the Company and its
Subsidiaries; provided, however, that the corporate existence of the Company or
of any Subsidiary may be discontinued as a result of liquidation or sale of
assets or merger in accordance with the provisions of Section 7.4 hereof.
6.2 Insurance. The Company will insure and keep insured, and will cause
each Subsidiary to insure and keep insured, at all times all of its properties
which are of an insurable nature and of the character usually insured by
companies operating properties similar to the properties of the Company or each
such Subsidiary, against loss or damage by fire and from other causes
customarily insured against by companies engaged in businesses similar to those
of the Company in such amounts as are usually insured against by such companies.
The Company will also maintain, and will also cause each Subsidiary to maintain,
at all times adequate insurance against loss or damage from such hazards and
risks to the person and property of others as are usually insured against by
companies operating properties similar to the properties of the Company or each
such Subsidiary. All such insurance shall be carried with financially sound and
reputable insurers. The Company shall furnish to you on or prior to the Closing
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Date a summary of insurance presently in force with respect to itself and its
Subsidiaries.
6.3 Taxes, Claims for Labor and Materials. The Company will pay and
discharge when due, and will cause each Subsidiary to pay and discharge when
due, all taxes, assessments and governmental charges or levies imposed upon it
or its property or assets, or upon properties leased by it (but only to the
extent required to do so by the applicable lease), prior to the date on which
penalties attach thereto, and all lawful claims which, if unpaid, might become a
Lien upon its property or assets, provided that neither the Company nor any
Subsidiary shall be required to pay any such tax, assessment, charge, levy or
claim, the payment of which is being contested in good faith and by proper
proceedings that will stay the forfeiture or sale of any property and with
respect to which adequate reserves are maintained in accordance with generally
accepted accounting principles.
6.4 Maintenance of Properties. The Company will maintain, preserve and
keep, and will cause each Subsidiary to maintain, preserve and keep, its
material properties (whether owned in fee or a leasehold interest) in good
repair and working order, ordinary wear and tear excepted, and from time to time
will make all necessary repairs, replacements, renewals and additions required
to maintain the business of the Company and each Subsidiary.
6.5 Maintenance of Records. The Company will keep, and will cause each
Subsidiary to keep, at all times proper books of record and account in which
full, true and correct entries will be made of all dealings or transactions of
or in relation to the business and affairs of the Company or such Subsidiary, in
accordance with generally accepted accounting principles consistently applied
throughout the period involved (except for such changes as are disclosed in the
financial statements of the Company and its Subsidiaries or in the notes thereto
and concurred in by the independent certified public accountants), and the
Company will, and will cause each Subsidiary to, provide reasonable protection
against loss or damage to such books of record and account.
6.6 Financial Information and Reports. The Company will furnish to you and
to any other Institutional Holder (in duplicate if you or such other holder so
request), the following:
(a) As soon as available and in any event within 60 days after the end
of each of the first three quarterly accounting periods of each fiscal year
of the Company, consolidated balance sheets of the Company and its
Consolidated Subsidiaries as of the end of such period and consolidated
statements of income and changes in financial position of the Company and
its Consolidated Subsidiaries (and, if prepared and provided to third
parties at any time by the Company and its Subsidiaries, consolidating
balance sheets and consolidating statements of income and changes in
financial position) for the periods beginning on the first day of such
fiscal year and the first day of such period and ending on the date of such
balance sheet, setting forth in comparative form the corresponding
consolidated figures for the corresponding periods of the preceding fiscal
year, all in reasonable detail prepared in accordance with generally
accepted accounting principles consistently applied throughout the period
involved (except for such changes as are disclosed in such financial
statements or in the notes thereto and concurred in by independent
certified public accountants);
(b) As soon as available and in any event within 120 days after the
last day of each fiscal year consolidated balance sheets of the Company and
its Consolidated Subsidiaries as of the end of such fiscal year and the
related consolidated statements of income, stockholders' equity and changes
in financial position of the Company and its Subsidiaries (and, if prepared
and provided to third parties at any time by the Company and its
Subsidiaries, consolidating balance sheets and consolidating statements of
income and changes in financial position) for such fiscal year, in each
case setting forth in comparative form figures for the preceding fiscal
year, all in reasonable detail, prepared in accordance with generally
accepted accounting principles consistently applied throughout the period
involved (except for changes as are disclosed in such financial statements
or in the notes thereto and concurred in by independent certified public
accountants) and accompanied by a report of a firm of independent certified
public accountants of recognized national standing selected by the Company;
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(c) Together with the financial reports delivered pursuant to
Paragraphs (a) and (b) of this Section 6.6, a certificate of the chief
financial officer or any vice president, treasurer or assistant treasurer
responsible for financial or accounting matters, (i) to the effect that the
signer thereof has re-examined the terms and provisions of this Agreement
and that, to the best of his knowledge after due inquiry, at the date of
such certificate, during the periods covered by such financial reports and
as of the end of such periods, no Event of Default, or event which, with
the lapse of time or the giving of notice, or both, would become an Event
of Default hereunder, is occurring or has occurred as of the date of such
certificate, during such periods and as of the end of such periods, or if
the signer is aware of any such event or Event of Default, he shall
disclose in such statement the nature thereof, its period of existence and
what action, if any, the Company has taken, is taking or proposes to take
with respect thereto, and (ii) stating whether the Company is in compliance
with Sections 7.1 through 7.7 and setting forth, in sufficient detail, the
information and computations required to establish whether or not the
Company was in compliance with the requirements of Sections 7.1, 7.2, 7.3
and 7.4 during the periods covered by the financial reports then being
furnished and as of the end of such periods;
(d) Together with the financial reports delivered pursuant to
Paragraph (b) of this Section 6.6, a report of the Company's independent
certified public accountants stating that in making the examination
necessary for expressing an opinion on such financial statements, nothing
came to their attention that caused them to believe that there is in
existence or has occurred any Event of Default hereunder, or any event (the
occurrence of which is ascertainable by accountants in the course of normal
audit procedures) which, with the lapse of time or the giving of notice, or
both, would become an Event of Default hereunder or, if such accountants
shall have obtained knowledge of any such event or Event of Default, they
shall disclose in such report the nature thereof and the length of time it
has existed or did exist;
(e) Within 10 business days after the Company obtains knowledge
thereof, notice of any litigation or governmental proceeding pending
against the Company or any Subsidiary in which the damages sought exceed
$5,000,000, after deducting the amount with respect to which the Company or
such Subsidiary is insured and with respect to which the insurer has
assumed responsibility in writing, or which, individually or in the
aggregate, might otherwise materially adversely affect the business,
operations or condition, financial or otherwise, of the Company and its
Subsidiaries on a consolidated basis;
(f) As soon as available, copies of such financial statements,
notices, reports and proxy statements as the Company shall furnish to its
stockholders; copies of all registration statements (other than
registration statements covering employee benefit, stock option or similar
plans) and periodic reports which the Company may file with the Securities
and Exchange Commission, and any other similar or successor agency of the
Federal government administering the Securities Act of 1933, as amended,
the Securities Exchange Act of 1934, as amended, or the Trust Indenture Act
of 1939, as amended; and copies of all reports relating to the Company or
its securities which the Company may file with any securities exchange on
which any of the Company's securities may be registered;
(g) As soon as reasonably possible after it is available, a copy of
each other report submitted to the Company by any Person and prepared by
independent accountants retained by the Company or any Subsidiary in
connection with any interim or special audit made by them of the books of
the Company or any Subsidiary;
(h) Such additional information as you or such other Institutional
Holder of the Notes may reasonably request concerning the Company and its
Subsidiaries; and
(i) For purposes of satisfying the requirements for delivery of
financial statements pursuant to (a) and (b) of this Section 6.6, such
requirements will be satisfied by the delivery to the Purchasers of the
Company's quarterly reports on Form 10-Q and annual reports on Form 10-K in
the form filed with the Securities and Exchange Commission.
6.7 Inspection of Properties and Records. The Company will allow, and will
cause each Subsidiary to allow, any representative of you or any other
Institutional Holder, so long as you or such other Institutional
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Holder shall hold any Note, to visit and inspect, upon five days notice, any of
its properties, to examine its books of record and account and to discuss its
affairs, finances and accounts with its officers and its public accountants (and
by this provision the Company and each Subsidiary hereby authorize such
accountants to discuss with you or such Institutional Holder its affairs,
finances and accounts), all at such reasonable times and as often as you or such
Institutional Holder may reasonably request.
6.8 ERISA. (a) The Company agrees that all assumptions and methods used to
determine the actuarial valuation of employee benefits, both vested and
unvested, under any Plan of the Company or any Subsidiary, and each such Plan,
will comply in all material respects with ERISA and other applicable laws.
(b) The Company will not at any time cause any Plan established, maintained
or contributed to by it or any Subsidiary or "affiliate" (as defined in Section
407(d)(7) of ERISA) to:
(i) engage in any "prohibited transaction" as such term is defined in
Section 4975 of the Code or in Section 406 of ERISA;
(ii) incur any "accumulated funding deficiency" as such term is
defined in Section 302 of ERISA, whether or not waived; or
(iii) be terminated under circumstances which are likely to result in
the imposition of a lien on the property of the Company or any Subsidiary
pursuant to Section 4068 of ERISA, if and to the extent such termination is
within the control of the Company;
if the event or condition described in (i), (ii) or (iii) above is likely to
subject the Company or any Subsidiary or "affiliate" to a liability which, in
the aggregate, is material in relation to the business, operations, property or
condition, financial or otherwise, of the Company and its Subsidiaries on a
consolidated basis.
(c) Upon the request of you or any other Institutional Holder, the Company
will furnish a copy of the annual report of each Plan (Form 5500) required to be
filed with the Internal Revenue Service. Copies of annual reports shall be
delivered no later than 30 days after the later of the date such report has been
filed with the Internal Revenue Service or the date the copy is requested.
6.9 Compliance with Laws. The Company will comply, and will cause each of
its Subsidiaries to comply, with all laws, rules and regulations relating to its
or their respective businesses, other than laws, rules and regulations the
failure to comply with which and the sanctions and penalties resulting
therefrom, when taken together with the failure to comply with all other laws,
rules and regulations and the sanctions and penalties resulting therefrom, would
not have a material adverse effect on the operations, business, property, assets
or condition, financial or otherwise, of the Company and its Subsidiaries on a
consolidated basis, and would not result in the creation of a Lien which, if
incurred in the ordinary course of business, would not be permitted by Section
7.2 on any of the property of the Company or any Subsidiary; provided, however,
that the Company and its Subsidiaries shall not be required to comply with laws,
rules and regulations the validity or applicability of which are being contested
in good faith and by appropriate proceedings and with respect to which adequate
reserves are maintained in accordance with generally accepted accounting
principles.
6.10 Acquisition of Notes. The Company will forthwith cancel any Notes in
any manner or at any time acquired by the Company or any Subsidiary or Affiliate
and such Notes shall not be deemed to be outstanding for any of the purposes of
this Agreement or the Notes.
6.11 Notification of Change in Control. The Company shall, within ten days
following the occurrence of an event constituting a Change of Control, notify
each holder of a Note in writing of such Change in Control.
6.12 Private Placement Number. The Company agrees, in connection with the
obtaining of a "private placement number" from Standard & Poor's Corporation, to
permit the Purchasers to file this Agreement with Standard & Poor's.
6.13 Disposition of Notes. The Company will cooperate in good faith with
the holders of the Notes to provide to each holder of a Note, promptly upon
request, information concerning the Company sufficient to
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enable such holder to make dispositions of any Note in compliance with and as
required pursuant to statutes or rules adopted by the Securities and Exchange
Commission.
SECTION 7. NEGATIVE COVENANTS
The Company agrees that, for so long as any amount remains unpaid on any
Note:
7.1 Funded Debt.
(a) The Company will not, and will not permit any Consolidated
Subsidiary to, create, assume, incur, guarantee or otherwise become liable,
directly or indirectly, in respect of any Funded Debt unless, after giving
effect thereto, Consolidated Funded Debt shall not exceed 65% of
Consolidated Capitalization.
(b) The Company will not permit any Consolidated Subsidiary to create,
assume, incur, guarantee or otherwise become liable, directly or
indirectly, in respect of any Funded Debt unless, after giving effect
thereto, Exempted Debt then outstanding does not exceed 15% of Consolidated
Net Tangible Assets.
Notwithstanding the foregoing, the Company and its Consolidated
Subsidiaries may, without limit, incur or become liable in respect of
Funded Debt incurred solely for the purpose of refunding, extending or
renewing outstanding Funded Debt, provided that, after giving effect
thereto and to the application of the proceeds therefrom, there shall be no
increase in total Funded Debt outstanding.
7.2 Liens. The Company will not, and will not permit any Consolidated
Subsidiary to, create, assume, incur or permit to exist, directly or indirectly,
any Lien on its properties or assets, whether now owned or hereafter acquired
without equally and ratably securing the Notes, except:
(a) Liens, in addition to those otherwise permitted pursuant to this
Section 7.2, that exist on property of the Company or any Consolidated
Subsidiary as of the date of this Agreement and that either (i) are
described on Annex III hereto or (ii) that secure Indebtedness in a
principal amount less than $125,000;
(b) Liens existing on property of a corporation at the time it becomes
a Consolidated Subsidiary;
(c) Liens on property or shares of stock existing at the time of
acquisition thereof (including acquisition through merger or consolidation)
or Liens on property or shares of stock hereafter acquired (or, in the case
of real property, constructed), which are created prior to, at the time of,
or within 180 days after such acquisition (or, in the case of property, the
completion of such construction and commencement of full operation of such
property, whichever is later) to secure or provide for the payment of all
or any part of the purchase price (or, in the case of real property, the
construction cost) thereof (provided, however, that in each case the
Indebtedness secured by such Lien shall not exceed the fair market value of
the property or shares of stock to which such Lien relates and such
Indebtedness shall not be secured by any additional assets of the Company
or any Subsidiary other than the property being acquired and, if
applicable, fixed improvements then or thereafter erected thereon);
(d) Liens on property of a Consolidated Subsidiary to secure only
Indebtedness owing to the Company or to one or more other Wholly-Owned
Consolidated Subsidiaries;
(e) Liens existing on property of a corporation at the time such
corporation is merged into or consolidated with the Company or a
Consolidated Subsidiary or at the time of purchase, lease or other
acquisition of all or substantially all of the assets of such corporation
by the Company or a Consolidated Subsidiary; provided that such Liens shall
not extend to any additional assets of the Company or any Subsidiary other
than the property being acquired and, if applicable, fixed improvements
then or thereafter erected thereon;
(f) A lien on the Company's headquarters building located at 1390
Enclave Parkway, Houston, Texas to secure Indebtedness in an aggregate
principal amount not to exceed $25,000,000;
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(g) Liens on property of the Company or a Consolidated Subsidiary in
favor of the United States of America or any political subdivision thereof
or in favor of any other country or political subdivision thereof to secure
certain payments pursuant to any contract or statute or to secure any
Indebtedness incurred or guaranteed for the purpose of financing all or any
part of the purchase price (or, in the case of real property, the cost of
construction) of the assets subject to such liens, including, but not
limited to, liens incurred in connection with pollution control, industrial
revenue or similar bond financing;
(h) Extensions, renewals, or replacements (or any successive
extensions, renewals or replacements) in whole or in part of the Liens (or
Indebtedness secured thereby) referred to in clauses (a) through (g),
provided there is no increase in the principal amount of Indebtedness
secured thereby and any new Lien attaches only to the same property subject
to such earlier Lien;
(i) Pledges, deposits or liens to secure obligations under workmen's
compensation laws or similar legislation thereunder which are not currently
dischargeable and pledges, deposits, performance bonds or similar security
interests in connection with bids, tenders, contracts and leases to which
the Company or any Consolidated Subsidiary is a party;
(j) Attachments, judgments and other similar Liens arising in
connection with court proceedings, provided the claims secured thereby are
being actively contested in good faith and by appropriate proceedings and
such liens have not remained in effect for more than 60 days without having
been effectively stayed, vacated or bonded;
(k) Liens for taxes, assessments or governmental charges not then due
and delinquent or the validity of which is being contested in good faith
and with respect to which adequate reserves are maintained in accordance
with generally accepted accounting principles;
(l) Liens arising in the ordinary course of business (including
landlord's liens, easements and similar encumbrances) that are not incurred
in connection with the borrowing of money, provided that such Liens do not,
in the judgment of management of the Company, materially impair the use or
value of the assets of the Company, subject to such Liens or materially
interfere with the conduct of the business of the Company and its
Consolidated Subsidiaries, taken as a whole;
(m) Mechanics and materialmen's Liens or Statutory Liens or similar
Liens, each arising in the ordinary course of business of the Company or a
Consolidated Subsidiary or Liens arising out of government contracts; and
(n) Liens incurred in connection with the borrowing of money not
permitted by clauses (a) through (h) above, provided that, after giving
effect thereto, Exempted Debt outstanding does not exceed 15% of
Consolidated Net Tangible Assets.
7.3 Sale and Lease-Back Transaction. The Company will not, and will not
permit any Consolidated Subsidiary to, effect any Sale and Lease-Back
Transaction other than a Sale and Lease-Back Transaction involving a lease,
including renewals, not in excess of three years, unless (a) the Company or such
Consolidated Subsidiary could incur, pursuant to Section 7.2(a) through (n),
Indebtedness secured by a Lien on the assets to be sold at least equal in
principal amount to the Attributable Debt arising from such transaction without
equally and ratably securing the Notes, or (b) the proceeds of such Sale and
Lease-Back Transaction are at least equal to the fair market value of the assets
sold and are applied either (w) to the retirement of Indebtedness other than the
Notes, except as permitted pursuant to Section 2.2 hereof, or (x) to the
purchase (or construction) of other property having a fair market value at least
equal to the amount of the proceeds of such Sale and Lease-Back, provided that
the property purchased or constructed with such proceeds is not encumbered by
any Liens, except that Liens may attach to such property if the Indebtedness
secured by such Liens does not exceed 50% of the fair market value of the
property so purchased, or (y) to any combination of the foregoing.
7.4 Merger or Sale of Substantially All Assets. The Company will not merge
or consolidate with, or sell, lease or convey all or substantially all of its
assets to, any other Person, except that the Company may
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consolidate with, merge into or sell, lease or convey all or substantially all
of its assets to any Person, or permit any other Person to merge into it,
provided that immediately after giving effect thereto,
(a) The Company shall be the successor corporation, or if the Company
is not the successor corporation, such successor corporation shall be a
corporation organized under the laws of a state of the United States having
substantially all of its assets in the United States.
(b) The Company shall be in compliance with all provisions of this
Agreement, or if the Company is not the successor corporation, the
obligations of the Company with respect to the Notes shall be expressly
assumed in writing by such successor corporation, and such successor
corporation shall be in compliance with all provisions of this Agreement;
and
(c) The Company or the successor corporation shall be able to incur at
least $1.00 of additional Funded Debt pursuant to Section 7.1.
7.5 Dealings with Affiliates. The Company will not, and will not permit
any Subsidiary to, enter into any transaction (including the furnishing of goods
or services) with an Affiliate except in the ordinary course of business as
presently conducted and on terms and conditions no less favorable to the Company
or such Subsidiary than would be obtained in a comparable arm's-length
transaction with a Person not an Affiliate.
7.6 Consolidated Tax Returns. The Company will not file, or consent to the
filing of, any consolidated federal income tax return with any Person other than
a Subsidiary (or a corporation that was a Subsidiary during the period with
respect to which such tax return is filed).
7.7 Purchase of Notes. The Company will not, and will not permit any
Subsidiary to purchase or offer to purchase any of the Notes, except pursuant to
a written offer made to all holders or pursuant to the terms of this Agreement.
SECTION 8. EVENTS OF DEFAULT AND REMEDIES THEREFOR
8.1 Nature of Events. An "Event of Default" shall exist in case any one or
more of the following occurs and is continuing:
(a) Default in the payment of interest on any of the Notes when the
same shall have become due, and such default shall continue for 5 business
days;
(b) Default in the payment of the principal of, or premium, if any, on
any of the Notes when due, at maturity or upon acceleration of maturity or
otherwise;
(c) Default shall occur (i) in the payment of the principal of or
interest on any other Indebtedness in excess of $5,000,000, individually or
in the aggregate, as and when the same shall become due and payable, of the
Company or any Subsidiary for borrowed money, (ii) under any mortgage,
agreement or other instrument under or pursuant to which such Indebtedness
for borrowed money in excess of $5,000,000, individually or in the
aggregate, is issued, or (iii) under any Capitalized Lease, or any
operating lease with aggregate payments or rentals in excess of $5,000,000,
individually or in the aggregate, regardless of whether such default would
be an Event of Default hereunder, and such default under (i), (ii) or (iii)
above shall continue, unless waived, beyond the period of grace, if any,
allowed with respect thereto and, in the case of any default not involving
the payment of money, the sums due thereunder shall have been accelerated
and such acceleration shall not have been annulled within 10 days after
written notice of such acceleration;
(d) Default shall occur in any material respect under any other
covenant or provision of this Agreement which is not remedied within 30
days after management of the Company knows of such default;
(e) Any representation or warranty made by the Company herein, or made
by the Company in any written statement or certificate furnished by the
Company in connection with the issuance and sale of the Notes or furnished
by the Company pursuant hereto, proves incorrect in any material respect as
of the date of the issuance or making thereof;
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(f) Any judgment, writ or warrant of attachment or any similar process
in an aggregate amount in excess of $500,000 shall be entered or filed
against the Company or any Subsidiary or against any property or assets of
either and remain unpaid, unvacated, unbonded or unstayed (through appeal
or otherwise) for a period of 60 days after the Company receives notice
thereof;
(g) The Company shall incur a "Distress Termination" (as defined in
Title IV of ERISA) of any Plan or any trust created thereunder which
results in material liability to the PBGC, the PBGC shall institute
proceedings to terminate any Plan or any trust created thereunder, or a
trustee shall be appointed by a United States District Court pursuant to
Section 4042(b) of ERISA to administer any Plan or any trust created
thereunder; or
(h) The Company or any Subsidiary the assets of which are equal to at
least 10% of the assets of the Company and its Subsidiaries on a
consolidated basis shall be in financial difficulties as evidenced by
(i) its generally not paying its debts as they become due or its
admitting in writing its inability to pay its debts generally as they
become due;
(ii) its filing a petition in bankruptcy or for reorganization or
for the adoption of an arrangement under the Federal Bankruptcy Code, or
any similar applicable Federal or State bankruptcy or insolvency law, as
now or in the future amended (herein collectively called "Bankruptcy
Laws"), or an answer or other pleading admitting or failing to deny the
material allegations of such a petition or seeking, consenting to or
acquiescing in relief provided for under the Bankruptcy Laws;
(iii) its making an assignment of all or a substantial part of its
property for the benefit of its creditors;
(iv) its seeking or consenting to or acquiescing in the appointment
of a receiver, liquidator, custodian or trustee of it or for all or a
substantial part of its property;
(v) its being finally adjudicated a bankrupt or insolvent;
(vi) the entry of a court order, which shall not be vacated, set
aside or stayed within 60 days from the date of entry, appointing a
receiver, liquidator, custodian or trustee of it or for all or a
substantial part of its property, or approving a petition filed against
it for, or effecting an arrangement in, bankruptcy or for a
reorganization pursuant to the Bankruptcy Laws or for any other judicial
modification or alteration of the rights of creditors; or
(vii) the assumption of custody or sequestration by a court of
competent jurisdiction of all or a substantial part of its property,
which custody or sequestration shall not be suspended or terminated
within 60 days from its inception.
8.2 Remedies on Default. When (i) any Event of Default described in
Section 8.1 hereof, except paragraphs (a) and (b) thereof, has happened and is
continuing, the holder or holders of at least 25% in principal amount of the
Notes then outstanding may, and when (ii) any Event of Default described in
paragraphs (a) or (b) of Section 8.1 hereof has happened and is continuing, any
holder may (in addition to any other right, power or remedy permitted to such
holder or holders by law) declare the entire principal, together with the
premium, if any, set forth below, and all interest accrued on all the Notes then
outstanding to be, and, in either of such events or when any Event of Default
described in paragraph (h) of Section 8.1 hereof has happened and is continuing,
all of such Notes and, the premium, if any, and all interest accrued thereon
shall thereupon become, forthwith due and payable, without any presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived. The Company will forthwith pay to the holder or holders of all the Notes
then outstanding the entire principal of and interest accrued (including, but
not limited to, any interest due with respect to overdue installments of
interest) on such Notes, plus the premium, if any, payable as calculated
pursuant to Section 2.2(b).
8.3 Annulment of Acceleration of Notes. The provisions of the foregoing
Section 8.2 are subject to the condition that if the principal of and accrued
interest on the Notes have been declared immediately due and payable by reason
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reason of the occurrence of any Event of Default, the holder or holders of
66- 2/3% in aggregate principal amount of the Notes then outstanding may, by
written instrument filed with the Company, rescind and annul such declaration
and the consequences thereof, provided that (i) at the time such declaration is
annulled and rescinded no judgment or decree has been entered for the payment of
any monies due pursuant to the Notes or this Agreement, (ii) all arrears of
interest upon all the Notes and all other sums payable under the Notes and under
this Agreement (except any principal, interest or premium on the Notes which has
become due and payable solely by reason of such declaration under Section 8.2)
shall have been duly paid and (iii) each and every other Event of Default shall
have been cured or waived; and provided further, that no such rescission and
annulment shall extend to or affect any subsequent default or Event of Default
or impair any right consequent thereto.
8.4 Other Remedies. If any Event of Default shall be continuing, any
holder of Notes may enforce its rights by suit in equity, by action at law, or
by any other appropriate proceedings, whether for the specific performance (to
the extent permitted by law) of any covenant or agreement contained in this
Agreement or in the Notes or in aid of the exercise of any power granted in this
Agreement, and may enforce the payment of any Note held by such holder and any
of its other legal or equitable rights.
8.5 Conduct No Waiver; Collection Expenses. No course of dealing on the
part of any holder of Notes, nor any delay or failure on the part of any holder
of Notes to exercise any of its rights, shall operate as a waiver of such rights
or otherwise prejudice such holder's rights, powers and remedies. If the Company
fails to pay, when due, the principal of, or the interest on, any Note, or fails
to comply with any other provision of this Agreement, the Company will pay to
each holder, to the extent permitted by law, on demand, such further amounts as
shall be sufficient to cover the cost and expenses, including but not limited to
reasonable attorneys' fees, incurred by such holders of the Notes in collecting
any sums due on the Notes or in otherwise enforcing any of their rights.
8.6 Remedies Cumulative. No right or remedy conferred upon or reserved to
any holder of Notes under this Agreement is intended to be exclusive of any
other right or remedy, and every right and remedy shall be cumulative and in
addition to every other right or remedy given hereunder or now or hereafter
existing under any applicable law. Every right and remedy given by this
Agreement or by applicable law to any holder of Notes may be exercised from time
to time and as often as may be deemed expedient by such holder, as the case may
be.
8.7 Notice of Default. With respect to Events of Default or claimed
defaults, the Company will give the following notices:
(a) The Company will promptly, but in any event in no more than five
business days, furnish to each holder of a Note notice in writing by
registered mail, return receipt requested, of the occurrence of an Event of
Default or an event which, with the lapse of time or the giving of notice,
or both, would become an Event of Default. Such notice shall specify the
nature of such default, the period of existence thereof and what action the
Company has taken or is taking or proposes to take with respect thereto.
(b) If the holder of any Note or of any other evidence of indebtedness
of the Company or any Subsidiary gives any notice or takes any other action
of which the Company has notice with respect to a claimed default, the
Company will forthwith give written notice thereof to each holder of the
then outstanding Notes, describing the notice or action and the nature of
the claimed default.
SECTION 9. AMENDMENTS, WAIVERS AND CONSENTS
9.1 Matters Subject to Modification. Any term, covenant, agreement or
condition of this Agreement may, with the consent of the Company, be amended, or
compliance therewith may be waived (either generally or in a particular instance
and either retroactively or prospectively), if the Company shall have obtained
the consent in writing of the holder or holders of at least 66- 2/3% in
aggregate principal amount of outstanding Notes; provided, however, that without
the written consent of the holder or holders of all of the Notes then
outstanding, no such waiver, modification, alteration or amendment shall be
effective which will (i) change the time or amount of payment (including any
required prepayment or optional prepayment) of the principal of, or the
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premium or interest on, any Note, (ii) reduce the principal amount thereof or
the premium, if any, or reduce the rate of interest thereon, (iii) change any
provision of any instrument affecting the preferences between holders of the
Notes or between holders of the Notes and other creditors of the Company, or
(iv) change any of the provisions of Section 8.1, Section 8.2, Section 8.3 or
this Section 9.
For the purpose of determining whether holders of the requisite principal
amount of Notes have made or concurred in any waiver, consent, approval, notice
or other communication under this Agreement, Notes held in the name of, or owned
beneficially by, the Company, any Subsidiary or any Affiliate of any thereof,
shall not be deemed outstanding.
9.2 Solicitation of Holders of Notes. The Company will not solicit,
request or negotiate for or with respect to any proposed waiver or amendment of
any of the provisions of this Agreement or the Notes unless each holder of the
Notes (irrespective of the amount of Notes then owned by it) shall concurrently
be informed thereof by the Company and shall be afforded the opportunity of
considering the same and shall be supplied by the Company with sufficient
information to enable it to make an informed decision with respect thereto.
Executed or true and correct copies of any waiver or consent effected pursuant
to the provisions of this Article 9 shall be delivered by the Company to each
holder of outstanding Notes forthwith following the date on which the same shall
have been executed and delivered by the holder or holders of the requisite
percentage of outstanding Notes. The Company will not, directly or indirectly,
pay or cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, to any holder of the Notes as
consideration for or as an inducement to the entering into by any holder of the
Notes of any waiver or amendment of any of the terms and provisions of this
Agreement unless such remuneration is concurrently paid, on the same terms,
ratably to each holder of the then outstanding Notes.
9.3 Binding Effect. Any such amendment or waiver shall apply equally to
all the holders of the Notes and shall be binding upon them, upon each future
holder of any Note and upon the Company whether or not such Note shall have been
marked to indicate such amendment or waiver. No such amendment or waiver shall
extend to or affect any obligation not expressly amended or waived or impair any
right related thereto.
SECTION 10. FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE AND
REPLACEMENT
10.1 Form of Notes. The Notes initially delivered under this Agreement
will be in the form attached hereto as Exhibit A. The Notes are issuable only in
fully registered form and in denominations of at least $100,000 (or the
remaining outstanding balance thereof, if less than $100,000).
10.2 Note Register. The Company shall cause to be kept at its principal
office a register (the "Note Register") for the registration and transfer of the
Notes. The names and addresses of the holders of Notes, the transfer thereof and
the names and addresses of the transferees of the Notes shall be registered in
the Note Register. The Company may deem and treat the person in whose name a
Note is so registered as the holder and owner thereof for all purposes and shall
not be affected by any notice to the contrary, until due presentment of such
Note for registration of transfer as provided in this Section 10.
10.3 Issuance of New Notes upon Exchange or Transfer. Upon surrender for
exchange or registration of transfer of any Note at the office of the Company
designated for notices in accordance with Section 11.2, the Company shall
execute and deliver, at its expense, one or more new Notes of any authorized
denominations requested by the holder of the surrendered Note, each dated the
date to which interest has been paid on the Notes so surrendered (or, if no
interest has been paid, the date of such surrendered Note), but in the same
aggregate unpaid principal amount as such surrendered Note, and registered in
the name of such person or persons as shall be designated in writing by such
holder. Every Note surrendered for registration of transfer shall be duly
endorsed, or be accompanied by a written instrument transfer duly executed, by
the holder of such Note or by his attorney duly authorized in writing. The
Company may condition its issuance of any new Note in connection with a transfer
by any Person on compliance by both transferee and transferor with Section 3.2,
by Institutional Holders on compliance with Section 2.4 and on the payment to it
of a sum sufficient to cover any stamp tax or other governmental charge imposed
in respect of such transfer.
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10.4 Replacement of Notes. Upon receipt of evidence satisfactory to the
Company of the loss, theft, mutilation or destruction of any Note, and in the
case of any such loss, theft or destruction upon delivery of a bond of indemnity
in such form and amount as shall be reasonably satisfactory to the Company or in
the event of such mutilation upon surrender and cancellation of the Note, the
Company, without charge to the holder thereof, will make and deliver a new Note,
of like tenor in lieu of such lost, stolen, destroyed or mutilated Note. If any
such lost, stolen or destroyed Note is owned by you or any other Institutional
Holder, then the affidavit of an authorized officer of such owner setting forth
the fact of loss, theft or destruction and of its ownership of the Note at the
time of such loss, theft or destruction shall be accepted as satisfactory
evidence thereof, and no further indemnity shall be required as a condition to
the execution and delivery of a new Note, other than a written agreement of such
owner (in form reasonably satisfactory to the Company) to indemnify the Company.
SECTION 11. MISCELLANEOUS
11.1 Expenses. Whether or not the purchase of Notes herein contemplated
shall be consummated, the Company agrees to pay directly all reasonable expenses
in connection with the preparation, execution and delivery of this Agreement and
the transactions contemplated hereby, including, but not limited to, out-of-
pocket expenses, filing fees related to the obtaining of a "private placement
number" from Standard & Poor's Corporation, charges and disbursements of special
counsel, photocopying and printing costs and charges for shipping the Notes,
adequately insured, to you at your home office or at such other address as you
may designate, and all similar expenses relating to any amendment, waivers or
consents in connection with this Agreement or the Notes. The Company also agrees
that it will pay and save you harmless against any and all liability with
respect to stamp and other documentary taxes, if any, which may be payable, or
which may be determined to be payable in connection with the execution and
delivery of this Agreement or the Notes (but not in connection with a transfer
of any Notes), whether or not any Notes are then outstanding. The obligations of
the Company under this Section 11.1 shall survive the retirement of the Notes.
11.2 Notices. Except as otherwise expressly provided herein, all
communications provided for hereunder shall be in writing and delivered or sent
by registered or certified mail, return receipt requested, or by overnight
courier (i) if to you, to the address set forth in Schedule I hereto or to such
other address as you may in writing designate, (ii) if to any other holder of
the Notes, to such address as the holder may designate in writing to the
Company, and (iii) if to the Company, to Sysco Corporation, 1390 Enclave
Parkway, Houston, Texas 77077, Attention: General Counsel, or to such other
address as the Company may in writing designate.
11.3 Reproduction of Documents. This Agreement and all documents relating
hereto, including, without limitation (a) consents, waivers and modifications
which may hereafter be executed, (b) documents received by you at the closing of
the purchase of the Notes (except the Notes themselves), and (c) financial
statements, certificates and other information previously or hereafter furnished
to you, may be reproduced by you by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process, and you may destroy
any original document so reproduced. The Company agrees and stipulates that any
such reproduction which is legible shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made by you in
the regular course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence;
provided that nothing herein contained shall preclude the Company from objecting
to the admission of any reproduction on the basis that such reproduction is not
accurate, has been altered, is otherwise incomplete or is otherwise
inadmissible.
11.4 Successors and Assigns. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and
assigns.
11.5 Law Governing. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS. No provision of this
Agreement may be waived, changed or modified, or the discharge thereof
acknowledged, orally, except only by
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an agreement in writing signed by the party against whom the enforcement of any
waiver, change, modification or discharge is sought.
11.6 Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
11.7 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument, and it shall
not be necessary in making proof of this Agreement to produce or account for
more than one such counterpart or reproduction thereof permitted by Section
11.3.
11.8 Reliance on and Survival of Provisions. All covenants,
representations and warranties made by the Company herein and in any
certificates delivered pursuant hereto, whether or not in connection with a
closing, (i) shall be deemed to have been relied upon by you, notwithstanding
any investigation heretofore or hereafter made by you or on your behalf and (ii)
shall survive the delivery of this Agreement and the Notes. Except as provided
in Section 11.1 or otherwise in this Agreement, such representations and
warranties shall not survive the payment in full of all principal of, premium,
if any, on and interest on the Notes.
11.9 Integration and Severability. This Agreement embodies the entire
agreement and understanding between you and the Company, and supersedes all
prior agreements and understandings relating to the subject matter hereof. In
case any one or more of the provisions contained in this Agreement or in any
Note, or application thereof, shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein, and any other application thereof, shall not in
any way be affected or impaired thereby.
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IN WITNESS WHEREOF, the Company and the Purchasers have caused this
Agreement to be executed and delivered by their respective officer or officers
thereunto duly authorized.
SYSCO CORPORATION
By: /s/ William J. DeLaney
------------------------------------
Title: Assistant Treasurer
AID ASSOCIATION FOR LUTHERANS
By: /s/ James Abitz
------------------------------------
Title: Vice President -- Securities
UNUM LIFE INSURANCE COMPANY
By: /s/ John N. Hastings
------------------------------------
Title: Vice President
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ Dorothy E. Even
------------------------------------
Title:
By: /s/ Peter D. Wells
------------------------------------
Title:
THE GREAT-WEST LIFE ASSURANCE
COMPANY
By: /s/ J.R. Abbott
------------------------------------
Title: Director, Private Placement
Investments (U.S.)
By: /s/ E.A. Marr
------------------------------------
Title: Manager, Private Placement
Investments (U.S.)
NATIONWIDE LIFE INSURANCE
COMPANY
By: /s/ Jeffrey G. Milburn
------------------------------------
Title: Vice President Corporate
Fixed-Income Securities
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UNUM LIFE INSURANCE COMPANY OF
AMERICA
By: /s/ John N. Hastings
------------------------------------
Title: Vice President
KNIGHTS OF COLUMBUS
By: /s/ George R. Humphrey
------------------------------------
Title: Assistant Supreme Secretary
ALLSTATE LIFE INSURANCE COMPANY
OF NEW YORK
By: /s/ Peter D. Wells
------------------------------------
Title:
By: /s/ Theodore A. Schnell
------------------------------------
Title:
THE HANOVER INSURANCE COMPANY
By: /s/ Dennis P. Howard
------------------------------------
Title: Assistant Treasurer
MODERN WOODMEN OF AMERICA
By: /s/ W.B. Foster
------------------------------------
Title: President
EMPLOYERS LIFE INSURANCE COMPANY
OF WAUSAU
By: /s/ John G. Powles
------------------------------------
Title: Vice President
CITIZENS INSURANCE COMPANY OF
AMERICA
By: /s/ Diane E. Wood
------------------------------------
Title: Assistant Treasurer
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UNITY MUTUAL LIFE INSURANCE
COMPANY
By: /s/ Elizabeth O'Riordan
------------------------------------
Title: Investment Operations Manager
Congress Asset Management
Company on behalf of Unity
Mutual Life Ins. Co.
PROVIDENT MUTUAL LIFE INSURANCE
COMPANY OF PHILADELPHIA
By: /s/ Rosanne Gatta
------------------------------------
Title: Treasurer
WOODMEN ACCIDENT AND LIFE
COMPANY
By: /s/ H.A. Wievers
------------------------------------
Title: Senior Vice President and
Treasurer
25
30
SCHEDULE I
----------------
PRINCIPAL AMOUNT OF NOTES TO BE PURCHASED
PRINCIPAL AMOUNT
NAME AND ADDRESS OF PURCHASER OF NOTES
----------------------------- ----------------
Aid Association for Lutherans $20,000,000
4321 North Ballard Road
Appleton, Wisconsin 54919
Attention: Investment Department
Address for all communications is as above, except that
notices of payment and written confirmations of wire or
interbank transfers, are to be sent as below. All payments
are to be by wire transfer of immediately available funds
to:
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60690
ABA # 071 000 288
For deposit in the account of Aid Association for
Lutherans Account No. 164-096-0
Each wire transfer shall show the name of the Company, the
due date of the payment and the nature thereof.
All notices and communications, to be addressed as first
provided above, except notices with respect to payments,
and written confirmation of each such payment, shall be
provided by telephone and in writing to:
Aid Association for Lutherans
4321 North Ballard Road
Appleton, Wisconsin 54919
Attention: Investment Accounting
Telephone #:
26
31
SCHEDULE I
----------------
(CONTINUED)
PRINCIPAL AMOUNT OF NOTES TO BE PURCHASED
PRINCIPAL AMOUNT
NAME AND ADDRESS OF PURCHASER OF NOTES
----------------------------- ----------------
UNUM Life Insurance Company $15,000,000
Corporate Securities Department
2211 Congress Street
Portland, Maine 04122
Attention: Bond Investment Division
(Fax # (207) 770-3000)
Address for all communications is as above, except that
notices of payment and written communications of wire or
inter-bank transfers are to be sent to the address
specified below. All payments are to be by wire transfer
of immediately available funds to:
Maine National Bank
ABA #011200051
400 Congress Street
Portland, Maine 04101
For deposit in the account of UNUM Life Insurance Company
Account No. 000-0062-0
Each wire transfer shall show the name of the company, the
due date of the payment and the nature thereof.
Address for all notices of payment and written
confirmations:
UNUM Life Insurance Company
2211 Congress Street
Portland, Maine 04122
Attention: Investment Accounting
(Fax # (707) 770-3000)
27
32
SCHEDULE I
----------------
(CONTINUED)
PRINCIPAL AMOUNT OF NOTES TO BE PURCHASED
PRINCIPAL AMOUNT
NAME AND ADDRESS OF PURCHASER OF NOTES
----------------------------- ----------------
The Great-West Life Assurance Company $10,000,000
100 Osborne Street, North
Winnipeg, Manitoba R3C 3A5 Canada
Attention: Private Placement Investments -- U.S.
(Portage Place, Fourth Floor 393 Portage)
(Fax # (204) 946-8951)
Address for all communications is as above, except that
notices of payment and written confirmations of wire or
interbank transfers, are to be sent as below. All payments
are to be by wire transfer of immediately available funds
to:
NORWEST BANK MINNEAPOLIS, N.A.
ABA # 091000019
8th Street and Marquette Avenue
Minneapolis, Minnesota 55479-0065
For deposit to Trust Clearing Account #08-40-245 for the
Account of Great-West Life Assurance Company Account No.
7-06277-00-1
Each wire transfer shall show the name of the company, the
due date of the payment and the nature thereof.
Address for all notices of payment and written
confirmations:
NORWEST BANK MINNEAPOLIS, N.A.
Capital Management and Trust Group
Eighth Street and Marquette Avenue
Minneapolis, Minnesota 55479-0065
Attn: Dan Mroz
Fax #: (612) 372-0551
28
33
SCHEDULE I
----------------
(CONTINUED)
PRINCIPAL AMOUNT OF NOTES TO BE PURCHASED
PRINCIPAL AMOUNT
NAME AND ADDRESS OF PURCHASER OF NOTES
----------------------------- ----------------
Allstate Life Insurance Company $ 7,000,000
Allstate Plaza North E-2
Northbrook, Illinois 60062
Attention: Private Placement Taxable
Fixed Income Division E2
Address for all communications is as above, including
notices of payment and confirmations of wire or inter-bank
transfers. All payments are to be by wire transfer of
immediately available funds to:
Continental Illinois National Bank and Trust Company
(ABA # 071000039)
30 North LaSalle Street
Chicago, Illinois 60693
Attention: Trade Trust Teller
For deposit in the Account of Allstate Life Insurance
Company Account No. 17-00011-8
Each wire transfer shall show the name of the company, the
due date of the payment and the nature thereof.
29
34
SCHEDULE I
----------------
(CONTINUED)
PRINCIPAL AMOUNT OF NOTES TO BE PURCHASED
PRINCIPAL AMOUNT
NAME AND ADDRESS OF PURCHASER OF NOTES
----------------------------- ----------------
Nationwide Life Insurance Company $ 7,000,000
One Nationwide Plaza
Columbus, Ohio 43216
Attention: Fixed Income Securities
Address for all communications is as above, except that
notices of payment and written confirmations of wire or
inter-bank transfers, are to be sent as below. All
payments are to be by bank wire transfer of immediately
available funds to:
AMERITRUST
Trust # 30352900
ABA # 041000687
FAO Nationwide Life Insurance Company
One Nationwide Plaza
Columbus, Ohio 43216
Attention: Cash Division, Money and Banking
Each wire transfer shall show the name of the Company, the
due date of the payment and the nature thereof.
Address for all notices of payment and written
confirmations:
Nationwide Life Insurance Company
One Nationwide Plaza
Columbus, Ohio 43216
Attention: Cash Division, Money and Banking
30
35
SCHEDULE I
----------------
(CONTINUED)
PRINCIPAL AMOUNT OF NOTES TO BE PURCHASED
PRINCIPAL AMOUNT
NAME AND ADDRESS OF PURCHASER OF NOTES
----------------------------- ----------------
The Hanover Insurance Company $ 5,000,000
100 N. Parkway
Worcester, Massachusetts 01605
Attention: Investment Administration
Address for all notices of payment, written confirmations
and other communications shall be as above. All payments
are to be by wire transfer of immediately available funds
to:
The Chase Manhattan Bank, N.A.
ABA # 02100002
One Chase Manhattan Plaza
New York, New York 10081
Attn: Worldwide Insurance Division
For deposit in the Account of The Hanover Insurance
Company Demand Deposit Account No. 9101392943
Each wire transfer shall show the name of the company, the
due date of the payment and the nature thereof.
31
36
SCHEDULE I
----------------
(CONTINUED)
PRINCIPAL AMOUNT OF NOTES TO BE PURCHASED
PRINCIPAL AMOUNT
NAME AND ADDRESS OF PURCHASER OF NOTES
----------------------------- ----------------
UNUM Life Insurance Company of America $ 5,000,000
Corporate Securities Department
2211 Congress Street
Portland, Maine 04122
Attention: Bond Investment Division
(Fax # (207) 770-3000)
Address for all communications is as above, except that
notices of payment and written communications of wire or
inter-bank transfers are to be sent to the address
specified below. All payments are to be by wire transfer
of immediately available funds to:
Casco Northern Bank
ABA # 011200022
One Monument Square
Portland, Maine
For deposit in the Account of UNUM Life Insurance Company
of America No. 00-039-976
Each wire transfer shall show the name of the company, the
due date of the payment and the nature thereof.
Address for all notices of payment and written
confirmations:
UNUM Life Insurance Company of America
2211 Congress Street
Portland, Maine 04122
Attention: Investment Accounting
32
37
SCHEDULE I
----------------
(CONTINUED)
PRINCIPAL AMOUNT OF NOTES TO BE PURCHASED
PRINCIPAL AMOUNT
NAME AND ADDRESS OF PURCHASER OF NOTES
----------------------------- ----------------
Knights of Columbus $ 5,000,000
Supreme Office
One Columbus Plaza
New Haven, Connecticut 06507
Attention: Investment Department
Address for all communications is as above, except that
notices of payment and written confirmations of wire or
inter-bank transfers are to be sent to the address
specified below. All payments are to be by wire transfer
of immediately available funds to:
Connecticut National Bank and Trust Company
ABA # -----------------------------
One Constitution Plaza
Hartford, Connecticut 06115
For deposit in the Account of Knights of Columbus Account
No. 081-666-3
Each wire transfer shall show the name of the company, the
due date of the payment and the nature thereof.
Address for all notices of payment, written confirmations
and other communications:
Knights of Columbus
One Columbus Plaza
New Haven, Connecticut 06507
Attn: Accounting Department
33
38
SCHEDULE I
----------------
(CONTINUED)
PRINCIPAL AMOUNT OF NOTES TO BE PURCHASED
PRINCIPAL AMOUNT
NAME AND ADDRESS OF PURCHASER OF NOTES
----------------------------- ----------------
Allstate Life Insurance Company of New York $ 3,000,000
Allstate Plaza North
Northbrook, Illinois 60062
Attention: Investment Department -- Private Placement
Taxable Fixed Income Division E2
Address for all notices of payment, written confirmations
and other communications is as above. All payments are to
be by wire transfer of immediately available funds to:
Marine Midland Bank, N.A.
ABA # 0210-0108-8
140 Broadway
New York, New York 10015
Attention: Trust Teller
For deposit in the Account of Allstate Life Insurance
Company Account No. 007-3761-0
Each wire transfer shall show the name of the company, the
due date of the payment and the nature thereof.
34
39
SCHEDULE I
----------------
(CONTINUED)
PRINCIPAL AMOUNT OF NOTES TO BE PURCHASED
PRINCIPAL AMOUNT
NAME AND ADDRESS OF PURCHASER OF NOTES
----------------------------- ----------------
Modern Woodmen of America $ 3,000,000
Mississippi River at 17th Street
Rock Island, Illinois 61201
Attention: Investment Department
Address for all communications is as above, except that
notices of payment and written confirmations of wire or
inter-bank transfers are to be sent to the address
specified below. All payments are to be by wire transfer
of immediately available funds to:
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60690
ABA # 071-000288
For deposit in the account of Modern Woodmen of America
Account No. 34-79045
Each wire transfer shall show the name of the company, the
due date of the payment and the nature thereof.
Address for all notices of payment, written confirmations
and other communications:
Modern Woodmen of America
Mississippi River at 17th Street
Rock Island, Illinois 61201
Attention: General Accounting Department
35
40
SCHEDULE I
----------------
(CONTINUED)
PRINCIPAL AMOUNT OF NOTES TO BE PURCHASED
PRINCIPAL AMOUNT
NAME AND ADDRESS OF PURCHASER OF NOTES
----------------------------- ----------------
Employers Life Insurance Company of Wausau $ 3,000,000
2000 Westwood Avenue
Wausau, Wisconsin 54401
Attention:
All payments are to be by wire transfer of immediately
available
funds to:
First Wisconsin National Bank
Milwaukee, Wisconsin
for credit to: First Wisconsin
Trust Company Account No. 112-950-027
for further credit to: Employers
Life Insurance Company of Wausau
Account No. 600557511
Each wire transfer shall show the name of the company, the
due date of the payment and the nature thereof.
Address for all notices of payment, written confirmations
and other communications:
Employers Life Insurance Company of Wausau
One Nationwide Plaza -- 33T
Columbus, OH 43216
Attn: Corporate Fixed-Income Securities
[Registered in the name of Empl & Co.]
36
41
SCHEDULE I
----------------
(CONTINUED)
PRINCIPAL AMOUNT OF NOTES TO BE PURCHASED
PRINCIPAL AMOUNT
NAME AND ADDRESS OF PURCHASER OF NOTES
----------------------------- ----------------
Citizens Insurance Company of America $ 3,000,000
645 West Grand River
Howell, Michigan 48843
Attention: Investment Administration
Address for all notices of payment, written confirmations
and other communications is as above. All payments are to
be by wire transfer of immediately available funds to:
The Chase Manhattan Bank, N.A.
ABA # 021000021
One Chase Manhattan Plaza
New York, New York 10081
Attn: Insurance Division
For deposit in Custodial Demand Deposit Account #
9009000168 for the Account of Citizens Insurance Company
of America Account No. G01039.
Each wire transfer shall show the name of the company, the
due date of the payment and the nature thereof.
37
42
SCHEDULE I
----------------
(CONTINUED)
PRINCIPAL AMOUNT OF NOTES TO BE PURCHASED
PRINCIPAL AMOUNT
NAME AND ADDRESS OF PURCHASER OF NOTES
----------------------------- ----------------
Unity Mutual Life Insurance Company $ 2,500,000
c/o Congress Asset Management
105 Chauncy Street
Boston, Massachusetts 02111
Attention:
Address for all communications is as above, except that
notices of payment and written confirmations by wire or
inter-bank transfers are to the address specified below.
All payments are to be by wire transfer of immediately
available funds to:
Lincoln/ROCH/Trust ABA # 022300173
For deposit to the Account of Unity Mutual Life Insurance
Company Account # 611002310
Attention: Carol Eckton, Ext. 6973
Each wire transfer shall show the name of the company, the
due date of the payment and the nature thereof.
Address for all notices of payment and written
confirmations:
Original Confirmation:
Chase Lincoln First Bank, N.A.
IAMG/Unity Mutual Life Insurance Company
P.O. Box 1412
Rochester, New York 14603
Duplicate confirmation:
Unity Mutual Life Insurance Company
One Unity Plaza
Syracuse, New York 13215-0068
Attn: Toni McFadden
Triplicate confirmation:
Betsy O'Riordan
Congress Asset Management Company
105 Chauncy Street
7th Floor
Boston, Massachusetts 02111
Nominee Name: PENLIN
38
43
SCHEDULE I
----------------
(CONTINUED)
PRINCIPAL AMOUNT OF NOTES TO BE PURCHASED
PRINCIPAL AMOUNT
NAME AND ADDRESS OF PURCHASER OF NOTES
----------------------------- ----------------
Provident Mutual Life Insurance Company of Philadelphia $ 2,000,000
1600 Market Street, 4th Floor
P.O. Box 7378
Philadelphia, Pennsylvania 19103
All payments are to be by wire transfer of immediately
available funds to:
Provident National Bank of Philadelphia
ABA # 031000053
For deposit in the General Account of Provident Mutual
Life Insurance Company No. 200-049-0
Each wire transfer shall show the name of the company, the
due date of the payment and the nature thereof.
Address for all notices of payment, written confirmations
and other communications:
Provident Mutual Life Insurance Company of Philadelphia
1600 Market Street, 4th Floor
P.O. Box 7378
Philadelphia, Pennsylvania 19101
Attn: Treasurer
39
44
SCHEDULE I
----------------
(CONTINUED)
PRINCIPAL AMOUNT OF NOTES TO BE PURCHASED
PRINCIPAL AMOUNT
NAME AND ADDRESS OF PURCHASER OF NOTES
----------------------------- ----------------
Woodmen Accident and Life Company $ 1,000,000
1526 K Street
Lincoln, Nebraska 68501
Attention:
All payments are to be by wire transfer of immediately
available funds to:
FirsTier Bank Lincoln, N.A.
ABA # 104000032
13 and M Streets
Lincoln, Nebraska 68501
For deposit in the account of the Woodmen Accident and
Life Insurance Company General Fund Account No. 092-909
Each wire transfer shall show the name of the company, the
due date of the payment and the nature thereof.
Address for all notices of payment, written confirmations
and other communications:
Woodmen Accident and Life Company
P.O. Box 82288
1526 K Street
Lincoln, Nebraska 68501
Attn: Securities Division
Telecopy No.: 402-437-4392
40
45
ANNEX I
SUBSIDIARIES OF THE COMPANY
I. SUBSIDIARIES OF SYSCO CORPORATION
COMPANY JURISDICTION OF INCORPORATION
------- -----------------------------
AOD, Inc. (Inactive)........................................ Illinois
Allied-Sysco Food Services, Inc............................. California
Arrow-Sysco Food Services, Inc.............................. Delaware
Baraboo-Sysco Food Services, Inc............................ Wisconsin
Bell-Sysco Food Services, Inc............................... North Carolina
CFS Bakeries, Inc. (Inactive)............................... California
CFS Continental Transportation Company (Inactive)*.......... Illinois
CFS Interstate Foods, Inc. (Inactive)....................... New Jersey
Continental-Keil, Inc....................................... Montana
Continental of Miami, Inc................................... Delaware
Continental of Orlando, Inc................................. Delaware
Deaktor/Sysco Food Services Co.............................. Pennsylvania
DiPaolo/Sysco Food Services, Inc............................ Ohio
FSB, Inc. (Inactive)........................................ Delaware
Favorite Chef, Inc. (Inactive).............................. Illinois
Foodservice Specialists, Inc................................ Delaware
Galaxy Transportation Services, Inc......................... Delaware
Glencoe-Sysco Food Services Co.............................. California
Global Frozen Foods, Inc. (Alfmark, a division)............. Delaware
Grants-Sysco Food Services, Inc............................. Michigan
Gregg Foods, Inc. (Inactive)................................ Delaware
HFP-Sysco Food Services, Inc................................ Virginia
Hardin's-Sysco Food Services, Inc........................... Tennessee
IFC, Inc. (Inactive)........................................ Illinois
K. W. Food Distributors Ltd.*............................... British Columbia, Canada
Koon-Sysco Food Services, Inc............................... Kentucky
Lankford-Sysco Food Services, Inc........................... Maryland
Maine/Sysco, Inc............................................ Maine
Major-Sysco, Inc............................................ California
Mid-Central/Sysco Food Services, Inc........................ Missouri
Miesel/Sysco Food Service Co................................ Michigan
New York Tea-Sysco Food Service Co.......................... Minnesota
Nobel/Sysco Food Services Co................................ Colorado
41
46
ANNEX I
SUBSIDIARIES OF THE COMPANY -- (CONTINUED)
COMPANY JURISDICTION OF INCORPORATION
------- -----------------------------
Pegler-Sysco Food Services Co............................... Nebraska
Pegler-Sysco Transportation Co.............................. Nebraska
The Perseco Company (Name Saver)*........................... Illinois
Puramco, Ltd. (Name Saver).................................. Delaware
Puramco U.S.A., Inc. (Name Saver)*.......................... Illinois
Robert Orr-Sysco Food Services Co. ......................... Tennessee
Select-Sysco Foods, Inc..................................... California
Smelkinson Brothers Corporation (Name Saver)*............... Maryland
Sugar Foods, Inc............................................ Delaware
The Sygma Network, Inc...................................... Delaware
Sysco/Avard Continental Food Services, Inc.................. Delaware
Sysco/Continental Food Services of Atlanta, Inc............. Delaware
Sysco/Continental Food Services of Chicago, Inc............. Delaware
Sysco/Continental Food Services of Indianapolis, Inc........ Delaware
Sysco/Continental Food Services of Iowa, Inc................ Delaware
Sysco/Continental Food Services of Los Angeles, Inc......... Delaware
Sysco/Continental Food Services of Minnesota, Inc........... Delaware
Sysco/Continental Food Services of Phoenix, Inc............. Delaware
Sysco/Continental Food Services of Pittsburgh, Inc.......... Delaware
Sysco/Continental Food Services of Portland, Inc............ Delaware
Sysco/Continental Food Services of Seattle, Inc............. Delaware
Sysco/Continental Institutional Food Services of Macon,
Inc....................................................... Delaware
Sysco/Continental Keil Food Services, Inc................... Delaware
Sysco/Continental Mulberry Food Services, Inc............... Delaware
Sysco/Continental Smelkinson Food Services, Inc............. Delaware
Sysco Equipment & Furnishings Co............................ Delaware
Sysco Food Services, Inc.................................... Texas
Sysco Food Services of Beaumont, Inc........................ Texas
Sysco Food Services Southeast, Inc.......................... Georgia
Sysco Food Systems, Inc..................................... Texas
Sysco Frosted Foods, Inc.................................... New York
Sysco/Frost-Pack Food Services, Inc......................... Michigan
Sysco/General Food Services, Inc............................ Idaho
Sysco/Louisville Food Services Co........................... Kentucky
Sysco-Rome Food Services, Inc............................... Georgia
Testing Consultants, Inc. (Inactive)........................ Illinois
Vernon, Inc. (Inactive)..................................... California
Vogel/Sysco Food Service, Inc............................... Arkansas
- ---------------
* This subsidiary is not in good standing under the laws of its jurisdiction of
incorporation.
42
47
ANNEX II
LIST OF MULTI-EMPLOYER PLANS
--------------------------------
COMPANY LOCAL PLAN
------- ----------- ----
Allied IBT #150 Western Conference of Teamsters Pension Trust Fund
IBT #431 Western Conference of Teamsters Pension Trust Fund
IBT #588 Western Conference of Teamsters Pension Trust Fund
Deaktor UFW # 23 United Food & Commercial Workers International
Union -- Industry Pension Fund
Glencoe IBT #572 Western Conference of Teamsters Pension Trust Fund
IBT #683 Western Conference of Teamsters Pension Trust Fund
IBT #381 Western Conference of Teamsters Pension Trust Fund
Global IBT #805 Local 805 Pension and Retirement Fund
Grants IBT #486 Central States, Southeast & Southwest Areas Pension Fund
(American National Bank, P. O. Box 1431, Chicago,
Illinois 60690; Account No. 7000)
Mid-Central IBT #955 Central States, Southeast and Southwest Areas, Pension
Fund
Miesel/Detroit IBT #337 Michigan Conference of Teamsters Welfare Fund SOA Plan
Michigan Conference of Teamsters Welfare Fund SUE Plan
(Account at National Bank of Detroit)
Central States, Southeast and Southwest Areas Pension
Fund
(American National Bank, P. O. Box 1431, Chicago,
Illinois 60690; Account No. 7000)
Miesel/Cleveland IBT #507 Teamsters Local #507 Pension Fund
Nobel/Albuquerque IBT #492 Western Conference of Teamsters Pension Trust Fund
Nobel/Denver IBT #435 Western Conference of Teamsters Pension Trust Fund
Select-Sysco IBT #588 Western Conference of Teamsters Pension Trust Fund
IBT #137 Western Conference of Teamsters Pension Trust Fund
IBT #190 Automotive Industries Pension Trust Fund
Sysco Food Services IBT #657 Central States, Southeast Area, Pension Fund
of Austin
(decertified 6/11/89)
Sysco Food Services CTDU Chicago Truck Drivers, Helpers and Warehouse Workers
Chicago Union (Independent) Pension fund
IBT #738 Chicago Pension Fund
Sysco Frosted Foods, IBT #294 Pension Fund of the Albany Area Trucking and Allied
Inc. (Albany) Industries
Avard IBT #588 Western Conference of Teamsters Pension Plan
Chicago UFCW #546 UFCW Local #546
Indianapolis IBT #135 Central States, Southeast and Southwest Areas Pension
Plan
S & E Warehouse IBT #135 Central States, Southeast and Southwest Areas Pension
Plan
Iowa IBT #147 Central States, Southeast and Southwest Areas Pension
Plan
43
48
ANNEX II
(CONTINUED)
LIST OF MULTI-EMPLOYER PLANS
-------------------------------
COMPANY LOCAL PLAN
------- ----------- ----
Keil IBT #190 Western Conference of Teamsters Pension Plan
Los Angeles IBT #542 Western Conference of Teamsters Pension Plan
IBT #848 Western Conference of Teamsters Pension Plan
IBT #630 Western Conference of Teamsters Pension Plan
IBT #683 Western Conference of Teamsters Pension Plan
Miami IBT #769 Central States, Southeast and Southwest Areas Pension
Plan
Minnesota IBT #544 Central States, Southeast and Southwest Areas Pension
Plan -- Minneapolis Food Distribution Industry
Phoenix IBT #104 Western Conference of Teamsters Pension Plan
Portland IBT #162 Western Conference of Teamsters Pension Plan
Seattle IBT #117 Western Conference of Teamsters Pension Plan
Smelkinson IBT #355 IBT Local #355
44
49
ANNEX III
DESCRIPTION OF OUTSTANDING LIENS
DEBTOR COLLATERAL LIENHOLDER BALANCE(1) MATURITY
------ ---------- ---------- ------------ -----------
Baraboo-Sysco Food Services, Inc. Facility Baraboo Industrial $ 65,103 01/01/95
Expansion Corp. 92,762 12/01/94
108,010 06/01/93
Bell-Sysco Food Services, Inc. Facility Thomas & Howard 148,000 11/28/91
Cochran-Sysco Services Facility Deposit Guaranty 940,000 12/01/94
National Bank
Global/Sysco Facility European American 1,072,500 11/01/93
Banking Corp.
Global/Sysco Real Estate, Trucks Waldbaum, Inc., Metro 3,025,116 01/01/04
Trucking and
11/01/08
Hallsmith-Sysco Facility First National Bank of 2,645,000 05/01/04
Boston
Koon-Sysco Food Services, Inc. Facility J.M. Classic Chicken 16,000 11/01/90
Maine/Sysco, Inc. Facility SBA 69,775 08/01/98
Facility SBA 205,670 11/01/02
Mid-Central/Sysco Food Services, Inc. Facility First City National Bank 7,490,000 08/08/12
of Houston
Miesel/Sysco Food Service Co. Warehouse Robert M. Levin 8,503 03/31/89
(Cleveland) Cleveland Trust Co.
Nobel/Sysco Food Services Co. Building Central Bank Intrawest $ 87,525 12/01/92
(Denver) Building Mortgage 2,835,615 02/01/01
Nobel/Sysco Food Services Co. Facility Pacific Mutual 4,962,000 09/01/04
(Albuquerque)
Robert Orr -- Sysco Food Services Co. Facility First National Bank of 815,000 03/01/90
Nashville
Pegler-Sysco Food Services Co. Facility First National Bank & 205,000 10/01/90
Trust of Lincoln 1,130,000 10/01/95
Facility First City National Bank 3,400,000 11/01/94
of Houston
Sysco Food Services, Inc. Facility State Farm 1,684,653 02/2000
Sysco Frosted Foods, Inc. (Syracuse) Facility First City National Bank 5,200,000
Bank of Houston of which
3,000,000 04/01/03
2,200,000 04/01/08
Sysco Frosted Foods, Inc. (Albany) Facility Manufacturers & Traders 3,100,000 11/01/98
Trust Co.
Sysco Frosted Foods, Inc. (Elmira) Facility Elmira Savings Bank 247,383 10/01/93
Sysco Intermountain Food Services Facility First Security Bank of 885,000 12/01/89
(Shire Warehouse) Utah
Sysco Food Services, Chicago Warehouse Bankers Life Nebraska $ 911,000 02/01/90
45
50
ANNEX III
(CONTINUED)
DESCRIPTION OF OUTSTANDING LIENS
DEBTOR COLLATERAL LIENHOLDER BALANCE(1) MATURITY
------ ---------- ---------- ------------ -----------
Continental of Orlando, Inc. Facility Continental Illinois 800,000
National Bank & Trust of which
Company 300,000 05/01/94
300,000 05/01/99
200,000 05/01/95
-98
Sysco/Continental Food Services of Facility First National Bank of 1,020,000 06/01/97
Iowa, Inc. Minneapolis
Sugar Foods, Inc. Facility First Trust Company of 1,260,000 02/01/99
Ohio, N.A.
Sysco/Continental Mulberry Food Facility Bank of the South, N.A. 816,660 10/31/90
Services, Inc.
Sysco/Continental Food Services of Facility Bank of the South, N.A. 758,330 10/31/90
Indianapolis, Inc.
Sugar Foods, Inc. Facility Bank One Trust Company, 533,333 01/01/97
N.A.
Continental of Orlando, Inc. Facility Atlantic National Bank 954,000 11/01/97
of Florida
Sysco/Continental Food Services of Equipment Bank of the South, N.A. 1,150,000 09/01/93
Atlanta, Inc.
Food Service Specialists, Inc. Equipment Harris Trust and Savings 900,000 10/15/94
Bank
Sysco/Continental Food Services of Facility City of Mounds View, 1,780,000 03/20/90
Minnesota, Inc. Minnesota
Sysco Corporation Facility Utica National Bank and 485,111 01/31/2004
Trust Company
Sysco Corporation Atlanta Warehouse John Hancock Mutual Life 7,551,800 01/01/97
Ins. Company
Hallsmith Capital Lease Town of Norton 750,000 05/01/94
Olewines Warehouse Dauphin Deposit Bank and 772,449 09/01/96
Trust
Olewines Warehouse Dauphin Deposit Bank and 947,287 06/01/96
Trust
Baraboo-Sysco Food Services, Inc. Land City of Baraboo 14,000 08/01/93
Sysco/Continental Smelkinson Food Capital Lease Robert N. Smelkinson and 629,640(2) 05/31/96
Services, Inc. Sheldon R. Roth
Sysco/Continental Smelkinson Food Capital Lease Robert N. Smelkinson and 738,003(2) 05/31/96
Services, Inc. Sheldon R. Roth
Sysco/Continental Smelkinson Food Capital Lease Robert N. Smelkinson and 3,385,675(2) 05/31/96
Services, Inc. Sheldon R. Roth
Sysco Frosted Foods, Inc. (Elmira) Capital Lease SBA-Horseheads 15,000 07/01/94
K.W. Food Distributors, Ltd. Cooler and Freezer Bank of British Columbia 257,330 06/19/91
Equipment
K.W. Food Distributors, Ltd. Inventory and Assets Bank of British Columbia 3,450,000 demand
(Canadian)
- ---------------
(1) All balances are as of April 1, 1989
(2) This represents the total rent payments of Sysco/Continental Smelkinson Food
Services, Inc. from May 1, 1989, to May 31, 1996, the maturity date of the
Lease.
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ANNEX IV
DESCRIPTION OF OPEN TAX YEARS
Federal Income Tax Liability has been determined and satisfied for the
Company and its subsidiaries through the fiscal year ending June 29, 1985 except
for:
COMPANY FISCAL YEAR
------- -----------
1985 (The tax liability is currently on appeal; the issue is
the I.T.C. on a freezer addition which has been tentatively
Hallsmith-Sysco Food settled, subject to the appeal process, for approximately
Services, Inc. $40,000)
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EXHIBIT A
SYSCO CORPORATION
9.95% SENIOR NOTES
DUE JUNE 15, 1999
Registered Note No. R-1 June 15, 1999
$ PPN #: 871829B*7
SYSCO CORPORATION, a Delaware corporation (the "Company"), for value
received, hereby promises to pay to or registered assigns,
on the fifteenth day of June 1999, the principal amount of
Dollars ($ ) and to pay interest (computed on the basis of a 360-day
year of twelve 30-day months) on the principal amount from time to time
remaining unpaid hereon at the rate of nine and ninety-five hundredths percent
(9.95%) per annum from the date hereof until maturity, payable on June 15 and
December 15 in each year, commencing December 15, 1989, and at maturity, and to
pay interest on overdue principal and (to the extent legally enforceable) on any
overdue installment of interest at the rate of ten and ninety-five hundredths
percent (10.95%) per annum after maturity or the due date thereof, whether by
acceleration or otherwise, until paid. Payments of the principal of, the
premium, if any, and interest on this Note shall be made in lawful money of the
United States of America in the manner and at the place provided in Section 2.4
of the Note Agreement hereinafter defined.
This Note is issued under and pursuant to the terms and provisions of a
Note Agreement, dated as of June 1, 1989, entered into by the Company with those
Purchasers set forth in Schedule I thereto (the "Note Agreement"), and this Note
and any holder hereof are entitled to all of the benefits provided for by such
Note Agreement or referred to therein. The provisions of the Note Agreement are
hereby incorporated in this Note to the same extent as if set forth at length
herein.
As provided in the Note 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 his attorney duly
authorized in writing, a new Note for a like unpaid principal amount will be
issued to, and registered in the name of, the transferee upon the payment of the
taxes or other governmental charges, if any, that may be imposed in connection
therewith. 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.
This Note may be declared due prior to its expressed maturity date, and
certain prepayments at the option of holders of the Notes are required to be
made hereon in the events, on the terms and the manner as provided in the Note
Agreement.
Should the indebtedness represented by this Note or any part thereof be
collected in any proceeding provided for in the Note Agreement or be placed in
the hands of attorneys for collection, the Company agrees to pay, in addition to
the principal, premium, if any, and interest due and payable hereon, all costs
of collecting this Note, including reasonable and actual attorneys' fees and
expenses.
This Note and said Note Agreement are governed by and construed in
accordance with the laws of the State of Illinois.
SYSCO CORPORATION
By:
------------------------------------
Its:
------------------------------------
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EXHIBIT B
LEGAL OPINIONS
A. The opinion of Gardner, Carton & Douglas, special counsel for the
Purchasers, shall be to the effect that:
1. The Company is a corporation duly organized and validly existing in
good standing under the laws of the State of Delaware, with all requisite
corporate power and authority to carry on the business now being conducted
by it, to enter into the Agreement and to issue and sell the Notes.
2. The Agreement has been duly authorized by proper corporate action
on the part of the Company, has been duly executed and delivered by an
authorized officer of the Company and constitutes the legal, valid and
binding agreement of the Company, enforceable in accordance with its terms,
except to the extent that enforcement of the Agreement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws of general application relating to or affecting the enforcement of the
rights of creditors or secured parties or by equitable principles if
equitable remedies are sought.
3. The Notes have been duly authorized by proper corporate action on
the part of the Company, have been duly executed and delivered by an
authorized officer of the Company, and constitute the legal, valid and
binding obligations of the Company, enforceable in accordance with their
terms, except to the extent that enforcement of the Notes may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws of general application relating to or affecting the enforcement of the
rights of creditors or secured parties or by equitable principles if
equitable remedies are sought.
4. Based upon the representations set forth in the Agreement, the
offering, sale and delivery of the Notes do not require the registration of
the Notes under the Securities Act of 1933, as amended, nor the
qualification of an indenture under the Trust Indenture Act of 1939, as
amended.
5. The issuance and sale of the Notes and compliance with the terms
and provisions of the Notes and the Agreement will not conflict with or
result in any breach of any of the provisions of the Articles of
Incorporation or By-Laws of the Company.
6. Assuming the truth and accuracy of the Company's representations
and warranties contained in Section 3.1 of the Agreement, the issuance of
the Notes and the use of the proceeds of the sale of the Notes do not
violate or conflict with Regulation G, T or X of the Board of Governors of
the Federal Reserve System (12 C.F.R., Chapter II).
7. The legal opinion of Arnall Golden & Gregory, counsel for the
Company, delivered to you pursuant to the Agreement, is satisfactory in
form and substance to us, and, in our opinion, you and we are justified in
relying thereon.
8. In giving its opinion, Gardner, Carton & Douglas may rely, as to
matters involving Texas law, upon the opinion of Arnall Golden & Gregory.
B. The opinion of Arnall Golden & Gregory, counsel for the Company, shall
cover all matters specified in clauses 1 through 4 and 6 set forth above and
shall also be to the effect that:
1. Each of the Subsidiaries of the Company listed as such in Annex I
to the Agreement is a corporation duly organized and validly existing in
good standing under the laws of its jurisdiction of incorporation, and each
has all requisite corporate power and authority to carry on the business
now being conducted by it and to own its property.
2. The Company and its Subsidiaries are duly qualified and in good
standing as foreign corporations in the jurisdictions in which they carry
on business and such jurisdictions are all of the jurisdictions where the
nature of its or their business or the character of its or their properties
makes such qualification or licensing necessary.
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3. No authorization, approval or consent of any governmental or
regulatory body is necessary or required in connection with the lawful
execution and delivery by the Company of the Agreement or the lawful
offering, issuance and sale of the Notes, and no designation, filing,
declaration, registration and/or qualification with any governmental
authority is required by the Company in connection with such offer,
issuance and sale.
4. The issuance and sale of the Notes and compliance with the terms
and provisions of the Notes and the Agreement will not conflict with, or
result in any breach of any of the provisions of, or constitute a default
under, or result in the creation or imposition of any lien or encumbrance
upon any of the property of the Company pursuant to the provisions of the
Certificate of Incorporation or by-laws of the Company or any Subsidiary or
result in any breach of any laws, rules, regulations, judgements or orders
or result in any material breach in the provisions of or any material
default under any loan agreement under which the Company or any Subsidiary
is bound, or other agreement or instrument known to such counsel (after due
inquiry) under which the Company or any Subsidiary is bound.
5. There are no actions, suits or proceedings pending or, to the best
of such counsel's knowledge after due inquiry, threatened against, or
affecting the Company or its Subsidiaries, at law or in equity or before or
by any Federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
which are likely to result, either individually or collectively, in any
material adverse change in the business, properties, operations or
condition, financial or otherwise, of the Company or any Subsidiary.
6. All of the issued and outstanding shares of capital stock of each
Subsidiary have been duly and validly issued, are fully paid and
nonassessable and, to the knowledge of such counsel, are owned by the
Company free and clear of any lien or encumbrance.
7. The Company and each Subsidiary have all franchises, permits,
licenses and other authority as are necessary to enable them to carry on
their respective businesses as now being conducted and as proposed to be
conducted, and none of them is in default under any of such franchises,
permits, licenses or other authority.
Such opinion shall also cover such other matters incident to the
transactions contemplated hereby as you or your special counsel may reasonably
request. In giving its opinion, counsel for the Company may rely, as to matters
of law, upon the opinion of other counsel delivered to you at the closing
(provided that in each such case such counsel shall state that such opinion is
satisfactory in form and substance to it, and that, in its opinion, it and you
are justified in so relying thereon); as to matters of fact, upon a certificate
or certificates of an officer or officers of the Company; and, as to the good
standing of the Company or any Subsidiary, upon certificates of good standing or
similar certificates issued by appropriate governmental authorities. In each
case, such opinions and certificates shall be satisfactory to your special
counsel.
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