1
Exhibit 2.2
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AMERICAN HOMESTAR CORPORATION
NOTE PURCHASE AGREEMENT
DATED AS OF SEPTEMBER 15, 1998
$46,000,000 7.25% SENIOR NOTES, SERIES A,
DUE SEPTEMBER 15, 2008
AND
$5,000,000 7.14% SENIOR NOTES, SERIES B,
DUE SEPTEMBER 15, 2008
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TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. AUTHORIZATION OF NOTES.................................................................1
SECTION 2. SALE AND PURCHASE OF NOTES.............................................................2
SECTION 3. CLOSING................................................................................2
SECTION 4. CONDITIONS TO CLOSING..................................................................3
Section 4.1. Representations and Warranties...................................................3
Section 4.2. Performance; No Default..........................................................3
Section 4.3. Compliance Certificates..........................................................3
Section 4.4. Opinions of Counsel..............................................................3
Section 4.5. Purchase Permitted By Applicable Law, etc........................................3
Section 4.6. Sale of Other Notes..............................................................4
Section 4.7. Payment of Special Counsel Fees..................................................4
Section 4.8. Private Placement Number.........................................................4
Section 4.9. Changes in Corporate Structure...................................................4
Section 4.10. Proceedings and Documents........................................................4
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY..........................................4
Section 5.1. Organization; Power and Authority................................................4
Section 5.2. Authorization, Etc...............................................................5
Section 5.3. Disclosure.......................................................................5
Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.................5
Section 5.5. Financial Statements.............................................................6
Section 5.6. Compliance with Laws, Other Instruments, Etc.....................................6
Section 5.7. Governmental Authorizations, etc.................................................6
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders........................6
Section 5.9. Taxes............................................................................7
Section 5.10. Title to Property; Leases........................................................7
Section 5.11. Licenses, Permits, Etc...........................................................7
Section 5.12. Compliance with ERISA............................................................8
Section 5.13. Private Offering by the Company..................................................8
Section 5.14. Use of Proceeds; Margin Regulations..............................................9
Section 5.15. Existing Material Indebtedness; Future Liens.....................................9
Section 5.16. Foreign Assets Control Regulations, etc..........................................9
Section 5.17. Status under Certain Statutes....................................................9
Section 5.18. Environmental Matters............................................................9
Section 5.19. Year 2000.......................................................................10
SECTION 6. REPRESENTATIONS OF THE PURCHASER......................................................10
Section 6.1. Purchase for Investment.........................................................10
Section 6.2. Source of Funds.................................................................11
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SECTION 7. INFORMATION AS TO COMPANY.............................................................12
Section 7.1. Financial and Business Information..............................................12
Section 7.2. Officer's Certificate...........................................................15
Section 7.3. Inspection......................................................................15
SECTION 8. PREPAYMENT OF THE NOTES...............................................................16
Section 8.1. Required Prepayments............................................................16
Section 8.2. Optional Prepayments with Make-Whole Amount.....................................16
Section 8.3. Allocation of Partial Prepayments...............................................16
Section 8.4. Maturity; Surrender, Etc........................................................16
Section 8.5. Purchase of Notes...............................................................17
Section 8.6. Make-Whole Amount...............................................................17
SECTION 9. AFFIRMATIVE COVENANTS.................................................................19
Section 9.1. Compliance with Law.............................................................19
Section 9.2. Insurance.......................................................................19
Section 9.3. Maintenance of Properties.......................................................19
Section 9.4. Payment of Taxes and Claims.....................................................19
Section 9.5. Corporate Existence, Etc........................................................20
Section 9.6. Nature of Business..............................................................20
Section 9.7. Compliance Regarding Year 2000..................................................20
SECTION 10. NEGATIVE COVENANTS....................................................................20
Section 10.1. Transactions with Affiliates....................................................20
Section 10.2. Merger, Consolidation, etc......................................................20
Section 10.3. Sale of Assets, Etc.............................................................21
Section 10.4. Limitations on Debt.............................................................22
Section 10.5. Fixed Charges Coverage Ratio....................................................23
Section 10.6. Net Working Capital.............................................................23
Section 10.7. Consolidated Net Worth..........................................................23
Section 10.8. Restricted Payments and Restricted Investments..................................23
Section 10.9. Limitation on Liens.............................................................23
Section 10.10. Restrictions on Dividends of Subsidiaries, Etc..................................26
SECTION 11. EVENTS OF DEFAULT.....................................................................26
SECTION 12. REMEDIES ON DEFAULT, ETC..............................................................28
Section 12.1. Acceleration....................................................................28
Section 12.2. Other Remedies..................................................................29
Section 12.3. Rescission......................................................................29
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc...............................29
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.........................................30
Section 13.1. Registration of Notes...........................................................30
Section 13.2. Transfer and Exchange of Notes..................................................30
Section 13.3. Replacement of Notes............................................................30
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SECTION 14. PAYMENTS ON NOTES.....................................................................31
Section 14.1. Place of Payment................................................................31
Section 14.2. Home Office Payment.............................................................31
SECTION 15. EXPENSES, ETC.........................................................................31
Section 15.1. Transaction Expenses............................................................31
Section 15.2. Survival........................................................................32
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT..........................32
SECTION 17. AMENDMENT AND WAIVER..................................................................32
Section 17.1. Requirements....................................................................32
Section 17.2. Solicitation of Holders of Notes................................................32
Section 17.3. Binding Effect, Etc.............................................................33
Section 17.4. Notes Held by Company...........................................................33
SECTION 18. NOTICES...............................................................................33
SECTION 19. REPRODUCTION OF DOCUMENTS.............................................................34
SECTION 20. CONFIDENTIAL INFORMATION..............................................................34
SECTION 21. SUBSTITUTION OF PURCHASER.............................................................35
SECTION 22. MISCELLANEOUS.........................................................................35
Section 22.1. Successors and Assigns..........................................................35
Section 22.2. Payments Due on Non-Business Days...............................................35
Section 22.3. Severability....................................................................36
Section 22.4. Construction....................................................................36
Section 22.5. Counterparts....................................................................36
Section 22.6. Governing Law...................................................................36
Signature Page..........................................................................................37
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SCHEDULE A PURCHASER INFORMATION
SCHEDULE B DEFINED TERMS
SCHEDULE B-C MAJOR COMPETITORS
SCHEDULE 4.9 CHANGES IN CORPORATE STRUCTURE
SCHEDULE 5.4 SUBSIDIARIES OF THE COMPANY
SCHEDULE 5.5 FINANCIAL STATEMENTS
SCHEDULE 5.14 USE OF PROCEEDS
SCHEDULE 5.15 EXISTING INDEBTEDNESS
SCHEDULE 5.18 ENVIRONMENTAL MATTERS
SCHEDULE 10.10 RESTRICTIONS ON DIVIDENDS
EXHIBIT 1 FORM OF NOTE
EXHIBIT 4.4(a) FORM OF OPINION OF SPECIAL COUNSEL TO THE COMPANY
EXHIBIT 4.4(b) FORM OF OPINION OF SPECIAL COUNSEL TO THE PURCHASERS
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AMERICAN HOMESTAR CORPORATION
2450 SOUTH SHORE BOULEVARD, SUITE 300
LEAGUE CITY, TEXAS 77573
$46,000,000 7.25% Senior Notes, Series A, due September 15, 2008
and
$5,000,000 7.14% Senior Notes, Series B, due September 15, 2008
Dated as of September 15, 1998
To each of the Purchasers identified
on the attached Schedule A
Ladies and Gentlemen:
AMERICAN HOMESTAR CORPORATION, a Texas corporation (together with its
permitted successors, the "Company"), agrees with you as follows:
SECTION 1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of (i) $46,000,000
aggregate principal amount of its 7.25% Senior Notes, Series A, due September
15, 2008 (the "Series A Notes") and (ii) $5,000,000 7.14% Senior Notes, Series
B, due September 15, 2008 (the Series B Notes" and, together with the Series A
Notes, the "Notes"), such term to include any such notes issued in substitution
therefor pursuant to Section 13 of this Agreement or the Other Agreements (as
hereinafter defined)). The Notes shall be substantially in the form set out in
Exhibit 1, with such changes therefrom, if any, as may be approved by you and
the Company. Certain capitalized terms used in this Agreement are defined in
Schedule B; references to a "Schedule" or an "Exhibit" are, unless otherwise
specified, to a Schedule or an Exhibit attached to this Agreement.
The Company and you acknowledge and agree that the interest rate or
other forbearance payable on the Notes shall not exceed the highest rate
permitted under applicable law. All agreements between you and the Company are
hereby limited by the provisions of this paragraph which shall override and
control all such agreements, whether now existing or hereafter arising and
whether written or oral. In no way, nor in any event or contingency (including
but not limited to prepayment, default, demand for payment, or acceleration of
the maturity of any obligation), shall the interest for, reserved, contacted
for, charged or received under the Notes or otherwise, exceed the maximum
nonusurious amount permissible under applicable law. If, from any possible
construction of any document, interest would otherwise be payable in excess of
the maximum nonusurious amount, any such construction shall be subject to the
provisions of this paragraph and such document shall be automatically reformed
and the interest payable shall be automatically reduced to the maximum
nonusurious amount permitted under applicable law, without the necessity of
execution of any amendment or new document. If the holder of a Note shall ever
receive anything of value which is characterized as interest under applicable
law and
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which would apart from this provision be in excess of the maximum lawful
amount, an amount equal to the amount which would have been excessive interest
shall, without penalty, be applied to the reduction of the principal amount
owing on the indebtedness evidenced hereby in the inverse order of its maturity
and not to the payment of interest, or refunded to the Company if and to the
extent such amount which would have been excessive exceeds such unpaid
principal. All interest paid or agreed to be paid to the holder of a Note shall,
to the extent permitted by applicable law, be amortized, prorated, allocated and
spread throughout the full stated term (including any renewal or extension) of
such indebtedness so that the amount of interest on account of such indebtedness
does not exceed the maximum nonusurious amount permitted by applicable law.
SECTION 2. SALE AND PURCHASE OF NOTES
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closing,
provided for in Section 3, Notes of the series and in the principal amount
specified opposite your name in Schedule A at the purchase price of 100% of the
principal amount thereof. Contemporaneously with entering into this Agreement,
the Company is entering into separate Note Purchase Agreements (the "Other
Agreements") identical with this Agreement with each of the other purchasers
named in Schedule A (the "Other Purchasers"), providing for the sale at such
Closing to each of the Other Purchasers of Notes of the series and in the
principal amount specified opposite its name in Schedule A. Your obligations
hereunder, and the obligations of the Other Purchasers under the Other
Agreements, are several and not joint obligations, and you shall have no
obligation under any Other Agreement and no liability to any Person for the
performance or nonperformance by any Other Purchaser thereunder.
SECTION 3. CLOSING.
The sale and purchase of the Notes to be purchased by you and the Other
Purchasers shall occur at the offices of Chapman and Cutler, 111 West Monroe
Street, Chicago, Illinois 60603, at 10:00 a.m. local time, at a closing (the
"Closing") on September 30, 1998 or on such other Business Day thereafter as may
be agreed upon by the Company and you and the Other Purchasers. At the Closing,
the Company will deliver to you the Notes to be purchased by you in the form of
a single Note for each series (or such greater number of Notes in denominations
of at least $250,000 as you may request) dated the date of the Closing and
registered in your name (or in the name of your nominee), against delivery by
you to the Company or its order of immediately available funds in the amount of
the purchase price therefor by wire transfer of immediately available funds for
the account of Associates Commercial Corporation for American Homestar
Corporation, Account No. 5159563 at The First National Bank of Chicago, Chicago,
Illinois, ABA No. 071000013. If at the Closing the Company shall fail to tender
such Notes to you as provided above in this Section 3, or any of the conditions
specified in Section 4 shall not have been fulfilled to your satisfaction, you
shall, at your election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights you may have by reason of such
failure or such nonfulfillment.
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SECTION 4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your satisfaction, prior to or at
the Closing, of the following conditions:
Section 4.1. Representations and Warranties. The representations and
warranties of the Company in this Agreement shall be correct in all material
respects when made and at the time of the Closing.
Section 4.2. Performance; No Default. The Company shall have performed
and complied in all material respects with all agreements and conditions
contained in this Agreement required to be performed or complied with by it
prior to or at the Closing, and after giving effect to the issue and sale of the
Notes (and the application of the proceeds thereof as contemplated by Schedule
5.14), no Default or Event of Default shall have occurred and be continuing.
Neither the Company nor any Subsidiary shall have entered into any transaction
since the date of the Memorandum that would have been prohibited by Sections
10.1, 10.2 or 10.3 hereof had such Sections applied since such date.
Section 4.3. Compliance Certificates.
(a) Officer's Certificate. The Company shall have delivered
to you an Officer's Certificate, dated the date of the Closing,
certifying that the conditions specified in Sections 4.1, 4.2 and 4.9
have been fulfilled.
(b) Secretary's Certificate. The Company shall have delivered
to you a certificate certifying as to the resolutions attached thereto
and other corporate proceedings relating, to the authorization,
execution and delivery of the Notes and the Agreements.
Section 4.4. Opinions of Counsel. You shall have received opinions in
form and substance satisfactory to you, dated the date of the Closing,
(a) from Jackson Walker L.L.P., counsel for the Company,
covering the matters set forth in Exhibit 4.4(a) and covering such
other matters incident to the transactions contemplated hereby as you
or your counsel may reasonably request (and the Company hereby
instructs its counsel to deliver such opinion to you) and
(b) from Chapman and Cutler, your special counsel in
connection with the transactions contemplated hereby.
Section 4.5. Purchase Permitted By Applicable Law, etc. On the date of
the Closing your purchase of Notes shall (a) be permitted by the laws and
regulations of each jurisdiction to which you are subject, without recourse to
provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting
limited investments by insurance companies without restriction as to the
character of the particular investment, (b) not violate any applicable law or
regulation (including, without limitation, Regulation T, U or X of the Board of
Governors of the Federal
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Reserve System) and (c) not subject you to any tax, penalty or liability under
or pursuant to any applicable law or regulation, which law or regulation was not
in effect on the date hereof. If requested by you, you shall have received an
Officer's Certificate certifying as to such matters of fact as you may
reasonably specify to enable you to determine whether such purchase is so
permitted.
Section 4.6. Sale of Other Notes. Contemporaneously with the Closing,
the Company shall sell to the Other Purchasers, and the Other Purchasers shall
purchase, the Notes to be purchased by them at the Closing as specified in
Schedule A.
Section 4.7. Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.1, the Company shall have paid on or before the Closing
the reasonable fees charges and disbursements of your special counsel referred
to in Section 4.4 to the extent reflected in a statement of such counsel
rendered to the Company at least one Business Day prior to the Closing.
Section 4.8. Private Placement Number. A Private Placement Number
issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the
Securities Valuation Office of the National Association of Insurance
Commissioners) shall have been obtained for the Notes.
Section 4.9. Changes in Corporate Structure. Except as specified in
Schedule 4.9, the Company shall not have changed its jurisdiction of
incorporation or been a party to any merger or consolidation and shall not have
succeeded to all or any substantial part of the liabilities of any other entity,
at any time following the date of the most recent financial statements referred
to in Schedule 5.5.
Section 4.10. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to you and your special counsel, and you and your special counsel
shall have received all such counterpart originals or certified or other copies
of such documents as you or they may reasonably request.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
Section 5.1. Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and authority to own or hold under lease the properties
it purports to own or hold under lease, to transact the business it transacts
and proposes to transact, to execute and deliver this Agreement and the Other
Agreements and the Notes and to perform the provisions hereof and thereof.
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Section 5.2. Authorization, Etc. This Agreement, the Other Agreements
and the Notes have been duly authorized by all necessary corporate action on the
part of the Company, and this Agreement constitutes, and upon execution and
delivery thereof each Note will constitute, a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
Section 5.3. Disclosure. The Company, through its agent Warburg Dillon
Read LLC, has delivered to you and each Other Purchaser a copy of a Confidential
Private Placement Memorandum (the "Memorandum") relating to the transactions
contemplated hereby. The Memorandum fairly describes, in all material respects,
the general nature of the business and principal properties of the Company and
its Subsidiaries. This Agreement, the Memorandum, the documents, certificates or
other writings delivered to you by or on behalf of the Company in connection
with the transactions contemplated hereby and the financial statements listed in
Schedule 5.5, taken as a whole, do not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under which they
were made. Since May 31, 1998, there has been no change in the financial
condition, operations, business, properties or prospects of the Company or any
Subsidiary except changes that individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. There is no fact known
to the Company that could reasonably be expected to have a Material Adverse
Effect that has not been set forth herein or in the Memorandum or in the other
documents, certificates and other writings delivered to you by or on behalf of
the Company specifically for use in connection with the transactions
contemplated hereby.
Section 5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates. (a) Schedule 5.4 contains (except as noted therein) complete and
correct lists (i) of the Company's Subsidiaries, showing, as to each Subsidiary,
the correct name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary, (ii) of
the Company's Affiliates, other than Subsidiaries and (iii) of the Company's
directors and senior officers.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each such Subsidiary has
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the corporate or other power and authority to own or hold under lease the
properties it purports to own or hold under lease and to transact the business
it transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to, any legal
restriction or any agreement (other than this Agreement, the agreements listed
on Schedule 5.4 and customary limitations imposed by corporate law statutes)
restricting the ability of such Subsidiary to pay dividends out of profits or
make any other similar distributions of profits to the Company or any of its
Subsidiaries that owns outstanding shares of capital stock or similar equity
interests of such Subsidiary.
Section 5.5. Financial Statements. The Company has delivered to each
Purchaser copies of the financial statements of the Company and its Subsidiaries
listed on Schedule 5.5. All of said financial statements (including in each case
the related schedules and notes) fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as of the
respective dates specified in such Schedule and the consolidated results of
their operations and cash flows for the respective periods so specified and have
been prepared in accordance with GAAP consistently applied throughout the
periods involved except as set forth in the notes thereto (subject, in the case
of any interim financial statements, to normal year-end adjustments).
Section 5.6. Compliance with Laws, Other Instruments, Etc. The
execution, delivery and performance by the Company of this Agreement and the
Notes will not (a) contravene, result in any breach of, or constitute a default
under, or result in the creation of any Lien in respect of any property of the
Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan,
purchase or credit agreement, lease, corporate charter or by-laws, or any other
agreement or instrument to which the Company or any Subsidiary is bound or by
which the Company or any Subsidiary or any of their respective properties may be
bound or affected, (b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or any Subsidiary
or (c) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary.
Section 5.7. Governmental Authorizations, etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement or the Notes.
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) There are no actions, suits or proceedings pending or, to the knowledge of
the Company, threatened against or affecting the Company or any Subsidiary or
any property of the Company or any Subsidiary in any court or before any
arbitrator of any kind or before or by any Governmental Authority that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any term
of any agreement or instrument to which it is a party or by which it is bound,
or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance, rule
or regulation (including without limitation Environmental Laws)
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of any Governmental Authority, which default or violation, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
Section 5.9. Taxes. The Company and its Subsidiaries have filed all tax
returns that are required to have been filed in any jurisdiction, and have paid
all taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent except for any taxes and assessments (a) the amount
of which is not individually or in the aggregate Material or (b) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or a Subsidiary,
as the case may be, has established adequate reserves in accordance with GAAP.
The Company knows of no basis for any other tax or assessment that could
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of the Company and its Subsidiaries in respect of
Federal, state or other taxes for all fiscal periods are adequate. The Federal
income tax liabilities of the Company and its Subsidiaries have been determined
by the Internal Revenue Service and paid for all fiscal years up to and
including the fiscal year ended May 31, 1993.
Section 5.10. Title to Property; Leases. The Company and its
Subsidiaries have good and sufficient title to their respective properties,
including all such properties reflected in the most recent audited balance sheet
referred to in Section 5 or purported to have been acquired by the Company or
any Subsidiary after said date (except as sold or otherwise disposed of in the
ordinary course of business), in each case free and clear of Liens prohibited by
this Agreement. All leases that individually or in the aggregate are Material
are valid and subsisting and are in full force and effect in all material
respects.
Section 5.11. Licenses, Permits, Etc. (a) The Company and its
Subsidiaries own or possess all licenses, permits, franchises, authorizations,
patents, copyrights, service marks, trademarks and trade names, or rights
thereto, that individually or in the aggregate are Material, without known
conflict with the rights of others;
(b) to the best knowledge of the Company, no product of the
Company infringes in any Material respect any license, permit,
franchise, authorization, patent, copyright, service mark, trademark,
trade name or other right owned by any other Person; and
(c) to the best knowledge of the Company, there is no
Material violation by any Person of any right of the Company or any of
its Subsidiaries with respect to any patent, copyright, service mark,
trademark, trade name or other right owned or used by the Company or
any of its Subsidiaries.
Section 5.12. Compliance with ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the
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Code relating to employee benefit plans (as defined in Section 3 of ERISA), and
no event, transaction or condition has occurred or exists that could reasonably
be expected to result in the incurrence of any such liability by the Company or
any ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to Section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not be individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities. The term "benefit liabilities" has the
meaning specified in section 4001 of ERISA and the terms "current value" and
"present value" have the meaning specified in Section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The expected post-retirement benefit obligation (determined as of
the last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Company and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the issuance and
sale of the Notes hereunder will not involve any transaction that is subject to
the prohibitions of section 406 of ERISA or in connection with which a tax could
be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation
by the Company in the first sentence of this Section 5.12(e) is made in reliance
upon and subject to the accuracy of your representation in Section 6.2 as to the
sources of the funds used to pay the purchase price of the Notes to be purchased
by you.
Section 5.13. Private Offering by the Company. Neither the Company nor
anyone acting on its behalf has offered the Notes or any similar securities for
sale to, or solicited any offer to buy any of the same from, or otherwise
approached or negotiated in respect thereof with, any Person other than you, the
Other Purchasers and not more than 20 other Institutional Investors, each of
which has been offered the Notes at a private sale for investment. Neither the
Company nor anyone acting on its behalf has taken, or will take, any action that
would subject the issuance or sale of the Notes to the registration requirements
of Section 5 of the Securities Act.
Section 5.14. Use of Proceeds; Margin Regulations. The Company will
apply the proceeds of the sale of the Notes as set forth in Schedule 5.14. No
part of the proceeds from the sale of the Notes hereunder will be used, directly
or indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 221), or for the purpose of buying, or carrying or trading in any
securities under such circumstances as to involve the Company in a violation of
Regulation X of
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said Board (12 CFR 224) or to involve any broker or dealer in a violation of
Regulation T of said Board (12 CFR 220). Margin stock does not constitute more
than 1% of the value of the consolidated assets of the Company and its
Subsidiaries and the Company does not have any present intention that margin
stock will constitute more than 1% of the value of such assets. As used in this
Section, the terms "margin stock" and "purpose of buying or carrying" shall have
the meanings assigned to them in said Regulation U.
Section 5.15. Existing Material Indebtedness; Future Liens. (a)
Schedule 5.15 sets forth a complete and correct list of all outstanding
Indebtedness greater than $50,000 of the Company and its Restricted Subsidiaries
as of May 31, 1998, since which date there has been no Material change in the
amounts, interest rates, sinking funds, installment payments or maturities of
the Indebtedness of the Company or its Restricted Subsidiaries. Neither the
Company nor any Subsidiary is in default and no waiver of default is currently
in effect, in the payment of any principal or interest on any Indebtedness
greater than $50,000 of the Company or such Subsidiary and no event or condition
exists with respect to any Indebtedness greater than $50,000 of the Company or
any Subsidiary that would permit (or that with notice or the lapse of time, or
both, would permit) one or more Persons to cause such Indebtedness to become due
and payable before its stated maturity or before its regularly scheduled dates
of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company nor any
Restricted Subsidiary has agreed or consented to cause or permit in the future
(upon the happening of a contingency or otherwise) any of its property, whether
now owned or hereafter acquired, to be subject to a Lien not permitted by
Section 10.9.
Section 5.16. Foreign Assets Control Regulations, etc. Neither the sale
of the Notes by the Company hereunder nor its use of the proceeds thereof will
violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto.
Section 5.17. Status under Certain Statutes. Neither the Company nor any
Subsidiary is subject to regulation under the Investment Company Act of 1940, as
amended, the Public Utility Holding Company Act of 1935, as amended, the ICC
Termination Act of 1995, as amended, or the Federal Power Act, as amended.
Section 5.18. Environmental Matters. Except as set forth on Schedule
5.18, neither the Company nor any Subsidiary has knowledge of any claim or has
received any notice of any claim, and no proceeding has been instituted raising
any claim against the Company or any of its Subsidiaries or any of their
respective real properties now or formerly owned, leased or operated by any of
them or other assets, alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect. Except as set forth on Schedule
5.18,
(a) neither the Company nor any Subsidiary has knowledge of any facts
which would give rise to any claim, public or private, of violation of
Environmental Laws or damage to the environment emanating from, occurring on or
in any way related to real properties now or
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formerly owned, leased or operated by any of them or to other assets or their
use, except, in each case, such as could not reasonably be expected to result in
a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has stored any
Hazardous Materials on real properties now or formerly owned, leased or operated
by any of them or has disposed of any Hazardous Materials in a manner contrary
to any Environmental Laws in each case in any manner that could reasonably be
expected to result in a Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased or operated
by the Company or any of its Subsidiaries are in compliance with applicable
Environmental Laws, except where failure to comply could not reasonably be
expected to result in a Material Adverse Effect.
The Company represents and warrants that its aggregate liabilities with
respect to the matters referred to in Schedule 5.18 (i) will not have a Material
Adverse Effect and (ii) could not reasonably be expected to result in costs to
the Company and its Subsidiaries in excess of $1,000,000 which the Company
expects will be payable over an eight to ten year period.
Section 5.19. Year 2000. The Company has reviewed its operations and
those of its Subsidiaries with a view to assessing whether it or its
Subsidiaries' respective businesses will, in the receipt, transmission,
processing, manipulation, storage, retrieval, retransmission or other
utilization of data, be vulnerable to a Year 2000 Problem or will be vulnerable
to the effects of a Year 2000 Problem. Based on such review, the Company has no
reason to believe that a Material Adverse Effect will occur with respect to its
or its Subsidiaries' businesses or operations resulting from a Year 2000
Problem.
"Year 2000 Problem" means any significant risk that computer hardware
or software used in the Company's or its Subsidiaries' businesses or operations
will not, in the case of dates or time periods occurring after December 31,
1999, function at least as effectively as in the case of dates or time periods
occurring prior to January 1, 2000, including the making of accurate leap year
calculations.
SECTION 6. REPRESENTATIONS OF THE PURCHASER.
Section 6.1. Purchase for Investment. You represent that you are
purchasing the Notes for your own account or for one or more separate accounts
maintained by you or for the account of one or more pension or trust funds and
not with a view to the distribution thereof, provided that the disposition of
your or their property shall at all times be within your or their control. You
understand that the Notes have not been registered under the Securities Act and
may be resold only if registered pursuant to the provisions of the Securities
Act or if an exemption from registration is available, except under
circumstances where neither such registration nor such an exemption is required
by law, and that the Company is not required to register the Notes.
Section 6.2. Source of Funds. You represent that at least one of the
following statements is an accurate representation as to each source of funds (a
"Source") to be used by you to pay the purchase price of the Notes to be
purchased by you hereunder:
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(a) if you are an insurance company, the Source is your "insurance
company general account" as defined in Department of Labor Prohibited
Transaction Exemption PTE 95-60 (60 FR 35925), July 12, 1995 (hereinafter "PTE
95-60"), and in respect thereof you represent that there is no "employee benefit
plan" (as defined in Section 3(3) of ERISA and Section 4975(e)(1) of the Code)
established or maintained by the Company (and affiliates thereof as defined in
Section V(a)(1) of the PTE 95-60) with respect to which the amount of general
account reserves and liabilities of all contracts held by or on behalf of such
plan exceed ten percent (10%) of the total reserves and liabilities of such
general account (exclusive of separate account liabilities) plus surplus, as set
forth in the National Association of Insurance Commissioners' Annual Statement
filed with your state of domicile; or
(b) the Source is either (i) an insurance company pooled separate
account, within the meaning of Prohibited Transaction Exemption ("PTE") 90-1
(issued January 29, 1990), or (ii) a bank collective investment fund, within the
meaning of the PTE 91-38 (issued July 12, 1991) and, except as you have
disclosed to the Company in writing pursuant to this paragraph (b), no employee
benefit plan or group of plans maintained by the same employer or employee
organization beneficially owns more than 10% of all assets allocated to such
pooled separate account or collective investment fund; or
(c) the Source constitutes assets of an "investment fund" (within the
meaning of Part V of the QPAM Exemption) managed by a "qualified professional
asset manager" or "QPAM" (within the meaning of Part V of the QPAM Exemption),
no employee benefit plan's assets that are included in such investment fund,
when combined with the assets of all other employee benefit plans established or
maintained by the same employer or by an affiliate (within the meaning of
Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client assets
managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption
are satisfied, neither the QPAM nor a person controlling or controlled by the
QPAM (applying the definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and (i) the identity of
such QPAM and (ii) the names of all employee benefit plans whose assets are
included in such investment fund have been disclosed to the Company in writing
pursuant to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans, each of
which has been identified to the Company in writing pursuant to this paragraph
(e); or
(f) the Source does not include assets of any "employee benefit plan"
other than a plan exempt from the coverage of ERISA.
If you indicate that you are relying on any representation contained in
subparagraph (b), (c) or (e) above, the Company shall deliver on the Closing
Date a certificate, which shall either state that (i) it is neither a party in
interest nor a "disqualified person" (as defined in Section 4975(e)(2) of the
Code), with respect to any plan identified pursuant to paragraphs (b) or (e)
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above, or (ii) with respect to any plan identified pursuant to subparagraph (c)
above, neither it nor any "affiliate" (as defined in Section V(c) of the QPAM
Exemption) has at such time, and during the immediately preceding one year,
exercised the authority to appoint or terminate said QPAM as Manager of any plan
identified in writing pursuant to subparagraph (c) above or to negotiate the
terms of said QPAM's management agreement on behalf of any such identified plan.
As used in this Section 6.2, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.
SECTION 7. INFORMATION AS TO COMPANY.
Section 7.1. Financial and Business Information. The Company shall
deliver to each holder of Notes that is an Institutional Investor:
(a) Quarterly Statements - promptly, and in any event within 60 days
after the end of each quarterly fiscal period in each fiscal year of the Company
(other than the last quarterly fiscal period of each such fiscal year),
duplicate copies of:
(i) consolidated balance sheets of (x) the Company and its
Subsidiaries and (y) the Company and its Restricted Subsidiaries as at
the end of such quarter, and
(ii) consolidated statements of income, cash flows, and
changes in shareholders' equity, of (x) the Company and its
Subsidiaries and (y) the Company and its Restricted Subsidiaries for
such quarter and (in the case of the second and third quarters) for the
portion of the fiscal year ending with such quarter, setting forth in
each case in comparative form the figures for the corresponding periods
in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial statements
generally, and certified by a Senior Financial Officer as fairly
presenting, in all material respects, the financial position of the
companies being reported on and their results of operations and cash
flows, subject to changes resulting from year-end adjustments, provided
that delivery within the time period specified above of copies of the
Company's Quarterly Report on Form 10-Q prepared in compliance with the
requirements therefor and filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this Section
7.1(a) with respect to the financial statements of the Company and its
Subsidiaries;
(b) Annual Statements - promptly, and in any event within 105 days
after the end of each fiscal year of the Company, duplicate copies of,
(i) consolidated balance sheets of (x) the Company and its
Subsidiaries and (y) the Company and its Restricted Subsidiaries, as at
the end of such year, and
(ii) consolidated statements of income, cash flows, and
changes in shareholders' equity, of (x) the Company and its
Subsidiaries and (y) the Company and
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its Restricted Subsidiaries, for such year, setting forth in each case
in comparative form the figures for the previous fiscal year, all in
reasonable detail, prepared in accordance with GAAP, (x) in the case of
the consolidated financial statements of the Company and its Restricted
Subsidiaries referred to above, certified by a Senior Financial Officer
as fairly presenting, in all material respects, the financial position
of the companies being reported on and their results of operations and
cash flows and, (y) in the case of each of the consolidated financial
statements of the Company and its Subsidiaries referred to above,
accompanied by
(A) an opinion thereon of independent certified
public accountants of recognized national standing, which
opinion shall state that such financial statements present
fairly, in all material respects, the financial position of
the companies being reported upon and their results of
operations and cash flows and have been prepared in conformity
with GAAP, and that the examination of such accountants in
connection with such financial statements has been made in
accordance with generally accepted auditing standards, and
that such audit provides a reasonable basis for such opinion
in the circumstances, and
(B) a certificate of such accountants stating that
they have reviewed this Agreement and stating further whether,
in making their audit, they have become aware of any condition
or event that then constitutes a Default or an Event of
Default, and, if they are aware that any such condition or
event then exists, specifying the nature and period of the
existence thereof (it being understood that such accountants
shall not be liable, directly or indirectly, for any failure
to obtain knowledge of any Default or Event of Default unless
such accountants should have obtained knowledge thereof in
making an audit in accordance with generally accepted auditing
standards or did not make such an audit), provided that the
delivery within the time period specified above of the
Company's Annual Report on Form 10-K for such fiscal year
(together with the Company's annual report to shareholders if
any, prepared pursuant to Rule 14a-3 under the Exchange Act)
prepared in accordance with the requirements therefor and
filed with the Securities and Exchange Commission, together
with the accountant's certificate described in clause (B)
above shall be deemed to satisfy the requirements of this
Section 7.1(b) with respect to the financial statements of the
Company and its Subsidiaries;
(c) SEC and Other Reports - promptly upon their becoming available, one
copy of (i) each financial statement, report, notice or proxy statement sent by
the Company or any Subsidiary to public securities holders generally, and (ii)
each regular or periodic report, each registration statement (without exhibits
except as expressly requested by such holder), and each prospectus and all
amendments thereto filed by the Company or any Subsidiary with the Securities
and Exchange Commission and of all press releases and other statements made
available generally by the Company or any Subsidiary to the public concerning
developments that are Material;
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(d) Notice of Default or Event of Default - promptly, and in any event
within five days after a Responsible Officer becoming aware of (i) the existence
of any Default or Event of Default or that any Person has given any notice or
taken any action with respect to a claimed default hereunder or that any Person
has given any notice or taken any action with respect to a claimed default of
the type referred to in Section 11(f), a written notice specifying the nature
and period of existence thereof and what action the Company is taking or
proposes to take with respect thereto or (ii) the acceleration of any Note
pursuant to Section 12.1 hereof, a written notice setting forth the principal
amount of each Note so accelerated, the name of the holder thereof and the
circumstances surrounding such acceleration;
(e) ERISA Matters - promptly, and in any event within five days after a
Responsible Officer becoming aware of any of the following, a written notice
setting forth the nature thereof and the action, if any, that the Company or an
ERISA Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable event, as defined
in section 4043(b) of ERISA and the regulations thereunder, for which
notice thereof has not been waived pursuant to such regulations as in
effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings under
section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Company or any
ERISA Affiliate of a notice from a Multiemployer Plan that such action
has been taken by the PBGC with respect to such Multiemployer Plan; or
(iii) any event transaction or condition that could result in
the incurrence of any liability by the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, or in the
imposition of any Lien on any of the rights, properties or assets of
the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA
or such penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then existing,
could reasonably be expected to have a Material Adverse Effect;
(f) Notices from Governmental Authority - promptly, and in any event
within 30 days of receipt thereof, copies of any notice to the Company or any
Subsidiary from any Federal or state Governmental Authority relating to any
order, ruling, statute or other law or regulation that could reasonably be
expected to have a Material Adverse Effect; and
(g) Requested Information - with reasonable promptness, such other data
and information relating to the business, operations, affairs, financial
condition, assets or properties of the Company or any of its Subsidiaries or
relating to the ability of the Company to perform its obligations hereunder and
under the Notes as from time to time may be reasonably requested by any such
holder of Notes, including, without limitation, quarterly and annual
consolidating balance sheets and statements of income of the Company and its
Subsidiaries (upon the request of a holder until such time, if any, as such
request has been rescinded).
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Section 7.2. Officer's Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b)
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth:
(a) Covenant Compliance - the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Section 10.3 through Section 10.9 hereof,
inclusive, during the quarterly or annual period covered by the statements then
being furnished (including with respect to each such Section, where applicable,
the calculations of the maximum or minimum amount, ratio or percentage, as the
case may be permissible under the terms of such Sections, and the calculation of
the amount, ratio or percentage then in existence); and
(b) Event of Default - a statement that such officer has reviewed the
relevant terms hereof and has made, or caused to be made, under his or her
supervision, a review of the transactions and conditions of the Company and its
Subsidiaries from the beginning of the quarterly or annual period covered by the
statements then being furnished to the date of the certificate and that such
review shall not have disclosed the existence during such period of any
condition or event that constitutes a Default or an Event of Default or, if any
such condition or event existed or exists (including, without limitation, any
such event or condition resulting from the failure of the Company or any
Subsidiary to comply with any Environmental Law), specifying the nature and
period of existence thereof and what action the Company shall have taken or
proposes to take with respect thereto.
Section 7.3. Inspection. The Company shall permit the representatives
of each holder of Notes that is an Institutional Investor:
(a) No Default - if no Default or Event of Default then exists, at the
expense of such holder and upon reasonable prior notice to the Company, to visit
the principal executive office of the Company, to discuss the affairs, finances
and accounts of the Company and its Subsidiaries with the Company's officers,
and (with the consent of the Company, which consent will not be unreasonably
withheld) its independent public accountants, and (with the consent of the
Company, which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Subsidiary, all at such
reasonable times and as often as may be reasonably requested in writing; and
(b) Default - if a Default or Event of Default then exists, at the
expense of the Company, to visit and inspect any of the offices or properties of
the Company or any Subsidiary, to examine all their respective books of account,
records, reports and other papers, to make copies and extracts therefrom and to
discuss their respective affairs, finances and accounts with their respective
officers and independent public accountants (and by this provision the Company
authorizes said accountants to discuss the affairs, finances and accounts of the
Company and its Subsidiaries), all at such times and as often as may be
requested.
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SECTION 8. PREPAYMENT OF THE NOTES.
Section 8.1. Required Prepayments. On September 15, 2004 and on each
September 15 thereafter to and including 2007, the Company will prepay (i)
$10,200,000 principal amount (or such lesser principal amount as shall then be
outstanding) of the Notes at par and without payment of the Make-Whole Amount or
any premium, provided that, upon any partial prepayment of the Notes pursuant to
Section 8.2, pursuant to any Debt Offered Prepayment Application or pursuant to
any purchase of the Notes permitted by Section 8.5, the principal amount of each
required prepayment of the Notes becoming due under this Section 8.1 on and
after the date of such prepayment or purchase shall be reduced in the same
proportion as the aggregate unpaid principal amount of the Notes is reduced as a
result of such prepayment or purchase.
Section 8.2. Optional Prepayments with Make-Whole Amount. The Company
may, at its option, upon notice as provided below, prepay at any time all, or
from time to time any part of, the Notes, in an amount not less than 10% of the
aggregate principal amount of the Notes then outstanding in the case of a
partial prepayment at 100% of the principal amount so prepaid, together with
interest accrued thereon to the date of such prepayment, plus the Make-Whole
Amount determined for the prepayment date with respect to such principal amount.
The Company will give each holder of Notes written notice of each optional
prepayment under this Section 8.2 not less than 30 days and not more than 60
days prior to the date fixed for such prepayment. Each such notice shall specify
such date, the aggregate principal amount of the Notes to be prepaid on such
date, the principal amount of each Note held by such holder to be prepaid
(determined in accordance with Section 8.3), and the interest to be paid on the
prepayment date with respect to such principal amount being prepaid, and shall
be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make-Whole Amount due in connection with such prepayment (calculated
as if the date of such notice were the date of the prepayment), setting forth
the details of such computation. Two Business Days prior to such prepayment, the
Company shall deliver to each holder of Notes a certificate of a Senior
Financial Officer specifying the calculation of such Make-Whole Amount as of the
specified prepayment date. References to the Make-Whole Amount above shall be
deemed to refer to the Modified Make-Whole Amount in connection with any Debt
Offered Prepayment Application.
Section 8.3. Allocation of Partial Prepayments. Except as provided in
the second paragraph of Section 8.4 with respect to Debt Offered Prepayment
Applications, in the case of each partial prepayment of the Notes, the principal
amount of the Notes to be prepaid shall be allocated among all of the Notes at
the time outstanding in proportion, as nearly as practicable, to the respective
unpaid principal amounts thereof not theretofore called for prepayment.
Section 8.4. Maturity; Surrender, Etc. In the case of each prepayment
of Notes pursuant to this Section 8 and as provided in the second paragraph of
this Section 8.4, the principal amount of each Note to be prepaid shall mature
and become due and payable on the date fixed for such prepayment, together with
interest on such principal amount accrued to such date and the applicable
Make-Whole Amount, if any. From and after such date, unless the Company shall
fail to pay such principal amount when so due and payable together with the
interest and Make-Whole Amount, if any, as aforesaid, interest on such principal
amount shall cease to accrue. Any
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Note paid or prepaid in full shall be surrendered to the Company and cancelled
and shall not be reissued, and no Note shall be issued in lieu of any prepaid
principal amount of any Note.
Any Debt Offered Prepayment Application shall be on terms as set forth
in Section 8.2 (provided that the Modified Make-Whole Amount shall be paid in
lieu of the Make-Whole Amount) and this Section 8.4, provided that only those
holders who shall have accepted any offer in respect of such Debt Offered
Prepayment Application shall have their Notes prepaid, in whole or part, in
connection therewith.
Section 8.5. Purchase of Notes. The Company will not and will not
permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly
or indirectly, any of the outstanding Notes except (a) upon the payment or
prepayment of the Notes in accordance with the terms of this Agreement and the
Notes (including, without limitation, in connection with any Debt Offered
Prepayment Application accepted by any holder of a Note) or (b) pursuant to an
offer to purchase made by the Company or an Affiliate pro rata to the holders of
all Notes at the time outstanding upon the same terms and conditions. Any such
offer shall provide each holder with sufficient information to enable it to make
an informed decision with respect to such offer, and shall remain open for at
least 30 Business Days. If the holders of more than 75% of the principal amount
of the Notes then outstanding accept such offer, the Company shall promptly
notify the remaining holders of such fact and the expiration date for the
acceptance by holders of Notes of such offer shall be extended by the number of
days necessary to give each such remaining holder at least 10 Business Days from
its receipt of such notice to accept such offer. The Company will promptly
cancel all Notes acquired by it or any Affiliate pursuant to any payment,
prepayment or purchase of Notes pursuant to any provision of this Agreement and
no Notes may be issued in substitution or exchange for any such Notes.
Section 8.6. Make-Whole Amount. The term "Make-Whole Amount" means,
with respect to any Note, an amount equal to the excess, if any, of the
Discounted Value of the Remaining Scheduled Payments with respect to the Called
Principal of such Note over the amount of such Called Principal, provided that
the Make-Whole Amount may in no event be less than zero. For the avoidance of
doubt, the Company and you agree that the determination of the Make-Whole Amount
in respect of each Series of Notes will result in different Make-Whole Amounts
in respect of the Notes for each such Series. For the purposes of determining
the Make-Whole Amount, the following terms have the following meanings:
Called Principal means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to Section 8.2 or
has become or is declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.
Discounted Value means, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
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Reinvestment Yield means, with respect to the Called Principal
of any Note, 0.50% over the yield to maturity implied by (i) the yields
reported, as of 10:00 A.M. (New York City time) on the second Business
Day preceding the Settlement Date with respect to such Called
Principal, on the display designated as "USD" of the Bloomberg
Financial Markets Services Screen (or such other display as may replace
USD of Bloomberg Financial Markets Services Screen) for actively traded
U.S. Treasury securities having a maturity equal to the Remaining
Average Life of such Called Principal as of such Settlement Date, or
(ii) if such yields are not reported as of such time or the yields
reported as of such time are not ascertainable, the Treasury Constant
Maturity Series Yields reported, for the latest day for which such
yields have been so reported as of the second Business Day preceding
the Settlement Date with respect to such Called Principal, in Federal
Reserve Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded U.S. Treasury securities having a
constant maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date. Such implied yield will be
determined, if necessary, by (a) converting U.S. Treasury bill
quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between (1) the
actively traded U.S. Treasury security with the duration closest to and
greater than the Remaining Average Life and (2) the actively traded
U.S. Treasury security with the duration closest to and less than the
Remaining Average Life.
Remaining Average Life means with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (b) the number of years (calculated to the nearest one-twelfth year)
that will elapse between the Settlement Date with respect to such
Called Principal and the scheduled due date of such Remaining Scheduled
Payment.
Remaining Scheduled Payments means, with respect to the Called
Principal of any Note of any series, all payments of such Called
Principal and interest thereon that would be due after the Settlement
Date with respect to such Called Principal if no payment of such Called
Principal were made prior to its scheduled due date, provided that if
such Settlement Date is not a date on which interest payments are due
to be made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on
such Settlement Date pursuant to Section 8.2 or 12.1.
Settlement Date means, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2 or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context requires.
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SECTION 9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
Section 9.1. Compliance with Law. The Company will, and will cause each
of its Subsidiaries to, comply with all laws, ordinances or governmental rules
or regulations to which each of them is subject, including, without limitation,
Environmental Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in effect such licenses, certificates,
permits, franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
Section 9.2. Insurance. The Company will, and will cause each of its
Subsidiaries to, maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business
and similarly situated.
Section 9.3. Maintenance of Properties. The Company will, and will
cause each of its Restricted Subsidiaries to, maintain and keep, or cause to be
maintained and kept, their respective properties in good repair, working order
and condition (other than ordinary wear and tear), so that the business carried
on in connection therewith may be properly conducted at all times, provided that
this Section shall not prevent the Company or any Restricted Subsidiary from
discontinuing the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Company has
concluded that such discontinuance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
Section 9.4. Payment of Taxes and Claims. The Company will and will
cause each of its Subsidiaries to file all tax returns required to be filed in
any jurisdiction and to pay and discharge all taxes shown to be due and payable
on such returns and all other taxes, assessments, governmental charges, or
levies imposed on them or any of their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent and all claims for which sums have become due and
payable that have or might become a Lien on properties or assets of the Company
or any Subsidiary, provided that neither the Company nor any Subsidiary need pay
any such tax or assessment or claims if (i) the amount, applicability or
validity thereof is contested by the Company or such Subsidiary on a timely
basis in good faith and in appropriate proceedings, and the Company or a
Subsidiary has established adequate reserves therefor in accordance with GAAP on
the books of the Company or such Subsidiary or (ii) the nonpayment of all such
taxes and assessments in the aggregate could not reasonably be expected to have
a Material Adverse Effect.
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Section 9.5. Corporate Existence, Etc. The Company will at all times
preserve and keep in full force and effect its corporate existence. Subject to
Sections 10.2 and 10.3, the Company will at all times preserve and keep in full
force and effect the corporate existence of each of its Restricted Subsidiaries
and all rights and franchises of the Company and its Restricted Subsidiaries
unless, in the good faith judgment of the Company the termination of or failure
to preserve and keep in full force and effect such corporate existence, right or
franchise could not, individually or in the aggregate, have a Material Adverse
Effect.
Section 9.6. Nature of Business. The Company will not, and will not
permit any of its Restricted Subsidiaries to, engage to any substantial extent
in any business other than the businesses in which the Company and its
Restricted Subsidiaries are engaged on the date of this Agreement as described
in the Memorandum, the modular housing business and businesses reasonably
related to thereto or in furtherance thereof excluding, in all events, the
business of manufacturing or selling motor homes, travel trailers, camper units
or recreational vehicles (other than in respect of motor homes, travel trailers,
camper units or recreational vehicles taken as trade-ins in connection with the
pursuit of its business as provided in this Section 9.6).
Section 9.7. Compliance Regarding Year 2000. The Company shall take all
actions necessary and commit adequate resources to assure that its
computer-based and other systems (and those of all Subsidiaries) are able to
effectively process data, including dates before, on and after January 1, 2000,
without experiencing any Year 2000 Problem that could cause a Material Adverse
Effect. At the request of any holder of Notes, the Company will provide such
holder with assurances and substantiations (including, but not limited to, the
results of internal or external audit reports prepared in the ordinary course of
business) reasonably acceptable to such holder as to the capability of the
Company and its Subsidiaries to conduct its and their businesses and operations
before, on and after January 1, 2000 without experiencing a Year 2000 Problem
causing a Material Adverse Effect.
SECTION 10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
Section 10.1. Transactions with Affiliates. The Company will not and
will not permit any Restricted Subsidiary to enter into directly or indirectly
any Material transaction or Material group of related transactions (including
without limitation the purchase, lease, sale or exchange of properties of any
kind or the rendering of any service) with any Affiliate (other than the Company
or another Restricted Subsidiary), except in the ordinary course and pursuant to
the reasonable requirements of the Company's or such Restricted Subsidiary's
business and upon fair and reasonable terms no less favorable to the Company or
such Subsidiary than would be obtainable in a comparable arm's-length
transaction with a Person not an Affiliate.
Section 10.2. Merger, Consolidation, etc. The Company shall not, and
shall not permit any Restricted Subsidiary to, consolidate with or merge with
any other corporation or convey, transfer or lease substantially all of its
assets in a single transaction or series of transactions to any Person unless:
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(a) in the case of any consolidation or merger involving the Company,
the successor formed by such consolidation or the survivor of such merger or the
Person that acquires by conveyance, transfer or lease substantially all of the
assets of the Company as an entirety, as the case may be, shall be a solvent
corporation organized and existing under the laws of the United States or any
State thereof (including the District of Columbia), and, if the Company is not
such corporation, (i) such corporation shall have executed and delivered to each
holder of any Notes its assumption of the due and punctual performance and
observance of each covenant and condition of this Agreement, the Other
Agreements and the Notes and (ii) shall have caused to be delivered to each
holder of any Notes an opinion of nationally recognized independent counsel, or
other independent counsel reasonably satisfactory to the Required Holders, to
the effect that all agreements or instruments effecting such assumption have
been duly authorized, executed and delivered and are valid and enforceable in
accordance with their terms and comply with the terms hereof;
(b) in the case of any consolidation or merger involving a Restricted
Subsidiary and not involving the Company, such Restricted Subsidiary shall be
the survivor, or the successor corporation shall be a Wholly-Owned Restricted
Subsidiary;
(c) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing; and
(d) immediately after giving effect to such transaction, the successor
corporation would be permitted to incur at least $1.00 of additional Debt
pursuant to Section 10.4.
No such conveyance, transfer or lease of substantially all of the
assets of the Company shall have the effect of releasing the Company or any
successor corporation that shall theretofore have become such in the manner
prescribed in this Section 10.2 from its liability under this Agreement or the
Notes. Anything contained herein to the contrary notwithstanding, any
consolidation or merger of a Restricted Subsidiary into an Unrestricted
Subsidiary, where the Unrestricted Subsidiary shall be the surviving entity,
shall be treated as if the net book value of the assets of such Restricted
Subsidiary had been Transferred to such Unrestricted Subsidiary and such
Transfer shall constitute an Asset Disposition and shall be tested under Section
10.3 and not this Section 10.2.
Section 10.3. Sale of Assets, Etc. Except as permitted under Section
10.2, the Company will not, and will not permit any of its Restricted
Subsidiaries to, make any Asset Disposition unless:
(a) in the good faith opinion of the management or the Board of
Directors of the Company, the Asset Disposition is in exchange for consideration
having a Fair Market Value at least equal to that of the property exchanged and
is in the best interests of the Company or such Restricted Subsidiary;
(b) immediately after giving effect to the Asset Disposition, no
Default or Event of Default would exist;
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(c) immediately after giving effect to the Asset Disposition, (i) the
net book value of all property that was the subject of any Asset Disposition
occurring in the period of 365 days then ending would not exceed 10% of
Consolidated Assets as of the end of the then most recently ended fiscal year of
the Company and (ii) the net book value of all property that was the subject of
any Asset Disposition occurring since the date of the Closing would not exceed
35% of Consolidated Assets as of the end of the then most recently ended fiscal
year of the Company; and
(d) the Company would be permitted to incur at least $1.00 of
additional Debt pursuant to the provisions of Section 10.4.
To the extent that the Net Proceeds Amount for any Asset Disposition is
applied to a Debt Offered Prepayment Application and/or is applied to, or
committed in writing to, a Property Reinvestment Application, in each case
within 365 days after the consummation of such Asset Disposition (and, in the
case of any such commitment, such Property Reinvestment Application is actually
consummated within 30 days after the expiration of such 365-day period), then,
to the extent of such application, such Asset Disposition shall be excluded from
any calculations set forth in clause (c) above.
For purposes of determining the net book value of any property that is
the subject of an Asset Disposition, such net book value shall be the net book
value of such property, as determined in accordance with GAAP, at the time of
the consummation of such Asset Disposition, provided that, in the case of a
Transfer of any capital stock or other equity interests of a Subsidiary, the net
book value thereof shall be deemed to be an amount equal to
(A) the difference (determined after eliminating all
intra-company transactions, assets and liabilities in
accordance with GAAP) of
(1) the net book value of the total assets
of such Subsidiary less
(2) the liabilities of such Subsidiary
times
(B) a percentage that is equal to the percentage of
total equity interests of such Subsidiary attributable to the
capital stock or other equity interest being so Transferred.
Section 10.4. Limitations on Debt. The Company will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, create, incur,
assume, guarantee, or otherwise become directly or indirectly liable with
respect to any Debt, unless on the date the Company or such Restricted
Subsidiary becomes liable with respect to any such Debt and immediately after
giving effect thereto and the concurrent retirement of any other Debt,
(a) Total Senior Debt is less than 60% of Total Capitalization,
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(b) the sum of Total Senior Debt plus Total Subordinated Debt is less
than 65% of Total Capitalization,
(c) Priority Debt is less than 15% of Consolidated Net Worth, and
(d) no Default or Event of Default exists.
Section 10.5. Fixed Charges Coverage Ratio. The Company will not permit
the ratio of (i) Earnings Before Interest, Taxes and Rent to (ii) Total Interest
and Rent Expense, determined as of the end of each fiscal quarter, for the
immediately preceding four consecutive fiscal quarters (taken as a single
accounting period) to be less than 2.25 to 1.00.
Section 10.6. Net Working Capital. The Company will not, at any time,
permit Net Working Capital to be less than $1.00.
Section 10.7. Consolidated Net Worth. The Company will not permit
Consolidated Net Worth to be less than the sum of (a) $85,000,000, plus (b) an
aggregate amount equal to 35% of its Consolidated Net Income on a cumulative
basis (but, in each case, only if a positive number) for each completed fiscal
year beginning with the fiscal year ended May 31, 1998.
Section 10.8. Restricted Payments and Restricted Investments.
(a) Limitation. The Company will not, and will not permit any of its
Restricted Subsidiaries to, at any time, (i) declare or make or incur any
liability to declare or make, any Restricted Payment or (ii) make or authorize
any Restricted Investment, unless immediately after giving effect to such
action, the aggregate amount of Restricted Payments of the Company and its
Restricted Subsidiaries declared or made during the period commencing on June 1,
1997 and ending on the date of such action, inclusive, and the amount of all
Restricted Investments at such time, would not exceed the sum of
(i) $5,000,000, plus
(ii) 50% of Consolidated Net Income on a cumulative
basis for such period (or minus 100% of Consolidated Net
Income for such period if Consolidated Net Income is a loss).
(b) Time of Payment. The Company will not, and will not permit any of
its Restricted Subsidiaries to, authorize or declare a Restricted Payment that
is not payable within 60 days of authorization or declaration.
Section 10.9. Limitation on Liens. The Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly create,
incur, assume or permit to exist (upon the happening of a contingency or
otherwise) any Lien on or with respect to any property or asset (including,
without limitation, any document or instrument in respect of goods or accounts
receivable) of the Company or any such Restricted Subsidiary, whether now owned
or held or hereafter acquired, or any income or profits therefrom or assign or
otherwise convey any right to
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receive income or profits (unless it makes, or causes to be made, effective
provision whereby the Notes will be equally and ratably secured with any and all
other obligations thereby secured, such security to be pursuant to an agreement
reasonably satisfactory to the Required Holders and, in any such case, the Notes
shall have the benefit, to the fullest extent that, and with such priority as,
the holders of the Notes may be entitled under applicable law, of an equitable
Lien on such property, provided that each holder retains the right to waive,
with respect to itself, the benefits of any such Lien), except:
(a) Liens for taxes, assessments or other governmental charges which
are not yet due and payable or the payment of which is not at the time required
by Section 9.4;
(b) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other similar Liens, in each case, incurred in the
ordinary course of business for sums not yet due and payable or the payment of
which is not at the time required by Section 9.1;
(c) Liens (other than any Lien imposed by ERISA) incurred or deposits
made in the ordinary course of business (i) in connection with workers'
compensation, unemployment insurance and other types of social security or
retirement benefits, or (ii) to secure (or to obtain letters of credit that
secure) the performance of tenders, statutory obligations, surety bonds, appeal
bonds (not in excess of $1,000,000), bids, leases (other than Capital Leases),
performance bonds, purchase, construction or sales contracts and other similar
obligations, in each case not incurred or made in connection with the borrowing
of money, the obtaining of advances or credit or the payment of the deferred
purchase price of property;
(d) any attachment or judgment Lien, unless the judgment it secures (i)
shall not, within 30 days after the entry thereof, have been discharged or
execution thereof stayed pending appeal, or shall not have been discharged
within 30 days after the expiration of any such stay or (ii) exceeds $1,000,000;
(e) leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges or encumbrances, in each case incidental
to, and not interfering with, the ordinary conduct of the business of the
Company or any of its Restricted Subsidiaries, provided that such Liens do not,
in the aggregate, materially detract from the value of such property;
(f) Liens on property or assets of the Company or any of its Restricted
Subsidiaries securing Debt owing to the Company or to another Restricted
Subsidiary;
(g) Liens on Manufactured Homes inventory (together with any mobile
homes, motor homes, travel trailers, camper units, recreational vehicles and any
furnishings, furniture and accessories used therewith or attached or connected
thereto which, in each case, may then be owned by the Company or any Restricted
Subsidiary) and Cash in Transit of the Company and its Restricted Subsidiaries
securing, in each case, Debt of the Company or a Restricted Subsidiary under its
Floor Plan Financing;
(h) Liens existing on the date of this Agreement and securing Debt of
the Company and its Restricted Subsidiaries as indicated on Schedule 5.15;
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(i) any Lien created to secure all or any part of the purchase price,
or to secure Debt incurred or assumed to pay all or any part of the purchase
price or cost of construction, of tangible property (or any improvement thereon)
acquired or constructed by the Company or a Restricted Subsidiary after the date
of the Closing, provided that
(i) any such Lien shall extend solely to the item or items of
such property (or improvement thereon) so acquired or constructed and,
if required by the terms of the instrument originally creating such
Lien, other property (or improvement thereon) which is an improvement
to or is acquired for specific use in connection with such acquired or
constructed property (or improvement thereon) or which is real property
being improved by such acquired or constructed property (or improvement
thereon),
(ii) the principal amount of the Debt secured by any such Lien
shall at no time exceed an amount equal to 75% of the lesser of (A) the
cost of the Company or such Restricted Subsidiary of the property (or
improvement thereon) so acquired or constructed and (B) the Fair Market
Value (as determined in good faith by the board of directors of the
Company) of such property (or improvement thereon) at the time of such
acquisition or construction, and
(iii) any such Lien shall be created contemporaneously with, or
within 180 days after, the acquisition or construction of such
property;
(j) any Lien existing on property of a Person immediately prior to its
being consolidated with or merged into the Company or a Restricted Subsidiary or
its becoming a Restricted Subsidiary, or any Lien existing on any property
acquired by the Company or any Restricted Subsidiary at the time such property
is so acquired (whether or not the Debt secured thereby shall have been
assumed), provided that (i) no such Lien shall have been created or assumed in
contemplation of such consolidation or merger or such Person's becoming a
Restricted Subsidiary or such acquisition of property, (ii) each such Lien shall
extend solely to the item or items of property so acquired and, if required by
the terms of the instrument originally creating such Lien, other property which
is an improvement to or is acquired for specific use in connection with such
acquired property and (iii) the principal amount of the Debt secured by such
Lien shall at no time exceed an amount equal to 75% of the lesser of (A) the
cost to the Company or such Restricted Subsidiary of the acquisition of such
property or, in the case of a consolidation or merger or such Person's becoming
a Restricted Subsidiary, allocated (in good faith by a Senior Financial Officer)
to such property and (B) the Fair Market Value (as determined in good faith by
the board of directors of the Company) of such property (or improvement thereon)
at the time of such acquisition, consolidation, merger or such Person's becoming
a Restricted Subsidiary, as the case may be;
(k) Liens arising from the Transfer by the Company or any Restricted
Subsidiary of all or any of its receivables, whether with or without recourse to
the Company or such Restricted Subsidiary, which Liens shall extend solely to
such receivables, the proceeds in respect thereof, receivables substituted
therefor and books or records in respect thereof, provided that such Transfer is
in the ordinary course of business, is an arm's-length transaction, is not
accounted for under GAAP as a secured loan and, in the good faith opinion of a
Senior Financial Officer, is for
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fair value and in the best interests of the Company and the Restricted
Subsidiaries, taken as a whole, and provided further, that recourse to the
Company or such Restricted Subsidiary in connection with any such Transfer shall
be limited to (A) liabilities arising from the breach of warranties made by the
Company or such Restricted Subsidiary in connection with such Transfer and (B)
an amount, with respect to any such Transfer and in addition to clause (A)
above, not in excess of 20% of the proceeds of the disposition of the
receivables so transferred in such Transfer;
(l) other Liens provided that at the time of incurrence of such other
Liens and after giving effect to the application of the proceeds secured
thereby, Priority Debt shall not exceed 15% of Consolidated Net Worth; and
(m) any Lien renewing, extending, or refunding any Lien permitted by
paragraphs (g), (h), (i) or (j) of this Section 10.9, provided that (i) the
principal amount of Debt secured by such Lien immediately prior to such
extension, renewal or refunding is not increased or the maturity thereof
reduced, (ii) such Lien is not extended to any other property, and (iii)
immediately after such extension, renewal or refunding no Default or Event of
Default would exist.
Section 10.10. Restrictions on Dividends of Subsidiaries, Etc. Except
for the restrictions specifically described in Schedule 10.10, the Company will
not, and will not permit any of its Restricted Subsidiaries to, enter into any
agreement with a Person other than the Company or another Restricted Subsidiary
which would restrict any such Restricted Subsidiary's ability or right to pay
dividends to, or make advances to or Investments in, the Company or, if such
Restricted Subsidiary is not directly owned by the Company, the "parent"
Subsidiary of such Restricted Subsidiary.
SECTION 11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or Make-Whole
Amount, if any, on any Note when the same becomes due and payable, whether at
maturity or at a date fixed for prepayment or by declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any Note for
more than five Business Days after the same becomes due and payable; or
(c) the Company defaults in the performance of or compliance with any
term contained in Section 10; or
(d) the Company defaults in the performance of or compliance with any
term contained herein (other than those referred to in paragraphs (a), (b) and
(c) of this Section 11) and such default is not remedied within 30 days after
the earlier of (i) a Responsible Officer obtaining actual knowledge of such
default and (ii) the Company receiving written notice of such default
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from any holder of a Note (any such written notice to be identified as a "notice
of default" and to refer specifically to this paragraph (d) of Section 11); or
(e) any representation or warranty made in writing by or on behalf of
the Company or by any officer of the Company in this Agreement or in any writing
furnished in connection with the transactions contemplated hereby proves to have
been false or incorrect in any material respect on the date as of which made, or
(f) (i) the Company or any Restricted Subsidiary is in default (as
principal or as guarantor or other surety) in the payment of any principal of or
premium or make-whole amount or interest on any Indebtedness that is outstanding
in an aggregate principal amount of at least $2,000,000 beyond any period of
grace provided with respect thereto, or (ii) the Company or any Restricted
Subsidiary is in default in the performance of or compliance with any term of
any evidence of any Indebtedness in an aggregate outstanding principal amount of
at least $2,000,000 or of any mortgage, indenture or other agreement relating
thereto or any other condition exists, and as a consequence of such default or
condition such Indebtedness has become, or has been declared (or one or more
Persons are entitled to declare such Indebtedness to be), due and payable before
its stated maturity or before its regularly scheduled dates of payment, or (iii)
as a consequence of the occurrence or continuation of any event or condition
(other than the passage of time or the right of the holder of Indebtedness to
convert such Indebtedness into equity interests), (x) the Company or any
Restricted Subsidiary has become obligated to purchase or repay Indebtedness
before its regular maturity or before its regularly scheduled dates of payment
in an aggregate outstanding principal amount of at least $2,000,000, or (y) one
or more Persons have the right to require the Company or any Restricted
Subsidiary so to purchase or repay such Indebtedness; or
(g) the Company or any Restricted Subsidiary (i) is generally not
paying, or admits in writing its inability to pay, its debts as they become due,
(ii) files, or consents by answer or otherwise to the filing against it of, a
petition for relief or reorganization or arrangement or any other petition in
bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency,
reorganization, moratorium or other similar law of any jurisdiction, (iii) makes
an assignment for the benefit of its creditors, (iv) consents to the appointment
of a custodian, receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its property, (v) is
adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for
the purpose of any of the foregoing; or
(h) a court or governmental authority of competent jurisdiction enters
an order appointing, without consent by the Company or any of its Restricted
Subsidiaries, a custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial part of its
property, or constituting an order for relief or approving a petition for relief
or reorganization or any other petition in bankruptcy or for liquidation or to
take advantage of any bankruptcy or insolvency law of any jurisdiction, or
ordering the dissolution, winding-up or liquidation of the Company or any of its
Restricted Subsidiaries, or any such petition shall be filed against the Company
or any of its Restricted Subsidiaries and such petition shall not be dismissed
within 60 days; or
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(i) a final judgment or judgments for the payment of money of greater
than $500,000 are rendered against one or more of the Company and its Restricted
Subsidiaries and which judgments are not, within 30 days after entry thereof,
bonded, discharged or stayed pending appeal; or
(j) if (i) any Plan shall fail to satisfy the minimum funding standards
of ERISA or the Code for any plan year or part thereof or a waiver of such
standards or extension of any amortization period is sought or granted under
section 412 of the Code, (ii) a notice of intent to terminate any Plan shall
have been or is reasonably expected to be filed with the PBGC or the PBGC shall
have instituted proceedings under ERISA section 4042 to terminate or appoint a
trustee to administer any Plan or the PBGC shall have notified the Company or
any ERISA Affiliate that a Plan may become a subject of any such proceedings
(iii) the aggregate "amount of unfunded benefit liabilities" (within the meaning
of section 4001(a)(18) of ERISA) under all Plans, determined in accordance with
Title IV of ERISA, shall exceed $500,000, (iv) the Company or any ERISA
Affiliate shall have incurred or is reasonably expected to incur any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of
the Code relating to employee benefit plans, (v) the Company or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or any
Restricted Subsidiary establishes or amends any employee welfare benefit plan
that provides post-employment welfare benefits in a manner that would increase
the liability of the Company or any Restricted Subsidiary thereunder; and any
such event or events described in clauses (i) through (vi) above, either
individually or together with any other such event or events, could reasonably
be expected to have a Material Adverse Effect.
As used in Section 11(j), the terms "employee benefit plan" and
"employee welfare benefit plan" shall have the respective meanings assigned to
such terms in Section 3 of ERISA.
SECTION 12. REMEDIES ON DEFAULT, ETC.
Section 12.1. Acceleration. (a) If an Event of Default with respect to
the Company described in paragraph (g) or (h) of Section 11 (other than an Event
of Default described in clause (i) of paragraph (g) or described in clause (vi)
of paragraph (g) by virtue of the fact that such clause encompasses clause (i)
of paragraph (g)) has occurred, all the Notes then outstanding shall
automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, any
holder or holders of more than 33-1/3% in principal amount of the Notes at the
time outstanding may at any time at its or their option, by notice or notices to
the Company, declare all the Notes then outstanding to be immediately due and
payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder or holders of Notes at the
time outstanding affected by such Event of Default may at any time, at its or
their option, by notice or notices to the Company, declare all the Notes held by
it or them to be immediately due and payable.
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Upon any Notes becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, plus (i) all accrued and
unpaid interest thereon and (ii) the Make-Whole Amount determined in respect of
such principal amount (to the full extent permitted by applicable law), shall
all be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for), and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
Section 12.2. Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 12.1, the holder of
any Note at the time outstanding may proceed to protect and enforce the rights
of such holder by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or in any Note, or for an injunction against a violation of any of the
terms hereof or thereof, or in aid of the exercise of any power granted hereby
or thereby or by law or otherwise.
Section 12.3. Rescission. At any time after any Notes have been
declared due and payable pursuant to clause (b) or (c) of Section 12.1, the
holders of more than 66-2/3% in principal amount of the Notes then outstanding,
by written notice to the Company, may rescind and annul any such declaration and
its consequences if (a) the Company has paid all overdue interest on the Notes,
all principal of and Make-Whole Amount, if any, on any Notes that are due and
payable and are unpaid other than by reason of such declaration, and all
interest on such overdue principal and Make-Whole Amount, if any, and (to the
extent permitted by applicable law) any overdue interest in respect of the
Notes, at the Default Rate, (b) all Events of Default and Defaults, other than
non-payment of amounts that have become due solely by reason of such
declaration, have been cured or have been waived pursuant to Section 17, and (c)
no judgment or decree has been entered for the payment of any monies due
pursuant hereto or to the Notes. No rescission and annulment under this Section
12.3 will extend to or affect any subsequent Event of Default or Default or
impair any right consequent thereon.
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No
course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under Section 15, the Company
will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including, without limitation,
reasonable attorneys' fees, expenses and disbursements.
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35
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
Section 13.1. Registration of Notes. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of Notes.
Section 13.2. Transfer and Exchange of Notes. Upon surrender of any
Note at the principal executive office of the Company for registration of
transfer or exchange (and in the case of a surrender for registration of
transfer, duly endorsed or accompanied by a written instrument of transfer duly
executed by the registered holder of such Note or its attorney duly authorized
in writing and accompanied by the address for notices of each transferee of such
Note or part thereof), the Company shall execute and deliver, at the Company's
expense (except as provided below), one or more new Notes (as requested by the
holder thereof) in exchange therefor, in an aggregate principal amount equal to
the unpaid principal amount of the surrendered Note. Each such new Note shall be
payable to such Person as such holder may request and shall be substantially in
the form of Exhibit 1. Each such new Note shall be dated and bear interest from
the date to which interest shall have been paid on the surrendered Note or dated
the date of the surrendered Note if no interest shall have been paid thereon.
The Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes. Notes
shall not be transferred in denominations of less than $250,000, provided that
if necessary to enable the registration of transfer by a holder of its entire
holding of Notes, one Note may be in a denomination of less than $250,000. Any
transferee, by its acceptance of a Note registered in its name (or the name of
its nominee), shall be deemed to have made the representation set forth in
Section 6.2.
Section 13.3. Replacement of Notes. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note
is, or is a nominee for, an original Purchaser or another holder of a
Note with a minimum net worth of at least $100,000,000, such Person's
own unsecured agreement of indemnity shall be deemed to be
satisfactory), or
(b) in the case of mutilation, upon surrender and
cancellation thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen,
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36
destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or
mutilated Note if no interest shall have been paid thereon.
SECTION 14. PAYMENTS ON NOTES.
Section 14.1. Place of Payment. Subject to Section 14.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in Chicago, Illinois at the principal office of The
First National Bank of Chicago in such jurisdiction. The Company may at any
time, by notice to each holder of a Note, change the place of payment of the
Notes so long as such place of payment shall be either the principal office of
the Company in such jurisdiction or the principal office of a bank or trust
company in such jurisdiction.
Section 14.2. Home Office Payment. So long as you or your nominee shall
be the holder of any Note, and notwithstanding anything contained in Section
14.1 or in such Note to the contrary, the Company will pay all sums becoming due
on such Note for principal, Make-Whole Amount, if any, and interest by the
method and at the address specified for such purpose below your name in Schedule
A, or by such other method or at such other address as you shall have from time
to time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Company made concurrently with or
reasonably promptly after payment or prepayment in full of any Note, you shall
surrender such Note for cancellation, reasonably promptly after any such
request, to the Company at its principal executive office or at the place of
payment most recently designated by the Company pursuant to Section 14.1. Prior
to any sale or other disposition of any Note held by you or your nominee you
will, at your election, either endorse thereon the amount of principal paid
thereon and the last date to which interest has been paid thereon or surrender
such Note to the Company in exchange for a new Note or Notes pursuant to Section
13.2. The Company will afford the benefits of this Section 14.2 to any
Institutional Investor that is the direct or indirect transferee of any Note
purchased by you under this Agreement and that has made the same agreement
relating to such Note as you have made in this Section 14.2.
SECTION 15. EXPENSES, ETC.
Section 15.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all reasonable costs
and expenses (including reasonable attorneys' fees of a special counsel and, if
reasonably required, local or other counsel) incurred by you and each Other
Purchaser or holder of a Note in connection with such transactions and in
connection with any amendments, waivers or consents under or in respect of this
Agreement or the Notes (whether or not such amendment, waiver or consent becomes
effective), including, without limitation (a) the costs and expenses incurred in
enforcing or defending (or determining whether or how to enforce or defend) any
rights under this Agreement or the Notes or in responding to any subpoena or
other legal process or informal investigative demand issued in connection with
this Agreement or the Notes, or by reason of being a holder of any Note, and (b)
the costs and expenses, including financial advisors' fees, incurred in
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37
connection with the insolvency or bankruptcy of the Company or any Subsidiary or
in connection with any work-out or restructuring, of the transactions
contemplated hereby and by the Notes. The Company will pay, and will save you
and each other holder of a Note harmless from, all claims in respect of any
fees, costs or expenses, if any, of brokers and finders incurred in connection
with the purchase by you of the Notes on the date of Closing (other than those
retained by you).
Section 15.2. Survival. The obligations of the Company under this
Section 15 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement or the Notes, and the
termination of this Agreement.
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by you of any Note or portion thereof or interest therein and the payment of any
Note, and may be relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any other holder of
a Note. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant to this Agreement shall be
deemed representations and warranties of the Company under this Agreement.
Subject to the preceding sentence, this Agreement and the Notes embody the
entire agreement and understanding between you and the Company and supersede all
prior agreements and understandings relating to the subject matter hereof.
SECTION 17. AMENDMENT AND WAIVER.
Section 17.1. Requirements. This Agreement and the Notes may be
amended, and the observance of any term hereof or of the Notes may be waived
(either retroactively or prospectively), with (and only with) the written
consent of the Company and the Required Holders, except that (a) no amendment or
waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any
defined term (as it is used therein), will be effective as to you unless
consented to by you in writing, and (b) no such amendment or waiver may, without
the written consent of the holder of each Note at the time outstanding affected
thereby, (i) subject to the provisions of Section 12 relating to acceleration or
rescission, change the amount or time of any prepayment or payment of principal
of, or reduce the rate or change the time of payment or method of computation of
interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage
of the principal amount of the Notes the holders of which are required to
consent to any such amendment or waiver, or (iii) amend any of Sections 8,
11(a), 11(b), 12, 17 or 20.
Section 17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the
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provisions hereof or of the Notes. The Company will deliver executed or true and
correct copies of each amendment, waiver or consent effected pursuant to the
provisions of this Section 17 to each holder of outstanding Notes promptly
following the date on which it is executed and delivered by, or receives the
consent or approval of, the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes of any waiver or amendment of any of the terms and provisions hereof or of
the Notes unless such remuneration is concurrently paid, or security is
concurrently granted, on the same terms, ratably to each holder of Notes then
outstanding whether or not such holder consented to such waiver or amendment.
Section 17.3. Binding Effect, Etc. Any amendment or waiver consented to
as provided in this Section 17 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein, the term "this Agreement" and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.
Section 17.4. Notes Held by Company. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding.
SECTION 18. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telefacsimile if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address
specified for such communications in Schedule A, or at such other
address as you or it shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at
such address as such other holder shall have specified to the Company
in writing, or
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39
(iii) if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of the Vice
President-Finance, or at such other address as the Company shall have
specified to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when actually
received.
SECTION 19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves) and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 19
shall not prohibit the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
SECTION 20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential Information" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified in writing when received by you as being
confidential information of the Company or such Subsidiary, including, without
limitation, the Memorandum, provided that such term does not include information
that (a) was publicly known or otherwise known to you prior to the time of such
disclosure, (b) subsequently becomes publicly known through no act or omission
by you or any Person acting, on your behalf, (c) otherwise becomes known to you
other than through disclosure by the Company or any Subsidiary or (d)
constitutes financial statements delivered to you under Section 7.1 that are
otherwise publicly available. You will maintain the confidentiality of such
Confidential Information in accordance with procedures adopted by you in good
faith to protect confidential information of third parties delivered to you,
provided that you may deliver or disclose Confidential Information to (i) your
directors, trustees, officers, employees, agents, attorneys and affiliates, (ii)
your financial advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in accordance with the
terms of this Section 20, (iii) any other holder of any Note that is not a
Competitor, (iv) any Institutional Investor to which you sell or offer to sell
such Note or any part thereof or any participation therein (if such Person has
agreed in writing prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 20), (v) any Person that is not a
Competitor from
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which you offer to purchase any security of the Company (if such Person has
agreed in writing prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 20), (vi) any federal or state
regulatory authority having jurisdiction over you, (vii) the National
Association of Insurance Commissioners or any similar organization, or any
nationally recognized rating agency that requires access to information about
your investment portfolio or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance with any
law, rule, regulation or order applicable to you, (x) in response to any
subpoena or other legal process, (y) in connection with any litigation to which
you are a party or (z) if an Event of Default has occurred and is continuing, to
the extent you may reasonably determine such delivery and disclosure to be
necessary or appropriate in the enforcement or for the protection of the rights
and remedies under your Notes and this Agreement. Each holder of a Note, by its
acceptance of a Note, will be deemed to have agreed to be bound by and to be
entitled to the benefits of this Section 20 as though it were a party to this
Agreement. On reasonable request by the Company in connection with the delivery
to any holder of a Note of information required to be delivered to such holder
under this Agreement or requested by such holder (other than a holder that is a
party to this Agreement or its nominee), such holder will enter into an
agreement with the Company embodying the provisions of this Section 20.
SECTION 21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your Affiliates as
the purchaser of the Notes that you have agreed to purchase hereunder by written
notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this Section 21), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this Section
21), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original holder of the
Notes under this Agreement.
SECTION 22. MISCELLANEOUS.
Section 22.1. Successors and Assigns. All covenants and other
agreements contained in this Agreement by or on behalf of any of the parties
hereto bind and inure to the benefit of their respective successors and assigns
(including, without limitation, any subsequent holder of a Note) whether so
expressed or not.
Section 22.2. Payments Due on Non-Business Days. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of principal
of or Make-Whole Amount or interest on any Note that is due on a date other than
a Business Day shall be made on the next
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41
succeeding Business Day without including the additional days elapsed in the
computation of the interest payable on such next succeeding Business Day.
Section 22.3. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
Section 22.4. Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
Section 22.5. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies hereof, each signed by less than all, but together signed by
all, of the parties hereto.
Section 22.6. Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the law of the State of Illinois excluding choice-of-law principles of the law
of such State that would require the application of the laws of a jurisdiction
other than such State.
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42
If you are in agreement with the foregoing please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Company.
Very truly yours,
AMERICAN HOMESTAR CORPORATION
By: /s/ Laurence A. Dawson, Jr.
-------------------------------------------
President and Co-CEO
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The foregoing is hereby agreed
to as of the date thereof.
[PURCHASER]
-38-
44
PRINCIPAL AMOUNT
NAME AND ADDRESS OF SERIES A NOTES
OF PURCHASER TO BE PURCHASED
MASSACHUSETTS MUTUAL LIFE INSURANCE $7,750,000
COMPANY
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 7.25% Senior Notes, Series A, due 2008, PPN
026651 A@ 8, principal, premium or interest") to:
Citibank, N.A.
111 Wall Street
New York, New York 10043
ABA #021000089
for credit to: MassMutual Long Term Pool Account Number 4067-3488
Re: Description of security, principal and interest split
with telephone advice of payment to the Securities Custody and Collection
Department of Massachusetts Mutual Life Insurance Company at (413) 744-3561.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments, to be addressed to Attention: Securities
Custody and Collection Department, F 381.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 04-1590850
SCHEDULE A
(to Note purchase Agreement)
45
PRINCIPAL AMOUNT
NAME AND ADDRESS OF SERIES A NOTES
OF PURCHASER TO BE PURCHASED
MASSACHUSETTS MUTUAL LIFE INSURANCE $2,000,000
COMPANY
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 7.25% Senior Notes, Series A, due 2008, PPN
026651 A@ 8, principal, premium or interest") to:
Chase Manhattan Bank, N.A
4 Chase MetroTech Center
New York, New York 10081
ABA #021000021
for credit to: MassMutual IFM Non-Traditional Account Number
910-2509073 Re: Description of security, principal and interest split
with telephone advice of payment to the Securities Custody and Collection
Department of Massachusetts Mutual Life Insurance Company at (413) 744-3561.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments, to be addressed to Attention: Securities
Custody and Collection Department, F 381.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 04-1590850
-2-
46
PRINCIPAL AMOUNT
NAME AND ADDRESS OF SERIES A NOTES
OF PURCHASER TO BE PURCHASED
MASSACHUSETTS MUTUAL LIFE INSURANCE $1,500,000
COMPANY
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 7.25% Senior Notes, Series A, due 2008, PPN
026651 A@ 8, principal, premium or interest") to:
Chase Manhattan Bank, N.A
4 Chase MetroTech Center
New York, New York 10081
ABA #021000021
for credit to: MassMutual Pension Management Account Number 910-2594018
Re: Description of security, principal and interest split
with telephone advice of payment to the Securities Custody and Collection
Department of Massachusetts Mutual Life Insurance Company at (413) 744-3561.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments, to be addressed to Attention: Securities
Custody and Collection Department, F 381.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 04-1590850
-3-
47
PRINCIPAL AMOUNT
NAME AND ADDRESS OF SERIES A NOTES
OF PURCHASER TO BE PURCHASED
BAYSTATE HEALTH SYSTEM, INC. $500,000
c/o Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 7.25% Senior Notes, Series A, due 2008, PPN
026651 A@ 8, principal, premium or interest") to:
Boston Safe Deposit and Trust Company
ABA No. 011001234
DDA No. 048771
Ref: Baystate Health Systems Intermediate Aggregate
A/C #BPOF3001002
with telephone advice of payment to the Securities Custody and Collection
Department of Massachusetts Mutual Life Insurance Company at (413) 744-3561.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments, to be addressed to Attention: Securities
Custody and Collection Department, F 381.
Name of Nominee in which Notes are to be issued: MAC & Co.
Taxpayer I.D. Number: 04-2105941
Securities should be delivered to:
Mellon Securities Trust Company
120 Broadway, 13th Floor
New York, NY 10271
Re: Baystate Health Systems Intermediate Aggregate
A/C #BPOF3001002
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48
PRINCIPAL AMOUNT
NAME AND ADDRESS OF SERIES A NOTES
OF PURCHASER TO BE PURCHASED
CM LIFE INSURANCE COMPANY $250,000
c/o Massachusetts Mutual Life Insurance Company
1295 State Street
Springfield, Massachusetts 01111
Attention: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 7.25% Senior Notes, Series A, due 2008, PPN
026651 A@ 8, principal, premium or interest") to:
Citibank, N.A.
111 Wall Street
New York, New York 10043
(ABA #021000089)
for credit to: Segment 43 - Universal Life Account Number 4068-6561
Re: Description of security, principal and interest split
with telephone advice of payment to the Securities Custody and Collection
Department of Massachusetts Mutual Life Insurance Company at (413) 744-3561.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments, to be addressed to Attention: Securities
Custody and Collection Department, F 381.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 06-1041383
-5-
49
PRINCIPAL AMOUNT
NAME AND ADDRESS OF SERIES A NOTES
OF PURCHASER TO BE PURCHASED
KEMPER INVESTORS LIFE INSURANCE COMPANY $6,900,000
c/o Scudder Kemper Investments, Inc.
222 South Riverside Plaza
Chicago, Illinois 60606-5808
Attention: Private Placements
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 7.25% Senior Notes, Series A, due 2008, PPN
026651 A@ 8, principal, premium or interest") to:
HARE & CO - Account No. 195279
at
The Bank of New York
ABA No.: 021000018
BNF
IOC 566
Attention: Security Income Collection
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: HARE & CO
Taxpayer I.D. Number: 36-3050975
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PRINCIPAL AMOUNT
NAME AND ADDRESS OF SERIES A NOTES
OF PURCHASER TO BE PURCHASED
FEDERAL KEMPER LIFE ASSURANCE COMPANY $3,400,000
c/o Scudder Kemper Investments, Inc.
222 South Riverside Plaza
Chicago, Illinois 60606-5808
Attention: Private Placements
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 7.25% Senior Notes, Series A, due 2008, PPN
026651 A@ 8, principal, premium or interest") to:
HARE & CO - Account No. 195269
at
The Bank of New York
ABA No.: 021000018
BNF
IOC 566
Attention: Security Income Collection
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: HARE & CO
Taxpayer I.D. Number: 04-6046830
-7-
51
PRINCIPAL AMOUNT
NAME AND ADDRESS OF SERIES A NOTES
OF PURCHASER TO BE PURCHASED
FIDELITY LIFE ASSOCIATION $1,200,000
c/o Scudder Kemper Investments, Inc.
222 South Riverside Plaza
Chicago, Illinois 60606-5808
Attention: Private Placements
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 7.25% Senior Notes, Series A, due 2008, PPN
026651 A@ 8, principal, premium or interest") to:
HARE & CO - Account No. 195271
at
The Bank of New York
ABA No.: 021000018
BNF
IOC 566
Attention: Security Income Collection
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: HARE & CO
Taxpayer I.D. Number: 36-1068685
-8-
52
PRINCIPAL AMOUNT
NAME AND ADDRESS OF SERIES A NOTES
OF PURCHASER TO BE PURCHASED
ZURICH LIFE INSURANCE COMPANY $500,000
OF AMERICA
c/o Scudder Kemper Investments, Inc.
222 South Riverside Plaza
Chicago, Illinois 60606-5808
Attention: Private Placements
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 7.25% Senior Notes, Series A, due 2008, PPN
026651 A@ 8, principal, premium or interest") to:
HARE & CO - Account No. 399609
at
The Bank of New York
ABA No.: 021000018
BNF
IOC 566
Attention: Security Income Collection
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: HARE & CO
Taxpayer I.D. Number: 36-6071398
-9-
53
PRINCIPAL AMOUNT
NAME AND ADDRESS OF SERIES A NOTES
OF PURCHASER TO BE PURCHASED
THE NORTHWESTERN MUTUAL LIFE $10,000,000
INSURANCE COMPANY
720 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: Securities Department
Telecopier Number: (414) 299-7124
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 7.25% Senior Notes, Series A, due 2008, PPN
026651 A@ 8, principal, premium or interest") to:
Bankers Trust Company (ABA #0210-01033)
16 Wall Street
Insurance Unit, 4th Floor
New York, New York 10005
for credit to: The Northwestern Mutual Life Insurance Company
Account Number 00-000-027
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments and written confirmation of each such payment
to be addressed, Attention: Investment Operations. Telecopy Number: (414)
299-5714.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 39-0509570
-10-
54
PRINCIPAL AMOUNT
NAME AND ADDRESS OF SERIES A NOTES
OF PURCHASER TO BE PURCHASED
RELIASTAR LIFE INSURANCE COMPANY $4,000,000
c/o ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, Minnesota 55401-2121
Attention: James Tobin
Phone: (612) 342-3204
Fax: (612) 372-5368
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 7.25% Senior Notes, Series A, due 2008, PPN
026651 A@ 8, principal, premium or interest") to:
US Bank N.A./Mpls
601 2nd Avenue South
Minneapolis, Minnesota
ABA #091000022
Account Name: ReliaStar Life Insurance Company
Account #110240014461
Attention: Securities Accounting
Ref: Issuer, Cusip, Coupon, Maturity and P&I Breakdown
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 41-0451140
Securities should be delivered to:
ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, Minnesota 55401-2121
Attention: Bret Brunner
-11-
55
PRINCIPAL AMOUNT
NAME AND ADDRESS OF SERIES A NOTES
OF PURCHASER TO BE PURCHASED
NORTHERN LIFE INSURANCE COMPANY $2,000,000
c/o ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, Minnesota 55401-2121
Attention: James Tobin
Phone: (612) 342-3204
Fax: (612) 372-5368
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 7.25% Senior Notes, Series A, due 2008, PPN
026651 A@ 8, principal, premium or interest") to:
US Bank N.A./Mpls.
601 2nd Avenue South
Account #160232376105
Bank ABA #091000022
Attention: Securities Accounting
Ref: Issuer, Cusip, Coupon & Maturity
for credit to: Northern Life Insurance Company
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 41-1295933
Securities should be delivered to:
ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, Minnesota 55401-2121
Attention: Bret Brunner
-12-
56
PRINCIPAL AMOUNT
NAME AND ADDRESS OF SERIES A NOTES
OF PURCHASER TO BE PURCHASED
SECURITY CONNECTICUT LIFE INSURANCE COMPANY $2,000,000
c/o ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, Minnesota 55401-2121
Attention: James Tobin
Phone: (612) 342-3204
Fax: (612) 372-5368
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 7.25% Senior Notes, Series A, due 2008, PPN
026651 A@ 8, principal, premium or interest") to:
Chase Manhattan Bank
New York, New York
ABA #021-000-021
Beneficiary Account #544755102
Reference: Sigler & Co.
Tax I.D. #13-3641527
F/C #G54426
Ref: Cusip, Security Description and P&I Breakdown
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: SIGLER & CO.
Taxpayer I.D. Number: 35-1468921
Securities should be delivered to:
ReliaStar Investment Research, Inc.
100 Washington Avenue South, Suite 800
Minneapolis, Minnesota 55401-2121
Attention: Bret Brunner
-13-
57
PRINCIPAL AMOUNT
NAME AND ADDRESS OF SERIES A NOTES
OF PURCHASER TO BE PURCHASED
PROVIDENT MUTUAL LIFE INSURANCE COMPANY $3,000,000
P.O. Box 1717
Valley Forge, Pennsylvania 19482-1717
Attention: Securities Investment Department
Telefacsimile: (610) 407-1322
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 7.25% Senior Notes, Series A, due 2008, PPN
026651 A@ 8, principal, premium or interest") to:
PNC Bank
(ABA #031-000-053)
Broad and Chestnut Streets
Philadelphia, Pennsylvania 19101
for credit to: Provident Mutual Life Insurance Company
Account Number 85-4084-2176
Notices
All notices and communications requiring overnight express delivery service
should be addressed to:
1205 Westlakes Drive
Berwyn, PA 19312-2405
Attention: Treasurer
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 23-0990450
-14-
58
PRINCIPAL AMOUNT
NAME AND ADDRESS OF SERIES A NOTES
OF PURCHASER TO BE PURCHASED
AMERICAN BANKERS INSURANCE COMPANY $1,000,000
OF FLORIDA
11222 Quail Roost Drive
4th Floor
Miami, FL 33157
Attention: Gus Rodriguez/Robert Kisiel
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"American Homestar Corporation, 7.25% Senior Notes, Series A, due 2008, PPN
026651 A@ 8, principal, premium or interest") to:
Chase Manhattan Bank
//FW 021000021
New York
For credit to: /001-1-153277
Royal Trust
Toronto, Canada
For further credit to: American Bankers Insurance Company of Florida -
US Vested Account #105598-004
Royal Trust Custody Services
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: BRANT INVESTMENTS
Securities should be delivered to:
Royal Trust
Royal Trust Tower
77 King Street West, 11th Floor
P.O. Box 7500 Station A
Toronto, Ontario, Canada M5W 1P9
Attention: Jeff Vereecken
Telephone No. 416-955-7588
-15-
59
PRINCIPAL AMOUNT
NAME AND ADDRESS OF SERIES B NOTES
OF PURCHASER TO BE PURCHASED
ALLSTATE INSURANCE COMPANY $5,000,000
3075 Sanders Road, STE G3A
Northbrook, Illinois 60062-7127
Attention: Private Placements Department
Telephone Number: (847) 402-4394
Telecopier Number: (847) 402-3092
Payments
All payments on or in respect of the Notes to be made by Fedwire transfer of
immediately available funds (identifying each payment with name of the Issuer,
the Private Placement Number preceded by "DPP" and the payment as principal,
interest or premium) in the exact format as follows:
BBK = Harris Trust and Savings Bank
ABA #071000288
BNF = Allstate Insurance Company
Collection Account #168-114-7
ORG = (Enter Issuer Name)
OBI = DPP - 026651 A# 6
Payment Due Date (MM/DD/YY) --
P ______ (Enter "P" and the amount of principal being
remitted, for example, P5000000.00) --
I ______ (Enter "I" and the amount of interest being
remitted, for example, I225000.00)
Notices
All notices of scheduled payments and written confirmation of each such wire
transfer, to be sent to:
Allstate Insurance Company
Investment Operations--Private Placements
3075 Sanders Road, STE G4A
Northbrook, Illinois 60062-7127
Telephone: (847) 402-2769
Telecopy: (847) 326-5040
All financial reports, compliance certificates and all other written
communications, including notice of prepayments to be addressed as first
provided above.
Name of Nominee in which Notes are to be issued: None
-16-
60
Taxpayer I.D. Number: 36-0719665
Securities should be delivered to:
Citibank, Federal Savings Bank
US Custody & Employee Benefit Trust
500 West Madison Street
Floor 6, Zone 4
Chicago, Illinois 60661-2591
Attention: Ellen Lorden
For Allstate Insurance Company/Safekeeping Account No. 846626
-17-
61
SCHEDULE B
DEFINED TERMS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"Affiliate" means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests. As used in this
definition "Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an "Affiliate"
is a reference to an Affiliate of the Company.
"Asset Disposition" means any Transfer except:
(a) any
(i) Transfer from a Restricted Subsidiary to the
Company or a Wholly-Owned Restricted Subsidiary;
(ii) Transfer from the Company to a Wholly-Owned
Restricted Subsidiary; and
(iii) Transfer from the Company to a Restricted
Subsidiary (other than a Wholly-Owned Restricted Subsidiary)
or from a Restricted Subsidiary to another Restricted
Subsidiary, which in either case is for Fair Market Value,
so long as immediately before and immediately after the consummation of
any such Transfer and after giving effect thereto, no Default or Event
of Default exists;
(b) any Transfer made in the ordinary course of business and
involving only property that is either (i) inventory held for sale or
(ii) equipment, fixtures, supplies or materials no longer required in
the operation of the business of the Company or any of its Restricted
Subsidiaries or that is obsolete;
(c) any Transfer of receivables of the Company or any
Restricted Subsidiary, whether with or without recourse to the Company
or such Restricted Subsidiary, provided that such Transfer is in the
ordinary course of business, is an arm's-length transaction, is
SCHEDULE B
(to Note Purchase Agreement)
62
not accounted for under GAAP as a secured loan and, in the good faith
opinion of a Senior Financial Officer, is for fair value and is in the
best interests of the Company and the Restricted Subsidiaries, taken as
a whole, and provided further, that recourse to the Company or such
Restricted Subsidiary in connection with any such Transfer shall be
limited to (A) liabilities arising from the breach of warranties made
by the Company or such Restricted Subsidiary in connection with any
such Transfer and (B) an amount, with respect to any such Transfer and
in addition to clause (A) above, not in excess of 20% of the proceeds
of the disposition of the receivables so transferred in such Transfer;
and
(d) any Transfer of the Pendleton Plant, if, but only if,
such Transfer is for fair value (as determined in good faith by the
Board of Directors of the Company) and all of the Net Proceeds Amount
in respect thereof is applied to a Property Reinvestment Application
within 365 days after the consummation of such Transfer.
"Business Day" means (a) for the purposes of Section 8.6 only,
any day other than a Saturday, a Sunday or a day on which commercial banks in
New York City are required or authorized to be closed, and (b) for the purposes
of any other provision of this Agreement, any day other than a Saturday, a
Sunday or a day on which commercial banks in Dallas, Texas or New York, New York
are required or authorized to be closed.
"Capital Lease" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Capital Lease Obligation" means, with respect to any Person and a
Capital Lease, the amount of the obligation of such Person as the lessee under
such Capital Lease which would, in accordance with GAAP, appear as a liability
on a balance sheet of such Person.
"Cash in Transit" shall mean any asset on the Company's or a Restricted
Subsidiary's balance sheet representing money due for the sale of (i)
Manufactured Homes, (ii) any motor homes, travel trailers, camper units or
recreational vehicles taken in trade-ins only and (iii) any furnishings,
furniture and accessories used therewith or attached or connected thereto for
which a financing commitment has been obtained (which commitment provides for a
closing and funding not more than 60 days after the date of such commitment) and
a down payment has been received by the Company or such Restricted Subsidiary
from the purchaser thereof.
"Closing" is defined in Section 3,
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"Company" means American Homestar Corporation, a Texas corporation.
"Competitor" means
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63
(a) each Person which is (i) engaged in the business of the
Company described in Section 9.6 and (ii) identified as a "Competitor"
on Schedule B-C and the successors and assigns thereof;
(b) each Person which is (i) engaged in the business of the
Company described in Section 9.6 and (ii) identified by the Company as
a "Competitor" in a certification delivered to the holders of the Notes
from time to time, which Person so identified is consented to by the
Required Holders (which consent shall not be unreasonably withheld);
(c) any Person identified as such to the holders by written
certificate of the Company who legally or beneficially owning, directly
or indirectly, more than 25% of the issued and outstanding Voting
Shares of any Person which would qualify as a "Competitor" under clause
(a) or clause (b) of this definition; and
(d) any Person identified as such to the holders by written
certificate of the Company more than 25% of the issued and outstanding
Voting Shares of which is legally or beneficially owned by any Person
which would qualify as a "Competitor" under clause (a) or clause (b) of
this definition,
provided that
(i) none of the Purchasers or their affiliates, and
(ii) no Person that is primarily a bank, trust
company, savings and loan association or other financial
institution, a pension plan (other than a pension plan for a
Competitor), an investment company, an insurance company, a
broker or dealer, or any other similar financial institution
or entity (regardless of legal form),
shall be considered or deemed to be a "Competitor."
"Confidential Information" is defined in Section 20.
"Consolidated Assets" means, at any time, the total assets of the
Company and its Restricted Subsidiaries as of such time prepared in accordance
with GAAP, after eliminating all amounts properly attributable to minority
interests, if any, in the stock and surplus of Restricted Subsidiaries.
"Consolidated Net Income" means, with reference to any period, the net
income (or loss) of the Company and its Restricted Subsidiaries for such period
(taken as a cumulative whole), as determined in accordance with GAAP, after
eliminating all offsetting debits and credits between the Company and its
Restricted Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of the Company
and its Restricted Subsidiaries in accordance with GAAP, provided that there
shall be excluded:
-3-
64
(a) the income (or loss) of any Person accrued prior to the
date it became a Restricted Subsidiary or is merged into or
consolidated with the Company (or a Restricted Subsidiary, and the
income (or loss) of any Person, substantially all of the assets of
which have been acquired in any manner, realized by such other Person
prior to the date of acquisition,
(b) the income (or loss) of any Person (other than a
Restricted Subsidiary) in which the Company or any Restricted
Subsidiary has an ownership interest, except to the extent that any
such income has been actually received by the Company or such
Restricted Subsidiary in the form of cash dividends or similar cash
contributions,
(c) without limiting the provisions of Section 10.10, the
undistributed earnings of any Restricted Subsidiary to the extent that
the declaration or payment of dividends or similar distributions by
such Restricted Subsidiary is not at the time permitted by the terms of
its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such Restricted
Subsidiary,
(d) any restoration to income of any contingency reserve,
except to the extent that provision for such reserve was made out of
income accrued during such period,
(e) any aggregate net gain (or any aggregate net loss) during
such period arising from the sale, conversion, exchange or other
disposition of capital assets (such term to include, without
limitation, (i) all non-current assets and, without duplication, (ii)
the following, whether or not current: all fixed assets, whether
tangible or intangible, all inventory sold in conjunction with the
disposition of fixed assets, and all Securities),
(f) any gains from any write-up of any assets (or any loss
resulting from any write-down of any assets),
(g) any gain arising from the acquisition of any Security, or
the extinguishment, under GAAP, of any Debt, of the Company or any
Restricted Subsidiary,
(h) any net income or gain (or any net loss) during such
period from (i) any change in accounting principles in accordance with
GAAP, (ii) any prior period adjustment resulting from any change in
accounting principles in accordance with GAAP, (iii) any extraordinary
non-recurring items, or (iv) any discontinued operations or the
disposition thereof,
(i) any deferred credit representing the excess of equity in
any Restricted Subsidiary at the date of acquisition over the cost of
the investment in such Restricted Subsidiary,
(j) in the case of a successor to the Company by
consolidation or merger or as a transferee of its assets, any earnings
of the successor corporation prior to such consolidation, merger or
transfer of assets, and
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65
(k) any portion of such net income that cannot be freely
converted into United States Dollars.
"Consolidated Net Worth" means, at any time,
(a) the total assets of the Company and its Restricted
Subsidiaries which would be shown as assets on a consolidated balance
sheet of the Company and its Restricted Subsidiaries as of such time
prepared in accordance with GAAP, minus
(b) the total liabilities of the Company and its Restricted
Subsidiaries which would be shown as liabilities on a consolidated
balance sheet of the Company and its Restricted Subsidiaries as of such
time prepared in accordance with GAAP, including all amounts properly
attributable to minority interests, if any, in the stock and surplus of
Restricted Subsidiaries.
"Control" is defined in the definition of "Affiliate."
"Debt" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising in
the ordinary course of business but including, without limitation, all
liabilities created or arising under any conditional sale or other
title retention agreement with respect to any such property);
(c) its Capital Lease Obligations;
(d) all liabilities for borrowed money secured by any Lien
with respect to any property owned by such Person (whether or not it
has assumed or otherwise become liable for such liabilities);
(e) such Person's obligations in respect of any Mandatorily
Redeemable Preferred Stock, in each case taken at the greatest of (i)
its voluntary liquidation or redemption price, (ii) its involuntary
liquidation or redemption price and (iii) its stated par value, as
determined at such time; and
(f) any Guaranty of such Person with respect to liabilities
of a type described in any of clauses (a) through (d) hereof.
Debt of any Person
(i) shall include all obligations of such Person of
the character described in clauses (a) through (f) to the
extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be
extinguished under GAAP and
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66
(ii) with respect to the Company and the Restricted
Subsidiaries, shall exclude (1) any subordinated debt (as
described in the definition of Trust Preferred Securities)
issued by the Company or any Restricted Subsidiary to any
Preferred Trust that shall have issued and have outstanding
Trust Preferred Securities, (2) any Guaranties (subject to
subordination provisions at least as favorable to the holders
as the subordination provisions referred to in the definition
of Trust Preferred Securities) issued by the Company or any
Restricted Subsidiary of any payments in respect of such Trust
Preferred Securities and (3) any Trust Preferred Securities
issued by any Preferred Trust.
With respect to any sale of receivables by the Company or any Restricted
Subsidiary described under clause (c) of the definition of "Asset Disposition"
(a "Securitization Sale"), if the Company or such Restricted Subsidiary is
obligated, pursuant to the terms of such Securitization Sale, to repurchase
receivables so sold because of their uncollectibility or, by virtue of such
uncollectibility, to forego (by adjustment to the purchase price, a loss of a
reserve or otherwise) a portion of the sales proceeds in respect of such
uncollectible receivables and, in either case, the aggregate amount of such
repurchases or the losses of such sales proceeds would exceed the aggregate
amount of uncollectible receivables that such Senior Financial Officer in good
faith would reasonably estimate by using two times the historical receivable
uncollectibility loss rate of the Company or such Restricted Subsidiary (after
giving full effect to recoveries of all collateral with respect to such
uncollectible receivables), then such excess amount with respect to such
Securitization Sale shall be deemed Debt, with such Debt being ratably decreased
as the receivables subject to such Securitization Sale are paid down or
repurchased. Each of the foregoing calculations shall be made by a Senior
Financial Officer and shall be included in each of the certificates required to
be delivered under Section 7.2 to the extent not previously included in such a
certificate.
"Debt Offered Prepayment Application" means, with respect to any Asset
Disposition, the offering, in writing, by the Company of cash in an amount not
exceeding the Net Proceeds Amount with respect to such Asset Disposition to pay
any Senior Debt (other than Senior Debt owing to any Affiliate and other than
Senior Debt in respect of any revolving credit or similar credit facility
providing the Company or any Restricted Subsidiary with the right to obtain
loans or other extensions of credit from time to time, except to the extent that
in connection with such payment of Senior Debt the availability of credit under
such credit facility is permanently reduced by an amount not less than the
amount of such proceeds applied to the payment of such Senior Debt) and any
interest and premium in respect thereof, provided that in connection with any
such Asset Disposition and payment of Senior Debt, the Company shall have
offered to prepay the Ratable Portion in respect of each outstanding Note in
accordance with Section 8.4 and shall have prepaid each holder of each such Note
that shall have accepted such offer of prepayment in accordance with said
Section in a principal amount which, when added to any accrued and unpaid
interest thereon and the Modified Make-Whole Amount, equals the Ratable Portion
for such Note. As used in this definition, "Ratable Portion" for any Note means
an amount equal to the product of (x) the Net Proceeds Amount being so applied
to the payment of Senior Debt multiplied by (y) a fraction the numerator of
which is the outstanding principal amount of such Note and the denominator of
which is the aggregate principal amount of all Senior Debt of the Company with
respect to which such offer of prepayment is made. For
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67
purposes of Section 10.3, a Net Proceeds Amount shall be deemed applied to a
Debt Offered Prepayment Application upon the extension of the offer in respect
of such Debt Offered Prepayment Application, provided that if the actual
prepayments in respect thereof, if any, are not made in accordance with the
requirements of such offer or, in any case, are not made within 365 days after
the applicable Asset Disposition, such application of such Net Proceeds Amount
will be deemed not to have been made.
"Default" means an event or condition the occurrence or existence of
which would with the lapse of time or the giving of notice or both, become an
Event of Default.
"Default Rate" means the rate of interest that is greater of (i) 2.0%
per annum above the rate of interest stated in clause (a) of the first paragraph
of the Notes or (ii) 2.0% over the rate of interest publicly announced by
Citibank, N.A. in New York, New York, or any successor thereof, as its "base" or
"prime" rate.
"Distribution" means, in respect of any corporation, association or
other business entity:
(a) dividends or other distributions or payments on capital
stock or other equity interest of such corporation, association or
other business entity (except distributions in such stock or other
equity interest); and
(b) the redemption or acquisition of such stock or other
equity interests or of warrants, rights or other options to purchase
such stock or other equity interests (except when solely in exchange
for such stock or other equity interests) unless made,
contemporaneously, from the net proceeds of a sale of such stock or
other equity interests.
"Earnings Before Interest, Taxes and Rent" means with respect to any
period, Consolidated Net Income of the Company and its Restricted Subsidiaries
for such period plus all amounts deducted in the computation thereof on account
of (a) Interest Charges for such period, (b) Lease Rentals for such period and
(c) taxes imposed on or measured by income or excess profits of the Company and
its Restricted Subsidiaries for such period.
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
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"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, at any time and with respect to any
property, the sale value of such property that would be realized in an
arm's-length sale at such time between an informed and willing buyer and an
informed and willing seller (neither being under a compulsion to buy or sell).
"Floor Plan Financing" means, as required by the context hereof, (a)
with respect to the Company and any Restricted Subsidiary, without duplication,
all working capital Debt of the Company and such Restricted Subsidiary incurred
to finance the acquisition, holding and making available for sale by the Company
or such Restricted Subsidiary of (i) Manufactured Homes inventory, (ii) motor
homes, travel trailers, camper units, recreational vehicles taken in trade-ins
only and (iii) any furnishings, furniture and accessories used therewith or
attached or connected thereto which, in each case, are owned by the Company or
such Restricted Subsidiary, which Debt is required to be reduced substantially
concurrently with the sales of such inventory out of the proceeds of such sales,
and (b) with respect to any Person other than the Company and any Restricted
Subsidiary, working capital Debt of such Person incurred to finance the
acquisition, holding and making available for sale of manufactured homes
inventory by such Person, which Debt is required to be reduced substantially
concurrently with the sales of such inventory out of the proceeds of such sales.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or
other political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or which
asserts jurisdiction over any properties of the Company or any
Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"Guaranty" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:
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(a) to purchase such Indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or
payment of such Indebtedness or obligation, or (ii) to maintain any
working capital or other balance sheet condition or any income
statement condition of any other Person or otherwise to advance or make
available funds for the purchase or payment of such Indebtedness or
obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such Indebtedness or
obligation of the ability of any other Person to make payment of the
Indebtedness or obligation; or
(d) otherwise to assure the owner of such Indebtedness or
obligation against loss in respect thereof.
In any computation of the Indebtedness or other liabilities of the
obligor under any Guaranty, the Indebtedness or other obligations that are the
subject of such Guaranty shall be assumed to be directed obligations of such
obligor.
"Hazardous Material" means any and all pollutants, toxins or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"holder" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
13.1.
"Indebtedness" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of Mandatorily Redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising in
the ordinary course of business but including all liabilities created
or arising under any conditional sale or other title retention
agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien
with respect to any property owned by such Person (whether or not it
has assumed or otherwise become liable for such liabilities);
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(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not
representing obligations for borrowed money);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities
of a type described in any of clauses (a) through (f) hereof.
Indebtedness of any Person
(i) shall include all obligations of such Person of
the character described in clauses (a) through (g) to the
extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be
extinguished under GAAP and
(ii) with respect to the Company and the Restricted
Subsidiaries, shall exclude (1) any subordinated debt (as
described in the definition of Trust Preferred Securities)
issued by the Company or any Restricted Subsidiary to any
Preferred Trust that shall have issued and have outstanding
Trust Preferred Securities, (2) any Guaranties (subject to
subordination provisions at least as favorable to the holders
as the subordination provisions referred to in the definition
of Trust Preferred Securities) issued by the Company or any
Restricted Subsidiary of any payments in respect of such Trust
Preferred Securities and (3) any Trust Preferred Securities
issued by any Preferred Trust.
"Institutional Investor" means (a) any original purchaser of a Note,
(b) any holder of a Note (other than a Competitor) holding more than 10% of the
aggregate principal amount of the Notes then outstanding, and (c) any bank,
trust company, savings and loan association or other financial institution, any
pension plan, any investment company, any insurance company, any broker or
dealer, or any other similar financial institution or entity, regardless of
legal form.
"Interest Charges" means, with respect to any period, the sum (without
duplication) of the following (in each case, eliminating all offsetting debits
and credits between the Company and its Restricted Subsidiaries and all other
items required to be eliminated in the course of the preparation of consolidated
financial statements of the Company and its Restricted Subsidiaries in
accordance with GAAP): (a) all interest in respect of Debt of the Company and
its Restricted Subsidiaries (including imputed interest on Capital Lease
Obligations) deducted in determining Consolidated Net Income for such period,
(b) all dividends paid during such period with respect to any Trust Preferred
Securities and (c) all debt discount and expense amortized or required to be
amortized in the determination of Consolidated Net Income for such period.
"Investment" means any investment, made in cash or by delivery of
property, by the Company or any of its Restricted Subsidiaries (i) in any
Person, whether by acquisition of stock, indebtedness or other obligation or
Security, or by loan, Guaranty, advance, capital contribution or otherwise, or
(ii) in any property.
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"Lease Rentals" means, with respect to any period, the sum of the
rental and other obligations required to be paid during such period by the
Company or any Restricted Subsidiary as lessee under all leases of real or
personal property (other than Capital Leases), excluding any amount required to
be paid by the lessee (whether or not therein designated as rental or additional
rental) on account of maintenance and repairs, insurance, taxes, assessments,
water rates and similar charges.
"Lien" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including, in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"Make-Whole Amount" is defined in Section 8.6.
"Mandatorily Redeemable Preferred Stock" means, with respect to any
Person, such Person's Preferred Stock to the extent that it is required to be
redeemed, purchased or otherwise retired or extinguished, or convertible into
Debt of such Person. For the avoidance of doubt, (a) Preferred Trust Securities
shall not be, or be deemed to be, "Mandatorily Redeemable Preferred Stock" for
purposes of this Agreement and (b) Preferred Stock that is redeemable at the
option of the Company with common stock of the Company shall not be, or be
deemed to be, "Mandatorily Redeemable Preferred Stock" for purposes of this
Agreement.
"Manufactured Homes" means any mobile, modular and manufactured homes.
"Material" means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Company
and its Restricted Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Restricted Subsidiaries taken as a whole, or (b) the ability of
the Company to perform its obligations under this Agreement and the Notes, or
(c) the validity or enforceability of this Agreement or the Notes.
"Memorandum" is defined in Section 5.3.
"Modified Make-Whole Amount" has the meaning ascribed to the term
"Make-Whole Amount" provided that the reference to ".50%" in Reinvestment Yield
used in the calculation of "Make-Whole Amount" shall be deemed to refer to
"0.75%". For the avoidance of doubt, the Company and you agree that the
determination of Modified Make-Whole Amount in respect of each Series of Notes
will result in different Modified Make-Whole Amounts in respect of the Notes for
each such Series.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
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"Net Proceeds Amount" means, with respect to any Transfer of any
property by the Company or any Restricted Subsidiary, an amount equal to the
difference of
(a) the aggregate amount of the consideration (valued at the
Fair Market Value of such consideration at the time of the consummation
of such Transfer as determined by a Senior Financial Officer in good
faith) paid by the transferee in respect of such Transfer, minus
(b) all ordinary and reasonable out-of-pocket costs and
expenses actually incurred by the transferor in connection with such
Transfer and all indebtedness secured by such property and required by
its terms to be paid in connection with the consummation of such
Transfer.
"Net Working Capital" means Total Current Assets minus Total Current
Liabilities, as determined in accordance with GAAP.
"Notes" is defined in Section 1.
"Officer's Certificate" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
"Other Agreements" is defined in Section 2.
"Other Purchasers" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Pendleton Plant" means that certain plant of the Company located at
Pendleton, Oregon which is capable of manufacturing Manufactured Homes and, as
of the date of this Agreement, is inactive except for routine maintenance and
security.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
"Preferred Stock" means any class of capital stock of a corporation
that is preferred over any other class of capital stock of such corporation as
to the payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
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"Preferred Trust" is defined in the definition of "Trust Preferred
Securities."
"Priority Debt" means (i) all Debt of the Restricted Subsidiaries not
owing to the Company or another Restricted Subsidiary and (but without
duplication) (ii) all Debt of the Company and its Restricted Subsidiaries
secured by Liens permitted under Section 10.9 (excluding, in any case, Debt
under Sections 10.9(f), 10.9(g), 10.9(i) and 10.9(j)).
"property" or "properties" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.
"Property Reinvestment Application" means, with respect to any Asset
Disposition, the application of an amount not exceeding the Net Proceeds Amount
with respect to such Asset Disposition to the acquisition by the Company or a
Restricted Subsidiary of (a) property of a similar utility as to the property
subject to such Asset Disposition or property otherwise related to the business
of the Company and the Restricted Subsidiaries, taken as a whole (as determined
by the Board of Directors of the Company in good faith), or (b) a business
reasonably related to the business of the Company and the Restricted
Subsidiaries, taken as a whole (as determined by the Board of Directors of the
Company in good faith), and, in either case, of at least an equivalent net book
value as the property that was the subject of such Asset Disposition (as
determined by the Board of Directors of the Company in good faith).
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"Qualified Warehouse Loans" means loans extended to any Restricted
Subsidiary or 21st Century (so long as it is an Unrestricted Subsidiary
substantially in the same lines of business as at the date hereof) by any
Person, which loans are primarily secured by receivables generated or acquired
from the sale of Manufactured Homes by such Restricted Subsidiary or 21st
Century in the ordinary course of business.
"Required Holders" means, at any time, the holders of at least 66-2/3%
in principal amount of the Notes at the time outstanding (exclusive of Notes
then owned by the Company or any of its Affiliates).
"Responsible Officer" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this agreement.
"Restricted Investments" means all Investments except the following:
(a) property to be used in the ordinary course of business of the
Company and its Restricted Subsidiaries;
(b) current assets arising from the sale of goods and services in the
ordinary course of business of the Company and its Restricted Subsidiaries;
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(c) Investments in one or more Restricted Subsidiaries or any Person
that concurrently with such Investment becomes a Restricted Subsidiary;
(d) Investments in United States Governmental Securities, provided that
such obligations mature within 365 days from the date of acquisition thereof;
(e) Investments in certificates of deposit or banker's acceptances
issued by an Acceptable Bank, provided that such obligations mature within 365
days from the date of acquisition thereof;
(f) Investments in commercial paper given the highest rating by a
credit rating agency of recognized national standing and maturing not more than
270 days from the date of creation thereof;
(g) Investments in Repurchase Agreements;
(h) (i) loans made by the Company or any Restricted Subsidiary to any
Unrestricted Subsidiary of the Company or any Restricted Subsidiary in
connection with the extension of Floor Plan Financing to such Unrestricted
Subsidiary or (ii) participations purchased by the Company or any Restricted
Subsidiary in loans made by any Person (other than the Company or a Restricted
Subsidiary) which, at the time of purchase, has outstanding unsecured long-term
debt rated at least investment grade by a nationally known rating agency to any
Unrestricted Subsidiary of the Company or any Restricted Subsidiary in
connection with the extension of Floor Plan Financing to such Unrestricted
Subsidiary;
(i) Qualified Warehouse Loans made by the Company or any Restricted
Subsidiary in the ordinary course of business or participations purchased in
Qualified Warehouse Loans and participations therein by the Company or any
Restricted Subsidiary in the ordinary course of business; provided, that each
such Qualified Warehouse Loan is secured by collateral including at least the
assets financed and is on a pari passu basis with any other warehouse lenders
and participants; and
(j) Investments in 21st Century, provided that (i) with respect to any
such Investment made after the date of Closing, the aggregate amount of such
Investment and all other Investments in 21st Century made after the date of
Closing (valued as set forth below) shall not, at the time of the making of such
Investment, exceed 10% of Consolidated Net Worth, determined at such time, and
(ii) the proceeds of such Investments are used by 21st Century to assist it in
the securitization of receivables generated from the sale of Manufactured Homes
by the Company, any Restricted Subsidiary or any franchisee of the Company or
any Restricted Subsidiary.
As of any date of determination, each Restricted Investment shall be
valued at the greater of
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(x) the amount at which such Restricted Investment
is shown on the books of the Company or any of its Restricted
Subsidiaries (or zero if such Restricted Investment is not
shown on any such books); and
(y) either
(i) in the case of any Guaranty of the
obligation of any Person, the amount which the
Company or any of its Restricted Subsidiaries has
paid on account of such obligation less any
recoupment by the Company or such Subsidiary of any
such payments, or
(ii) in the case of any other Restricted
Investment, the excess of (x) the greater of (A) the
amount originally entered on the books of the Company
or any of its Restricted Subsidiaries with respect
thereto and (B) the cost thereof to the Company or
its Restricted Subsidiary over (y) any return of
capital (after income taxes applicable hereto) upon
such Restricted Investment through the sale or other
liquidation thereof or part thereof or otherwise.
As used in this definition of "Restricted Investments":
"Acceptable Bank" means any bank or trust
company (i) which is organized under the laws of the United
States of America or any State thereat (ii) which has capital
surplus and undivided profits at least $250,000,000, and (iii)
whose long-term unsecured debt obligations (or the long-term
unsecured debt obligations of the bank holding company owning
all of the capital stock of such bank or trust company) shall
have been given a rating of "A" or better by S&P, "A2" or
better by Moody's or an equivalent rating by any other credit
rating agency of recognized national standing.
"Acceptable Broker-Dealer" means any Person
other than natural person (i) which is registered as a broker
or dealer pursuant to the Exchange Act and (ii) whose
long-term unsecured debt obligation shall have been given a
rating of "A" or better by S&P, "A2" or better by Moody's by
an equivalent rating by any other credit rating agency of
recognized national standing.
"Moody's" means Moody's Investors Service,
Inc.
"Repurchase Agreement" means any written
agreement
(a) that provides for (i) the
transfer of one or more United States
Governmental Securities in an aggregate
principal amount at least equal to the
amount of the Transfer Price (defined below)
to the Company or any of its Subsidiaries
from an Acceptable Bank or an Acceptable
Broker-Dealer against a transfer of funds
(the "Transfer Price") by the Company or
such
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Subsidiary to such Acceptable Bank or
Acceptable Broker-Dealer, and (ii) a
simultaneous agreement by the Company or
such Subsidiary, in connection with such
transfer of funds, to transfer to such
Acceptable Bank or Acceptable Broker-Dealer
the same or substantially similar United
States Governmental Securities for a price
not less than the Transfer Price plus a
reasonable return thereon at a date certain
not later than 365 days after such transfer
of funds,
(b) in respect of which the
Company or such Subsidiary shall have the
right, whether by contract or pursuant to
applicable law, to liquidate such agreement
upon the occurrence of any default
thereunder, and
(c) in connection with which the
Company or such Subsidiary, or an agent
thereat shall have taken all action required
by applicable law or regulations to perfect
a Lien in such United States Governmental
Securities.
"S & P" means Standard & Poor's Rating
Group, a division of McGraw Hill, Inc.
"United States Governmental Security" means
any direct obligation of, or obligation guaranteed by, the
United States of America, or any agency controlled or
supervised by or acting as an instrumentality of the United
States of America pursuant to authority granted by the
Congress of the United States of America, so long as such
obligation or guarantee shall have the benefit of the full
faith and credit of the United States of America which shall
have been pledged pursuant to authority granted by the
Congress of the United States of America.
"Restricted Payment" means
(a) any Distribution in respect of the Company or any Restricted
Subsidiary of the Company (other than on account of capital stock or other
equity interests of a Restricted Subsidiary of the Company owned legally and
beneficially by the Company or another Restricted Subsidiary of the Company),
including, without limitation, any Distribution resulting in the acquisition by
the Company of Securities which would constitute treasury stock, provided that
any dividend payable or paid in respect of any Trust Preferred Securities shall
be excluded from this clause (a) and the definition of "Restricted Payment" and
(b) any payment, repayment, redemption, retirement, repurchase or other
acquisition, direct or indirect, by the Company or any Restricted Subsidiary of,
on account of, or in respect of, the principal of any subordinated debt (or any
installment thereof) prior to the regularly scheduled maturity date thereof (as
in effect on the date such subordinated debt was originally incurred).
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For purposes of this Agreement, the amount of any Restricted Payment
made in property shall be the greater of (x) the Fair Market Value of such
property (as determined in good faith by the board of directors (or equivalent
governing body) of the Person making such Restricted Payment) and (y) the net
book value thereof on the books of such Person, in each case determined as of
the date on which such Restricted Payment is made. "Restricted Payments" shall
not count any payment, repayment, redemption, retirement, repurchase or other
acquisition made or effected by the Company or any Restricted Subsidiary in
respect of any subordinated debt held by a Preferred Trust if the proceeds
thereof are used by such Preferred Trust to make a payment, repayment,
redemption, retirement, repurchase or other acquisition of any of its
outstanding Trust Preferred Securities and such payment, repayment, redemption,
retirement, repurchase or other acquisition is included within the defined term
Distribution for purposes of this definition. For the avoidance of doubt, the
receipt by any holder of such subordinated debt of capital stock of the Company
in exchange for such subordinated debt or by virtue of the conversion of such
subordinated debt into such capital stock and/or any exchange of such capital
stock for any Trust Preferred Securities shall not be construed as being
prohibited or otherwise restricted by this definition.
"Restricted Subsidiary" means any Subsidiary so designated on Schedule
5.4 and any other Subsidiary (i) which is organized under the laws of the United
States or any State thereof; (ii) which conducts substantially all of its
business and has substantially all of its assets within the United States; and
(iii) of which more than 80% (by number of votes) of the Voting Stock is
beneficially owned, directly or indirectly, by the Company.
Anything contained in this definition to the contrary notwithstanding,
(a) a Preferred Trust shall be, and for purposes of this Agreement be
deemed to be, a Restricted Subsidiary,
(b) 21st Century shall be, and for purposes of this Agreement be deemed
to be, an Unrestricted Subsidiary and
(c) any Subsidiary acquired by the Company or by any Restricted
Subsidiary, in each case, after the date of Closing may (i) at the Company's
election and notwithstanding that such Subsidiary would otherwise satisfy the
requirements of this definition, be permanently designated by the Company as an
Unrestricted Subsidiary and shall, if so designated, be treated hereunder for
all purposes from and after such acquisition as an Unrestricted Subsidiary; any
such designation shall be effected by the Company's sending to each holder of
Notes a written notice of such designation no later than 30 Business Days after
the acquisition of such Subsidiary or (ii) at the Company's election and
notwithstanding that such Subsidiary would not otherwise satisfy the
requirements of this definition, be permanently designated by the Company as a
Restricted Subsidiary and shall, if so designated, be treated hereunder for all
purposes from and after such acquisition as a Restricted Subsidiary; any such
designation shall be effected by the Company's sending to each holder of Notes a
written notice of such designation no later than 30 Business Days after the
acquisition of such Subsidiary.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
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"Security" has the meaning set forth in Section 2(1) of the Securities
Act.
"Senior Debt" means any unsecured Debt of any one or more of the
Company or any Restricted Subsidiary that is not in any manner subordinated in
right of payment to the Notes or to any other Debt of such Person.
"Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
"Significant Subsidiary" means Oak Creek Housing Corporation, American
Homestar Financial Services, Inc. and Nationwide Housing Corporation.
"Subsidiary" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company. Notwithstanding
anything to the contrary contained herein, "Subsidiary" shall not include a
special purpose entity (a) that is formed for the sole purpose of acquiring
receivables from the Company or any Restricted Subsidiary, (b) that meets the
requirements of GAAP with respect to special purpose entities and the
off-balance sheet treatment of the transfer of financial assets thereto, (c)
that is not required by GAAP to be consolidated with the Company and its
Subsidiaries, (d) with respect to which the Transfer of such receivables is
treated under GAAP as a sale of the same and (e) with respect to which the
Transfer of such receivables qualifies as a so-called "true sale" under
applicable law and such qualification is confirmed by the delivery to the
Company of a customary "true sale" opinion issued by a nationally recognized
securitization law firm.
"Subsidiary Stock" means, with respect to a Person, the stock (or any
options or warrants to purchase stock or other Securities exchangeable for or
convertible into stock) of any Subsidiary of such Person.
"Swaps" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
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"Total Capitalization" means as of the date of any determination
thereof, the sum of (a) Total Debt plus (b) Consolidated Net Worth, determined
on a consolidated basis in accordance with GAAP.
"Total Current Assets" means, at any time, the total assets of the
Company and its Restricted Subsidiaries which would be shown as current assets
on a consolidated balance sheet of the Company and its Restricted Subsidiaries
prepared in accordance with GAAP at such time.
"Total Current Liabilities" means, at any time, the total liabilities
of the Company and its Restricted Subsidiaries which would be shown as current
liabilities on a consolidated balance sheet of the Company and its Restricted
Subsidiaries prepared in accordance with GAAP at such time.
"Total Debt" means, as of the date of any determination thereof, the
sum of (i) Total Senior Debt plus (ii) Total Subordinated Debt.
"Total Interest and Rent Expense" means, with respect to any period,
the sum of (a) Interest Charges for such period and (b) Lease Rentals for such
period.
"Total Senior Debt" means, as of the date of any determination thereof,
(i) all Debt of the Company and its Restricted Subsidiaries other than Total
Subordinated Debt and other than Debt owing to the Company or any Restricted
Subsidiary minus (ii) Cash in Transit from financial institutions.
"Total Subordinated Debt" means and includes all unsecured Debt of the
Company (other than Debt owing to a Restricted Subsidiary) which (i) has a
remaining average life (determined in accordance with the procedures set forth
in Section 8.6) which is longer than the Remaining Average Life (as defined in
Section 8.6) of the Notes, and (ii) is subject to subordination provisions
acceptable to the holders of the Notes.
"Transfer" means, with respect to any Person, any transaction in which
such Person sells, conveys, transfers or leases (as lessor) any of its property,
including, without limitation, Subsidiary Stock.
"Trust Preferred Securities" means preferred securities (whether
convertible or nonconvertible into common stock or other stock of the Company)
issued by a trust or other similar special purpose entity (a "Preferred Trust")
that is Controlled by the Company, the proceeds of which preferred securities
are used to finance the acquisition by such trust or other similar entity of
subordinated debt obligations (including any Guaranty thereof) of the Company
(as described below) and which trust or other similar entity is consolidated for
financial statement purposes under GAAP with the Company, provided that, with
respect to any Preferred Trust, the preferred securities in respect thereof
shall not be subject to any scheduled redemption or purchasing by such trustee
or other similar entity, the Company or any Restricted Subsidiary prior to the
maturity date of the Notes. It is the intention of the parties hereto that Trust
Preferred Securities be counted as part of Consolidated Net Worth, as defined in
this Schedule B. The aforesaid subordinated debt (or any related Guaranty) shall
be subject to terms and conditions
-19-
80
that shall be at least as favorable to the holders of the Notes (being a part of
a class of senior indebtedness) as the following terms and conditions: (i) such
subordinated debt shall not provide for any scheduled payments of principal
prior to the maturity date of the Notes, (ii) such subordinated debt shall
prohibit any payment thereon if the maturity of the Notes shall have been
accelerated unless all amounts payable hereunder and under the Notes shall have
been paid in full or provision shall have been made in cash or cash equivalents
for such payment, (iii) such subordinated debt shall prohibit any payment
thereon if any payment default shall exist under the Notes or hereunder unless
such payment default shall have been cured, (iv) such subordinated debt shall
prohibit any payment thereon if an Event of Default of the type described in
Section 11(g) or (h) shall exist with respect to the Company unless all amounts
payable hereunder and under the Notes shall have been paid in full or provision
shall have been made in cash or cash equivalents for such payment, (v) such
subordinated debt shall prohibit any payment thereon if the maturity of such
subordinated debt shall have been accelerated unless all amounts payable
hereunder and under the Notes shall have been paid in full or provision shall
have been made in cash or cash equivalents for such payment, and (vi) subject to
clause (i) through (v) above, such subordinated debt shall permit the Company,
at its election, to defer any payment in respect thereof for a period of at
least 1 year. For the avoidance of doubt, the receipt by any holder of such
subordinated debt of capital stock of the Company in exchange for such
subordinated debt or by virtue of the conversion of such subordinated debt into
such capital stock shall not be construed as being prohibited or otherwise
restricted by this definition.
"21st Century" means 21st Century Mortgage Company, a Delaware
corporation.
"Unrestricted Subsidiary" means any Subsidiary other than a Restricted
Subsidiary.
"Voting Stock" shall mean Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or Persons performing similar
functions).
"Wholly-Owned Restricted Subsidiary" means, at any time, any Restricted
Subsidiary one hundred percent (100%) of all of the equity interests (except
directors' qualifying shares) and voting interests of which are owned by any one
or more of the Company and the Company's other Wholly-Owned Subsidiaries at such
time.
-20-
81
MAJOR COMPETITORS
Cavalier Homes, Inc.
Champion Enterprises, Inc.
Clayton Homes, Inc.
Fleetwood Enterprises
Oakwood Homes Corporation
Skyline Corporation
Southern Energy Homes
SCHEDULE B-C
(to Note Purchase Agreement)
82
CHANGES IN CORPORATE STRUCTURE
The corporate structure, as of May 31, 1998, is as set forth on the
Corporate Organization Chart provided in the Memorandum. Changes since May 31,
1998 are as follows:
Effective July 1, 1998, the Company acquired First Value Homes, Inc.
("First Value"), a retailer based in Gastonia, North Carolina, which specializes
in selling modular homes through its two environmentally displayed modular home
superstore locations.
Effective September 1, 1998, the Company acquired substantially all of
the assets of DWP Management, Inc. and the stock of its related companies, Value
Homes Inc., Value Homes of Washington, Premiere Manufactured Homes, Inc.,
Premiere Manufactured Homes Inc. of Washington, Park Place Mobile Homes, Inc.,
Kilroy's M.H., Inc. and Premiere Homes of Moses Lake, Inc. (the "DWP Companies")
through a merger of the DWP companies into a newly formed subsidiary of American
Homestar Pacific Northwest Holdings Inc. American Homestar owns 80% of this new
venture which adds six new retail sales centers (three in Oregon, two in
Washington, and one in New Mexico).
On May 28, 1998, the Company agreed to acquire R-Anell Custom Homes,
Inc. and its related manufacturing operations, Gold Medal Homes, Inc. and Gold
Medal Homes of North Carolina ("R-Arnell"). R-Arnell produces distinctive lines
of high-quality, upscale manufactured homes and modular homes which are marketed
under the R-Arnell and Gold Medal brand names through a network of approximately
90 independent retailers located primarily in North Carolina, South Carolina and
Virginia. R-Arnell operates two plants in Denver, North Carolina and a new plant
in Cherryville, North Carolina which is currently in its startup phase. Closing
is expected on or before December 31, 1998.
SCHEDULE 4.9
(to Note Purchase Agreement)
83
SUBSIDIARIES OF THE COMPANY AND OWNERSHIP OF SUBSIDIARY STOCK,
AFFILIATES AND DIRECTORS AND SENIOR OFFICERS
1. RESTRICTED SUBSIDIARIES
PERCENTAGE OF
CAPITAL STOCK OR
NATURE AND SIMILAR EQUITY INTERESTS
JURISDICTION OF OWNED BY THE COMPANY AND EACH
NAME OF SUBSIDIARY INCORPORATION SUBSIDIARY
Nationwide Housing Systems, Inc. Texas 100%
Nationwide Housing Corporation Texas 100%
Nationwide West, Inc. Texas 100%
Nationwide East, Inc. Texas 100%
Associated Retailers Group, Inc. Texas 100%
Nationwide NC Homes, Inc. Texas 100%
Nationwide of Alabama, Inc. Texas 100%
American Homestar Financial Services, Inc. Texas 100%
Western Insurance Agency, Inc. Texas 100%
Lifestar Reinsurance, Ltd. Turks & Caicos 100%
Oak Creek Housing Corporation Texas 100%
American Homestar of Burleson, Inc. Texas 100%
American Homestar of Lancaster, Inc. Texas 100%
Oak Creek Homes, Inc. Nevada 100%
Heartland Homes, Inc. North Carolina 100%
Guerdon Holdings, Inc. Delaware 100%
Guerdon Homes, Inc. Delaware 100%
Brilliant Holding Corporation Delaware 100%
Brilliant Homes Corporation Alabama 100%
Brilliant Carriers, Inc. Alabama 100%
SCHEDULE 5.4
(to Note Purchase Agreement)
84
PERCENTAGE OF
CAPITAL STOCK OR
NATURE AND SIMILAR EQUITY INTERESTS
JURISDICTION OF OWNED BY THE COMPANY AND EACH
NAME OF SUBSIDIARY INCORPORATION SUBSIDIARY
First Value Homes, Inc. North Carolina 100%
Pacific Northwest Holdings, Inc. Texas 80%
Pacific II Northwest Holdings, Inc. Texas 100% (80%)
2. UNRESTRICTED SUBSIDIARIES
PERCENTAGE OF
CAPITAL STOCK OR
NATURE AND SIMILAR EQUITY INTERESTS
JURISDICTION OF OWNED BY THE COMPANY AND EACH
NAME OF SUBSIDIARY INCORPORATION SUBSIDIARY
Roadmasters Transport Company, Inc. Texas 51%
3. NAME OF AFFILIATE (OTHER THAN SUBSIDIARIES):
PERCENTAGE OF
CAPITAL STOCK OR
NATURE AND SIMILAR EQUITY INTERESTS
JURISDICTION OF OWNED BY THE COMPANY AND EACH
NAME OF AFFILIATE INCORPORATION SUBSIDIARY
21st Century Mortgage Corporation Delaware 50%
-2-
85
4. NAMES OF DIRECTORS AND SENIOR OFFICERS AND OFFICE(S) HELD:
A. DIRECTORS
Finis Teeter
Laurence Dawson, Jr.
Craig Reynolds
Jackie Holland
Chuck Carney, Jr.
Ron McCaslin
Bill Hunt
Jack McDonald
Dale Kesler
B. OFFICERS
NAME OFFICE
Finis F. Teeter Chairman and Co-Chief Executive Officer
Laurence A. Dawson, Jr. President and Co-Chief Executive Officer
Craig A. Reynolds Executive Vice President, Chief Financial
Officer and Secretary
Jackie H. Holland Vice President and Treasurer
Charles N. Carney, Jr. Executive Vice President
Ron McCaslin Executive Vice President
-3-
86
FINANCIAL STATEMENTS
For each of the fiscal years ended May 31, 1996 through 1998 as set forth in
form 10K filed with the Securities and Exchange Commission on August 28, 1998.
SCHEDULE 5.5
(to Note Purchase Agreement)
87
USE OF PROCEEDS
($ Millions)
Reduce Net Floor Plan Indebtedness 50.4*
Origination Costs 0.6
51.0
*If limited by contract, any excess will be invested in permitted investments
SCHEDULE 5.14
(to Note Purchase Agreement)
88
EXISTING INDEBTEDNESS
AS OF MAY 31, 1998
Indebtedness of the Company and its Subsidiaries as of May 31, 1998 was as
follows:
BALANCE
OUTSTANDING
FINAL AS OF
OBLIGOR LENDER NATURE MATURITY MAY 31, 1998
AHC Various Senior Unsecured Notes 7/10/2007 61,000,000
AHC City of Guin Brilliant Plant 3/1/2003 366,463
AHC Jim Johnson Heartland Acquisition 9/3/1998 93,750
AHC Charles Rumbley Heartland Acquisition 9/3/1998 93,750
*Guerdon Homes, Inc. Pendleton Property 12/1/2010 24,000
*Nationwide Housing Albuquerque-Land Albuquerque 7/1/2001 109,086
*Nationwide Housing JL Investments Burleson Property 11/1/2010 164,803
*Nationwide Housing James Stewart Seguin Property 5/1/2002 32,393
*Nationwide Housing Roy Powell Seguin Property 5/1/2002 32,393
*Nationwide Housing CM Rosteet Lake Charles Property 4/1/2001 35,226
*Nationwide Housing Lee Murphy Amarillo Property 11/1/2001 27,085
*Nationwide Housing Clara Vick Amarillo Property 11/1/2000 19,539
*Nationwide Housing Ray Poole Ft. Worth Property 6/1/2000 58,649
*Nationwide Housing Paulette Hawkins Oklahoma City Property 9/1/2004 157,405
*Nationwide Housing Dotson Trust El Paso Property 7/1/2012 105,034
*Nationwide Housing James McDuffie Columbus Property 4/1/2000 315,000
Nationwide NC Homes Bobby Sauls NC Homes Acquisition 6/16/2000 1,382,703
Other 11,000
----------
64,028,279
==========
* Secured by Liens
SCHEDULE 5.15
(to Note Purchase Agreement)
89
ENVIRONMENTAL MATTERS
Lynn, Brilliant and Guin, Alabama: Final Report-Environmental Investigation of
Brilliant Homes, dated February 25, 1997, prepared by Environmental Management &
Engineering, Inc.
Lynn, Alabama: Limited Phase II Environmental Investigation, dated February 14,
1997, prepared by Environmental Management & Engineering, Inc.
Lynn, Alabama: Groundwater Assessment Report, dated May 1, 1997, prepared by
Williams Engineering, Inc.
Lynn, Alabama: Phase I Environmental Site Assessment, dated July 1996, prepared
by Layton Environmental Engineering, Inc.
SCHEDULE 5.18
(to Note Purchase Agreement)
90
RESTRICTIONS ON DIVIDENDS
The payment of dividends to the shareholders of Pacific Northwest
Holdings, Inc., a Texas corporation ("Pacific Northwest"), is prohibited under
that certain Securityholders Agreement dated as of September 4, 1998, by and
among Pacific Northwest, American Homestar Corporation ("Parent") and DWP
Management, Inc., an Oregon corporation ("Minority Shareholder"). The issued and
outstanding shares of such corporation are owned by Parent and Minority
Shareholder.
SCHEDULE 10.10
(to Note Purchase Agreement)
91
EXHIBIT 1
[FORM OF NOTE]
AMERICAN HOMESTAR CORPORATION
___% SENIOR NOTE, SERIES [__], DUE SEPTEMBER 15, 2008
No.[___________] [Date]
$[______________] PPN
FOR VALUE RECEIVED, the undersigned, AMERICAN HOMESTAR CORPORATION
(herein called the "Company"), a corporation organized and existing under the
laws of the State of Texas, hereby promises to pay to
[_______________________________], or registered assigns, the principal sum of
[______________________________] DOLLARS on September 15, 2008, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
unpaid balance thereof at the rate of [____]% per annum from the date hereof,
payable semiannually, on the fifteenth day of March and September in each year,
commencing with the first of such dates next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
permitted by law on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any
Make-Whole Amount or Modified Make-Whole Amount (as defined in the Note Purchase
Agreements referred to below), payable semiannually as aforesaid (or, at the
option of the registered holder hereof, on demand), at a rate per annum from
time to time equal to the greater of (i) [stated rate plus 2%] or (ii) 2.0% over
the rate of interest publicly announced by Citibank, N.A., or any successor
thereof, from time to time in New York, New York as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount or
Modified Make-Whole Amount with respect to this Note are to be made in lawful
money of the United States of America at The First National Bank of Chicago in
Chicago, Illinois or at such other place as the Company shall have designated by
written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of the Series [__] of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
September 15, 1998 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
have made the representation set forth in Section 6 of the Note Purchase
Agreements.
EXHIBIT 1
(to Note Purchase Agreement)
92
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
The Company will make required prepayments of principal on the dates
and in the amounts specified in the Note Purchase Agreements. This Note is also
subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreements, but not
otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount or Modified Make-Whole Amount) and with the effect
provided in the Note Purchase Agreements.
The Company and the holder hereof acknowledge and agree that the
interest rate or other forbearance payable on the Notes shall not exceed the
highest rate permitted under applicable law.
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Illinois
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
AMERICAN HOMESTAR CORPORATION
By /s/ Laurance A. Dawson
--------------------------------
Its President and Co-CEO
--------------------------------
E-1-2
93
FORM OF OPINION OF SPECIAL COUNSEL
TO THE COMPANY
The closing opinion of Jackson Walker L.L.P., special counsel to the
Company which is called for by Section 4.4(a) of the Note Purchase Agreements,
shall be dated the date of the Closing and addressed to you and the Other
Purchasers, shall be satisfactory in scope and form to you and the Other
Purchasers and shall be to the effect that:
1. The Company is a corporation, duly incorporated, validly
existing and in good standing under the laws of the State of Texas, has
the corporate power and the corporate authority to execute and perform
the Note Purchase Agreements and to issue the Notes and has the full
corporate power and the corporate authority to conduct the activities
in which it is now engaged and is duly licensed or qualified as a
foreign corporation and is in good standing as a foreign corporation in
each jurisdiction in which the character of the properties owned or
leased by it or the nature of the business transacted by it makes such
licensing or qualification necessary.
2. Each Note Purchase Agreement has been duly authorized by
all necessary corporate action on the part of the Company, has been
duly executed and delivered by the Company and constitutes the legal,
valid and binding obligation of the Company enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance or similar laws affecting creditors' rights generally, and
general principles of equity (regardless of whether the application of
such principles is considered in a proceeding in equity or at law).
3. Each Significant Subsidiary is a corporation in good
standing under the laws of its jurisdiction of incorporation and is
duly licensed or qualified and is in good standing in each jurisdiction
in which the character of the properties owned or leased by it or the
nature of the business transacted by it makes such licensing or
qualification necessary and all of the issued and outstanding shares of
capital stock of each such Significant Subsidiary are owned by the
Company.
4. The Notes have been duly authorized by all necessary
corporate action on the part of the Company, have been duly executed
and delivered by the Company and constitute the legal, valid and
binding obligations of the Company enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent conveyance or
similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
5. No approval, consent or withholding of objection on the
part of, or filing, registration or qualification with, any
Governmental Authority, is necessary in connection with the execution,
delivery or performance by the Company of the Note Purchase Agreements
or the Notes.
EXHIBIT 4.4(a)
(to Note Purchase Agreement)
94
6. The issuance of the Notes and the use of the proceeds of
the sale of the Notes in accordance with the provisions of and
contemplated by the Note Purchase Agreements do not violate or conflict
with Regulation T, U or X of the Board of Governors of the Federal
Reserve System.
7. The issuance and sale of the Notes and the execution,
delivery and performance by the Company of the Note Purchase Agreements
do 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 upon any of the property of the Company pursuant
to the provisions of the Articles of Incorporation or By-laws of the
Company or any agreement or other instrument known to such counsel to
which the Company is a party or by which the Company may be bound.
8. There are no proceedings pending or, to the knowledge of
such counsel, threatened against or affecting the Company or any
Subsidiary in any court or before any Governmental Authority which, if
adversely determined, could reasonably be expected to have a Material
Adverse Effect.
9. Neither the Company nor any of its Subsidiaries is an
"investment company", or a company "controlled" by an "investment
company", as such terms are defined in the Investment Company Act of
1940, as amended.
10. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Purchase Agreements do not,
under existing law, require the registration of the Notes under the
Securities Act of 1933, as amended, or the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
The opinion of Jackson Walker L.L.P. (i) shall cover such other matters
relating to the sale of the Notes as you and the Other Purchasers may reasonably
request and (ii) is limited to the laws of the State of Texas and the Federal
laws of the United States. With respect to matters of fact on which such opinion
is based, such counsel shall be entitled to rely on appropriate certificates of
public officials and officers of the Company.
E-4.4(a)-2
95
FORM OF OPINION OF SPECIAL COUNSEL
TO THE PURCHASERS
The closing opinion of Chapman and Cutler, special counsel to the
Purchasers, called for by Section 4.4(b) of the Note Purchase Agreements, shall
be dated the date of Closing and addressed to you and the other Purchasers,
shall be satisfactory in form and substance to you and the other Purchasers and
shall be to the effect that:
1. The Company is a corporation, validly existing and in
good standing under the laws of the State of Texas and has the
corporate power and the corporate authority to execute and deliver the
Note Purchase Agreements and to issue the Notes.
2. Each Note Purchase Agreement has been duly authorized by
all necessary corporate action on the part of the Company, has been
duly executed and delivered by the Company and constitutes the legal,
valid and binding contract of the Company enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance and similar laws affecting creditors' rights generally, and
general principles of equity (regardless of whether the application of
such principles is considered in a proceeding in equity or at law).
3. The Notes have been duly authorized by all necessary
corporate action on the part of the Company, and the Notes being
delivered on the date hereof have been duly executed and delivered by
the Company and constitute the legal, valid and binding obligations of
the Company enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent conveyance and similar laws
affecting creditors' rights generally, and general principles of equity
(regardless of whether the application of such principles is considered
in a proceeding in equity or at law).
4. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Purchase Agreements do not,
under existing law, require the registration of the Notes under the
Securities Act of 1933, as amended, or the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
The opinion of Chapman and Cutler shall also state that the opinion of
Jackson Walker L.L.P. is satisfactory in scope and form to Chapman and Cutler
and that, in their opinion, the Purchasers are justified in relying thereon.
In rendering the opinion set forth in paragraph 1 above, Chapman and
Cutler may rely, as to matters referred to in paragraph 1, solely upon an
examination of the Articles of Incorporation certified by, and a certificate of
good standing of the Company from, the Secretary of State of the State of Texas
and the By-laws of the Company. The opinion of Chapman and Cutler is limited to
the general business corporation law of the State of Illinois and the Federal
laws of the United States.
With respect to matters of fact upon which such opinion is based,
Chapman and Cutler may rely on appropriate certificates of public officials and
officers of the Company and upon
EXHIBIT 4.4(b)
(to Note Purchase Agreement)
96
representations of the Company, the other Purchasers and you delivered in
connection with the issuance and sale of the Notes.
E-4.4(b)-2