EXHIBIT 10.1
EXECUTION COPY
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ENCORE WIRE CORPORATION
ENCORE WIRE LIMITED
$300,000,000 Aggregate Principal Amount
Senior Notes Issuable in Series
Initial Issuance of
$55,000,000 Floating Rate Senior Notes, Series 2006-A
due September 30, 2011
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MASTER NOTE PURCHASE AGREEMENT
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Dated as of September 28, 2006
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PPN: 29263@ AB 5
TABLE OF CONTENTS
Section Page
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1. AUTHORIZATION OF NOTES..................................................................................1
1.1. Amount; Establishment of Series................................................................1
1.2. The Series 2006-A Notes........................................................................2
1.3. Floating Interest Rate Provisions for Floating Rate Notes......................................2
1.4. Guaranties; Release of Subsidiary Guaranty.....................................................4
2. SALE AND PURCHASE OF SERIES 2006-A NOTES................................................................4
3. CLOSING.................................................................................................4
4. CONDITIONS TO CLOSING...................................................................................5
4.1. Representations and Warranties.................................................................5
4.2. Performance; No Default........................................................................5
4.3. Compliance Certificates........................................................................5
4.4. Opinions of Counsel............................................................................5
4.5. Purchase Permitted By Applicable Law, etc......................................................6
4.6. Sale of Other Notes............................................................................6
4.7. Payment of Special Counsel Fees................................................................6
4.8. Private Placement Number.......................................................................6
4.9. Changes in Corporate Structure.................................................................6
4.10. Guaranties.....................................................................................7
4.11. Amendment to the Credit Agreement..............................................................7
4.12. Funding Instructions...........................................................................7
4.13. Proceedings and Documents......................................................................7
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY...........................................................7
5.1. Organization; Power and Authority..............................................................7
5.2. Authorization, etc.............................................................................8
5.3. Disclosure.....................................................................................8
5.4. Organization and Ownership of Shares of Subsidiaries...........................................8
5.5. Financial Statements...........................................................................9
5.6. Compliance with Laws, Other Instruments, etc...................................................9
5.7. Governmental Authorizations, etc..............................................................10
5.8. Litigation; Observance of Statutes and Orders.................................................10
5.9. Taxes.........................................................................................11
5.10. Title to Property; Leases.....................................................................11
5.11. Licenses, Permits, etc........................................................................11
5.12. Compliance with ERISA.........................................................................12
5.13. Private Offering by the Company...............................................................13
5.14. Use of Proceeds; Margin Regulations...........................................................13
5.15. Existing Debt.................................................................................13
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5.16. Foreign Assets Control Regulations, Etc.......................................................14
5.17. Status under Certain Statutes.................................................................14
5.18. Environmental Matters.........................................................................14
5.19. Solvency of Subsidiary Guarantors.............................................................15
6. REPRESENTATIONS OF THE PURCHASERS......................................................................15
6.1. Purchase for Investment.......................................................................15
6.2. Source of Funds...............................................................................15
7. INFORMATION AS TO THE PARENT AND THE COMPANY...........................................................17
7.1. Financial and Business Information............................................................17
7.2. Officer's Certificate.........................................................................20
7.3. Inspection....................................................................................21
8. PREPAYMENT OF THE NOTES................................................................................21
8.1. Required Prepayments of Series 2006-A Notes...................................................21
8.2. Optional Prepayments..........................................................................21
8.3. Allocation of Partial Prepayments.............................................................22
8.4. Maturity; Surrender, etc......................................................................22
8.5. Purchase of Notes.............................................................................23
8.6. Make-Whole Amount.............................................................................23
8.7. LIBOR Breakage Amount.........................................................................25
9. AFFIRMATIVE COVENANTS..................................................................................25
9.1. Compliance with Law...........................................................................25
9.2. Insurance.....................................................................................25
9.3. Maintenance of Properties.....................................................................26
9.4. Payment of Taxes..............................................................................26
9.5. Corporate Existence, etc......................................................................26
9.6. Additional Subsidiary Guarantors..............................................................26
9.7. Ranking of Notes..............................................................................27
10. NEGATIVE COVENANTS.....................................................................................27
10.1. Consolidated Debt.............................................................................27
10.2. Interest Coverage.............................................................................27
10.3. Priority Debt.................................................................................27
10.4. Liens.........................................................................................28
10.5. Mergers, Consolidations, etc..................................................................29
10.6. Sale of Assets................................................................................30
10.7. Designation of Restricted and Unrestricted Subsidiaries.......................................31
10.8. Nature of Business............................................................................31
10.9. Transactions with Affiliates..................................................................32
11. EVENTS OF DEFAULT......................................................................................32
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12. REMEDIES ON DEFAULT, ETC...............................................................................34
12.1. Acceleration..................................................................................34
12.2. Other Remedies................................................................................35
12.3. Rescission....................................................................................35
12.4. No Waivers or Election of Remedies, Expenses, etc.............................................36
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES..........................................................36
13.1. Registration of Notes.........................................................................36
13.2. Transfer and Exchange of Notes................................................................36
13.3. Restriction on Transfer to Competitor.........................................................37
13.4. Replacement of Notes..........................................................................37
14. PAYMENTS ON NOTES......................................................................................37
14.1. Place of Payment..............................................................................37
14.2. Home Office Payment...........................................................................38
15. EXPENSES, ETC..........................................................................................38
15.1. Transaction Expenses..........................................................................38
15.2. Survival......................................................................................39
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT...........................................39
17. AMENDMENT AND WAIVER...................................................................................39
17.1. Requirements..................................................................................39
17.2. Solicitation of Holders of Notes..............................................................39
17.3. Binding Effect, etc...........................................................................40
17.4. Notes held by Company, etc....................................................................40
18. NOTICES................................................................................................40
19. REPRODUCTION OF DOCUMENTS..............................................................................41
20. CONFIDENTIAL INFORMATION...............................................................................41
21. SUBSTITUTION OF PURCHASER..............................................................................42
22. MISCELLANEOUS..........................................................................................43
22.1. Successors and Assigns........................................................................43
22.2. Payments Due on Non-Business Days.............................................................43
22.3. Severability..................................................................................43
22.4. Construction..................................................................................43
22.5. Counterparts..................................................................................43
22.6. Governing Law.................................................................................44
22.7. Limitation on Interest........................................................................44
22.8. Submission to Jurisdiction....................................................................45
22.9. Waiver of Jury Trial..........................................................................45
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SCHEDULE A -- Information Relating to Purchasers
SCHEDULE B -- Defined Terms
SCHEDULE 5.3 -- Disclosure Materials
SCHEDULE 5.4 -- Subsidiaries and Ownership of Subsidiary Stock
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Debt
EXHIBIT 1.1(a) -- Form of Fixed Rate Note
EXHIBIT 1.1(b) -- Form of Floating Rate Note
EXHIBIT 1.1(c) -- Form of Supplement
EXHIBIT 1.2 -- Form of Series 2006-A Senior Note
EXHIBIT 1.4(a) -- Form of Parent Guaranty
EXHIBIT 1.4(b) -- Form of Subsidiary Guaranty
EXHIBIT 4.4(a) -- Form of Opinion of Counsel for the Company
EXHIBIT 4.4(b) -- Form of Opinion of Special Counsel to the Purchasers
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ENCORE WIRE CORPORATION
ENCORE WIRE LIMITED
1410 Millwood Road
McKinney, TX 75069
(972) 562-9473
Fax: (972) 562-4744
$300,000,000 Aggregate Principal Amount
Senior Notes Issuable in Series
$55,000,000 Floating Rate Senior Notes, Series 2006-A
due September 30, 2011
Dated as of September 28, 2006
TO EACH OF THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
ENCORE WIRE LIMITED, a Texas limited partnership (the
"Company"), and ENCORE WIRE CORPORATION, a Delaware corporation (the "Parent"),
agree with you as follows:
1. AUTHORIZATION OF NOTES.
1.1. AMOUNT; ESTABLISHMENT OF SERIES.
The Company is contemplating the issue and sale of up to
$300,000,000 aggregate principal amount of its senior notes issuable in series
(the "Notes", such term to include any such Notes issued in substitution
therefor pursuant to Section 13 of this Agreement). Fixed rate Notes will be
substantially in the form set out in Exhibit 1.1(a) and floating rate Notes will
be substantially in the form set out in Exhibit 1.1(b), in each case, with such
changes therefrom, if any, as may be approved by the purchasers of such Notes,
or series thereof, 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. Each series of Notes, other than the Series 2006-A Notes (as defined
below), will be issued pursuant to a supplement to this Agreement (a
"Supplement") in substantially the form of Exhibit 1.1(c), and will be subject
to the following terms and conditions:
(a) the designation of each series of Notes shall distinguish
the Notes of one series from the Notes of all other series;
(b) each series of additional Notes may consist of different
and separate tranches and may differ as to outstanding principal
amounts, maturity dates, interest rates and premiums or make-whole
amounts, if any, and price and terms of redemption or payment prior to
maturity;
(c) the Notes of each series shall rank pari passu with the
Notes of all other series and the Company's other outstanding unsecured
senior Debt;
(d) each series of Notes shall be dated the date of issue,
bear interest at such rate or rates, mature on such date or dates, be
subject to such mandatory or optional prepayments, if any, on the dates
and with the make-whole amounts, premiums or breakage amounts if any,
as are provided in the Supplement under which such Notes are issued,
and shall have such additional or different conditions precedent to
closing and such additional or different representations and warranties
or, subject to the following clause (e), other terms and provisions as
shall be specified in such Supplement;
(e) any additional or more restrictive covenants, Defaults,
Events of Default, rights or similar provisions that are added or
varied by a Supplement for the benefit of the series of Notes to be
issued pursuant to such Supplement shall apply to all outstanding
Notes, whether or not the Supplement so provides; and
(f) except to the extent provided in foregoing clause (d), all
of the provisions of this Agreement shall apply to the Notes of each
series.
The Purchasers of the Series 2006-A Notes need not purchase subsequent series of
Notes.
1.2. THE SERIES 2006-A NOTES.
The Company has authorized, as the initial series of Notes
hereunder, the issue and sale of $55,000,000 aggregate principal amount of
Floating Rate Senior Notes, Series 2006-A, due September 30, 2011 (the "Series
2006-A Notes," such term to include any such Notes issued in substitution
therefor pursuant to Section 13 of this Agreement). The Series 2006-A Notes
shall be substantially in the form set out in Exhibit 1.2, with such changes
therefrom, if any, as may be approved by you and the Company.
1.3. FLOATING INTEREST RATE PROVISIONS FOR FLOATING RATE NOTES.
(a) Adjusted LIBOR Rate. "Adjusted LIBOR Rate" means, for each
Interest Period, the rate per annum equal to LIBOR for such Interest
Period plus the percentage applicable to a series or tranche of
floating rate Notes. The percentage applicable to the Series 2006-A
Notes is .60%.
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For purposes of determining Adjusted LIBOR Rate, the following terms
have the following meanings:
"LIBOR" means, for any Interest Period, the rate per
annum (rounded upwards, if necessary, to the next higher one
hundred-thousandth of a percentage point) for deposits in U.S.
Dollars for a 3-month period (or such other period as is
specified in the applicable Supplement) that appears on the
Bloomberg Financial Markets Service Page BBAM-1 (or if such
page is not available, the Reuters Screen LIBO Page) as of
11:00 a.m. (London, England time) on the date two Business
Days before the commencement of such Interest Period (or three
Business Days before the commencement of the first Interest
Period).
"REUTERS SCREEN LIBO PAGE" means the display
designated as the "LIBO" page on the Reuters Monitory Money
Rates Service (or such other page as may replace the LIBO page
on that service) or such other service as may be nominated by
the British Bankers' Association as the information vendor for
the purpose of displaying British Bankers' Association
Interest Settlement Rates for U.S. Dollar deposits.
(b) Determination of the Adjusted LIBOR Rate. The Adjusted
LIBOR Rate shall be determined by the Company, and notice thereof shall
be given to the holders of the applicable series or tranche of floating
rate Notes, within two Business Days after the beginning of each
Interest Period, together with (i) a copy of the relevant screen used
for the determination of LIBOR, (ii) a calculation of the Adjusted
LIBOR Rate for such Interest Period, (iii) the number of days in such
Interest Period, (iv) the date on which interest for such Interest
Period will be paid and (v) the amount of interest to be paid to each
holder of Notes of such series or tranche on such date. If the holders
of a majority in principal amount of the Notes of such series or
tranche outstanding do not concur with such determination by the
Company, as evidenced by a single written notice (together with such
holders' determination of items (ii) to (v) of the preceding sentence
and in the case of item (i), a copy of the screen used by such
holders), delivered to the Company within 10 Business Days after
receipt by such holders of the notice delivered by the Company pursuant
to the immediately preceding sentence, the determination of the
Adjusted LIBOR Rate shall be made by such holders of the Notes, and any
such determination made in accordance with the provisions of this
Agreement shall be conclusive and binding absent manifest error.
(c) Interest Period. "INTEREST PERIOD" means for any series or
tranche of floating rate Notes and for any period for which interest is
to be calculated or paid, the period commencing on an interest payment
date for such series or tranche of floating rate Notes, or on the date
of Closing in the case of the first such period, and continuing up to,
but not including, the next interest payment date. The interest payment
dates for the Series 2006-A Notes are March 30, June 30, September 30
and December 30.
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1.4. GUARANTIES; RELEASE OF SUBSIDIARY GUARANTY.
(a) Guaranties. The Notes will be guaranteed (i) by the Parent
pursuant to a guaranty in substantially the form of Exhibit 1.4(a) (the
"Parent Guaranty") and (ii) by the Subsidiary Guarantors pursuant to a
guaranty in substantially the form of Exhibit 1.4(b) (the "Subsidiary
Guaranty," and, together with the Parent Guaranty, the "Guaranties").
(b) Release of Subsidiary Guaranty. Each holder of a Note
agrees to release and discharge a Subsidiary Guarantor from the
Subsidiary Guaranty upon written request of the Company, provided that
(i) such Subsidiary has been, or concurrently with the release by the
holders of Notes, will be released and discharged as guarantor under
and in respect of the Credit Agreement and any other Senior Debt; (ii)
such release and discharge is not part of a plan of financing that
contemplates such Subsidiary Guarantor guaranteeing any other Debt of
the Company or becoming a borrower under the Credit Agreement; (iii) no
Default or Event of Default exists or will exist immediately following
such release and discharge; (iv) if any fee or other consideration is
paid or given to any holder of Debt in connection with such release,
other than the repayment of all or a portion of such Debt, each holder
of a Note receives equivalent consideration on a pro rata basis; and
(v) at the time of such written request, the Company delivers to each
holder of Notes a certificate of a Responsible Officer certifying the
matters set forth in clauses (i) through (iv).
2. SALE AND PURCHASE OF SERIES 2006-A NOTES.
Subject to the terms and conditions of this Agreement, the
Company will issue and sell to you and each of the other purchasers named in
Schedule A (the "Other Purchasers"), and you and the Other Purchasers will
purchase from the Company, at the Closing provided for in Section 3, Series
2006-A Notes in the principal amount specified opposite your names in Schedule A
at the purchase price of 100% of the principal amount thereof. Your obligation
hereunder and the obligations of the Other Purchasers are several and not joint
obligations and you shall have no liability to any Person for the performance or
non-performance by any Other Purchaser hereunder.
3. CLOSING.
The sale and purchase of the Series 2006-A Notes to be
purchased by you and the Other Purchasers shall occur at the offices of Gardner,
Carton & Douglas LLP, Suite 3700, 191 North Wacker Drive, Chicago, Illinois
60606 at 9:00 a.m., Chicago time, at a closing on September 28, 2006 (the
"Closing") or on such other Business Day thereafter, not later than October 6,
2006, as may be agreed upon by the Company and the purchasers that are scheduled
to purchase Notes at such Closing. At the Closing, the Company will deliver to
you the Series 2006-A Notes to be purchased by you in the form of a single
Series 2006-A Note (or such greater number of Series 2006-A Notes in
denominations of at least $100,000 as you may request) dated the date of 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 the
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Company to account number 4779592667 at Bank of America, N.A., 901 Main Street,
67th Floor, Dallas TX, ABA No. 111 0000 25. If at the Closing the Company fails
to tender such Series 2006-A Notes to you as provided above in this Section 3,
or any of the conditions specified in Section 4 shall not have been fulfilled to
your satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.
4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold
to you at the Closing is subject to the fulfillment to your satisfaction, prior
to or at the Closing, of the following conditions:
4.1. REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Parent and the
Company in this Agreement shall be correct when made and at the time of the
Closing.
4.2. PERFORMANCE; NO DEFAULT.
The Parent and the Company shall have performed and complied
with all agreements and conditions contained in this Agreement required to be
performed or complied with by them prior to or at the Closing and after giving
effect to the issue and sale of the Notes (and the application of the proceeds
thereof as contemplated by Schedule 5.14) no Default or Event of Default shall
have occurred and be continuing. Neither the Parent nor any Subsidiary,
including the Company, shall have entered into any transaction since June 30,
2006 that would have been prohibited by Sections 10, had such Section applied
since such date.
4.3. COMPLIANCE CERTIFICATES.
(a) Officer's Certificate. The Parent and the Company each
shall have delivered to you an Officer's Certificate, dated the date of
such Closing, certifying that the conditions specified in Sections 4.1,
4.2 and 4.9 have been fulfilled.
(b) Secretary's Certificate. The Parent, the Company and each
Subsidiary Guarantor 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 Agreement.
4.4. OPINIONS OF COUNSEL.
You shall have received opinions in form and substance
reasonably satisfactory to you, dated the date of the Closing (a) from Thompson
& Knight LLP, counsel for the Parent, the Company and the Subsidiary Guarantors,
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 Parent and the Company instruct their counsel to
deliver
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such opinion to you) and (b) from Gardner Carton & Douglas LLP, your special
counsel in connection with such transactions, substantially in the form set
forth in Exhibit 4.4(b) and covering such other matters incident to such
transactions as you may reasonably request.
4.5. PURCHASE PERMITTED BY APPLICABLE LAW, ETC.
On the date of the Closing your purchase of Notes shall (i) 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, (ii) not
violate any applicable law or regulation (including Regulation U, T or X of the
Board of Governors of the Federal Reserve System) and (iii) 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.
4.6. SALE OF OTHER NOTES.
Contemporaneously with the Closing the Company shall sell to
the Other Purchasers and the Other Purchasers shall purchase the Notes to be
purchased by them at the Closing as specified in Schedule A.
4.7. PAYMENT OF SPECIAL COUNSEL FEES.
Without limiting the provisions of Section 15.1, the Company
shall have paid on or before the Closing the fees, charges and disbursements of
your special counsel referred to in Section 4.4, to the extent reflected in a
reasonably detailed statement of such counsel rendered to the Company at least
one Business Day prior to the Closing.
4.8. PRIVATE PLACEMENT NUMBER.
A Private Placement Number issued by Standard & Poor's CUSIP
Service Bureau (in cooperation with the Securities Valuation Office of the
National Association of Insurance Commissioners) shall have been obtained by
Gardner Carton & Douglas LLP for the series of Notes to be issued at the
Closing.
4.9. CHANGES IN CORPORATE STRUCTURE.
Neither the Parent nor the Company shall 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.
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4.10. GUARANTIES.
The Parent shall have executed and delivered the Parent
Guaranty and each Subsidiary Guarantor shall have executed and delivered the
Subsidiary Guaranty.
4.11. AMENDMENT TO THE CREDIT AGREEMENT.
You and your special counsel shall have been provided with a
copy of the Second Amendment to the Credit Agreement executed by the Company.
4.12. FUNDING INSTRUCTIONS.
At least three Business Days prior to the date of the Closing,
each Purchaser shall have received written instructions signed by a Responsible
Officer on letterhead of the Company confirming the information specified in
Section 3 including (i) the name and address of the transferee bank, (ii) such
transferee bank's ABA number and (iii) the account name and number into which
the purchase price for the Notes is to be deposited.
4.13. 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 reasonably satisfactory to you and your
special counsel, and you and your special counsel shall have received all such
counterpart originals or certified or other copies of such documents as you or
they may reasonably request.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Each of the Company and the Parent represents and warrants to
you that:
5.1. ORGANIZATION; POWER AND AUTHORITY.
Each of the Company and the Parent is a limited partnership or
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization, and is duly qualified as a foreign limited
partnership or corporation and is in good standing in each jurisdiction in which
such qualification is required by law, other than those jurisdictions as to
which the failure to be so qualified or in good standing could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Each of the Company and the Parent has the limited partnership or 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, the Parent Guaranty (in the
case of the Parent) and the Series 2006-A Notes (in the case of the Company) and
to perform the provisions hereof and thereof.
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5.2. AUTHORIZATION, ETC.
This Agreement and the Series 2006-A Notes have been duly
authorized by all necessary limited partnership action on the part of the
Company, and this Agreement constitutes, and upon execution and delivery thereof
each Series 2006-A 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).
The Guaranties have been duly authorized by all necessary
corporate action on the part of the Parent or each Subsidiary Guarantor, as the
case may be, and upon execution and delivery thereof will constitute the legal,
valid and binding obligation of the Parent and each Subsidiary Guarantor,
enforceable against the Parent or each Subsidiary Guarantor, as the case may be,
in accordance with their respective terms, except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, fraudulent conveyance,
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).
5.3. DISCLOSURE.
This Agreement, 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. Except as
expressly described in Schedule 5.3, or in one of the documents, certificates or
other writings identified therein, or in the financial statements listed in
Schedule 5.5, since December 31, 2005, there has been no change in the financial
condition, operations, business or properties of the Parent or any Subsidiary,
including the Company, 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 Parent or the Company that could reasonably be expected to
have a Material Adverse Effect that has not been set forth herein or in the
other documents, certificates and other writings delivered to you by or on
behalf of the Parent or the Company specifically for use in connection with the
transactions contemplated hereby.
5.4. ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES.
(a) Schedule 5.4 contains (except as noted therein) complete
and correct lists of (i) the Parent'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 Parent and
each other Subsidiary, including the Company, (ii) the Parent's
Affiliates, other than Subsidiaries, and (iii) the Parent's and the
Company's directors and senior officers.
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(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 Parent and its Subsidiaries, including the Company, have
been validly issued, are fully paid and nonassessable and are owned by
the Parent or another Subsidiary, including the Company, free and clear
of any Lien (except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a
corporation or other legal entity duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization,
and is duly qualified as a foreign corporation or other legal entity
and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to
which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Subsidiary has the corporate or
other power and authority to own or hold under lease the properties it
purports to own or hold under lease and to transact the business it
transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to any
legal restriction or any agreement (other than this Agreement, the
agreements listed on Schedule 5.4 and customary limitations imposed by
corporate, partnership or limited liability company law statutes)
restricting the ability of such Subsidiary to pay dividends out of
profits or make any other similar distributions of profits to the
Company or any of its Subsidiaries that owns outstanding shares of
capital stock or similar equity interests of such Subsidiary.
5.5. FINANCIAL STATEMENTS.
The Parent has delivered to you and each Other Purchaser
copies of the consolidated financial statements of the Parent and its
Subsidiaries, including the Company, 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 Parent and its Subsidiaries, including the Company, 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 and to the absence
of footnotes). The Parent and its Subsidiaries, including the Company, do not
have any Material liabilities that are not disclosed on such financial
statements or otherwise disclosed in this Agreement or the documents,
certificates or other writings delivered to you by or on behalf of the Company
in connection with the transactions contemplated hereby.
5.6. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.
The execution, delivery and performance by the Company and the
Parent of this Agreement and by the Company of the Series 2006-A Notes will not
(i) 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 Parent or
any Subsidiary, including the Company, under, any indenture, mortgage, deed of
trust, loan, purchase or credit agreement, lease, corporate charter or by-laws,
or any other
9
Material agreement or instrument to which the Parent or any Subsidiary,
including the Company, is bound or by which any of their respective properties
may be bound or affected, (ii) 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 Parent or any
Subsidiary, including the Company, or (iii) violate any provision of any statute
or other rule or regulation of any Governmental Authority applicable to the
Parent or any Subsidiary, including the Company.
The execution, delivery and performance by each of the Parent
and each Subsidiary Guarantor of the Guaranty to which it is a party will not
(i) 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 Parent or
such Subsidiary Guarantor under, any agreement, or corporate charter or by-laws,
to which the Parent or such Subsidiary Guarantor is bound or by which the Parent
or such Subsidiary Guarantor or any of their properties may be bound or
affected, (ii) 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 Parent or such Subsidiary
Guarantor or (iii) violate any provision of any statute or other rule or
regulation of any Governmental Authority applicable to the Parent or such
Subsidiary Guarantor.
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 Series 2006-A Notes or the execution, delivery or performance by the Parent
of this Agreement or the Parent Guaranty or by each Subsidiary Guarantor of the
Subsidiary Guaranty.
5.8. LITIGATION; OBSERVANCE OF STATUTES AND ORDERS.
(a) There are no actions, suits or proceedings pending or, to
the knowledge of the Parent or the Company, threatened against or
affecting the Parent or any Subsidiary, including the Company, or any
property of the Parent or any Subsidiary, including the Company, 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 Parent nor any Subsidiary, including the
Company, 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 Environmental Laws and the USA Patriot Act) of any
Governmental Authority, which default or violation, individually or in
the aggregate, could reasonably be expected to have a Material Adverse
Effect.
10
5.9. TAXES.
The Parent and its Subsidiaries, including the Company, have
filed all tax returns that are required to have been filed in any jurisdiction,
and have paid all taxes shown to be due and payable on such returns and all
other taxes and assessments levied upon them or their properties, assets, income
or franchises, to the extent such taxes and assessments have become due and
payable and before they have become delinquent, except for any taxes and
assessments (i) the amount of which is not individually or in the aggregate
Material or (ii) the amount, applicability or validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which the Parent or a Subsidiary, as the case may be, has established adequate
reserves in accordance with GAAP. Neither the Parent nor the Company knows of
any 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 Parent and its Subsidiaries, including the Company, in respect of
Federal, state or other taxes for all fiscal periods are, in the good faith
judgment of the Parent, adequate. The federal income tax liabilities of the
Parent and its Subsidiaries, including the Company, have been determined by the
Internal Revenue Service and paid for all fiscal years up to and including the
fiscal year ended December 31, 2003.
5.10. TITLE TO PROPERTY; LEASES.
The Parent and its Subsidiaries, including the Company, have
good and defensible title to their respective Material properties, including all
such properties reflected in the most recent audited balance sheet referred to
in Section 5.5 or acquired by the Company or any Subsidiary after said date
(except as sold or otherwise disposed of in the ordinary course of business), in
each case free and clear of Liens prohibited by this Agreement. All leases that
individually or in the aggregate are Material are valid and subsisting and are
in full force and effect in all material respects.
5.11. LICENSES, PERMITS, ETC.
(a) the Parent and its Subsidiaries, including the Company,
own or possess all licenses, permits, franchises, authorizations,
patents, copyrights, service marks, trademarks and trade names, or
rights thereto necessary for the conduct of their businesses without
known conflict with the rights of others;
(b) to the knowledge of the Parent and the Company, no product
of the Parent or any Subsidiary, including the Company, infringes any
license, permit, franchise, authorization, patent, copyright, service
mark, trademark, trade name or other right owned by any other Person;
and
(c) to the knowledge of the Parent, there is no violation by
any Person of any right of the Parent or any of its Subsidiaries,
including the Company, with respect to any patent, copyright, service
mark, trademark, trade name or other right owned or used by the Parent
or any of its Subsidiaries, including the Company;
11
except, in each instance, for the lack of ownership or possession,
conflicts or violations that, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.
5.12. COMPLIANCE WITH ERISA.
(a) The Parent and each ERISA Affiliate, including the
Company, 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 Parent nor any ERISA Affiliate,
including the Company, has incurred any liability pursuant to Title I
or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA),
and no event, transaction or condition has occurred or exists that
could reasonably be expected to result in the incurrence of any such
liability by the Parent or any ERISA Affiliate, including the Company,
or in the imposition of any Lien on any of the rights, properties or
assets of the Parent or any ERISA Affiliate, including the Company, 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 could 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 Parent and its ERISA Affiliates, including the
Company, have not incurred withdrawal liabilities (and are not subject
to contingent withdrawal liabilities) under section 4201 or 4204 of
ERISA in respect of Multiemployer Plans that individually or in the
aggregate are Material.
(d) The expected postretirement benefit obligation (determined
as of the last day of the Parent'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 Parent and its ERISA
Affiliates, including the Company, is not Material.
(e) The execution and delivery of this Agreement and the
issuance and sale of the Series 2006-A 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 Parent
and the Company in the first sentence of this Section 5.12(e) is made
in reliance upon and
12
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 Series
2006-A Notes to be purchased by you.
5.13. PRIVATE OFFERING BY THE COMPANY.
None of the Parent, the Company or anyone acting on their
behalf has offered the Series 2006-A 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 one (1) other Institutional Investor, each of which
has been offered the Series 2006-A Notes at a private sale for investment. None
of the Parent, the Company or anyone authorized to act on their behalf has
taken, or will take, any action that would subject the issuance or sale of the
Series 2006-A Notes to the registration requirements of Section 5 of the
Securities Act.
5.14. USE OF PROCEEDS; MARGIN REGULATIONS.
The Company will apply the proceeds of the sale of the Series
2006-A Notes to repay Debt as set forth in Schedule 5.14 and for general
corporate purposes. No part of the proceeds from the sale of the Series 2006-A
Notes will be used, directly or indirectly, for the purpose of buying or
carrying any margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System (12 CFR 221), or for the purpose of
buying or carrying or trading in any securities under such circumstances as to
involve the Company in a violation of Regulation X of said Board (12 CFR 224) or
to involve any broker or dealer in a violation of Regulation T of said Board (12
CFR 220). Margin stock does not constitute more than 5% 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 5% 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.
5.15. EXISTING DEBT.
(a) Except as described therein, Schedule 5.15 sets forth a
complete and correct list of all outstanding Debt of the Parent and its
Subsidiaries, including the Company, as of June 30, 2006, since which
date there has been no Material change in the amounts, interest rates,
sinking funds, installment payments or maturities of the Debt of the
Company or its Subsidiaries. Neither the Parent nor any Subsidiary,
including the Company, is in default and no waiver of default is
currently in effect, in the payment of any principal or interest on any
Debt of the Parent or such Subsidiary, including the Company, and no
event or condition exists with respect to any Debt of the Parent or any
Subsidiary, including the Company, that would permit (or that with
notice or the lapse of time, or both, could permit) one or more Persons
to cause such Debt to become due and payable before its stated maturity
or before its regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Parent
nor any Subsidiary, including the Company, has agreed or consented to
cause or permit in the
13
future (upon the happening of a contingency or otherwise) any of its
property, whether now owned or hereafter acquired, to be subject to a
Lien not permitted by Section 10.4.
5.16. FOREIGN ASSETS CONTROL REGULATIONS, ETC.
(a) Neither the sale of the Series 2006-A 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.
(b) Neither the Parent nor any Subsidiary, including the
Company, (i) is a Person described or designated in the Specially
Designated Nationals and Blocked Persons List of the Office of Foreign
Assets Control or in Section 1 of the Anti-Terrorism Order or (ii)
engages in any dealings or transactions with any such Person. The
Parent and its Subsidiaries are in compliance, in all material
respects, with the USA Patriot Act.
(c) No part of the proceeds from the sale of the Series 2006-A
Notes hereunder will be used, directly or indirectly, for any payments
to any governmental official or employee, political party, official of
a political party, candidate for political office, or anyone else
acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977, as amended, assuming in
all cases that such Act applies to the Parent and its Subsidiaries,
including the Company.
5.17. STATUS UNDER CERTAIN STATUTES.
Neither the Parent nor any Subsidiary, including the Company,
is subject to regulation under the Investment Company Act of 1940, as amended,
the Interstate Commerce Act, as amended by the ICC Termination Act, as amended,
or the Federal Power Act, as amended.
5.18. ENVIRONMENTAL MATTERS.
Neither the Parent nor any Subsidiary, including the Company,
has knowledge of any claim or has received any notice of any claim, and no
proceeding has been instituted raising any claim against the Parent or any of
its Subsidiaries, including the Company, or any of their respective real
properties now or formerly owned, leased or operated by any of them or other
assets, alleging any damage to the environment or violation of any Environmental
Laws, except, in each case, such as could not reasonably be expected to result
in a Material Adverse Effect. Except as otherwise disclosed to you in writing,
(a) neither the Parent nor any Subsidiary, including the
Company, has knowledge of any facts which could give rise to any claim,
public or private, of violation of Environmental Laws or damage to the
environment emanating from, occurring on or in any way related to real
properties now or formerly owned, leased or operated by any of
14
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 Parent nor any Subsidiary, including the
Company, has stored any Hazardous Materials on real properties now or
formerly owned, leased or operated by any of them and has not disposed
of any Hazardous Materials in a manner contrary to any Environmental
Laws in each case in any manner that could reasonably be expected to
result in a Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Parent or any of its Subsidiaries, including the
Company, are in compliance with applicable Environmental Laws, except
where failure to comply could not reasonably be expected to result in a
Material Adverse Effect.
5.19. SOLVENCY OF SUBSIDIARY GUARANTORS.
After giving effect to the transactions contemplated herein
and after giving due consideration to any rights of contribution (i) each
Subsidiary Guarantor has received fair consideration and reasonably equivalent
value for the incurrence of its obligations under the Subsidiary Guaranty, (ii)
the fair value of the assets of each Subsidiary Guarantor (both at fair
valuation and at present fair saleable value) exceeds its liabilities, (iii)
each Subsidiary Guarantor is able to and expects to be able to pay its debts as
they mature, and (iv) each Subsidiary Guarantor has capital sufficient to carry
on its business as conducted and as proposed to be conducted.
6. REPRESENTATIONS OF THE PURCHASERS.
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. You represent that you are an
"accredited investor" within the meaning of subparagraph (a)(1), (2), (3) or (7)
of Rule 501 of Regulation D under the Securities Act.
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:
15
(a) the Source is an "insurance company general account" (as
the term is defined in the United States Department of Labor's
Prohibited Transaction Exemption ("PTE") 95-60) in respect of which the
reserves and liabilities (as defined by the annual statement for life
insurance companies approved by the National Association of Insurance
Commissioners (the "NAIC Annual Statement")) for the general account
contract(s) held by or on behalf of any employee benefit plan together
with the amount of the reserves and liabilities for the general account
contract(s) held by or on behalf of any other employee benefit plans
maintained by the same employer (or affiliate thereof as defined in PTE
95-60) or by the same employee organization in the general account do
not exceed 10% of the total reserves and liabilities of the general
account (exclusive of separate account liabilities) plus surplus as set
forth in the NAIC Annual Statement filed with such Purchaser's state of
domicile; or
(b) the Source is a separate account that is maintained solely
in connection with such Purchaser's fixed contractual obligations under
which the amounts payable, or credited, to any employee benefit plan
(or its related trust) that has any interest in such separate account
(or to any participant or beneficiary of such plan (including any
annuitant)) are not affected in any manner by the investment
performance of the separate account; or
(c) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
PTE 91-38 (issued August 12, 1991) and, except as you have disclosed to
the Company in writing pursuant to this paragraph (c), 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
(d) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of PTE 84-14 (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 or any Guarantor 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 clause (d); or
(e) the Source constitutes assets of a "plan(s)" (within the
meaning of Section IV of PTE 96-23 (the "INHAM Exemption")) managed by
an "in-house asset manager" or "INHAM" (within the meaning of Part IV
of the INHAM exemption), the conditions
16
of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither
the INHAM nor a person controlling or controlled by the INHAM (applying
the definition of "control" in Section IV(h) of the INHAM Exemption)
owns a 5% or more interest in the Company or any Guarantor and (i) the
identity of such INHAM and (ii) the name(s) of the employee benefit
plan(s) whose assets constitute the Source have been disclosed to the
Company in writing pursuant to this clause (e); or
(f) the Source is a governmental plan; or
(g) 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 (g); or
(h) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms "employee benefit plan", "governmental
plan" and "separate account" shall have the respective meanings assigned to such
terms in section 3 of ERISA.
7. INFORMATION AS TO THE PARENT AND THE COMPANY.
7.1. FINANCIAL AND BUSINESS INFORMATION.
The Parent will deliver to each holder of Notes that is an
Institutional Investor:
(a) Quarterly Statements -- within 60 days (or such other
shorter period within which Quarterly Reports on Form 10-Q are required
to be timely filed with the Securities and Exchange Commission,
including any extension permitted by Rule 12b-25 of the Exchange Act)
after the end of each quarterly fiscal period in each fiscal year of
the Parent (other than the last quarterly fiscal period of each such
fiscal year), duplicate copies of,
(i) a consolidated balance sheet of the Parent and
its Subsidiaries, including the Company, as at the end of such
quarter,
(ii) consolidated statements of income and
shareholders' equity of the Parent and its Subsidiaries,
including the Company, for such quarter and (in the case of
the second and third quarters) for the portion of the fiscal
year ending with such quarter, and
(iii) consolidated statements of cash flows of the
Parent and its Subsidiaries, including the Company, for such
quarter or (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
17
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 Parent's Quarterly Report
on Form 10-Q prepared in compliance with the requirements therefor and
filed with the Securities and Exchange Commission shall be deemed to
satisfy the requirements of this Section 7.1(a);
(b) Annual Statements -- within 105 days (or such other
shorter period within which Annual Reports on Form 10-K are required to
be timely filed with the Securities and Exchange Commission, including
any extension permitted by Rule 12b-25 of the Exchange Act) after the
end of each fiscal year of the Parent, duplicate copies of,
(i) a consolidated balance sheet of the Parent and
its Subsidiaries, including the Company, as at the end of such
year, and
(ii) consolidated statements of income, shareholders'
equity and cash flows of the Parent and its Subsidiaries,
including the Company, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied by an opinion thereon of independent
certified public accountants of recognized regional or national
standing, which opinion shall state that such financial statements
present fairly, in all material respects, the financial position of the
companies being reported upon and their results of operations and cash
flows and have been prepared in conformity with GAAP, and that the
examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted auditing
standards, and that such audit provides a reasonable basis for such
opinion in the circumstances; provided that the delivery within the
time period specified above of the Parent's Annual Report on Form 10-K
for such fiscal year (together with the Parent's annual report to
shareholders, if any, prepared pursuant to Rule 14a-3 under the
Exchange Act) prepared in accordance with the requirements therefor and
filed with the Securities and Exchange Commission shall be deemed to
satisfy the requirements of this Section (b);
(c) Unrestricted Subsidiaries -- if, at the time of delivery
of any financial statements pursuant to Section 7.1(a) or (b),
Unrestricted Subsidiaries account for more than 10% of (i) the
consolidated total assets of the Parent and its Subsidiaries, including
the Company, reflected in the consolidated balance sheet included in
such financial statements or (ii) the consolidated revenues of the
Parent and its Subsidiaries, including the Company, reflected in the
consolidated statement of income included in such financial statements,
an unaudited balance sheet for all Unrestricted Subsidiaries taken as
whole as at the end of the fiscal period included in such financial
statements and the related unaudited statements of income,
stockholders' equity and cash flows for such Unrestricted Subsidiaries
for such period, together with consolidating statements reflecting all
eliminations or adjustments necessary to reconcile such group financial
statements to the consolidated financial statements of the Parent and
its Subsidiaries,
18
including the Company, shall be delivered together with the financial
statements required pursuant to Sections 7.1(a) and (b);
(d) SEC and Other Reports -- promptly upon their becoming
available, one copy of (i) each financial statement, report, notice or
proxy statement sent by the Parent or any Subsidiary, including the
Company, to public securities holders generally, and (ii) each regular
or periodic report, each registration statement that shall have become
effective (without exhibits except as expressly requested by such
holder), and each final prospectus and all amendments thereto filed by
the Parent or any Subsidiary, including the Company, 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;
(e) Notice of Default or Event of Default -- promptly, and in
any event within five Business Days after a Responsible Officer
becoming aware of the existence of any Default or Event of Default, a
written notice specifying the nature and period of existence thereof
and what action the Parent or the Company is taking or proposes to take
with respect thereto;
(f) ERISA Matters -- promptly, and in any event within five
Business 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 Parent or an ERISA Affiliate, including the
Company, 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 Parent 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 Parent or an
ERISA Affiliate, including the Company, 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
Parent or an ERISA Affiliate, including the Company, 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;
19
(g) 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;
(h) Requested Information -- with reasonable promptness, such
other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Parent or any
of its Subsidiaries, including the Company, or relating to the ability
of the Parent or 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; and
(i) Supplements to Agreement -- in the event an additional
series of Notes is, or is proposed to be, issued under this Agreement,
promptly, and in any event within 10 Business Days after execution and
delivery thereof, a true copy of the Supplement pursuant to which such
Notes are to be, or were, issued.
7.2. OFFICER'S CERTIFICATE.
Each set of financial statements delivered to a holder of
Notes pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a
certificate of a Senior Financial Officer setting forth:
(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Parent was in
compliance with the requirements of Section 10.1 through Section 10.9,
inclusive, during the quarterly or annual period covered by the
statements then being furnished (including with respect to each such
Section, where applicable, the calculations of the maximum or minimum
amount, ratio or percentage, as the case may be, permissible under the
terms of such Sections, and the calculation of the amount, ratio or
percentage then in existence); and
(b) Event of Default -- a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and
conditions of the Parent and its Subsidiaries, including the Company,
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
any such event or condition resulting from the failure of the Parent or
any Subsidiary, including the Company, to comply with any Environmental
Law), specifying the nature and period of existence thereof and what
action the Parent or the Company shall have taken or proposes to take
with respect thereto.
20
7.3. INSPECTION.
The Parent and the Company will 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 Parent or the Company, to visit the principal executive office
of the Parent or the Company, to discuss the affairs, finances and
accounts of the Parent and its Subsidiaries, including the Company,
with the Parent's and the Company's officers, and (with the consent of
the Parent and the Company, which consent will not be unreasonably
withheld) its independent public accountants, and (with the consent of
the Parent and the Company which consent will not be unreasonably
withheld), to visit the other offices and properties of the Parent and
each Subsidiary, including the Company, 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 Parent or any Subsidiary, including the Company,
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
Parent and the Company authorize said accountants to discuss the
affairs, finances and accounts of the Parent and its Subsidiaries,
including the Company), all at such times and as often as may be
requested.
8. PREPAYMENT OF THE NOTES.
8.1. REQUIRED PREPAYMENTS OF SERIES 2006-A NOTES.
No regularly scheduled prepayments are due on the Series
2006-A Notes prior to their stated maturity.
8.2. OPTIONAL PREPAYMENTS.
The Company may, at its option, as provided below, prepay at
any time all, or from time to time any part of, the Notes in an amount not less
than $1,000,000 in the aggregate in the case of a partial prepayment.
(a) Fixed Rate Notes. Prepayments of fixed rate Notes shall be
made at 100% of the principal amount so prepaid, plus the Make-Whole
Amount determined for the prepayment date with respect to such
principal amount. The Company will give each holder of fixed rate Notes
written notice of each optional prepayment under this Section 8.2(a)
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 (which
shall be a Business Day), the aggregate principal amount of the fixed
rate Notes to be prepaid on such date,
21
the principal amount of each fixed rate 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 fixed rate Notes a certificate
of a Senior Financial Officer specifying the calculation of such
Make-Whole Amount as of the specified prepayment date.
(b) Floating Rate Notes. Prepayments of Series 2006-A Notes
shall be made at 100% of the principal amount so prepaid, plus the
prepayment premium set forth below, and if such prepayment is to occur
on any date other than an interest payment date, the LIBOR Breakage
Amount, if any.
IF PREPAID DURING THE PERIOD PREPAYMENT PREMIUM
---------------------------- ------------------
September 28, 2006 through
September 29, 2007 1.0%
September 30, 2007 and thereafter 0.0%
The terms on which floating rate Notes other than the Series 2006-A
Notes may be prepaid at the option of the Company will be set forth in
the Supplement pursuant to which such Notes are issued.
The Company will give each holder of floating rate Notes to be
prepaid written notice of each optional prepayment under this Section
8.2(b) 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 floating rate Notes to be
prepaid on such date, the principal amount of each floating rate Note
held by such holder to be prepaid (determined in accordance with
Section 8.3), the interest to be paid on the prepayment date with
respect to such principal amount being prepaid and the amount of any
prepayment premium and LIBOR Breakage Amount to be paid.
8.3. ALLOCATION OF PARTIAL PREPAYMENTS.
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.
8.4. MATURITY; SURRENDER, ETC.
In the case of each prepayment of Notes pursuant to this
Section 8, the principal amount of each Note to be prepaid shall mature and
become due and payable on the date fixed for such prepayment (which shall be a
Business Day), together with interest on such principal
22
amount accrued to such date and any applicable Make-Whole Amount, prepayment
premium and/or LIBOR Breakage Amount. 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 any applicable Make-Whole Amount, prepayment
premium and/or LIBOR Breakage Amount, as aforesaid, interest on such principal
amount shall cease to accrue. Any Note paid or prepaid in full shall be
surrendered to the Company and canceled and shall not be reissued, and no Note
shall be issued in lieu of any prepaid principal amount of any Note.
8.5. PURCHASE OF NOTES.
Neither the Parent nor the Company will, 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 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 25% 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 ten 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.
8.6. MAKE-WHOLE AMOUNT.
The term "MAKE-WHOLE AMOUNT" means, with respect to any fixed
rate 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 fixed
rate Note over the amount of such Called Principal, provided that the Make-Whole
Amount may in no event be less than zero. For the purposes of determining the
Make-Whole Amount, the following terms have the following meanings:
"CALLED PRINCIPAL" means, with respect to any fixed rate Note,
the principal of such fixed rate Note that is to be prepaid pursuant to
Section 8.2(a) 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 fixed rate 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
23
which interest on such fixed rate Notes is payable) equal to the
Reinvestment Yield with respect to such Called Principal.
"REINVESTMENT YIELD" means, with respect to the Called
Principal of any fixed rate Note, .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 the "PX1
Screen" on the Bloomberg Financial Market Service (or such other
display as may replace the PX1 Screen on Bloomberg Financial Market
Service) for actively traded U.S. Treasury securities having a maturity
equal to the Remaining Average Life of such Called Principal as of such
Settlement Date, or (ii) if such yields are not reported as of such
time or the yields reported as of such time are not ascertainable, the
Treasury Constant Maturity Series Yields reported, for the latest day
for which such yields have been so reported as of the second Business
Day preceding the Settlement Date with respect to such Called
Principal, in Federal Reserve Statistical Release H.15 (519) (or any
comparable successor publication) for actively traded U.S. Treasury
securities having a constant maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date. Such implied
yield will be determined, if necessary, by (a) converting U.S. Treasury
bill quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between (1) the
actively traded U.S. Treasury security with the maturity closest to and
greater than the Remaining Average Life and (2) the actively traded
U.S. Treasury security with the maturity closest to and less than the
Remaining Average Life.
"REMAINING AVERAGE LIFE" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (b) the number of years (calculated to the nearest one-twelfth year)
that will elapse between the Settlement Date with respect to such
Called Principal and the scheduled due date of such Remaining Scheduled
Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the
Called Principal of any fixed rate Note, all payments of such Called
Principal and interest thereon that could 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 such fixed rate 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(a) or 12.1.
"SETTLEMENT DATE" means, with respect to the Called Principal
of any fixed rate Note, the date on which such Called Principal is to
be prepaid pursuant to Section 8.2(a) 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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8.7. LIBOR BREAKAGE AMOUNT.
The term "LIBOR Breakage Amount" means any loss, cost or
expense reasonably incurred by any holder of a floating rate Note as a result of
any payment or prepayment of such floating rate Note (whether voluntary,
mandatory, automatic, by reason of acceleration or otherwise) on a day other
than an interest payment date or at scheduled maturity thereof, and, without
duplication, any loss or expense arising from the liquidation or reemployment of
funds obtained by such holder or from fees payable to terminate the deposits
from which such funds were obtained. Any such loss, cost or expense shall be
limited to the time period from the date of such prepayment through the earlier
of the next interest payment date or the maturity of such floating rate Note.
Each holder of a floating rate Note shall determine the LIBOR Breakage Amount
with respect to the principal amount of its floating rate Notes then being paid
or prepaid (or required to be paid or prepaid) by written notice to the Company
setting forth such determination in reasonable detail with supporting
calculations not less than two Business Days prior to the date of prepayment.
Each such determination shall be conclusive absent manifest error.
9. AFFIRMATIVE COVENANTS.
Each of the Parent and the Company covenants that so long as
any of the Notes are outstanding:
9.1. COMPLIANCE WITH LAW.
The Parent and the Company will, and will cause each other
Subsidiary to, comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, Environmental Laws, and
will obtain and maintain in effect all licenses, certificates, permits,
franchises and other governmental authorizations necessary to the ownership of
their respective properties or to the conduct of their respective businesses, in
each case to the extent necessary to ensure that non-compliance with such laws,
ordinances or governmental rules or regulations or failures to obtain or
maintain in effect such licenses, certificates, permits, franchises and other
governmental authorizations could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
9.2. INSURANCE.
The Parent and the Company will, and will cause each
Restricted Subsidiary 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
customary 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.
25
9.3. MAINTENANCE OF PROPERTIES.
The Parent and the Company will, and will cause each
Restricted Subsidiary 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 Parent or any Subsidiary, including the Company, 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 Parent has
concluded that such discontinuance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
9.4. PAYMENT OF TAXES.
The Parent and the Company will, and will cause each other
Subsidiary 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 Parent or any Subsidiary,
including the Company, provided that neither the Parent nor any Subsidiary,
including the Company, need pay any such tax or assessment or claims if (i) the
amount, applicability or validity thereof is contested by the Parent or such
Subsidiary on a timely basis in good faith and in appropriate proceedings, and
the Parent or a Subsidiary, including the Company, has established adequate
reserves therefor in accordance with GAAP on the books of the Parent 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.
9.5. CORPORATE EXISTENCE, ETC.
Each of the Parent and the Company will at all times preserve
and keep in full force and effect its corporate existence. Subject to Sections
10.5 and 10.6, the Parent and the Company will at all times preserve and keep in
full force and effect the corporate existence of each Restricted Subsidiary
(unless merged into the Parent or a Wholly Owned Restricted Subsidiary,
including the Company) and all rights and franchises of the Parent and its
Restricted Subsidiaries, including the Company, unless, in the good faith
judgment of the Parent, the termination of or failure to preserve and keep in
full force and effect each corporate existence, right or franchise could not,
individually or in the aggregate, have a Material Adverse Effect.
9.6. ADDITIONAL SUBSIDIARY GUARANTORS.
The Parent and the Company will cause any Subsidiary that
(whether or not required by the terms of the Credit Agreement) is to become a
party to, or guarantee, Debt in respect of the Credit Agreement or any other
Senior Debt, to enter into the Subsidiary Guaranty concurrently therewith and as
a part thereof to deliver to each of the holders:
26
(a) a copy of an executed joinder to the Subsidiary Guaranty;
(b) a certificate signed by a Responsible Officer confirming
the accuracy of the representations and warranties in Sections 5.2,
5.6, 5.7 and 5.19, with respect to such Subsidiary and the Subsidiary
Guaranty as it relates to such Subsidiary, as applicable; and
(c) an opinion of counsel (who may be counsel for the Company)
reasonably satisfactory to the Required Holders addressed to each
holder of the Notes to the effect that the Subsidiary Guaranty of such
Person has been duly authorized, executed and delivered and that the
Subsidiary Guaranty constitutes the legal, valid and binding contract
and agreement of such Person enforceable in accordance with its terms,
except as an enforcement of such terms may be limited by bankruptcy,
insolvency, fraudulent conveyance and similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles.
9.7. RANKING OF NOTES.
The Debt evidenced by the Notes will at all times rank at
least pari passu with all of the Company's outstanding unsecured Senior Debt.
10. NEGATIVE COVENANTS.
Each of the Parent and the Company covenants that so long as
any of the Notes are outstanding:
10.1. CONSOLIDATED DEBT.
The Parent will not permit the ratio of Consolidated Debt (as
of the end of any fiscal quarter of the Parent) to Consolidated EBITDA (for the
Parent's then most recently completed four fiscal quarters) (a) to be greater
than 3.50 to 1.00 at any time or (b) to be greater than 3.25 to 1.00 for more
than two consecutive fiscal quarters.
10.2. INTEREST COVERAGE.
The Parent will not permit the ratio of Consolidated EBIT to
Consolidated Interest Expense (in each case for the Parent's then most recently
completed four fiscal quarters) to be less than 2.0 to 1.0 at any time.
10.3. PRIORITY DEBT.
The Parent and the Company will not permit Priority Debt to
exceed 20% of Consolidated Net Worth (determined as of the end of the Parent's
most recently completed fiscal quarter) at any time.
27
10.4. LIENS.
The Parent and the Company will not, and will not permit any
Restricted Subsidiary to, permit to exist, create, assume or incur, directly or
indirectly, any Lien on its properties or assets, whether now owned or hereafter
acquired, unless the Notes are equally and ratably secured by a Lien on the same
property and assets pursuant to an agreement reasonably acceptable to the
Required Holders, except:
(a) Liens for taxes, assessments or governmental charges not
then due and delinquent or the nonpayment of which is permitted by
Section 9.4;
(b) Liens incidental to the conduct of business or the
ownership of properties and assets (including landlords', lessors',
carriers', operators', warehousemen's, mechanics', materialmen's and
other similar Liens) and Liens to secure the performance of bids,
tenders, leases or trade contracts, or to secure statutory obligations
(including obligations under workers compensation, unemployment
insurance and other social security legislation), surety or appeal
bonds or other Liens of like general nature incurred in the ordinary
course of business and not in connection with the borrowing of money;
(c) encumbrances in the nature of leases, subleases, zoning
restrictions, easements, rights of way and other rights and
restrictions of record on the use of real property and defects in title
arising or incurred in the ordinary course of business, which,
individually and in the aggregate, do not materially impair the use or
value of the property or assets subject thereto;
(d) any attachment or judgment Lien, unless the judgment it
secures has not, within 60 days after the entry thereof, been
discharged or execution thereof stayed pending appeal, or has not been
discharged within 60 days after the expiration of any such stay;
(e) Liens securing Debt of a Restricted Subsidiary to the
Parent or to another Restricted Subsidiary, including the Company;
(f) Liens (i) existing on property at the time of its
acquisition by the Parent or a Restricted Subsidiary, including the
Company, and not created in contemplation thereof, whether or not the
Debt secured by such Lien is assumed by the Parent or a Restricted
Subsidiary; including the Company, or (ii) on property created
contemporaneously with its acquisition or within 365 days of the
acquisition or completion of construction or development thereof to
secure or provide for all or a portion of the purchase price or cost of
the acquisition, construction or development of such property after the
date of Closing; or (iii) existing on property of a Person at the time
such Person is merged or consolidated with, or becomes a Restricted
Subsidiary of, or substantially all of its assets are acquired by, the
Parent or a Restricted Subsidiary, including the Company, and not
created in contemplation thereof; provided that in the case of clauses
(i), (ii) and (iii) such Liens do not extend to additional property of
the Parent or any Restricted Subsidiary, including the Company, (other
than property that is an improvement to or is acquired for specific use
in
28
connection with the subject property) and that the aggregate principal
amount of Debt secured by each such Lien does not exceed the fair
market value (determined in good faith by one or more officers of the
Parent to whom authority to enter into such transaction has been
delegated by the board of directors of the Parent) of the property
subject thereto;
(g) Liens resulting from extensions, renewals or replacements
of Liens permitted by paragraphs (e), (f) and (g), provided that (i)
there is no increase in the principal amount or decrease in maturity of
the Debt secured thereby at the time of such extension, renewal or
replacement, (ii) any new Lien attaches only to the same property
theretofore subject to such earlier Lien and (iii) immediately after
such extension, renewal or replacement no Default or Event of Default
would exist; and
(h) Liens securing Debt not otherwise permitted by paragraphs
(a) through (g) of this Section 10.4, provided that Priority Debt does
not exceed 20% of Consolidated Net Worth at any time.
10.5. MERGERS, CONSOLIDATIONS, ETC.
The Parent and the Company will not, and will not permit any
Restricted Subsidiary to, consolidate with or merge with any other Person or
convey, transfer, sell or lease all or substantially all of its assets in a
single transaction or series of transactions to any Person except that:
(a) the Company may consolidate or merge with the Parent or
convey, transfer, sell or lease all or substantially all of its assets
in a single transaction or series of transactions to the Parent,
provided that the Parent is the successor or survivor; and
(b) the Parent may consolidate or merge with any other Person
or convey, transfer, sell or lease all or substantially all of its
assets in a single transaction or series of transactions to any Person,
provided that:
(i) the successor formed by such consolidation or the
survivor of such merger or the Person that acquires by
conveyance, transfer, sale or lease of all or substantially
all of the assets of the Parent 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 Parent is
not such corporation, such corporation (y) 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 and the Parent
Guaranty and (z) shall have caused to be delivered to each
holder of any Notes an opinion of outside counsel reasonably
satisfactory to the Required Holders, to the effect that all
agreements or instruments effecting such assumption are
enforceable in accordance with their terms and comply with the
terms hereof; and
29
(ii) after giving effect to such transaction, no
Default or Event of Default shall exist; and
(c) any Restricted Subsidiary other than the Company may (x)
merge into the Parent or the Company (provided that the Parent or the
Company is the surviving entity) or another Restricted Subsidiary or
(y) sell, transfer or lease all or any part of its assets to the Parent
or the Company or another Restricted Subsidiary, or (z) merge or
consolidate with, or sell, transfer or lease all or substantially all
of its assets to, any Person in a transaction that is permitted by
Section 10.6 or, as a result of which, such Person becomes a Restricted
Subsidiary; provided in each instance set forth in clauses (x) through
(z) that, immediately after giving effect thereto, there shall exist no
Default or Event of Default;
No such conveyance, transfer, sale or lease of all or substantially all of the
assets of the Parent shall have the effect of releasing the Parent or any
successor corporation that shall theretofore have become such in the manner
prescribed in this Section 10.5 from its liability under this Agreement or the
Notes.
10.6. SALE OF ASSETS.
Except as permitted by Section 10.5, the Parent and the
Company will not, and will not permit any Restricted Subsidiary to, sell, lease,
transfer or otherwise dispose of, including by way of merger (collectively a
"Disposition"), any assets, including capital stock of Subsidiaries, in one or a
series of transactions, to any Person, other than:
(a) Dispositions in the ordinary course of business;
(b) Dispositions by a Restricted Subsidiary, including the
Company, to the Parent or another Restricted Subsidiary, including the
Company;
(c) Dispositions not otherwise permitted by clauses (a) or (b)
of this Section 10.6, provided that the aggregate net book value of all
assets so disposed of in any fiscal year pursuant to this Section
10.6(c) does not exceed 10% of Consolidated Total Assets as of the end
of the immediately preceding fiscal year.
Notwithstanding the foregoing provisions of this Section 10.6, the Parent may,
or may permit any Restricted Subsidiary, including the Company to, make a
Disposition and the assets subject to such Disposition shall not be subject to
or included in any of the limitations or the computation contained in foregoing
Section 10.6(c) of the preceding sentence if:
(A) such assets are leased back by the Parent or any
Restricted Subsidiary, including the Company, as lessee, within 365
days of the original acquisition or construction thereof by the Parent
or such Restricted Subsidiary, including the Company; or
(B) the net proceeds from such Disposition are within 365 days
of such Disposition:
30
(i) reinvested in productive assets used in carrying
on the business of the Parent and its Restricted Subsidiaries,
including the Company; or
(ii) applied to the payment or prepayment of any
outstanding Senior Debt (including the Notes) of the Parent or
any Restricted Subsidiary, including the Company.
Any prepayment of Notes pursuant to this Section 10.6 shall be in
accordance with Sections 8.2 and 8.3, without regard to the minimum
prepayment requirements of Section 8.2.
10.7. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES.
The Parent may designate any Restricted Subsidiary as an
Unrestricted Subsidiary and any Unrestricted Subsidiary as a Restricted
Subsidiary by notice in writing given to the holders of the Notes; provided
that,
(a) if such Subsidiary initially is designated a
Restricted Subsidiary, then such Restricted Subsidiary may be
subsequently designated as an Unrestricted Subsidiary and such
Unrestricted Subsidiary may be subsequently designated as a
Restricted Subsidiary, but no further changes in designation
may be made;
(b) if such Subsidiary initially is designated an
Unrestricted Subsidiary, then such Unrestricted Subsidiary may
be subsequently designated as a Restricted Subsidiary and such
Restricted Subsidiary may be subsequently designated as an
Unrestricted Subsidiary, but no further changes in designation
may be made;
(c) the Parent may not designate a Restricted
Subsidiary as an Unrestricted Subsidiary unless: (i) such
Restricted Subsidiary does not own, directly or indirectly,
any Debt or capital stock of the Parent or any other
Restricted Subsidiary, including the Company, (ii) such
designation, considered as a sale of assets, is permitted
pursuant to Section 10.6, and (iii) immediately before and
after such designation there exists no Default or Event of
Default;
(d) notwithstanding Section 10.4(g), if an
Unrestricted Subsidiary is designated as a Restricted
Subsidiary, all outstanding Debt and Liens of such Subsidiary
shall be deemed to have been incurred as of the date of such
designation; and
(e) the Parent may not designate the Company or any
Subsidiary Guarantor an Unrestricted Subsidiary.
10.8. NATURE OF BUSINESS.
The Parent and the Company will not, and will not permit any
other Restricted Subsidiary to, engage in any business if, as a result, the
general nature of the business in which the Parent and its Restricted
Subsidiaries, including the Company, taken as a whole, would then be engaged
would be substantially changed from the general nature of the business in which
the
31
Parent and its Restricted Subsidiaries, including the Company, taken as a whole,
are engaged on the date of this Agreement.
10.9. TRANSACTIONS WITH AFFILIATES.
The Parent and the Company will not, and will not permit any
other Restricted Subsidiary to, enter into directly or indirectly any Material
transaction or Material group of related transactions (including the purchase,
lease, sale or exchange of properties of any kind or the rendering of any
service) with any Affiliate (other than the Parent, the Company or another
Restricted Subsidiary), except in the ordinary course and pursuant to the
reasonable requirements of the Parent's, the Company's or such Restricted
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Parent, the Company or such Restricted Subsidiary than would be obtainable
in a comparable arm's-length transaction with a Person not an Affiliate.
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
any applicable Make-Whole Amount, prepayment premium or LIBOR Breakage
Amount 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 Parent or the Company defaults in the performance of
or compliance with any term contained in Sections 10.1, 10.2, 10.3,
10.4, 10.5 or 10.6; or
(d) the Parent or 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 Parent
or the Company receiving written notice of such default from any holder
of a Note; or
(e) any representation or warranty made in writing by or on
behalf of the Company or any Guarantor or by any officer of the Company
or any Guarantor in this Agreement, the Parent Guaranty, the Subsidiary
Guaranty or in any writing furnished in connection with the
transactions contemplated hereby or thereby proves to have been false
or incorrect in any material respect on the date as of which made; or
(f) (i) the Company, any Guarantor or any Restricted
Subsidiary is in default (as principal or as guarantor or other surety)
in the payment of any principal of or premium or make-whole amount or
interest in excess of $50,000 on any Debt that is outstanding in an
aggregate principal amount exceeding $5,000,000 beyond any period of
32
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 Debt that is outstanding in an
aggregate principal amount exceeding $5,000,000 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 Debt has
become, or has been declared, or one or more Persons are entitled to
declare such Debt to be, due and payable before its stated maturity or
before its regularly scheduled dates of payment, or (iii) as a
consequence of the occurrence or continuation of any event or condition
(other than the passage of time or the right of the holder of Debt to
convert such Debt into equity interests), (x) the Company, any
Guarantor or any Restricted Subsidiary has become obligated to purchase
or repay Debt in an aggregate principal amount exceeding $5,000,000
before its regular maturity or before its regularly scheduled dates of
payment, or (y) one or more Persons have the right to require the
Company, any Guarantor or any Restricted Subsidiary so to purchase or
repay such Debt; or
(g) the Company, any Guarantor or any Material 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, any Guarantor or any Material Subsidiary, a custodian,
receiver, trustee or other officer with similar powers with respect to
it or with respect to any substantial part of its property, or
constituting an order for relief or approving a petition for relief or
reorganization or any other petition in bankruptcy or for liquidation
or to take advantage of any bankruptcy or insolvency law of any
jurisdiction, or ordering the dissolution, winding-up or liquidation of
the Company, any Guarantor or any Material Subsidiary, or any such
petition shall be filed against the Company, any Guarantor or any
Material Subsidiary and such petition shall not be dismissed within 60
days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $5,000,000 are rendered against one or more of
the Company, any Guarantor and any Restricted Subsidiaries, which
judgments are not, within 60 days after entry thereof, bonded,
discharged or stayed pending appeal, or are not discharged within 60
days after the expiration of such stay; or
(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,
33
(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
Parent, the Company or any other ERISA Affiliate that a Plan may become
a subject of any such proceedings, (iii) the aggregate "amount of
unfunded benefit liabilities" (within the meaning of section
4001(a)(18) of ERISA) under all Plans determined in accordance with
Title IV of ERISA, shall exceed $5,000,000, (iv) the Parent, the
Company or any other 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 Parent, the Company or any other ERISA
Affiliate withdraws from any Multiemployer Plan, or (vi) the Parent or
any Restricted Subsidiary, including the Company, establishes or amends
any employee welfare benefit plan that provides post-employment welfare
benefits in a manner that would increase the liability of the Parent or
any Restricted Subsidiary, including the Company, 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; or
(k) any Guarantor defaults in the performance of or compliance
with any term contained in either of the Guaranties or either of the
Guaranties ceases to be in full force and effect, except as provided in
Section 1.4(b), or is declared to be null and void in whole or in
material part by a court or other governmental or regulatory authority
having jurisdiction or the validity or enforceability thereof shall be
contested by any of the Parent, the Company or any Subsidiary Guarantor
or any of them renounces any of the same or denies that it has any or
further liability thereunder.
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.
12. REMEDIES ON DEFAULT, ETC.
12.1. ACCELERATION.
(a) If an Event of Default with respect to the Parent or 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 a majority 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
34
affected by such Event of Default may at any time, at its or their
option, by notice or notices to the Company, declare all the Notes held
by it or them to be immediately due and payable.
Upon any Notes becoming due and payable under this Section
12.1, whether automatically or by declaration, such Notes will forthwith mature
and the entire unpaid principal amount of such Notes, plus (w) all accrued and
unpaid interest thereon, (x) any applicable Make-Whole Amount with respect to
any such fixed rate Notes determined in respect of such principal amount (to the
full extent permitted by applicable law), (y) any applicable prepayment premium
with respect to any such floating rate Notes (to the full extent permitted by
applicable law), and (z) any LIBOR Breakage Amount with respect to any such
floating rate Notes determined in respect of such principal amount, 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 any applicable Make-Whole Amount, prepayment premium or LIBOR Breakage Amount
by the Company in the event that such Notes are prepaid or are accelerated as a
result of an Event of Default, is intended to provide compensation for the
deprivation of such right under such circumstances.
12.2. OTHER REMEDIES.
If any Default or Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or have been
declared immediately due and payable under Section 12.1, the holder of any Note
at the time outstanding may proceed to protect and enforce the rights of such
holder by an action at law, suit in equity or other appropriate proceeding,
whether for the specific performance of any agreement contained 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.
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 a majority 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 any
applicable Make-Whole Amount, prepayment premium and/or LIBOR Breakage Amount,
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 any applicable
Make-Whole Amount, prepayment premium and/or LIBOR Breakage Amount, and (to the
extent permitted by applicable law) any overdue interest in respect of such
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.
35
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 reasonable costs and expenses of such holder
incurred in any enforcement or collection under this Section 12, including
reasonable attorneys' fees, expenses and disbursements.
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
13.1. REGISTRATION OF NOTES.
The Company shall keep at its principal executive office a
register for the registration and registration of transfers of Notes. The name
and address of each holder of one or more Notes, each transfer thereof and the
name and address of each transferee of one or more Notes shall be registered in
such register. Prior to due presentment for registration of transfer, the Person
in whose name any Note shall be registered shall be deemed and treated as the
owner and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall give to
any holder of a Note that is an Institutional Investor, promptly upon request
therefor, a complete and correct copy of the names and addresses of all
registered holders of Notes.
13.2. TRANSFER AND EXCHANGE OF NOTES.
Upon surrender of any Note at the principal executive office
of the Company for registration of transfer or exchange (and in the case of a
surrender for registration of transfer, duly endorsed or accompanied by a
written instrument of transfer duly executed by the registered holder of such
Note or his attorney duly authorized in writing and accompanied by the address
for notices of each transferee of such Note or part thereof), the Company shall
execute and deliver within five Business Days, at the Company's expense (except
as provided below), one or more new Notes (as requested by the holder thereof)
of the same series or tranche in exchange therefor, in an aggregate principal
amount equal to the unpaid principal amount of the surrendered Note. Each such
new Note shall be payable to such Person as such holder may request and shall be
substantially in the form of the Note specified for the Notes of such series and
tranche. 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 $500,000, 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 $500,000. Any transferee,
by its acceptance of a Note registered
36
in its name (or the name of its nominee), shall be deemed to have made the
representation set forth in Section 6.2.
13.3. RESTRICTION ON TRANSFER TO COMPETITOR.
So long as no Event of Default has occurred and is continuing,
you and each subsequent holder of a Note agree not to transfer all or any
portion of a Note to any Competitor of the Company. As used herein, the term
"Competitor" means any Person (including any Subsidiary or Affiliate thereof)
primarily engaged in the residential and commercial electrical copper wire
industry; provided that such term shall not include 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.
13.4. REPLACEMENT OF NOTES.
Upon receipt by the Company of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of any Note (which evidence shall be, in the case of an Institutional
Investor, notice from such Institutional Investor of such ownership and such
loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note
is, or is a nominee for, an original Purchaser or another Institutional
Investor holder of a Note with a minimum net worth of at least
$50,000,000, such Person's own unsecured agreement of indemnity shall
be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense shall execute and deliver within five Business
Days, in lieu thereof, a new Note of the same series and tranche, dated and
bearing interest from the date to which interest shall have been paid on such
lost, stolen, destroyed or mutilated Note or dated the date of such lost,
stolen, destroyed or mutilated Note if no interest shall have been paid thereon.
14. PAYMENTS ON NOTES.
14.1. PLACE OF PAYMENT.
Subject to Section 14.2, payments of principal, any applicable
Make-Whole Amount prepayment premium and/or LIBOR Breakage Amount, and interest
becoming due and payable on the Notes shall be made in Chicago, Illinois at the
principal office of Bank of America, N.A. 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.
37
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, any applicable Make-Whole Amount, prepayment premium, and/or LIBOR
Breakage Amount, and interest by the method and at the address specified for
such purpose below your name in Schedule A, or by such other method or at such
other address as you shall have from time to time specified to the Company in
writing for such purpose, without the presentation or surrender of such Note or
the making of any notation thereon, except that upon written request of the
Company made concurrently with or reasonably promptly after payment or
prepayment in full of any Note, you shall surrender such Note for cancellation,
reasonably promptly after any such request, to the Company at its principal
executive office or at the place of payment most recently designated by the
Company pursuant to Section 14.1. Prior to any sale or other disposition of any
Note held by you or your nominee you will, at your election, either endorse
thereon the amount of principal paid thereon and the last date to which interest
has been paid thereon or surrender such Note to the Company in exchange for a
new Note or Notes pursuant to Section 13.2. The Company will afford the benefits
of this Section 14.2 to any Institutional Investor that is the direct or
indirect transferee of any Note purchased by you under this Agreement and that
has made the same agreement relating to such Note as you have made in this
Section 14.2.
15. EXPENSES, ETC.
15.1. TRANSACTION EXPENSES.
Whether or not the transactions contemplated hereby are
consummated, the Parent or 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, the Notes or the Guaranties (whether or not such amendment, waiver or
consent becomes effective), including: (a) the costs and expenses incurred in
enforcing or defending (or determining whether or how to enforce or defend) any
rights under this Agreement, the Notes or the Guaranties or in responding to any
subpoena or other legal process or informal investigative demand issued in
connection with this Agreement, the Notes or the Guaranties, or by reason of
being a holder of any Note, (b) the costs and expenses, including financial
advisors' fees, incurred in connection with the insolvency or bankruptcy of the
Parent or any Restricted Subsidiary, including the Company, or in connection
with any work-out or restructuring of the transactions contemplated hereby and
by the Notes and (c) the costs and expenses incurred in connection with the
initial filing of this Agreement and all related documents and financial
information, and all subsequent annual and interim filings of documents and
financial information related to this Agreement, with the Securities Valuation
Office of the National Association of Insurance Commissioners or any successor
organization succeeding to the authority thereof. The Parent or the Company will
pay, and will save you and each other holder of a Note harmless from, all claims
in respect of any fees, costs or expenses if any, of brokers and finders (other
than those retained by you).
38
15.2. SURVIVAL.
The obligations of the Parent and 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.
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 Parent or the Company pursuant to
this Agreement or the Guaranties shall be deemed representations and warranties
of the Parent and the Company under this Agreement. Subject to the preceding
sentence, this Agreement, the Notes and the Guaranties embody the entire
agreement and understanding between you and the Parent and the Company and
supersede all prior agreements and understandings relating to the subject matter
hereof.
17. AMENDMENT AND WAIVER.
17.1. REQUIREMENTS.
This Agreement, the Notes, the Parent Guaranty and the
Subsidiary Guaranty 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 Parent, the Company and the Subsidiary
Guarantors, if parties thereto, 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 any applicable Make-Whole Amount,
prepayment premium or LIBOR Breakage 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.
17.2. SOLICITATION OF HOLDERS OF NOTES.
(a) Solicitation. The Parent and the Company will provide each
holder of the Notes (irrespective of the amount of Notes then owned by
it) with sufficient information, sufficiently far in advance of the
date a decision is required, to enable such holder to make an informed
and considered decision with respect to any proposed amendment, waiver
or consent in respect of any of the provisions hereof or of the Notes.
The
39
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 Parent and the Company will not directly or
indirectly pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, or grant any
security, to any holder of Notes as consideration for or as an
inducement to the entering into by any holder of Notes or any waiver or
amendment of any of the terms and provisions hereof unless such
remuneration is concurrently paid, or security is concurrently granted,
on the same terms, ratably to each holder of Notes then outstanding
even if such holder did not consent to such waiver or amendment.
17.3. BINDING EFFECT, ETC.
Any amendment or waiver consented to as provided in this
Section 17 applies equally to all holders of Notes and is binding upon them and
upon each future holder of any Note and upon the Parent, the Company and the
Subsidiaries (in each case, if a party thereto) 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 Parent or 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" or "the Agreement" and references thereto
shall mean this Agreement as it may from time to time be amended or
supplemented.
17.4. NOTES HELD BY COMPANY, ETC.
Solely for the purpose of determining whether the holders of
the requisite percentage of the aggregate principal amount of Notes then
outstanding approved or consented to any amendment, waiver or consent to be
given under 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.
18. NOTICES.
All notices and communications provided for hereunder shall be
in writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
40
(i) if to you or your nominee, to you or it at the
address specified for such communications in Schedule A, or at
such other address as you or it shall have specified to the
Company in writing,
(ii) if to any other holder of any Note, to such
holder at such address as such other holder shall have
specified to the Company in writing, or
(iii) if to the Company, the Parent or any Subsidiary
Guarantor, to the Company at its address set forth at the
beginning hereof to the attention of the Chief Financial
Officer, or at such other address as the Company shall have
specified to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when actually received.
19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including
(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 holder of Notes from contesting any such
reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential
Information" means information delivered to you by or on behalf of the Parent,
the Company or any Subsidiary in connection with the transactions contemplated
by or otherwise pursuant to this Agreement that is proprietary in nature and
that was clearly marked or labeled or otherwise adequately identified when
received by you as being confidential information of the Parent, the Company or
such Subsidiary, provided that such term does not include information that (a)
was publicly known or otherwise known to you prior to the time of such
disclosure, (b) subsequently becomes publicly known through no act or omission
by you or any Person acting on your behalf, (c) otherwise becomes known to you
other than through disclosure by the Parent, 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
41
Affiliates (to the extent such disclosure reasonably relates to the
administration of the investment represented by your Notes), (ii) your financial
advisors and other professional advisors who agree to hold confidential the
Confidential Information substantially in accordance with the terms of this
Section 20, (iii) any other holder of any Note, (iv) any Institutional Investor
to which you sell or offer to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior to its receipt
of such Confidential Information to be bound by the provisions of this Section
20), (v) any Person from which you offer to purchase any security of the Parent
or 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.
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.
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22. MISCELLANEOUS.
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 any subsequent holder of a
Note) whether so expressed or not.
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 any applicable Make-Whole
Amount, prepayment premium or LIBOR Breakage Amount or interest on, any Note
that is due on a date other than a Business Day shall be made on the next
succeeding Business Day (unless such next succeeding Business Day would fall in
the next calendar month, in which case any such payment of interest on any
floating rate Note shall be made on the next preceding Business Day) without
including the additional days elapsed in the computation of the interest payable
on such next succeeding Business Day; provided that if the maturity date of any
Note is a date other than a Business Day, the payment otherwise due on such
maturity date shall be made on the next succeeding Business Day and shall
include the additional days elapsed in the computation of interest payable on
such next succeeding Business Day.
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.
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.
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.
43
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.
22.7. LIMITATION ON INTEREST.
You and the Other Purchasers, other holders of the Notes, the
Company, Parent, the Subsidiary Guarantors, and any other parties to the Note
Documents intend to contract in strict compliance with applicable usury law from
time to time in effect. In furtherance thereof such Persons stipulate and agree
that none of the terms and provisions contained herein or in the Notes shall
ever be construed to create a contract to pay, for the use, forbearance or
detention of money, interest in excess of the maximum amount of interest
permitted to be charged by applicable law from time to time in effect. Neither
the Company, nor Parent, nor the Subsidiary Guarantors nor any present or future
guarantors, endorsers, or other Persons hereafter becoming liable for payment of
any obligation under the Note Documents shall ever be liable for unearned
interest thereon or shall ever be required to pay interest thereon in excess of
the maximum amount that may be lawfully contracted for, charged, or received
under applicable law from time to time in effect, and the provisions of this
section shall control over all other provisions of the Note Documents which may
be in conflict or apparent conflict herewith. You and the Other Purchasers and
other holders of the Notes expressly disavow any intention to contract for,
charge, or collect excessive unearned interest or finance charges in the event
the maturity of any Note is accelerated. If (a) the maturity of any Note is
accelerated for any reason, (b) any Note is prepaid and as a result any amounts
held to constitute interest are determined to be in excess of the legal maximum,
or (c) you or any Other Purchaser or any other holder of any Note shall
otherwise collect moneys that are determined to constitute interest that would
otherwise increase the interest on any or all of the Notes to an amount in
excess of that permitted to be charged by applicable law then in effect, then
all sums determined to constitute interest in excess of such legal limit shall,
without penalty, be promptly applied to reduce the then outstanding principal of
the related Notes or, at such Purchaser's or holder's option, promptly returned
to the Company or other payor thereof upon such determination. In determining
whether or not the interest paid or payable, under any specific circumstance,
exceeds the maximum amount permitted under applicable law, you and the Other
Purchasers, other holders of the Notes, the Company, Parent, the Subsidiary
Guarantors (and any other payors thereof) shall to the greatest extent permitted
under applicable law, (i) characterize any non-principal payment as an expense,
fee or premium rather than as interest, (ii) exclude voluntary prepayments and
the effects thereof, and (iii) amortize, prorate, allocate, and spread the total
amount of interest throughout the entire contemplated term of the instruments
evidencing the Notes in accordance with the amounts outstanding from time to
time thereunder and the maximum legal rate of interest from time to time in
effect under applicable law in order to lawfully contract for, charge, or
receive the maximum amount of interest permitted under applicable law. In the
event applicable law provides for an interest ceiling under Chapter 303 of the
Texas Finance Code (the "Texas Finance Code") as amended, to the extent that the
Texas Finance Code is mandatorily applicable to you or any Other Purchaser or
any other holder of any Note, for that day, the ceiling shall be
44
the "weekly ceiling" as defined in the Texas Finance Code, provided that if any
applicable law permits greater interest, the law permitting the greatest
interest shall apply.
22.8. SUBMISSION TO JURISDICTION.
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR THE NOTES, MAY BE BROUGHT AND MAINTAINED IN
THE COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR
THE NORTHERN DISTRICT OF ILLINOIS. EACH OF THE COMPANY AND THE PARENT EXPRESSLY
AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF
ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH OF THE
COMPANY AND THE PARENT FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, TO THE ADDRESS SPECIFIED IN SECTION 18 OR BY
PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. EACH OF THE COMPANY
AND THE PARENT EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM
THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
22.9. WAIVER OF JURY TRIAL.
EACH OF THE COMPANY AND THE PARENT WAIVES ANY RIGHT TO A TRIAL
BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR
THAT MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH AND AGREES THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
* * * * *
45
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, the Company and the Parent.
Very truly yours,
ENCORE WIRE LIMITED
By its General Partner, EWC GP CORP.
By:
-----------------------------------
Name:
Title:
ENCORE WIRE CORPORATION
By:
-----------------------------------
Name:
Title:
S-1
The foregoing is agreed to as of the date thereof.
METROPOLITAN LIFE INSURANCE COMPANY
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
METLIFE INSURANCE COMPANY OF CONNECTICUT
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
S-2
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
By:
----------------------------------------------
Name:
--------------------------------------------
Title:
-------------------------------------------
S-3
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name of Purchaser Notes to be Purchased
----------------- ---------------------
Metropolitan Life Insurance Company $37,000,000
Register Notes in name of: Metropolitan Life Insurance Company
(1) All scheduled payments of principal and interest by wire transfer of
immediately available funds to:
Bank Name: JPMorgan Chase Bank
ABA Routing #: 021-000-021
Account No.: 002-2-410591
Account Name: Metropolitan Life Insurance Company
Ref: Encore Wire
with sufficient information to identify the source and application of
such funds, including issuer, PPN#, interest rate, maturity and whether
payment is of principal, interest, make whole amount or otherwise.
For all payments other than scheduled payments of principal and
interest, the Company shall seek instructions from the holder, and in
the absence of instructions to the contrary, will make such payments to
the account and in the manner set forth above.
(2) All notices and communications:
Metropolitan Life Insurance Company
Investments, Private Placements
P.O. Box 1902
10 Park Avenue
Morristown, New Jersey 07962-1902
Attention: Director
Facsimile (973) 355-4250
With a copy OTHER THAN WITH RESPECT TO DELIVERIES OF FINANCIAL
STATEMENTS to:
Metropolitan Life Insurance Company
P.O. Box 1902
10 Park Avenue
Morristown, New Jersey 07962-1902
Attention: Chief Counsel-Securities Investments (PRIV)
Facsimile (973) 355-4338
Schedule A
(3) Original notes delivered to:
Metropolitan Life Insurance Company
Securities Investments, Law Department
P.O. Box 1902
10 Park Avenue
Morristown, New Jersey 07962-1902
Attention: Thomas Pasuit, Esq.
Tax ID No. 13-5581829
2
Schedule A
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name of Purchaser Notes to be Purchased
----------------- ---------------------
Metlife Insurance Company of Connecticut $8,000,000
Register Notes in name of: Metlife Insurance Company of Connecticut
(1) All scheduled payments of principal and interest by wire transfer of
immediately available funds to:
Bank Name: JPMorgan Chase Bank
ABA Routing #: 021-000-021
Account No.: 910-2-587434
Account Name: Metlife Insurance Company of Connecticut
Ref: Encore Wire
with sufficient information to identify the source and application of
such funds, including issuer, PPN#, interest rate, maturity and whether
payment is of principal, interest, make whole amount or otherwise.
For all payments other than scheduled payments of principal and
interest, the Company shall seek instructions from the holder, and in
the absence of instructions to the contrary, will make such payments to
the account and in the manner set forth above.
(2) All notices and communications:
Metlife Insurance Company of Connecticut
c/o Metropolitan Life Insurance Company
Investments, Private Placements
P.O. Box 1902
10 Park Avenue
Morristown, New Jersey 07962-1902
Attention: Director
Facsimile (973) 355-4250
With a copy OTHER THAN WITH RESPECT TO DELIVERIES OF FINANCIAL
STATEMENTS to:
Metlife Insurance Company of Connecticut
c/o Metropolitan Life Insurance Company
3
Schedule A
P.O. Box 1902
10 Park Avenue
Morristown, New Jersey 07962-1902
Attention: Chief Counsel-Securities Investments (PRIV)
Facsimile (973) 355-4338
(3) Original notes delivered to:
Metlife Insurance Company of Connecticut
c/o Metropolitan Life Insurance Company
Securities Investments, Law Department
10 Park Avenue
Morristown, New Jersey 07962-1902
Attention: Thomas Pasuit, Esq.
Tax ID No. 06-0566090
4
Schedule A
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name of Purchaser Notes to be Purchased
----------------- ---------------------
Great-West Life & Annuity Insurance Company $10,000,000
Register Notes in name of: Hare & Co.
(1) All scheduled payments of principal and interest by wire transfer of
immediately available funds to:
ABA #021-000-018 BKofNYC/CTR/BBK=IOC566
P&I Department - GWL #640935
Special Instructions: 1) security description (PPN #),
2) allocation of payment between
principal and interest, and
3) confirmation of principal balance.
For all payments other than scheduled payments of principal and
interest, the Company shall seek instructions from the holder, and in
the absence of instructions to the contrary, will make such payments to
the account and in the manner set forth above.
(2) All notices regarding payments:
The Bank of New York
Institutional Custody Department, 14th Floor
One Wall Street
New York, New York 10286
Telecopier: 212.635.8844
(3) All other notices and communications/financial statements, trustee
reports, etc.
Great-West Life & Annuity Insurance Company
Attention: Investments Division
8515 East Orchard Road, 3T2
Greenwood Village, Colorado 80111
Telecopier: 303.737.6193
5
Schedule A
(4) Original notes delivered to:
The Bank of New York
3rd Floor, Window A
One Wall Street
New York, New York 10286
Attention: Receive/Deliver Department - GWL # 640935
Tax ID No. 84-0467907
(Hare & Co. 13-6062916)
6
Schedule A
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:
"ADJUSTED LIBOR RATE" is defined in Section 1.3(a).
"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, 15% 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, 15% 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 Parent or the
Company.
"ANTI-TERRORISM ORDER" means Executive Order 13224 of
September 23, 2001 Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001),
as amended).
"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 Chicago, Illinois or New York City
are required or authorized to be closed; provided that if the applicable
Business Day relates to the determination of LIBOR, a day on which dealings are
also carried on in U.S. Dollar deposits in the London interbank market.
"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.
"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 Encore Wire Limited, a Texas limited
partnership.
"CONFIDENTIAL INFORMATION" is defined in Section 20.
Schedule B
"CONSOLIDATED DEBT" means, as of any date, outstanding Debt of
the Parent and its Restricted Subsidiaries, including the Company, as of such
date, determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED EBIT" means, for any period, the sum of
Consolidated Net Income for such period, plus, to the extent deducted in
determining such Consolidated Net Income, (i) Consolidated Interest Expense,
(ii) federal, state, local and foreign income, franchise, value added and
similar taxes, and (iii) other non-cash charges, except depreciation and
amortization expense.
"CONSOLIDATED EBITDA" means, for any period, the sum of
Consolidated Net Income for such period, plus, to the extent deducted in
determining such Consolidated Net Income, (i) Consolidated Interest Expense,
(ii) federal, state, local and foreign income, franchise, value added and
similar taxes, (iii) depreciation and amortization expense and (iv) other
non-cash charges. If, during the period for which Consolidated EBITDA is being
calculated, the Parent or a Restricted Subsidiary, including the Company, has
acquired one or more Persons (or the assets thereof) or divested one or more
Restricted Subsidiaries (or the assets thereof), Consolidated EBITDA shall be
calculated on a pro forma basis as if all of such acquisitions (other than
acquisitions by or resulting in Unrestricted Subsidiaries) and divestitures had
occurred on the first day of such period.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the
consolidated interest expense of the Parent and its Restricted Subsidiaries,
including the Company, for such period determined in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, for any period, the net
income or loss of the Parent and its Restricted Subsidiaries, including the
Company, for such period determined on a consolidated basis in accordance with
GAAP.
"CONSOLIDATED NET WORTH" means, as of any date, the
consolidated stockholders' equity of the Parent and its Restricted Subsidiaries,
including the Company, as of such date, determined in accordance with GAAP, less
minority interests.
"CONSOLIDATED TOTAL ASSETS" means, as of any date, the assets
and properties of the Parent and its Restricted Subsidiaries, including the
Company, as of such date, determined on a consolidated basis in accordance with
GAAP.
"CREDIT AGREEMENT" means the Credit Agreement dated as of
August 27, 2004 (as amended by a First Amendment to Credit Agreement dated as of
May 16, 2006 and a Second Amendment to Credit Agreement dated as of August 31,
2006), by and among the Company, Bank of America, N.A., as agent, and Wells
Fargo Bank, N.A., as a lender and the other lenders party thereto, as such
agreement may be hereafter amended, modified, restated, supplemented,
2
Schedule B
refinanced, increased or reduced from time to time, and any successor credit
agreement or similar facilities.
"DEBT" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable and other
accrued liabilities arising in the ordinary course of business but
including 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);
(e) its redemption liabilities under mandatorily redeemable
preferred stock, to the extent such obligations arise prior to the
stated maturity of the Notes; and
(f) any Guaranty of such Person with respect to liabilities of
a type described in any of clauses (a) through (e) hereof.
"DEFAULT" means an event or condition the occurrence or
existence of which would, with the lapse of time or the giving of notice or
both, become an Event of Default.
"DEFAULT RATE" means that rate of interest that is the greater
of (i) 2% per annum above the rate of interest stated in clause (a) of the first
paragraph of the Notes or (ii) 2% over the rate of interest publicly announced
by Bank of America, N.A. as its "base" or "prime" rate.
"DISPOSITION" is defined in Section 10.6
"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.
3
Schedule B
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
"EVENT OF DEFAULT" is defined in Section 11.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"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 debt, dividend or other obligation of any other Person in any
manner, whether directly or indirectly, including obligations incurred through
an agreement, contingent or otherwise, by such Person:
(a) to purchase such debt or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment
of such debt or obligation, or (ii) to maintain any working capital or
other balance sheet condition or any income statement condition of any
other Person or otherwise to advance or make available funds for the
purchase or payment of such debt or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such debt or
obligation of the ability of any other Person to make payment of the
debt or obligation; or
4
Schedule B
(d) otherwise to assure the owner of such debt or obligation
against loss in respect thereof.
In any computation of the debt or other liabilities of the obligor under any
Guaranty, the debt or other obligations that are the subject of such Guaranty
shall be assumed to be direct obligations of such obligor.
"GUARANTIES" is defined in Section 1.4(a).
"HAZARDOUS MATERIAL" means any and all pollutants, toxic or
hazardous wastes or any other substances that might pose a hazard to health or
safety, the removal of which may be required or the generation, manufacture,
refining, production, processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage, or filtration of
which is or shall be restricted, prohibited or penalized by any applicable law
(including, asbestos, urea formaldehyde foam insulation and polycholorinated
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.
"INHAM EXEMPTION" is defined in Section 6.2(e).
"INSTITUTIONAL INVESTOR" means (a) any original purchaser of a
Note, (b) any holder of $5,000,000 or more in aggregate principal amount of the
Notes 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 PERIOD" is defined in Section 1.3(c).
"LIBOR" is defined in Section 1.3(a).
"LIBOR BREAKAGE AMOUNT" is defined in Section 8.7.
"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.
5
Schedule B
"MATERIAL" means material in relation to the business,
operations, affairs, financial condition, assets or properties of the Parent and
its Subsidiaries, including the Company, 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 Parent and its Subsidiaries, including the Company, taken as a whole, (b)
the ability of the Company to perform its obligations under this Agreement and
the Notes, (c) the ability of the Parent to perform its obligations under this
Agreement or the Parent Guaranty, (d) the ability of any Subsidiary Guarantor to
perform its obligations under the Subsidiary Guaranty, or (e) the validity or
enforceability of this Agreement, the Notes, the Parent Guaranty or the
Subsidiary Guaranty.
"MATERIAL SUBSIDIARY" means, at any time, any Restricted
Subsidiary that would at such time account for more than 10% of (i) Consolidated
Total Assets as of the end of the most recently completed fiscal quarter or (ii)
consolidated revenue of the Parent and its Restricted Subsidiaries, including
the Company, for the four fiscal quarters ending as of the end of the most
recently completed fiscal quarter.
"MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA).
"NAIC ANNUAL STATEMENT" is defined in Section 6.2(a).
"NOTE DOCUMENTS" means the Notes, the Guaranties and this
Agreement.
"NOTES" is defined in Section 1.1.
"OFFICER'S CERTIFICATE" means a certificate of a Senior
Financial Officer or of any other officer of the Parent whose responsibilities
extend to the subject matter of such certificate.
"OTHER PURCHASERS" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA or any successor thereto.
"PARENT" means Encore Wire Corporation, a Delaware
corporation.
"PARENT GUARANTY" is defined in Section 1.4(a).
"PERSON" means an individual, partnership, corporation,
limited liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
6
Schedule B
"PLAN" means an "employee benefit plan" (as defined in section
3(3) of ERISA) that is or, within the preceding five years, has been established
or maintained, or to which contributions are or, within the preceding five
years, have been made or required to be made, by the Company or any ERISA
Affiliate or with respect to which the Company or any ERISA Affiliate may have
any liability.
"PRIORITY DEBT" means, as of any date, the sum (without
duplication) of (a) Debt of the Parent or a Restricted Subsidiary, including the
Company, secured by Liens not otherwise permitted by Sections 10.4(a) through
(g), and (b) unsecured Debt of a Restricted Subsidiary other than (i) the Notes,
(ii) Debt owed to the Parent or any other Restricted Subsidiary, including the
Company, (iii) any guarantee of the Notes pursuant to the Subsidiary Guaranty,
(iv) Debt of a Person (other than an Unrestricted Subsidiary) outstanding at the
time such Person became a Restricted Subsidiary, provided that such Debt was not
incurred in contemplation of such Person becoming a Restricted Subsidiary and
(v) Debt of the Company under the Credit Agreement.
"PROPERTY" or "PROPERTIES" means, unless otherwise
specifically limited, real or personal property of any kind, tangible or
intangible, choate or inchoate.
"PTE" is defined in Section 6.2(a).
"PURCHASER" means each purchaser listed in Schedule A.
"QPAM EXEMPTION" is defined in Section 6.2(d).
"REQUIRED HOLDERS" means, at any time, the holders of more
than 65% 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 Parent with responsibility for the administration of
the relevant portion of this agreement.
"RESTRICTED SUBSIDIARY" means any Subsidiary (a) of which at
least a majority of the voting securities are owned by the Parent and/or one or
more Restricted Subsidiaries and (b) that the Parent has not designated an
Unrestricted Subsidiary by notice in writing given to the holders of the Notes
pursuant to Section 10.7.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time.
"SENIOR DEBT" means, at any time, all Consolidated Debt other
than Subordinated Debt.
"SENIOR FINANCIAL OFFICER" means the chief financial officer,
principal accounting officer, treasurer or comptroller of the Parent.
7
Schedule B
"SERIES 2006-A NOTES" is defined in Section 1.2.
"SOURCE" is defined in Section 6.2.
"SUBORDINATED DEBT" means any Debt that is in any manner
subordinated in right of payment or security in any respect to Debt evidenced by
the Notes.
"SUBSIDIARY" means, as to any Person, any corporation,
association or other business entity in which such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries owns sufficient
equity or voting interests to enable it or them (as a group) ordinarily, in the
absence of contingencies, to elect a majority of the directors (or Persons
performing similar functions) of such entity, and any partnership, joint venture
or limited liability company 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 or
limited liability company 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 Parent.
"SUBSIDIARY GUARANTOR" means EWC GP Corp., EWC LP Corp., EWC
Aviation Corp. and any other Subsidiary that hereafter becomes a party to the
Subsidiary Guaranty.
"SUBSIDIARY GUARANTY" is defined in Section 1.4(a).
"SUPPLEMENT" is defined in Section 1.1.
"THIS AGREEMENT" OR "THE AGREEMENT" is defined in Section
17.3.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Parent,
other than the Company, that has been so designated by notice in writing given
by the Parent to the holders of the Notes.
"USA PATRIOT ACT" means Public Law 107-56 of the United States
of America, Uniting and Strengthening America by Providing Tools Required to
Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from
time to time, and the rules and regulations promulgated thereunder from time to
time in effect.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" means, at any time, any
Restricted Subsidiary 100% of all of the equity interests (except directors'
qualifying shares) and voting interests of which are owned by any one or more of
the Parent and the Parent's other Wholly Owned Restricted Subsidiaries,
including the Company, at such time.
8
Schedule B
SCHEDULE 5.3
DISCLOSURE MATERIALS
None.
Schedule 5.3
SCHEDULE 5.4
SUBSIDIARIES AND OWNERSHIP OF SUBSIDIARY STOCK
SUBSIDIARIES
EWC GP CORP., A DELAWARE CORPORATION
100% of outstanding shares owned by Parent
EWC LP CORP., A TEXAS CORPORATION
100% of outstanding shares owned by Parent
ENCORE WIRE LIMITED, A TEXAS LIMITED PARTNERSHIP
1% general partnership interest owned by EWC GP Corp.
99% limited partnership interest owned by EWC LP Corp.
EWC AVIATION CORP., A TEXAS CORPORATION
100% of outstanding shares owned by Parent
AFFILIATES
Capital Southwest Corporation
(beneficial owner of more than 15% of outstanding capital stock of
Parent)
DIRECTORS AND OFFICERS OF PARENT AND THE COMPANY
Directors of Parent:
Donald E. Courtney, Daniel L. Jones, Scott D. Weaver, William R. Thomas,
John H. Wilson, Joseph M. Brito, Thomas L. Cunningham
Senior Officers of Parent:
Daniel L. Jones, President and CEO
Frank J. Bilban, Vice President-Finance, CFO, Treasurer and Secretary
Directors of EWC GP Corp., general partner of the Company:
Daniel L. Jones, Frank J. Bilban
Senior Officers of EWC GP Corp., general partner of the Company:
Daniel L. Jones, President and CEO
Frank J. Bilban, Vice President-Finance, CFO, Treasurer and Secretary
Schedule 5.4
SCHEDULE 5.5
FINANCIAL STATEMENTS
Consolidated financial statements of the Parent contained in Parent's Form 10-K
for the year ended December 31, 2005.
Consolidated financial statements of the Parent contained in Parent's Form 10-Q
for the quarter ended March 31, 2006.
Consolidated financial statements of the Parent contained in Parent's Form 10-Q
for the quarter ended June 30, 2006.
Schedule 5.5
SCHEDULE 5.14
USE OF PROCEEDS
The Company will apply all proceeds of the sale of the Series 2006-A Notes to
repay outstanding debt under the Credit Agreement.
Schedule 5.14
SCHEDULE 5.15
DEBT
As of June 30, 2006:
$107,236,000 of outstanding principal Debt under the Credit Agreement dated
August 27, 2004 among Encore Wire Limited, Bank of America, N.A., as
administrative agent, and the lenders party thereto (as amended, supplemented,
extended or modified from time to time, the "Credit Agreement"), maturing
5/31/07, LIBOR plus.
On August 31, 2006, the Credit Agreement was amended by the Second Amendment to
Credit Agreement increasing the aggregate commitments thereunder from
$150,000,000 to $200,000,000.
As of September 25, 2006 (after giving effect to application of the proceeds of
the Series 2006-A Notes): Approximately $44,983,000 of outstanding principal
Debt under the Credit Agreement.
As of June 30, 2006:
Note Purchase Agreement dated as of August 1, 2004 among Encore Wire Limited,
Encore Wire Corporation and the purchasers named therein, under which Encore
Wire Limited issued 5.27% Senior Notes, Series 2004-A, Nos. AR-1 thorough AR-8,
dated as of August 27, 2004, and No. AR-10, dated as of May 5, 2005, in the
aggregate principal amount of $45,000,000.
Schedule 5.15
EXHIBIT 1.1(a)
[FORM OF FIXED RATE SENIOR NOTE]
ENCORE WIRE LIMITED
[ ]% Senior Note, Series [ ]
due [ ]
No. [__] [Date]
$[_______] PPN: [ ]
FOR VALUE RECEIVED, the undersigned, ENCORE WIRE LIMITED
(herein called the "Company"), a limited partnership organized and existing
under the laws of the State of Texas, promises to pay to [ ], or registered
assigns, the principal sum of $[ ] on [ ], 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 [ ] and [ ] in each year, commencing with the [ ] or
[ ] next succeeding the date hereof, until the principal hereof shall have
become due and payable, and (b) to the extent permitted by law on any overdue
payment (including any overdue prepayment) of principal, any overdue payment of
interest and any overdue payment of any Make-Whole Amount (as defined in the
Note Purchase Agreement 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) [ ]% or (ii) 2% over the
rate of interest publicly announced by Bank of America, N.A. from time to time
in Chicago, Illinois as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole
Amount with respect to this Note are to be made in lawful money of the United
States of America at the principal office of Bank of America, N.A. 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 Agreement
referred to below.
This Note is one of a series of Senior Notes (herein called
the "Notes") issued pursuant to a Master Note Purchase Agreement dated as of
September 28, 2006 [and a Supplement thereto dated as of [ ]] (as from time
to time amended and supplemented, the "Note Purchase Agreement"), between the
Company, Encore Wire Corporation (the "Parent") 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
Agreement, (ii) to have made the representation set forth in Section 6.2 of the
Note Purchase Agreement and (iii) to have agreed to the restriction on transfer
of this Note set forth in Section 13.3 of the Note Purchase Agreement.
Exhibit 1.1(a)
This Note is a registered Note and, as provided in the Note
Purchase Agreement, upon surrender of this Note for registration of transfer,
duly endorsed, or accompanied by a written instrument of transfer duly executed,
by the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company 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 Agreement.] [This
Note [also] is 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 Agreement but
not otherwise.]
If an Event of Default, as defined in the Note Purchase
Agreement, occurs and is continuing, the principal of this Note may be declared
or otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
[Payment of the principal of, and interest and Make-Whole
Amount, if any, on, this Note, and all other amounts due under the Note Purchase
Agreement, is guaranteed pursuant to the terms of Guaranties dated as of
September 28, 2006 of the Parent and certain Subsidiaries of the Company.]
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.
ENCORE WIRE LIMITED
By its General Partner,
EWC GP Corp.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
2
Exhibit 1.1(a)
EXHIBIT 1.1(b)
[FORM OF FLOATING RATE NOTE]
ENCORE WIRE LIMITED
Floating Rate Senior Note
due [ ]
No. [__] [Date]
$[_______] PPN: [ ]
FOR VALUE RECEIVED, the undersigned, ENCORE WIRE LIMITED
(herein called the "Company"), a limited partnership organized and existing
under the laws of the State of Texas, promises to pay to [ ], or registered
assigns, the principal sum of $[ ] on [ ], with interest (computed on
the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance
thereof at a floating rate equal to the Adjusted LIBOR Rate from time to time,
payable quarterly, on each [____], [____], [____] and [____] in each year,
commencing with the [ ], [____], [____] and [____] next succeeding the date
hereof (except that no interest payment shall be made on [____], 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 principal,
any overdue payment of interest, any overdue payment of prepayment premium and
any LIBOR Breakage Amount at the Default Rate (as defined in the Note Purchase
Agreement referred to below) until paid.
Payments of principal of, interest on and any prepayment
premium or LIBOR Breakage Amount with respect to this Note are to be made in
lawful money of the United States of America at the principal office of Bank of
America, N.A. 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 Agreement referred to below.
This Note is one of a series of Senior Notes (herein called
the "Notes") issued pursuant to a Master Note Purchase Agreement dated as of
September 28, 2006 [and a Supplement thereto dated as of [ ]] (as from time
to time amended and supplemented, the "Note Purchase Agreement"), between the
Company, Encore Wire Corporation (the "Parent") and the respective Purchasers
named therein and is entitled to the benefits thereof. Reference is made to the
Note Purchase Agreement for the definitions used herein and the method of
calculating the interest and other payments to be made on or in respect of this
Note. 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 Agreement, (ii) to have made the representation set forth in
Section 6.2 of the Note Purchase Agreement and (iii) to have agreed to the
restriction on transfer of this Note set forth in Section 13.3 of the Note
Purchase Agreement.
Exhibit 1.1(b)
This Note is a registered Note and, as provided in the Note
Purchase Agreement, upon surrender of this Note for registration of transfer,
duly endorsed, or accompanied by a written instrument of transfer duly executed,
by the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company 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 Agreement.] This
Note [also] is 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
Agreement, 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 prepayment premium and LIBOR Breakage Amount) and with the effect
provided in the Note Purchase Agreement.
[Payment of the principal of, and interest and any prepayment
premium or LIBOR Breakage Amount on, this Note, and all other amounts due under
the Note Purchase Agreement, is guaranteed pursuant to the terms of Guaranties
dated as of September 28, 2006 of the Parent and certain Subsidiaries of the
Company.]
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.
ENCORE WIRE LIMITED
By its General Partner,
EWC GP Corp.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
2
Exhibit 1.1(b)
EXHIBIT 1.1(c)
[FORM OF SUPPLEMENT]
SUPPLEMENT TO MASTER NOTE PURCHASE AGREEMENT
THIS SUPPLEMENT is entered into as of [ ] (this "Supplement") between
ENCORE WIRE LIMITED, a Texas limited partnership (the "Company"), and ENCORE
WIRE CORPORATION, a Delaware corporation (the "Parent"), and the Purchasers
listed in the attached Schedule A (the "Purchasers").
R E C I T A L S
A. The Company and the Parent have entered into a Master Note Purchase
Agreement dated as of September 28, 2006 with the purchasers listed in Schedule
A thereto [and one or more supplements or amendments thereto] (as heretofore
amended and supplemented, the "Note Purchase Agreement"); and
B. The Company desires to issue and sell, and the Purchasers desire to
purchase, an additional series of Notes (as defined in the Note Purchase
Agreement) pursuant to the Note Purchase Agreement and in accordance with the
terms set forth below;
NOW, THEREFORE, the Company and the Purchasers agree as follows:
1. Authorization of the New Series of Notes. The Company has authorized
the issue and sale of $[ ] aggregate principal amount of Notes to be
designated as its [[__]% ] [Floating Rate] Senior Notes, Series [ ], due [ ]
(the "Series [ ] Notes", such term to include any such Notes issued in
substitution therefor pursuant to Section 13 of the Note Purchase Agreement).
The Series [ ] 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.
2. Sale and Purchase of Series [ ] Notes. Subject to the terms and
conditions of this Supplement and the Note Purchase Agreement, the Company will
issue and sell to each of the Purchasers, and the Purchasers will purchase from
the Company, at the Closing provided for in Section 3, Series [ ] Notes in the
principal amount specified opposite their respective names in Schedule A at the
purchase price of 100% of the principal amount thereof. The obligations of the
Purchasers hereunder are several and not joint obligations and no Purchaser
shall have any liability to any Person for the performance or non-performance by
any other Purchaser hereunder.
3. Closing. The sale and purchase of the Series [ ] Notes to be
purchased by the Purchasers shall occur at the offices of [special counsel to
the Purchasers] [address] at 9:00 a.m., Chicago time, at a closing (the
"Closing") on [ ], [ ] or on such other Business Day thereafter on or prior
to [ ], [ ] as may be agreed upon by the Company and the Purchasers. At the
Closing the Company will deliver to each Purchaser the Series [ ] Notes to be
purchased
Exhibit 1.1(c)
by it in the form of a single Note (or such greater number of Series
[ ] Notes in denominations of at least $100,000 as such Purchaser may request)
dated the date of the Closing and registered in its name (or in the name of its
nominee), against delivery by such Purchaser 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 the Company to
account number [ ] at [Name and Address of Bank], ABA No. [ ]. If at the
Closing the Company shall fail to tender such Series [ ] Notes to a Purchaser as
provided above in this Section 3, or any of the conditions specified in
Section 4 of the Note Purchase Agreement, as modified or expanded by Section 4
hereof, shall not have been fulfilled to such Purchaser's satisfaction, such
Purchaser shall, at its election, be relieved of all further obligations under
this Agreement, without thereby waiving any rights it may have by reason of such
failure or such nonfulfillment.
4. Conditions to Closing. Each Purchasers obligation to purchase and
pay for the Series [ ] Notes to be sold to it at the Closing is subject to the
fulfillment to its satisfaction, prior to or at the Closing, of the conditions
set forth in Section 4 of the Note Purchase Agreement, as hereafter modified,
and to the following additional conditions:
[Set forth any modifications and additional conditions.]
5. Representations and Warranties of the Company. Each of the Company
and the Parent represents and warrants to the Purchasers that each of the
representations and warranties contained in Section 5 of the Note Purchase
Agreement is true and correct as of the date hereof (i) except that all
references to "Purchaser" and "you" therein shall be deemed to refer to the
Purchasers hereunder, all references to "this Agreement" shall be deemed to
refer to the Note Purchase Agreement as supplemented by this Supplement, all
references to "Notes" therein shall be deemed to include the Series [ ] Notes,
and (ii) except for changes to such representations and warranties or the
Schedules referred to therein, which changes are set forth in the attached
Schedule 5.
6. Representations of the Purchasers. Each Purchaser confirms to the
Company that the representations set forth in Section 6 of the Note Purchase
Agreement are true and correct as to such Purchaser with respect to the Series
[ ] Notes to be purchased by it pursuant to this Supplement.
7. [Insert special provisions for Series [ ] Notes, including
prepayment provisions applicable to Series [ ] Notes (including any applicable
make-whole amount, prepayment premium and LIBOR breakage amount, if any).]
[8. Additional Provisions.]
9. Applicability of Note Purchase Agreement. Except as otherwise
expressly provided herein (and expressly permitted by the Note Purchase
Agreement), all of the provisions of the Note Purchase Agreement are
incorporated by reference herein and shall apply to the Series [ ] Notes as
if expressly set forth in this Supplement.
2
Exhibit 1.1(c)
IN WITNESS WHEREOF, the Company, the Parent and the Purchasers have
caused this Supplement to be executed and delivered as of the date set forth
above.
ENCORE WIRE LIMITED
By its General Partner, EWC GP CORP.
By:
---------------------------------
Name:
Title:
ENCORE WIRE CORPORATION
By:
---------------------------------
Name:
Title:
[ADD PURCHASER SIGNATURE BLOCKS]
3
Exhibit 1.1(c)
Schedule A
to Supplement
INFORMATION RELATING TO PURCHASERS
Principal Amount of Series
Name and Address of Purchaser [ ] Notes to be Purchased
- ----------------------------- --------------------------
[NAME OF PURCHASER] $
(1) All payments by wire transfer
of immediately available
funds to:
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and
written confirmations of such
wire transfers:
(3) All other communications:
4
Exhibit 1.1(c)
Schedule 5
to Supplement
EXCEPTIONS TO REPRESENTATIONS
AND WARRANTIES
5
Exhibit 1.1(c)
Exhibit 1 to
Supplement
[FORM OF SERIES [ ] SENIOR NOTE]
6
Exhibit 1.1(c)
EXHIBIT 1.2
[FORM OF SERIES 2006-A SENIOR NOTE]
ENCORE WIRE LIMITED
Floating Rate Senior Note, Series 2006-A
due September 30, 2011
No. AR-[__] [Date]
$[_______] PPN: 29263@ AB 5
FOR VALUE RECEIVED, the undersigned, ENCORE WIRE LIMITED
(herein called the "Company"), a limited partnership organized and existing
under the laws of the State of Texas, promises to pay to [ ], or registered
assigns, the principal sum of $[ ] on September 30, 2011, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
unpaid balance thereof at a floating rate equal to the Adjusted LIBOR Rate from
time to time, payable quarterly, on each March 30, June 30, September 30 and
December 30 in each year, commencing with the March 30, June 30, September 30
and December 30 next succeeding the date hereof (except that no interest payment
shall be made on September 30, 2006), 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 principal, any overdue payment of interest,
any overdue payment of prepayment premium and any LIBOR Breakage Amount at the
Default Rate (as defined in the Note Purchase Agreement referred to below) until
paid.
Payments of principal of, interest on and any prepayment
premium or LIBOR Breakage Amount with respect to this Note are to be made in
lawful money of the United States of America at the principal office of Bank of
America, N.A. 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 Agreement referred to below.
This Note is one of a series of Notes (herein called the
"Notes") issued pursuant to a Master Note Purchase Agreement, dated as of
September 28, 2006 as from time to time amended and supplemented, the "Note
Purchase Agreement"), between the Company, Encore Wire Corporation (the
"Parent") and the respective Purchasers named therein and is entitled to the
benefits thereof. Reference is made to the Note Purchase Agreement for the
definitions used herein and the method of calculating the interest and other
payments to be made on or in respect of this Note. 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 Agreement, (ii) to have
made the representation set forth in Section 6.2 of the Note Purchase Agreement
and
Exhibit 1.2
(iii) to have agreed to the restriction on transfer of this Note set forth
in Section 13.3 of the Note Purchase Agreement.
This Note is a registered Note and, as provided in the Note
Purchase Agreement, upon surrender of this Note for registration of transfer,
duly endorsed, or accompanied by a written instrument of transfer duly executed,
by the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
This Note is subject to optional prepayment, in whole or from
time to time in part, at the times and on the terms specified in the Note
Purchase Agreement but not otherwise.
If an Event of Default, as defined in the Note Purchase
Agreement, 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 prepayment premium and LIBOR Breakage Amount) and with the effect
provided in the Note Purchase Agreement.
Payment of the principal of, and interest and any prepayment
premium or LIBOR Breakage Amount on, this Note, and all other amounts due under
the Note Purchase Agreement, is guaranteed pursuant to the terms of Guaranties
dated as of September 28, 2006 of the Parent and certain Subsidiaries of the
Company.*
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.
ENCORE WIRE LIMITED
By its General Partner,
EWC GP Corp.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
- ----------
* This paragraph must be modified at such time as there are no Subsidiary
Guarantors.
Exhibit 1.2
EXHIBIT 1.4(a)
PARENT GUARANTY
THIS GUARANTY (this "Guaranty") dated as of September 28, 2006 is made
by Encore Wire Corporation, a Delaware corporation (the "Guarantor"), in favor
of the holders from time to time of the Notes hereinafter referred to, including
each purchaser named in the Note Purchase Agreement hereinafter referred to, and
their respective successors and assigns (collectively, the "Holders" and each
individually, a "Holder").
W I T N E S S E T H:
WHEREAS, Encore Wire Limited, a Texas limited partnership (the
"Company"), the Guarantor and the initial Holders have entered into a Master
Note Purchase Agreement dated as of September 28, 2006 (the Master Note Purchase
Agreement as amended, supplemented, restated or otherwise modified from time to
time in accordance with its terms and in effect, the "Note Purchase Agreement");
WHEREAS, the Note Purchase Agreement contemplates the issuance by the
Company of Notes (as defined in the Note Purchase Agreement) in one or more
series and tranches, up to $300,000,000 aggregate principal amount;
WHEREAS, the Company is a Wholly Owned Restricted Subsidiary of the
Guarantor and the Guarantor will derive substantial benefits from the purchase
by the Holders of the Company's Notes;
WHEREAS, it is a condition precedent to the obligation of the Holders
to purchase the Series 2006-A Notes that the Guarantor shall have executed and
delivered this Guaranty to the Holders, and it is and will be a condition to the
sale of subsequent series of the Notes that this Guaranty run in favor of the
holders of such subsequent series of Notes; and
WHEREAS, the Guarantor desires to execute and deliver this Guaranty to
satisfy the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the premises and other benefits to
the Guarantor, and of the purchase of the Company's Notes by the Holders, and
for other good and valuable consideration, the receipt and sufficiency of which
are acknowledged, the Guarantor makes this Guaranty as follows:
SECTION 1. Definitions. Any capitalized terms not otherwise herein
defined shall have the meanings ascribed to them in the Note Purchase Agreement.
Exhibit 1.4(a)
SECTION 2. Guaranty. The Guarantor unconditionally and irrevocably
guarantees to the Holders the due, prompt and complete payment by the Company of
the principal of, any make-whole amount, prepayment premium, breakage amount and
interest on, and each other amount due under, the Notes or the Note Purchase
Agreement, when and as the same shall become due and payable (whether at stated
maturity or by required or optional prepayment or by declaration or otherwise)
in accordance with the terms of the Notes and the Note Purchase Agreement (the
Notes and the Note Purchase Agreement being sometimes hereinafter collectively
referred to as the "Note Documents" and the amounts payable by the Company under
the Note Documents, and all other monetary obligations of the Company thereunder
(including any reasonable attorneys' fees and expenses), being sometimes
collectively hereinafter referred to as the "Obligations"). This Guaranty is a
guaranty of payment and not just of collectibility and is in no way conditioned
or contingent upon any attempt to collect from the Company or upon any other
event, contingency or circumstance whatsoever. If for any reason whatsoever the
Company shall fail or be unable duly, punctually and fully to pay such amounts
as and when the same shall become due and payable, the Guarantor, without
demand, presentment, protest or notice of any kind, will forthwith pay or cause
to be paid such amounts to the Holders under the terms of such Note Documents,
in lawful money of the United States, at the place specified in the Note
Purchase Agreement, or perform or comply with the same or cause the same to be
performed or complied with, together with interest (to the extent provided for
under such Note Documents) on any amount due and owing from the Company. The
Guarantor, promptly after demand, will pay to the Holders the reasonable costs
and expenses of collecting such amounts or otherwise enforcing this Guaranty,
including, without limitation, the reasonable fees and expenses of counsel.
SECTION 3. Guarantor's Obligations Unconditional. The obligations of
the Guarantor under this Guaranty shall be primary, absolute and unconditional
obligations of the Guarantor, shall not be subject to any counterclaim, set-off,
deduction, diminution, abatement, recoupment, suspension, deferment, reduction
or defense based upon any claim the Guarantor or any other person may have
against the Company or any other person, and to the full extent permitted by
applicable law shall remain in full force and effect without regard to, and
shall not be released, discharged or in any way affected by, any circumstance or
condition whatsoever (whether or not the Guarantor or the Company shall have any
knowledge or notice thereof), including:
(a) any termination, amendment or modification of or deletion
from or addition or supplement to or other change in any of the Note
Documents or any other instrument or agreement applicable to any of the
parties to any of the Note Documents;
(b) any furnishing or acceptance of any security, or any
release of any security, for the Obligations, or the failure of any
security or the failure of any person to perfect any interest in any
collateral;
(c) any failure, omission or delay on the part of the Company
to conform or comply with any term of any of the Note Documents or any
other instrument or agreement referred to in paragraph (a) above,
including, without limitation, failure to give
2
Exhibit 1.4(a)
notice to the Guarantor of the occurrence of a "Default" or an "Event
of Default" under any Note Document;
(d) any waiver of the payment, performance or observance of
any of the obligations, conditions, covenants or agreements contained
in any Note Document, or any other waiver, consent, extension,
indulgence, compromise, settlement, release or other action or inaction
under or in respect of any of the Note Documents or any other
instrument or agreement referred to in paragraph (a) above or any
obligation or liability of the Company, or any exercise or non-exercise
of any right, remedy, power or privilege under or in respect of any
such instrument or agreement or any such obligation or liability;
(e) any failure, omission or delay on the part of any of the
Holders to enforce, assert or exercise any right, power or remedy
conferred on such Holder in this Guaranty, or any such failure,
omission or delay on the part of such Holder in connection with any
Note Document, or any other action on the part of such Holder;
(f) any voluntary or involuntary bankruptcy, insolvency,
reorganization, arrangement, readjustment, assignment for the benefit
of creditors, composition, receivership, conservatorship,
custodianship, liquidation, marshaling of assets and liabilities or
similar proceedings with respect to the Company, the Guarantor or to
any other person or any of their respective properties or creditors, or
any action taken by any trustee or receiver or by any court in any such
proceeding;
(g) any discharge, termination, cancellation, frustration,
irregularity, invalidity or unenforceability, in whole or in part, of
any of the Note Documents or any other agreement or instrument referred
to in paragraph (a) above or any term hereof;
(h) any merger or consolidation of the Company or the
Guarantor into or with any other corporation, or any sale, lease or
transfer of any of the assets of the Company or the Guarantor to any
other person;
(i) any change in the ownership of any shares of capital stock
of the Company or any change in the corporate relationship between the
Company and the Guarantor, or any termination of such relationship;
(j) any release or discharge, by operation of law, of any
other guarantor from the performance or observance of any obligation,
covenant or agreement contained in any other guarantee of the Note
Documents or the Obligations; or
(k) any other occurrence, circumstance, happening or event
whatsoever, whether similar or dissimilar to the foregoing, whether
foreseen or unforeseen, and any other circumstance which might
otherwise constitute a legal or equitable defense or
3
Exhibit 1.4(a)
discharge of the liabilities of a guarantor or surety or which might
otherwise limit recourse against the Guarantor.
SECTION 4. Full Recourse Obligations. The obligations of the Guarantor
set forth herein constitute the full recourse obligations of the Guarantor
enforceable against it to the full extent of all its assets and properties.
SECTION 5. Waiver. The Guarantor unconditionally waives, to the extent
permitted by applicable law, (a) notice of any of the matters referred to in
Section 3, (b) notice to the Guarantor of the incurrence of any of the
Obligations, notice to the Guarantor or the Company of any breach or default by
the Company with respect to any of the Obligations or any other notice that may
be required, by statute, rule of law or otherwise, to preserve any rights of the
Holders against the Guarantor, (c) presentment to or demand of payment from the
Company or the Guarantor with respect to any amount due under any Note Document
or protest for nonpayment or dishonor, (d) any right to the enforcement,
assertion or exercise by any of the Holders of any right, power, privilege or
remedy conferred in the Note Purchase Agreement or any other Note Document or
otherwise, (e) any requirement of diligence on the part of any of the Holders,
(f) any requirement to exhaust any remedies or to mitigate the damages resulting
from any default under any Note Document, (g) any notice of any sale, transfer
or other disposition by any of the Holders of any right, title to or interest in
the Note Purchase Agreement or in any other Note Document and (h) any other
circumstance whatsoever which might otherwise constitute a legal or equitable
discharge, release or defense of a guarantor or surety or which might otherwise
limit recourse against the Guarantor.
SECTION 6. Subrogation, Contribution, Reimbursement or Indemnity. Until
one year and one day after all Obligations have been paid in full, the Guarantor
agrees not to take any action pursuant to any rights which may have arisen in
connection with this Guaranty to be subrogated to any of the rights (whether
contractual, under the United States Bankruptcy Code, as amended, including
section 509 thereof, under common law or otherwise) of any of the Holders
against the Company or against any collateral security or guaranty or right of
offset held by the Holders for the payment of the Obligations. Until one year
and one day after all Obligations have been paid in full, the Guarantor agrees
not to take any action pursuant to any contractual, common law, statutory or
other rights of reimbursement, contribution, exoneration or indemnity (or any
similar right) from or against the Company which may have arisen in connection
with this Guaranty. So long as the Obligations remain, if any amount shall be
paid by or on behalf of the Company to the Guarantor on account of any of the
rights waived in this paragraph, such amount shall be held by the Guarantor in
trust, segregated from other funds of the Guarantor, and shall, forthwith upon
receipt by the Guarantor, be turned over to the Holders (duly endorsed by the
Guarantor to the Holders, if required), to be applied against the Obligations,
whether matured or unmatured, in such order as the Holders may determine. The
provisions of this paragraph shall survive the term of this Guaranty and the
payment in full of the Obligations.
4
Exhibit 1.4(a)
SECTION 7. Effect of Bankruptcy Proceedings, etc. This Guaranty shall
continue to be effective or be automatically reinstated, as the case may be, if
at any time payment, in whole or in part, of any of the sums due to any of the
Holders pursuant to the terms of the Note Purchase Agreement or any other Note
Document is rescinded or must otherwise be restored or returned by the Holder
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Company or any other person, or upon or as a result of the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to the Company or other person or any substantial part of its property, or
otherwise, all as though such payment had not been made. If an event permitting
the acceleration of the maturity of the principal amount of the Notes shall at
any time have occurred and be continuing, and such acceleration shall at such
time be prevented by reason of the pendency against the Company or any other
person of a case or proceeding under a bankruptcy or insolvency law, the
Guarantor agrees that, for purposes of this Guaranty and its obligations
hereunder, the maturity of the principal amount of the Notes and all other
Obligations shall be deemed to have been accelerated with the same effect as if
any Holder had accelerated the same in accordance with the terms of the Note
Purchase Agreement or other applicable Note Document, and the Guarantor shall
forthwith pay such principal amount, any make-whole amount, prepayment premium,
breakage amount and interest thereon, and any other amounts guaranteed hereunder
without further notice or demand.
SECTION 8. Term of Agreement. This Guaranty and all guaranties,
covenants and agreements of the Guarantor contained herein shall continue in
full force and effect and shall not be discharged until such time as all of the
Obligations shall be paid and performed in full and all of the agreements of the
Guarantor hereunder shall be duly paid and performed in full.
SECTION 9. Notices. All notices and communications provided for
hereunder shall be in writing and sent by telecopy if the sender on the same day
sends a confirming copy of such notice by a recognized overnight delivery
service (charges prepaid), or by registered or certified mail with return
receipt requested (postage prepaid), or by a recognized overnight delivery
service (with charges prepaid) (a) if to the Company or any Holder at the
address set forth in the Note Purchase Agreement or (b) if to the Guarantor, in
care of the Company at the Company's address set forth in the Note Purchase
Agreement, or in each case at such other address as the Company, any Holder or
such Guarantor shall from time to time designate in writing to the other
parties. Any notice so addressed shall be deemed to be given when actually
received.
SECTION 10. Survival. All warranties, representations and covenants
made by the Guarantor herein or in any certificate or other instrument delivered
by it or on its behalf hereunder shall be considered to have been relied upon by
the Holders and shall survive the execution and delivery of this Guaranty,
regardless of any investigation made by any of the Holders. All statements in
any such certificate or other instrument shall constitute warranties and
representations by such Guarantor hereunder.
SECTION 11. SUBMISSION TO JURISDICTION. ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS GUARANTY, MAY BE BROUGHT AND
MAINTAINED IN THE COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT
5
Exhibit 1.4(a)
OF ILLINOIS. THE GUARANTOR EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION
OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS
SET FORTH ABOVE. THE GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, TO THE ADDRESS SPECIFIED IN SECTION
9 OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. THE GUARANTOR
EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY
SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 12. WAIVER OF JURY TRIAL. THE GUARANTOR WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER
THIS GUARANTY OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH AND
AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
SECTION 13. Miscellaneous. Any provision of this Guaranty 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 not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the Guarantor hereby waives any provision of law that renders
any provisions hereof prohibited or unenforceable in any respect. The terms of
this Guaranty shall be binding upon, and inure to the benefit of, the Guarantor
and the Holders and their respective successors and assigns. No term or
provision of this Guaranty may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the Guarantor and the
Required Holders. The section and paragraph headings in this Guaranty and the
table of contents are for convenience of reference only and shall not modify,
define, expand or limit any of the terms or provisions hereof, and all
references herein to numbered sections, unless otherwise indicated, are to
sections in this Guaranty. This Guaranty shall in all respects be governed by,
and construed in accordance with, the laws 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.
6
Exhibit 1.4(a)
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to
be duly executed as of the day and year first above written.
ENCORE WIRE CORPORATION
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
7
Exhibit 1.4(a)
EXHIBIT 1.4(b)
[FORM OF SUBSIDIARY GUARANTY]
THIS GUARANTY (this "Guaranty") dated as of September 28, 2006 is made
by the undersigned (each, a "Guarantor"), in favor of the holders from time to
time of the Notes hereinafter referred to, including each purchaser named in the
Note Purchase Agreement hereinafter referred to, and their respective successors
and assigns (collectively, the "Holders" and each individually, a "Holder").
W I T N E S S E T H:
WHEREAS, Encore Wire Limited, a Texas limited partnership (the
"Company"), Encore Wire Corporation, a Delaware corporation (the "Parent"), and
the initial Holders have entered into a Master Note Purchase Agreement dated as
of September 28, 2006 (the Master Note Purchase Agreement as amended,
supplemented, restated or otherwise modified from time to time in accordance
with its terms and in effect, the "Note Purchase Agreement");
WHEREAS, the Note Purchase Agreement contemplates the issuance by the
Company of Notes (as defined in the Note Purchase Agreement) in one or more
series and tranches, up to $300,000,000 aggregate principal amount;
WHEREAS, the Parent owns, directly or indirectly, all of the issued and
outstanding capital stock or partnership interests of each Guarantor and, by
virtue of such ownership and otherwise, each Guarantor will derive substantial
benefits from the purchase by the Holders of the Company's Notes;
WHEREAS, it is a condition precedent to the obligation of the Holders
to purchase the Series 2006-A Notes that each Guarantor shall have executed and
delivered this Guaranty to the Holders and it is and will be a condition to the
sale of subsequent series of the Notes that this Guaranty run in favor of the
holders of such subsequent series of Notes; and
WHEREAS, each Guarantor desires to execute and deliver this Guaranty to
satisfy the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the premises and other benefits to
each Guarantor, and of the purchase of the Company's Notes by the Holders, and
for other good and valuable consideration, the receipt and sufficiency of which
are acknowledged, each Guarantor makes this Guaranty as follows:
SECTION 1. Definitions. Any capitalized terms not otherwise herein
defined shall have the meanings attributed to them in the Note Purchase
Agreement.
SECTION 2. Guaranty. Each Guarantor, jointly and severally with each
other Guarantor, unconditionally and irrevocably guarantees to the Holders the
due, prompt and complete payment
Exhibit 1.4(b)
by the Company of the principal of, any make-whole amount, prepayment premium,
breakage amount and interest on, and each other amount due under, the Notes or
the Note Purchase Agreement, when and as the same shall become due and payable
(whether at stated maturity or by required or optional prepayment or by
declaration or otherwise) in accordance with the terms of the Notes and the Note
Purchase Agreement (the Notes and the Note Purchase Agreement being sometimes
hereinafter collectively referred to as the "Note Documents" and the amounts
payable by the Company under the Note Documents, and all other monetary
obligations of the Company thereunder (including reasonable attorneys' fees and
expenses), being sometimes collectively hereinafter referred to as the
"Obligations"). This Guaranty is a guaranty of payment and not just of
collectibility and is in no way conditioned or contingent upon any attempt to
collect from the Company or upon any other event, contingency or circumstance
whatsoever. If for any reason whatsoever the Company shall fail or be unable
duly, punctually and fully to pay such amounts as and when the same shall become
due and payable, each Guarantor, without demand, presentment, protest or notice
of any kind, will forthwith pay or cause to be paid such amounts to the Holders
under the terms of such Note Documents, in lawful money of the United States, at
the place specified in the Note Purchase Agreement, or perform or comply with
the same or cause the same to be performed or complied with, together with
interest (to the extent provided for under such Note Documents) on any amount
due and owing from the Company. Each Guarantor, promptly after demand, will pay
to the Holders the reasonable costs and expenses of collecting such amounts or
otherwise enforcing this Guaranty, including, without limitation, the reasonable
fees and expenses of counsel. Notwithstanding the foregoing, the right of
recovery against each Guarantor under this Guaranty is limited to the extent it
is judicially determined with respect to any Guarantor that entering into this
Guaranty would violate Section 548 of the United States Bankruptcy Code or any
comparable provisions of any state law, in which case such Guarantor shall be
liable under this Guaranty only for amounts aggregating up to the largest amount
that would not render such Guarantor's obligations hereunder subject to
avoidance under Section 548 of the United States Bankruptcy Code or any
comparable provisions of any state law.
SECTION 3. Guarantor's Obligations Unconditional. The obligations of
each Guarantor under this Guaranty shall be primary, absolute and unconditional
obligations of each Guarantor, shall not be subject to any counterclaim,
set-off, deduction, diminution, abatement, recoupment, suspension, deferment,
reduction or defense based upon any claim each Guarantor or any other person may
have against the Company or any other person, and to the full extent permitted
by applicable law shall remain in full force and effect without regard to, and
shall not be released, discharged or in any way affected by, any circumstance or
condition whatsoever (whether or not each Guarantor or the Company shall have
any knowledge or notice thereof), including:
(a) any termination, amendment or modification of or deletion
from or addition or supplement to or other change in any of the Note
Documents or any other instrument or agreement applicable to any of the
parties to any of the Note Documents;
2
Exhibit 1.4(b)
(b) any furnishing or acceptance of any security, or any
release of any security, for the Obligations, or the failure of any
security or the failure of any person to perfect any interest in any
collateral;
(c) any failure, omission or delay on the part of the Company
or the Parent to conform or comply with any term of any of the Note
Documents or any other instrument or agreement referred to in paragraph
(a) above, including, without limitation, failure to give notice to any
Guarantor of the occurrence of a "Default" or an "Event of Default"
under any Note Document;
(d) any waiver of the payment, performance or observance of
any of the obligations, conditions, covenants or agreements contained
in any Note Document, or any other waiver, consent, extension,
indulgence, compromise, settlement, release or other action or inaction
under or in respect of any of the Note Documents or any other
instrument or agreement referred to in paragraph (a) above or any
obligation or liability of the Company or the Parent, or any exercise
or non-exercise of any right, remedy, power or privilege under or in
respect of any such instrument or agreement or any such obligation or
liability;
(e) any failure, omission or delay on the part of any of the
Holders to enforce, assert or exercise any right, power or remedy
conferred on such Holder in this Guaranty, or any such failure,
omission or delay on the part of such Holder in connection with any
Note Document, or any other action on the part of such Holder;
(f) any voluntary or involuntary bankruptcy, insolvency,
reorganization, arrangement, readjustment, assignment for the benefit
of creditors, composition, receivership, conservatorship,
custodianship, liquidation, marshaling of assets and liabilities or
similar proceedings with respect to the Company, the Parent, any
Guarantor or to any other person or any of their respective properties
or creditors, or any action taken by any trustee or receiver or by any
court in any such proceeding;
(g) any discharge, termination, cancellation, frustration,
irregularity, invalidity or unenforceability, in whole or in part, of
any of the Note Documents or any other agreement or instrument referred
to in paragraph (a) above or any term hereof;
(h) any merger or consolidation of the Company or the Parent
or any Guarantor into or with any other corporation, or any sale, lease
or transfer of any of the assets of the Company or the Parent or any
Guarantor to any other person;
(i) any change in the ownership of any shares of capital stock
of the Company or the Parent or any change in the corporate
relationship between the Company or the Parent and any Guarantor, or
any termination of such relationship;
3
Exhibit 1.4(b)
(j) any release or discharge, by operation of law, of any
other Guarantor from the performance or observance of any obligation,
covenant or agreement contained in this Guaranty; or
(k) any other occurrence, circumstance, happening or event
whatsoever, whether similar or dissimilar to the foregoing, whether
foreseen or unforeseen, and any other circumstance which might
otherwise constitute a legal or equitable defense or discharge of the
liabilities of a guarantor or surety or which might otherwise limit
recourse against any Guarantor.
SECTION 4. Full Recourse Obligations. The obligations of each Guarantor
set forth herein constitute the full recourse obligations of such Guarantor
enforceable against it to the full extent of all its assets and properties.
SECTION 5. Waiver. Each Guarantor unconditionally waives, to the extent
permitted by applicable law, (a) notice of any of the matters referred to in
Section 3, (b) notice to such Guarantor of the incurrence of any of the
Obligations, notice to such Guarantor or the Company of any breach or default by
such Company with respect to any of the Obligations or any other notice that may
be required, by statute, rule of law or otherwise, to preserve any rights of the
Holders against such Guarantor, (c) presentment to or demand of payment from the
Company or the Guarantor with respect to any amount due under any Note Document
or protest for nonpayment or dishonor, (d) any right to the enforcement,
assertion or exercise by any of the Holders of any right, power, privilege or
remedy conferred in the Note Purchase Agreement or any other Note Document or
otherwise, (e) any requirement of diligence on the part of any of the Holders,
(f) any requirement to exhaust any remedies or to mitigate the damages resulting
from any default under any Note Document, (g) any notice of any sale, transfer
or other disposition by any of the Holders of any right, title to or interest in
the Note Purchase Agreement or in any other Note Document and (h) any other
circumstance whatsoever which might otherwise constitute a legal or equitable
discharge, release or defense of a guarantor or surety or which might otherwise
limit recourse against such Guarantor.
SECTION 6. Subrogation, Contribution, Reimbursement or Indemnity. Until
one year and one day after all Obligations have been paid in full, each
Guarantor agrees not to take any action pursuant to any rights which may have
arisen in connection with this Guaranty to be subrogated to any of the rights
(whether contractual, under the United States Bankruptcy Code, as amended,
including Section 509 thereof, under common law or otherwise) of any of the
Holders against the Company or against any collateral security or guaranty or
right of offset held by the Holders for the payment of the Obligations. Until
one year and one day after all Obligations have been paid in full, each
Guarantor agrees not to take any action pursuant to any contractual, common law,
statutory or other rights of reimbursement, contribution, exoneration or
indemnity (or any similar right) from or against the Company which may have
arisen in connection with this Guaranty. So long as the Obligations remain, if
any amount shall be paid by or on behalf of the Company to any Guarantor on
account of any of the rights waived in this paragraph, such amount shall be held
by such Guarantor in trust, segregated from other funds of
4
Exhibit 1.4(b)
such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned
over to the Holders (duly endorsed by such Guarantor to the Holders, if
required), to be applied against the Obligations, whether matured or unmatured,
in such order as the Holders may determine. The provisions of this paragraph
shall survive the term of this Guaranty and the payment in full of the
Obligations.
SECTION 7. Effect of Bankruptcy Proceedings, etc. This Guaranty shall
continue to be effective or be automatically reinstated, as the case may be, if
at any time payment, in whole or in part, of any of the sums due to any of the
Holders pursuant to the terms of the Note Purchase Agreement or any other Note
Document is rescinded or must otherwise be restored or returned by such Holder
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Company or any other person, or upon or as a result of the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to the Company or other person or any substantial part of its property, or
otherwise, all as though such payment had not been made. If an event permitting
the acceleration of the maturity of the principal amount of the Notes shall at
any time have occurred and be continuing, and such acceleration shall at such
time be prevented by reason of the pendency against the Company or any other
person of a case or proceeding under a bankruptcy or insolvency law, each
Guarantor agrees that, for purposes of this Guaranty and its obligations
hereunder, the maturity of the principal amount of the Notes and all other
Obligations shall be deemed to have been accelerated with the same effect as if
any Holder had accelerated the same in accordance with the terms of the Note
Purchase Agreement or other applicable Note Document, and such Guarantor shall
forthwith pay such principal amount, any make-whole amount, prepayment premium,
breakage amount and interest thereon, and any other amounts guaranteed hereunder
without further notice or demand.
SECTION 8. Term of Agreement. This Guaranty and all guaranties,
covenants and agreements of each Guarantor contained herein shall continue in
full force and effect and shall not be discharged until the earlier to occur of
(i) such time as all of the Obligations shall be paid and performed in full and
all of the agreements of such Guarantor hereunder shall be duly paid and
performed in full and (ii) such Guarantor is released by the Holders pursuant to
Section 1.4(b) of the Note Purchase Agreement.
SECTION 9. Representations and Warranties. Each Guarantor represents
and warrants to each Holder that:
(a) such Guarantor is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization and
has the 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,;
(b) such Guarantor has the power and authority to execute and
deliver this Guaranty and to perform the provisions hereof, and this
Guaranty has been duly authorized by all necessary action on the part
of such Guarantor;
5
Exhibit 1.4(b)
(c) this Guaranty constitutes the legal, valid and binding
obligation of such Guarantor enforceable against such Guarantor in
accordance with its terms, except as such enforceability may be limited
by (i) applicable bankruptcy, insolvency, fraudulent conveyance,
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);
(d) the execution, delivery and performance of this Guaranty
will not (i) 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 such Guarantor under, any agreement, or corporate charter
or by-laws to which such Guarantor is bound or by which such Guarantor
or any of its properties may be bound or affected, (ii) 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 such Subsidiary Guarantor or (iii)
violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to such Guarantor;
(e) except as disclosed in Section 5.7 to the Note Purchase
Agreement, 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 such
Guarantor of this Guaranty, and all such consents, approvals,
authorizations, registrations, filings or declarations listed in
Schedule 5.7 have been obtained or made;
(f) except as disclosed in Section 5.8 of the Note Purchase
Agreement, there are no actions, suits or proceedings pending or, to
the knowledge of such Guarantor, threatened against or affecting such
Guarantor, or any property of such Guarantor, 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;
(g) after giving effect to the transactions contemplated in
the Note Purchase Agreement and after giving due consideration to any
rights of contribution (i) such Guarantor has received fair
consideration and reasonably equivalent value for the incurrence of its
obligations hereunder, (ii) the fair value of the assets of such
Guarantor (both at fair valuation and at present fair saleable value)
exceeds its liabilities, (iii) such Guarantor is able to and expects to
be able to pay its debts as they mature, and (iv) such Guarantor has
capital sufficient to carry on its business as conducted and as
proposed to be conducted.
SECTION 10. Notices. All notices and communications provided for
hereunder shall be in writing and sent by telecopy if the sender on the same day
sends a confirming copy of such notice by a recognized overnight delivery
service (charges prepaid), or by registered or certified mail with return
receipt requested (postage prepaid), or by a recognized overnight delivery
6
Exhibit 1.4(b)
service (with charges prepaid) (a) if to the Company or any Holder at the
address set forth in the Note Purchase Agreement or (b) if to a Guarantor, in
care of the Company at the Company's address set forth in the Note Purchase
Agreement, or in each case at such other address as the Company, any Holder or
such Guarantor shall from time to time designate in writing to the other
parties. Any notice so addressed shall be deemed to be given when actually
received.
SECTION 11. Survival. All warranties, representations and covenants
made by each Guarantor herein or in any certificate or other instrument
delivered by it or on its behalf hereunder shall be considered to have been
relied upon by the Holders and shall survive the execution and delivery of this
Guaranty, regardless of any investigation made by any of the Holders. All
statements in any such certificate or other instrument shall constitute
warranties and representations by such Guarantor hereunder.
SECTION 12. SUBMISSION TO JURISDICTION. ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS GUARANTY, MAY BE BROUGHT AND
MAINTAINED IN THE COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS. EACH GUARANTOR EXPRESSLY
AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF
ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH
GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, TO THE ADDRESS SPECIFIED IN SECTION 9 OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. EACH GUARANTOR EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 13. WAIVER OF JURY TRIAL. EACH GUARANTOR WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER
THIS GUARANTY OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR THAT MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH AND
AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
SECTION 14. Miscellaneous. Any provision of this Guaranty which 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 not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, each Guarantor hereby waives any provision of law that
renders any provisions hereof prohibited or unenforceable in any respect. The
terms of this Guaranty shall be binding upon, and inure to the benefit of, each
Guarantor and the Holders and their respective successors and assigns. No term
or provision of this Guaranty may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by each Guarantor and the
Required Holders. The section and paragraph headings in this Guaranty are for
convenience of reference only and shall not modify, define, expand or limit any
of the terms or provisions hereof,
7
Exhibit 1.4(b)
and all references herein to numbered sections, unless otherwise indicated, are
to sections in this Guaranty. This Guaranty shall in all respects be governed
by, and construed in accordance with, the laws 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.
8
Exhibit 1.4(b)
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to
be duly executed as of the day and year first above written.
EWC GP Corp.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
EWC LP Corp.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
EWC AVIATION Corp.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
9
Exhibit 1.4(b)
FORM OF JOINDER TO SUBSIDIARY GUARANTY
The undersigned (the "Guarantor"), joins in the Subsidiary
Guaranty dated as of September 28, 2006 from the Guarantors named therein in
favor of the Holders, as defined therein, and agrees to be bound by all of the
terms thereof and represents and warrants to the Holders that:
(a) such Guarantor is duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization and
has the 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,;
(b) such Guarantor has the power and authority to execute and
deliver this Guaranty and to perform the provisions hereof, and this
Guaranty has been duly authorized by all necessary action on the part
of such Guarantor;
(c) this Guaranty constitutes the legal, valid and binding
obligation of such Guarantor enforceable against such Guarantor in
accordance with its terms, except as such enforceability may be limited
by (i) applicable bankruptcy, insolvency, fraudulent conveyance,
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);
(d) the execution, delivery and performance of this Guaranty
will not (i) 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 such Guarantor under, any agreement, or corporate charter
or by-laws to which such Guarantor is bound or by which such Guarantor
or any of its properties may be bound or affected, (ii) 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 such Subsidiary Guarantor or (iii)
violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to such Guarantor;
(e) except as disclosed in Section 5.7 to the Note Purchase
Agreement, 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 such
Guarantor of this Guaranty, and all such consents, approvals,
authorizations, registrations, filings or declarations listed in
Schedule 5.7 have been obtained or made;
(f) except as disclosed in Section 5.8 of the Note Purchase
Agreement, there are no actions, suits or proceedings pending or, to
the knowledge of such Guarantor, threatened against or affecting such
Guarantor, or any property of such Guarantor, in any
10
Exhibit 1.4(b)
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;
(g) after giving effect to the transactions contemplated by
the giving of this Joinder and giving due consideration to any rights
of contribution (i) such Guarantor has received fair consideration and
reasonably equivalent value for the incurrence of its obligations
hereunder, (ii) the fair value of the assets of such Guarantor (both at
fair valuation and at present fair saleable value) exceeds its
liabilities, (iii) such Guarantor is able to and expects to be able to
pay its debts as they mature, and (iv) such Guarantor has capital
sufficient to carry on its business as conducted and as proposed to be
conducted.
Capitalized Terms used but not defined herein have the meanings ascribed in the
Subsidiary Guaranty.
IN WITNESS WHEREOF, the undersigned has caused this Joinder to
Subsidiary Guaranty to be duly executed as of __________, ____.
[Name of Guarantor]
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
11
Exhibit 1.4(b)