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EXHIBIT 10.2
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THE TIMBERLAND COMPANY
NOTE AGREEMENT
Dated as of April 1, 1994
Re: $65,000,000 7.16% Senior Notes
due April 15, 2000
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TABLE OF CONTENTS
(Not a part of the Agreement)
SECTION HEADING PAGE
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT............................ 1
Section 1.1. Description of Notes........................................ 1
Section 1.2. Commitment, Closing Date.................................... 1
Section 1.3. Other Agreements............................................ 2
SECTION 2. PREPAYMENT OF NOTES............................................ 2
Section 2.1. No Required Prepayments..................................... 2
Section 2.2. Optional Prepayments With Premium........................... 2
Section 2.3. Prepayment on Failure of Holders to Give Certain Consents... 2
Section 2.4. Notice of Prepayments....................................... 3
Section 2.5. Allocation of Prepayments................................... 3
Section 2.6. Direct Payment.............................................. 3
SECTION 3. REPRESENTATIONS................................................ 4
Section 3.1. Representations of the Company.............................. 4
Section 3.2. Representations of the Purchaser............................ 4
SECTION 4. CLOSING CONDITIONS............................................. 5
Section 4.1. Conditions.................................................. 5
Section 4.2. Waiver of Conditions........................................ 5
SECTION 5. COMPANY COVENANTS.............................................. 6
Section 5.1. Corporate Existence, Etc.................................... 6
Section 5.2. Insurance................................................... 6
Section 5.3. Taxes, Claims for Labor and Materials, Compliance with Laws. 6
Section 5.4. Maintenance, Etc............................................ 7
Section 5.5. Nature of Business.......................................... 7
Section 5.6. Current Ratio............................................... 7
Section 5.7. Consolidated Tangible Net Worth............................. 7
Section 5.8. Limitations on Indebtedness................................. 7
Section 5.9. Fixed Charges Coverage...................................... 8
Section 5.10. Limitation on Liens......................................... 8
Section 5.11. Restricted Payments......................................... 10
Section 5.12. Sale and Leasebacks......................................... 11
Section 5.13. Mergers, Consolidations and Sales of Assets................. 11
Section 5.14. Guaranties.................................................. 14
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Section 5.15. Repurchase of Notes......................................... 14
Section 5.16. Transactions with Affiliates................................ 14
Section 5.17. Investments................................................. 15
Section 5.18. Termination of Pension Plans................................ 16
Section 5.19. Reports and Rights of Inspection............................ 16
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR....................... 20
Section 6.1. Events of Default........................................... 20
Section 6.2. Notice to Holders........................................... 21
Section 6.3. Acceleration of Maturities.................................. 21
Section 6.4. Rescission of Acceleration.................................. 22
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.............................. 22
Section 7.1. Consent Required............................................ 22
Section 7.2. Effect of Amendment or Waiver............................... 23
SECTION 8. INTERPRETATION OF AGREEMENT................................... 23
Section 8.1. Definitions................................................. 23
Section 8.2. Accounting Principles....................................... 32
Section 8.3. Directly or Indirectly...................................... 32
SECTION 9. MISCELLANEOUS................................................. 32
Section 9.1. Registered Notes............................................ 32
Section 9.2. Exchange of Notes........................................... 32
Section 9.3. Loss, Theft, Etc. of Notes.................................. 33
Section 9.4. Expenses, Stamp Tax Indemnity............................... 33
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative........... 33
Section 9.6. Notices..................................................... 33
Section 9.7. Successors and Assigns...................................... 34
Section 9.8. Survival of Covenants and Representations................... 34
Section 9.9. Severability................................................ 34
Section 9.10. Governing Law............................................... 34
Section 9.11. Captions.................................................... 34
Signatures..................................................................... 35
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ATTACHMENTS TO NOTE AGREEMENT:
Schedule I - Name and Address of Purchasers
Exhibit A - Form of 7.16% Senior Note due April 15, 2000
Exhibit B - Closing Certificate of the Company
Exhibit C - Description of Special Counsel's Closing Opinion
Exhibit D - Description of Closing Opinion of Counsel to the Company
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THE TIMBERLAND COMPANY
11 MERRILL INDUSTRIAL DRIVE
HAMPTON, NEW HAMPSHIRE 03842-5050
NOTE AGREEMENT
Re: $65,000,000 7.16% Senior Notes
Due April 15, 2000
Dated as of
April 1, 1994
To the Purchaser named In Schedule I
hereto which is a signatory of this
Agreement
Ladies and Gentlemen:
The undersigned, The Timberland Company, a Delaware corporation (the
"Company"), agrees with you as follows:
SECTION 1. DESCRIPTION OF NOTES AND COMMITMENT.
Section 1.1. Description of Notes. The Company will authorize the issue
and sale of $65,000,000 aggregate principal amount of its 7.16% Senior Notes
(the "Notes") to be dated the date of issue, to bear interest from such date at
the rate of 7.16% per annum, payable semiannually in arrears on the fifteenth
day of each April and October in each year (commencing October 15, 1994) and at
maturity and to bear interest on overdue principal (including any overdue
optional prepayment of principal) and premium, if any, and (to the extent
legally enforceable) on any overdue installment of interest at the rate of 9.16%
per annum after maturity, whether by acceleration or otherwise, until paid, to
be expressed to mature on April 15, 2000, and to be substantially in the form
attached hereto as Exhibit A. Interest on the Notes shall be computed on the
basis of a 360-day year of twelve 30-day months. The term "Notes" as used
herein shall include each Note delivered pursuant to this Agreement and the
separate agreements with the other purchasers named in Schedule I. You and the
other purchasers named in Schedule I are hereinafter sometimes referred to as
the "Purchasers".
Section 1.2. Commitment, Closing Date. Subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue and sell to you, and you
agree to purchase from the Company, the aggregate principal amount of the Notes
set forth opposite your name in Schedule I hereto, at a price of 100% of the
principal amount thereof on the Closing Date hereinafter mentioned.
Delivery of the Notes will be made at the offices of Chapman and Cutler,
111 West Monroe Street, Chicago, Illinois 60603, against payment therefor in
Federal Reserve or
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The Timberland Company Note Agreement
other funds current and immediately available at the principal office of The
Northern Trust Company, Chicago, Illinois in the amount of the purchase price at
10:00 A.M., Chicago, Illinois time, on April 15, 1994 or such earlier date as
the Company shall specify by not less than five business days' prior written
notice to you (the "Closing Date"). The Notes delivered to you on the Closing
Date will be delivered to you in the form of registered Notes for the full
amount of your purchase (unless different denominations are specified by you),
registered in your name or in the name of such nominee as you may specify and in
substantially the form attached hereto as Exhibit A, all as you may specify at
any time prior to the date fixed for delivery.
Section 1.3. Other Agreements. Simultaneously with the execution and
delivery of this Agreement, the Company is entering into similar agreements with
the other Purchasers under which such other Purchasers agree to purchase from
the Company the principal amount of Notes set opposite such Purchasers' names in
Schedule I, and your obligation and the obligations of the Company hereunder are
subject to the execution and delivery of the similar agreements by the other
Purchasers. This Agreement and said similar agreements with the other
Purchasers are herein collectively referred to as the "Agreements". The
obligations of each Purchaser shall be several and not joint and no Purchaser
shall be liable or responsible for the acts of any other Purchaser.
SECTION 2. PREPAYMENT OF NOTES.
Section 2.1. No Required Prepayments. No mandatory prepayments of
principal of the Notes are scheduled to be made prior to their expressed
maturity date, and the Notes are not subject to prepayment or redemption at the
option of the Company prior to their expressed maturity date except on the terms
and conditions and in the amounts and with the premium, if any, set forth below
in this [Section]2.
Section 2.2. Optional Prepayments With Premium. Upon compliance with
[Section]2.4, the Company shall have the privilege at any time and from time to
time of prepaying the outstanding Notes, either in whole or in part (but if in
part then in a minimum principal amount of $100,000) by payment of the principal
amount of the Notes, or portion thereof to be prepaid, and accrued interest
thereon to the date of such prepayment, together with a premium equal to the
Make-Whole Amount with respect to such principal amount then to be prepaid.
Section 2.3. Prepayment on Failure of Holders to Give Certain
Consents. In the event that (i) the Company shall have determined in good faith
to enter into a transaction which will result in a violation of any the
provisions of [Section] 5.13, (ii) the Company shall have requested the holders
of the Notes in writing (accompanied by a reasonably detailed description of the
proposed transaction) to consent to such transaction, and (iii) the holders of
more than 49% of the aggregate unpaid principal amount of the Notes shall have
failed to consent to such transaction within 30 days from the date of such
request, then and in such event the Company may upon the consummation of such
transaction, within 90 days after the expiration of such 30-day period, prepay
all (but not less than all) of the Notes held by such holders who have failed to
consent to such transaction. Any such prepayment shall be made
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The Timberland Company Note Agreement
by payment of the principal amount of the Notes being prepaid, and accrued
interest thereon to the date of such prepayment, together with a premium equal
to the Make-Whole Amount with respect to such principal amount then to be
prepaid.
Section 2.4. Notice of Prepayments. The Company will give notice of any
prepayment of the Notes to each holder thereof not less than 30 days nor more
than 60 days before the date fixed for such optional prepayment specifying (i)
such date, (ii) the section of this Agreement under which the prepayment is to
be made, (iii) the principal amount of the holder's Notes to be prepaid on such
date, (iv) that a premium may be payable, (v) the date when such premium will be
calculated, and (vi) the accrued interest applicable to the prepayment. Such
notice of prepayment shall also certify all facts which are conditions precedent
to any such prepayment. Notice of prepayment having been so given, the
aggregate principal amount of the Notes specified in such notice, together with
the premium, if any, and accrued interest thereon shall become due and payable
on the date of consummation of the related transaction (in the case of any
prepayment pursuant to [Section] 2.3) or on the date specified in the notice
given pursuant to the first sentence of this [Section] 2.4 (in the case of any
other prepayment). Not later than the prepayment date the Company shall provide
each holder of a Note written notice of the amount of the premium payable in
connection with such prepayment, whether or not any premium is payable, together
with a reasonably detailed computation thereof.
Section 2.5. Allocation of Prepayments. All partial prepayments, other
than prepayments pursuant to [Section] 2.3, shall be applied on all outstanding
Notes ratably in accordance with the unpaid principal amounts thereof.
Section 2.6. Direct Payment. Notwithstanding anything to the contrary
in this Agreement or the Notes, in the case of any Note owned by the Purchaser
or its nominee or owned by any other institutional holder who has given written
notice to the Company requesting that the provisions of this Section shall
apply, the Company will promptly and punctually pay when due the principal
thereof and premium, if any, and interest thereon, without any presentment
thereof directly to the Purchaser or such subsequent holder at the address of
the Purchaser set forth in Schedule I or at such other address as the Purchaser
or such subsequent holder may from time to time designate in writing to the
Company or, if a bank account is designated for the Purchaser on Schedule I
hereto or in any written notice to the Company from the Purchaser or any such
subsequent holder, the Company will make such payments in immediately available
funds to such bank account, marked for attention as indicated, or in such other
manner or to such other account of the Purchaser or such holder in any bank in
the United States as the Purchaser or any such subsequent holder may from time
to time direct in writing. No such notice shall be effective with respect to
any payment if such notice is given to the Company less than 14 days before the
date of such payment. The holder of any Notes to which this Section applies
agrees that in the event it shall sell or transfer any such Notes (i) it will,
prior to the delivery of such Notes (unless it has already done so), make a
notation thereon of all principal, if any, prepaid on such Notes and will also
note thereon the date to which interest has been paid on such Notes, and (ii)
it will promptly notify the Company of the name and address of the transferee
of any Notes so transferred. With respect to Notes to which this Section
applies, the Company shall be
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The Timberland Company Note Agreement
entitled to presume conclusively that the original or such subsequent
institutional holder as shall have requested the provisions hereof to apply to
its Notes remains the holder of such Notes until (y) the Company shall have
received notice from the transferor of the transfer of such Notes, and of the
name and address of the transferee, or (z) such Notes shall have been presented
to the Company as evidence of the transfer.
SECTION 3. REPRESENTATIONS.
Section 3.1. Representations of the Company. The Company represents and
warrants that all representations set forth in the form of certificate attached
hereto as Exhibit B are true and correct as of the date hereof and are
incorporated herein by reference with the same force and effect as though herein
set forth in full.
Section 3.2. Representations of the Purchaser.
(a) Purchase for Investment. You represent, and in entering into this
Agreement the Company understands, that you are acquiring the Notes for the
purpose of investment and not with a view to the resale or distribution thereof,
and that you have no present intention of selling, negotiating or otherwise
disposing of the Notes; provided that the disposition of your property shall at
all times be and remain within your control.
(b) You represent and warrant that either:
(i) you are acquiring the Notes for your own account and with your
general corporate assets and not with the assets of any separate account in
which any employee benefit plan has any interest; or
(ii) (A) you are an insurance company, and
(1) a portion of the funds to be used to make your investment
hereunder constitutes plan assets allocated to a separate account
maintained by you, and
(2) the names of each employee benefit plan whose assets in
such account exceed ten percent of the total assets or are expected to
exceed ten percent of the total assets of such account as of the date
of such investment (for the purposes of this [Section] 3.2(b)(ii)
(A)(2), all employee benefit plans maintained by the same employer or
employee organization are deemed to be a single plan) have been
disclosed in writing to the Company; and
(B) the remaining portion of the funds used to purchase the Notes does
not constitute assets allocated to any separate account maintained by you
such that the application of such funds constitutes a "prohibited
transaction" under Section 406 of the Employee Retirement Income Security
Act of 1974, as amended.
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The Timberland Company Note Agreement
(c) You acknowledge that the Notes have not been registered under the
Securities Act of 1933, as amended, and you understand that the Notes must be
held indefinitely unless they are subsequently registered under said Securities
Act or an exemption from such registration is available. You have been advised
that the Company does not contemplate registering, and is not legally required
to register, the Notes under said Securities Act.
SECTION 4. CLOSING CONDITIONS.
Section 4.1. Conditions. Your obligation to purchase the Notes on the
Closing Date shall be subject to the performance by the Company of its
agreements hereunder which by the terms hereof are to be performed at or prior
to the time of delivery of the Notes and to the following further conditions
precedent:
(a) Closing Certificate. You shall have received a certificate dated
the Closing Date, signed by the President or a Vice President of the Company
substantially in the form attached hereto as Exhibit B, the truth and
accuracy of which shall be a condition to your obligation to purchase the
Notes proposed to be sold to you.
(b) Legal Opinions. You shall have received from Chapman and Cutler,
who are acting as your special counsel in this transaction, and from Ropes &
Gray, counsel for the Company, their respective opinions dated the Closing
Date, in form and substance satisfactory to you, and covering the matters
set forth in Exhibits C and D, respectively, hereto.
(c) Related Transactions. The Company shall have consummated the sale
of the entire principal amount of the Notes scheduled to be sold on the
Closing Date pursuant to this Agreement and the other agreements referred
to in [Section] 1.3.
(d) Satisfactory Proceedings. All proceedings taken in connection with
the transactions contemplated by this Agreement, and all documents necessary
to the consummation thereof, shall be satisfactory in form and substance to
you and your special counsel, and you shall have received a copy (executed
or certified as may be appropriate) of all legal documents or proceedings
taken in connection with the consummation of said transactions.
Section 4.2. Waiver of Conditions. If on the Closing Date the Company
fails to tender to you the Notes to be issued to you on such date or if the
conditions specified in [Section] 4.1 have not been fulfilled, you may thereupon
elect to be relieved of all further obligations under this Agreement. Without
limiting the foregoing, if the conditions specified in [Section] 4.1 have not
been fulfilled, you may waive compliance by the Company with any such condition
to such extent as you may in your sole discretion determine. Nothing in this
[Section] 4.2 shall operate to relieve the Company of any of its obligations
hereunder or to waive any of your rights against the Company.
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The Timberland Company Note Agreement
SECTION 5. COMPANY COVENANTS.
From and after the Closing Date and continuing so long as any amount
remains unpaid on any Note:
Section 5.1. Corporate Existence, Etc. The Company will preserve and
keep in force and effect, and will cause each Restricted Subsidiary to preserve
and keep in force and effect, its corporate existence and all licenses and
permits reasonably necessary to the proper conduct of its business the absence
of which might materially and adversely affect the properties, business or
condition of the Company or of the Company and its Restricted Subsidiaries taken
as a whole, provided that the foregoing shall not prevent any transaction
permitted by [Section]5.13.
Section 5.2. Insurance. The Company will maintain, and will cause each
Restricted Subsidiary to maintain, insurance coverage by financially sound and
reputable insurers accorded a rating by A.M. Best Company, Inc. of A:XII or
better at the time of the issuance of any such policy and in such forms and
amounts and against such risks as are customary for corporations of established
reputation engaged in the same or a similar business and owning and operating
similar properties; provided, however, that if, during the term of any such
insurance policy, the rating accorded the insurer shall be less than A:XII, the
Company will, on the date of renewal of any such policy (or, if such change in
rating shall occur within 90 days prior to such renewal date, within 90 days of
the date of such change in rating), obtain such insurance policy from an insurer
so rated.
Section 5.3. Taxes, Claims for Labor and Materials, Compliance with
Laws. The Company will promptly pay and discharge, and will cause each
Restricted Subsidiary promptly to pay and discharge, all lawful taxes,
assessments and governmental charges or levies imposed upon the Company or such
Restricted Subsidiary, respectively, or upon or in respect of all or any part of
the property or business of the Company or such Restricted Subsidiary, all trade
accounts payable in accordance with usual and customary business terms, and all
claims for work, labor or materials, which if unpaid might become a Lien upon
any property of the Company or such Restricted Subsidiary not permitted by
[Section] 5.10; provided the Company or such Restricted Subsidiary shall not be
required to pay any such tax, assessment, charge, levy, account payable or claim
if (i) the validity, applicability or amount thereof is being contested in good
faith by appropriate actions or proceedings which will prevent the forfeiture or
sale of any property of the Company or such Restricted Subsidiary or any
material interference with the use thereof by the Company or such Restricted
Subsidiary if such forfeiture, sale or interference might have a material
adverse effect on the properties, business or condition of the Company or of the
Company and its Restricted Subsidiaries taken as a whole, and (ii) the Company
or such Restricted Subsidiary shall set aside on its books, reserves deemed by
it to be adequate with respect thereto. The Company will promptly comply and
will cause each Restricted Subsidiary to comply with all laws, ordinances or
governmental rules and regulations to which it is subject, including without
limitation, the Occupational Safety and Health Act of 1970, the Employee
Retirement Income Security Act of 1974 and all laws, ordinances, governmental
rules and regulations relating to environmental protection in all applicable
jurisdictions, the violation
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The Timberland Company Note Agreement
of which would materially and adversely affect the properties, business,
prospects, profits or condition of the Company and its Restricted Subsidiaries
or would result in any Lien upon any material property of the Company or any
Restricted Subsidiary.
Section 5.4. Maintenance, Etc. The Company will maintain, preserve and
keep, and will cause each Restricted Subsidiary to maintain, preserve and keep,
its properties which are used or useful in the conduct of its business (whether
owned in fee or a leasehold interest) in good repair and working order and from
time to time will make all necessary and reasonable repairs, replacements,
renewals and additions so that at all times the efficiency thereof shall be
maintained, unless the failure to do so would not have a material adverse effect
on the properties, business or condition of the Company or of the Company and
its Restricted Subsidiaries taken as a whole.
Section 5.5. Nature of Business. Neither the Company nor any
Restricted Subsidiary will engage in any business if, as a result, the general
nature of the business, taken on a consolidated basis, which would then be
engaged in by the Company and its Restricted Subsidiaries would be
substantially changed from the general nature of the business engaged in by the
Company and its Restricted Subsidiaries on the date of this Agreement.
Section 5.6. Current Ratio. The Company will at all times keep and
maintain Consolidated Current Assets at an amount not less than 125% of
Consolidated Current Liabilities.
Section 5.7. Consolidated Tangible Net Worth. The Company will at all
times keep and maintain Consolidated Tangible Net Worth at an amount not less
than (i) for the fiscal quarter of the Company ending June 30, 1994, the sum of
$56,759,000 plus 25% of Consolidated Net Income for the fiscal quarter of the
Company ended March 31, 1994 (but without deduction in the case of a deficit in
Consolidated Net Income) and (ii) for each fiscal quarter thereafter, the sum of
(x) the amount required to be maintained during the immediately preceding fiscal
quarter of the Company, and (y) an amount equal to 25% of Consolidated Net
Income for such preceding fiscal quarter (but without deduction in the case of a
deficit in Consolidated Net Income).
Section 5.8. Limitations on Indebtedness. (a) The Company will not and
will not permit any Restricted Subsidiary to create, assume or incur or in any
manner be or become liable in respect of any Current Debt or Funded Debt,
except:
(1) the Notes;
(2) Current Debt and Funded Debt of the Company and its Restricted
Subsidiaries outstanding as of the date of this Agreement and reflected in
Annex B to Exhibit B attached hereto (including any amendment, modification,
or other change to the Current Debt and Funded Debt described in such Annex
B and which does not increase the principal amount thereof);
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The Timberland Company Note Agreement
(3) Current Debt or Funded Debt of the Company, provided that
at the time of incurrence thereof and after giving effect thereto and to the
application of the proceeds thereof:
(i) Total Debt will not exceed 175% of Total Equity, and
(ii) Net Income Available for Interest Charges for the four
immediately preceding fiscal quarters shall have been
at least 200% of Pro Forma Interest Charges for such
period;
(4) Current Debt or Funded Debt of a Restricted Subsidiary to
the Company or to aWholly-owned Restricted Subsidiary; and
(5) Current Debt or Funded Debt of a Restricted Subsidiary, other than
that permitted by [Section] 5.8(a)(4), provided that at the time of
incurrence thereof and after giving effect thereto and to the application of
the proceeds thereof, (i) Specified Debt does not exceed 20% of Consolidated
Tangible Net Worth, (ii) Total Debt does not exceed 175% of Total Equity and
(iii) Net Income Available for Interest Charges for the four immediately
preceding fiscal quarters shall have been at least 200% of Pro Forma
Interest Charges for such period.
(b) Any corporation which becomes a Restricted Subsidiary after the
date hereof shall for all purposes of this [Section] 5.8 be deemed to have
created, assumed or incurred at the time it becomes a Restricted Subsidiary
all Funded Debt and Current Debt of such corporation existing immediately
after it becomes a Restricted Subsidiary.
Section 5.9. Fixed Charges Coverage. The Company will keep and
maintain Net Income Available for Fixed Charges for each period of four
consecutive fiscal quarters at an amount which is not less than 150% of Fixed
Charges for such period.
Section 5.10. Limitation on Liens. The Company will not, and will not
permit any Restricted Subsidiary to, create or incur, or suffer to be incurred
or to exist, any Lien on its or their property or assets, whether now owned or
hereafter acquired, or upon any income or profits therefrom, to secure any
Indebtedness or transfer any property for the purpose of subjecting the same to
the payment of obligations in priority to the payment of its or their general
creditors, or acquire or agree to acquire, or permit any Restricted Subsidiary
to acquire, any property or assets upon conditional sales agreements or other
title retention devices, except:
(a) Liens for property taxes and assessments or governmental charges or
Liens securing claims or demands of mechanics and material men, provided
that such claims or demands are being contested in a manner permitted by
[Section] 5.3;
(b) Liens of or resulting from any judgment or award, the time for the
appeal or petition for rehearing of which shall not have expired, or in
respect of which the Company or a Restricted Subsidiary shall at any time in
good faith be
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The Timberland Company Note Agreement
prosecuting an appeal or proceeding for a review and in respect of which a
stay of execution pending such appeal or proceeding for review shall have
been secured;
(c) Liens incidental to the conduct of business or the ownership of
properties and assets (including warehousemen's and attorneys' Liens and
statutory landlords' Liens) and Liens to secure the performance of bids,
tenders or trade contracts, or to secure statutory obligations, 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,
provided in each case, the obligation secured is not overdue or, if overdue,
is being contested in good faith by appropriate actions or proceedings;
(d) Liens securing Indebtedness of a Restricted Subsidiary to the
Company or to another Restricted Subsidiary;
(e) Liens on property of a Restricted Subsidiary which secure Specified
Debt of such Restricted Subsidiary, provided that all such Specified Debt
shall have been incurred within the applicable limitations provided in
[Section] 5.8;
(f) Liens (including Capitalized Leases) (i) existing as of the date of
this Agreement and reflected in Annex B to Exhibit B attached hereto,
securing Indebtedness of the Company or any Restricted Subsidiary
outstanding on such date and (ii) securing refundings, refinancings,
restructurings or replacements of Indebtedness secured by Liens (including
Capitalized Leases) permitted by clause (i) of this [Section] 5.10(f),
provided that each such refunding, refinancing, restructuring and
replacement shall not exceed the total principal amount of Indebtedness
being refunded, refinanced, restructured or replaced and such Indebtedness
may not be secured by any additional property of the Company and its
Subsidiaries;
(g) Liens incurred after the date hereof (1) given to secure the
payment of the purchase price incurred in connection with the acquisition
of fixed assets useful and intended to be used in carrying on the business
of the Company or a Restricted Subsidiary, including Liens existing on such
fixed assets at the time of acquisition thereof or at the time of
acquisition by the Company or a Restricted Subsidiary of any business
entity then owning such fixed assets, whether or not such existing Liens
were given to secure the payment of the purchase price of the fixed assets
to which they attach so long as they were not incurred, extended or
renewed in contemplation of such acquisition, provided that (i) the Lien
shall attach solely to the property acquired or purchased, (ii) at the
time of acquisition of such fixed assets, the aggregate amount remaining
unpaid on all Indebtedness secured by Liens on such fixed assets whether
or not assumed by the Company or a Restricted Subsidiary shall not exceed
an amount equal to 100% of the lesser of the total purchase price or fair
market value at the time of acquisition of such fixed assets (as determined
in good faith by the Board of Directors of the Company), and (iii) all such
Indebtedness shall have been incurred within the applicable limitations
provided in [Section] 5.8 and (2) given to secure refundings, refinancings,
restructurings or replacements of Indebtedness secured by Liens permitted
by clause (1) of this [Section] 5.10(g), provided that each such refunding,
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The Timberland Company Note Agreement
refinancing, restructuring and replacement shall not exceed the total
principal amount of Indebtedness being refunded, refinanced, restructured or
replaced and such Indebtedness may not be secured by any additional property
of the Company and its Subsidiaries;
(h) Liens on documents and the underlying goods securing obligations in
respect of documentary letters of credit and bankers' acceptances;
(i) Liens that may arise from the sale or transfer of receivables
pursuant to a Securitized Asset Transaction (as defined in
[Section] 5.13(d)(3));
(j) provided that no Default or Event of Default exists at the time of
creation thereof, other Liens on fixed assets (in addition to those
permitted by the foregoing provisions of this [Section] 5.10) if, after
giving effect thereto (and to the application of the proceeds thereof), the
aggregate amount of Specified Debt would not exceed 20% of Consolidated
Tangible Net Worth; and
(k) other Liens securing Funded Debt or Current Debt (in addition to
those permitted by the foregoing provisions of this [Section] 5.10),
provided that the Notes shall be equally and ratably secured pursuant to
agreements or instruments in form and substance satisfactory to the
Noteholders as evidenced by their prior written consent thereto in
accordance with the provisions of [Section] 7.1.
Section 5.11. Restricted Payments. The Company will not, except as
hereinafter provided:
(a) Declare any dividends, either in cash or property, on any shares of
its capital stock of any class (except dividends or other distributions
payable solely in shares of capital stock of the Company); or
(b) Directly or indirectly, or through any Subsidiary, purchase, redeem
or retire any shares of its capital stock of any class or any warrants,
rights or options to purchase or acquire any shares of its capital stock,
other than purchases, redemptions or retirements of its capital stock in
connection with any employee benefit plans to the extent that the aggregate
amount of such purchases, redemptions and retirements during the fiscal year
which includes the date of the purchase, redemption or retirement in
question does not exceed the sum of (1) $100,000 plus (2) the proceeds from
sales of shares of the Company's capital stock in connection with employee
benefit plans during such fiscal year; or
(c) Make any other payment or distribution, either directly or
indirectly or through any Subsidiary, in respect of its capital stock; or
(d) make, or permit any Restricted Subsidiary to make, any Restricted
Investment;
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15
(such declarations or payments of dividends, purchases, redemptions or
retirements of capital stock and warrants, rights or options, and all such other
distributions and Restricted Investments being herein collectively called
"Restricted Payments"), if after giving effect thereto the aggregate amount of
Restricted Payments made during the period from and after December 31, 1988 to
and including the date of the making of the Restricted Payment in question,
would exceed the sum of (i) $33,879,500 plus (ii) 50% of Consolidated Net Income
for the period from and after December 31, 1993, computed on a cumulative basis
for said entire period (or if such Consolidated Net Income is a deficit figure,
then minus 100% of such deficit), plus (iii) the aggregate net cash proceeds to
the Company during such period from the sale of shares of its capital stock or
warrants, rights or option to purchase or acquire any shares of its capital
stock (other than any such sale in connection with employee benefit plans), plus
(iv) the aggregate amount of net proceeds received by the Company and its
Restricted Subsidiaries in connection with any sale or disposition of Restricted
Investments made during such period provided that for the purposes of this
[Section]5.11 the amount of proceeds from the sale or disposition of any
Restricted Investment may not exceed the original amount of such Restricted
Investment.
The Company will not declare any dividend which constitutes a Restricted
Payment payable more than 60 days after the date of declaration thereof.
For the purposes of this [Section] 5.11 the amount of any Restricted
Payment declared, paid or distributed in property of the Company shall be deemed
to be the greater of the book value or fair market value (as determined in good
faith by the Board of Directors of the Company) of such property at the time of
the making of the Restricted Payment in question.
Section 5.12. Sale and Leasebacks. The Company will not, and will not
permit any Restricted Subsidiary to, enter into any arrangement whereby the
Company or any Restricted Subsidiary shall sell or transfer any property owned
by the Company or any Restricted Subsidiary to any Person other than the Company
or a Restricted Subsidiary and thereupon the Company or any Restricted
Subsidiary shall lease or intend to lease, as lessee, the same property unless
(i) such property was constructed or installed for the Company or such
Restricted Subsidiary and is sold and leased back to the Company or such
Restricted Subsidiary within 18 months after such construction or installation,
and (ii) such sale by the Company or such Restricted Subsidiary and leaseback to
the Company or such Restricted Subsidiary would not violate the provisions of
[Section] 5.8 hereof.
Section 5.13. Mergers, Consolidations and Sales of Assets. (a) The
Company will not, and will not permit any Restricted Subsidiary to (i)
consolidate with or be a party to a merger with any other corporation or (ii)
sell, lease or otherwise dispose of all or any substantial part (as defined in
paragraph (d) of this Section) of the assets of the Company and its Restricted
Subsidiaries, provided, however, that:
(1) any Restricted Subsidiary may merge or consolidate with or into any
other corporation so long as (i) in any merger or consolidation involving
the Company, the Company shall be the surviving or continuing corporation
and (ii) in any merger or consolidation involving a corporation other than
the Company, (x) the
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The Timberland Company Note Agreement
survivor shall be a Restricted Subsidiary and the Minority Interests in the
surviving corporation, expressed as a percentage of the net worth of such
surviving corporation after giving effect to such merger or consolidation,
would not exceed the lesser of (I) 25% and (II) 10% plus the Minority
Interests in such Restricted Subsidiary on the date of this Agreement or, if
the Restricted Subsidiary is acquired or designated after the date of this
Agreement, on the date of such acquisition or designation, and (y) aggregate
Tangible Minority Interests (as defined in paragraph (d) of this Section) in
all Restricted Subsidiaries after giving effect to such merger or
consolidation would not exceed 10% of Consolidated Tangible Net Worth;
(2) the Company may consolidate or merge with any other corporation if
(i) the surviving or continuing corporation is a corporation organized under
the laws of any state of the United States, (ii) at the time of such
consolidation or merger and after giving effect thereto no Default or Event
of Default shall have occurred and be continuing, and (iii) after giving
effect to such consolidation or merger the surviving corporation would be
permitted to incur at least $1.00 of additional Funded Debt under the
provisions of [Section]5.8(a)(3);
(3) any Restricted Subsidiary may sell, lease or otherwise dispose of
all or any substantial part of its assets to the Company or any Wholly-owned
Restricted Subsidiary;
(4) the Company or any Restricted Subsidiary may sell, transfer or
otherwise dispose of any Restricted Investment and any shares of stock in
any Unrestricted Subsidiary; and
(5) a Restricted Subsidiary may consolidate or merge with any other
corporation in a transaction permitted under the provisions of
[Section]5.13(c).
(b) The Company will not permit any Restricted Subsidiary to issue or
sell any shares of stock of any class (including as "stock" for the purposes of
this [Section]5.13, any warrants, rights or options to purchase or otherwise
acquire stock or other Securities exchangeable for or convertible into stock) of
such Restricted Subsidiary to any Person other than the Company or a
Wholly-owned Restricted Subsidiary, unless (i) such issue or sale does not
constitute a substantial part (as hereinafter defined) of the assets of the
Company and its Restricted Subsidiaries, and (ii) to the extent that (x) the
Minority Interests in such Restricted Subsidiary, expressed as a percentage of
the net worth of such Restricted Subsidiary after giving effect to such issuance
or sale would not exceed the lesser of (I) 25% and (II) 10% plus the Minority
Interests in such Restricted Subsidiary on the date of this Agreement or, if
such Restricted Subsidiary is acquired or designated after the date of this
Agreement, on the date of such acquisition or designation, and (y) aggregate
Tangible Minority Interests in all Restricted Subsidiaries after giving effect
to such issuance or sale would not exceed 10% of Consolidated Tangible Net
Worth.
(c) The Company will not sell, transfer or otherwise dispose of any
shares of stock in any Restricted Subsidiary (except to qualify directors) or
any Indebtedness of any
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The Timberland Company Note Agreement
Restricted Subsidiary, and will not permit any Restricted Subsidiary to sell,
transfer or otherwise dispose of (except to the Company or a Wholly-owned
Restricted Subsidiary) any shares of stock or any Indebtedness of any other
Restricted Subsidiary, unless:
(1) either (x) such sale, transfer or disposition is made within the
limitations of [Section] 5.13(b), or (y) simultaneously with such sale,
transfer, or disposition, all shares of stock and all Indebtedness
(excluding any trade receivables) owed by such Restricted Subsidiary at the
time owned by the Company and by every other Subsidiary shall be sold,
transferred or disposed of as an entirety;
(2) the Board of Directors of the Company shall have determined, as
evidenced by a resolution thereof, that such sale, transfer or disposition
is in the best interests of the Company;
(3) such stock and Indebtedness is sold, transferred or otherwise
disposed of to a Person, for consideration and on terms reasonably deemed by
the Board of Directors to be adequate and satisfactory, provided that (i)
the amount of any non-cash consideration received by the Company or a
Restricted Subsidiary shall be determined in good faith by the Board of
Directors of the Company, as evidenced by a certificate of the president or
any vice president of the Company setting forth in reasonable detail the
basis of such determination and delivered to the Note Purchasers, which
determination shall, upon the written request of the holder or holders of
not less than 25% of the unpaid principal amount of the Notes, be subject to
verification by an independent appraiser designated and compensated by the
Company and not objected to by such holders, and (ii) any non-cash
consideration will be deemed a Restricted Investment made by the Company or
such Restricted Subsidiary on the date of such sale, transfer or disposition
in the amount of such valuation;
(4) except in the case of transactions permitted by [Section] 5.13(b),
the Restricted Subsidiary being disposed of shall not have any continuing
investment in the Company or any other Restricted Subsidiary not being
simultaneously disposed of; and
(5) such sale or other disposition does not involve a substantial part
(as hereinafter defined) of the assets of the Company and its Restricted
Subsidiaries.
(d) As used in this [Section] 5.13:
(1) A sale, lease or other disposition of assets (other than Restricted
Investments and investments in Unrestricted Subsidiaries) shall be deemed to
be a "substantial part" of the assets of the Company and its Restricted
Subsidiaries only if the book value of such assets when added to the book
value of all other assets sold, leased or otherwise disposed of by the
Company and its Restricted Subsidiaries (other than Securitized Asset
Transactions and other transactions in the ordinary course of business)
during the same fiscal year, exceeds 15% of the Consolidated Net Tangible
Assets of the Company and its Restricted Subsidiaries determined as of the
end of the immediately preceding fiscal year or contributed more than 15% of
Net Income
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The Timberland Company Note Agreement
Available for Interest Charges, during the next preceding three fiscal years
taken as a whole. Sales or other realization on delinquent receivables
shall not be included in any computation of sales or other dispositions
hereunder. Sales of assets shall not be included in any computations under
this paragraph (d) to the extent that (x) the proceeds from such sale are
applied to prepay the Notes pursuant to [Section]2.2 hereof, (y) the
proceeds from such sale are applied to the voluntary prepayment of Funded
Debt, or (z) the proceeds of such sale are applied, within one year of
such sale, to the purchase of other property useful and to be used in the
business of the Company and its Restricted Subsidiaries and, pending such
application, are maintained by the Company or any Restricted Subsidiary in a
separate segregated account.
(2) The term "Tangible Minority Interests" shall mean, with respect to
any Restricted Subsidiary, the amount that bears the same relationship to
Minority Interests in such Subsidiary as the Consolidated Tangible Net Worth
of such Subsidiary bears to the net worth of such Subsidiary. For purposes
of this definition, the "Consolidated Tangible Net Worth" of a Restricted
Subsidiary shall be determined for such Subsidiary and its Restricted
Subsidiaries in accordance with the definitions set forth in [Section]8.1,
mutatis mutandis.
(3) "Securitized Asset Transaction" shall mean a sale or other transfer
by any of the Company and its Restricted Subsidiaries of receivables which
were produced in the ordinary course of business and not contingent upon any
performance or product guarantee on the part of the Company or any
Restricted Subsidiary, which sale or transfer does not involve the creation
of any recourse obligation in respect thereof on the part of the Company or
any Restricted Subsidiary (other than matters of title to, and the character
of, the receivables so sold or transferred).
Section 5.14. Guaranties. The Company will not and will not permit any
Restricted Subsidiary to become or be liable in respect of any Guaranty except
Guaranties by the Company and its Restricted Subsidiaries of the obligations of
any Person so long as the Company and/or the Restricted Subsidiary guaranteeing
such obligation could have incurred such obligation within the limits of this
Agreement, provided that such underlying obligation shall be deemed to have been
incurred by, and to be the continuing direct obligation of, the guarantor for
all purposes of this Agreement.
Section 5.15. Repurchase of Notes. Neither the Company nor any
Restricted Subsidiary or Affiliate, directly or indirectly, may repurchase or
make any offer to repurchase any Notes unless the offer has been made to
repurchase Notes, pro rata, from all holders of the Notes at the same time and
upon the same terms. In case the Company repurchases any Notes, such Notes
shall thereafter be canceled and no Notes shall be issued in substitution
therefor.
Section 5.16. Transactions with Affiliates. The Company will not, and
will not permit any Restricted Subsidiary to, enter into or be a party to, any
transaction or arrangement with any Affiliate (including without limitation, the
purchase from, sale to or exchange of property with, or the rendering of any
service by or for, any Affiliate), except
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The Timberland Company Note Agreement
in the ordinary course of and pursuant to the reasonable requirements of the
Company's or such Restricted Subsidiary's business and upon fair and reasonable
terms (as determined in good faith by the Board of Directors of the Company)
no less favorable to the Company or such Restricted Subsidiary than would obtain
in a comparable arm's-length transaction with a Person other than an Affiliate.
Section 5.17. Investments. The Company will not, and will not permit
any Restricted Subsidiary to, make any investments in or loans, advances or
extensions of credit to, any Person, except:
(a) investments, loans, advances and extensions of credit by the Company
and its Restricted Subsidiaries in a corporation which, after giving effect
to such investment, will be a Restricted Subsidiary;
(b) investments in commercial paper maturing in 270 days or less from
the date of issuance which, at the time of acquisition by the Company or any
Restricted Subsidiary, is accorded a rating of P-1 by Standard & Poor's
Corporation or a rating of A-1 by Moody's Investors Services, Inc.;
(c) investments in direct obligations issued or guaranteed by the full
faith and credit of the United States of America, maturing, except in the
case of investments made with security deposits of rental customers, in
twelve months or less from the date of acquisition thereof;
(d) investments in certificates of deposit maturing within one year from
the date of origin or other obligations (including repurchase agreements),
issued by a bank or trust company organized under the laws of the United
States or any state thereof, having capital, surplus and undivided profits
aggregating at least $250,000,000 and a long term deposit rating of A or
better from either Standard & Poor's Corporation or Moody's Investors
Service, Inc.;
(e) loans or advances not exceeding $1,000,000 in the aggregate in the
usual and ordinary course of business to officers, directors and employees
of the Company and its Restricted Subsidiaries;
(f) Investments in money market preferred stock, which, at the time of
acquisition by the Company or any Restricted Subsidiary, is accorded a
rating of AA or better by Standard & Poor's Corporation or a rating of Aa2
or better by Moody's Investors Services, Inc.;
(g) Investments in money market mutual funds having total assets
aggregating at least $1,000,000,000 or which invests primarily in assets
described in clauses (b), (c), (d) and (f) of this [Section] 5.17;
(h) Investments in demand deposits and endorsements for collection;
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The Timberland Company Note Agreement
(i) Investments to the extent that the consideration therefor consists
of capital stock of the Company; and
(j) Restricted Investments, subject to the limitations of [Section]
5.11.
In valuing any investments, loans and advances for the purpose of
applying the limitations set forth in this [Section] 5.17 and [Section] 5.11
such investments, loans and advances shall be taken at the original cost
thereof, without allowance for any subsequent write-offs or appreciation or
depreciation therein, but less any amount repaid or recovered on account of
capital or principal.
For purposes of this [Section] 5.17, at any time when a corporation
becomes a Restricted Subsidiary, all investments of such corporation at such
time shall be deemed to have been made by such corporation, as a Restricted
Subsidiary, at such time.
Section 5.18. Termination of Pension Plans. The Company will not and
will not permit any Subsidiary to permit any employee benefit plan maintained by
it to be terminated in a manner which could result in the imposition of a Lien
on any property of the Company or any Subsidiary pursuant to Section 4068 of the
Employee Retirement Income Security Act of 1974, as amended, if the incurrence
of such Lien would not be permitted by [Section] 5.10.
Section 5.19. Reports and Rights of Inspection. The Company will keep,
and will cause each Subsidiary to keep, proper books of record and account in
which full and correct entries will be made of all dealings or transactions of
or in relation to the business and affairs of the Company or such Subsidiary, in
accordance with generally accepted accounting principles consistently applied
(except for changes disclosed in the financial statements furnished to you
pursuant to this [Section] 5.19 and concurred in by the independent public
accountants referred to in [Section] 5.19(b) hereof), and will furnish to you so
long as you are the holder of any Note and to each other institutional holder of
the then outstanding Notes (in duplicate if so specified below or otherwise
requested):
(a) Quarterly Statements. As soon as available and in any event within
55 days after the end of each quarterly fiscal period (except the last) of
each fiscal year, duplicate copies of:
(1) consolidated and consolidating balance sheets of the Company
and its Restricted Subsidiaries and of the Company and its consolidated
Subsidiaries as of the close of such quarter setting forth, in the case
of such consolidated statements, in comparative form the amount for the
end of the preceding fiscal year,
(2) consolidated and consolidating statements of income of the
Company and its Restricted Subsidiaries and of the Company and its
consolidated Subsidiaries for such quarterly period, setting forth, in
the case of such consolidated statements, in comparative form the
amount for the corresponding period of the preceding fiscal year, and
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The Timberland Company Note Agreement
(3) consolidated statements of cash flows of the Company and its
Restricted Subsidiaries and of the Company and its consolidated
Subsidiaries for the portion of the fiscal year ending with such
quarter, setting forth in comparative form the amount for the
corresponding period of the preceding fiscal year,
all in reasonable detail and certified as complete and correct, by an
authorized financial officer of the Company, provided that so long as the
Company shall file a quarterly report on Form 10-Q or any similar form with
the Securities and Exchange Commission or any successor agency which
contains the information set forth in this paragraph (a), the requirements
of this paragraph (a) shall be satisfied by forwarding Form 10-Q to the
holders of the Notes within 55 days after the end of such quarterly fiscal
period but, in any event, within five days of filing such Form 10-Q with the
Securities and Exchange Commission, and provided, further that so long as
the Unrestricted Subsidiaries of the Company taken as a whole do not
constitute a Significant Subsidiary, the Company shall not be required to
deliver to you financial statements of the Company and its Restricted
Subsidiaries referred to in paragraphs (1), (2) and (3) of this
[Section] 5.19(a);
(b) Annual Statements. As soon as available and in any event within 110
days after the close of each fiscal year of the Company, duplicate copies
of:
(1) consolidated and consolidating balance sheets of the Company
and its Restricted Subsidiaries and of the Company and its consolidated
Subsidiaries as of the close of such fiscal year, and
(2) consolidated and consolidating statements of income and
stockholders' equity and cash flows of the Company and its Restricted
Subsidiaries and of the Company and its consolidated Subsidiaries for
such fiscal year,
in each case setting forth in comparative form the consolidated figures for
the preceding fiscal year, all in reasonable detail and accompanied by an
opinion thereon of a firm of independent public accountants of recognized
national standing selected by the Company to the effect that the
consolidated financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied (except for
changes in application in which such accountants concur) and present
fairly the financial condition of the companies reported on and that the
examination of such accountants in connection with such financial statements
has been made in accordance with generally accepted auditing standards and
accordingly, includes such tests of the accounting records and such other
auditing procedures as were considered necessary in the circumstances,
provided that so long as the Company shall file an annual report on Form
10-K or any similar form with the Securities and Exchange Commission or any
successor agency which contains the information set forth in this paragraph
(b), the requirements of this paragraph (b) shall be satisfied by forwarding
Form 10-K to the holders of the Notes within 110 days after the end of
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The Timberland Company Note Agreement
such fiscal year but, in any event, within five days of filing such Form
10-K with the Securities and Exchange Commission, and provided further that
so long as the Unrestricted Subsidiaries of the Company taken as a whole do
not constitute a Significant Subsidiary, the Company shall not be required
to deliver to you financial statements of the Company and its
Restricted Subsidiaries referred to in paragraphs (1) and (2) of this
[Section] 5.19(b);
(c) Audit Reports. Promptly upon receipt thereof, one copy of each
interim or special audit made by independent accountants of the books of the
Company or any Restricted Subsidiary and any management letter received from
such accountants;
(d) SEC and Other Reports. Promptly upon their becoming available, one
copy of each financial statement, report, notice or proxy statement sent by
the Company to stockholders generally and of each regular or periodic
report, and any registration statement or prospectus filed by the Company or
any Subsidiary with any securities exchange or the Securities and Exchange
Commission or any successor agency, and copies of any orders in any
proceedings to which the Company or any of its Subsidiaries is a party,
issued by any governmental agency, Federal or state, having jurisdiction
over the Company or any of its Subsidiaries;
(e) Requested Information. With reasonable promptness, such other data
and information as you or any such institutional holder may reasonably
request, provided, that with respect to any data and information obtained by
you as a result of any request pursuant to this paragraph (e), you agree
that, to the extent that such data and information has not theretofore
otherwise been disclosed by or as authorized by the Company in such a manner
as to render such data and information no longer confidential, you will use
reasonable efforts (consistent with your established procedures) to
reasonably maintain (and cause persons referred to in (i) below to maintain)
the confidential nature of the data and information therein contained;
provided, that anything herein contained to the contrary notwithstanding,
you may, to the extent necessary, disclose or disseminate such data and
information to: (i) your employees, agents, attorneys, and accountants who
would ordinarily have access to such data and information in the normal
course of the performance of their duties; (ii) such third parties as you
may, in your discretion, deem reasonably necessary or desirable in
connection with or in response to (x) compliance with any law, ordinance or
governmental order, regulation, rule, policy, subpoena, investigation,
regulatory authority request or request, or (y) any order, decree, judgment,
subpoena, notice of discovery or similar ruling or pleading issued, filed,
served or purported on its face to be issued, filed or served (A) by or
under authority of any court, tribunal, arbitration board of any
governmental or industry agency, commission, authority, board or similar
entity or (B) in connection with any proceeding, case or matter pending (or
on its face purported to be pending) before any court, tribunal, arbitration
board or any governmental agency, commission, authority, board or similar
entity; (iii) any prospective purchaser, securities broker or dealer or
investment banker in connection with the resale or proposed resale by you of
any portion of the Notes who shall agree in writing to accept such
information subject to
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The Timberland Company Note Agreement
the provisions of this paragraph (e); (iv) any Person holding your debt
Securities who shall have requested to inspect such information subject to
the provisions of this paragraph (e); (v) the National Association of
Insurance Commissioners; and (vi) any entity utilizing such information
to rate or classify your debt or equity Securities or to report to the
public concerning the industry of which you are a part; and, provided
further, that you shall not be liable to the Company or any other Person for
damages for any failure by you, despite your reasonable efforts so to do, to
comply with the provisions of this paragraph (e).
(f) Officers' Certificates. Within the periods provided in paragraphs
(a) and (b) above, a certificate of an authorized financial officer of the
Company stating that he has reviewed the provisions of this Agreement and
setting forth: (i) the information and computations (in sufficient detail)
required in order to establish whether the Company was in compliance with
the requirements of [Section] 5.5 through [Section] 5.18, inclusive, at the
end of the period covered by the financial statements then being furnished,
and (ii) whether there existed as of the date of such financial statements
and whether, to the best of his knowledge, there exists on the date of the
certificate or existed at any time during the period covered by such
financial statements any Default or Event of Default and, if any such
condition or event exists on the date of the certificate, specifying the
nature and period of existence thereof and the action the Company is taking
and proposes to take with respect thereto;
(g) Accountant's Certificates. Within the period provided in paragraph
(b) above, a certificate of the accountants who render an opinion with
respect to such financial statements, stating that they have reviewed this
Agreement and stating further, whether in making their audit, such
accountants have become aware of any Default or Event of Default under any
of the terms or provisions of [Section] 5.6 through [Section] 5.14,
inclusive, [Section] 5.17 or [Section] 5.18 of this Agreement insofar as
any such terms or provisions pertain to or involve accounting matters or
determinations, and if any such condition or event then exists, specifying
the nature and period of existence thereof; and
(h) Unrestricted Subsidiaries. Within the respective periods provided
in paragraph (b) above, financial statements of the character and for the
dates and periods as in said paragraph (b) provided covering Unrestricted
Subsidiaries on a consolidated and consolidating basis.
Without limiting the foregoing, the Company will permit you, so long as
you are the holder of any Note, and each institutional holder of the then
outstanding Notes (or such Persons as either you or such holder may designate)
to visit and inspect, under the Company's guidance, any of the properties of the
Company or any Subsidiary, to examine all their 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,
employees, and independent public accountants (and by this provision the Company
authorizes said accountants to discuss with you the finances and affairs of the
Company and its Subsidiaries) all at such reasonable times and as often as may
be reasonably requested.
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The Timberland Company Note Agreement
The Company shall not be required to pay or reimburse you or any such holder for
expenses which you or any such holder may incur in connection with any such
visitation or inspection.
SECTION 6. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
Section 6.1. Events of Default. Any one or more of the following shall
constitute an "Event of Default" as the term is used herein:
(a) Default shall occur in the payment of interest on any Note when the
same shall have become due and such default shall continue for more than
five days; or
(b) Default shall occur in the making of any payment of the principal of
any Note or the premium thereon at any date fixed for prepayment; or
(c) Default shall occur in the making of any other payment of the
principal of any Note or the premium thereon at the expressed or any
accelerated maturity date; or
(d) Default shall be made in the payment of the principal of or interest
on any Indebtedness of the Company or any Restricted Subsidiary for borrowed
money in an aggregate principal amount in excess of $1,000,000, as and when
the same shall become due and payable by the lapse of time, by declaration,
by call for redemption or otherwise, and such default shall continue beyond
the period of grace, if any, allowed with respect thereto; or
(e) Default or the happening of any event shall occur under any
indenture, agreement, or other instrument under which any Indebtedness of
the Company or any Restricted Subsidiary for borrowed money in an aggregate
principal amount in excess of $1,000,000 may be issued and such default or
event shall continue for a period of time sufficient to permit the
acceleration of the maturity of any Indebtedness of the Company or any
Restricted Subsidiary outstanding thereunder; or
(f) Default shall occur in the observance or performance of any covenant
or agreement contained in [Section] 5.6 through [Section] 5.15, inclusive,
or [Section] 5.17 hereof; or
(g) Default shall occur in the observance or performance of any other
provision of this Agreement which is not remedied within 30 days after
notice thereof to the Company by the holder of any Note; or
(h) If any representation or warranty made by the Company herein, or
made by the Company in any statement or certificate furnished by the
Company in connection with the consummation of the issuance and delivery
of the Notes or furnished by the Company pursuant hereto, is untrue in any
material respect as of the date of the issuance or making thereof; or
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The Timberland Company Note Agreement
(i) The Company or any Significant Subsidiary which is a Restricted
Subsidiary becomes insolvent or bankrupt, is generally not paying its debts
as they become due or makes an assignment for the benefit of creditors, or
the Company or any Significant Subsidiary which is a Restricted Subsidiary
causes or suffers an order for relief to be entered with respect to it under
applicable Federal bankruptcy law or applies for or consents to the
appointment of a custodian, trustee or receiver for the Company or such
Significant Subsidiary which is a Restricted Subsidiary or for the major
part of the property of either; or
(j) A custodian, trustee or receiver is appointed for the Company or any
Significant Subsidiary which is a Restricted Subsidiary or for the major
part of the property of either and is not discharged within 30 days after
such appointment; or
(k) Final judgment or judgments for the payment of money aggregating in
excess of $100,000 is or are outstanding against the Company or any
Significant Subsidiary which is a Restricted Subsidiary or against any
property or assets of either and any one of such judgments has remained
unpaid, unvacated, unbonded or unstayed by appeal or otherwise for a period
of 30 days from the date of its entry; or
(l) Bankruptcy, reorganization, arrangement or insolvency proceedings,
or other proceedings for relief under any bankruptcy or similar law or
laws for the relief of debtors, are instituted by or against the Company or
any Significant Subsidiary which is a Restricted Subsidiary and, if
instituted against the Company or any Significant Subsidiary which is a
Restricted Subsidiary, are consented to or are not dismissed within 60 days
after such institution.
Section 6.2. Notice to Holders. When any Event of Default described in
the foregoing [Section] 6.1 has occurred, or if the holder of any Note or of any
other evidence of Indebtedness of the Company gives any notice or takes any
other action with respect to a claimed default, the Company agrees to give
prompt notice of such event to all holders of the Notes then outstanding, such
notice to be in writing and sent by registered or certified mail or by telegram.
Section 6.3. Acceleration of Maturities. When any Event of Default
described in paragraph (a), (b) or (c) of [Section] 6.1 has happened and is
continuing, any holder of any Note may declare its Notes to be, and its Notes
shall thereupon become, forthwith due and payable, without any presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived. When any Event of Default described in paragraphs (a) through (h),
inclusive, and (k) of said [Section] 6.1 has happened and is continuing, the
holder or holders of 25% or more of the principal amount of Notes at the time
outstanding may, by notice in writing sent by registered or certified mail to
the Company, declare the entire principal and all interest accrued on all Notes
to be, and all Notes shall thereupon become, forthwith due and payable, without
any presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived. When any Event of Default described in paragraphs (i),
(j) and (l) of [Section] 6.1 has occurred, then all outstanding Notes shall
immediately become due and payable without presentment, demand or notice of any
kind.
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The Timberland Company Note Agreement
Upon any or all Notes becoming due and payable as a result of any Event of
Default as aforesaid, the Company will forthwith pay to the holders of such
Notes the entire principal and interest accrued on such Notes and, with respect
to a payment made as a result of an Event of Default described in paragraph (a),
(b), (c) or (f) of [Section]6.1, and to the extent permitted by law, liquidated
damages for the loss of the bargain evidenced hereby in an amount equal to the
Make-Whole Amount. No course of dealing on the part of any Noteholder nor any
delay or failure on the part of any Noteholder to exercise any right shall
operate as a waiver of such right or otherwise prejudice such holder's rights,
powers and remedies. The Company further agrees, to the extent permitted
by law, to pay to the holder or holders of the Notes all costs and expenses
incurred by them in the collection of any Notes upon any default hereunder or
thereon, including reasonable compensation to such holder's or holders'
attorneys for all services rendered in connection therewith.
Section 6.4. Rescission of Acceleration. The provisions of [Section]
6.3 are subject to the condition that if the principal of and accrued interest
on all or any outstanding Notes have been declared immediately due and payable
by reason of the occurrence of any Event of Default described in paragraphs (a)
through (h), inclusive, and (k) of [Section] 6.1, the holders of 51% in
aggregate principal amount of the Notes then outstanding may, by written
instrument filed with the Company, rescind and annul such declaration and the
consequences thereof, provided that at the time such declaration is annulled
and rescinded:
(a) no judgment or decree has been entered for the payment of any monies
due pursuant to the Notes or this Agreement;
(b) all arrears of interest upon all the Notes and all other sums
payable under the Notes and under this Agreement (except any principal,
interest or premium on the Notes which has become due and payable solely by
reason of such declaration under [Section] 6.3) shall have been duly paid;
and
(c) each and every other Default and Event of Default shall have been
made good, cured or waived pursuant to [Section] 7.1;
and provided further, that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right
consequent thereto.
SECTION 7. AMENDMENTS, WAIVERS AND CONSENTS.
Section 7.1. Consent Required. (a) Any term, covenant, agreement or
condition of this Agreement may, with the consent of the Company, be amended or
compliance therewith may be waived (either generally or in a particular instance
and either retroactively or prospectively), if the Company shall have obtained
the consent in writing of the holders of at least 51% in aggregate principal
amount of outstanding Notes; provided that without the written consent of the
holders of all of the Notes then outstanding, no such waiver, modification,
alteration or amendment shall be effective (i) which will change the time of
payment of the principal of or the interest on any Note or change the principal
amount thereof or change the rate of interest thereon, or (ii) which will change
any of the provisions
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The Timberland Company Note Agreement
with respect to optional prepayments, or (iii) which will change the percentage
of holders of the Notes required to consent to any such amendment, alteration
or modification or any of the provisions of this [Section] 7 or [Section] 6.
(b) So long as any outstanding Notes are owned by you, the Company will
not solicit, request or negotiate for or with respect to any proposed waiver or
amendment of any of the provisions of this Agreement or the Notes unless each
holder of the Notes (irrespective of the amount of Notes then owned by it)
shall be informed thereof by the Company and shall be afforded the opportunity
of considering the same and shall be supplied by the Company with sufficient
information to enable it to make an informed decision with respect thereto.
Executed or true and correct copies of any waiver or consent effected pursuant
to the provisions of this [Section] 7.1 shall be delivered by the Company to
each holder of outstanding Notes forthwith following the date on which the same
shall have been executed and delivered by the holder or holders of the
requisite percentage of outstanding Notes. The Company will not, directly or
indirectly, pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, to any holder of the
Notes as consideration for or as an inducement to the entering into by any
holder of the Notes of any waiver or amendment of any of the terms and
provisions of this Agreement unless such remuneration is concurrently paid, on
the same terms, ratably to the holders of all of the Notes then outstanding,
provided however, that if any holder of Notes fails to consent to a transaction
which will result in a violation of [Section] 5.13 hereof, and as a result of
such failure the Notes of such holder are prepaid pursuant to [Section] 2.3
hereof, such holder shall not be entitled to any remuneration pursuant to this
[Section] 7.1(b) in connection with the requested consent to such transaction.
Section 7.2. Effect of Amendment or Waiver. Any such amendment or
waiver shall apply equally to all of the holders of the Notes and shall be
binding upon them, upon each future holder of any Note and upon the Company,
whether or not such Note shall have been marked to indicate such amendment or
waiver. No such amendment or waiver shall extend to or affect any obligation
not expressly amended or waived or impair any right consequent thereon.
SECTION 8. INTERPRETATION OF AGREEMENT; DEFINITIONS.
Section 8.1. Definitions. Unless the context otherwise requires, the
terms hereinafter set forth when used herein shall have the following meanings
and the following definitions shall be equally applicable to both the singular
and plural forms of any of the terms herein defined:
"Affiliate" shall mean any Person (other than a Restricted Subsidiary)
(i) which directly or indirectly through one or more intermediaries controls, or
is controlled by, or is under common control with, the Company, (ii) which
beneficially owns or holds 5% or more of any class of the Voting Stock of the
Company or (iii) 5% or more of the Voting Stock (or in the case of a Person
which is not a corporation, 5% or more of the equity interest) of which is
beneficially owned or held by the Company or a Subsidiary. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the
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The Timberland Company Note Agreement
direction of the management and policies of a Person, whether through the
ownership of Voting Stock, by contract or otherwise.
"Capitalized Lease" shall mean any lease the obligation for Rentals with
respect to which is required to be capitalized on a balance sheet of the lessee
in accordance with generally accepted accounting principles.
"Capitalized Rentals" shall mean as of the date of any determination the
amount at which the aggregate Rentals due and to become due under all
Capitalized Leases under which the Company or any Restricted Subsidiary is a
lessee would be reflected as a liability on a consolidated balance sheet of the
Company and its Restricted Subsidiaries.
"Consolidated Current Assets" and "Consolidated Current Liabilities" shall
mean such assets and liabilities of the Company and its Restricted Subsidiaries
on a consolidated basis as shall be determined in accordance with generally
accepted accounting principles to constitute current assets and current
liabilities (including in current liabilities, in any event, Guaranties of
current liabilities of others), respectively.
"Consolidated Net Income" for any period shall mean the gross revenues of
the Company and its Restricted Subsidiaries for such period less all expenses
and other proper charges (including taxes on income), determined on a
consolidated basis in accordance with generally accepted accounting principles
consistently applied and after eliminating earnings or losses attributable to
outstanding Minority Interests, but excluding in any event:
(a) any gains or losses on the sale or other disposition of investments
or fixed or capital assets, to the extent any such gain or loss constitutes
an "extraordinary item" under generally accepted accounting principles, and
any taxes on such excluded gains and any tax deductions or credits on
account of any such excluded losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Restricted Subsidiary accrued prior
to the date it became a Restricted Subsidiary;
(d) net earnings and losses of any corporation (other than a Restricted
Subsidiary), substantially all the assets of which have been acquired in any
manner, realized by such other corporation prior to the date of such
acquisition;
(e) net earnings and losses of any corporation (other than a Restricted
Subsidiary) with which the Company or a Restricted Subsidiary shall have
consolidated or which shall have merged into or with the Company or a
Restricted Subsidiary prior to the date of such consolidation or merger;
(f) net earnings of any business entity (other than a Restricted
Subsidiary) in which the Company or any Restricted Subsidiary has an
ownership interest unless such
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The Timberland Company Note Agreement
net earnings shall have actually been received by the Company or such
Subsidiary in the form of cash distributions;
(g) any portion of the net earnings of any Restricted Subsidiary which
for any reason is unavailable for payment of dividends to the Company or any
other Restricted Subsidiary;
(h) earnings resulting from any reappraisal, revaluation or write-up of
assets;
(i) any deferred or other credit representing any excess of the equity
in any Subsidiary at the date of acquisition thereof over the amount
invested in such Subsidiary;
(j) any gain arising from the acquisition of any Securities of the
Company or any Restricted Subsidiary; and
(k) any reversal of any contingency reserve, except to the extent that
provision for such contingency reserve shall have been made from income
arising during such period.
"Consolidated Net Tangible Assets" shall mean as of the date of any
determination thereof the total amount of all Tangible Assets of the Company
and its Restricted Subsidiaries after deducting all Restricted Investments and
all items which in accordance with generally accepted accounting principles
would be included on the liability side of a consolidated balance sheet, except
deferred income taxes, deferred investment tax credits, capital stock of any
class, surplus, and Funded Debt.
"Consolidated Tangible Net Worth" shall mean, as of the date of any
determination thereof, Consolidated Net Tangible Assets less all outstanding
Funded Debt, deferred income taxes, deferred investment tax credits and
Minority Interests, all determined in accordance with generally accepted
accounting principles consolidating the Company and its Restricted
Subsidiaries.
"Current Debt" as of the date of any determination thereof shall mean (i)
all Indebtedness for money borrowed other than Funded Debt, (ii) all
Indebtedness with respect to documentary letters of credit and bankers'
acceptances, and (iii) Guaranties of Current Debt of others. "Consolidated"
when used as a prefix to any Current Debt shall mean the aggregate amount of
all such Current Debt of the Company and its Restricted Subsidiaries on a
consolidated basis eliminating intercompany items.
"Default" shall mean any event or condition, the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute an
Event of Default as defined in [Section] 6.1.
"Fixed Charges" for any period shall mean on a consolidated basis the sum
of (i) all Rentals (other than Rentals on Capitalized Leases) payable during
such period by the
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The Timberland Company Note Agreement
Company and its Restricted Subsidiaries, and (ii) all Interest Charges during
such period on all Indebtedness (including the interest component of Rentals on
Capitalized Leases) of the Company and its Restricted Subsidiaries.
"Funded Debt" of any Person shall mean (i) all Indebtedness for borrowed
money or which has been incurred in connection with the acquisition of assets
in each case having a final maturity of one or more than one year from the date
of origin thereof (or which is renewable or extendible at the option of the
obligor for a period or periods of one or more than one year from the date of
origin, but excluding revolving lines of credit renewable or extendible at the
option of the obligor for a period or periods of one or more than one year from
the date of origin except to the extent such option shall have been exercised),
including all payments in respect thereof that are required to be made within
one year from the date of any determination of Funded Debt, whether or not
included in Consolidated Current Liabilities, (ii) all Capitalized Rentals, and
(iii) all Guaranties of Funded Debt of others. "Consolidated" when used as a
prefix to any Funded Debt shall mean the aggregate amount of all such Funded
Debt of the Company and its Restricted Subsidiaries on a consolidated basis
eliminating intercompany items.
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing, or in effect guaranteeing,
any Indebtedness, dividend or other obligation of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, all obligations incurred through an agreement, contingent
or otherwise, by such Person: (i) to purchase such Indebtedness or obligation
or any property or assets constituting security therefor, (ii) to advance or
supply funds (x) for the purchase or payment of such Indebtedness or
obligation, (y) to maintain working capital or other balance sheet condition or
otherwise to advance or make available funds for the purchase or payment of
such Indebtedness or obligation, or (iii) to lease property or to purchase
Securities or other property or services primarily for the purpose of assuring
the owner of such Indebtedness or obligation of the ability of the primary
obligor to make payment of the Indebtedness or obligation, or (iv) otherwise to
assure the owner of the Indebtedness or obligation of the primary obligor
against loss in respect thereof. For the purposes of all computations made
under this Agreement, a Guaranty in respect of any Indebtedness for borrowed
money shall be deemed to be Indebtedness equal to the principal amount of such
Indebtedness for borrowed money which has been guaranteed, and a Guaranty in
respect of any other obligation or liability or any dividend shall be deemed to
be Indebtedness equal to the maximum aggregate amount of such obligation,
liability or dividend.
"Indebtedness" of any Person shall mean and include all obligations of
such Person which in accordance with generally accepted accounting principles
shall be classified upon a balance sheet of such Person as liabilities of such
Person, and in any event shall include all (i) obligations of such Person for
borrowed money or which has been incurred in connection with the acquisition of
property or assets, (ii) obligations secured by any Lien upon property or
assets owned by such Person, even though such Person has not assumed or
become liable for the payment of such obligations, (iii) obligations created or
arising under
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The Timberland Company Note Agreement
any conditional sale or other title retention agreement with respect to property
acquired by such Person, notwithstanding the fact that the rights and remedies
of the seller, lender or lessor under such agreement in the event of default are
limited to repossession or sale of property, and (iv) Capitalized Rentals under
any Capitalized Lease. For the purpose of computing the Indebtedness of any
Person, there shall be excluded any particular Indebtedness to the extent that,
upon or prior to the maturity thereof, there shall have been deposited with the
proper depository in trust the necessary funds (or evidences of such
Indebtedness, if permitted by the instrument creating such Indebtedness) for the
payment, redemption or satisfaction of such Indebtedness; and thereafter such
funds and evidences of Indebtedness so deposited shall not be included in any
computation of the assets of such Person.
"Interest Charges" for any period shall mean all interest and all
amortization of debt discount and expense on any particular Indebtedness for
which such calculations are being made. Computations of Interest Charges on a
pro forma basis for Indebtedness having a variable interest rate shall be
calculated at the rate in effect on the date of any determination.
"Lien" shall mean any mortgage, pledge, security interest, lien,
encumbrance or other charge of any kind on any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Make-Whole Amount" as at any date a payment thereof is due (the "payment
date") in connection with a payment or prepayment in respect of the Notes shall
mean the excess of (i) the present value as at the payment date of the
remaining principal and interest payments to become due in respect of that
portion of the principal amount of the Notes to be so paid or prepaid,
discounted semiannually at an annual rate which is equal to the Treasury Rate
plus 0.50% over (ii) the aggregate principal amount of the Notes then to be
paid or prepaid plus accrued interest on such principal amount. To the extent
that the Treasury Rate plus 0.50% at the time of determination of the
Make-Whole Amount is equal to or higher than 7.16%, the Make-Whole Amount is
zero. For purposes of any determination of the Make-Whole Amount:
(a) The applicable "Treasury Rate" means the mean of the yields to
maturity of customarily-issued United States Treasury obligations with a
constant maturity (as compiled by and published in the United States Federal
Reserve Bulletin H.15(519) or its successor publication for each of the two
weeks immediately preceding the payment date) most nearly equal to the
remaining Weighted Average Life to Maturity of the Notes as at the payment
date. If no maturity exactly corresponding to such remaining Weighted
Average Life to Maturity shall appear therein, yields for the two most
closely corresponding published maturities shall be calculated pursuant to
the foregoing sentence and the Treasury Rate shall be interpolated from such
yields on a straight-line basis (rounding to the nearest month). If such
rates shall not have been so published, the Treasury Rate in respect of such
determination date shall be calculated pursuant to the next preceding
sentence on the basis of the arithmetic mean of the arithmetic means of the
secondary market ask rates, as of approximately 3:30 P.M., New York City
time, on the last business days of each of the two weeks
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The Timberland Company Note Agreement
preceding the payment date, for the actively traded U.S. Treasury security
or securities with a maturity or maturities most closely corresponding to
such Weighted Average Life to Maturity, as reported by three primary
United States Government securities dealers in New York City of national
standing selected in good faith by the Company.
(b) "Weighted Average Life to Maturity" with respect to the Notes means,
as at the payment date, the number of years obtained by dividing the then
Remaining Dollar-years of the Notes by the outstanding principal amount of
the Notes. The term "Remaining Dollar-years" of the Notes means the product
obtained by (i) multiplying (A) the amount of each then remaining required
principal repayment (including repayment at final maturity), by (B) the
number of years (calculated to the nearest one-twelfth) which will elapse
between the time of determination and the date such required repayment is
due, and (ii) totaling all the products obtained in the computations
described in clause (i).
"Minority Interests" shall mean any shares of stock of any class of a
Restricted Subsidiary (other than directors' qualifying shares as required by
law, and other than shares of the Class A Stock of The Outdoor Footwear Company
so long as the number of outstanding shares of such Class A Stock do not exceed
50,000 at any time and the certificate of incorporation of The Outdoor Footwear
Company is not amended after the date hereof to increase the rights of the
holders of Class A Stock in the event of a liquidation of The Outdoor Footwear
Company) that are not owned by the Company and/or one or more of its Restricted
Subsidiaries. Minority Interests shall be valued by valuing Minority Interests
constituting preferred stock at the voluntary or involuntary liquidating value
of such preferred stock, whichever is greater, and by valuing Minority Interests
constituting common stock at the book value of capital and surplus applicable
thereto adjusted, if necessary, to reflect any changes from the book value of
such common stock required by the foregoing method of valuing Minority Interests
in preferred stock.
"Net Income Available for Fixed Charges" for any period shall mean the sum
of (i) Consolidated Net Income during such period plus (to the extent deducted
in determining Consolidated Net Income), (ii) all provisions for any Federal,
state or other income taxes made by the Company and its Restricted Subsidiaries
during such period and (iii) Fixed Charges of the Company and its Restricted
Subsidiaries during such period.
"Net Income Available for Interest Charges" for any period shall mean the
sum of (i) Consolidated Net Income during such period plus (to the extent
deducted in determining Consolidated Net Income), (ii) all provisions for any
Federal, state or other income taxes made by the Company and its Restricted
Subsidiaries during such period and (iii) Interest Charges during such period,
determined on a pro forma basis giving effect as of the beginning of such
period (x) to the disposition during such period of assets constituting a
substantial part of the assets of the Company and its Restricted Subsidiaries
taken as a whole, (y) to the acquisition or disposition during such period of
all or substantially all of the stock or assets of an entity or assets
consisting of a line of business of an entity, and (z) to the acquisition,
designation or disposition during such period of a Restricted Subsidiary;
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The Timberland Company Note Agreement
provided, however, that any such determination of the amount to be included in
Consolidated Net Income on a pro forma basis taking into account the earnings
of an entity, the stock or assets of which have been acquired by the Company or
a Restricted Subsidiary, shall include only such amounts as are based on the
actual historical financial results of such entity during such period,
determined in accordance with generally accepted accounting principles.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, and a government or agency or political
subdivision thereof.
"Pro Forma Interest Charges" for any period shall mean, as of the date of
any determination thereof, the maximum aggregate amount of Interest Charges
which would have become payable by the Company and its Restricted Subsidiaries
in such period determined on a pro forma basis giving effect as of the
beginning of such period to the incurrence of any Funded Debt (including
Capitalized Rentals) and the retirement of outstanding Funded Debt or
termination of any Capitalized Leases.
"Rentals" shall mean and include all fixed rents (including as such all
payments which the lessee is obligated to make to the lessor on termination of
the lease or surrender of the property) payable by the Company or a Restricted
Subsidiary, as lessee or sublessee under a lease of real or personal property,
but shall be exclusive of any amounts required to be paid by the Company or a
Restricted Subsidiary (whether or not designated as rents or additional rents)
on account of maintenance, repairs, insurance, taxes and similar charges.
Fixed rents under any so-called, "percentage leases" shall be computed solely
on the basis of the minimum rents, if any, required to be paid by the lessee
regardless of sales volume or gross revenues.
"Restricted Investments" shall mean all investments, loans and advances
existing on or made after the date of this Agreement of the Company and its
Restricted Subsidiaries other than investments, loans or advances permitted by
paragraphs (a) through (i), inclusive, of [Section] 5.17 hereof. The Company
and its Restricted Subsidiaries shall be deemed to have made a Restricted
Investment (i) to the extent of the equity of the Company and its Restricted
Subsidiaries in the net assets of a Restricted Subsidiary which has become an
Unrestricted Subsidiary on the date that the Restricted Subsidiary becomes an
Unrestricted Subsidiary and (ii) to the extent of the value of any non-cash
consideration received by the Company and its Restricted Subsidiaries in
connection with a sale of stock or Indebtedness permitted by [Section]
5.13(c)(3) hereof.
"Restricted Subsidiary" shall mean any Subsidiary which is designated as a
Restricted Subsidiary on Annex A of the Closing Certificate or any other
Subsidiary (i) which is organized under the laws of the United States or any
State thereof, Canada, Cayman Islands, the Dominican Republic, France, Puerto
Rico, the United Kingdom, West Germany, Australia, Austria, Belgium, Denmark,
Finland, Republic of Ireland, Italy, Luxembourg, Netherlands, New Zealand,
Norway, Portugal, Spain, Sweden, Switzerland, and U.S. Virgin Islands; (ii)
which conducts substantially all of its business and has substantially all of
its assets within the United States, Canada, the Dominican Republic, France,
Puerto Rico,
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The Timberland Company Note Agreement
the United Kingdom, West Germany, Australia, Austria, Belgium, Denmark, Finland,
Republic of Ireland, Italy, Luxembourg, Netherlands, New Zealand, Norway,
Portugal, Spain, Sweden, Switzerland, and U.S. Virgin Islands; (iii) of which
more than 75% (by number of votes) of the Voting Stock is owned by the Company
and/or one or more Restricted Subsidiaries; and (iv) which is designated a
Restricted Subsidiary at the time it first becomes a Subsidiary, provided, the
Board of Directors of the Company may designate any Unrestricted Subsidiary as a
Restricted Subsidiary but only if (i) after giving effect to such designation
the Company and its Restricted Subsidiaries could incur $1 of additional
Consolidated Funded Debt and (ii) at the time of such designation and after
giving effect thereto no Default or Event of Default shall have occurred and be
continuing. Any Subsidiary which is designated by the Board of Directors of the
Company as a Restricted Subsidiary after having been an Unrestricted Subsidiary
may not be redesignated an Unrestricted Subsidiary. The Company shall give
prompt notice to the Noteholders of designation of a Restricted Subsidiary.
"Security" shall have the same meaning as in Section 2(1) of the Securities
Act of 1933, as amended.
"Significant Subsidiary" shall mean any Subsidiary which meets any of the
following conditions:
(1) The Company's and its other Subsidiaries' investments in and
advances to the Subsidiary exceed 10 percent of the Consolidated Tangible
Net Worth of the Company and its Subsidiaries as of the end of the most
recently completed fiscal year; or
(2) The Company's and its other Subsidiaries' proportionate share of the
Consolidated Tangible Net Worth of the Subsidiary exceeds 10 percent of the
Consolidated Tangible Net Worth of the Company and its Subsidiaries as of
the end of the most recently completed fiscal year; or
(3) The Company's and its other Subsidiaries' equity in the income from
continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principle of the Subsidiary
exceeds 10 percent of such income of the Company and its Subsidiaries
consolidated for the most recently completed fiscal year.
"Specified Debt" shall mean, without duplication, any Indebtedness of
Restricted Subsidiaries which Indebtedness is permitted by [Section] 5.8(a)(5)
hereof and any Indebtedness of the Company secured by Liens permitted by
[Section] 5.10(j) hereof.
The term "subsidiary" shall mean, as to any particular parent corporation,
any corporation of which more than 50% (by number of votes) of the Voting Stock
shall be owned by such parent corporation and/or one or more corporations which
are themselves subsidiaries of such parent corporation. The term "Subsidiary"
shall mean a subsidiary of the Company.
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The Timberland Company Note Agreement
"Tangible Assets" shall mean as of the date of any determination thereof,
the total amount of all assets of the Company and its Restricted Subsidiaries
(less depreciation, depletion and other properly deductible valuation reserves)
after deducting good will, patents, trade names, trade marks, copyrights,
franchises, experimental expense, organization expense, unamortized debt
discount and expense, deferred assets other than prepaid insurance and prepaid
taxes, the excess of cost of shares acquired over book value of related assets
and such other assets as are properly classified as "intangible assets" in
accordance with generally accepted accounting principles.
"Total Debt" of the Company and its Restricted Subsidiaries as at any date
shall mean the sum of (i) Consolidated Funded Debt of the Company and its
Restricted Subsidiaries as at such date, plus (ii) the Average Outstanding
during the applicable Low Period. For purposes of this definition:
(a) "Average Outstanding" shall mean the average of the unpaid principal
amounts of Consolidated Current Debt of the Company and its Restricted
Subsidiaries outstanding at the close of business on each day within a
period of 30 consecutive days; and
(b) "Low Period" shall mean the period of 30 consecutive days for which
Average Outstanding is the lowest of any period of 30 consecutive days
during the period of 15 consecutive months ending with the date of
determination of Total Debt.
"Total Equity" as at any date shall mean stockholders' equity determined
in accordance with generally accepted accounting principles consolidating the
Company and its Restricted Subsidiaries.
"Unrestricted Subsidiary" shall mean any Subsidiary which is not a
Restricted Subsidiary; provided, that the Board of Directors may designate any
Restricted Subsidiary as an Unrestricted Subsidiary but only if (i) the
Subsidiary so designated shall then own no Funded Debt or capital stock of any
Restricted Subsidiary, (ii) after giving effect to such designation, the
Company and its Restricted Subsidiaries could issue $1 of additional
Consolidated Funded Debt and (iii) at the time of such designation and after
giving effect thereto no Default or Event of Default shall have occurred and be
continuing. Any Subsidiary which is designated by the Board of Directors of
the Company as an Unrestricted Subsidiary after having been a Restricted
Subsidiary may not be redesignated a Restricted Subsidiary. The Company shall
give prompt notice to the Noteholders of any designation of an Unrestricted
Subsidiary.
"Voting Stock" shall mean Securities of any class or classes, the holders
of which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions).
"Wholly-owned" when used in connection with any Subsidiary shall mean a
Subsidiary of which all of the issued and outstanding shares of stock (except
shares required as directors' qualifying shares and, in the case of The Outdoor
Footwear Company, Class A
-31-
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The Timberland Company Note Agreement
Stock so long as such Class A Stock is excluded from the definition of "Minority
Interests") are owned by the Company and its Wholly-owned Subsidiaries.
Section 8.2. Accounting Principles. Where the character or amount of
any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is required to
be made for the purposes of this Agreement, the same shall be done in
accordance with generally accepted accounting principles, to the extent
applicable, except where such principles are inconsistent with the requirements
of this Agreement.
Section 8.3. Directly or Indirectly. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person is
prohibited from taking, such provision shall be applicable whether the action in
question is taken directly or indirectly by such Person.
SECTION 9. MISCELLANEOUS.
Section 9.1. Registered Notes. The Company shall cause to be kept at
its principal office a register for the registration and transfer of the Notes
(hereinafter called the "Note Register"), and the Company will register or
transfer or cause to be registered or transferred, as hereinafter provided and
under such reasonable regulations as it may prescribe, any Note issued pursuant
to this Agreement.
At any time and from time to time the registered holder of any Note which
has been duly registered as hereinabove provided may transfer such Note upon
surrender thereof at the principal office of the Company duly endorsed or
accompanied by a written instrument of transfer duly executed by the registered
holder of such Note or its attorney duly authorized in writing.
The Person in whose name any registered Note shall be registered shall be
deemed and treated as the owner and holder thereof for all purposes of this
Agreement. Payment of or on account of the principal, premium, if any, and
interest on any registered Note shall be made to or upon the written order of
such registered holder.
Section 9.2. Exchange of Notes. At any time, and from time to time,
upon not less than ten days' notice to that effect given by the holder of any
Note initially delivered or of any Note substituted therefor pursuant to
[Section] 9.1, this [Section] 9.2 or [Section] 9.3, and, upon surrender of such
Note at its office, the Company will deliver in exchange therefor, without
expense to the holder, except as set forth below, Notes for the same aggregate
principal amount as the then unpaid principal amount of the Note so surrendered
in the denomination of $100,000 or any amount in excess thereof as such holder
shall specify, dated as of the date to which interest has been paid on the Note
so surrendered or, if such surrender is prior to the payment of any interest
thereon, then dated as of the date of issue, payable to such Person or Persons,
or order, as may be designated by such holder, and otherwise of the same form
and tenor as the Notes so surrendered for exchange. The Company may require
the payment of
-32-
37
The Timberland Company Note Agreement
a sum sufficient to cover any stamp tax or governmental charge imposed upon such
exchange or transfer.
Section 9.3. Loss, Theft, Etc. of Notes. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction of any
Note, and in the case of any such loss, theft or destruction upon delivery of a
bond of indemnity in such form and amount as shall be reasonably satisfactory to
the Company, or in the event of such mutilation upon surrender and cancellation
of the Note, the Company will make and deliver without expense to the holder
thereof, a new Note, of like tenor, in lieu of such lost, stolen, destroyed or
mutilated Note. If the Purchaser or any subsequent institutional holder is the
owner of any such lost, stolen or destroyed Note, then the affidavit of an
authorized officer of such owner, setting forth the fact of loss, theft or
destruction and of its ownership of the Note at the time of such loss, theft or
destruction shall be accepted as satisfactory evidence thereof and no further
indemnity shall be required as a condition to the execution and delivery of a
new Note other than the written agreement of such owner to indemnify the
Company.
Section 9.4. Expenses, Stamp Tax Indemnity. Whether or not the
transactions herein contemplated shall be consummated, the Company agrees to pay
directly all of your reasonable out-of-pocket expenses in connection with the
preparation, execution and delivery of this Agreement and the transactions
contemplated hereby, including but not limited to the reasonable charges and
disbursements of Chapman and Cutler, your special counsel, duplicating and
printing costs and charges for shipping the Notes, adequately insured to you at
your home office or at such other place as you may designate, and all such
expenses relating to any amendment, waivers or consents pursuant to the
provisions hereof. The Company also agrees that it will pay and save you
harmless against any and all liability with respect to stamp and other taxes
(other than transfer taxes or taxes on income or revenues), if any, which may be
payable or which may be determined to be payable in connection with the
execution and delivery of this Agreement or the Notes, whether or not any Notes
are then outstanding. The Company agrees to protect and indemnify you against
any liability for any and all brokerage fees and commissions payable or claimed
to be payable to any Person in connection with the transactions contemplated by
this Agreement. You hereby represent and warrant that you have not engaged any
investment banker or broker in connection with your purchase of the Notes.
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative. No
delay or failure on the part of the holder of any Note in the exercise of any
power or right shall operate as a waiver thereof; nor shall any single or
partial exercise of the same preclude any other or further exercise thereof,
or the exercise of any other power or right, and the rights and remedies of the
holder of any Note are cumulative to and are not exclusive of any rights or
remedies any such holder would otherwise have, and no waiver or consent, given
or extended pursuant to [Section] 7 hereof, shall extend to or affect any
obligation or right not expressly waived or consented to.
Section 9.6. Notices. All communications provided for hereunder shall
be in writing and, if to you, delivered or mailed by registered or certified
mail, addressed to you at your address appearing on Schedule I to this
Agreement or such other address as you or
-33-
38
The Timberland Company Note Agreement
the subsequent holder of any Note initially issued to you, may designate to the
Company in writing, and if to the Company, delivered or mailed by registered or
certified mail to the Company at 11 Merrill Industrial Drive, Hampton, New
Hampshire 03842-5050, Attention: Chief Financial Officer or to such other
address as the Company may in writing designate to you or to a subsequent holder
of the Note initially issued to you. Notice shall be effective upon the earlier
of (i) three business days after such notice is sent or (ii) actual receipt of
such notice.
Section 9.7. Successors and Assigns. This Agreement shall be binding
upon the Company and its successors and assigns and shall inure to your benefit
and to the benefit of your successors and assigns, including each successive
holder or holders of any Notes.
Section 9.8. Survival of Covenants and Representations. All covenants,
representations and warranties made by the Company herein and in any
certificates delivered pursuant hereto, whether or not in connection with the
Closing Date, shall survive the closing and the delivery of this Agreement and
the Notes.
Section 9.9. Severability. Should any part of this Agreement for any
reason be declared invalid, such decision shall not affect the validity of any
remaining portion, which remaining portion shall remain in force and effect as
if this Agreement had been executed with the invalid portion thereof eliminated
and it is hereby declared the intention of the parties hereto that they would
have executed the remaining portion of this Agreement without including therein
any such part, parts, or portion which may, for any reason, be hereafter
declared invalid.
Section 9.10. Governing Law. This Agreement and the Notes issued and
sold hereunder shall be governed by and construed in accordance with Illinois
law.
Section 9.11. Captions. The descriptive headings of the various
Sections or parts of this Agreement are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
-34-
39
The Timberland Company Note Agreement
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
THE TIMBERLAND COMPANY
By /s/ Carden N. Welsh
-----------------------
Its Carden N. Welsh
Treasurer
Accepted as of April 1, 1994.
PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY
By /s/ JON C HEINY
-----------------------
Its Jon C. Heiny
Counsel
By /s/ JON M. DAVIDSON
-----------------------
Its Jon M. Davidson
Assistant Director-
Securities Investment
40
The Timberland Company Note Agreement
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
THE TIMBERLAND COMPANY
By /s/ Carden N. Welsh
-----------------------
Its Carden N. Welsh
Treasurer
Accepted as of April 1, 1994.
GE CAPITAL ASSURANCE COMPANY TRUST
By /s/ William D. Koski
-----------------------
Its William D. Koski
Assistant Vice President
41
7.16% Senior Notes due April 15, 2000
The Timberland Company Note Agreement
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
THE TIMBERLAND COMPANY
By /s/ Carden N. Welsh
-----------------------
Its Carden N. Welsh
Treasurer
Accepted as of April 1, 1994.
SUN LIFE ASSURANCE COMPANY OF CANADA
(U.S.)
By /s/ L. Brock Thomson
-----------------------
Its L. Brock Thomson
Treasurer
42
The Timberland Company Note Agreement
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
THE TIMBERLAND COMPANY
By /s/ Carden N. Welsh
-----------------------
Its Carden N. Welsh
Treasurer
Accepted as of April 1, 1994.
NORTHERN LIFE INSURANCE COMPANY
By /s/ Mark S. Jordahl
-----------------------
Its Mark S. Jordahl
Assistant Treasurer
43
The Timberland Company Note Agreement
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
THE TIMBERLAND COMPANY
By /s/ Carden N. Welsh
-----------------------
Its Carden N. Welsh
Treasurer
Accepted as of April 1, 1994.
NORTHWESTERN NATIONAL LIFE INSURANCE
COMPANY
By /s/ Mark S. Jordahl
-----------------------
Its Mark S. Jordahl
Authorized Representative
44
The Timberland Company Note Agreement
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
THE TIMBERLAND COMPANY
By /s/ Carden N. Welsh
-----------------------
Its Carden N. Welsh
Treasurer
Accepted as of April 1, 1994.
THE NORTH ATLANTIC LIFE INSURANCE
COMPANY OF AMERICA
By /s/ Mark S. Jordahl
-----------------------
Its Mark S. Jordahl
Assistant Treasurer
45
The Timberland Company Note Agreement
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
THE TIMBERLAND COMPANY
By /s/ Carden N. Welsh
-----------------------
Its Carden N. Welsh
Treasurer
Accepted as of April 1, 1994.
THE FRANKLIN LIFE INSURANCE COMPANY
By /s/ Daniel C. Leimbach
-----------------------
Its Daniel C. Leimbach
Vice President
By /s/ Elizabeth E. Arthur
-----------------------
Its Elizabeth E. Arthur
Assistant Secretary
46
The Timberland Company Note Agreement
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
THE TIMBERLAND COMPANY
By /s/ Carden N. Welsh
-----------------------
Its Carden N. Welsh
Treasurer
Accepted as of April 1, 1994.
CENTURY LIFE OF AMERICA
By Century Investment Management Company
By /s/ Donald Heltner
-----------------------
Its Donald Heltner
Vice President
47
The Timberland Company Note Agreement
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
THE TIMBERLAND COMPANY
By /s/ Carden N. Welsh
-----------------------
Its Carden N. Welsh
Treasurer
Accepted as of April 1, 1994.
CUNA MUTUAL INSURANCE SOCIETY
By Century Investment Management Company
By /s/ Donald Heltner
-----------------------
Its Donald Heltner
Vice President
48
The Timberland Company Note Agreement
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
THE TIMBERLAND COMPANY
By /s/ Carden N. Welsh
-----------------------
Its Carden N. Welsh
Treasurer
Accepted as of April 1, 1994.
GUARANTEE MUTUAL LIFE COMPANY
By /s/ Steven A. Scanlan
-----------------------
Its Steven A. Scanlan
Senior Invesment Officer -
Securities
49
The Timberland Company Note Agreement
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
THE TIMBERLAND COMPANY
By /s/ Carden N. Welsh
-----------------------
Its Carden N. Welsh
Treasurer
Accepted as of April 1, 1994.
TMG LIFE INSURANCE COMPANY
By: THE MUTUAL GROUP, its Agent
By /s/ Michael J. Carew
-----------------------
Name: Michael J. Carew
Title: Assistant Vice President
By /s/ Robert Lapointe
-----------------------
Name: Robert Lapointe
Title: Vice President
50
SCHEDULE I
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
PRINCIPAL MUTUAL LIFE INSURANCE COMPANY $20,000,000(1)
711 High Street
Des Moines, Iowa 50392-0800
Attention: Investment Department-Securities Division
Regarding Bond No. 1-B-60072 (with respect to the $18,000,000 Note)
Regarding Bond No. 16-B-60072 (with respect to the $2,000,000 Note)
Telefacsimile: (515) 248-2490
Confirmation: (515) 248-3495
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as "The
Timberland Company, 7.16% Senior Notes due April 15, 2000, PPN 887100 B* 5,
Bond No. 1-B-60072 (with respect to the $18,000,000 Note) and Bond No.
16-B-60072 (with respect to the $2,000,000 Note), principal, premium or
interest") to:
Norwest Bank Iowa, N.A.
7th and Walnut Streets
Des Moines, Iowa 50309
ABA No. 073 000 228
for credit to: Principal Mutual Life Insurance Company
Account No. 014752 (with respect to the $18,000,000 Note)
Separate Account No. 032395 (with respect to the $2,000,000 Note)
Notices
All notices concerning payment on or in respect of the Notes, to:
Principal Mutual Life Insurance Company
711 High Street
Des Moines, Iowa 50392-0960
Attention: Investment Department, Accounting & Treasury
_____________________
(1) In two Notes denominated as follows: (i) $18,000,000 and (ii) $2,000,000.
I-1
51
All notices and communications other than those in respect to payments to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 42-012-7290
I-2
52
SCHEDULE I
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
GE CAPITAL ASSURANCE COMPANY TRUST $10,000,000
c/o GNA Corporation
Two Union Square, Suite 5600
P.O. Box 490
Seattle, Washington 98111-0490
Attention: Dan Greenshields
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as "The
Timberland Company, 7.16% Senior Notes due April 15, 2000, PPN 887100 B* 5,
principal, premium or interest") to:
Bankers Trust Company
16 Wall Street
New York, New York 10015
ABA 021001033
Attn: 99-911-145
Account No. 97834
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: SALKELD & CO
Taxpayer I.D. Number: 16-1202227
I-3
53
SCHEDULE I
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
SUN LIFE ASSURANCE COMPANY OF $10,000,000(2)
CANADA (U.S.)
One Sun Life Executive Park
Wellesley Hills, Massachusetts 02181
Attention: Investment Department/Private Placements, SC [Section] 1303
Telecopier Number: (617) 431-7521
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as "The
Timberland Company, 7.16% Senior Notes due April 15, 2000, PPN 887100 B* 5,
principal, premium or interest") to:
Chemical Bank (ABA [Section]021-000-128)
55 Water Street
New York, New York 10041
for credit to the account of:Sun Life Assurance Company of Canada (U.S.)
Account Number 323-023177 (with respect to the $8,000,000 Note)
Account Number 323-162592 (with respect to the $2,000,000 Note)
Notices
All notices of payment on or in respect of the Notes and written confirmation
of each such payment to:
Sun Life Assurance Company of Canada (U.S.)
Three Sun Life Executive Park
Wellesley Hills, Massachusetts 02181
Attention: Manager, Securities Accounting SC No. 3327
All notices and communications other than those in respect to payments to be
addressed as first provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 04-2461439
___________________________
(2) In two Notes denominated as follows: (i) $8,000,000 and (ii) $2,000,000.
I-4
54
SCHEDULE I
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
NORTHERN LIFE INSURANCE COMPANY $5,500,000
c/o Washington Square Capital
100 Washington Square, Suite 800
Minneapolis, Minnesota 55401-2147
Attention: Securities Department
Telecopier Number: (612) 372-5368
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as "The
Timberland Company, 7.16% Senior Notes due April 15, 2000, PPN 887100 B* 5,
principal, premium or interest") to:
First National Bank N.A./Mpls. (ABA No. 091000022)
601 2nd Avenue South
Attention: Securities Accounting
for credit to: Northern Life Insurance Company
Account Number 1602-3237-6105
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 41-1295933
I-5
55
SCHEDULE I
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
NORTHWESTERN NATIONAL LIFE INSURANCE $2,000,000
COMPANY
c/o Washington Square Capital
100 Washington Square, Suite 800
Minneapolis, Minnesota 55401-2147
Attention: Securities Department
Telecopier Number: (612) 372-5368
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as "The
Timberland Company, 7.16% Senior Notes due April 15, 2000, PPN 887100 B* 5,
principal, premium or interest") to:
First National Bank of Minneapolis (ABA No. 091000022)
601 2nd Avenue South
Minneapolis, Minnesota 55402
for credit to: Northwestern National Life Insurance Company
Account Number 1102-4001-4461
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 41-0451140
I-6
56
SCHEDULE I
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
THE NORTH ATLANTIC LIFE INSURANCE $1,500,000
COMPANY OF AMERICA
c/o Washington Square Capital
100 Washington Square, Suite 800
Minneapolis, Minnesota 55401-2147
Attention: Securities Department
Telecopier Number: (612) 372-5368
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as "The
Timberland Company, 7.16% Senior Notes due April 15, 2000, PPN 887100 B* 5,
principal, premium or interest") to:
Northern Trust Company (ABA No. 071-000-152)
for credit to: The North Atlantic Life Insurance Company
Account Number 5186041000
Notices
All notices and communications to be addresses as first provided above, except
notices of payments on or in respect of the Notes and written confirmation of
each such payment to be addressed Attention: Securities Operations.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 11-1983132
I-7
57
SCHEDULE I
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
THE FRANKLIN LIFE INSURANCE COMPANY $5,000,000
Franklin Square
Springfield, Illinois 62713
Attention: Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as "The
Timberland Company, 7.16% Senior Notes due April 15, 2000, PPN 887100 B* 5,
principal, premium or interest") to:
Morgan Guaranty Trust Company of New York (ABA No. 0210-0023-8)
23 Wall Street
New York, New York 10015
Attention: Money Transfer Department
for credit to: The Franklin Life Insurance Company
Account Number 022-05-988
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 37-0281650
Institution Identification Number 36362
I-8
58
SCHEDULE I
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
CENTURY LIFE OF AMERICA $3,000,000
c/o CUNA Mutual Insurance Group
Securities Management Department
5910 Mineral Point Road
Madison, Wisconsin 53705
Attention: Private Placements
Telecopier Number: (608) 238-2316
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as "The
Timberland Company, 7.16% Senior Notes due April 15, 2000, PPN 887100 B* 5,
principal, premium or interest") to:
USTRUST NYC (ABA No. 021001318)
Account Number 473633
FBO Century Life of America
Income Collections Department
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments and written confirmation of each such payment,
to be addressed as follows:
CUNA Mutual Insurance Group
Cash Management Department
P. O. Box 391
Madison, Wisconsin 53701
Attention: Kris Conway
Name of Nominee in which Notes are to be issued: Atwell & Co.
Taxpayer I.D. Number for Atwell: 13-6065575
I-9
59
SCHEDULE I
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
CUNA MUTUAL INSURANCE SOCIETY $2,000,000
c/o CUNA Mutual Insurance Group
Securities Management Department
5910 Mineral Point Road
Madison, Wisconsin 53705
Attention: Private Placements
Telecopier Number: (608) 238-2316
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as "The
Timberland Company, 7.16% Senior Notes due April 15, 2000, PPN 887100 B* 5,
principal, premium or interest") to:
USTRUST NYC (ABA No. 021001318)
Account Number 473633
FBO CUNA Mutual Insurance Group
Income Collections Department
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments and written confirmation of each such payment,
to be addressed as follows:
CUNA Mutual Insurance Group
Cash Management Department
P. O. Box 391
Madison, Wisconsin 53701
Attention: Kris Conway
Name of Nominee in which Notes are to be issued: Atwell & Co.
Taxpayer I.D. Number for Atwell: 13-6065575
I-10
60
SCHEDULE I
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
GUARANTEE MUTUAL LIFE COMPANY $3,000,000
One Guarantee Centre
8801 Indian Hills Drive
Omaha, Nebraska 68114
Attention: Investment Department
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as "The
Timberland Company, 7.16% Senior Notes due April 15, 2000, PPN 887100 B* 5,
principal, premium or interest") to:
Bankers Trust Company
16 Wall Street
New York, New York 10015
(ABA No. 021 001 033)
for credit to: Guarantee Mutual Life Company
Account Number 50-035-201
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed as first provided
above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 47-017-9235
I-11
61
SCHEDULE I
PRINCIPAL AMOUNT
NAME AND ADDRESS OF NOTES TO BE
OF PURCHASERS PURCHASED
TMG LIFE INSURANCE COMPANY $3,000,000
401 North Executive Drive
Brookfield, Wisconsin 53008-0980
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as "The
Timberland Company, 7.16% Senior Notes due April 15, 2000, PPN 887100 B* 5,
principal, premium or interest") to:
Federal Reserve Bank Minneapolis
Norwest Bank MN/Trust
ABA No. 091000019
Credit Account Number: 08-40-245
For credit to: TMG Life Universal A
Account Number 13075700
Contact: Michael Eiynck
Notices
All notices and communications, including notices with respect to payments and
written confirmation of each such payment, to be addressed to:
Lisa Harris
The Mutual Group (U.S.)
401 North Executive Drive
Brookfield, Wisconsin 53008-0980
Telephone Number: (414) 797-2305
Facsimile Number: (414) 797-3988
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 45-0208990
I-12
62
THE TIMBERLAND COMPANY
7.16% Senior Note
Due April 15, 2000
PPN: 887100 B* 5
No. R-
_____________, 19__
THE TIMBERLAND COMPANY, a Delaware corporation (the "Company"), for value
received, hereby promises to pay to
or registered assigns
on the fifteenth day of April, 2000
the principal amount of
DOLLARS ($_______________)
and to pay interest (computed on the basis of a 360-day year of twelve 30-day
months) on the principal amount from time to time remaining unpaid hereon at
the rate of 7.16% per annum from the date hereof until maturity, payable
semiannually on the fifteenth of each April and October in each year,
commencing October 15, 1994, and at maturity. The Company agrees to pay
interest on overdue principal (including any overdue optional prepayment of
principal) and premium, if any, and (to the extent legally enforceable) on any
overdue installment of interest, at the rate of 9.16% per annum after maturity,
whether by acceleration or otherwise, until paid. Both the principal hereof
and interest hereon are payable at the principal office of the Company in
Hampton, New Hampshire in coin or currency of the United States of America
which at the time of payment shall be legal tender for the payment of public
and private debts.
This Note is one of the 7.16% Senior Notes due April 15, 2000 (the
"Notes") of the Company in the aggregate principal amount of $65,000,000 issued
or to be issued under and pursuant to the terms and provisions of the separate
Note Agreements, each dated as of April 1, 1994 (the "Note Agreements"),
entered into by the Company with the original purchasers therein referred to.
This Note and the holder hereof are entitled equally and ratably with the
holders of all other Notes outstanding under the Note Agreements to all the
benefits and security provided for thereby or referred to therein. Reference
is hereby made to the Note Agreements for a statement of such rights and
benefits.
This Note and the other Notes outstanding under the Note Agreements may be
declared due prior to their expressed maturity dates, all in the events, on the
terms and in the manner and amounts as provided in the Note Agreements.
EXHIBIT A
(to Note Agreement)
63
The Notes are not subject to prepayment or redemption at the option of the
Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the premium, if any, set forth in the
Note Agreements.
This Note is registered on the books of the Company and is transferable
only by surrender thereof at the principal office of the Company duly endorsed
or accompanied by a written instrument of transfer duly executed by the
registered holder of this Note or its attorney duly authorized in writing.
Payment of or on account of principal, premium, if any, and interest on this
Note shall be made only to or upon the order in writing of the registered
holder.
THE TIMBERLAND COMPANY
By
--------------------------
Its
A-2
64
THE TIMBERLAND COMPANY
CLOSING CERTIFICATE
Principal Mutual Life The North Atlantic Life Insurance
Insurance Company Company of America
Des Moines, Iowa c/o Washington Square Capital
Minneapolis, Minnesota
GE Capital Assurance Company Trust
c/o GNA Corporation The Franklin Life Insurance Company
Seattle, Washington Springfield, Illinois
Sun Life Assurance Company of Century Life of America
Canada (U.S.) Madison, Wisconsin
Wellesley Hills, Massachusetts
Cuna Mutual Life Insurance Society
Northern Life Insurance Company Madison, Wisconsin
c/o Washington Square Capital
Minneapolis, Minnesota Guarantee Mutual Life Company
Omaha, Nebraska
Northwestern National Life Insurance
Company TMG Life Insurance Company
c/o Washington Square Capital Brookfield, Wisconsin
Minneapolis, Minnesota
Gentlemen:
This certificate is delivered to you in compliance with the requirements
of the separate Note Agreements, each dated as of April 1, 1994 (the
"Agreements"), entered into by the undersigned, The Timberland Company, a
Delaware corporation (the "Company"), with each of you, and as an inducement to
and as part of the consideration for your purchase on this date aggregating
$65,000,000 principal amount of the 7.16% Senior Notes due April 15, 2000 (the
"Notes") of the Company pursuant to the Agreements. The terms which are
capitalized herein shall have the same meanings as in the Agreements.
The Company represents and warrants to you as follows:
1. Subsidiaries. Annex A attached hereto states the name of
each of the Company's Subsidiaries, its jurisdiction of incorporation and
the percentage of its Voting Stock owned by the Company and/or its
Subsidiaries. The Company and each Subsidiary has good and marketable title
to all of the shares it purports to own of the stock of each Subsidiary,
free and clear in each case of any Lien. All such shares have been duly
issued and are fully paid and non-assessable.
EXHIBIT B
(to Note Agreement)
65
2. Corporate Organization and Authority. The Company, and each
Subsidiary,
(a) is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation;
(b) has all requisite power and authority and all necessary
licenses and permits to own and operate its properties and to carry on
its business as now conducted and as presently proposed to be conducted
except where the failure to have such licenses and permits would not
have a material adverse effect on the properties, business, prospects,
profits or condition (financial or otherwise) of the Company or of the
Company and its Subsidiaries, taken as a whole; and
(c) is duly licensed or qualified and is in good standing as a
foreign corporation in each jurisdiction wherein the nature of the
business transacted by it or the nature of the property owned or leased
by it makes such licensing or qualification necessary, except where the
failure to be so licensed or qualified in a jurisdiction would not have
a material adverse effect on the properties, business, prospects,
profits or condition (financial or otherwise) of the Company or of the
Company and its Subsidiaries, taken as a whole.
3. Business and Property. You have heretofore been furnished with a
copy of the Private Placement Offering Memorandum dated March, 1994 (the
"Memorandum") prepared by J.P. Morgan Securities Inc., which generally sets
forth the business conducted and proposed to be conducted by the Company and
its Subsidiaries and the principal properties of the Company and its
Subsidiaries.
4. Financial Statements. (a) The consolidated balance sheets of the
Company and its Subsidiaries as of December 31 in each of the years 1989 to
1993 both inclusive, and the statements of income and stockholders' equity
and changes in financial position or cash flows for the fiscal years ended
on said dates accompanied by a report thereon containing an opinion
unqualified as to scope limitations imposed by the Company and otherwise
without qualification except as therein noted, by Arthur Andersen & Co. or
Deloitte & Touche, have been prepared in accordance with generally accepted
accounting principles consistently applied except as therein noted, are
correct and complete and present fairly the financial position of the
Company and its Subsidiaries as of such dates and the results of their
operations and changes in their financial position for such periods.
(b) Since December 31, 1993, there has been no change in the condition,
financial or otherwise, of the Company and its Subsidiaries as shown on the
consolidated balance sheet as of such date except changes in the ordinary
course of business, none of which individually or in the aggregate has been
materially adverse.
5. Indebtedness. Annex B attached hereto correctly describes all
Current Debt, Funded Debt and Capitalized Leases of the Company and its
Restricted
B-2
66
Subsidiaries outstanding on the respective dates set forth therein (after
giving effect to the application of the proceeds of the Notes). There has
been no material change in the matters set forth in Annex B since the
respective dates set forth therein.
6. Full Disclosure. The financial statements referred to in paragraph
4 do not, nor does the Memorandum or any other written statement furnished
by the Company to you in connection with the negotiation of the sale of
the Notes, contain any untrue statement of a material fact or omit a
material fact necessary to make the statements contained therein or herein
not misleading. There is no fact peculiar to the Company or its
Subsidiaries which the Company has not disclosed to you in writing which
materially affects adversely nor, so far as the Company can now foresee,
will materially affect adversely the properties, business, prospects,
profits or condition (financial or otherwise) of the Company and its
Subsidiaries other than the effects of general economic conditions, weather
conditions or perceptions of style. The Company has no knowledge of any
weather condition or perception of style which might materially affect
adversely the properties, business, prospects, profits or condition
(financial or otherwise) of the Company or of the Company and its
Subsidiaries, taken as a whole.
7. Pending Litigation. Except as disclosed in Form 10-K of the Company
for the year ended December 31, 1993 and the Memorandum, there are no
proceedings pending or, to the knowledge of the Company threatened, against
or affecting the Company or any Subsidiary in any court or before any
governmental authority or arbitration board or tribunal which involve the
possibility of materially and adversely affecting the properties, business,
profits or condition (financial or otherwise) of the Company and its
Subsidiaries. Neither the Company nor any Subsidiary is in default with
respect to any order of any court or governmental authority or arbitration
board or tribunal.
8. Title to Properties. The Company, and each Subsidiary, has good and
marketable title in fee simple (or its equivalent under applicable law) to
all the real property and has good title to all the other property it
purports to own, including that reflected in the most recent balance sheet
referred to in paragraph 4 except as sold or otherwise disposed of in the
ordinary course of business and except for Liens disclosed in notes to the
financial statements referred to in paragraph 4 hereof or otherwise
permitted by the Agreement and except where the failure to maintain such
title would not have a material adverse effect on the properties, business,
profits or condition (financial or otherwise) of the Company or of the
Company and its Subsidiaries, taken as a whole.
9. Patents and Trademarks. The Company and each Subsidiary owns or
possesses all the patents, trademarks, trade names, service marks,
copyright, licenses and rights with respect to the foregoing necessary for
the present and planned future conduct of its business, without any known
conflict with the rights of others, except where the failure to own or
possess such items would not have a material adverse
B-3
67
effect on the properties, business, profits or condition (financial or
otherwise) of the Company or of the Company and its Subsidiaries, taken as
a whole.
10. Sale is Legal and Authorized. The sale of the Notes and compliance
by the Company with all of the provisions of the Agreement and the Notes -
(a) are within the corporate powers of the Company and have been
duly authorized by proper corporate action on the part of the Company;
and
(b) will not violate any provisions of any law or any order of
any court or governmental authority or agency and will not conflict
with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default under the Articles of
Incorporation or By-laws of the Company or any indenture or other
agreement or instrument to which the Company is a party or by which it
may be bound or result in the imposition of any Liens on any property
of the Company.
11. No Defaults. No Default or Event of Default has occurred and is
continuing. The Company is not in default in the payment of principal or
interest on any Indebtedness for borrowed money in an aggregate principal
amount in excess of $100,000 and is not in default under any instrument or
instruments or agreements under and subject to which any Indebtedness for
borrowed money in an aggregate principal amount in excess of $100,000 has
been issued and no event has occurred and is continuing under the provisions
of any such instrument or agreement which with the lapse of time or the
giving of notice, or both, would constitute an event of default thereunder.
12. Governmental Consent. No approval, consent or withholding of
objection on the part of any regulatory body, state, Federal or local, is
necessary in connection with the execution and delivery by the Company of
the Agreement or the Notes or compliance by the Company with any of the
provisions of the Agreement or the Notes.
13. Taxes. All tax returns required to be filed by the Company or any
Subsidiary in any jurisdiction have, in fact, been filed, and all taxes,
assessments, fees and other governmental charges upon the Company or any
Subsidiary or upon any of their respective properties, income or franchises,
which are shown to be due and payable in such returns have been paid. The
Company does not know of any proposed additional tax assessment against it
for which adequate provision has not been made on its accounts. The Federal
income tax liability of the Company and its Subsidiaries has been finally
determined by the Internal Revenue Service and satisfied for all taxable
years up to and including the taxable year ended December 31, 1985 and no
material controversy in respect of additional income taxes due since said
date is pending or to the knowledge of the Company threatened. The
provisions for taxes on the books of the Company and each Subsidiary are
adequate for all open years, and for its current fiscal period.
B-4
68
14. Use of Proceeds. The net proceeds from the sale of the Notes will
be used to repay certain outstanding Indebtedness, to finance manufacturing
improvements and management information systems and to provide additional
working capital and other corporate purposes. None of the transactions
contemplated in the Agreements (including, without limitation thereof, the
use of proceeds from the issuance of the Notes) will violate or result in a
violation of Section 7 of the Securities Exchange Act of 1934, as amended,
or any regulation issued pursuant thereto, including, without limitation,
Regulations G, T and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R., Chapter II. Neither the Company nor any Subsidiary owns
or intends to carry or purchase any "margin stock" (within the meaning of
said Regulation G), with the proceeds of the Notes. None of the proceeds
from the sale of the Notes will be used to purchase, or refinance any
borrowing, the proceeds of which were used to purchase any "security" within
the meaning of the Securities Exchange Act of 1934, as amended.
15. Private Offering. Neither the Company, directly or indirectly, nor
any agent on its behalf has offered or will offer the Notes or has solicited
or will solicit an offer to acquire the Notes from or has otherwise
approached or negotiated or will approach or negotiate in respect of the
Notes with any Person other than you and not more than 25 other
institutional investors, each of whom was offered a portion of the Notes at
private sale for investment. Neither the Company, directly or indirectly,
nor any agent on its behalf has offered or will offer the Notes or any
similar Security to, or has solicited or will solicit an offer to acquire
the Notes or any similar Security from, any Person so as to bring the
issuance and sale of the Notes within the provisions of Section 5 of the
Securities Act of 1933, as amended.
16. Employee Retirement Income Security Act of 1974. The consummation
of the transactions provided for in the agreement and compliance by the
Company with the provisions thereof and the Notes issued thereunder
will not involve any prohibited transaction within the meaning of the
Employee Retirement Income Security Act of 1974 ("ERISA") or Section 4975
of the Internal Revenue Code. No "employee pension benefit plans", as
defined in ERISA ("Plans"), maintained by the Company or any Person which
is under common control with the Company within the meaning of Section
4001(b) of ERISA, nor any trusts created thereunder, have incurred any
"accumulated funding deficiency" as defined in Section 302 of ERISA nor
does the present value of all benefits vested under all Plans exceed, as of
December 31, 1988, the last annual valuation date, the value of the assets
of the Plans allocable to such vested benefits.
17. Compliance with Environmental Laws. The Company complies with all
applicable Federal, state, or local laws, statutes, rules, regulations or
ordinances relating to public health, safety or the environment, including,
without limitation, relating to releases, discharges, emissions or disposals
to air, water, land or ground water, to the withdrawal or use of ground
water, to the use, handling or disposal of polychlorinated biphenyls
(PCB's), asbestos or urea formaldehyde, to the treatment, storage, disposal
or management of hazardous substances (including, without
B-5
69
limitation, petroleum, its derivatives, by-products or other hydrocarbons),
to exposure to toxic, hazardous or other controlled, prohibited or regulated
substances the failure to comply with which could have a material adverse
effect on the Company, its Subsidiaries, their businesses and properties,
taken as a whole. Except as disclosed in a letter of the Company
addressed to you and dated the date hereof, the Company does not know of any
liability of the Company or any Subsidiary under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
by the Superfund Amendments and Reauthorization Act of 1986 (42 U.S.C.
Section 9601 et seq.).
Dated:
THE TIMBERLAND COMPANY
By
--------------------------------
Its
70
SUBSIDIARIES OF THE COMPANY
1. RESTRICTED SUBSIDIARIES:
PERCENTAGE OF
VOTING STOCK
OWNED BY COMPANY
NAME OF JURISDICTION OF AND EACH OTHER
SUBSIDIARY INCORPORATION SUBSIDIARY
The Timberland World Trading Company Delaware 100%
The Timberland World Trading GmbH Germany 100%
The Outdoor Footwear Company Delaware 100%
The Timberland Finance Company Delaware 100%
Timberland S.A.R.L. France 100%
Timberland
Footwear & Clothing, Inc. Canada 100%
Timberland International, Inc. Delaware 100%
Timberland
(UK) Limited England 99.9%
Timberland Europe, Inc. (formerly
Timberland Precision
Instruments, Inc.) Delaware 100%
The Recreational Footwear Company Cayman Islands 100%
Timberland Manufacturing Company Delaware 100%
Timberland Retail, Inc. Delaware 100%
Timberland
Scandinavia, Inc. Delaware 100%
Component Footwear Dominicana, S.A. Dominican Republic 100%
The Recreational Footwear Dominican Republic 100%
Company (Dominicana), S.A.
Timberland Aviation, Inc. Delaware 100%
The Timberland Company of
Australia Pty, Ltd. Australia 100%
Timberland Direct Sales, Inc. Delaware 100%
Timberland
Espa[Section]a, S.A. Spain 99.98%
Timberland Footwear & Clothing
New Zealand Limited New Zealand 99%
Timberland GmbH Austria 100%
Timberland International Sales
Corporation U.S. Virgin Islands 100%
2. SUBSIDIARIES (OTHER THAN RESTRICTED SUBSIDIARIES):
PERCENTAGE OF VOTING STOCK
NAME OF JURISDICTION OF OWNED BY COMPANY AND
SUBSIDIARY INCORPORATION EACH OTHER SUBSIDIARY
None
ANNEX A
(to Closing Certificate)
71
DESCRIPTION OF DEBT AND LEASES
1. Current Debt of the Company and its Restricted Subsidiaries
outstanding on April 15, 1994 (after giving effect to the application
of proceeds of the Notes) is as follows:
Effective Maturity Original Face Outstanding
Date Date Amount Liability
MONEY MARKET LINES
LIBOR (Bank Hapoalim) 3/21/94 4/20/94 $ 9,000,000 $ 9,000,000
LIBOR (Credito Italiano) 4/14/94 4/15/94 5,000,000 5,000,000
=========== ===========
$14,000,000 $14,000,000
MORGAN GUARANTY REVOLVING CREDIT AGREEMENT
LIBOR 3/17/94 4/18/94 $ 3,000,000 $ 3,000,000
LIBOR 3/23/94 4/22/94 5,000,000 5,000,000
LIBOR 3/24/94 4/25/94 5,000,000 5,000,000
=========== ===========
$13,000,000 $13,000,000
MISCELLANEOUS OTHER LIENS(3)*
Copy Machines, Computers,
Equipment and other Maximum
miscellaneous - - $ 3,000,000 $ -
=========== ===========
____________________________
* Secured by lien
ANNEX B
(to Closing Certificate)
72
2. Funded Debt of the Company and its Restricted Subsidiaries
outstanding on February 25, 1994 is as follows:
Effective Maturity Original Face Outstanding
Date Date Amount Liability
PRIVATE PLACEMENT SENIOR NOTES
Principal Mutual Life Insurance
Company and other insurance companies 12/06/89 12/01/99 $35,000,000 $35,000,000
=========== ===========
CHASE MANHATTAN CREDIT AGREEMENT 11/23/93 5/15/99 $50,000,000 $50,000,000
=========== ===========
CAPITAL EQUIPMENT LEASES(4)*
BayBanks Financing & Leasing Co. Inc. 6/90 6/95 $ 2,096,332 $ 664,194
BayBanks Financing & Leasing Co. Inc. 10/90 11/95 456,507 177,756
BayBanks Financing & Leasing Co. Inc. 12/90 12/95 459,431 195,129
=========== ===========
$ 3,012,270 $ 1,037,079
INDUSTRIAL REVENUE BOND*
Shawmut Bank, N.A., Trustee 12/27/84 12/2014 $ 6,680,000 $ 5,345,000
3. Capitalized Leases of the Company and its Restricted
Subsidiaries outstanding on February 25, 1994 are as follows:
-See Item 2 Above-
______________________________
* Secured by lien
-2-
73
DESCRIPTION OF SPECIAL COUNSEL'S CLOSING OPINION
The closing opinion of Chapman and Cutler, special counsel to the
Purchasers, called for by [Section] 4.1 of the Agreements, shall be dated the
Closing Date and addressed to the Purchasers, shall be satisfactory in form and
substance to the Purchasers and shall be to the effect that:
(1) The Company is a corporation, validly existing and in good standing
under the laws of the State of Delaware and has the corporate power and the
corporate authority to execute and deliver the Agreements and to issue the
Notes.
(2) Each Agreement has been duly authorized by all necessary corporate
action on the part of the Company, has been duly executed and delivered by
the Company and constitutes the legal, valid and binding contract of the
Company enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent conveyance and similar laws affecting creditors'
rights generally, and general principles of equity (regardless of whether
the application of such principles is considered in a proceeding in equity
or at law).
(3) The Notes have been duly authorized by all necessary corporate
action on the part of the Company, and the Notes being delivered on the
date hereof have been duly executed and delivered by the Company and
constitute the legal, valid and binding obligations of the Company
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance and similar laws affecting creditors'
rights generally, and general principles of equity (regardless of whether
the application of such principles is considered in a proceeding in equity
or at law).
(4) The issuance, sale and delivery of the Notes under the circumstances
contemplated by the Agreements do not, under existing law, require the
registration of the Notes under the Securities Act of 1933, as amended, or
the qualification of an indenture under the Trust Indenture Act of 1939, as
amended.
The opinion of Chapman and Cutler shall also state that the opinion of
Ropes & Gray is satisfactory in scope and form to Chapman and Cutler and that,
in their opinion, the Purchasers are justified in relying thereon.
In rendering the opinion set forth in paragraph 1 above, Chapman and
Cutler may rely, as to matters referred to in paragraph 1, solely upon an
examination of the Certificate of Incorporation certified by, and a certificate
of good standing of the Company from, the Secretary of State of the State of
Delaware, the By-laws of the Company and the General Corporation Law of the
State of Delaware. The opinion of Chapman and Cutler is limited to the laws of
the State of Illinois, the General Corporation Law of the State of Delaware and
the Federal laws of the United States.
With respect to matters of fact upon which such opinion is based,
Chapman and Cutler may rely on appropriate certificates of public officials and
officers of the Company and
EXHIBIT C
(to Note Agreement)
74
upon representations of the Company and the Purchasers delivered in
connection with the issuance and sale of the Notes.
C-2
75
ROPES & GRAY
ONE INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02110-2624
30 Kennedy Plaza (617) 951-7000 1001 Pennsylvania Avenue, N.W.
Providence, R.I. 02903 Suite 1200 South
(401) 455-4400 Telecopier: (617) 951-7050 Washington, D.C. 20004
Telecopier: (401) 455-4401 (202) 626-3900
Telecopier: (202) 626-3961
April 15, 1994
To Each of the Purchasers Named in
Schedule I to the Note Agreements
Referred to Below
Ladies and Gentlemen:
This opinion is being furnished to you pursuant to Section 4.1(b) of
the separate but identical (except for the name of the Purchaser and
information related thereto) Note Agreements dated as of April 1, 1994 (the
"Note Agreements"), each between The Timberland Company, a Delaware Corporation
(the "Company"), and the Purchaser named therein relating to the issuance and
sale by the Company of $65,000,000 aggregate principal amount of the Company's
7.16% Senior Notes due April 15, 2000 (the "Notes"). This opinion is being
delivered to you contemporaneously with the execution and delivery of the Note
Agreements and the Closing thereunder. Terms defined in the Note Agreements and
not otherwise defined herein are used herein with the meanings so defined.
We have acted as counsel to the Company in connection with the Note
Agreements and the transactions contemplated thereby and as such are familiar
with the proceedings taken by the Company in connection therewith. Please be
advised, however, that, although we represent the Company on a regular basis,
the scope of our representation does not include, and, except as specified
herein, we have not undertaken, any special factual investigation into the
business, properties, agreements or affairs of the Company and its subsidiaries
for purposes of rendering the opinions expressed in paragraphs 7 and 8 below.
We have anticipated in the preparation of the Note Agreements and have
examined copies, executed by the Company, of the Note Agreements and each of
the Notes delivered to the Purchasers on the date thereof. We have also
examined such certificates, documents and records, and have made such
examination of law, as we have deemed necessary to enable us to render the
opinions expressed below. In addition, we have examined and relied upon
representations and warranties contained in the Note Agreements and in
certificates, copies of which have
EXHIBIT D
(to Note Agreement)
76
ROPES & GRAY
Purchasers Named -2- April 15, 1994
in Schedule I
been furnished to you and upon the covenants contained in the Note Agreements
as to the application of the proceeds of the loans made pursuant thereto.
The opinion expressed in clause (b) of paragraph 7 below assumes,
without investigation, that the transactions contemplated by the Note
Agreements will not result in a violation of financial ratios which are
contained in covenants.
We call your attention to the fact that each of the Note Agreements and
each Note provides that it is to be governed by and construed in accordance
with the internal laws of the State of Illinois, and we understand that you
are relying on the advice of your special counsel, Chapman and Cutler, with
respect to all matters of Illinois law. We are members of the bar of The
Commonwealth of Massachusetts, and we are not familiar with, or qualified to
express legal conclusions based upon, the laws of the State of Illinois. For
purposes of rendering the opinions expressed in paragraphs 5 and 6 below, we
have therefore assumed, with your permission, that the internal laws of the
State of Illinois are in all respects indentical to those of The Commonwealth
of Massachusetts.
The opinions expressed below are limited to matters governed by the
laws of the Commonwealth of Massachusetts, the General Corporation Law of the
State of Delaware and the federal laws of the United States. The opinions
expressed in paragraphs 2 and 4 concerning (i) the qualification and good
standing of the Company as foreign corporation under the laws of Massachusetts
and New Hampshire, (ii) the filing for qualification in Kentucky and (iii) the
qualification and good standing of The Outdoor Footwear Company, a Delaware
corporation ("TOFC"), under the laws of Puerto Rico are based solely upon
certificates or other certification of the Company as a foreign corporation
from officials of these jurisdictions, copies of which have been furnished to
you.
Based on the foregoing, we are of the opinion that:
1. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware with
corporate powers adequate for the execution, delivery and performance of the
Note Agreements and the issuance and sale of the Notes and for carrying on the
business now conducted by it.
2. The Company is duly qualified to do business as a foreign
corporation under the laws of Massachusetts and New Hampshire and has filed to
qualify to do business as a foreign corporation in Kentucky.
77
ROPES & GRAY
Purchasers Named -3- April 15, 1994
in Schedule I
3. TOFC is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware, with all corporate
powers adequate for carrying on the business now conducted by it.
4. TOFC is duly qualified as a foreign corporation in each
jurisdiction in which it owns or leases real property.
5. The Note Agreements have been duly authorized, executed and
delivered by the Company and (subject to the qualifications stated in the
penultimate paragraph hereof) are the legal, valid and binding obligations of
the Company, enforceable against the Company in accordance with their terms.
6. The issuance and sale of the Notes being delivered to the
Purchasers today and each of the Notes have been duly authorized, executed and
delivered by the Company and (subject to the qualifications stated in the
penultimate paragraph hereof) are the legal, valid and binding obligations of
the Company enforceable against the Company in accordance with their terms.
7. The exceution and delivery of the Note Agreements and the
issuance and sale of the Notes do not, and the performance by the Company of
the terms thereof will not, result in any violation of, be in conflict with,
constitute a default under, or result in the creation of a lien under, any term
or provision of: (a) its charter or bylaws or (b) any agreement, indenture or
other instrument identified in the Officer's Certificate attached hereto.
8. No approval, consent or withholding of objection on the part
of, or filing, registration or qualification with any Massachusetts or federal
government authority is required to be obtained or made by the Company in
connection with the execution and delivery by the Company of the Note
Agreements or the Notes, except for disclosure filings under the Securities Act
of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and
other laws, rules and regulations which do not affect the enforceability of the
Note Agreements or the Notes against the Company.
9. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Agreements constitute exempt
transactions under the registration provisions of the Securities Act of 1993,
as amended, and do not under existing law require the registration of the
Notes under said Act or the qualification of an indenture in respect thereof
under the Trust Indenture Act of 1939, as amended. We express no opinion
78
ROPES & GRAY
Purchasers Named -4- April 15, 1994
in Schedule I
regarding the applicability of such requirements to a resale by you of the
Notes.
Our opinions that the Note Agreements and the Notes are the legal,
valid and binding obligations of the Company, enforceable against the Company
in accordance with their terms are subject to (i) bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting the
rights and remedies of creditors and (ii) general principles of equity
regardless of whether applied in proceedings in equity or at law.
Very truly yours,
/s/ Ropes & Gray
Ropes & Gray
79
THE TIMBERLAND COMPANY
Officer's Certificate
---------------------
The undersigned, in his capacity as Chief Financial Officer of The
Timberland Company, a Delaware corporation (the "Company"), hereby certifies as
follows:
1. The Company owns or leases its headquarters and warehouses located
in New Hampshire and warehouses located in Kentucky and Massachusetts. The
Company does not own or lease any other real property in the States of the
United States of America, except for store and showroom locations in the
following States which represent less than 10% of the total assets and total
revenues annually of the Company:
California
District of Columbia
Georgia
Illinois
Maine
Massachusetts
New Hampshire
New York
Pennsylvania
Rhode Island
Tennessee
Texas
Vermont
2. The Outdoor Footwear Company leases real property only in the
Commonwealth of Puerto Rico.
3. The Recreational Footwear Compan (Dominicana), S.A. and Component
Footwear Dominicana, S.A. owns or leases real property only in the Dominican
Republic.
4. Timberland Manufacturing Company, Inc. owns or leases real property
only in North Carolina and Tennessee.
5. Each subsidiary of the Company, other than The Outdoor Footwear
Company, represents less than 10% of the Total assets and total revenues
annuallly of the Company.
6. The following is a list of all agreements, indentures or other
instruments to which the Company or its subsidiaries are a party or are
otherwise bound which prohibit or restrict the Company from incurring debt for
money borrowed:
80
(i) Credit Agreement, dated as of May 13, 1993, among the
Timberland Company, Morgan Guaranty Trust Company of New York,
as Administrative Agent, and the Lenders as defined therein, as
amended.
(ii) Credit Agreement, dated as of November 15, 1993, among Chase
Manhattan Bank, for itself and as Agent, and Lenders as defined
therein, as amended.
(iii) Amended and Restated Letter of Credit and Reimbursement
Agreement, dated as of March 23, 1988, between The Timberland
Company and The First National Bank of Boston, as amended.
(iv) Note Agreements, dated as of September 30, 1989, among The
Timberland Company and Principal Mutual Life Insurance Company,
Northwestern National Life Insurance Company, Northern Life
Insurance Company, Beneficial Standard Life Insurance, Farm
Bureau Life Insurance Company, FB Annuity Company, Farm Bureau
Mutual Insurance Company of Michigan, Sun Life Assurance
Company of Canada, Sun Life Insurance and Annuity Company of
New York and Guarantee Mutual Life Company, as amended.
Correct and complete copies of each of the above have been previously
furnished to Ropes and Gray.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and the
seal of the Company.
/s/ Keith D. Monda
---------------------------
Keith D. Monda
Senior Vice President and
Chief Financial Officer
Dated: April 15, 1994
81
The Timberland Company Note Agreement
The execution hereof by you shall constitute a contract between us for
the uses and purposes hereinabove set forth, and this Agreement may be executed
in any number of counterparts, each executed counterpart constituting an
original but all together only one agreement.
THE TIMBERLAND COMPANY
By /s/ Carden N. Welsh
-------------------
Its Carden N. Welsh
Treasurer
Accepted as of April 1, 1994.
PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY
By /s/ JON C. HEINY
-------------------
Its Jon C. Heiny
Counsel
By /s/ JON M. DAVIDSON
-------------------
Its Jon M. Davidson
Assistant Director-
Securities Investment
82
The Timberland Company Note Agreement
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
THE TIMBERLAND COMPANY
By /s/ Carden N. Welsh
-----------------------
Its Carden N. Welsh
Treasurer
Accepted as of April 1, 1994.
GE CAPITAL ASSURANCE COMPANY TRUST
By /s/ William D. Koski
-----------------------
Its William D. Koski
Assistant Vice President
83
The Timberland Company Note Agreement
7.16% Senior Notes due April 15, 2000
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
THE TIMBERLAND COMPANY
By /s/ Carden N. Welsh
-----------------------
Its Carden N. Welsh
Treasurer
Accepted as of April 1, 1994.
SUN LIFE ASSURANCE COMPANY OF CANADA
(U.S.)
By /s/ L. Brock Thomson
-----------------------
Its L. Brock Thomson
Treasurer
84
The Timberland Company Note Agreement
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
THE TIMBERLAND COMPANY
By /s/ Carden N. Welsh
-----------------------
Its Carden N. Welsh
Treasurer
Accepted as of April 1, 1994.
NORTHERN LIFE INSURANCE COMPANY
By /s/ Mark S. Jordahl
-----------------------
Its Mark S. Jordahl
Assistant Treasurer
85
The Timberland Company Note Agreement
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
THE TIMBERLAND COMPANY
By /s/ Carden N. Welsh
-----------------------
Its Carden N. Welsh
Treasurer
Accepted as of April 1, 1994.
NORTHWESTERN NATIONAL LIFE INSURANCE
COMPANY
By /s/ Mark S. Jordahl
-----------------------
Its Mark S. Jordahl
Authorized Representative
86
The Timberland Company Note Agreement
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
THE TIMBERLAND COMPANY
By /s/ Carden N. Welsh
-----------------------
Its Carden N. Welsh
Treasurer
Accepted as of April 1, 1994.
THE NORTH ATLANTIC LIFE INSURANCE
COMPANY OF AMERICA
By /s/ Mark S. Jordahl
-----------------------
Its Mark S. Jordahl
Assistant Treasurer
87
The Timberland Company Note Agreement
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
THE TIMBERLAND COMPANY
By /s/ Carden N. Welsh
-----------------------
Its Carden N. Welsh
Treasurer
Accepted as of April 1, 1994.
THE FRANKLIN LIFE INSURANCE COMPANY
By /s/ Daniel C. Leimbach
-----------------------
Its Daniel C. Leimbach
Vice President
By /s/ Elizabeth E. Arthur
-----------------------
Its Elizabeth E. Arthur
Assistant Secretary
88
The Timberland Company Note Agreement
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
THE TIMBERLAND COMPANY
By /s/ Carden N. Welsh
-----------------------
Its Carden N. Welsh
Treasurer
Accepted as of April 1, 1994.
CENTURY LIFE OF AMERICA
By Century Investment Management Company
By /s/ Donald Heltner
-----------------------
Its Donald Heltner
Vice President
89
The Timberland Company Note Agreement
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
THE TIMBERLAND COMPANY
By /s/ Carden N. Welsh
-----------------------
Its Carden N. Welsh
Treasurer
Accepted as of April 1, 1994.
CUNA MUTUAL INSURANCE SOCIETY
By Century Investment Management Company
By /s/ Donald Heltner
-----------------------
Its Donald Heltner
Vice President
90
The Timberland Company Note Agreement
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
THE TIMBERLAND COMPANY
By /s/ Carden N. Welsh
-----------------------
Its Carden N. Welsh
Treasurer
Accepted as of April 1, 1994.
GUARANTEE MUTUAL LIFE COMPANY
By /s/ Steven A. Scanlan
-----------------------
Its Steven A. Scanlan
Senior Invesment Officer -
Securities
91
The Timberland Company Note Agreement
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed in
any number of counterparts, each executed counterpart constituting an original
but all together only one agreement.
THE TIMBERLAND COMPANY
By /s/ Carden N. Welsh
-----------------------
Its Carden N. Welsh
Treasurer
Accepted as of April 1, 1994.
TMG LIFE INSURANCE COMPANY
By: THE MUTUAL GROUP, its Agent
By /s/ Michael J. Carew
-----------------------
Name: Michael J. Carew
Title: Assistant Vice President
By /s/ Robert Lapointe
-----------------------
Name: Robert Lapointe
Title: Vice President