CONFORMED COPY
Exhibit 10.47
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SCHAWK, INC.
$15,000,000 4.90% Series 2003-A Senior Notes, Tranche A,
due December 31, 2013
$10,000,000 4.98% Series 2003-A Senior Notes, Tranche B,
due April 30, 2014
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NOTE PURCHASE AGREEMENT
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DATED AS OF DECEMBER 23, 2003
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TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. AUTHORIZATION OF NOTES................................................................ 1
SECTION 2. SALE AND PURCHASE OF NOTES............................................................ 1
Section 2.1. Series 2003-A Notes................................................................... 1
Section 2.2. Additional Series of Notes............................................................ 2
Section 2.3. Subsidiary Guaranty................................................................... 3
SECTION 3. CLOSING............................................................................... 3
SECTION 4. CONDITIONS TO CLOSING................................................................. 4
Section 4.1. Representations and Warranties........................................................ 4
Section 4.2. Performance; No Default............................................................... 4
Section 4.3. Compliance Certificates............................................................... 4
Section 4.4. Opinions of Counsel................................................................... 5
Section 4.5. Purchase Permitted by Applicable Law, Etc............................................. 5
Section 4.6. Related Transactions.................................................................. 5
Section 4.7. Payment of Special Counsel Fees....................................................... 5
Section 4.8. Private Placement Number.............................................................. 5
Section 4.9. Changes in Corporate Structure........................................................ 5
Section 4.10. Subsidiary Guaranty................................................................... 6
Section 4.11. Proceedings and Documents............................................................. 6
Section 4.12. Conditions to Issuance of Additional Notes............................................ 6
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................................... 7
Section 5.1. Organization; Power and Authority..................................................... 7
Section 5.2. Authorization, Etc.................................................................... 7
Section 5.3. Disclosure............................................................................ 7
Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates...................... 7
Section 5.5. Financial Statements.................................................................. 8
Section 5.6. Compliance with Laws, Other Instruments, Etc.......................................... 8
Section 5.7. Governmental Authorizations, Etc...................................................... 9
Section 5.8. Litigation; Observance of Statutes and Orders......................................... 9
Section 5.9. Taxes................................................................................. 9
Section 5.10. Title to Property; Leases............................................................. 9
Section 5.11. Licenses, Permits, Etc................................................................ 10
Section 5.12. Compliance with ERISA................................................................. 10
Section 5.13. Private Offering by the Company....................................................... 11
Section 5.14. Use of Proceeds; Margin Regulations................................................... 11
Section 5.15. Existing Debt; Future Liens........................................................... 11
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Section 5.16. Foreign Assets Control Regulations, Etc............................................... 12
Section 5.17. Status under Certain Statutes......................................................... 12
Section 5.18. Environmental Matters................................................................. 12
Section 5.19. Notes Rank Pari Passu................................................................. 12
SECTION 6. REPRESENTATIONS OF THE PURCHASER...................................................... 13
Section 6.1. Purchase for Investment............................................................... 13
Section 6.2. Source of Funds....................................................................... 13
SECTION 7. INFORMATION AS TO COMPANY............................................................. 13
Section 7.1. Financial and Business Information.................................................... 14
Section 7.2. Officer's Certificate................................................................. 14
Section 7.3. Inspection............................................................................ 18
SECTION 8. PAYMENT OF THE NOTES.................................................................. 18
Section 8.1. Required Prepayments.................................................................. 18
Section 8.2. Optional Prepayments with Make-Whole Amount........................................... 19
Section 8.3. Allocation of Partial Prepayments..................................................... 19
Section 8.4. Maturity; Surrender, Etc.............................................................. 19
Section 8.5. Purchase of Notes..................................................................... 19
Section 8.6. Make-Whole Amount for the Series 2003-A Notes......................................... 20
SECTION 9. AFFIRMATIVE COVENANTS................................................................. 21
Section 9.1. Compliance with Law................................................................... 21
Section 9.2. Insurance............................................................................. 21
Section 9.3. Maintenance of Properties............................................................. 21
Section 9.4. Payment of Taxes and Claims........................................................... 22
Section 9.5. Corporate Existence, Etc.............................................................. 22
Section 9.6. Additional Subsidiary Guarantors...................................................... 22
SECTION 10. NEGATIVE COVENANTS.................................................................... 23
Section 10.1. Consolidated Net Worth................................................................ 23
Section 10.2. Limitations on Debt................................................................... 23
Section 10.3. Limitation on Liens................................................................... 24
Section 10.4. Sales of Asset........................................................................ 25
Section 10.5. Merger and Consolidation.............................................................. 26
Section 10.6. Nature of Business.................................................................... 27
Section 10.7. Transactions with Affiliates.......................................................... 27
SECTION 11. EVENTS OF DEFAULT..................................................................... 27
SECTION 12. REMEDIES ON DEFAULT, ETC.............................................................. 30
Section 12.1. Acceleration.......................................................................... 30
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Section 12.2. Other Remedies........................................................................ 30
Section 12.3. Rescission............................................................................ 31
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc..................................... 31
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES......................................... 31
Section 13.1. Registration of Notes................................................................. 31
Section 13.2. Transfer and Exchange of Notes........................................................ 31
Section 13.3. Replacement of Notes.................................................................. 32
SECTION 14. PAYMENTS ON NOTES..................................................................... 33
Section 14.1. Place of Payment...................................................................... 33
Section 14.2. Home Office Payment................................................................... 33
SECTION 15. EXPENSES, ETC......................................................................... 33
Section 15.1. Transaction Expenses.................................................................. 33
Section 15.2. Survival.............................................................................. 34
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.......................... 34
SECTION 17. AMENDMENT AND WAIVER.................................................................. 34
Section 17.1. Requirements.......................................................................... 34
Section 17.2. Solicitation of Holders of Notes...................................................... 35
Section 17.3. Binding Effect, Etc................................................................... 35
Section 17.4. Notes Held by Company, Etc............................................................ 35
SECTION 18. NOTICES............................................................................... 36
SECTION 19. REPRODUCTION OF DOCUMENTS............................................................. 36
SECTION 20. CONFIDENTIAL INFORMATION.............................................................. 37
SECTION 21. SUBSTITUTION OF PURCHASER............................................................. 38
SECTION 22. MISCELLANEOUS......................................................................... 38
Section 22.1. Successors and Assigns................................................................ 38
Section 22.2. Payments Due on Non-Business Days..................................................... 38
Section 22.3. Severability.......................................................................... 38
Section 22.4. Construction.......................................................................... 39
Section 22.5. Counterparts.......................................................................... 39
Section 22.6. Governing Law......................................................................... 39
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SCHEDULE A -- INFORMATION RELATING TO PURCHASERS
SCHEDULE B -- DEFINED TERMS
SCHEDULE 4.9 -- Changes in Corporate Structure
SCHEDULE 5.4 -- Subsidiaries of the Company, Ownership of Subsidiary Stock, Affiliates
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.11 -- Licenses, Permits, Etc.
SCHEDULE 5.15 -- Existing Debt
SCHEDULE 10.3 -- Existing Liens
EXHIBIT 1 -- Form of 4.90% Series 2003-A Senior Notes, Tranche A, due December 31, 2013
EXHIBIT 2 -- Form of 4.98% Series 2003-A Senior Notes, Tranche B, due April 30, 2014
EXHIBIT 2.2 -- Form of Subsidiary Guaranty
EXHIBIT 4.4(a) -- Form of Opinion of Special Counsel to the Company
EXHIBIT 4.4(b) -- Form of Opinion of Special Counsel to the Purchasers
EXHIBIT S -- Form of Supplement to Note Purchase Agreement
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SCHAWK, INC.
1695 RIVER ROAD
DES PLAINES, ILLINOIS 60018
$15,000,000 4.90% SERIES 2003-A SENIOR NOTES, TRANCHE A,
DUE DECEMBER 31, 2013
$10,000,000 4.98% SERIES 2003-A SENIOR NOTES, TRANCHE B,
DUE APRIL 30, 2014
Dated as of
December 23, 2003
TO THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
SCHAWK, INC., a Delaware corporation (the "Company"), agrees with the
Purchasers listed in the attached Schedule A (the "Purchasers") to this Note
Purchase Agreement (this "Agreement") as follows:
SECTION 1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of (i) $15,000,000 4.90%
Series 2003-A Senior Notes, Tranche A, due December 31, 2013 (the "Tranche A
Notes") and (ii) $10,000,000 4.98% Series 2003-A Senior Notes, Tranche B, due
April 30, 2014 (the "Tranche B Notes," and together with the Tranche A Notes,
the "Series 2003-A Notes"). The Series 2003-A Notes together with each Series of
Additional Notes which may from time to time be issued pursuant to the
provisions of Section 2.2 are collectively referred to as the "Notes" (such term
shall also include any such notes issued in substitution therefor pursuant to
Section 13 of this Agreement). The Tranche A Notes and the Tranche B Notes shall
be substantially in the form set out in Exhibit 1(a) and Exhibit 1(b),
respectively, with such changes therefrom, if any, as may be approved by the
Purchasers and the Company. Certain capitalized terms used in this Agreement are
defined in Schedule B; references to a "Schedule" or an "Exhibit" are, unless
otherwise specified, to a Schedule or an Exhibit attached to this Agreement.
SECTION 2. SALE AND PURCHASE OF NOTES.
Section 2.1. Series 2003-A Notes. Subject to the terms and conditions of
this Agreement, the Company will issue and sell to each Purchaser and each
Purchaser will purchase from the Company, at the respective Closings provided
for in Section 3, the Series 2003-A Notes in the principal amount specified
opposite such Purchaser's name in Schedule A at the purchase price of 100% of
the principal amount thereof. The obligations of each Purchaser hereunder are
several and not joint obligations and each Purchaser shall have no obligation
and no liability to any Person for the performance or nonperformance by any
other Purchaser hereunder.
Section 2.2. Additional Series of Notes. The Company may, from time to
time, in its sole discretion but subject to the terms hereof, issue and sell one
or more additional Series of its unsecured promissory notes under the provisions
of this Agreement pursuant to a supplement (a "Supplement") substantially in the
form of Exhibit S, provided that the aggregate principal amount of Notes of all
Series issued pursuant to all Supplements in accordance with the terms of this
Section 2.12 shall not exceed $150,000,000. Each additional Series of Notes (the
"Additional Notes") issued pursuant to a Supplement shall be subject to the
following terms and conditions:
(i) each Series of Additional Notes, when so issued,
shall be differentiated from all previous Series by sequential
alphabetical designation inscribed thereon;
(ii) Additional Notes of the same Series may consist of
more than one different and separate tranches and may differ with
respect to outstanding principal amounts, maturity dates, interest
rates and premiums, if any, and price and terms of redemption or
payment prior to maturity, but all such different and separate tranches
of the same Series shall vote as a single class and constitute one
Series;
(iii) each Series of Additional Notes shall be dated the
date of issue, bear interest at such rate or rates, mature on such date
or dates, be subject to such mandatory and optional prepayment on the
dates and at the premiums, if any, have such additional or different
conditions precedent to closing, such representations and warranties
and such additional covenants as shall be specified in the Supplement
under which such Additional Notes are issued and upon execution of any
such Supplement, this Agreement shall be amended (a) to reflect such
additional covenants without further action on the part of the holders
of the Notes outstanding under this Agreement, provided, that any such
additional covenants shall inure to the benefit of all holders of Notes
so long as any Additional Notes issued pursuant to such Supplement
remain outstanding, and (b) to reflect such representations and
warranties as are contained in such Supplement for the benefit of the
holders of such Additional Notes in accordance with the provisions of
Section 16;
(iv) each Series of Additional Notes issued under this
Agreement shall be in substantially the form of Exhibit 1 to Exhibit S
hereto with such variations, omissions and insertions as are necessary
or permitted hereunder;
(v) the minimum principal amount of any Note issued under
a Supplement shall be $100,000, except as may be necessary to evidence
the outstanding amount of any Note originally issued in a denomination
of $100,000 or more;
(vi) all Additional Notes shall constitute Senior Debt of
the Company and shall rank pari passu with all other outstanding Notes;
and
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(vii) no Additional Notes shall be issued hereunder if at
the time of issuance thereof and after giving effect to the application
of the proceeds thereof, any Default or Event of Default shall have
occurred and be continuing.
Section 2.3. Subsidiary Guaranty. (a) The payment by the Company of all
amounts due with respect to the Notes and the performance by the Company of its
obligations under this Agreement will be absolutely and unconditionally
guaranteed by the Subsidiary Guarantors pursuant to the Subsidiary Guaranty
Agreement dated as of even date herewith, which shall be substantially in the
form of Exhibit 2.3 attached hereto, and otherwise in accordance with the
provisions of Section 9.6 hereof (the "Subsidiary Guaranty").
(b) The holders of the Notes agree to discharge and release any
Subsidiary Guarantor from the Subsidiary Guaranty upon the written request of
the Company, provided that (i) such Subsidiary Guarantor has been released and
discharged (or will be released and discharged concurrently with the release of
such Subsidiary Guarantor under the Subsidiary Guaranty) as an obligor and
guarantor under and in respect of the Bank Credit Agreement and the Company so
certifies to the holders of the Notes in a certificate of a Responsible Officer,
(ii) at the time of such release and discharge, the Company shall deliver a
certificate of a Responsible Officer to the holders of the Notes stating that no
Default or Event of Default exists, and (iii) if any fee or other form of
consideration is given to any holder of Debt of the Company in connection with
such release, the holders of the Notes shall receive the same consideration (a
"Collateral Release").
SECTION 3. CLOSING.
The sale and purchase of the Tranche A Notes to be purchased by each
Purchaser shall occur at the offices of Chapman and Cutler LLP, 111 West Monroe
Street, Chicago, Illinois 60603 at 10:00 a.m. Chicago time, at a closing (the
"Tranche A Closing") on December 23, 2003 or on such other Business Day
thereafter on or prior to December 31, 2003 as may be agreed upon by the Company
and the Purchasers. The sale and purchase of the Tranche B Notes to be purchased
by each Purchaser shall occur at the offices of Chapman and Cutler LLP, 111 West
Monroe Street, Chicago, Illinois 60603 at 10:00 a.m. Chicago time, at a closing
(the "Tranche B Closing" and together with the Tranche A Closing, the "Closing
Dates") on April 30, 2003 or on such other Business Day thereafter as may be
agreed upon by the Company and the Purchasers. On each Closing Date, the Company
will deliver to each Purchaser the Series 2003-A Notes to be purchased by such
Purchaser in the form of a single Series 2003-A Note (or such greater number of
Series 2003-A Notes in denominations of at least $100,000 as such Purchaser may
request) dated the date of such Closing Date and registered in such Purchaser's
name (or in the name of such Purchaser's nominee), against delivery by such
Purchaser to the Company or its order of immediately available funds in the
amount of the purchase price therefor by wire transfer of immediately available
funds for the account of the Company to Account Number 50-86736, at Bank One,
Chicago, Illinois, ABA Number 071000013, in the Account Name of "Schawk, Inc."
If, on any Closing Date, the Company shall fail to tender such Series 2003-A
Notes to any Purchaser as provided above in this Section 3, or any of the
conditions specified in Section 4 shall not have been fulfilled to any
Purchaser's satisfaction, such Purchaser shall, at such
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Purchaser's election, be relieved of all further obligations under this
Agreement, without thereby waiving any rights such Purchaser may have by reason
of such failure or such nonfulfillment.
SECTION 4. CONDITIONS TO CLOSING.
The obligation of each Purchaser to purchase and pay for the Series
2003-A Notes to be sold to such Purchaser at each Closing Date is subject to the
fulfillment to such Purchaser's satisfaction, prior to or on such Closing Date,
of the following conditions applicable to such Closing Date:
Section 4.1. Representations and Warranties.
(a) Representations and Warranties of the Company. The
representations and warranties of the Company in this Agreement shall be correct
when made and at the time of each Closing Date.
(b) Representations and Warranties of the Subsidiary Guarantors.
The representations and warranties of the Subsidiary Guarantors in the
Subsidiary Guaranty shall be correct when made and at the time of each Closing
Date.
Section 4.2. Performance; No Default. The Company and each Subsidiary
Guarantor shall have performed and complied with all agreements and conditions
contained in this Agreement and the Subsidiary Guaranty required to be performed
or complied with by the Company and each such Subsidiary Guarantor prior to or
on such Closing Date, and after giving effect to the issue and sale of the
Series 2003-A Notes (and the application of the proceeds thereof as contemplated
by Section 5.14), no Default or Event of Default shall have occurred and be
continuing. Neither the Company nor any Subsidiary shall have entered into any
transaction since the date of the Memorandum that would have been prohibited by
Section 10 hereof had such Sections applied since such date.
Section 4.3. Compliance Certificates.
(a) Officer's Certificate of the Company. The Company shall have
delivered to such Purchaser an Officer's Certificate, dated such Closing Date,
certifying that the conditions specified in Sections 4.1(a), 4.2 and 4.9 have
been fulfilled.
(b) Secretary's Certificate of the Company. The Company shall have
delivered to such Purchaser a certificate, dated such Closing Date, certifying
as to the resolutions attached thereto and other corporate proceedings relating
to the authorization, execution and delivery of the Series 2003-A Notes and this
Agreement.
(c) Officer's Certificate of the Subsidiary Guarantors. Each
Subsidiary Guarantor shall have delivered to such Purchaser an Officer's
Certificate, dated such Closing Date, certifying that the conditions specified
in Sections 4.1(b), 4.2 and 4.9 have been fulfilled.
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(d) Secretary's Certificate of the Subsidiary Guarantors. Each
Subsidiary Guarantor shall have delivered to such Purchaser a certificate, dated
such Closing Date, certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of
the Subsidiary Guaranty.
Section 4.4. Opinions of Counsel. Such Purchaser shall have received
opinions in form and substance satisfactory to such Purchaser, dated such
Closing Date (a) from Vedder, Price, Kaufman & Kammholz, special counsel for the
Company, covering the matters set forth in Exhibit 4.4(a) and covering such
other matters incident to the transactions contemplated hereby as such Purchaser
or such Purchaser's counsel may reasonably request (and the Company hereby
instructs its counsel to deliver such opinion to such Purchaser) and (b) from
Chapman and Cutler LLP, the Purchasers' special counsel in connection with such
transactions, substantially in the form set forth in Exhibit 4.4(b) and covering
such other matters incident to such transactions as such Purchaser may
reasonably request.
Section 4.5. Purchase Permitted by Applicable Law, Etc. On such Closing
each purchase of Series 2003-A Notes shall (a) be permitted by the laws and
regulations of each jurisdiction to which each Purchaser is subject, without
recourse to provisions (such as Section 1405(a)(8) of the New York Insurance
Law) permitting limited investments by insurance companies without restriction
as to the character of the particular investment, (b) not violate any applicable
law or regulation (including, without limitation, Regulation T, U or X of the
Board of Governors of the Federal Reserve System) and (c) not subject any
Purchaser to any tax, penalty or liability under or pursuant to any applicable
law or regulation, which law or regulation was not in effect on the date hereof.
If requested by any Purchaser, such Purchaser shall have received an Officer's
Certificate certifying as to such matters of fact as such Purchaser may
reasonably specify to enable such Purchaser to determine whether such purchase
is so permitted.
Section 4.6. Related Transactions. The Company shall have consummated the
sale of the entire principal amount of the Series 2003-A Notes scheduled to be
sold on such Closing Date pursuant to this Agreement.
Section 4.7. Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.1, the Company shall have paid on or before such
Closing Date, the reasonable fees, reasonable charges and reasonable
disbursements of the Purchasers' special counsel referred to in Section 4.4 to
the extent reflected in a statement of such counsel rendered to the Company at
least one Business Day prior to such Closing Date.
Section 4.8. Private Placement Number. A Private Placement Number issued
by Standard & Poor's CUSIP Service Bureau (in cooperation with the Securities
Valuation Office of the National Association of Insurance Commissioners) shall
have been obtained for each Series of the Series 2003-A Notes.
Section 4.9. Changes in Corporate Structure. Neither the Company nor any
Subsidiary Guarantor shall have changed its jurisdiction of organization or,
except as reflected in Schedule 4.9, been a party to any merger or
consolidation, or shall have succeeded to all or any substantial
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part of the liabilities of any other entity, at any time following the date of
the most recent financial statements referred to in Schedule 5.5.
Section 4.10. Subsidiary Guaranty. The Subsidiary Guaranty shall have
been duly authorized, executed and delivered by each Subsidiary Guarantor, shall
constitute the legal, valid and binding contract and agreement of each
Subsidiary Guarantor and such Purchaser shall have received a true, correct and
complete copy thereof.
Section 4.11. Proceedings and Documents. All corporate or other
organizational proceedings in connection with the transactions contemplated by
this Agreement and all documents and instruments incident to such transactions
shall be satisfactory to such Purchaser and such Purchaser's special counsel,
and such Purchaser and such Purchaser's special counsel shall have received all
such counterpart originals or certified or other copies of such documents as
such Purchaser or such Purchaser's special counsel may reasonably request.
Section 4.12. Conditions to Issuance of Additional Notes. The obligations
of the Additional Purchasers to purchase any Additional Notes shall be subject
to the following conditions precedent, in addition to the conditions specified
in the Supplement pursuant to which such Additional Notes may be issued:
(a) Compliance Certificate. A duly authorized Senior
Financial Officer shall execute and deliver to each Additional
Purchaser and each holder of Notes an Officer's Certificate dated the
date of issue of such Series of Additional Notes stating that such
officer has reviewed the provisions of this Agreement (including any
Supplements hereto) and setting forth the information and computations
(in sufficient detail) required in order to establish whether after
giving effect to the issuance of the Additional Notes and after giving
effect to the application of the proceeds thereof, the Company is in
compliance with the requirements of Section 10.2 on such date (based
upon the financial statements for the most recent fiscal quarter ended
prior to the date of such certificate).
(b) Execution and Delivery of Supplement. The Company and
each such Additional Purchaser shall execute and deliver a Supplement
substantially in the form of Exhibit S hereto.
(c) Representations of Additional Purchasers. Each
Additional Purchaser shall have confirmed in the Supplement that the
representations set forth in Section 6 are true with respect to such
Additional Purchaser on and as of the date of issue of the Additional
Notes.
(d) Execution and Delivery of Guaranty Ratification.
Provided a Collateral Release shall not have occurred, each Subsidiary
Guarantor shall execute and deliver a Guaranty Ratification in the form
attached to the Subsidiary Guaranty.
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SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each Purchaser that:
Section 5.1. Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and authority to own or hold under lease the properties
it purports to own or hold under lease, to transact the business it transacts
and proposes to transact, to execute and deliver this Agreement and the Series
2003-A Notes and to perform the provisions hereof and thereof.
Section 5.2. Authorization, Etc. This Agreement and the Series 2003-A
Notes have been duly authorized by all necessary corporate action on the part of
the Company, and this Agreement constitutes, and upon execution and delivery
thereof each Series 2003-A Note will constitute, a legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
Section 5.3. Disclosure. The Public Filings of the Company fairly
describes, in all material respects, the general nature of the business and
principal properties of the Company and its Restricted Subsidiaries. This
Agreement, the Public Filings of the Company, the documents, certificates or
other writings delivered to the Purchasers by or on behalf of the Company in
connection with the transactions contemplated hereby and the financial
statements listed in Schedule 5.5, taken as a whole, do not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading in light of the circumstances under
which they were made. Since December 31, 2002, there has been no change in the
financial condition, operations, business or properties of the Company or any of
its Restricted Subsidiaries except changes that individually or in the aggregate
could not reasonably be expected to have a Material Adverse Effect. There is no
fact known to the Company that could reasonably be expected to have a Material
Adverse Effect that has not been set forth herein or in the Public Filings of
the Company or in the other documents, certificates and other writings delivered
to each Purchaser by or on behalf of the Company specifically for use in
connection with the transactions contemplated hereby.
Section 5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates. (a) Schedule 5.4 contains (except as noted therein) complete and
correct lists of (i) the Company's Restricted and Unrestricted Subsidiaries,
showing, as to each Subsidiary, the correct name thereof, the jurisdiction of
its organization, and the percentage of shares of each class of its capital
stock or similar equity interests outstanding owned by the Company and each
other Subsidiary, and all other Investments of the Company and its Restricted
Subsidiaries, (ii) the
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Company's Affiliates, other than Subsidiaries, and (iii) the Company's directors
and senior officers.
(b) Except with respect to De Minimis Subsidiaries, all of the
outstanding shares of capital stock or similar equity interests of each
Subsidiary shown in Schedule 5.4 as being owned by the Company and its
Subsidiaries have been validly issued, are fully paid and nonassessable and are
owned by the Company or another Subsidiary free and clear of any Lien (except as
otherwise disclosed in Schedule 5.4).
(c) Except with respect to De Minimis Subsidiaries, each
Subsidiary identified in Schedule 5.4 is a corporation or other legal entity
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization, and is duly qualified as a foreign corporation or
other legal entity and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Except with
respect to De Minimis Subsidiaries, each such Subsidiary has the corporate or
other power and authority to own or hold under lease the properties it purports
to own or hold under lease and to transact the business it transacts and
proposes to transact.
(d) Except with respect to De Minimis Subsidiaries, no Subsidiary
is a party to, or otherwise subject to, any legal restriction or any agreement
(other than this Agreement, the agreements listed on Schedule 5.4 and customary
limitations imposed by corporate law statutes) restricting the ability of such
Subsidiary to pay dividends out of profits or make any other similar
distributions of profits to the Company or any of its Subsidiaries that owns
outstanding shares of capital stock or similar equity interests of such
Subsidiary.
Section 5.5. Financial Statements. The Company has delivered to each
Purchaser copies of the financial statements of the Company and its Subsidiaries
listed on Schedule 5.5. All of said financial statements (including in each case
the related schedules and notes) fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as of the
respective dates specified in such financial statements and the consolidated
results of their operations and cash flows for the respective periods so
specified and have been prepared in accordance with GAAP consistently applied
throughout the periods involved except as set forth in the notes thereto
(subject, in the case of any interim financial statements, to normal year-end
adjustments).
Section 5.6. Compliance with Laws, Other Instruments, Etc. The execution,
delivery and performance by the Company of this Agreement and the Series 2003-A
Notes will not (a) contravene, result in any breach of, or constitute a default
under, or result in the creation of any Lien in respect of any property of the
Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan,
purchase or credit agreement, lease, corporate charter or by-laws, or any other
agreement or instrument to which the Company or any Subsidiary is bound or by
which the Company or any Subsidiary or any of their respective properties may be
bound or affected, (b) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority
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applicable to the Company or any Subsidiary, or (c) violate any provision of any
statute or other rule or regulation of any Governmental Authority applicable to
the Company or any Subsidiary.
Section 5.7. Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement or the Series 2003-A Notes.
Section 5.8. Litigation; Observance of Statutes and Orders. (a) There are
no actions, suits or proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or any Restricted Subsidiary or any
property of the Company or any Restricted Subsidiary in any court or before any
arbitrator of any kind or before or by any Governmental Authority that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(b) Neither the Company nor any Restricted Subsidiary is in
default under any term of any agreement or instrument to which it is a party or
by which it is bound, or any order, judgment, decree or ruling of any court,
arbitrator or Governmental Authority or is in violation of any applicable law,
ordinance, rule or regulation (including without limitation Environmental Laws)
of any Governmental Authority, which default or violation, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
Section 5.9. Taxes. The Company and its Restricted Subsidiaries have
filed all tax returns that are required to have been filed in any jurisdiction
which the failure to file would result in a Material Adverse Effect, and have
paid all taxes shown to be due and payable on such returns and all other taxes
and assessments levied upon them or their properties, assets, income or
franchises, to the extent such taxes and assessments have become due and payable
and before they have become delinquent, except for any taxes and assessments (a)
the amount of which is not individually or in the aggregate Material or (b) the
amount, applicability or validity of which is currently being contested in good
faith by appropriate proceedings and with respect to which the Company or a
Subsidiary, as the case may be, has established adequate reserves in accordance
with GAAP. The Company knows of no basis for any other tax or assessment that
could reasonably be expected to have a Material Adverse Effect. The charges,
accruals and reserves on the books of the Company and its Subsidiaries in
respect of federal, state or other taxes for all fiscal periods are adequate.
The federal income tax liabilities of the Company and its Subsidiaries have been
determined by the Internal Revenue Service and paid for all fiscal years up to
and including the fiscal year ended December 31, 1998.
Section 5.10. Title to Property; Leases. The Company and its Restricted
Subsidiaries have good and sufficient title to their respective properties which
the Company and its Restricted Subsidiaries own or purport to own that
individually or in the aggregate are Material, including all such properties
reflected in the most recent audited balance sheet referred to in Section 5.5 or
purported to have been acquired by the Company or any Restricted Subsidiary
after said date (except as sold or otherwise disposed of in the ordinary course
of business), in each case free and clear of Liens prohibited by this Agreement.
All leases that individually or in the aggregate are Material are valid and
subsisting and are in full force and effect in all material respects.
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Section 5.11. Licenses, Permits, Etc. Except as disclosed in Schedule
5.11,
(a) the Company and its Restricted Subsidiaries own or
possess all licenses, permits, franchises, authorizations, patents,
copyrights, service marks, trademarks and trade names, or rights
thereto, that individually or in the aggregate are Material, without
known conflict with the rights of others;
(b) to the best knowledge of the Company, no product of
the Company or any of its Restricted Subsidiaries infringes in any
Material respect any license, permit, franchise, authorization, patent,
copyright, service mark, trademark, trade name or other right owned by
any other Person; and
(c) to the best knowledge of the Company, there is no
Material violation by any Person of any right of the Company or any of
its Restricted Subsidiaries with respect to any patent, copyright,
service mark, trademark, trade name or other right owned or used by the
Company or any of its Restricted Subsidiaries.
Section 5.12. Compliance with ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in section 3 of ERISA), and no
event, transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company or any
ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not be individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under
each of the Plans (other than Multiemployer Plans), determined as of the end of
such Plan's most recently ended plan year on the basis of the actuarial
assumptions specified for funding purposes in such Plan's most recent actuarial
valuation report, did not exceed the aggregate current value of the assets of
such Plan allocable to such benefit liabilities. The term "benefit liabilities"
has the meaning specified in section 4001 of ERISA and the terms "current value"
and "present value" have the meaning specified in section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred any
withdrawal liabilities (and are not subject to contingent withdrawal
liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer
Plans that individually or in the aggregate are Material.
(d) The expected post-retirement benefit obligation (determined as
of the last day of the Company's most recently ended fiscal year in accordance
with Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Company and its Subsidiaries is not Material.
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(e) The execution and delivery of this Agreement and the issuance
and sale of the Series 2003-A Notes hereunder will not involve any transaction
that is subject to the prohibitions of Section 406 of ERISA or in connection
with which a tax could be imposed pursuant to Section 4975(c)(1)(A)-(D) of the
Code. The representation by the Company in the first sentence of this Section
5.12(e) is made in reliance upon and subject to the accuracy of each Purchaser's
representation in Section 6.2 as to the sources of the funds to be used to pay
the purchase price of the Series 2003-A Notes to be purchased by such Purchaser.
Section 5.13. Private Offering by the Company. Neither the Company nor
anyone acting on the Company's behalf has offered the Series 2003-A Notes or any
similar securities for sale to, or solicited any offer to buy any of the same
from, or otherwise approached or negotiated in respect thereof with, any Person
other than the Purchasers and not more than five (5) other Institutional
Investors, each of which has been offered the Series 2003-A Notes in connection
with a private sale for investment. Neither the Company nor anyone acting on its
behalf has taken, or will take, any action that would subject the issuance or
sale of the Series 2003-A Notes to the registration requirements of Section 5 of
the Securities Act.
Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply
the proceeds of the sale of the Series 2003-A Notes to refinance existing debt,
to make acquisitions and for general corporate purposes of the Company and its
Restricted Subsidiaries. No part of the proceeds from the sale of the Series
2003-A Notes hereunder will be used, directly or indirectly, for the purpose of
buying or carrying any margin stock within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System (12 CFR 221), or for the
purpose of buying or carrying or trading in any securities under such
circumstances as to involve the Company in a violation of Regulation X of said
Board (12 CFR 224) or to involve any broker or dealer in a violation of
Regulation T of said Board (12 CFR 220). Margin stock does not constitute more
than 1% of the value of the consolidated assets of the Company and its
Subsidiaries and the Company does not have any present intention that margin
stock will constitute more than 1% of the value of such assets. As used in this
Section, the terms "margin stock" and "purpose of buying or carrying" shall have
the meanings assigned to them in said Regulation U.
Section 5.15. Existing Debt; Future Liens. (a) Except as described
therein, Schedule 5.15 sets forth a complete and correct list of all outstanding
Debt of the Company and its Restricted Subsidiaries as of September 30, 2003,
since which date there has been no Material change in the amounts, interest
rates, sinking funds, installment payments or maturities of the Debt of the
Company or its Restricted Subsidiaries. Neither the Company nor any Restricted
Subsidiary is in default and no waiver of default is currently in effect, in the
payment of any principal or interest on any Debt of the Company or such
Restricted Subsidiary, and no event or condition exists with respect to any Debt
of the Company or any Restricted Subsidiary, that would permit (or that with
notice or the lapse of time, or both, would permit) one or more Persons to cause
such Debt to become due and payable before its stated maturity or before its
regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company nor
any Restricted Subsidiary has agreed or consented to cause or permit in the
future (upon the happening of a
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contingency or otherwise) any of its property, whether now owned or hereafter
acquired, to be subject to a Lien not permitted by Section 10.4.
Section 5.16. Foreign Assets Control Regulations, Etc. Neither the sale
of the Series 2003-A Notes by the Company hereunder nor its use of the proceeds
thereof will violate the Trading with the Enemy Act, as amended, or any of the
foreign assets control regulations of the United States Treasury Department (31
CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto, or is in violation of any federal statute or
Presidential Executive Order, including without limitation Executive Order 13224
66 Fed. Reg. 49079 (September 25, 2001) (Blocking Property and Prohibiting
Transactions with Persons who Commit, Threaten to Commit or Support Terrorism),
or The USA Patriot Act.
Section 5.17. Status under Certain Statutes. Neither the Company nor any
Restricted Subsidiary is an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended, or is subject
to regulation under the Public Utility Holding Company Act of 1935, as amended,
the ICC Termination Act of 1995, as amended, or the Federal Power Act, as
amended.
Section 5.18. Environmental Matters. Neither the Company nor any
Restricted Subsidiary has knowledge of any claim or has received any notice of
any claim, and no proceeding has been instituted raising any claim against the
Company or any of its Restricted Subsidiaries or any of their respective real
properties now or formerly owned, leased or operated by any of them, or other
assets, alleging damage to the environment or any violation of any Environmental
Laws, except, in each case, such as could not reasonably be expected to result
in a Material Adverse Effect. Except as otherwise disclosed to each Purchaser in
writing:
(a) neither the Company nor any Restricted Subsidiary has
knowledge of any facts which would give rise to any claim, public or
private, for violation of Environmental Laws or damage to the
environment emanating from, occurring on or in any way related to real
properties or to other assets now or formerly owned, leased or operated
by any of them or their use, except, in each case, such as could not
reasonably be expected to result in a Material Adverse Effect;
(b) neither the Company nor any of its Restricted
Subsidiaries has stored any Hazardous Materials on real properties now
or formerly owned, leased or operated by any of them or has disposed of
any Hazardous Materials in each case in a manner contrary to any
Environmental Laws and in any manner that could reasonably be expected
to result in a Material Adverse Effect; and
(c) all buildings on all real properties now owned,
leased or operated by the Company or any of its Restricted Subsidiaries
are in compliance with applicable Environmental Laws, except where
failure to comply could not reasonably be expected to result in a
Material Adverse Effect.
Section 5.19. Notes Rank Pari Passu. The obligations of the Company under
this Agreement and the Notes rank pari passu in right of payment with all other
senior unsecured
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Debt (actual or contingent) of the Company, including, without limitation, all
senior unsecured Debt of the Company described in Schedule 5.15 hereto.
SECTION 6. REPRESENTATIONS OF THE PURCHASER.
Section 6.1. Purchase for Investment. Each Purchaser represents that it
is an institutional "accredited investor," as such term is defined in Regulation
D under the Securities Act of 1933, as amended, and is purchasing the Series
2003-A Notes for its own account or for one or more separate accounts maintained
by it or for the account of one or more pension or trust funds and not with a
view to the distribution thereof, provided that the disposition of such
Purchaser's or such pension or trust funds' property shall at all times be
within such Purchaser's or such pension or trust funds' control. Each Purchaser
understands that the Series 2003-A Notes have not been registered under the
Securities Act and may be resold only if registered pursuant to the provisions
of the Securities Act or if an exemption from registration is available, except
under circumstances where neither such registration nor such an exemption is
required by law, and that the Company is not required to register the Series
2003-A Notes.
Section 6.2. Source of Funds. Each Purchaser represents that at least one
of the following statements is an accurate representation as to each source of
funds (a "Source") to be used by it to pay the purchase price of the Series
2003-A Notes to be purchased by it hereunder:
(a) the Source is an "insurance company general account"
within the meaning of Department of Labor Prohibited Transaction
Exemption ("PTE") 95-60 (issued July 12, 1995) and there is no employee
benefit plan, treating as a single plan all plans maintained by the
same employer or employee organization, with respect to which the
amount of the general account reserves and liabilities for all
contracts held by or on behalf of such plan, exceeds ten percent (10%)
of the total reserves and liabilities of such general account
(exclusive of separate account liabilities) plus surplus, as set forth
in the NAIC Annual Statement for such Purchaser most recently filed
with such Purchaser's state of domicile; or
(b) the Source is either (i) an insurance company pooled
separate account, within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of
the PTE 91-38 (issued July 12, 1991) and, except as such Purchaser
prior to the execution and delivery of this Agreement has disclosed to
the Company in writing pursuant to this paragraph (b), no employee
benefit plan or group of plans maintained by the same employer or
employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment
fund; or
(c) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that
are included in such investment fund, when combined with the assets of
all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of
the QPAM Exemption) of
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such employer or by the same employee organization and managed by such
QPAM, exceed 20% of the total client assets managed by such QPAM, the
conditions of Part I(c) and (g) of the QPAM Exemption are satisfied,
neither the QPAM nor a person controlling or controlled by the QPAM
(applying the definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and (i) the
identity of such QPAM and (ii) the names of all employee benefit plans
whose assets are included in such investment fund have been disclosed
to the Company in writing pursuant to this paragraph (c) prior to the
execution and delivery of this Agreement; or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or
a separate account or trust fund comprised of one or more employee
benefit plans, each of which prior to the execution and delivery of
this Agreement has been identified to the Company in writing pursuant
to this paragraph (e); or
(f) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of ERISA; or
(g) the Source is an insurance company separate account
maintained solely in connection with the fixed contractual obligations
of the insurance company under which the amounts payable, or credited,
to any employee benefit plan (or its related trust) and to any
participant or beneficiary of such plan (including any annuitant) are
not affected in any manner by the investment performance of the
separate account.
If any Purchaser or any Additional Purchaser or any subsequent transferee of the
Notes indicates that such Purchaser or any Additional Purchaser or such
transferee is relying on any representation contained in paragraph (b), (c) or
(e) above, the Company shall deliver on the date of issuance of such Notes and
on the date of any applicable transfer a certificate, which shall either state
that (i) it is neither a party in interest nor a "disqualified person" (as
defined in Section 4975(e)(2) of the Code), with respect to any plan identified
pursuant to paragraphs (b) or (e) above, or (ii) with respect to any plan,
identified pursuant to paragraph (c) above, neither it nor any "affiliate" (as
defined in Section V(c) of the QPAM Exemption) has at such time, and during the
immediately preceding one year, exercised the authority to appoint or terminate
said QPAM as manager of any plan identified in writing pursuant to paragraph (c)
above or to negotiate the terms of said QPAM's management agreement on behalf of
any such identified plan. As used in this Section 6.2, the terms "employee
benefit plan", "governmental plan", "party in interest" and "separate account"
shall have the respective meanings assigned to such terms in Section 3 of ERISA.
SECTION 7. INFORMATION AS TO COMPANY.
Section 7.1. Financial and Business Information. The Company shall
deliver to each holder of Notes that is an Institutional Investor:
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(a) Quarterly Statements -- within 60 days after the end
of each quarterly fiscal period in each fiscal year of the Company
(other than the last quarterly fiscal period of each such fiscal year),
duplicate copies of,
(i) a consolidated balance sheet of the Company
and its Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes
in shareholders' equity and cash flows of the Company and its
Subsidiaries, for such quarter and (in the case of the second
and third quarters) for the portion of the fiscal year ending
with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial
Officer as fairly presenting, in all material respects, the financial
position of the companies being reported on and their results of
operations and cash flows, subject to changes resulting from year-end
adjustments, provided that delivery within the time period specified
above of copies of the Company's Quarterly Report on Form 10-Q prepared
in compliance with the requirements therefor and filed with the
Securities and Exchange Commission shall be deemed to satisfy the
requirements of this Section 7.1(a);
(b) Annual Statements -- within 105 days after the end of
each fiscal year of the Company, duplicate copies o f,
(i) a consolidated balance sheet of the Company
and its Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes
in shareholders' equity and cash flows of the Company and its
Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail, prepared in accordance
with GAAP, and accompanied by an opinion thereon of independent
certified public accountants of recognized national standing, which
opinion shall state that such financial statements present fairly, in
all material respects, the financial position of the companies being
reported upon and their results of operations and cash flows and have
been prepared in conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has been made
in accordance with generally accepted auditing standards, and that such
audit provides a reasonable basis for such opinion in the
circumstances, provided that the delivery within the time period
specified above of the Company's Annual Report on Form 10-K for such
fiscal year (together with the Company's annual report to shareholders,
if any, prepared pursuant to Rule 14a-3 under the Exchange Act)
prepared in accordance with the requirements therefor and filed with
the Securities and Exchange Commission shall be deemed to satisfy the
requirements of this Section 7.1(b);
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(c) SEC and Other Reports -- promptly upon their becoming
available, one copy of (i) each financial statement, report, notice or
proxy statement sent by the Company or any Subsidiary to public
securities holders generally, and (ii) each regular or periodic report,
each registration statement (without exhibits except as expressly
requested by such holder), and each prospectus and all amendments
thereto filed by the Company or any Subsidiary with the Securities and
Exchange Commission and of all press releases and other statements made
available generally by the Company or any Subsidiary to the public
concerning developments that are Material;
(d) Notice of Default or Event of Default -- promptly,
and in any event within five Business Days after a Responsible Officer
becomes aware of the existence of any Default or Event of Default or
that any Person has given any notice or taken any action with respect
to a claimed default hereunder or that any Person has given any notice
or taken any action with respect to a claimed default of the type
referred to in Section 11(f), a written notice specifying the nature
and period of existence thereof and what action the Company is taking
or proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within
five Business Days after a Responsible Officer becomes aware of any of
the following, a written notice setting forth the nature thereof and
the action, if any, that the Company or an ERISA Affiliate proposes to
take with respect thereto:
(i) with respect to any Plan, any reportable
event, as defined in Section 4043(c) of ERISA and the
regulations thereunder, for which notice thereof has not been
waived pursuant to such regulations as in effect on the date
thereof; or
(ii) the taking by the PBGC of steps to
institute, or the threatening by the PBGC of the institution
of, proceedings under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer,
any Plan, or the receipt by the Company or any ERISA Affiliate
of a notice from a Multiemployer Plan that such action has
been taken by the PBGC with respect to such Multiemployer
Plan; or
(iii) any event, transaction or condition that
could result in the incurrence of any liability by the Company
or any ERISA Affiliate pursuant to Title I or IV of ERISA or
the imposition of a penalty or excise tax under the provisions
of the Code relating to employee benefit plans, or the
imposition of any Lien on any of the rights, properties or
assets of the Company or any ERISA Affiliate pursuant to Title
I or IV of ERISA or such penalty or excise tax provisions, if
such liability or Lien, taken together with any other such
liabilities or Liens then existing, could reasonably be
expected to have a Material Adverse Effect;
(f) Notices from Governmental Authority -- promptly, and
in any event within 30 days of receipt thereof, copies of any notice to
the Company or any Subsidiary
-16-
from any federal or state Governmental Authority relating to any order,
ruling, statute or other law or regulation that could reasonably be
expected to have a Material Adverse Effect;
(g) Supplements -- promptly and in any event within 10
Business Days after the execution and delivery of any Supplement, a
copy thereof; and
(h) Requested Information -- with reasonable promptness,
such other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Company or
any of its Subsidiaries or relating to the ability of the Company to
perform its obligations hereunder and under the Notes as from time to
time may be reasonably requested by any such holder of Notes.
Notwithstanding the foregoing, in the event that one or more
Unrestricted Subsidiaries shall either (i) own more than 10% of the total
consolidated assets of the Company and its Subsidiaries, or (ii) account for
more than 10% of the consolidated gross revenues of the Company and its
Subsidiaries, determined in each case in accordance with GAAP, then, within the
respective periods provided in Section 7.1(a) and (b) above, the Company shall
deliver to each holder of Notes that is an Institutional Investor, unaudited
financial statements of the character and for the dates and periods as in said
Sections 7.1(a) and (b) covering such group of Unrestricted Subsidiaries (on a
consolidated basis), together with a consolidating statement reflecting
eliminations or adjustments required to reconcile the financial statements of
such group of Unrestricted Subsidiaries to the financial statements delivered
pursuant to Sections 7.1(a) and (b).
Section 7.2. Officer's Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b)
hereof shall be accompanied by a certificate of a Senior Financial Officer
setting forth:
(a) Covenant Compliance -- the information (including
detailed calculations) required in order to establish whether the
Company was in compliance with the requirements of Section 10.1 through
Section 10.4 hereof, inclusive, during the quarterly or annual period
covered by the statements then being furnished (including with respect
to each such Section, where applicable, the calculations of the maximum
or minimum amount, ratio or percentage, as the case may be, permissible
under the terms of such Sections, and the calculation of the amount,
ratio or percentage then in existence); and
(b) Event of Default -- a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and
conditions of the Company and its Subsidiaries from the beginning of
the quarterly or annual period covered by the statements then being
furnished to the date of the certificate and that such review shall not
have disclosed the existence during such period of any condition or
event that constitutes a Default or an Event of Default or, if any such
condition or event existed or exists (including, without limitation,
any such event or condition resulting from the failure of the Company
or any Subsidiary to comply with any Environmental Law), specifying the
nature and period of
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existence thereof and what action the Company shall have taken or
proposes to take with respect thereto.
Section 7.3. Inspection. The Company shall permit the representatives of
each holder of Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable prior notice
to the Company, to visit the principal executive office of the Company,
to discuss the affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and (with the consent of the
Company, which consent will not be unreasonably withheld) its
independent public accountants, and (with the consent of the Company,
which consent will not be unreasonably withheld) to visit the other
offices and properties of the Company and each Restricted Subsidiary,
all at such reasonable times during normal business hours and as often
as may be reasonably requested in writing; and
(b) Default -- if a Default or Event of Default then
exists, at the expense of the Company, to visit and inspect any of the
offices or properties of the Company or any Restricted Subsidiary, to
examine all their respective books of account, records, reports and
other papers, to make copies and extracts therefrom, and to discuss
their respective affairs, finances and accounts with their respective
officers and independent public accountants (and by this provision the
Company authorizes said accountants to discuss the affairs, finances
and accounts of the Company and its Subsidiaries), all at such times
and as often as may be requested.
SECTION 8. PAYMENT OF THE NOTES.
Section 8.1. Required Prepayments. (a) On December 31, 2007 and on each
December 31st thereafter to and including December 31, 2012, the Company will
prepay $2,142,857 principal amount (or such lesser principal amount as shall
then be outstanding) of the Tranche A Notes at par and without payment of the
Make-Whole Amount or any premium. The entire unpaid principal amount of the
Tranche A Notes shall become due and payable on December 31, 2013.
(b) On April 30, 2008 and on each April 30th thereafter to and
including April 30, 2013, the Company will prepay $1,428,571 principal amount
(or such lesser principal amount as shall then be outstanding) of the Tranche B
Notes at par and without payment of the Make-Whole Amount or any premium. The
entire unpaid principal amount of the Tranche B Notes shall become due and
payable on April 30, 2014.
(c) Upon any partial prepayment of the Tranche A Notes or the
Tranche B Notes pursuant to Section 8.2, the principal amount of each required
prepayment of the Tranche A Notes or Tranche B Notes, as the case may be,
becoming due under this Section 8.1 on and after the date of such prepayment or
purchase shall be reduced in the same proportion as the aggregate unpaid
principal amount of the Tranche A Notes or Tranche B Notes, as the case may be
is reduced as a result of such prepayment or purchase.
-18-
Section 8.2. Optional Prepayments with Make-Whole Amount. The Company
may, at its option, upon notice as provided below, prepay at any time all, or
from time to time any part of, the Notes, in an amount not less than $2,000,000
in the aggregate principal amount of the Notes then outstanding in the case of a
partial prepayment (or such lesser amount as shall be required to effect a
partial prepayment resulting from an offer of prepayment pursuant to Section
10.4), at 100% of the principal amount so prepaid, together with interest
accrued thereon to the date of such prepayment, plus the Make-Whole Amount or
other premium determined for the prepayment date with respect to such principal
amount of each Note then outstanding. The Company will give each holder of Notes
to be prepaid written notice of each optional prepayment under this Section 8.2
not less than 30 days and not more than 60 days prior to the date fixed for such
prepayment. Each such notice shall specify such date, the aggregate principal
amount of the Notes to be prepaid on such date, the principal amount of each
Note held by such holder to be prepaid (determined in accordance with Section
8.3), and the interest to be paid on the prepayment date with respect to such
principal amount being prepaid, and shall be accompanied by a certificate of a
Senior Financial Officer as to the estimated respective Make-Whole Amount or
other premium due in connection with such prepayment (calculated as if the date
of such notice were the date of the prepayment), setting forth the details of
such computation. Two Business Days prior to such prepayment, the Company shall
deliver to each holder of Notes to be prepaid a certificate of a Senior
Financial Officer specifying the calculation of each such Make-Whole Amount as
of the specified prepayment date.
Section 8.3. Allocation of Partial Prepayments. In the case of each
partial prepayment of the Notes pursuant to the provisions of Section 8.2, the
principal amount of the Notes to be prepaid shall be allocated among all of the
Notes at the time outstanding in proportion, as nearly as practicable, to the
respective unpaid principal amounts thereof. All regularly scheduled partial
prepayments made with respect to any Series of Additional Notes pursuant to any
Supplement shall be allocated as provided therein.
Section 8.4. Maturity; Surrender, Etc. In the case of each prepayment of
Notes pursuant to this Section 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such date
and the applicable Make-Whole Amount or other premium, if any. From and after
such date, unless the Company shall fail to pay such principal amount when so
due and payable, together with the interest and Make-Whole Amount or other
premium, if any, as aforesaid, interest on such principal amount shall cease to
accrue. Any Note paid or prepaid in full shall be surrendered to the Company and
cancelled and shall not be reissued, and no Note shall be issued in lieu of any
prepaid principal amount of any Note.
Section 8.5. Purchase of Notes. The Company will not and will not permit
any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except (a) upon the payment or
prepayment of the Notes of any Series in accordance with the terms of this
Agreement (including any Supplement hereto) and the Notes or (b) pursuant to a
written offer to purchase any outstanding Notes made by the Company or an
Affiliate pro rata to the holders of any Series of the Notes upon the same terms
and conditions. The Company will promptly cancel all Notes acquired by it or any
Affiliate pursuant to any payment, prepayment or
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purchase of Notes pursuant to any provision of this Agreement and no Notes may
be issued in substitution or exchange for any such Notes.
Section 8.6. Make-Whole Amount for the Series 2003-A Notes. The term
"Make-Whole Amount" means with respect to a Series 2003-A Note an amount equal
to the excess, if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of the Series 2003-A Note of the
applicable Tranche, over the amount of such Called Principal, provided that the
Make-Whole Amount may in no event be less than zero. For the purposes of
determining the Make-Whole Amount, the following terms have the following
meanings:
"Called Principal" means, with respect to a Series 2003-A
Note, the principal of the Series 2003-A Note of the applicable Tranche
that is to be prepaid pursuant to Section 8.2 or has become or is
declared to be immediately due and payable pursuant to Section 12.1, as
the context requires.
"Discounted Value" means, with respect to the Called Principal
of a Series 2003-A Note, the amount obtained by discounting all
Remaining Scheduled Payments with respect to such Called Principal from
their respective scheduled due dates to the Settlement Date with
respect to such Called Principal, in accordance with accepted financial
practice and at a discount factor (applied on the same periodic basis
as that on which interest on the Series 2003-A Note is payable) equal
to the Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" means, with respect to the Called
Principal of a Series 2003-A Note, 0.50% plus the yield to maturity
implied by (i) the yields reported, as of 10:00 A.M. (New York City
time) on the second Business Day preceding the Settlement Date with
respect to such Called Principal, on the display designated as "PX-1"
on the Bloomberg Financial Market Screen (or such other display as may
replace "PX-1" on the Bloomberg Financial Market Screen) for actively
traded U.S. Treasury securities having a maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement
Date, or (ii) if such yields are not reported as of such time or the
yields reported as of such time are not ascertainable, the Treasury
Constant Maturity Series Yields reported, for the latest day for which
such yields have been so reported as of the second Business Day
preceding the Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any comparable
successor publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date. Such implied yield will be
determined, if necessary, by (a) converting U.S. Treasury bill
quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly on a straight line
basis between (1) the actively traded U.S. Treasury security with the
maturity closest to and greater than the Remaining Average Life and (2)
the actively traded U.S. Treasury security with the maturity closest to
and less than the Remaining Average Life.
"Remaining Average Life" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such
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Called Principal into (ii) the sum of the products obtained by
multiplying (a) the principal component of each Remaining Scheduled
Payment with respect to such Called Principal by (b) the number of
years (calculated to the nearest one-twelfth year) that will elapse
between the Settlement Date with respect to such Called Principal and
the scheduled due date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the
Called Principal of a Series 2003-A Note of the applicable Tranche, all
payments of such Called Principal and interest thereon that would be
due after the Settlement Date with respect to such Called Principal if
no payment of such Called Principal were made prior to its scheduled
due date, provided that if such Settlement Date is not a date on which
interest payments are due to be made under the terms of the Series
2003-A Note, then the amount of the next succeeding scheduled interest
payment will be reduced by the amount of interest accrued to such
Settlement Date and required to be paid on such Settlement Date
pursuant to Section 8.2 or 12.1.
"Settlement Date" means, with respect to the Called Principal
of a Series 2003-A Note of any Tranche, the date on which such Called
Principal is to be prepaid pursuant to Section 8.2 or has become or is
declared to be immediately due and payable pursuant to Section 12.1, as
the context requires.
SECTION 9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
Section 9.1. Compliance with Law. The Company will, and will cause each
of its Subsidiaries to, comply with all laws, ordinances or governmental rules
or regulations to which each of them is subject, including, without limitation,
Environmental Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in effect such licenses, certificates,
permits, franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
Section 9.2. Insurance. The Company will, and will cause each of its
Restricted Subsidiaries to, maintain, with financially sound and reputable
insurers, insurance with respect to their respective properties and businesses
against such casualties and contingencies, of such types, on such terms and in
such amounts (including deductibles, co-insurance and self-insurance, if
adequate reserves are maintained with respect thereto) as is customary in the
case of entities of established reputations engaged in the same or a similar
business and similarly situated, except for any non-maintenance that could not
reasonably be expected to have a Material Adverse Effect.
Section 9.3. Maintenance of Properties. The Company will, and will cause
each of its Restricted Subsidiaries to, maintain and keep, or cause to be
maintained and kept, their
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respective properties in good repair, working order and condition (other than
ordinary wear and tear), so that the business carried on in connection therewith
may be properly conducted at all times, provided that this Section shall not
prevent the Company or any Restricted Subsidiary from discontinuing the
operation and the maintenance of any of its properties if such discontinuance is
desirable in the conduct of its business and the Company has concluded that such
discontinuance could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
Section 9.4. Payment of Taxes and Claims. The Company will, and will
cause each of its Subsidiaries to, file all tax returns required to be filed in
any jurisdiction and to pay and discharge all taxes shown to be due and payable
on such returns and all other taxes, assessments, governmental charges, or
levies imposed on them or any of their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent and all claims for which sums have become due and
payable that have or might become a Lien on properties or assets of the Company
or any Subsidiary not permitted by Section 10.4, provided that neither the
Company nor any Subsidiary need pay any such tax or assessment or claims if (i)
the amount, applicability or validity thereof is contested by the Company or
such Subsidiary on a timely basis in good faith and in appropriate proceedings,
and the Company or a Subsidiary has established adequate reserves therefor in
accordance with GAAP on the books of the Company or such Subsidiary or (ii) the
non-filing or nonpayment, as the case may be, of all such taxes and assessments
in the aggregate could not reasonably be expected to have a Material Adverse
Effect.
Section 9.5. Corporate Existence, Etc. Subject to Sections 10.4 and 10.5,
the Company will at all times preserve and keep in full force and effect its
corporate existence, and will at all times preserve and keep in full force and
effect the corporate existence of each of its Restricted Subsidiaries (unless
merged into the Company or a Restricted Subsidiary) and all rights and
franchises of the Company and its Restricted Subsidiaries unless, in the good
faith judgment of the Company, the termination of or failure to preserve and
keep in full force and effect such corporate existence, right or franchise could
not, individually or in the aggregate, to have a Material Adverse Effect.
Section 9.6. Additional Subsidiary Guarantors. The Company will cause any
Subsidiary which is required by the terms of the Bank Credit Agreement to become
a party to, or otherwise guarantee, Debt in respect of the Bank Credit
Agreement, to enter into the Subsidiary Guaranty and deliver to each of the
holders of the Notes (concurrently with the incurrence of any such obligation
pursuant to the Bank Credit Agreement) the following items:
(a) a joinder agreement in respect of the Subsidiary
Guaranty;
(b) a certificate signed by the President, a Vice
President or another authorized Responsible Officer of the Company
making representations and warranties to the effect of those contained
in Sections 5.4, 5.6 and 5.7, with respect to such Subsidiary and the
Subsidiary Guaranty, as applicable; and
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(c) an opinion of counsel (who may be in-house counsel
for the Company) addressed to each of the holders of the Notes
satisfactory to the Required Holders, to the effect that the Subsidiary
Guaranty by such Person has been duly authorized, executed and
delivered and that the Subsidiary Guaranty constitutes the legal, valid
and binding contract and agreement of such Person enforceable in
accordance with its terms, except as an enforcement of such terms may
be limited by bankruptcy, insolvency, fraudulent conveyance and similar
laws affecting the enforcement of creditors' rights generally and by
general equitable principles.
Section 9.7. Designation of Subsidiaries. The Company may from time to
time cause any Subsidiary (other than a Subsidiary Guarantor) to be designated
as an Unrestricted Subsidiary or any Unrestricted Subsidiary to be designated a
Restricted Subsidiary; provided, however, that at the time of such designation
and immediately after giving effect thereto, (a) no Default or Event of Default
would exist under the terms of this Agreement, and (b) the Company and its
Restricted Subsidiaries would be in compliance with all of the covenants set
forth in this Section 9 and Section 10 if tested on the date of such action and
provided, further, that once a Subsidiary has been designated an Unrestricted
Subsidiary, it shall not thereafter be redesignated as a Restricted Subsidiary
on more than one occasion. Within ten (10) days following any designation
described above, the Company will deliver to you a notice of such designation
accompanied by a certificate signed by a Senior Financial Officer of the Company
certifying compliance with all requirements of this Section 9.7 and setting
forth all information required in order to establish such compliance.
Section 9.8. Notes to Rank Pari Passu. The Notes and all other
obligations under this Agreement of the Company are and at all times shall
remain direct and unsecured obligations of the Company ranking pari passu as
against the assets of the Company with all other Notes from time to time issued
and outstanding hereunder without any preference among themselves and pari passu
with all other present and future unsecured Debt (actual or contingent) of the
Company which is not expressed to be subordinate or junior in rank to any other
unsecured Debt of the Company.
SECTION 10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
Section 10.1. Consolidated Net Worth. The Company will not, at any time,
permit Consolidated Net Worth to be less than the sum of (a) $81,634.400, plus
(b) 25% of Consolidated Net Income (but only if a positive number) for each
fiscal year beginning with the fiscal year ending December 31, 2004.
Section 10.2. Limitations on Debt.
(a) Consolidated Debt. The Company will not, at any time, permit
the ratio of Consolidated Debt to Consolidated EBITDA (calculated as at the end
of each fiscal quarter for the four consecutive fiscal quarters then ended) to
exceed 3.50 to 1.00.
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(b) Priority Debt. The Company will not, at any time, permit the
aggregate amount of all Priority Debt to exceed 15% of Consolidated Total
Capitalization, determined as of the end of the then most recently ended fiscal
quarter of the Company
Section 10.3. Limitation on Liens. The Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly create,
incur, assume or permit to exist (upon the happening of a contingency or
otherwise) any Lien on or with respect to any property or asset (including,
without limitation, any document or instrument in respect of goods or accounts
receivable) of the Company or any such Restricted Subsidiary, whether now owned
or held or hereafter acquired, or any income or profits therefrom, or assign or
otherwise convey any right to receive income or profits (unless it makes, or
causes to be made, effective provision whereby the Notes will be equally and
ratably secured with any and all other obligations thereby secured, such
security to be pursuant to an agreement reasonably satisfactory to the Required
Holders and, in any such case, the Notes shall have the benefit, to the fullest
extent that, and with such priority as, the holders of the Notes may be entitled
under applicable law, of an equitable Lien on such property), except:
(a) Liens for taxes, assessments or other governmental
charges that are not yet due and payable or the payment of which is not
at the time required by Section 9.4;
(b) any attachment or judgment Lien, unless the judgment
it secures shall not, within 60 days after the entry thereof, have been
discharged or execution thereof stayed pending appeal, or shall not
have been discharged within 60 days after the expiration of any such
stay;
(c) Liens incidental to the conduct of business or the
ownership of properties and assets (including landlords', carriers',
warehousemen's, mechanics', materialmen's and other similar Liens for
sums not yet due and payable) and Liens to secure the performance of
bids, tenders, leases, or trade contracts, or to secure statutory
obligations (including obligations under workers compensation,
unemployment insurance and other social security legislation), surety
or appeal bonds or other Liens incurred in the ordinary course of
business and not in connection with the borrowing of money;
(d) leases or subleases granted to others, easements,
rights-of-way, restrictions and other similar charges or encumbrances,
in each case incidental to the ownership of property or assets or the
ordinary conduct of the business of the Company or any of its
Restricted Subsidiaries, on Liens incidental to minor survey exceptions
and the like, provided that such Liens do not, in the aggregate,
materially detract from the value of such property;
(e) Liens securing Debt of a Restricted Subsidiary to the
Company or to a Restricted Subsidiary;
(f) Liens existing as of the date of Closing and
reflected in Schedule 10.3;
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(g) Liens incurred after the date of Closing given to
secure the payment of the purchase price incurred in connection with
the acquisition, construction or improvement of property (other than
accounts receivable or inventory) useful and intended to be used in
carrying on the business of the Company or a Restricted Subsidiary,
including Liens existing on such property at the time of acquisition or
construction thereof or Liens incurred within 365 days of such
acquisition or completion of such construction or improvement, provided
that (i) the Lien shall attach solely to the property acquired,
purchased, constructed or improved; (ii) at the time of acquisition,
construction or improvement of such property, the aggregate amount
remaining unpaid on all Debt secured by Liens on such property, whether
or not assumed by the Company or a Restricted Subsidiary, shall not
exceed the lesser of (y) the cost of such acquisition, construction or
improvement or (z) the Fair Market Value of such property (as
determined in good faith by one or more officers of the Company to whom
authority to enter into the transaction has been delegated by the board
of directors of the Company; and (iii) at the time of such incurrence
and after giving effect thereto, no Default or Event of Default would
exist;
(h) any Lien existing on property of a Person immediately
prior to its being consolidated with or merged into the Company or a
Restricted Subsidiary or its becoming a Restricted Subsidiary, or any
Lien existing on any property acquired by the Company or any Restricted
Subsidiary at the time such property is so acquired (whether or not the
Debt secured thereby shall have been assumed), provided that (i) no
such Lien shall have been created or assumed in contemplation of such
consolidation or merger or such Person's becoming a Restricted
Subsidiary or such acquisition of property, (ii) each such Lien shall
extend solely to the item or items of property so acquired and, if
required by the terms of the instrument originally creating such Lien,
other property which is an improvement to or is acquired for specific
use in connection with such acquired property, and (iii) at the time of
such incurrence and after giving effect thereto, no Default or Event of
Default would exist;
(i) any extensions, renewals or replacements of any Lien
permitted by the preceding subparagraphs (e), (f) and (g) of this
Section 10.3, provided that (i) no additional property shall be
encumbered by such Liens, (ii) the unpaid principal amount of the Debt
or other obligations secured thereby shall not be increased on or after
the date of any extension, renewal or replacement, and (iii) at such
time and immediately after giving effect thereto, no Default or Event
of Default shall have occurred and be continuing; and
(j) Liens securing Priority Debt of the Company or any
Restricted Subsidiary, provided that the aggregate principal amount of
any such Priority Debt shall be permitted by Section 10.2.
Section 10.4. Sales of Assets. The Company will not, and will not permit
any Restricted Subsidiary to, sell, lease or otherwise dispose of any
substantial part (as defined below) of the assets of the Company and its
Restricted Subsidiaries (including without limitation the sale or transfer of
assets in a sale and leaseback transaction or a securitization transaction or a
sale of
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equity interest in any Subsidiary); provided, however, that the Company or any
Restricted Subsidiary may sell, lease or otherwise dispose of assets
constituting a substantial part of the assets of the Company and its Restricted
Subsidiaries if such assets are sold in an arms length transaction and, at such
time and after giving effect thereto, no Default or Event of Default shall have
occurred and be continuing and an amount equal to the Net Proceeds received from
such sale, lease or other disposition shall be used within 365 days of such
sale, lease or disposition, in any combination:
(1) to acquire productive assets used or useful in
carrying on the business of the Company and its Restricted Subsidiaries
and having a value at least equal to the value of such assets sold,
leased or otherwise disposed of; or
(2) to prepay or retire Consolidated Senior Debt of the
Company and/or its Restricted Subsidiaries, provided that, to the
extent any such proceeds are used to prepay the outstanding principal
amount of the Notes, such prepayment shall be made in accordance with
the terms of Section 8.2.
As used in this Section 10.4, a sale, lease or other disposition of
assets shall be deemed to be a "substantial part" of the assets of the Company
and its Restricted Subsidiaries if the book value of such assets, when added to
the book value of all other assets sold, leased or otherwise disposed of by the
Company and its Restricted Subsidiaries during the period of 12 consecutive
months ending on the date of such sale, lease or other disposition, exceeds 10%
of the book value of Consolidated Total Assets, determined as of the end of the
fiscal quarter immediately preceding such sale, lease or other disposition;
provided that there shall be excluded from any determination of a "substantial
part" any (i) sale or disposition of assets in the ordinary course of business
of the Company and its Restricted Subsidiaries and (ii) any transfer of assets
from the Company to any Restricted Subsidiary or from any Restricted Subsidiary
to the Company or a Restricted Subsidiary.
Section 10.5. Merger and Consolidation. The Company will not, and will
not permit any of its Restricted Subsidiaries to, consolidate with or merge with
any other Person or convey, transfer or lease substantially all of its assets in
a single transaction or series of transactions to any Person; provided that:
(1) any Restricted Subsidiary of the Company may (x)
consolidate with or merge with, or convey, transfer or lease
substantially all of its assets in a single transaction or series of
transactions to, (i) the Company or a Restricted Subsidiary so long as
in any merge or consolidation involving the Company, the Company shall
be the surviving or continuing corporation or (ii) any other Person so
long as the survivor is the Restricted Subsidiary, or (y) convey,
transfer or lease all of its assets in compliance with the provisions
of Section 10.4; and
(2) the foregoing restriction does not apply to the
consolidation or merger of the Company with, or the conveyance,
transfer or lease of substantially all of the assets of the Company in
a single transaction or series of transactions to, any Person so long
as:
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(a) the successor formed by such consolidation or the
survivor of such merger or the Person that acquires by conveyance,
transfer or lease substantially all of the assets of the Company as an
entirety, as the case may be (the "Successor Corporation"), shall be a
solvent corporation organized and existing under the laws of the United
States of America, any State thereof or the District of Columbia;
(b) if the Company is not the Successor Corporation, such
Successor Corporation shall have executed and delivered to each holder
of Notes its assumption of the due and punctual performance and
observance of each covenant and condition of this Agreement (and each
Supplement thereto) and the Notes (pursuant to such agreements and
instruments as shall be reasonably satisfactory to the Required
Holders), and the Successor Corporation shall have caused to be
delivered to each holder of Notes (A) an opinion of nationally
recognized independent counsel, to the effect that all agreements or
instruments effecting such assumption are enforceable in accordance
with their terms and (B) an acknowledgment from each Subsidiary
Guarantor that the Subsidiary Guaranty continues in full force and
effect; and
(c) immediately after giving effect to such transaction
no Default or Event of Default would exist.
Section 10.6. Nature of Business. The Company and its Restricted
Subsidiaries will not engage in any business, if, as a result, when taken as a
whole, the general nature of the business of the Company and its Restricted
Subsidiaries would be substantially changed from the general nature of the
business conducted by the Company and its Restricted Subsidiaries on the date of
this Agreement as described in the Memorandum.
Section 10.7. Transactions with Affiliates. The Company will not and will
not permit any Restricted Subsidiary to enter into directly or indirectly any
Material transaction or Material group of related transactions (including
without limitation the purchase, lease, sale or exchange of properties of any
kind or the rendering of any service) with any Affiliate (other than the Company
or another Restricted Subsidiary), except in the ordinary course and upon fair
and reasonable terms that are not materially less favorable to the Company or
such Restricted Subsidiary than would be obtainable in a comparable arm's-length
transaction with a Person not an Affiliate.
SECTION 11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal
or Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
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(b) the Company defaults in the payment of any interest
on any Note for more than five Business Days after the same becomes due
and payable; or
(c) the Company defaults in the performance of or
compliance with any term contained in Section 10.1 through Section
10.5, inclusive, or any covenant in a Supplement which specifically
provides that it shall have the benefit of this paragraph (c) or any
Subsidiary Guarantor defaults in the performance of or compliance with
any term of the Subsidiary Guaranty beyond any period of grace or cure
period provided with respect thereto; or
(d) the Company defaults in the performance of or
compliance with any term contained herein or in any Supplement (other
than those referred to in paragraphs (a), (b) and (c) of this Section
11) and such default is not remedied within 30 days after the earlier
of (i) a Responsible Officer obtaining actual knowledge of such default
or (ii) the Company receiving written notice of such default from any
holder of a Note (any such written notice to be identified as a "notice
of default" and to refer specifically to this paragraph (d) of Section
11); or
(e) any Subsidiary Guaranty ceases to be a legally valid,
binding and enforceable obligation or contract of a Subsidiary
Guarantor (other than upon a release of any Subsidiary Guarantor from a
Subsidiary Guaranty in accordance with the terms of Section 2.3(b)
hereof), or any Subsidiary Guarantor or any party by, through or on
account of any such Person, challenges the validity, binding nature or
enforceability of any such Subsidiary Guaranty; or
(f) any representation or warranty made in writing by or
on behalf of the Company or Subsidiary Guarantor or by any officer of
the Company or any Subsidiary Guarantor in any writing furnished in
connection with the transactions contemplated hereby or by any
Subsidiary Guaranty proves to have been false or incorrect in any
material respect on the date as of which made; or
(g) (i) the Company or any Restricted Subsidiary is in
default (as principal or as guarantor or other surety) in the payment
of any principal of or premium or make-whole amount or interest (in the
payment amount of at least $100,000) on any Debt other than the Notes
that is outstanding in an aggregate principal amount of at least
$5,000,000 beyond any period of grace provided with respect thereto, or
(ii) the Company or any Restricted Subsidiary is in default in the
performance of or compliance with any term of any instrument, mortgage,
indenture or other agreement relating to any Debt other than the Notes
in an aggregate principal amount of at least $5,000,000 or any other
condition exists, and as a consequence of such default or condition
such Debt has become, or has been declared, due and payable or one or
more Persons has the right to declare such Debt to be due and payable
before its stated maturity or before its regularly scheduled dates of
payment, or (iii) as a consequence of the occurrence or continuation of
any event or condition (other than the passage of time or the right of
the holder of Debt to convert such Debt into equity interests), the
Company or any Restricted Subsidiary has become obligated to purchase
or repay Debt other than the Notes before its regular maturity or
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before its regularly scheduled dates of payment in an aggregate
outstanding principal amount of at least $5,000,000 or one or more
Persons have the right to require the Company or any Restricted
Subsidiary to purchase or repay such Debt; or
(h) the Company, any Material Subsidiary or any
Subsidiary Guarantor (i) is generally not paying, or admits in writing
its inability to pay, its debts as they become due, (ii) files, or
consents by answer or otherwise to the filing against it of, a petition
for relief or reorganization or arrangement or any other petition in
bankruptcy, for liquidation or to take advantage of any bankruptcy,
insolvency, reorganization, moratorium or other similar law of any
jurisdiction, (iii) makes an assignment for the benefit of its
creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with
respect to any substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes corporate action for the
purpose of any of the foregoing; or
(i) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by the
Company, any of its Material Restricted Subsidiaries or any Subsidiary
Guarantor, a custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial part of
its property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in
bankruptcy or for liquidation or to take advantage of any bankruptcy or
insolvency law of any jurisdiction, or ordering the dissolution,
winding-up or liquidation of the Company, any of its Material
Restricted Subsidiaries or any Subsidiary Guarantor, or any such
petition shall be filed against the Company, any of its Material
Restricted Subsidiaries or any Subsidiary Guarantor and such petition
shall not be dismissed within 60 days; or
(j) a final judgment or judgments at any one time
outstanding for the payment of money aggregating in excess of
$5,000,000 are rendered against one or more of the Company, its
Restricted Subsidiaries or any Subsidiary Guarantor and which judgments
are not, within 60 days after entry thereof, bonded, discharged or
stayed pending appeal, or are not discharged within 60 days after the
expiration of such stay; or
(k) if (i) any Plan shall fail to satisfy the minimum
funding standards of ERISA or the Code for any plan year or part
thereof or a waiver of such standards or extension of any amortization
period is sought or granted under Section 412 of the Code, (ii) a
notice of intent to terminate any Plan shall have been or is reasonably
expected to be filed with the PBGC or the PBGC shall have instituted
proceedings under Section 4042 of ERISA to terminate or appoint a
trustee to administer any Plan or the PBGC shall have notified the
Company or any ERISA Affiliate that a Plan may become a subject of any
such proceedings, (iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of Section 4001(a)(18) of ERISA) under
all Plans, determined in accordance with Title IV of ERISA, shall
exceed $5,000,000, (iv) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the
Code relating to employee benefit plans, (v) the Company or any ERISA
Affiliate withdraws from any
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Multiemployer Plan, or (vi) the Company or any Subsidiary establishes
or amends any employee welfare benefit plan that provides
post-employment welfare benefits in a manner that could increase the
liability of the Company or any Subsidiary thereunder; and any such
event or events described in clauses (i) through (vi) above, either
individually or together with any other such event or events, could
reasonably be expected to have a Material Adverse Effect.
As used in Section 11(j), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
SECTION 12. REMEDIES ON DEFAULT, ETC.
Section 12.1. Acceleration. (a) If an Event of Default with respect to
the Company described in paragraph (h) or (i) of Section 11 (other than an Event
of Default described in clause (i) of paragraph (h) or described in clause (vi)
of paragraph (h) by virtue of the fact that such clause encompasses clause (i)
of paragraph (h)) has occurred, all the Notes of every Series then outstanding
shall automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing,
any holder or holders of more than 50% in aggregate principal amount of the
Notes at the time outstanding may at any time at its or their option, by notice
or notices to the Company, declare all the Notes then outstanding to be
immediately due and payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing with respect to any Notes, any holder
or holders of Notes at the time outstanding affected by such Event of Default
may at any time, at its or their option, by notice or notices to the Company,
declare all the Notes held by such holder or holders to be immediately due and
payable.
Upon any Note's becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Note will forthwith mature and the
entire unpaid principal amount of such Note, plus (i) all accrued and unpaid
interest thereon and (ii) the Make-Whole Amount or other premium determined in
respect of such principal amount (to the full extent permitted by applicable
law), shall all be immediately due and payable, in each and every case without
presentment, demand, protest or further notice, all of which are hereby waived.
The Company acknowledges, and the parties hereto agree, that each holder of a
Note has the right to maintain its investment in the Notes free from repayment
by the Company (except as herein specifically provided for) and that the
provision for payment of a Make-Whole Amount or other premium by the Company in
the event that the Notes are prepaid or are accelerated as a result of an Event
of Default, is intended to provide compensation for the deprivation of such
right under such circumstances.
Section 12.2. Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 12.1, the holder of
any Note at the time outstanding may proceed to protect and enforce the rights
of such holder by an action at law, suit in equity or
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other appropriate proceeding, whether for the specific performance of any
agreement contained herein or in any Note, or for an injunction against a
violation of any of the terms hereof or thereof, or in aid of the exercise of
any power granted hereby or thereby or by law or otherwise.
Section 12.3. Rescission. At any time after the Notes have been declared
due and payable pursuant to clause (b) or (c) of Section 12.1, the holders of
not less than 51% in aggregate principal amount of the Notes then outstanding,
by written notice to the Company, may rescind and annul any such declaration and
its consequences if (a) the Company has paid all overdue interest on the Notes,
all principal of and Make-Whole Amount or premium, if any, on any Notes that are
due and payable and are unpaid other than by reason of such declaration, and all
interest on such overdue principal and Make-Whole Amount or premium, if any, and
(to the extent permitted by applicable law) any overdue interest in respect of
the Notes, at the Default Rate, (b) all Events of Default and Defaults, other
than non-payment of amounts that have become due solely by reason of such
declaration, have been cured or have been waived pursuant to Section 17, and (c)
no judgment or decree has been entered for the payment of any monies due
pursuant hereto or to any Notes. No rescission and annulment under this Section
12.3 will extend to or affect any subsequent Event of Default or Default or
impair any right consequent thereon.
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. No
course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under Section 15, the Company
will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all costs and expenses of such holder incurred in any
enforcement or collection under this Section 12, including, without limitation,
reasonable attorneys' fees, expenses and disbursements.
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
Section 13.1. Registration of Notes. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of Notes.
Section 13.2. Transfer and Exchange of Notes. Upon surrender of any Note
at the principal executive office of the Company for registration of transfer or
exchange (and in the case of a surrender for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer duly executed by the
registered holder of such Note or its attorney duly authorized in
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writing and accompanied by the address for notices of each transferee of such
Note or part thereof), the Company shall execute and deliver not more than 5
Business Days following surrender of such Note, at the Company's expense (except
as provided below), one or more new Notes (as requested by the holder thereof)
of the same Series (and of the same tranche if such Series has separate
tranches) in exchange therefor, in an aggregate principal amount equal to the
unpaid principal amount of the surrendered Note. Each such new Note shall be
payable to such Person as such holder may request and shall be substantially in
the form of the Note of such Series originally issued hereunder or pursuant to
any Supplement. Each such new Note shall be dated and bear interest from the
date to which interest shall have been paid on the surrendered Note or dated the
date of the surrendered Note if no interest shall have been paid thereon. The
Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes. Notes
shall not be transferred in denominations of less than $100,000, provided that
if necessary to enable the registration of transfer by a holder of its entire
holding of Notes, one Note may be in a denomination of less than $100,000. Any
transferee, by its acceptance of a Note registered in its name (or the name of
its nominee), shall be deemed to have made the representation set forth in
Section 6.2, provided that such holder may (in reliance upon information
provided by the Company, which shall not be unreasonably withheld) make a
representation to the effect that the purchase by such holder of any Note will
not constitute a non-exempt prohibited transaction under Section 406(a) of
ERISA.
The Notes have not been registered under the Securities Act or under
the securities laws of any state and may not be transferred or resold unless
registered under the Securities Act and all applicable state securities laws or
unless an exemption from the requirement for such registration is available.
Section 13.3. Replacement of Notes. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be, in the case of
an Institutional Investor, notice from such Institutional Investor of such
ownership and such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of
indemnity reasonably satisfactory to it (provided that if the holder of
such Note is, or is a nominee for, an original Purchaser or another
holder of a Note with a minimum net worth of at least $50,000,000, such
Person's own unsecured agreement of indemnity shall be deemed to be
satisfactory), or
(b) in the case of mutilation, upon surrender and
cancellation thereof,
the Company at its own expense shall execute and deliver not more than five
Business Days following satisfaction of such conditions, in lieu thereof, a new
Note of the same Series (and of the same tranche if such Series has separate
tranches), dated and bearing interest from the date to which interest shall have
been paid on such lost, stolen, destroyed or mutilated Note or dated the date of
such lost, stolen, destroyed or mutilated Note if no interest shall have been
paid thereon.
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SECTION 14. PAYMENTS ON NOTES.
Section 14.1. Place of Payment. Subject to Section 14.2, payments of
principal, Make-Whole Amount or premium, if any, and interest becoming due and
payable on the Notes shall be made in New York, New York at the principal office
of Banc of America Securities LLC in such jurisdiction. The Company may at any
time, by notice to each holder of a Note, change the place of payment of the
Notes so long as such place of payment shall be either the principal office of
the Company in such jurisdiction or the principal office of a bank or trust
company in such jurisdiction.
Section 14.2. Home Office Payment. So long as any Purchaser or Additional
Purchaser or such Purchaser's nominee or such Additional Purchaser's nominee
shall be the holder of any Note, and notwithstanding anything contained in
Section 14.1 or in such Note to the contrary, the Company will pay all sums
becoming due on such Note for principal, Make-Whole Amount or premium, if any,
and interest by the method and at the address specified for such purpose for
such Purchaser on Schedule A hereto or, in the case of any Additional Purchaser,
Schedule A attached to any Supplement pursuant to which such Additional
Purchaser is a party, or by such other method or at such other address as such
Purchaser or Additional Purchaser shall have from time to time specified to the
Company in writing for such purpose, without the presentation or surrender of
such Note or the making of any notation thereon, except that upon written
request of the Company made concurrently with or reasonably promptly after
payment or prepayment in full of any Note, such Purchaser or Additional
Purchaser shall surrender such Note for cancellation, reasonably promptly after
any such request, to the Company at its principal executive office or at the
place of payment most recently designated by the Company pursuant to Section
14.1. Prior to any sale or other disposition of any Note held by any Purchaser
or Additional Purchaser or such Person's nominee, such Person will, at its
election, either endorse thereon the amount of principal paid thereon and the
last date to which interest has been paid thereon or surrender such Note to the
Company in exchange for a new Note or Notes pursuant to Section 13.2. The
Company will afford the benefits of this Section 14.2 to any Institutional
Investor that is the direct or indirect transferee of any Note.
SECTION 15. EXPENSES, ETC.
Section 15.1. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all reasonable costs
and expenses (including reasonable attorneys' fees of one special counsel for
the Purchasers or any Additional Purchasers and, if reasonably required, local
or other counsel) incurred by each Purchaser and each Additional Purchaser and
each other holder of a Note in connection with such transactions and in
connection with any amendments, waivers or consents under or in respect of this
Agreement (including any Supplement) or the Notes (whether or not such
amendment, waiver or consent becomes effective), including, without limitation:
(a) the reasonable out-of-pocket costs and expenses incurred in enforcing or
defending (or determining whether or how to enforce or defend) any rights under
this Agreement (including any Supplement) or the Notes or in responding to any
subpoena or other legal process or informal investigative demand by any
Governmental Authority issued in connection with this Agreement (including any
Supplement) or the Notes, or by reason of being a holder of any Note, and (b)
the reasonable out-of-pocket
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costs and expenses, including financial advisors' fees, incurred in connection
with the insolvency or bankruptcy of the Company or any Subsidiary or in
connection with any work-out or restructuring of the transactions contemplated
hereby and by the Notes. The Company will pay, and will save each Purchaser,
each Additional Purchaser and each other holder of a Note harmless from, all
claims in respect of any reasonable fees, costs or expenses if any, of brokers
and finders (other than those retained by the Purchasers).
Section 15.2. Survival. The obligations of the Company under this Section
15 will survive the payment or transfer of any Note, the enforcement, amendment
or waiver of any provision of this Agreement, any Supplement or the Notes, and
the termination of this Agreement or any Supplement.
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein or in any
Supplement shall survive the execution and delivery of this Agreement, such
Supplement and the Notes, the purchase or transfer by any Purchaser or any
Additional Purchaser of any such Note or portion thereof or interest therein and
the payment of any Note may be relied upon by any subsequent holder of any such
Note, regardless of any investigation made at any time by or on behalf of any
Purchaser or any Additional Purchaser or any other holder of any such Note. All
statements contained in any certificate or other instrument delivered by or on
behalf of the Company pursuant to this Agreement or any Supplement shall be
deemed representations and warranties of the Company under this Agreement;
provided, that the representations and warranties contained in any Supplement
shall only be made for the benefit of the Additional Purchasers which are party
to such Supplement and the holders of the Notes issued pursuant to such
Supplement, including subsequent holders of any Note issued pursuant to such
Supplement, and shall not require the consent of the holders of existing Notes.
Subject to the preceding sentence, this Agreement (including every Supplement)
and the Notes embody the entire agreement and understanding between the
Purchasers and the Additional Purchasers and the Company and supersede all prior
agreements and understandings relating to the subject matter hereof.
SECTION 17. AMENDMENT AND WAIVER.
Section 17.1. Requirements. (a) This Agreement (including any Supplement)
and the Notes may be amended, and the observance of any term hereof or of the
Notes may be waived (either retroactively or prospectively), with (and only
with) the written consent of the Company and the Required Holders, except that
(i) no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6
or 21 hereof or the corresponding provision of any Supplement, or any defined
term (as it is used in any such Section or such corresponding provision of any
Supplement), will be effective as to any holder of Notes unless consented to by
such holder of Notes in writing, and (ii) no such amendment or waiver may,
without the written consent of all of the holders of Notes at the time
outstanding affected thereby, (A) subject to the provisions of Section 12
relating to acceleration or rescission, change the amount or time of any
prepayment or payment of principal of, or reduce the rate or change the time of
payment or method of computation of interest or of the Make-Whole Amount or
premium on, the Notes, (B) change the
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percentage of the principal amount of the Notes the holders of which are
required to consent to any such amendment or waiver, or (C) amend any of
Sections 8, 11(a), 11(b), 12, 17 or 20.
(b) Supplements. Notwithstanding anything to the contrary
contained herein, the Company may enter into any Supplement providing for the
issuance of one or more Series of Additional Notes consistent with Sections 2.2
and 4.14 hereof without obtaining the consent of any holder of any other Series
of Notes.
Section 17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each holder of the
Notes (irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof, any Supplement or of the Notes. The Company will deliver executed or
true and correct copies of each amendment, waiver or consent effected pursuant
to the provisions of this Section 17 to each holder of outstanding Notes
promptly following the date on which it is executed and delivered by, or
receives the consent or approval of, the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay or
cause to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by such holder of
Notes of any waiver or amendment of any of the terms and provisions hereof or
any Supplement unless such remuneration is concurrently paid, or security is
concurrently granted, on the same terms, ratably to each holder of Notes then
outstanding even if such holder did not consent to such waiver or amendment.
Section 17.3. Binding Effect, Etc. Any amendment or waiver consented to
as provided in this Section 17 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein, the term "this Agreement" and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.
Section 17.4. Notes Held by Company, Etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding.
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SECTION 18. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telefacsimile if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by a recognized overnight delivery service (with
charges prepaid). Any such notice must be sent:
(i) if to a Purchaser or such Purchaser's nominee, to
such Purchaser or such Purchaser's nominee at the address specified for
such communications in Schedule A to this Agreement, or at such other
address as such Purchaser or such Purchaser's nominee shall have
specified to the Company in writing pursuant to this Section 18;
(ii) if to an Additional Purchaser or such Additional
Purchaser's nominee, to such Additional Purchaser or such Additional
Purchaser's nominee at the address specified for such communications in
Schedule A to any Supplement, or at such other address as such
Additional Purchaser or such Additional Purchaser's nominee shall have
specified to the Company in writing,
(iii) if to any other holder of any Note, to such holder at
such address as such other holder shall have specified to the Company
in writing pursuant to this Section 18, or
(iv) if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of Chief Financial
Officer, with a copy to the Special Counsel, or at such other address
as the Company shall have specified to the holder of each Note in
writing.
Notices under this Section 18 will be deemed given only when actually received.
SECTION 19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by each Purchaser at the Closing (except the
Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to each Purchaser, may be
reproduced by such Purchaser by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and such Purchaser
may destroy any original document so reproduced. The Company agrees and
stipulates that, to the extent permitted by applicable law, any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such Purchaser in the
regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence. This
Section 19 shall not prohibit the Company or any other holder of Notes from
contesting any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any such
reproduction.
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SECTION 20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential Information" means
information delivered to any Purchaser by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when received by such
Purchaser as being confidential information of the Company or such Subsidiary,
provided that such term does not include information that (a) was publicly known
or otherwise known to such Purchaser prior to the time of such disclosure, (b)
subsequently becomes publicly known through no act or omission by such Purchaser
or any Person acting on such Purchaser's behalf, (c) otherwise becomes known to
such Purchaser other than through disclosure by the Company or any Subsidiary or
(d) constitutes financial statements delivered to such Purchaser under Section
7.1 that are otherwise publicly available. Each Purchaser will maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by such Purchaser in good faith to protect confidential information of
third parties delivered to such Purchaser, provided that such Purchaser may
deliver or disclose Confidential Information to (i) such Purchaser's directors,
trustees, officers, employees, agents, attorneys and affiliates who shall have
agreed in writing to be bound by the provisions contained in Section 20 prior to
its receipt of such Confidential Information (to the extent such disclosure
reasonably relates to the administration of the investment represented by such
Purchaser's Notes), (ii) such Purchaser's financial advisors and other
professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 20, (iii)
any other holder of any Note, (iv) any Institutional Investor to which such
Purchaser sells or offers to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior to its receipt
of such Confidential Information to be bound by the provisions of this Section
20), (v) any Person from which such Purchaser offers to purchase any security of
the Company (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section 20), (vi)
any federal or state regulatory authority having jurisdiction over such
Purchaser, (vii) the National Association of Insurance Commissioners or any
similar organization, or any nationally recognized rating agency that requires
access to information about such Purchaser's investment portfolio, or (viii) any
other Person to which such delivery or disclosure may be necessary or
appropriate (w) to effect compliance with any law, rule, regulation or order
applicable to such Purchaser, (x) in response to any subpoena or other legal
process, (y) in connection with any litigation to which such Purchaser is a
party or (z) if an Event of Default has occurred and is continuing, to the
extent such Purchaser may reasonably determine such delivery and disclosure to
be necessary or appropriate in the enforcement or for the protection of the
rights and remedies under such Purchaser's Notes and this Agreement. Each holder
of a Note, by its acceptance of a Note, will be deemed to have agreed to be
bound by and to be entitled to the benefits of this Section 20 as though it were
a party to this Agreement. On reasonable request by the Company in connection
with the delivery to any holder of a Note of information required to be
delivered to such holder under this Agreement or requested by such holder (other
than a holder that is a party to this Agreement or its nominee), such holder
will enter into an agreement with the Company embodying the provisions of this
Section 20.
Notwithstanding anything herein to the contrary, and to the extent not
otherwise prohibited by applicable securities laws, each Purchaser (and each
employee, representative or
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other agent of each Purchaser) may disclose to any Person, without limitations
of any kind, the "tax treatment" and "tax structure" (in each case, within the
meaning of Treasury Regulation Section 1.6011-4) of the offering of the Notes
and all materials of any kind (including opinions or other tax analyses) that
are or have been provided to each Purchaser relating to such tax treatment or
tax structure; provided that, with respect to any document or similar item that
in either case contains information concerning such tax treatment or tax
structure of the offering as well as other information, such permitted
disclosure shall apply solely to such facts and relevant portions of the
document or similar item that relate to such tax treatment or tax structure.
SECTION 21. SUBSTITUTION OF PURCHASER.
Each Purchaser shall have the right to substitute any one of such
Purchaser's Affiliates as the purchaser of the Notes that such Purchaser has
agreed to purchase hereunder, by written notice to the Company, which notice
shall be signed by both such Purchaser and such Purchaser's Affiliate, shall
contain such Affiliate's agreement to be bound by this Agreement and shall
contain a confirmation by such Affiliate of the accuracy with respect to it of
the representations set forth in Section 6. Upon receipt of such notice,
wherever the word "Purchaser" is used in this Agreement (other than in this
Section 21), such word shall be deemed to refer to such Affiliate in lieu of
such Purchaser. In the event that such Affiliate is so substituted as a
purchaser hereunder and such Affiliate thereafter transfers to such Purchaser
all of the Notes then held by such Affiliate, upon receipt by the Company of
notice of such transfer, wherever the word "Purchaser" is used in this Agreement
(other than in this Section 21), such word shall no longer be deemed to refer to
such Affiliate, but shall refer to such Purchaser, and such Purchaser shall have
all the rights of an original holder of the Notes under this Agreement.
SECTION 22. MISCELLANEOUS.
Section 22.1. Successors and Assigns. All covenants and other agreements
contained in this Agreement (including all covenants and other agreements
contained in any Supplement) by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not.
Section 22.2. Payments Due on Non-Business Days. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of principal
of or Make-Whole Amount or interest on any Note that is due on a date other than
a Business Day shall be made on the next succeeding Business Day without
including the additional days elapsed in the computation of the interest payable
on such next succeeding Business Day.
Section 22.3. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
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Section 22.4. Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
Section 22.5. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original but all of which together
shall constitute one instrument. Each counterpart may consist of a number of
copies hereof, each signed by less than all, but together signed by all, of the
parties hereto.
Section 22.6. Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the law of the State of New York excluding choice-of-law principles of the law
of such State that would require the application of the laws of a jurisdiction
other than such State.
* * * * *
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The execution hereof by the Purchasers shall constitute a contract
among the Company and the Purchasers for the uses and purposes hereinabove set
forth. This Agreement may be executed in any number of counterparts, each
executed counterpart constituting an original but all together only one
agreement.
Very truly yours,
SCHAWK, INC.
By /s/ James J. Patterson
---------------------------------------------
Name: James J. Patterson
Title: Sr. VP and Chief Financial Officer
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The foregoing is hereby agreed to
as of the date hereof:
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By: David L. Babson & Company Inc., as
Investment Adviser
By /s/ Richard C. Morrison
-----------------------------------------
Name: Richard C. Morrison
Title: Managing Director
C.M. LIFE INSURANCE COMPANY
By: David L. Babson & Company Inc. as
Investment Sub-Adviser
By /s/ Richard C. Morrison
-----------------------------------------
Name: Richard C. Morrison
Title: Managing Director
MASSMUTUAL ASIA LIMITED
By: David L. Babson & Company Inc. as
Investment Adviser
By /s/ Richard C. Morrison
-----------------------------------------
Name: Richard C. Morrison
Title: Managing Director
-41-
NAME AND ADDRESS PRINCIPAL AMOUNT OF THE
OF PURCHASER TRANCHE SERIES 2003-A NOTES TO BE PURCHASED
MASSACHUSETTS MUTUAL LIFE TRANCHE A $6,420,000
INSURANCE TRANCHE B $4,280,000
COMPANY
c/o David L. Babson & Company Inc.
1500 Main Street, Suite 2800
Springfield, Massachusetts 01115
Attention: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
$15,000,000 4.90% Series 2003-A Senior Notes, Tranche A, due 2013, PPN 806373 A*
7 and $10,000,000 4.98% Series 2003-A Senior Notes, Tranche B, due 2014, PPN
806373 A@5, principal, premium or interest") to:
Citibank, N.A.
111 Wall Street
New York, New York 10043
ABA #021000089
For MassMutual Long-Term Pool Account Number 30510669
Re: Description of security, cusip, principal and interest split
With telephone advice of payment to the Securities Custody and Collection
Department of David L. Babson & Company Inc. at (413) 226-1803 or (413)
226-1889.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments to be addressed Suite 800, Attention:
Securities Custody and Collection Department, S431.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 04-1590850
SCHEDULE A
(to Note Purchase Agreement)
PRINCIPAL AMOUNT OF THE
NAME AND ADDRESS SERIES 2003-ANOTES
OF PURCHASER TRANCHE TO BE PURCHASED
MASSACHUSETTS MUTUAL LIFE INSURANCE A $1,560,000
COMPANY B $1,040,000
c/o David L. Babson & Company Inc.
1500 Main Street, Suite 2800
Springfield, Massachusetts 01115
Attention: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
$15,000,000 4.90% Series 2003-A Senior Notes, Tranche A, due 2013, PPN 806373 A*
7 and $10,000,000 4.98% Series 2003-A Senior Notes, Tranche B, due 2014, PPN
806373 A@5, principal, premium or interest") to:
Citibank, N.A.
111 Wall Street
New York, New York 10043
ABA #021000089
For MassMutual IFM Non-Traditional Account Number 30510589
Re: Description of security, cusip, principal and interest split
With telephone advice of payment to the Securities Custody and Collection
Department of David L. Babson & Company Inc. at (413) 226-1803 or (413)
226-1839.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments to be addressed Suite 800, Attention:
Securities Custody and Collection Department, S431.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 04-1590850
A-2
PRINCIPAL AMOUNT OF THE
NAME AND ADDRESS SERIES 2003-A NOTES
OF PURCHASER TRANCHE TO BE PURCHASED
C.M. LIFE INSURANCE COMPANY A $2,970,000
C/O MASSACHUSETTS MUTUAL LIFE B $1,980,000
INSURANCE COMPANY
c/o David L. Babson & Company Inc.
1500 Main Street, Suite 2800
Springfield, Massachusetts 01115
Attn: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
$15,000,000 4.90% Series 2003-A Senior Notes, Tranche A, due 2013, PPN 806373 A*
7 and $10,000,000 4.98% Series 2003-A Senior Notes, Tranche B, due 2014, PPN
806373 A@5, principal, premium or interest") to:
Citibank, N.A.
111 Wall Street
New York, New York 10043
ABA #021000089
For CM Life Segment 43 - Universal Life
Account Number 30510546
Re: Description of security, cusip, principal and interest split
With telephone advice of payment to the Securities Custody and Collection
Department of David L. Babson & Company Inc. at (413) 226-1803 or (413)
226-1839.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments to be addressed: Suite 800, Attention:
Securities Custody and Collection Department, S431.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 06-1041383
A-3
PRINCIPAL AMOUNT OF THE
NAME AND ADDRESS SERIES 2003-A NOTES
OF PURCHASER TRANCHE TO BE PURCHASED
MASSACHUSETTS MUTUAL LIFE INSURANCE A $1,860,000
COMPANY B $1,240,000
c/o David L. Babson & Company Inc.
1500 Main Street, Suite 2800
Springfield, Massachusetts 01115
Attention: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
$15,000,000 4.90% Series 2003-A Senior Notes, Tranche A, due 2013, PPN 806373 A*
7 and $10,000,000 4.98% Series 2003-A Senior Notes, Tranche B, due 2014, PPN
806373 A@5, principal, premium or interest") to:
Citibank, N.A.
111 Wall Street
New York, New York 10043
ABA #021000089
For MassMutual Pension Management Account Number 30510538
Re: Description of security, cusip, principal and interest split
With telephone advice of payment to the Securities Custody and Collection
Department of David L. Babson & Company Inc. at (413) 226-1803 or (413)
226-1839.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments to be addressed Suite 800, Attention:
Securities Custody and Collection Department, S431.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 04-1590850
A-4
PRINCIPAL AMOUNT OF THE
NAME AND ADDRESS SERIES 2003-A NOTES
OF PURCHASER TRANCHE TO BE PURCHASED
MASSACHUSETTS MUTUAL LIFE INSURANCE A $1,680,000
COMPANY B $1,120,000
c/o David L. Babson & Company Inc.
1500 Main Street, Suite 2800
Springfield, Massachusetts 01115
Attention: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
$15,000,000 4.90% Series 2003-A Senior Notes, Tranche A, due 2013, PPN 806373 A*
7 and $10,000,000 4.98% Series 2003-A Senior Notes, Tranche B, due 2014, PPN
806373 A@5, principal, premium or interest") to:
Citibank, N.A.
111 Wall Street
New York, New York 10043
ABA #021000089
For MassMutual Spot Priced Contract Account Number 30510597
Re: Description of security, cusip, principal and interest split
With telephone advice of payment to the Securities Custody and Collection
Department of David L. Babson & Company Inc. at (413) 226-1807 or (413)
226-1839.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments to be addressed Suite 800, Attention:
Securities Custody and Collection Department, S431.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 04-1590850
A-5
PRINCIPAL AMOUNT OF THE
NAME AND ADDRESS SERIES 2003-A NOTES
OF PURCHASER TRANCHE TO BE PURCHASED
MASSMUTUAL ASIA LIMITED A $510,000
c/o David L. Babson & Company Inc. B $340,000
1500 Main Street, Suite 2800
Springfield, Massachusetts 01115
Attention: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
$15,000,000 4.90% Series 2003-A Senior Notes, Tranche A, due 2013, PPN 806373 A*
7 and $10,000,000 4.98% Series 2003-A Senior Notes, Tranche B, due 2014, PPN
806373 A@5, principal, premium or interest") to:
Gerlach & Co.
c/o Citibank, N.A
111 Wall Street
New York, New York 10043
ABA #021000089
Concentration Account 36112805
Attention: Judy Rock
Re: MassMutual Asia
Name of Security/CUSIP Number
With telephone advice of payment to the Securities Custody and Collection
Department of David L. Babson & Company Inc. at (413) 226-1807 or (413)
226-1839.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments to be addressed Suite 800, Attention:
Securities Custody and Collection Department, S431.
Send Corporate Action Notification to:
Citigroup Global Securities Services
Attn: Corporate Action Department
3800 Citibank Center Tampa
Building B Floor 3
Tampa, Florida 33610-9122
Name of Nominee in which Notes are to be issued: Gerlach & Co.
A-6
DEFINED TERMS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"Additional Notes" is defined in Section 2.2.
"Additional Purchasers" means purchasers of Additional Notes.
"Administrative Agent" means Bank One, N.A. in its capacity as
administrative agent under the Bank Credit Agreement, together with its
successors and assigns in such capacity.
"Affiliate" means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any Person of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests. As used in this
definition, "Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an "Affiliate"
is a reference to an Affiliate of the Company.
"Bank Credit Agreement" means the Credit Agreement dated as of October
29, 1999 by and among the Company, certain Subsidiaries of the Company named
therein, Bank One, N.A., as administrative agent, and the other financial
institutions party thereto, as amended, restated, joined, supplemented or
otherwise modified from time to time, and any renewals, extensions or
replacements thereof, which constitute the primary bank credit facility of the
Company and its Subsidiaries.
"Bank Lenders" means the banks and financial institutions party to the
Bank Credit Agreement.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which commercial banks in New York, New York are required or authorized to be
closed.
"Capital Lease" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Capital Lease Obligation" means, with respect to any Person and a
Capital Lease, the amount of the obligation of such Person as the lessee under
such Capital Lease which would, in accordance with GAAP, appear as a liability
on a balance sheet of such Person.
"Closing" is defined in Section 3.
SCHEDULE B
(to Note Purchase Agreement)
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"Company" means Schawk, Inc., a Delaware corporation.
"Confidential Information" is defined in Section 20.
"Consolidated Debt" means as of any date of determination the total
amount of all Debt of the Company and its Restricted Subsidiaries determined on
a consolidated basis in accordance with GAAP.
"Consolidated EBITDA" shall mean, for any period, Consolidated Net
Income for such period, plus, to the extent deducted in computing such
Consolidated Net Income and without duplication, (a) depreciation and
amortization expense for such period, (b) Consolidated Interest Expense for such
period, (c) income tax expense for such period, and (d) all other non cash
expenses for such period, all as determined in accordance with GAAP consistently
applied. For purposes of calculating Consolidated EBITDA for any period of four
consecutive quarters, if during such period the Company or any Restricted
Subsidiary shall have acquired any Person which becomes a Restricted Subsidiary
or acquired all or substantially all of the operating assets of any Person or
disposed of any Restricted Subsidiary or all or substantially all of the
operating assets of any Restricted Subsidiary or disposed of any segment of the
business of the Company or a Restricted Subsidiary, Consolidated EBITDA for such
period shall be calculated after giving pro forma effect thereto as if such
acquisition or disposition occurred on the first day of such period.
"Consolidated Interest Expense" shall mean, for any period, the gross
interest expense of the Company and its Restricted Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP consistently applied.
"Consolidated Net Income" shall mean, for any period, the consolidated
net income (or loss) of the Company and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP consistently
applied, provided that any charges related to the impairment of goodwill or
other intangibles as required under SFAS No. 142 shall be excluded from the
calculation of Consolidated Net Income.
"Consolidated Net Worth" shall mean the consolidated stockholder's
equity of the Company and its Restricted Subsidiaries, as defined according to
GAAP, less the sum of (i) minority interests and (ii) Restricted Investments in
excess of 10% of stockholders' equity of the Company and its Restricted
Subsidiaries, provided that, for purposes of any determination of Consolidated
Net Worth, charges related to the impairment of goodwill or other intangibles as
required under SFAS No. 142 shall be excluded from Consolidated Net Worth.
"Consolidated Total Assets" means, as of any date of determination, the
total amount of all assets of the Company and its Restricted Subsidiaries,
determined on a consolidated basis in accordance with GAAP.
B-2
"Consolidated Total Capitalization" means, at any time, the sum of (i)
Consolidated Net Worth and (ii) Consolidated Debt.
"Debt" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable and other
accrued liabilities arising in the ordinary course of business but
including, without limitation, all liabilities created or arising under
any conditional sale or other title retention agreement with respect to
any such property);
(c) its Capital Lease Obligations;
(d) all liabilities for borrowed money secured by any
Lien with respect to any property owned by such Person (whether or not
it has assumed or otherwise become liable for such liabilities); and
(e) Guarantees of such Person with respect to liabilities
of a type described in any of clauses (a) through (d) hereof.
Debt of any Person shall include all obligations of such Person of the
character described in clauses (a) through (e) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
"Default" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
"Default Rate" means with respect to the Notes of any Series that rate
of interest that is 2% per annum above the rate of interest stated in clause (a)
of the first paragraph of the Notes of such Series (and of such tranche if such
Series has separate tranches).
"De Minimis Subsidiary" means any Unrestricted Subsidiary which has
total assets of less than $1,000,000 and total revenues during each of the last
three fiscal years of less than $1,000,000.
"Environmental Laws" means any and all federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
B-3
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value" means, at any time and with respect to any
property, the sale value of such property that would be realized in an
arm's-length sale at such time between an informed and willing buyer and an
informed and willing seller (neither being under a compulsion to buy or sell),
as reasonably determined in the good faith opinion of the Company's board of
directors.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any state or
other political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Restricted Subsidiary conducts all or any part of its
business, or which has jurisdiction over any properties of the
Company or any Restricted Subsidiary, or
(b) any entity exercising executive, legislative,
judicial, regulatory or administrative functions of, or pertaining to,
any such government.
"Guaranty" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Debt, dividend or other obligation of any other Person in any manner, whether
directly or indirectly, including (without limitation) obligations incurred
through an agreement, contingent or otherwise, by such Person:
(a) to purchase such Debt or obligation or any property
constituting security therefor primarily for the purpose of assuring
the owner of such Debt or obligation of the ability of any other Person
to make payment of the Debt or obligation;
(b) to advance or supply funds (i) for the purchase or
payment of such Debt or obligation, or (ii) to maintain any working
capital or other balance sheet condition or any income statement
condition of any other Person or otherwise to advance or make available
funds for the purchase or payment of such Debt or obligation;
B-4
(c) to lease properties or to purchase properties or
services primarily for the purpose of assuring the owner of such Debt
or obligation of the ability of any other Person to make payment of the
Debt or obligation; or
(d) otherwise to assure the owner of such Debt or
obligation against loss in respect thereof.
In any computation of the Debt or other liabilities of the obligor
under any Guaranty, the Debt or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor, provided
that the amount of such Debt outstanding for purposes of this Agreement shall
not exceed the maximum amount of Debt that is the subject of such Guaranty.
"Hazardous Material" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"holder" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
13.1.
"Institutional Investor" means (a) any original purchaser of a Note,
(b) any holder of more than $2,000,000 of the aggregate principal amount of the
Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"Investments" shall mean all investments, in cash or by delivery of
property made, directly or indirectly in any Person, whether by acquisition of
shares of capital stock, Debt or other obligations or securities or by loan,
advance, capital contribution or otherwise.
"Lien" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement (other than an operating
lease) or Capital Lease, upon or with respect to any property or asset of such
Person (including, in the case of stock, shareholder agreements, voting trust
agreements and all similar arrangements).
"Make-Whole Amount" shall have the meaning (i) set forth in Section 8.6
with respect to any Series 2003-A Note and (ii) set forth in the applicable
Supplement with respect to any other Series of Notes.
"Material" means material in relation to the business, operations,
affairs, financial condition, assets or properties of the Company and its
Restricted Subsidiaries taken as a whole.
B-5
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Restricted Subsidiaries taken as a whole, or (b) the ability of
the Company to perform its obligations under this Agreement (including any
Supplement) and the Notes, (c) the ability of any Subsidiary Guarantor to
perform its obligations under the Subsidiary Guaranty or (d) the validity or
enforceability of this Agreement (including any Supplement), the Notes or the
Subsidiary Guaranty.
"Material Subsidiary" means, at any time, any Restricted Subsidiary of
the Company which, together with all other Restricted Subsidiaries of such
Restricted Subsidiary, accounts for more than (i) 5% of the consolidated assets
of the Company and its Restricted Subsidiaries at the end of either of the two
fiscal years immediately preceding the date of determination or (ii) 5% of
consolidated revenue of the Company and its Restricted Subsidiaries for either
of the two fiscal years immediately preceding the date of determination.
"Memorandum" is defined in Section 5.3.
"Moody's" shall mean Moody Investors Service, Inc.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" (as
such term is defined in Section 4001(a)(3) of ERISA).
"Net Proceeds" means with respect to any sale of property by any Person
an amount equal to the aggregate amount of consideration received by such Person
in respect of such sale, minus all out-of-pocket costs and expenses actually
incurred by such Person in connection with such sale (but excluding all state,
federal and foreign taxes incurred, or to be incurred, by such Person in
connection with such sale).
"Notes" is defined in Section 1.
"Officer's Certificate" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Plan" means an "employee benefit plan" (as defined in Section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
B-6
"Priority Debt" means (without duplication), as of the date of any
determination thereof, the sum of (i) all unsecured Debt of Restricted
Subsidiaries (including all Guaranties of Debt of the Company but excluding (x)
Debt owing to the Company or any other Restricted Subsidiary and (y) Debt
outstanding at the time such Person became a Restricted Subsidiary (other than
an Unrestricted Subsidiary which is designated as a Restricted Subsidiary
pursuant to Section 9.7 hereof), provided that such Debt shall have not been
incurred in contemplation of such person becoming a Restricted Subsidiary, and
(ii) all Debt of the Company and its Restricted Subsidiaries secured by Liens
other than Debt secured by Liens permitted by subparagraphs (a) through (i),
inclusive, of Section 10.3.
"property" or "properties" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.
"Public Filings of any Person means each financial statement, notice or
proxy statement filed by such Person with the Securities and Exchange Commission
and each regular or periodic report, registration statement and prospectus (and
all amendments thereto) and all other filings of such Person made with the
Securities and Exchange Commission, including, without limitation, Form 10-K,
and Form 10-Q.
"Purchasers" means the purchasers of the Notes named in Schedule A
hereto.
"QPAM Exemption" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"Qualified Institutional Buyer" means any Person who is a qualified
institutional buyer within the meaning of such term as set forth in Rule
144(a)(1) under the Securities Act.
"Required Holders" means, at any time, the holders of not less than 51%
in principal amount of the Notes of all Series at the time outstanding
(exclusive of Notes then owned by the Company or any of its Affiliates).
"Responsible Officer" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"Restricted Investments" shall mean all Investments except the
following:
(a) current assets arising from the sale of goods and
services in the ordinary course of business of the Company;
(b) property to be used in the ordinary course of
business;
(c) Investments existing on the date of the Closing and
described in Schedule B;
(d) Investments in obligations issued by the United
States of America or an agency thereof, or Canada (or any province
thereof), so long as such agency obligations
B-7
have been unconditionally guaranteed by the United States of America or
Canada, as the case may be, provided that such obligations mature
within 365 days from the date of acquisition thereof;
(e) Investments in certificates of deposit or banker's
acceptances issued by an Acceptable Bank, provided that such
obligations mature within 365 days from the date of acquisition
thereof;
(f) Investments in commercial paper rated A-1 or A-2 by
S&P or P-1 or P-2 by Moody's and maturing not more than 270 days from
the date of creation thereof;
(g) Investments in Repurchase Agreements;
(h) Investments in one or more Restricted Subsidiaries or
any Person that becomes a Restricted Subsidiary;
(i) Investments in tax-exempt obligations of any state of
the United States of America, or any municipality of any such state, in
each case rated at least A- by S&P or A-3 by Moody's or, provided that
such obligations mature within 365 days from the date of acquisition
thereof;
(j) Investments in treasury stock; and
(k) Investments in money market instrument programs which
are classified as current assets in accordance with GAAP, which money
market instrument programs are administered by an "investment company"
regulated under the Investment Company Act of 1940 and which money
market instrument programs hold only Investments satisfying the
criteria set forth in clauses (d), (e), (f) and (g) above.
As used in this definition of "Restricted Investments":
"Repurchase Agreement" shall mean any written agreement:
(a) that provides for (1) the transfer of one or
more United States Governmental Securities in an aggregate
principal amount at least equal to the amount of the Transfer
Price (defined below) to the Company or any of its Restricted
Subsidiaries from an Acceptable Bank or an Acceptable
Broker-Dealer against a transfer of funds (the "Transfer
Price") by the Company to such Acceptable Bank or Acceptable
Broker-Dealer, and (2) a simultaneous agreement by the
Company, in connection with such transfer of funds, to
transfer to such Acceptable Bank or Acceptable Broker-Dealer
the same or substantially similar United States Governmental
Securities for a price not less than the Transfer Price plus a
reasonable return thereon at a date certain not later than 365
days after such transfer of funds,
B-8
(b) in respect of which the Company shall have
the right, whether by contract or pursuant to applicable law,
to liquidate such agreement upon the occurrence of any default
thereunder, and
(c) in connection with which the Company, or an
agent thereof, shall have taken all action required by
applicable law or regulations to perfect a Lien in such United
States Governmental Securities.
"Acceptable Bank" shall mean any bank or trust company (i)
which is organized under the laws of the United States of America or
any state thereof, (ii) which has capital, surplus and undivided
profits aggregating at least $250,000,000, and (iii) whose long-term
unsecured debt obligations (or the long-term unsecured debt obligations
of the bank holding company owning all of the capital stock of such
bank or trust company) shall have been given a rating of "A" or better
by S&P, "A2" or better by Moody's or an equivalent rating by any other
credit rating agency of recognized national standing.
"Acceptable Broker-Dealer" shall mean any Person other than a
natural person (i) which is registered as a broker or dealer pursuant
to the Exchange Act and (ii) whose long-term unsecured debt obligations
shall have been given a rating of "A" or better by S&P, "A2" or better
by Moody's or an equivalent rating by any other credit rating agency of
recognized national standing.
"Restricted Subsidiary" means any Subsidiary in which: (i) at least a
majority of the voting securities are owned by the Company and/or one or more
Restricted Subsidiaries and (ii) the Company has not designated an Unrestricted
Subsidiary by notice in writing given to the holders of the Notes.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw-Hill Companies, Inc.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Senior Debt" means, as of the date of any determination thereof, all
Consolidated Debt, other than Subordinated Debt.
"Senior Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
"Series" means any series of Notes issued pursuant to this Agreement or
any Supplement hereto.
"Series 2003-A Notes" is defined in Section 1 of this Agreement.
"Subordinated Debt" means all unsecured Debt of the Company which shall
contain or have applicable thereto subordination provisions providing for the
subordination thereof to other
B-9
Debt of the Company (including, without limitation, the obligations of the
Company under this Agreement, any Supplement or the Notes).
"Subsidiary" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.
"Subsidiary Guarantor" means each Subsidiary which is party to the
Subsidiary Guaranty.
"Subsidiary Guaranty" is defined in Section 2.3 of this Agreement.
"Supplement" is defined in Section 2.2 of this Agreement.
"tranche" means all Notes of a Series having the same maturity,
interest rate and schedule for mandatory prepayments.
"Tranche A Notes" is defined in Section 1 of this Agreement.
"Tranche B Notes" is defined in Section 1 of this Agreement.
"Unrestricted Subsidiary" means any Subsidiary so designated by the
Company.
B-10
CHANGES IN CORPORATE STRUCTURE
None
SCHEDULE 4.9
(to Note Purchase Agreement)
SUBSIDIARIES OF THE COMPANY, OWNERSHIP OF SUBSIDIARY STOCK, AFFILIATES
STATE OF
SUBSIDIARY INCORPORATION STOCKHOLDER
---------- ------------- -----------
Schawk Canada, Inc. Ontario, Canada Schawk, Inc. (100%)
Schawk USA, Inc. Delaware Schawk, Inc. (100%)
Schawk Global Enterprises, Inc. Michigan Schawk, Inc. (100%)
InterchangeDigital, Inc. Delaware Schawk USA, Inc. (100%)
Schawk Japan, Inc. Delaware Schawk USA, Inc. (100%)
Schawk-Asia, Inc. Delaware Schawk USA, Inc. (100%)
LSI/Kala of Michigan, Inc. Michigan Schawk USA, Inc. (100%)
LSI/Kala LLC Delaware LSI/Kala of Michigan, Inc., sole
member
Schawk LLC Delaware Schawk Global Enterprises, Inc.,
sole member
Schawk de Mexico S. de RL. de C.V. Mexico Schawk LLC
Schawk Servicios Administrativos S. de RL.de C.V. Mexico Schawk LLC
Schawk, Inc. (Ontario) Ontario, Canada Schawk Canada, Inc. (100%)
Anthem Group, Inc. Ontario, Canada Schawk Canada, Inc. (100%)
Cactus Imaging Centres, Inc. Ontario, Canada Schawk Canada, Inc. (100%)
9108-2859 Quebec, Inc. Ontario, Canada Schawk Canada, Inc. (100%)
Schawk Japan, Ltd. Japan Schawk Asia, Inc. (100%)
Schawk Labuan Inc. Labuan, Malaysia Schawk, Inc. (100%)
Schawk (BVI) Services, Inc. Malaysia Schawk Labuan (sole shareholder)
Schawk (BVI) Holdings, Inc. Malaysia Schawk Labuan (sole shareholder)
Laserscan Sdn. Berhad Malaysia Schawk (BVI) Holdings, Inc.
Schawk Japan, Inc. Delaware Schawk USA, Inc. (100%)
Schawk Singapore PTE Ltd. Singapore Schawk USA, Inc.
SCHEDULE 5.4
(to Note Purchase Agreement)
The Company's directors are:
Clarence W. Schawk
David A Schawk
A. Alex Sarkisian
Len Caronia
Judith W. McCue, Esq.
John T. McEnroe, Esq.
Hollis W. Rademacher
The Company's senior officers are:
Chairman Clarence W. Schawk
Chief Executive Officer and President David A. Schawk
Executive Vice President and Secretary A. Alex Sarkisian
Vice President of Finance James Patterson
Assistant Secretary Ron Vittorini
Assistant Secretary John T. McEnroe
5.4-2
FINANCIAL STATEMENTS
Financial Statements and information relating therein available as a
Public Filing.
SCHEDULE 5.5
(to Note Purchase Agreement)
LICENSES, PERMITS, ETC.
None
SCHEDULE 5.11
(to Note Purchase Agreement)
EXISTING DEBT; FUTURE LIENS
SCHAWK, INC. AND SUBSIDIARIES
EXISTING DEBT
AS OF DECEMBER 15, 2003
($000'S OMITTED)
-----------------------------
TOTAL OUTSTANDING
COUNTRY/DESCRIPTION INSTITUTION FACILITY BALANCE
------------------- ----------- -------- -------
United States
Committed Credit Facility Bank One $65,000 $12,000
Demand Line of Credit Northern Trust 15,000 3,300
Private Placement Prudential Capital 12,000 12,000
Capital Leases Various N/A 103
Canada
Demand Line of Credit Toronto Dominion Bank 3,500 0
Malaysia
Credit facility and mortgage Hong Leong Bank 1,250 114
(Malaysia)
China
Shanghai, China CITIC (China) 1,500 0
------- -------
Totals $98,250 $27,517
SCHEDULE 5.15
(to Note Purchase Agreement)
EXISTING LIENS
1. SCHAWK, INC.
A. Delaware Secretary of State
1. UCC - 7 found as of 12/1/03 as follows:
SECURED PARTY FILE NUMBER FILE DATE COLLATERAL
------------- ----------- --------- ----------
E.I. DuPont DeNemours & Company Inc. 10719398 7/24/01 Cyrel FAST Processor
E.I. DuPont DeNemours & Company Inc. 10798350 8/8/01 2000 BP with all additions
etc.
CIT Communications Finance Corporation 21600596 5/30/02 Leased equipment
Imaging Financial Services Inc. 21924954 7/12/02 Xerox copier
Imaging Financial Services Inc. 22754848 10/22/02 Xerox printer
Harold M. Pitman Company 30503287 2/28/03 Goods and inventory on
consignment
BASF Corporation 30928203 4/9/03 BASF printing plates
2. Federal Tax Liens - 0 found as of 12/1/03
3. EPA/ERISA Liens - 0 found as of 12/1/03
SCHEDULE 10.3
(to Note Purchase Agreement)
II. SCHAWK USA, INC.
A. Delaware Secretary of State
1. UCC - 0 found as of 12/1/03
2. Federal Tax Liens - 0 found as of 12/1/03
3. EPA/ERISA Liens - 0 found as of 12/1/03
10.3-2
[FORM OF TRANCHE A NOTE]
SCHAWK, INC.
4.90% SERIES 2003-A SENIOR NOTE, TRANCHE A, DUE DECEMBER 31, 2013
No. [_______] [Date]
$[__________] PPN 806373 A*7
FOR VALUE RECEIVED, the undersigned, SCHAWK, INC. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to [_____________________] or registered
assigns, the principal sum of [______________] DOLLARS on December 31, 2013 with
interest (computed on the basis of a 360-day year of twelve 30-day months) (a)
on the unpaid balance thereof at the rate of 4.90% per annum from the date
hereof, payable semi-annually, on the last day of June and December in each year
and at maturity, commencing on June 30, 2004, until the principal hereof shall
have become due and payable, and (b) to the extent permitted by law on any
overdue payment (including any overdue prepayment) of principal, any overdue
payment of interest and any overdue payment of any Make-Whole Amount (as defined
in the Note Purchase Agreement referred to below), payable semi-annually as
aforesaid (or, at the option of the registered holder hereof, on demand), at a
rate per annum from time to time equal to the greater of (i) 6.90% or (ii) 2%
over the rate of interest publicly announced by Bank of America, N.A. from time
to time in New York, New York as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Banc of America Securities LLC in New York,
New York or at such other place as the Company shall have designated by written
notice to the holder of this Note as provided in the Note Purchase Agreement
referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to the Note Purchase Agreement, dated as of December
23, 2003 (as from time to time amended, supplemented or modified, the "Note
Purchase Agreement"), between the Company and the respective Purchasers named
therein and is entitled to the benefits thereof. Each holder of this Note will
be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
provisions set forth in Section 20 of the Note Purchase Agreement and (ii) to
have made the representation set forth in Section 6.2 of the Note Purchase
Agreement.
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
EXHIBIT 1
(to Note Purchase Agreement)
The Company will make required prepayments of principal on the date and
in the amounts specified in the Note Agreement. This Note is subject to optional
prepayment, in whole or from time to time in part, at the times and on the terms
specified in the Note Purchase Agreement, but not otherwise.
Pursuant to the Subsidiary Guaranty Agreement dated as of December 23,
2003 (as amended, restated or otherwise modified from time to time, the
"Subsidiary Guaranty"), certain Subsidiaries of the Company have absolutely and
unconditionally guaranteed payment in full of the principal of, Make-Whole
Amount, if any, and interest on this Note and the performance by the Company of
its obligations contained in the Note Purchase Agreement all as more fully set
forth in said Subsidiary Guaranty.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Note shall be construed and enforced in accordance with, and the
rights of the issuer and holder hereof shall be governed by, the law of the
State of New York excluding choice-of-law principles of the law of such State
that would require the application of the laws of a jurisdiction other than such
State.
SCHAWK, INC.
By_______________________________
Name: _________________________
Title: ________________________
E-1-2
[FORM OF TRANCHE B NOTE]
SCHAWK, INC.
4.98% SERIES 2003-A SENIOR NOTE, TRANCHE B, DUE APRIL 30, 2014
No. [_______] [Date]
$[__________] PPN [_________]
FOR VALUE RECEIVED, the undersigned, SCHAWK, INC. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to [_____________________] or registered
assigns, the principal sum of [______________] DOLLARS on April 30, 2014 with
interest (computed on the basis of a 360-day year of twelve 30-day months) (a)
on the unpaid balance thereof at the rate of 4.98% per annum from the date
hereof, payable semi-annually, on the last day of April and October in each year
and at maturity, commencing with the April or October next succeeding the date
hereof, until the principal hereof shall have become due and payable, and (b) to
the extent permitted by law on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreement
referred to below), payable semi-annually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 6.98% or (ii) 2% over the rate of interest publicly
announced by Bank of America, N.A. from time to time in New York, New York as
its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Banc of America Securities LLC in New York,
New York or at such other place as the Company shall have designated by written
notice to the holder of this Note as provided in the Note Purchase Agreement
referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to the Note Purchase Agreement, dated as of December
23, 2003 (as from time to time amended, supplemented or modified, the "Note
Purchase Agreement"), between the Company and the respective Purchasers named
therein and is entitled to the benefits thereof. Each holder of this Note will
be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
provisions set forth in Section 20 of the Note Purchase Agreement and (ii) to
have made the representation set forth in Section 6.2 of the Note Purchase
Agreement.
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
EXHIBIT 2
(to Note Purchase Agreement)
The Company will make required prepayments of principal on the date and
in the amounts specified in the Note Agreement. This Note is subject to optional
prepayment, in whole or from time to time in part, at the times and on the terms
specified in the Note Purchase Agreement, but not otherwise.
Pursuant to the Subsidiary Guaranty Agreement dated as of December 23,
2003 (as amended, restated or otherwise modified from time to time, the
"Subsidiary Guaranty"), certain Subsidiaries of the Company have absolutely and
unconditionally guaranteed payment in full of the principal of, Make-Whole
Amount, if any, and interest on this Note and the performance by the Company of
its obligations contained in the Note Purchase Agreement all as more fully set
forth in said Subsidiary Guaranty.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Note shall be construed and enforced in accordance with, and the
rights of the issuer and holder hereof shall be governed by, the law of the
State of New York excluding choice-of-law principles of the law of such State
that would require the application of the laws of a jurisdiction other than such
State.
SCHAWK, INC.
By____________________________
Name: ______________________
Title: _____________________
E-2-2
FORM OF SUBSIDIARY GUARANTY
EXHIBIT 2.2
(to Note Purchase Agreement)
DESCRIPTION OF OPINION OF SPECIAL COUNSEL
FOR THE COMPANY
The closing opinion of Vedder Price Kaufman & Kammholz P.C., special
counsel for the Company, which is called for by Section 4.4(a) of the Note
Purchase Agreement, shall be dated the date of the Closing and addressed to the
Purchasers, shall be satisfactory in scope and form to the Purchasers and shall
be to the effect that:
1. The Company is a corporation, duly incorporated,
validly existing and in good standing under the laws of its
jurisdiction of incorporation, has the corporate power and the
corporate authority to execute and perform the Note Purchase Agreement
and to issue the Series 2003-A Notes.
2. Each Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of its
jurisdiction of incorporation.
3. The Note Purchase Agreement has been duly authorized
by all necessary corporate action on the part of the Company, has been
duly executed and delivered by the Company and constitutes the legal,
valid and binding contract of the Company enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance and similar laws affecting creditors' rights generally, and
general principles of equity (regardless of whether the application of
such principles is considered in a proceeding in equity or at law).
4. The Series 2003-A Notes have been duly authorized by
all necessary corporate action on the part of the Company, have been
duly executed and delivered by the Company and constitute the legal,
valid and binding obligations of the Company enforceable in accordance
with their terms, subject to bankruptcy, insolvency, fraudulent
conveyance 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).
5. The Subsidiary Guaranty Agreement has been duly
authorized by all necessary corporate action on the part of the
Subsidiary Guarantors, has been duly executed and delivered by the
Subsidiary Guarantors and constitutes the legal, valid and binding
contract of the Subsidiary Guarantors 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).
6. No approval, consent or withholding of objection on
the part of, or filing, registration or qualification with, any
governmental body, Federal or state, is necessary in connection with
the execution and delivery of the Note Purchase Agreement, the Series
2003-A Notes or the Subsidiary Guaranty Agreement.
EXHIBIT 4.4(a)
(to Note Purchase Agreement)
7. The issuance and sale of the Series 2003-A Notes and
the execution, delivery and performance by the Company of the Note
Purchase Agreement do not conflict with or result in any breach of any
of the provisions of or constitute a default under or result in the
creation or imposition of any Lien upon any of the property of the
Company pursuant to the provisions of the Certificate of Incorporation
or By-laws of the Company or any agreement or other instrument known to
such counsel to which the Company is a party or by which the Company
may be bound.
8. The execution, delivery and performance by the
Subsidiary Guarantors of the Subsidiary Guaranty Agreement does not
conflict with or result in any breach of any of the provisions of or
constitute a default under or result in the creation or imposition of
any Lien upon any of the property of the Subsidiary Guarantor pursuant
to the provisions of the Articles or Certificate of Incorporation or
By-laws of the Subsidiary Guarantors or any agreement or other
instrument known to such counsel to which each Subsidiary Guarantors is
a party or by which the Subsidiary Guarantors may be bound.
9. The issuance, sale and delivery of the Series 2003-A
Notes under the circumstances contemplated by the Note Purchase
Agreement do not, under existing law, require the registration of the
Series 2003-A Notes or the Subsidiary Guaranty Agreement under the
Securities Act of 1933, as amended, or the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
10. Neither the issuance of the Series 2003-A Notes nor
the application of the proceeds of the sale of the Series 2003-A 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, Regulation T, U or X of the
Board of Governors of the Federal Reserve System.
11. There are no actions, suits or proceedings pending
or, to the knowledge of such counsel after due inquiry, threatened
against or affecting the Company or any Subsidiary in any court or
before any governmental authority or arbitration board or tribunal
which, if adversely determined, would have a materially adverse effect
on the financial condition of the Company and its Subsidiaries or the
ability of the Company to perform its obligations under the Note
Purchase Agreement and the Series 2003-A Notes or on the legality,
validity or enforceability of the Company's obligations under the Note
Purchase Agreement or the Series 2003-A Notes or on the legality,
validity or enforceability of the Subsidiary Guarantor's obligations
under the Subsidiary Guaranty Agreement.
12. The Company is not an "investment company" or a
company "controlled" by an "investment company", within the meaning of
the Investment Company Act of 1940, as amended.
E-4.4(a)-2
The opinion of Vedder Price Kaufman & Kammholz P.C. shall cover such
other matters relating to the sale of the Series 2003-A Notes as the Purchasers
may reasonably request. With respect to matters of fact on which such opinion is
based, such special counsel shall be entitled to rely on appropriate
certificates of public officials and officers of the Company and the Subsidiary
Guarantors. Such opinion shall also state that subsequent holders of the Series
2003-A Notes may also rely thereon.
E-4.4(a)-3
FORM OF OPINION OF SPECIAL COUNSEL
TO THE PURCHASERS
The closing opinion of Chapman and Cutler LLP, special counsel to the
Purchasers, called for by Section 4.4 of the Note Purchase Agreement, shall be
dated the date of Closing and addressed to each Purchaser, shall be satisfactory
in form and substance to each Purchaser and shall be to the effect that:
1. The Company is a corporation, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has the
corporate power and the corporate authority to execute and deliver the Note
Purchase Agreement and to issue the Series 2003-A Notes.
2. The Note Purchase Agreement has been duly authorized by all
necessary corporate action on the part of the Company, has been duly executed
and delivered by the Company and constitutes the legal, valid and binding
contract of the Company enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent conveyance and similar laws affecting
creditors' rights generally, and general principles of equity (regardless of
whether the application of such principles is considered in a proceeding in
equity or at law).
3. The Series 2003-A 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 Series 2003-A Notes and
the execution and delivery of the Subsidiary Guaranty under the circumstances
contemplated by the Note Purchase Agreement and the Subsidiary Guaranty do not,
under existing law, require the registration of the Series 2003-A Notes or the
Subsidiary Guaranty under the Securities Act of 1933, as amended, or the
qualification of an indenture under the Trust Indenture Act of 1939, as amended.
EXHIBIT 4.4(b)
(to Note Purchase Agreement)
The opinion of Chapman and Cutler LLP shall also state that the
opinions of Vedder, Price, Kaufman & Kammholz P.C., special counsel to the
Company, are satisfactory in scope and form to Chapman and Cutler LLP and that,
in their opinion, the Purchasers are justified in relying thereon. With respect
to matters of fact upon which such opinion is based, Chapman and Cutler LLP may
rely on appropriate certificates of public officials and officers of the Company
and upon representations of the Company and the Purchasers delivered in
connection with the issuance and sale of the Series 2003-A Notes.
In rendering the opinion set forth in paragraph 1 above, Chapman and
Cutler LLP may rely, as to matters referred to in paragraph 1, solely upon an
examination of the Articles of Incorporation certified by, and a certificate of
good standing of the Company from, the Secretary of State of the State of
Delaware, the Bylaws of the Company and the general business corporation law of
the State of Delaware. The opinion of Chapman and Cutler LLP is limited to the
laws of the State of New York, the general business corporation law of the State
of Delaware and the Federal laws of the United States.
E-4.4(b)-2
SCHAWK, INC.
[NUMBER] SUPPLEMENT TO NOTE PURCHASE AGREEMENT
Dated as of ______________________
Re: $____________ _____% Series _______ Senior Notes
DUE _____________________
EXHIBIT S
(to Note Purchase Agreement)
SCHAWK, INC.
1695 RIVER ROAD
DES PLAINES, ILLINOIS 60018
Dated as of
____________________, 20__
To the Purchaser(s) named in
Schedule A hereto
Ladies and Gentlemen:
This [Number] Supplement to Note Purchase Agreement (the "Supplement")
is between SCHAWK, INC., a Delaware corporation (the "Company"), and the
institutional investors named on Schedule A attached hereto (the "Purchasers").
Reference is hereby made to that certain Note Purchase Agreement dated
as of December 23, 2003 (the "Note Purchase Agreement") between the Company and
the purchasers listed on Schedule A thereto. All capitalized terms not otherwise
defined herein shall have the same meaning as specified in the Note Purchase
Agreement. Reference is further made to Section 4.14 of the Note Purchase
Agreement which requires that, prior to the delivery of any Additional Notes,
the Company and each Additional Purchaser shall execute and deliver a
Supplement.
The Company hereby agrees with the Purchaser(s) as follows:
1. The Company has authorized the issue and sale of $__________
aggregate principal amount of its _____% Series ______ Senior Notes due
_________, ____ (the "Series ______ Notes"). The Series ____ Notes, together
with the Series 2003-A Notes [and the Series ____ Notes] initially issued
pursuant to the Note Purchase Agreement [and the _________ Supplement] and each
series of Additional Notes which may from time to time hereafter be issued
pursuant to the provisions of Section 2.2 of the Note Purchase Agreement, are
collectively referred to as the "Notes" (such term shall also include any such
notes issued in substitution therefor pursuant to Section 13 of the Note
Purchase Agreement). The Series _____ Notes shall be substantially in the form
set out in Exhibit 1 hereto with such changes therefrom, if any, as may be
approved by the Purchaser(s) and the Company.
2. Subject to the terms and conditions hereof and as set forth in
the Note Purchase Agreement and on the basis of the representations and
warranties hereinafter set forth, the Company agrees to issue and sell to each
Purchaser, and each Purchaser agrees to purchase from the Company, Series _____
Notes in the principal amount set forth opposite such Purchaser's name on
Schedule A hereto at a price of 100% of the principal amount thereof on the
closing date hereinafter mentioned.
3. The sale and purchase of the Series ______ Notes to be
purchased by each Purchaser shall occur at the offices of [Chapman and Cutler
LLP, 111 West Monroe Street, Chicago, Illinois 60603,] at 10:00 A.M. Chicago
time, at a closing (the "Closing") on ______, ____ or on such other Business Day
thereafter on or prior to _______, ____ as may be agreed upon by the Company and
the Purchasers. At the Closing, the Company will deliver to each Purchaser the
Series ______ Notes to be purchased by such Purchaser in the form of a single
Series ______ Note (or such greater number of Series ______ Notes in
denominations of at least $100,000 as such Purchaser may request) dated the date
of the Closing and registered in such Purchaser's name (or in the name of such
Purchaser's nominee), against delivery by such Purchaser to the Company or its
order of immediately available funds in the amount of the purchase price
therefor by wire transfer of immediately available funds for the account of the
Company to account number [__________________________] at ____________ Bank,
[Insert Bank address, ABA number for wire transfers, and any other relevant wire
transfer information]. If, at the Closing, the Company shall fail to tender such
Series ______ Notes to any Purchaser as provided above in this Section 3, or any
of the conditions specified in Section 4 shall not have been fulfilled to any
Purchaser's satisfaction, such Purchaser shall, at such Purchaser's election, be
relieved of all further obligations under this Agreement, without thereby
waiving any rights such Purchaser may have by reason of such failure or such
nonfulfillment.
4. The obligation of each Purchaser to purchase and pay for the
Series ______ Notes to be sold to such Purchaser at the Closing is subject to
the fulfillment to such Purchaser's satisfaction, prior to the Closing, of the
conditions set forth in Section 4 of the Note Purchase Agreement with respect to
the Series ______ Notes to be purchased at the Closing, and to the following
additional conditions:
(a) Except as supplemented, amended or superceded by the
representations and warranties set forth in Exhibit A hereto, each of
the representations and warranties of the Company set forth in Section
5 of the Note Purchase Agreement shall be correct as of the date of
Closing and the Company shall have delivered to each Purchaser an
Officer's Certificate, dated the date of the Closing certifying that
such condition has been fulfilled.
(b) Contemporaneously with the Closing, the Company shall
sell to each Purchaser, and each Purchaser shall purchase, the Series
______ Notes to be purchased by such Purchaser at the Closing as
specified in Schedule A.
5. [Here insert special provisions for Series ______ Notes
including prepayment provisions applicable to Series ______ Notes (including
Make-Whole Amount) and closing conditions applicable to Series ______ Notes].
6. Each Purchaser represents and warrants that the
representations and warranties set forth in Section 6 of the Note Purchase
Agreement are true and correct on the date hereof with respect to the purchase
of the Series ______ Notes by such Purchaser.
7. The Company and each Purchaser agree to be bound by and comply
with the terms and provisions of the Note Purchase Agreement as fully and
completely as if such Purchaser were an original signatory to the Note Purchase
Agreement.
-2-
The execution hereof shall constitute a contract between the Company
and the Purchaser(s) 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.
SCHAWK, INC.
By___________________________________
Name:______________________________
Title:_____________________________
Accepted as of __________, _____
[VARIATION]
By___________________________________
Name:______________________________
Title:_____________________________
-3-
INFORMATION RELATING TO PURCHASERS
PRINCIPAL
NAME AND ADDRESS OF PURCHASER AMOUNT OF SERIES ______
NOTES TO BE PURCHASED
[NAME OF PURCHASER] $
(1) All payments by wire transfer of immediately
available funds to:
with sufficient information to identify the source
and application of such funds.
(2) All notices of payments and written confirmations of such wire
transfers:
(3) All other communications:
SCHEDULE A
(to Supplement)
SUPPLEMENTAL REPRESENTATIONS
The Company represents and warrants to each Purchaser that except as
hereinafter set forth in this Exhibit A, each of the representations and
warranties set forth in Section 5 of the Note Purchase Agreement is true and
correct in all material respects as of the date hereof with respect to the
Series ______ Notes with the same force and effect as if each reference to
"Series 2003-A Notes" set forth therein was modified to refer the "Series ______
Notes" and each reference to "this Agreement" therein was modified to refer to
the Note Purchase Agreement as supplemented by the _______ Supplement. The
Section references hereinafter set forth correspond to the similar sections of
the Note Purchase Agreement which are supplemented hereby:
Section 5.3. Disclosure. The Company, through its agent, Banc of
America Securities LLC has delivered to each Purchaser a copy of a Private
Placement Memorandum, dated ____________ (the "Memorandum"), relating to the
transactions contemplated by the ______ Supplement. The Memorandum fairly
describes, in all material respects, the general nature of the business and
principal properties of the Company and its Restricted Subsidiaries. The Note
Purchase Agreement, the Memorandum, the documents, certificates or other
writings delivered to each Purchaser by or on behalf of the Company in
connection with the transactions contemplated by the Note Purchase Agreement and
the _______ Supplement and the financial statements listed in Schedule 5.5 to
the _____ Supplement, taken as a whole, do not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under which they
were made. Since ____________, there has been no change in the financial
condition, operations, business, properties or prospects of the Company or any
Restricted Subsidiary except changes that individually or in the aggregate could
not reasonably be expected to have a Material Adverse Effect. There is no fact
known to the Company that could reasonably be expected to have a Material
Adverse Effect that has not been set forth herein or in the Memorandum or in the
other documents, certificates and other writings delivered to each Purchaser by
or on behalf of the Company specifically for use in connection with the
transactions contemplated hereby.
Section 5.4. Organization and Ownership of Shares of Subsidiaries. (a)
Schedule 5.4 to the ______ Supplement contains (except as noted therein)
complete and correct lists of (i) the Company's Restricted and Unrestricted
Subsidiaries, and showing, as to each Subsidiary, the correct name thereof, the
jurisdiction of its organization, and the percentage of shares of each class of
its capital stock or similar equity interests outstanding owned by the Company
and each other Subsidiary, (ii) the Company's Affiliates, other than
Subsidiaries, and (iii) the Company's directors and senior officers.
Section 5.13. Private Offering by the Company. Neither the Company nor
anyone acting on its behalf has offered the Series __ Notes or any similar
securities for sale to, or solicited any offer to buy any of the same from, or
otherwise approached or negotiated in respect thereof with, any Person other
than the Purchasers and not more than [______] other Institutional Investors,
each of which has been offered the Series ______ Notes at a private sale for
investment. Neither the Company nor anyone acting on its behalf has taken, or
will take, any action that would
EXHIBIT A
(to Supplement)
subject the issuance or sale of the Notes to the registration requirements of
Section 5 of the Securities Act.
Section 5.14. Use of Proceeds; Margin Regulations. The Company will
apply the proceeds of the sale of the Series ______ Notes to
______________________________ and for general corporate purposes. No part of
the proceeds from the sale of the Series ______ Notes pursuant to the _____
Supplement will be used, directly or indirectly, for the purpose of buying or
carrying any margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System (12 CFR 221), or for the purpose of
buying or carrying or trading in any securities under such circumstances as to
involve the Company in a violation of Regulation X of said Board (12 CFR 224) or
to involve any broker or dealer in a violation of Regulation T of said Board (12
CFR 220). Margin stock does not constitute more than 2% of the value of the
consolidated assets of the Company and its Subsidiaries and the Company does not
have any present intention that margin stock will constitute more than 2% of the
value of such assets. As used in this Section, the terms "margin stock" and
"purpose of buying or carrying" shall have the meanings assigned to them in said
Regulation U.
Section 5.15. Existing Debt; Future Liens. (a) Schedule 5.15 to the
_________ Supplement sets forth a complete and correct list of all outstanding
Debt of the Company and its Restricted Subsidiaries as of _____________, since
which date there has been no Material change in the amounts, interest rates,
sinking funds, installment payments or maturities of the Debt of the Company or
its Restricted Subsidiaries. Neither the Company nor any Restricted Subsidiary
is in default and no waiver of default is currently in effect, in the payment of
any principal or interest on any Debt of the Company or such Subsidiary and no
event or condition exists with respect to any Debt of the Company or any
Restricted Subsidiary that would permit (or that with notice or the lapse of
time, or both, would permit) one or more Persons to cause such Debt to become
due and payable before its stated maturity or before its regularly scheduled
dates of payment.
[Add any additional Sections as appropriate at the time the Series ______ Notes
are issued]
-2-
[FORM OF SERIES ______ NOTE]
SCHAWK, INC.
___% SERIES ______ SENIOR NOTE DUE ______________
No. [_________] [Date]
$[____________] PPN [____________]
FOR VALUE RECEIVED, the undersigned, Schawk, INC., a Delaware
corporation (herein called the "Company"), a corporation organized and existing
under the laws of the State of ____________, hereby promises to pay to
[________________], or registered assigns, the principal sum of
[________________] DOLLARS on _______________, with interest (computed on the
basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance
thereof at the rate of ____% per annum from the date hereof, payable
semiannually, on the _____ day of ______ and ______ in each year, commencing on
the first of such dates after the date hereof, until the principal hereof shall
have become due and payable, and (b) to the extent permitted by law on any
overdue payment (including any overdue prepayment) of principal, any overdue
payment of interest and any overdue payment of any Make-Whole Amount (as defined
in the Note Purchase Agreement referred to below), payable semiannually as
aforesaid (or, at the option of the registered holder hereof, on demand), at a
rate per annum from time to time equal to the greater of (i) [coupon + 2%]% or
(ii) 2% over the rate of interest publicly announced by _________________ from
time to time in ____________________ as its "base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at ______________________, in ______________________, or at such other
place as the Company shall have designated by written notice to the holder of
this Note as provided in the Note Purchase Agreement referred to below.
This Note is one of a series of Senior Notes (the "Notes") issued
pursuant to a Supplement to the Note Purchase Agreement dated as of December 23,
2003 (as from time to time amended, supplemented or modified, the "Note Purchase
Agreement"), between the Company, the Purchasers named therein and Additional
Purchasers of Notes from time to time issued pursuant to any Supplement to the
Note Purchase Agreement. This Note and the holder hereof are entitled equally
and ratably with the holders of all other Notes of all series from time to time
outstanding under the Note Purchase Agreement to all the benefits provided for
thereby or referred to therein. Each holder of this Note will be deemed, by its
acceptance hereof, to have made the representation set forth in Sections 6.1 and
6.2 of the Note Purchase Agreement, provided that such holder may (in reliance
upon information provided by the Company, which shall not be unreasonably
withheld) make a representation to the effect that the purchase by such holder
of any Note will not constitute a non-exempt prohibited transaction under
Section 406(a) of ERISA.
EXHIBIT 1
(to Supplement)
This Note is registered with the Company and, as provided in the Note
Purchase Agreement, upon surrender of this Note for registration of transfer,
duly endorsed, or accompanied by a written instrument of transfer duly executed,
by the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
[The Company will make required prepayments of principal on the dates
and in the amounts specified in the Note Purchase Agreement.] [This Note is not
subject to regularly scheduled prepayments of principal.] This Note is [also]
subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement, but not
otherwise.
Pursuant to the Subsidiary Guaranty Agreement dated as of December 23,
2003 (as amended or modified from time to time, the "Subsidiary Guaranty"),
certain Subsidiaries of the Company have absolutely and unconditionally
guaranteed payment in full of the principal of, Make-Whole Amount, if any, and
interest on this Note and the performance by the Company of its obligations
contained in the Note Purchase Agreement all as more fully set forth in said
Subsidiary Guaranty.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the [State of New York]
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
SCHAWK, INC.
By
Name:_____________________________
Title:____________________________
E-1-2